Pinnacle: First the good news …; Cuomo strikes again

Pinnacle Entertainment has lined up $2.9 billion in financing for its takeover of Ameristar Casinos. (Wouldn’t it have been awkward if Wall Street had said, “No thanks”?) In case you’re wondering, the deal values Ameristar at 8X cash flow, a nice premium for a company that’s rooted in secondary and tertiary markets. Assets sales to placate either the Federal Trade Commission or the State of Missouri shouldn’t change that valuation, since it’s Pinnacle’s own Lumiere Place (above) and an unfinished Ameristar casino that are likeliest to go onto the auction block — with Pinnacle in a very poor bargaining position right now.

(Oddly, Forbes has chosen this nodal moment to run a piece on the short-lived tenure of John Boushy as CEO of Ameristar. Boushy’s Harrah’s Entertainment-derived methods and the Ameristar corporate culture reportedly clashed and out he went.)

The not-so-good news is that Pinnacle is likely to miss its late-summer deadline for consummating the Ameristar deal and not conclude it until sometime in 2014 — which raises the question of whether the particulars of the agreement will be renegotiated or not. Will Pinnacle have to fork over a fee — or try to dicker for a lower price? It’s pretty much taken as gospel that Lumiere Place, in St. Louis, is a goner. The bigger question is whether to spend $340 million on Ameristar’s Mojito Pointe project, on Lake Charles, downsize it or maybe sell it altogether. MGM Resorts International and newly expansive Churchill Downs Inc. — whose reach now extends into Maine — are mooted as potential buyers for Mojito Pointe, giving either a direct pipeline to the Houston market. However, with a stranglehold on Lake Charles, Pinnacle CEO Anthony Sanfilippo (above) will undoubtedly fight tooth and nail to keep it.

This just in … Chalk up another win for New York State Gov. Andrew Cuomo (D), who continues to bring recalcitrant tribal casinos into the fold. His office has just come to terms with the Seneca Nation of Indians in a longstanding brouhaha over tax payments. New York gets over a half-billion dollars in back taxes; the Senecas’ three upstate casinos (including one in Buffalo) will be shielded from nearby competition and possibly able to extent their reach to Rochester.. Cuomo cut similar deals with the St. Regis Mohawks and the Oneida tribe, but the dollar figures in those accords are dwarfed by today’s pact. Three nearby racinos will also have to remove VLTs, to diminish their competition with the Senecas. Cuomo had called their addition of electronic table games “a legitimate bone of contention” for the tribe. The three offending tracks will also be excluded from expansion to full-casino status. So the Senecas may be writing out a big check today, but they’re the winners in the long run.