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Beltarra Expansion Could Result In Losses

21 August 2002

VEVAY, Indiana -- Belterra Casino and Resort has maintained a near 100 percent occupancy in its 308-room hotel, but if attendance declines, the resort could lose money on a new $30 million hotel tower, an analyst says.

Belterra agreed to build the tower as part of a settlement agreement reached June 29 with the Indiana Gaming Commission following complaints that the casino arranged for prostitutes to entertain wealthy gamblers.

Belterra's existing 14-story hotel is nearly full all week and is sold out most weekends. If the new hotel tower draws guests at the same pace, it likely will earn money.

But analysts fear that if attendance declines at the casino resort about 40 miles west of Cincinnati, one of the state's biggest attractions and revenue generators could lose money.

"On one hand, a successful casino can always use more guest rooms," said Jacques Cornet, a New York-based equity analyst who follows Belterra's parent, California-based Pinnacle Entertainment Inc.

"But they have already invested $225 million in the area, and while they're doing very well, they haven't seen a return on that investment yet," Cornet said. "So having them build a new hotel there certainly creates some uncertainty for the company."

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