GAMBLING OFFICIALS TO RESIST SATURATION

Four years ago, Mississippi became one of the first two states in the Midwest to reach for the golden ring of legalized riverboat gambling.

Mississippi has grabbed the ring dozens of times so far, granting 35 gambling licenses since the first boat opened in August of 1991. There is no limit on the number of licenses that can be granted.

For a few, the golden ring tarnished quickly. Four casino failures have occurred since 1991 -- one on the Gulf Coast, where 14 casinos are still operating, and three in the Tunica area just south of Memphis, Tenn., where nine casinos currently operate.

Among the latter group is Boyd Gaming Corporation's Sam's Town Hotel and Gambling Hall. Boyd Gaming is Cape Girardeau's designated riverboat operator.

A tenth casino is scheduled to crank up its slot machines in Tunica County next month.

Fierce competition for gamblers and dollars, industry observers say, is likely to eliminate even more Mississippi casinos eventually.

Jason Adar, a gaming analyst with Smith Barney Investments, and Craig Silvers, an analyst with Hancock Financial Services discussed gaming saturation problems this week with the news media. Adar said a couple of other gaming operations are borderline survivors and Silvers predicted that as many as five gambling operations will close along the Gulf Coast over the next two years.

A considerable distance upriver in Illinois, lawmakers have taken a more conservative approach to introducing legalized gambling. Illinois gaming laws limit gambling to 10 casinos All 10 licenses are taken and all 10 casinos report good activity.

During the 12-month period from November 1993 to October 1994, the 10 operations reported a cumulative gross-winnings total of $934,290,001. The Joliet Empress in Joliet led the pack with a gross win figure of $190,370,168.

Players International, located in Metropolis, Ill., and just 65 miles from Cape Girardeau, reported a comfortable gross win of more than $69 million.

Somewhere between these two reports could be a lesson for Missouri casino regulators: More is not necessarily better.

Missouri, one of the newest states on the gambling scene, currently has six gambling operations offering a "full dose" of gambling activity, ranging from table games to the pull of the slot-machine levers.

And like Mississippi, Missouri has no limit on the number of casinos.

So far, 25 companies have applied for Missouri licenses, and 25 municipalities have legalized gambling, setting the stage for Mississippi-style saturation.

"We want to avoid oversaturation," said Mel Fisher, deputy director for enforcement for the Missouri Gaming Commission.

The commission is doing a market study for metropolitan areas."The commission will be very cautious in its efforts to prevent market saturation," said Fisher.

"The companies we have operating in Missouri are strong companies," said Harold Bailey, of the state Gaming Commission. "We have a responsibility to these companies and the communities they are in to prevent a saturation problem."

The commission is proceeding with two investigations of casino applicants -- standard procedure before a license is granted.

Companies currently under review are Aztar Corporation, which is building a riverboat complex at Caruthersville, and Boyd Gaming Corporation, which applied for a license for its Kansas City complex already under construction.

Four Missouri areas presently are home to gambling riverboats -- St. Charles, St. Louis, St. Joseph and Kansas City.

The St. Charles complex consists of two operations, a floating riverboat casino and a dock-side operation. The third St. Louis-area casino, the Admiral, also is a dockside operation on the Mississippi River in downtown St. Louis.

Other operations include Harrah's North Star and Argosy Riverside in the Kansas City area, and the St. Jo Frontier Casino.

Although Missouri riverboat casinos have been in operation since April 1994, the big numbers didn't begin rolling in until December.

The state's latest figures, reported by the Missouri Gaming Commission, reveal revenues of $28.8 million, up more than $8 million over November totals.

The December report reflects 22 days of reel slot machine play. Prior to that time, the casinos were limited to table games and poker and/or blackjack slot machines.

Harrah's North Star, a dockside operation in North Kansas City, led the state with a win of $8.15 million in December, compared with $6.48 million in November.

However, the average win per admission is far below the Illinois averages. For example, on a big day on the Admiral, the average was $18.59 per admission, less than half the average for the Alton Belle and E. St. Louis Casino Queen.

One reason for that big difference, says Steve Schneider, an analyst for Stifel, Nicolaus & Co., is the Missouri loss limit of $500 per gaming session. That keeps away the high rollers. Illinois casinos have no loss limits.