On Thursday, Pinnacle Entertainment
Revenues at Boomtown New Orleans dropped 38% to $40 million, leading to a hefty 60% decline in EBITDA, to $12.4 million. Meanwhile, the Belterra Casino Resort in Indiana saw EBITDA drop 27%, to $6.4 million, on what the company described as a "self-induced" increase in marketing spending in response to a new competitor opening in French Lick. Boomtown Bossier City also posted a 15% drop in EBITDA, while Boomtown Reno saw its EBITDA output drop 61% to a paltry $713,000.
In fact, the only property to actually report a gain was the biggest and most important one. L'Auberge du Lac in Lake Charles saw revenues climb 12%, to $75.8 million, while generating $17.3 million in EBITDA -- up from $3.7 million last year.
That said, the comps will be easier next year and beyond: Pinnacle has one of the deepest development pipelines in the industry, with two casinos under construction in St. Louis, another in Lake Charles to go with L'Auberge, a $1.5 billion-plus project in Atlantic City, and another potential project in Baton Rouge.
St. Louis. Lumiere Place -- the downtown St. Louis casino -- is now slated for a Q4 2007 opening. The budget is expected to increase from $430 million to between $475 million and $495 million, mainly because of construction cost increases. The company expects the hotel to be a Four Seasons.
Pinnacle also completed the $45 million purchase of the President Casino, which is located adjacent to the site of the new downtown casino. The company has yet to determine final plans for the President, but possibilities include moving the casino to another area in the market; if allowed by the state, that could mean moving to north St. Louis to battle Penn National's
Missouri's loss limit of $500 every two hours. CEO Dan Lee gauges the probability of its repeal at less than 50-50. Lee notes that there are casino operators lobbying against the bill, as it includes a limit on casino licenses in the state. I imagine Isle of Capri
Baton Rouge. Lee said "there's a pretty good shot" at winning approval in East Baton Rouge, but if that doesn't happen, there are three other parishes in Baton Rouge the company could shoot for. Lee noted that if there's a 50-50 chance of winning approval in each of the four parishes, then the company has a 95% chance of passing in at least one of them.
Belterra. The company intends to spend $45 million on a third hotel tower. However, the company notes that a bill passed in the Indiana House of Representatives could allow for the opening of two racinos in Indianapolis with 2,500 slots each. Lee says that "one of them is closed and the other never existed, but there are two entities that have licenses to build race tracks in Indianapolis." Indianapolis is Belterra's third-biggest market, behind Cincinnati and Louisville; if the racinos are approved, the company may pass on building the third tower.
Boomtown Bossier City. The company said it will spend $20 million to touch up the hotel and insert an escalator barge between its three-deck gambling riverboat and the land-based facilities. Of the five riverboats in the Shreveport-Bossier City market, only two have escalators -- Harrah's Horseshoe Bossier City and the privately owned Eldorado Shreveport. Dan Lee says that, if not for Indians operating in Oklahoma and competing for business from Texas, the company would be building another hotel tower in the market.
Take a gamble on further Foolishness:
- Pinnacle: The Battle for Baton Rouge
- Competition Pinches Pinnacle
- Pinnacle Turns On AC
- The Casinos of Southern Indiana: Part II
- Harrah's Still Can't Beat Ameristar