Pinnacle at its peak after casino vote

February 12, 2008 6:12 AM
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Pinnacle Entertainment’s weekend victory in a Baton Rouge vote opens the door to a 550-acre development along the Mississippi River. Almost 57 percent of the voters backed Pinnacle’s proposal, a result that must have been particularly satisfying for Chairman Dan Lee.

Casino campaigns don’t get much more difficult than this one, as anti-Pinnacle interests launched wave after wave of attack ads. Las Vegas-based Pinnacle is now very involved on a number of fronts, what with expansions in St. Louis, elsewhere in Louisiana and, of course its Boardwalk project in Atlantic City.

Months of campaigning in East Baton Rouge Parrish saw millions spent on advertising by Pinnacle and the operators of the two existing "first generation riverboats" — the way Lee described them — do all they could to defeat the Pinnacle plan.

Lee hopes to have the $250 million first phase open two or three years from now with a golf course, expanded hotel offerings and residential components to follow.

Members of the Pinnacle team were saying in the wake of Saturday’s voting that they had never been involved in such a negative campaign.

"Kind of like guerilla warfare," is the way it was described by one of the Pinnacle insiders who said about $50,000 worth of pro-Pinnacle signs were recently trashed and campaign rhetoric often veered in unexpected directions that had nothing to do with what Baton Rouge — win or lose — could expect in terms of a casino product.

A Pinnacle sympathizer grumbled, "Every time we talked about the number of jobs that will be created and the new tax revenues we’ll generate, someone with the other side stands up and says, ”˜Yeah, but what about those hookers in Indiana?’"

Hard to believe anyone in a Louisiana audience can be shocked by an effort to put hookers and casinos in the same sentence. The reference was an attempt to get new mileage from a bit of old Pinnacle history that never had anything to do with Louisiana.

Pinnacle paid a $2.6 million fine levied by Indiana regulators in 2002 after a former senior executive flew in about a dozen women from California to service the interests of special guests attending a high-roller event at its Belterra casino. The trauma associated with the Indiana action resulted in changes at the top that brought in Lee.

Pinnacle bears little resemblance to the company it was then. Lee has aggressively engineered acquisition and development plans from Atlantic City to St. Louis and Las Vegas.

Now he’s ready to build in the Baton Rouge market.

Pinnacle’s plan dwarfs current investments there by Penn National and Columbia Sussex. Penn Chairman Peter Carlino protested that Pinnacle’s Baton Rouge scenario will do nothing except drive one of the three companies out of the market. Months ago he vowed total opposition to the proposal. Carlino argued the process of market normalization following Katrina will shrink its potential with one of the existing casinos probably being driven out of business.

Lee’s response: Why not let Baton Rouge voters decide?

Which is what they did.

Florida the next Vegas?

Efforts to reshape Florida’s gaming landscape will pick up momentum.

We can count on it. It’s just a matter of waiting to see where the noisy whirl of circumstances and special interests come together to create viable ventures.

Florida’s Seminoles now have Class III slots. So do the residents of Miami-Dade County. Neighboring Broward County has had them for a couple years.

Florida lawmakers will be faced with proposals for expanding gambling when they return to Tallahassee next month. Plans are taking shape to push for slots at 19 other parimutuel facilities elsewhere in the state and lowering the 50 percent tax rate to perhaps 35 percent, a change that would encourage investment and the chance to compete with Seminole casinos.

Former Caesars World chairman Clifford Perlman assessed the situation from his home in the Miami area and told me there is little doubt in his mind that expanded gambling will eventually take root there. It’s just a matter of time, he said, as lawmakers get accustomed to the money being generated by the new slots.