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Louisiana gaming authorities on Thursday awarded the state's final gaming license to Creative Casinos, a Las Vegas-based company headed by Dan Lee, who plans to build Mojito Pointe, a $400 million hotel-casino in Lake Charles on land adjacent to Pinnacle's flagship L'Auberge du Lac resort.
Lee, a former executive with Steve Wynn's Mirage Resorts who built Pinnacle into a regional gaming powerhouse, won the license over competing bids from Penn National Gaming, which wanted to bring the gaming license to New Orleans, and a Louisiana developer, who proposed a Hard Rock Hotel and Casino in Lake Charles.
The commission's decision means Lee can take his project to Lake Charles voters for their approval.
"We're going to build a beautiful resort for that property," Lee told the Associated Press after the hearing. "It'll be a great asset for the state. Now, the real work begins."
Analysts believe it will be two years or more before the development could open.
"Most investors had speculated that the license would go to Penn National because of the certainty of completion given Penn's balance sheet," said Merriman Capital gaming analyst Adam Steinberg. "We had thought the Lake Charles bids were better in the long-run for Louisiana as that market is underpenetrated and would grow the Louisiana economy because most of the customers come from Texas."
Pinnacle, a regional casino operator based in Las Vegas, returned the gaming license to Louisiana last year when it canceled the Sugarcane Bay casino project on the site.
Lee left Pinnacle in November 2009. He was the primary driver behind the regional casino operator's growth into St. Louis and other markets. Pinnacle is involved in litigation with Lee over the land rights for the proposed site.
Shares of Pinnacle closed down 23 cents, or 1.62 percent, on the New York Stock Exchange after the gaming panel's vote. The company was going to face competition regardless of where the licenses landed. In addition to Lake Charles, Pinnacle operates Louisiana casinos in New Orleans, Bossier City and is building a hotel-casino in Baton Rouge.
The Lake Charles market is well underserved," said Morgan Joseph gaming analyst Justin Sebastiano. "Moreover, Mojito Pointe likely won't open until early 2014. In that time, we believe Pinnacle will have created a well-oiled, player-loyalty program that should make L'Auberge du Lac an even more daunting competitor."
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