Regulators reject Pinnacle's riverboat substitution plan

Aug 31, 2009 7:15 PM
by Ray Poirier | Dan Lee, chairman and CEO of Pinnacle Entertainment Inc., has played a major role in enriching the tax coffers of the State of Missouri, by building the elegant Lumiere Place on the Mississippi River in St. Louis.

The chic new casino and five-star hotel has made the city more attractive for conventions, according to St. Louis officials.

In so doing, however, Pinnacle’s nearby facility, the President Casino on the old, decrepit Admiral riverboat, has seen its revenues decline. So, Pinnacle went to the gaming regulators with a plan to replace the President with a new, more attractive riverboat barge.

All we ask, said Pinnacle lawyers, is the transfer of the gaming license from the old riverboat to the new.

No way, said the gaming commission. You can’t just replace one boat with another, they said. Pinnacle will have to apply for a new license.

And there is the problem. Missouri has capped the number of gaming licenses at 13, the current number. If Pinnacle were forced to give up its license for the President Casino, in order to apply for another license, there are at least two other groups in the state that plan casino developments but have been waiting for a license to become available.

Las Vegas lawyer Jack Godfrey, who represents Pinnacle Entertainment, remarked, "We are disappointed with the commission’s decision. We don’t believe that it’s supported by the law, and we’ll now have to just consider whatever legal remedies we might have."

It was the commission’s staff that doomed the Pinnacle plan. They argued that it didn’t make sense to allow two casinos to be so close together, especially after the total number of operating licenses was capped.