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The opening of Las Vegas-based Pinnacle Entertainment's $365 million resort in Lake Charles, La., fueled the state's casino revenues to a 11.4 percent increase, figures released Tuesday by Louisiana authorities show.
L'Auberge du Lac, which opened in late May, reported $20.4 million in gaming revenue for June, its first full month of operation. Louisiana casinos reported gaming revenue of $196.1 million in June.
For the second quarter, which includes brief results from May, the property generated $29.4 million in gaming revenue, well above one gaming analyst's estimate.
"While revenue trends are very strong, we would caution investors that margins could be soft until the property builds market share," Deutsche Bank gaming analyst Marc Falcone said in a note to investors. "Similar to other recent property openings (Borgata in Atlantic City), it typically takes time and money to build up a database and the slot business."
L'Auberge du Lac, which sits on a 227-acre site, has 750 hotel rooms, a 30,000-square-foot floating casino, restaurants and an 18-hole golf course.
The new casino was expected to draw customers from the heavily populated Houston market, which is about a two-hour drive along Interstate 10.
The earnings during the month gave Pinnacle more than 36 percent of the Lake Charles gaming market, outpacing Boyd Gaming's Delta Downs racetrack and riverboats operated by Isle of Capri and Harrah's.
Falcone said Harrah's and Isle of Capri were negatively affected by L'Auberge du Lac.
"In addition, Pinnacle Lake Charles appears to be stealing (customer) share from the Coushatta Native American casino in nearby Kinder, as the property is down an estimated 20 percent to 30 percent," Falcone said.
Pinnacle also helped drive up casino revenues in New Orleans, where Boomtown had a 14.3 percent year-over-year increase in gaming revenue to $10.1 million.
Pinnacle Entertainment shares rose 28 cents, or 1.33 percent, Tuesday to close at $21.39 on the New York Stock Exchange.
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