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Buckle Up Biloxi!

Thirty years of rockin’ and rollin’ with legal casino gaming

Buckle Up Biloxi!

As improbable as it was that Mississippi, the buckle of the Bible Belt, would legalize gambling, there was one sure bet: Biloxi, with its colorful history and prime locale, would be a major player.

“For Biloxi, gambling is nothing new,” said Biloxi Mayor Andrew “FoFo” Gilich. “It’s part of Biloxi’s history, but it has certainly evolved over the last 30 years, in big ways and mostly all good.”   

Evolved indeed. Aug. 1, 2022, marks 30 years to the day when thousands lined up on a scorching, humid Biloxi summer afternoon, some for as long as three hours, all for a chance to pull a slot handle or pull up to a table game for the new thing in Biloxi, the thing known as known as “dockside gaming.”   

The day the Isle of Capri’s two paddle wheelers opened on the tip of the Biloxi peninsula, was the precursor to an era that today sees the Mississippi Gulf Coast, with Biloxi’s eight casinos and four others in cities nearby, comprising the nation’s fifth largest gaming market. The Gulf Coast’s $1.61 billion in revenue in 2021 was topped only by Las Vegas, Atlantic City, Chicagoland and Baltimore-Washington, and was ahead of New York City, Philadelphia and Detroit.

Said Gilich: “When you consider the size of those cities compared to Biloxi and the Gulf Coast, and you consider the tremendous amount of revenue you’re seeing, that makes a statement. The achievement is that much more significant.”

For Biloxi, it’s an achievement that over the years has had the city mentioned in the same sentences as Las Vegas and Orlando. It’s an achievement that has seen the number of visitors to the city each year increase from a million a year before casinos to between 13 and 15 million today.

Biloxi’s gaming market, which alone in ‘2021 saw record-shattering gaming revenue ($1.2 billion) and sales taxes ($13.8 million), is not unlike those of other high-performing gaming communities coming out of the pandemic.

However, Gilich points to the epic challenges the city has overcome and how the industry has maintained over the years: Hurricane Katrina and countless smaller storms, the BP oil spill, the national recession, and the COVID-19 pandemic.

And, they say, it’s been done while Biloxi has retained its small-town charm and friendliness while the area continues to see a host of new amenities, from a minor league ballpark, aquariums, museums, and a host of other attractions to compliment gaming.

“We don’t want to be the Las Vegas of the South,” longtime Biloxi Mayor A.J. Holloway once said. “We want to be what we are, Biloxi, a city with a colorful history and a bright future.”

Legal gaming quickly resuscitated the stagnant Biloxi tourism industry, evolving into supersized gambling halls with dazzling new resort hotels and entertainment centers. The largest casino companies in Las Vegas moved in to buy out the smaller operations and world class resorts dominated Biloxi’s skyline by the late 1990s.

Ten years into the gaming endeavor the Magnolia State was home to three dozen casinos with 30,000 employees. Mississippi, a state that was (mocked? disparaged?) known for dirt roads, bare feet and rebel flags, had stumbled upon “the Mississippi miracle,” and Biloxi was the Cinderella story.

Biloxi, a 50-square-mile city whose population is just under 50,000 today, is in an area that local historian Paige Gutierrez calls “south of south.” It’s closer akin to Florida and Louisiana than the rest of Mississippi.

Biloxi was first settled in 1699 by a French explorer seeking the mouth of the Mississippi River. The Biloxi peninsula became a cultural melting pot. The city, its peninsula ringed with shrimp and oyster canneries and processing plants, initially attracted immigrants to the seafood industry. Some of the first fishermen were Austrians from the Dalmatia Coast. In 1890 the Bohemians became the first imported laborers from Baltimore. In 1914 the first Cajun families arrived from Louisiana. In 1978, the city became one of the first in the country to receive Vietnamese refugees, who today represent the backbone of the city’s fabled seafood industry, which had once been heralded as the Seafood Capital of the World.”

In the early ‘90s the city saw the arrival of its next wave of immigrants, Las Vegas and New Jersey casino workers.

Casino-style gambling was a part of Biloxi’s history dating back to at least the early 20th century when back-room clubs offered slot machines and table games to thousands of locals and hundreds of thousands of tourists.

