BILOXI, Miss. - While much of America's Gulf Coast continues its slow recovery from Hurricanes Katrina and Rita, two years later, casinos along the Biloxi beachfront are flourishing.

Of the 13 Mississippi coast casinos that were severely damaged or destroyed in 2005, 11 have reopened, and all have expanded and upgraded their properties.

Plus, the Hard Rock Hotel Casino, which was heavily damaged by Hurricane Katrina just days before it was to open in August 2005, (finally) opened its doors in July.

The company that owns the Hard Rock reportedly collected more than $160 million in hurricane-related insurance proceeds.

Now, the Gulf Coast casinos are reporting higher revenue than before the hurricane - sometimes with fewer customers - as the remaining army of construction and relief workers flow into the casinos seeking entertainment and diversion.

Many of the area's movie theaters, bars and malls remain closed, leaving casinos as the principal form of entertainment and contributing to the casino boom.

Gulf Coast boosters also were buoyed this summer by the openings of Emeril's Fish House, Ruth's Chris Steak House and the Hard Rock Hotel Casino, plus the expansion of Treasure Bay Casino.

Emeril Lagasse, the nationally recognized New Orleans chef and television personality, opened his first Mississippi restaurant at the Island View Casino Hotel in Gulfport.

The Ruth's Chris Steak House, which also started in New Orleans, now has its first location in Mississippi and is part of the Hard Rock Hotel Casinos dining choices.

The Hard Rock will have its own niche in the Mississippi market. The rock n roll memorabilia, lounges and laid-back atmosphere of the property, as well as its headline entertainment, are targeted to a younger demographic.

"The dynamics of our market are accelerating," says Stephen Richer, executive director of the Mississippi Gulf Coast Convention and Visitors Bureau.

The Mississippi casinos strong performance and large employee base has bolstered both local tax revenues and recovery efforts.

"There's no doubt that (casinos) are the engine driving this train," says Biloxi Mayor A.J. Holloway. "The income coming in has helped us to recover at a quicker pace."

Holloway expects the number of casinos in Biloxi to more than double in the next 10 years, in part because of a post-Katrina rule that allows them to rebuild 800 feet ashore. Before the storm, Mississippi casinos were required to be on floating barges, which limited their size.

In New Orleans, casino business has also been brisk, a bright spot in a city where about 60 percent of the population has returned. Harrah's, the only land-based casino in the city, is on pace to bring in record revenue this year.

A handful of riverboat casinos in the area are still benefiting from a post-Katrina boom caused by the closure of other local entertainment venues.

Riverboats such as Treasure Chest, docked outside New Orleans, have no hotel and rely primarily on local clients. But Harrah's, which opened a 450-room hotel last fall, is counting on the return of national and international tourists to boost business.

Still, all is not totally rosy. The resurgence of the gambling industry in the region also may have come at a price: higher potential for gambling-related problems.

Colleen Leonard, program director of the Louisiana Problem Gamblers Helpline, says calls to the hotline are "much more serious than three years ago. Basically, what we're seeing is a lot of people going to the casino to do more escape-type gambling, or to the racetracks," says Leonard. "We have people who called us and said they have received money" from the Federal Emergency Management Agency and they lost it gambling.

However, Wendy Bailey, of the Mississippi Department of Mental Health, says her agency has not seen "a noticeable rise in addiction problems for our citizens" as casinos have rebuilt and expanded.

Meanwhile, much of the growth of the casinos in Biloxi and nearby Gulfport is coming at the expense of Louisiana and New Orleans.

Because Mississippi allows its casinos to open on shore, and Louisiana doesn't, large gaming companies are selling casinos in Louisiana and investing in Biloxi, possibly so they can develop "bigger, resort-style projects," according to a state report.

Brian Sanderson, president of the Gulf Coast Business Council, projects the Mississippi coast will one day overtake Atlantic City as the No. 2 gaming market in the U.S., behind Las Vegas.

They have a ways to go, however. In 2006, the Biloxi-Gulfport area ranked 11th among casino markets, bringing in $845.2 million in gaming revenue.