Pinnacle Entertainment finds itself in an interesting pickle today: It’s 
awfully far into its Federal Trade Commission-blocked purchase of Ameristar Casinos to blow it up by, say, selling three or more Ameristar properties or otherwise triggering a fallout. And if it tries to fight the FTC, it could easily overrun the deadline for cutting the deal, incurring a breakup fee. So Pinnacle finds itself between a rock and a hard place.
This morning, J.P. Morgan‘s Joseph Greff had some interesting thoughts on the PNK predicament, tacitly putting a “buy” recommendation on the stock. Federal intervention “will not prove to be a deal-breaker,” he predicts, adding that investors anticipated a casino divestiture in St. Louis. “[C]oncerns existed that this would be forced by the Missouri gaming regulators with three properties in that market … Of the two markets, clearly the Lake Charles news was the surprise given that it was a PNK-owned project years ago as the proposed Sugar Cane Bay.”
Greff estimates that Ameristar has spent $217 million on the former Mojito Pointe. However, like Lumiere Place in Missouri, it comes with the state’s last gaming license, a not-invaluable commodity. Therefore, Greff projects that Pinnacle CEO Anthony Sanfilippo will be able to get $242 million for the unfinished Louisiana project (which will ease the sting of an anticipated 15% drop in gambling revenue at L’Auberge du Lac, above) and another $306 million for Lumiere Place. The latter price is far less in both dollars and cash flow (3X) than Caesars Entertainment was able to extract from Penn National Gaming for Harrah’s Maryland Heights — and downright humiliating for what was supposed to be a trophy property. But Sanfilippo’s not exactly holding aces at the moment.
It’s World Series of Poker time, which means you can expect a tribute to CityCenter CEO Bobby Baldwin in our local papers, a seemingly annual ritual. Thankfully, Baldwin’s MGM Resorts International superiors aren’t taking his sniffy attitude toward Internet poker. If only they’d been less quick to trust his oversight regarding the Harmon Hotel and Vdara Death Ray, Baldwin’s signature Vegas achievements.
“Cotai Strip Cotaiticketing”?!?!? That’s the latest clunky bit of nomenclature to get ixnayed by Macao courts, as trademark-crazed Sands China functionaries run around, trying to rubber-stamp anything they can imagine. Melco Crown Entertainment is having a good week, continuing to play racketball with Sheldon Adelson‘s ass.