Bookmaking was also part of the mix. So connected it was, the local newspaper sometimes gathered scores from a local bookie. Baseball legend Dizzy Dean was even caught up on a book making scandal after placing long distance bets with Biloxi bookies.

Games of chance, for the record, date back hundreds of years in Biloxi, to the time of Native Americans. During a national investigation into organized crime involved in interstate commerce in the 1950s, Tennessee Sen. Estes Kefauver convened a congressional committee in Biloxi to the delight of area ministers. Still, the practice persisted until the late 1960s when the last of the wink-and-a-nod rooms faded into history.

Hurricane Camille wiped away the remnants of any land-based gaming joints.

Run-Up to Legalization

Casino Row on Point Cadet in Biloxi, pre-Katrina

Truth be told, August 2022 is actually not the 30th anniversary of legal gambling in Biloxi, says Gerald Blessey, the Biloxi native and Harvard-educated lawyer who was the city’s mayor from 1981 to 1989.

It actually began four years before 1992.

It was a time when the Biloxi economy was in a tail spin. The completion of Interstate 10 allowed visitors from Louisiana and Texas to easily bypass Biloxi and the Mississippi Gulf Coast for the clearer waters and bigger waves of the Florida and Alabama coasts.

“We needed a new attraction,” Blessey says today. “We did a waterfront masterplan, with citizen input. We had not fully recovered from (Hurricane) Camille, so the idea was ‘let’s restore our waterfront.’

“And when we started doing that, we noticed that these cruises-to-nowhere were working in other areas, so we built in a big boat slip and advertised. And low and behold, the Europa Star from Pensacola came in and made a proposal, and rest was history.”

Almost overnight, Blessey said, “the mom-and-pop hotels, which were running at 10 percent occupancy, overnight jumped to 60 percent occupancy—with that one little boat. That was a sign that we were on to something, and it would lead to more things because clearly there was a demand for this type of recreation.

“We were an untold opportunity of really authentic, waterfront, seafront sports, billfish tournaments, sailing, you name it, all the water recreation. We’re a water town. We have 150 miles of waterfront, and so throughout our history our tourist attraction had been mainly water sports, beaches and things like that.

“I didn’t realize at the time that it would so quickly become what it has now become. Clearly the economics were there, and we were on to the kind of attraction that has really paid off. It’s not just casinos. It’s all the entertainment, the better food, the golf courses, the fishing tournaments, all the things that we already known for for 150 years, a New Orleans kind of tourism area, middle America, Chicago and so forth, and now we’re a national attraction.”

If only it were so, easy, though. Both Blessey and Biloxi attorney Michael Cavanaugh, today an authority on waterfront gaming, recall the struggle to get the cruises-to-nowhere under sail to somewhere.

“First of all,” Blessey said, “we had to sue the state to stop them from arresting everybody. Apparently, they had not read the federal laws in a long time in Jackson.”

State leaders, Cavanaugh said, had threatened to confiscate gambling devises on the Panama-flagged ship that was sailing regularly out of Biloxi and into international waters 12 miles offshore, where the gambling took place.

“We didn’t fight the law,” Cavanaugh said, “we fought for the law” that protected foreign-flagged vessels.

Rollin’ on the River

Biloxi’s two Isle of Capri riverboats were the first legal gaming operations to open in Mississippi 30 years ago.

Two things happened next. The first was that powerful legislators from Delta towns, Senator Bob Dearing of Natchez and Rep. Sonny Meredith of Greenville, sat up and took notice at what was happening with the cruises to nowhere, and, for the Mississippi River, they harkened to the days of Mark Twain and riverboat gambling.

Said Cavanaugh: “They were focused on the riverboats, and they knew we would tag along.”

The ensuing legislation originally intended to allow cruises-to-nowhere from communities that had approved a county referendum on gambling. In an 11th hour move, and to avoid any jurisdictional issues with Louisiana on the Mississippi River, the word “underway” was removed from Legislation, which led to dockside gaming.

Interestingly, the first vote in Harrison County failed, despite an overwhelming 80 percent in Biloxi. Hancock County, to the west of Biloxi, voted in favor, and in the third coastal county, Jackson County, voters opted against gambling in their communities.

