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Howard Stutz

Gaming industry escapes wrath of Hurricane Ike

16 September 2008

TEXAS AND LOUISIANA -- Hurricane Ike caused some structural damage at Pinnacle Entertainment's L'Auberge du Lac casino in Lake Charles, La., but the gaming industry emerged relatively unscathed from the massive storm.

Las Vegas-based Pinnacle said Monday it shut down the gaming operations at L'Auberge early Saturday when the hurricane, which made landfall over the Gulf Coast area of Texas, arrived over western Louisiana.

Lake Charles is roughly 150 miles east of Houston, which received the brunt of Hurricane Ike. Isle of Capri, which also operates a casino in Lake Charles, closed its gaming operation ahead of the storm. Boyd Gaming Corp. shut down its Delta Downs race track and casino, which is located in Vinton, La., about 20 miles from the Texas-Louisiana border.

Casinos to the east in New Orleans and the Mississippi Gulf Coast were unaffected by the storm.

In a statement, Pinnacle said the storm surge caused structural damage to some of the entrance and exit ramps between L'Auberge's hotel and floating casino. Pinnacle expects to reopen the casino later this week, once structural engineers and marine experts inspect and repair the ramps.

The company said neither the casino itself, nor the hotel, were damaged.

Deutsche Bank gaming analyst Bill Lerner said the damage shouldn't be enough for Pinnacle to receive business interruption insurance.

"The damage was not significant and unlikely to exceed the deductible for property damage and business insurance combined," Lerner told investors.

At Delta Downs, high winds and water caused some minor damage, Boyd Gaming spokesman Rob Stillwell said. He added that the company hoped the facility will reopen by the end of the week.

As the storm moved north, high winds caused Pinnacle's Belterra casino in Indiana to lose power on Sunday. The property remained open on generator power while local utilities worked to restore power to the area.