By Alan Sayre, AP Writer
January 16, 2006
Casino operator Pinnacle Entertainment Inc. will construct a 200-room hotel at its Boomtown riverboat casino in the suburb of Harvey, the company said Friday.
It will be the first hotel built for a New Orleans-area dockside gambling facility. The plans follow a sharp increase in customers for the riverboat, which lost competition and increased its winnings after Hurricane Katrina shut down several gambling venues in Louisiana and Mississippi.
Las Vegas-based Pinnacle also plans to add another 250 hotel rooms to its L'Auberge du Lac casino resort in Lake Charles, giving that riverboat a total of 1,000 hotel rooms.
The projects will be financed with an offering of 6 million newly issued shares of Pinnacle common stock, the company said. Work is expected to begin on both later this year with completion in 2007, Pinnacle said in a statement.
Although hotels are a standard for gambling boats in the Texas-oriented markets of Lake Charles and Shreveport-Bossier City in western Louisiana, only the now-defunct Flamingo in New Orleans had immediate adjoining hotel space-the Hilton on the Mississippi River, which was present long before the boat.
Harrah's Entertainment Inc. is building a hotel for its downtown New Orleans land casino, which is to re-open in February after being closed for Hurricane Katrina. Boomtown also competes in the market with the Treasure Chest Casino in Kenner and the Belle of Orleans in New Orleans. The Belle has been closed since Katrina hit.
Pinnacle officials declined additional comment until the stock offering is completed.
Since its opening last May, L'Auberge du Lac has been a hit with gamblers. In November, the latest month for which figures are available, the casino took in $26.9 million-far and away the largest tally among the state-licensed casinos.
With two of its New Orleans-area competitors closed and the Mississippi Gulf Coast casino market closed except for one gambling hall, the Harvey casino has seen a sharp increase in its winnings. In July, the last full month before Katrina hit, Boomtown won $11.3 million. In November, that figure totaled $21.7 million.
Pinnacle also said it would use the stock offering to add 250 hotel rooms at its Belterra Casino Resort in Belterra, Ind., giving that casino 850 rooms sometime in 2007. The company also said proceeds could be used to fund a portion of the construction of two casino developments in the St. Louis area that are awaiting regulatory approval in Missouri.
In Louisiana, Pinnacle also owns the Boomtown in Bossier City. It previously operated a casino in Biloxi, Miss. that was heavily damaged by Katrina.
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