After the initial failed vote, Blessey and Co. filed a second lawsuit that pointed out under state law, the two judicial districts in Harrison County could be viewed as separate counties. Harrison County Court Judge James Thomas, the saw jurist who ruled in favor of cruises to no where, listened to the argument and took the matter under advisement, which, Blessey said, “is exactly what we wanted him to do.” A second vote eventually took place and the measure passed.

The second huge milestone in the early days was when two Biloxi engineers, Mark Seymour Sr. and Terry Moran, working for Casino Magic in Bay St. Louis and Biloxi, introduced a design where barges were joined and a two-story casino was built atop the dockside platform. The first opened in Bay St. Louis, 30 miles to the west of Biloxi and closer to the hundreds of thousands of potential customers in the New Orleans area.

“Once that happened, and operators realized you could do that, all of the others came behind,” Cavanaugh said. “That’s when the bigger operations came. Instead of boats, you had essentially a floating building on the water, and you didn’t realize you were on a boat or a barge at all.”

The Market Rules

If there’s one thing everyone agrees on these days it’s that Mississippi chose the right path in following the Nevada free-market approach, instead of those jurisdictions that limit the number of casinos.

Taxes would be lower (12 percent on gross gaming revenue), and the number of licenses would be dictated by the market. The strong and well-managed will survive.

Said Harrison County Supervisor Beverly Martin: “When you have a free market with unlimited licenses, by natural circumstance, the casinos that are existing are always going to continue to upgrade their property, continue to offer more and new amenities. I don’t think you have that in areas that limit the licenses.”

The Nevada model also had other advantages, noted Bruce Nourse, a Biloxi native who made his bones dealing craps and cards in Las Vegas before eventually joining the Nevada Gaming Control Commission. When Mississippi legalized gaming, it was an opportunity for Nourse to return to his home state, armed with working knowledge of the Nevada laws, and, as a matter of fact, the manuals, forms and procedures that would be needed in Mississippi.

“We just plugged it right in,” Nourse said. “We were able to get started, get up and going as quick as anybody could have done because we had this template to use, which is the Nevada regulatory system. And it also helped in that the operators that were coming here form Nevada felt comfortable in Mississippi because they were under the regulatory structure of Nevada, which they were used to.”

As part of the Nevada model, anyone in the casino industry who touched a gaming chip or money, or anyone working in management, would undergo a background check. Same for owners and any distributors working with the industry.

Gaming in Mississippi, Nourse once said, “would not be clean, it would be squeaky clean.”

Some 30 years ago, when the idea of “dockside gambling” was being promoted in Biloxi, local business leaders had a campaign promise: “Jobs, jobs, jobs.”

A study by a local economic development agency said the market could support three dockside paddle wheelers and would employ a total of 10,000 people.

“We had three major hotels at that time,” restaurateur Bobby Mahoney used to say. “Two of them were in bankruptcy and the third one didn’t care.”

Longtime business leader Jake Mladinich, whose West Beach nightclub gave Jimmy Buffett his first public gig, lamented the lack of traffic on once-busy U.S. 90, which hugs Biloxi’s 8.2 mile stretch of the world’s largest man-made beach. Said Mladinich: “you could shoot a cannon on Highway 90 or play a game of football and no one would know.”

Economic Impact

Hurricane Katrina in 2005 destroyed the gaming industry in Biloxi only to have it rise again. The President casino barge (top) was floated hundreds of feet and deposited across Highway 90, the main route through the Gulf Coast. The Palace Casino (abv.) also suffered damage.

As Biloxi’s mayor, Gilich is keenly aware of the impact of the city’s eight casinos.

The $20 million in gaming taxes alone the casinos pay each year accounts for a third of the city’s operating budget. Toss in $10 to $12 million in sales taxes and you’re approaching half of the city’s annual budget.

The impact on the community has been profound in Biloxi. When casinos arrived in 1992, the city had not built a new school in 30 years, going back to 1960, with the construction of Biloxi High School.

By 1999, the city had invested $80 million in schools construction, four new elementary schools and a new high school with a campus that looked more like a small college. The Biloxi Public School District had the highest paid teachers in the state.

It was an era when residents saw free recreation leagues, the lowest water and sewer rates anywhere, and about $6 billion in development, primarily on the waterfront and driven by the casino and hospitality industry.

World-renowned architect Frank Gehry designed a signature museum to honor a turn-of-the-century Biloxi potter, George Ohr. The museum joined three others, the Biloxi Maritime and Seafood Industry Museum, a Mardi Gras Museum, and Beauvoir: Jefferson Davis Home and Presidential Library.

