Fight Night Restarts Ameristar St. Charles

• Email
• Share
• Print

The highlight was rising star and St. Louis native Deandre "The Bull" Latimore knocking the daylights out of his opponent in a whole 46 seconds. The lowlight was IBU heavyweight champ Ernest Mateen withdrawing from the feature bout before it even began, leaving the crowd in disgust. Still, the first-ever boxing match held Thursday night in the brand new conference center at the St. Louis property of Ameristar Casinos (Nasdaq: ASCA) was -- in aggregate -- nothing short of a smashing success, giving local boxing fans and Ameristar shareholders alike something to look forward to.

Ameristar Casino St. Charles, which had led the St. Louis gaming market since opening a new gaming barge in August 2002, has fallen to second-best in terms of gaming revenues since March 2006, when chief rival Harrah's Entertainment (NYSE: HET) capped off a series of additions and upgrades to its St. Louis property with the opening of a brand new 21-table poker room. Not to be outdone, Ameristar is in the midst of making $240 million in capital additions to its flagship St. Louis property, and the opening of the 55,000 square-foot conference center this month is just the beginning of this second development phase.

St. Louis market gaming revenues:

Casino	2002	2003	2004	2005	2006*
Ameristar	$196M	$264M	$295M	$306M	$206M
Harrah's	$256M	$239M	$280M	$302M	$214M
Casino Queen	$157M	$158M	$166M	$169M	$118M
Alton Belle	$119M	$109M	$107M	$112M	$82M
President	$77M	$73M	$73M	$70M	$48M

*Through August

Ameristar is looking to expand on its best-in-market parking advantage with the addition of a second parking garage, and 1,400 new parking spaces are scheduled to become available by the end of the year. In fourth-quarter 2007, the property should see the opening of a new 400-room all-suite hotel with an indoor/outdoor pool and full-service spa, along with 950 additional parking spaces.

In the meantime, the new conference center will help drive traffic to the property by being able to host bigger live events. Boxing matches will be held regularly; it has been suggested that they occur every six weeks or so. The facility -- which sat roughly 1000 people for the boxing match -- can also accommodate a larger audience for concerts than the 300-seat Bottleneck Blues Bar. Moreover, the potential to host business meetings and conferences will be more fully realized when the hotel opens next year. Then, the property will be able to better attract the kind of national business that Harrah's currently has cornered in this market.

Ameristar has a tough competitor in Harrah's, and will see two new casinos at the East and South ends of the market over the next two years from Pinnacle Entertainment (NYSE: PNK). But I still believe that Ameristar's casino offers the superior competitive platform in the market, and that the current expansion phase will bear this out.

For related coverage, check out:

• A Star in Colorado
• Re-evaluating Ameristar: St. Louis Part I and Part II
• Re-evaluating Ameristar: Kansas City

Ameristar Casinos is a Hidden Gems pick. A free trial will let you find out why.

Fool contributor Jeff Hwang owns shares of Ameristar Casinos. The Fool is investors writing for investors.