Insurance coverage for coastal casinos, whose claim paymentsafter Hurricane Katrina are helping them stage resurgence, will behigh priced and hard to come by, according to a broker.

In a report issued by Standard & Poor's today, the NewYork-based rating service said the casino industry is poised for astrong comeback in Mississippi, with most of the state's casinosreadying to reopen by the end of this year and more gaminginterests looking to take root in the state.

The state's gaming industry was centered in Biloxi, with twocasinos in Gulfport and one in Bay St. Louis, employing 16,000workers. S&P said there are only three casinos in operationtoday, employing 4,600 people but generating 55 percent of revenuesthe 12 did before Katrina. The industry generated $1.2 billion ingaming revenue before the hurricane.

S&P said this figure gives the pre-existing casinos a strongincentive to get back into the game as soon as possible.

“We expected rated companies to invest significantly in thismarket in the next few years,” said Peggy Hebard, an associatedirector for S&P, in a statement.

It also helps that the state changed the laws so the casinos,which were confined to barges anchored along the coast, are nowbuilt on land.

S&P said that while many of the casino operators arenational corporations able to make the capital investments, theywill receive help from insurance claims settlements. The reportalso noted that the cost of insurance could be an issue for thesecompanies as they begin operations again.

Speaking to National Underwriter, Ms. Hebard and Mike Scerbo, adirector with S&P, said the larger operators should be able toabsorb the increased cost for insurance. The fact that threecasinos have opened–and others are planning to follow soon,including single-property operators–demonstrates that insurance isavailable and not unaffordable.

Dana Berry, director of gaming and hospitality for Chicago-basedinsurance broker Aon, said that changes in the laws mean thecasinos, which were swept up by Katrina and destroyed, will now bebuilt to withstand hurricanes, making them a better insurancerisk.

However, “wind coverage is almost impossible to get,” he said,and those who do secure it find it “painfully expensive.”

While there are no hard numbers available, he said the industryhas paid well over a billion dollars in claims to the casinos, withproperty and content losses settled, and business interruptionclaims left to be squared away.

“Business interruption claims usually take about a year tosettle, just in time for the next season,” he noted with irony.

Casinos transfer risk to the traditional market, he explained,and despite the improved construction to the casinos, insurersremain reluctant about writing coastal risks, especially along theGulf of Mexico. What the strategy will be for dealing withobtaining coverage, as capacity appears to shrink, remains anongoing question.

“The situation is not just about price, but just getting theinsurance,” he said, adding the situation remains “fluid” withavailability changing week to week.

“This is what I lay awake at night wondering about,” hesaid.