{"id":5798,"date":"2011-02-17T17:28:20","date_gmt":"2011-02-18T01:28:20","guid":{"rendered":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/?p=5798"},"modified":"2022-12-21T06:42:47","modified_gmt":"2022-12-21T14:42:47","slug":"dan-lees-revenge-comeuppance-for-penn-in-louisiana","status":"publish","type":"post","link":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/dan-lees-revenge-comeuppance-for-penn-in-louisiana\/","title":{"rendered":"Dan Lee’s revenge & comeuppance for Penn in Louisiana"},"content":{"rendered":"

While the casino industry suffers no shortage of big egos, Penn National Gaming<\/strong> CEO Peter Carlino<\/strong> zooms past that, heading full speed toward arrogance. When not trying to use the political process to sandbag its competitors, Penn occasionally builds casinos. (It will be interesting to see if Penn tries this Big Man on Campus act in Nevada<\/strong> once its M Resort<\/strong> [left<\/em>] takeover is finalized.)<\/p>\n

Not long ago, it was reported that, while Louisiana<\/strong> regulators where still pondering which company to grace with the state’s final riverboat license, Penn’s backhoes were doing “preliminary site work<\/a>” in New Orleans<\/strong>. Whether or not this act of presumption backfired on Penn (as similar highhandedness did in Kansas<\/strong>), it experienced a valuable “teaching moment” this morning: Get the license first, then<\/em> dig. ‘Cause when the gavel fell and the 15th license Pelican State was awarded, it went to Dan Lee<\/strong>‘s upstart Creative Casinos<\/strong>, not to Penn<\/a>. The vote was unanimous and the size of Lee’s proposed investment — larger than the two losing projects, combined — proved to be the deciding factor. Perceived casino saturation in the Crescent City was another major consideration.<\/p>\n

\"\"As J.P. Morgan<\/strong> analyst Joseph Greff<\/strong> points out, Lee (left<\/em>) still has to scrape together the $400 million budget and get voter approval (the latter will surely be easier). If all goes according to plan, Lee’s “Mojito Pointe<\/strong>” (how’s that for a linguistically scrambled idiom?) will enter into direct competition in the Lake Charles<\/strong> market with Pinnacle Entertainment<\/strong>‘s L’Auberge du Lac<\/strong>. Since the latter represents a plurality of Pinnacle’s revenue (37%), Lee has a chance to inflict revenge on Pinnacle, which ousted him as CEO after he browbeat a Missouri<\/strong> public official in a shocking public meltdown<\/a>.<\/p>\n

Said incident, along with some recklessly extravagant fiscal policies that included a gargantuan waste of money on an abortive Atlantic City<\/strong> resort, suggested that early success at Pinnacle had gone to Lee’s head, like too much wine before dinner. He’d been brought in to clean house there and had several good innings before he tried to grow the company too much too soon … and in the teeth of a recessionary economy. He’s got a chance to clean the slate and hopefully has learned from old mistakes like doubling down on St. Louis<\/strong>, where Pinnacle’s River City<\/strong> is cannibalizing its ritzier sister property<\/a>, Lumiere Place<\/strong>. Just imagine if Lee had gotten his way and been given a third<\/em> Pinnacle casino in that struggling market. Gadzooks!<\/p>\n

\"\"One needn’t worry<\/strong> for Pinnacle now, argues Wells Fargo<\/strong> analyst Carlo Santarelli<\/strong>. “[T]he process<\/em>,” he writes, “will take considerably longer to get built given what we assume will be a slew of lawsuits and a need to raise financing, something we also believe will be difficult<\/em>.” Remember that Pinnacle once had its own ‘second front’ planned for Lake Charles, the now-defunct Sugarcane Bay<\/strong> project. The company accuses Lee of poaching his Mojito Pointe ideas from them and benefiting from access to its proprietary knowledge of the market, back in his Pinnacle days.<\/p>\n

Nor do we need<\/strong> to pass the hat for Penn. Carlino’s got plenty to keep himself busy, building two casinos in Ohio<\/strong>, finishing one in Kansas, absorbing M Resort and trying to leverage a pair of Texas<\/strong> racetracks into racinos. (A real long shot, that.) Losing in Louisiana isn’t going to be any skin off Penn’s nose. It also presented a brief buying opportunity in PNK stock: a Wall Street<\/strong> overreaction to the news caused a midday selloff of Pinnacle shares, which did a quick nosedive, then recovered. Given the unlikelihood of casino gambling in Texas and Lake Charles’ proximity to Houston<\/strong>, analysts are sanguine that the lake is big enough for Pinnacle and Creative alike. So everybody wins … except maybe Penn. And you thought only nice guys finished last.<\/p>\n","protected":false},"excerpt":{"rendered":"

While the casino industry suffers no shortage of big egos, Penn National Gaming CEO Peter Carlino zooms past that, heading full speed toward arrogance. When not trying to use the political process to sandbag its competitors, Penn occasionally builds casinos. … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[23,28,145,14,45,84,63,39,71,69,30,25,114,38],"tags":[],"_links":{"self":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/5798"}],"collection":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/comments?post=5798"}],"version-history":[{"count":3,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/5798\/revisions"}],"predecessor-version":[{"id":32083,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/5798\/revisions\/32083"}],"wp:attachment":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/media?parent=5798"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/categories?post=5798"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/tags?post=5798"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}