The number of hotel rooms over the years had grown from about 3,000 before casinos and was days away from reaching nearly 18,000 with the opening of the Hard Rock Hotel & Casino, scheduled to open September 1, 2005.

Of course, there was a fear from the outset.

“I remember it well,” said John Miller, who today is Biloxi’s police chief who began his career here as a patrolman in 1989.

“Overnight, they said, we were going to be overtaken by everything from the Mafia to all kinds of organized crime. Overnight, they said, and that just did not happen. Crime did grow certainly, but it was mainly from the number of people.”

Mahoney, the colorful Biloxi restaurateur and owner of the legendary Mary Mahoney’s, remembered it well. “People used to ask if all these casinos caused crime. I tell them that to have crime you need two things: people and money. We used to have NO crime.”

Added the police chief: “We did see some crimes that we never seen before or dealt with before, such as fraud-related and stuff like that, but they were very gradual. And it was no overnight impact. It took several years before we really felt any type of change in crime.

“And I don’t think we ever felt it because we’d already prepared for it. We had hired more patrolmen, bought better equipment, and we kind of absorbed it. We never had that really big crime wave, the big boom that some people thought. Instead, what we ended up with was better law enforcement.”

Trickle Down Effect

If there was a poster child for the impact of gaming in Biloxi, it’s Knight-Abbey Printing & Mail. The family run firm employs 70 professionals who design, print and see to the timely delivery of more than 150 million pieces of mail a year, primarily customers of more than 90 gaming facilities that dot the map from one end of the country to the other.

It’s another example of how the free-market system has worked — and exceeded any predictions. Today, casinos in Mississippi employ 15,879, with 10,850 of those jobs at dozen casinos and casino hotels on the Gulf Coast. Jobs also were created throughout the community, with more restaurants and attractions, and suppliers for the casino industry.

Says County Supervisor Martin, who 30 years ago was a member of a community group that touted “Jobs, jobs, jobs” in its pro-casino campaign: “It just blows my mind how this entire industry has grown and created so many jobs. When we did the first campaign to get gambling legalized, we were predicting 2,500 to 3,500 jobs. Statewide, we were just a little off.”

A company like Knight-Abbey, leaders say, took it to a new level.

You used to be able to trace the growth of the firm from the patchwork of wood-frame offices or steel-frame print shop buildings on Biloxi’s Caillavet Street. It’s a street bookended by Biloxi’s two largest resorts, IP and Beau Rivage, but Knight Abbey’s vision went far beyond its street, or even its city or state.

Today, 30 years later, Knight Abbey is in a cavernous former Toys R Us location. The company parlayed Biloxi’s arrival in the casino business into a nationwide printing and direct-mail operation.

“People wonder how it is that we have so many customers across the country,” says Tonya Spiers, head of the company she runs with her husband, Jim. “The fact is, 80 to 85 percent of our business is outside of Biloxi. But it’s all done right here in Biloxi.”

So how did it happen? “We started out small and we proved ourselves in the casino industry here in Biloxi,” Spiers says. “We developed relationships based on quality and delivery, and when some of our partners moved higher up in their respective companies, maybe now responsible for regions of the country or just different properties, they took us with them. It’s like college football coaches. They take their staffs with them.”

And today, Spiers likes to think Knight Abbey enjoys homefield advantage from coast to coast.

The Bump Named Katrina

Biloxi was rocking and rolling, figuratively in August 2005.

The city had overseen $5 billion in development in Biloxi. Ten casino resorts helped create 15,000 new jobs. The number of visitors had grown from a million a year to between 8 and 10 million a year.

The city had invested tens of millions in public education, public safety and recreation, in heritage and cultural preservation of historic city-owned buildings and historic neighborhoods. Gulfport-Biloxi International Airport and the Mississippi Coast Coliseum and Convention Center were both ready to double in size.

The economy and quality of life were humming along.

Then Hurricane Katrina hit on August 29, 2005. Katrina destroyed 6,000 homes and businesses in Biloxi. Hundreds of historic homes and landmarks. Entire blocks of neighborhoods were reduced to debris fields or simply washed away. Giant casino barges, whose mooring systems were designed to withstand a 15-foot tidal surge and 150 mph winds, were pushed ashore, some as much as a quarter mile down the coastline landing on the highway or crushing hotels and historic homes that had stood for decades.

