PNK: UPDATE FROM LAS VEGAS

Here are our company notes from our Las Vegas trip last week

 


RiverCity will have 2,100 slots, 300 of which are retrofitted IGT machines.  The breakout of the remaining 1,800 is as follows: 20% IGT, 31/32% WMS, low 20’s% share for BYI (mostly spinning reel)

 

 

Missouri and the President:

  • Cannot move, replace, or repair the Admiral President in downtown St. Louis. The governor hates the executive director of casinos and the executive favors another casino since he won't get his job renewed
  • They can probably put a floating device under the boat which the gaming commission doesn't need to approve

 

 

Lumiere Place (LP) continues to ramp:

  • Loss limit removal impact difficult to estimate
  • Four seasons is making money now. ADR is around $180. There is very little booking visibility

 

 

River City:

  • 15-20% of the LP customers are coming from River City markets. They hope to make that up by expanding and picking up extra visitation per month from people living closer
  • Casino utilization is worst on game days at LP because players hate the traffic - can deflect to River City
  • The target return is 15% on both LP and River City combined but they would be satisfied at 12%. They think they can hit 120mm EBITDA for both Missouri properties on 900mm

 

 

Louisiana:

  • New Orleans - closest (10-15 min drive) customers have been the weakest because of the traffic
  • Bossier is doing well
  • L'Auberge resumed marketing to slot customers. BP's oil discovery in the region should be a big benefit for New Orleans/Texas economy.  September was ok although there was a weak September comp because they were closed for 9 days last year

 

 

Sugarcane:

  • Haven't started construction. They will start foundation work in 4Q09 - costs $16mm and will take 4-5 months. They are waiting to extend second tranche before ordering steel.  All the bond deal participants had to preliminarily agree on extending in the second tranche. It seems like they can get up to 7x for new construction and 6x for borrowings at L+450
  • Sugarcane could open in the tail end of 2011
  • They believe they can pull out 60mm incremental EBITDA at Sugarcane Bay. 70% of Coushatta’s customers come from TX on weekends because PNK is full. They don't think there will be a lot of construction disruption

 

 

Baton Rouge:

  • A year behind Sugarcane Bay
  • They just got another extension from the gaming commission
  • If it’s only 12 months behind then they get tight. 18 months would be ideal, which would bring the opening back to 2013.

 

 

General comments:

  • Rated and unrated plays are equally weak across the properties
  • Spend per visit is the issue
  • Reno made money last month - and this month so far.
  • Texas shouldn’t pop back up in legislature until 2011.
  • Bid on Ohio racetrack – but it’s a low ball bid so they won't win.


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