Pinnacle closes racetrack deal; faces new Louisiana competition

Las Vegas-based Pinnacle Entertainment closed its $45 million purchase of a racetrack in southeast Cincinnati last week.
 
The regional casino operator s hopeful Ohio will eventually authorize slot machines at racetracks, which would allow Pinnacle to build out a casino at the facility.
 
“(The) location is expected to complement our existing Belterra Casino Resort, less than one hour away (in Northern Indiana),” Pinnacle Chief Executive Officer Anthony Sanfilippo said in a statement.
 
While the company has shorn up business in the Midwest, the company’s flagship casino in Lake Charles, La., is facing new additional competition.
 
The Coushatta Casino Resort in Kinder, La., located about 35 miles north of Lake Charles, began construction of a $60 million hotel tower that will give the property 950 rooms by next year. The casino has 2,800 slot machines and 70 table games.
 
Operated by the Coushatta Indian Tribe, the casino is looking to compete with L’Auberge du Lac, Pinnacle’s 1,000-room hotel-casino in Lake Charles, which accounts for more than one-third of the company’s annual cash flow.
 
L’Auberge relies on the Houston market, about two hours west, for the bulk of its customer base. With Coushatta also hoping to tap into the Houston customer base, analysts believe Pinnacle could see a negative impact on the company’s earnings.
 
Pinnacle is facing additional challenges in Louisiana. The company returned a gaming license to the state when it cancelled construction of a second hotel-casino in Lake Charles next to L’Auberge.
 
The state is expected to award the license to one of three companies, two of whom plan to keep the license in Lake Charles. Penn National Gaming told state regulators it would take the license to New Orleans and build a casino that would compete with Pinnacle’s Boomtown New Orleans.