Fifty-three people lost their lives in Biloxi.

Biloxi’s 16-square-mile peninsula was framed by destruction and devastation.

“So let me get this right,” a Los Angeles Times reporter asked in the days after Katrina. “It’s an industry that represents a third of your annual income and it employs thousands, and by choice you put in not on the water, but in the water?”

Even with the devastation of such a proven and massive economic engine, there was still reluctance in some quarters of the state to allow the casino industry to move ashore, even as little as 800 feet from the water.

Would the major operators be willing to make another huge investment in the wake of Katrina without moving ashore?

In a word, no, says Keith Crosby, general manager of the privately owned Palace Casino, whose gambling barge was decimated by the storm.

“It was too risky at that point,” said Crosby, who was at the state Capitol for two weeks during deliberations as industry leaders and lawmakers debated the future gaming in Mississippi. “Let’s put it this way. Immediately afterwards? Absolutely not. If things had simmered down, maybe. Look how long it took the housing market to recover on the beach. 15 years. It was over. It was either we do this or it’s over.”

A year before Katrina, Crosby had traveled with other Coast volunteers to Pensacola, where Hurricane Ivan had decimated the city.

He wondered what would happen if such a storm were to strike Biloxi.

Tourism Expansion

Linda Hornsby’s livelihood is hotel rooms. As executive director of the 300-member Mississippi Hotel & Lodging Association she keeps tabs on hotel inventory and future.

But she also realizes more hotel rooms are only part of the mix to success for the Gulf Coast’s tourism industry. Right now, the Coast hotel inventory is keeping up with demand.

“Nobody goes to—or very few people—go to some place to simply stay in a hotel room,” said Hornsby, a Biloxi native who has worked in the industry her entire adult life. “If we add more hotel rooms, that doesn’t mean more people will come. They come here for a reason. The casinos created the demand, they created the environment for the demand” where such amenities as fishing, golf, shopping, restaurants, aquariums and museums can flourish.

The challenge, says former tourism authority director Steve Richer says, is to know the appeal of Biloxi and promote it. Does Biloxi want to be a convenience market or a leisure market.

“That first one is a convenience gaming, which attracts those from 200 miles or less. It’s people who want a place with casinos and have an itch to scratch. They want to pull a slot handle. They want to try their luck and it’s convenient.

“The other one, which is really much more rare is a pleasure destination with gaming, one that has very different aspects. It has more things to do than just play in the casino. It uses the travel industry—travel agents, tour operators and airlines—and it’s got a lot of other things because of the destination itself.”

“Make sure that we focus on the goal of being a major destination with gaming and not just being a bigger convenience market. Because you’re only limited to, probably, Georgia, Florida and Mississippi itself, Louisiana and maybe eastern Texas.

“We’re stronger to the East because you don’t have to pass all of those Louisiana casinos. However, if we truly build a leisure destination with gaming, with more entertainment, more attractions, more diversity in the gaming product itself, and keep building up dining and shopping.

“It all goes back to marketing, because you have the product.”

Thirty years after casinos were legalized in Biloxi, if there was thing tourism advocates fear, besides a Category 5 hurricane, it would have to be protectionism, the thought of limiting new casinos in favor of existing operators.

Just north of Biloxi, the Scarlet Pearl Casino in D’Iberville, which opened in December 2015 was the most recent casino to open on the Gulf Coast. Earlier that year, the Island View Casino in Gulfport also expanded with an adjoining operation, the Beachview Casino.

Gilich has long said he thought market was primed for growth, especially after Biloxi’s gaming revenue surged a year after the new competition.

Two proposals amounting to more than a billion dollars have been announced by developers: The UMusic Broadwater in West Biloxi and the Tivoli in East Biloxi, but neither has yet to present formal plans to the city.

“They know the market is here,” Gilich said. “They know that we have a proven track record, even when faced with man-made or natural disasters, and they know coming to Biloxi is not much of a gamble.”


Notes, Quotes And Anecdotes

Land Infrastructure

When the Isle of Capri’s Emerald Lady and Diamond Lady paddle wheelers made their way to the shores of Biloxi, they were coming from Bettendorf, Iowa, where operators were escaping new competition from Illinois.    

