Entrepreneur Takes a Chance on What Gambling's Big Fish Have Overlooked : Gaming: Jon Elliott seeks out remote markets in need of an economic turnaround. But not all have laid out the welcome mat.

He's been jostled by crowds of hostile Baptists and thwarted by small-town politicians. He's struck a deal with a struggling Indian tribe, only to leave baffled, angry and $10,000 poorer.

His tribulations contrast sharply with the swift and seemingly effortless ride to wealth enjoyed by those who got in on the gambling boom early.

In the last five years, such companies have struck it rich as new casinos have sprung up in 24 states, said I. Nelson Rose, a gaming expert at Whittier Law School. Today, new-jurisdiction casinos--those in Mississippi, Colorado, South Dakota and other states--get more visitors per year than casinos in Atlantic City and Las Vegas.

But the boom is already ebbing a little. Four years ago, a Midwestern company was able to turn $400,000 in assets into $153 million in annual revenue. Today, Elliott, who runs the company from his home, thinks himself lucky to have so far purchased just one small, money-losing casino in South Dakota, with a couple of million in annual revenue.

Small entrepreneurs--who first cleared a path into new jurisdictions--are now squeezed by competition from large, well-financed rivals. Big, easy profits are harder to come by. Entry costs are higher. Some markets are saturated.

"The price of poker has gone up," said G. Dan Marshall, spokesman for Argosy Gaming Co. of Alton, Ill.

Elliott maintains that gambling "is still a gold rush." But until more states open their doors to casinos, "the easy markets have all been taken," Rose said.

What's left for a company like Royal are the remote market niches that the big firms overlook.

Enter gaming's low-rent Wild West, where a single casino in a small, poor community can utterly transform the local economy.

In such places, gambling has a way of stirring up emotions and bringing cultural clashes into sharp relief. Each has "its own unique personality," Elliott said.

Last April, for example, Elliott gave a $10,000 good-faith deposit to a Washington state Indian tribe with 60% unemployment, believing he would soon sign a contract with tribal leaders to develop a casino. Instead, Elliott says, the Quileute tribe entered into an agreement with another entity behind his back--and kept his deposit.

However, the Quileutes say they legitimately sought a new investor because Royal wasn't moving fast enough.

It's an example of the kind of lesson Elliott can't afford to learn too often. He's already attempted a handful of other casino enterprises, only to be set back by local political backlash, competition from bigger firms or last-minute changes in state laws.

But Elliott also says he has become more savvy since his early days. Once, he said, he gamely attended a Baptist rally in Scott City, Mo., where demonstrators were protesting a measure to allow casinos.

A California businessman in dress and manner, Elliott displays a polish that bespeaks an early, short-lived stint as host of a cable TV sports program. But he was unprepared for his encounter with Bible Belt passions. And the Baptists were even less prepared to accept him. "I barely got out alive," he said.

Elliott recently signed an exclusive franchise deal, yet to be approved by the state Gaming Commission, with the Missouri town of Wyatt, population 376.

Wyatt, which lies amid corn, soybean and cotton fields, doesn't make it to some maps. The official state estimate of unemployment in the region is 10.4%, twice that of the rest of Missouri. Descendants of migrant workers populate the countryside, and the poverty is generational, said Tammy Berg, a spokeswoman for the Missouri Labor Department.

"There is a lot of welfare here and an awful lot of people who don't work," said Edward Bowles, owner of a Wyatt sandblasting firm. "It's not that they are out of work. They don't work."

Royal Casinos has proposed building a $13-million to $15-million riverboat in Wyatt that could unleash a mini-economic revolution there. The boat would pull in a projected $40 million in yearly revenue for Royal, Elliott said. It would also provide jobs for 300 people, he said. Moreover, taxes from gambling would increase the town's general budget tenfold, from $80,000 a year to $800,000, according to Mayor Riley Fitzgerald.

Fitzgerald talks of fixing the city's aging water well, building a park, buying an ambulance. The town has even annexed a skinny, five-mile strip of riverfront land, since it must be a river town to host a riverboat.

But the proposal has also sparked controversy in a community with a history of intricate racial politics.