The Isle boats merely untied and moved on.

This departure was something the Mississippi Gaming Commission wanted to avoid, so the landside infrastructure requirement was put into place, requiring casino operators to spend as much money on land as on their barge. And policymakers preferred the landside infrastructure to be in the form of a hotel.

The requirement also saw a number of amenities and novelties, many of which, unfortunately, were destroyed by Katrina or gave way to higher and better uses with more of an impact on the bottom line.

But, oh the amenities.

There was Ralph Engelstad’s antique car museum at the IP (left), an attraction that, they say, moved away after Engelstad balked at the state’s request to place a taxable value of the dozens of cars, including Hitler’s parade car. He had a similar display at this Imperial Palace in Vegas.

The IP also at one time housed a movie theater, offering screens of first-run movies. And next door, Boomtown, the only casino without a hotel, offered an indoor motion theater ride, not unlike one seen at a theme park.

The Grand, on Biloxi’s Point Cadet and in Gulfport, offered Kids Quest, where parents could drop off their kids at a huge, well-supervised indoor playground.

There was the dragon at Lady Luck, and nearly all of the original casinos offered a “free pull” slot machine, typically buried deep within the casino, past slot machines and table games.

Several Gulf Coast casinos constructed nearby championship golf courses, designed as Jack Nicklaus, Arnold Palmer and others.

And when the Scarlet Pearl opened in D’Iberville in 2015, it touted its Lava Rocks, an outdoor miniature golf course (left) with its own volcano.

And some things never happened.

The Beau Rivage, in its initial plans, included a water feature not unlike the fountains outside Bellagio. Alas, there was insufficient room fronting U.S. 90.

And down on Point Cadet, in an area known that had been known as Casino Row, developers had hoped to see the billion-dollar Margaritaville, a Jimmy Buffett-themed resort that would have a small lake and sea plane in its front yard, at Oak Street and U.S. 90. It seemed a natural, albeit an ambitious one, with Biloxi having been the first place Buffett had a playing gig at the outset of his career.

Alas, financing never came to pass. “Harrah’s,” Mayor Holloway said at the time, “was the largest gaming company in the world, but at the time it also had the largest debt, too.”

A second, smaller Margaritaville did open on the northeast side of the Biloxi peninsula, but it closed after gamblers never found their way.

The third time was the charm for Margaritaville, when local developers purchased Casino Magic in Biloxi, which had been dormant since Katrina, and opened a full-scale family resort, all games but no gaming.

Blessed Event

When Casino Magic opened its hotel and casino on Biloxi’s Point Cadet, later also known as Casino Row, Father Nicholas Filipich had walked across U.S. 90 from the St. Michael’s Catholic Church, “the church of the fishermen,” to sprinkle Holy Water on the craps table.

The Lingo

You don’t hear the term “dockside gaming” much anymore, but vestiges of that original vision—paddle wheelers tied to the dock—are still to be found. In fact, notes gaming authority Michael Cavanaugh, a Biloxi attorney, you still have to identify your “cruise vessel,” and to the point of whether it will cruise.

A Southern Thing

Hours before the Beau Rivage opened for business in March 1999, Steve Wynn had Biloxi Mayor A.J. Holloway over for dinner. Wynn, Holloway recalled later, complained about being able to hear the freight trains traveling through several blocks away. Holloway agreed. Later, as desert was to be served, Wynn trotted out a chocolatier, who he said had just won an international competition. Said Wynn: “Mayor, did you ever think you would have a fantastic resort like this in your town, and you’d be enjoying dessert served by a world-renowned chocolatier?” And don’t forget, Holloway said, “With a railroad too.”

Jackpot

Months before Katrina devastated the Gulf Coast, Holloway, recognizing the importance of the industry’s revenue to the city, convinced the City Council to spend $94,000 on a $10 million business-interruption policy, which would reimburse the city should disaster cause any loss in casino revenue. Why $10 million? Because that was six months of revenue, and, as Holloway said, “no storm will close the casinos for six months.” The first to open was IP, three months after the storm. Didn’t matter because the city had already booked a $10 million winner.

Biloxi native Vincent Creel was an editor and reporter before being named the city of BIloxi’s Public Affairs Manager in 1995, a post he held until May 2022.

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