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Howard Stutz

L'Auberge du Lac Fuels Louisiana's Casino Numbers

18 August 2005

LOUISIANA – Without the nearly $20 million in gaming revenues contributed by Las Vegas-based Pinnacle Entertainment's new Louisiana resort during July, casinos in the Southern state would have collectively seen their monthly gaming figures decrease year-over-year.

One gaming analyst added that it was obvious the $365 million L'Auberge du Lac in Lake Charles, which opened at the end of May, is bringing new customers into the market.

L'Auberge du Lac reported $19.7 million in revenues during July, which contributed to the Louisiana's overall take of $217.7 million, an increase of 8.5 percent compared with $200.6 million from July 2004. However, without L'Auberge's numbers, the state's gaming revenues would have decreased 1.3 percent.

Pinnacle's new property, which sits on 227 acres and includes a 750-room hotel, a 30,000-square-foot floating casino, restaurants and an 18-hole golf course, had the state's third highest revenue total in July, trailing only Harrah's New Orleans, which reported revenue of $29.5 million, and the Horseshoe in Bossier City, which had revenues of $23.9 million.

Monthly state gaming revenues are tabulated by the Louisiana State Police, but are not broken out by tables games versus slot machines.

Pinnacle's $10 million marketing effort to attract customers to L'Auberge from the nearby Houston market seems to have paid off for Louisiana, CRT Capital Group gaming analyst Steven Ruggiero said. In June, the casino reported gaming revenues of $20.4 million.

"The company said on their recent conference call that their slot business had grown during the month," Ruggiero said. "They've also started to boost their high-end table game play. There is no doubt they have also brought new customers into the state. I'm really curious to see how the property will perform in August and September."

L'Auberge competes with two other casino operations in Lake Charles -- two riverboats operated by Isle of Capri and two riverboats operated by Harrah's. Three of the four riverboats had decreases in their year-over-year gaming revenues.

"Pinnacle has definitely cut into Isle of Capri and Harrah's because the company has a superior product," Ruggiero said.

Deutsche Bank gaming analyst Marc Falcone said L'Auberge's newness has not faded.

"Considering that early results benefited from incremental visitation from people checking out the facility, we would view continued solid win per day positively," Falcone said in an investors note. "While it is too early to extrapolate trends, we remain encouraged by the initial performance."

Pinnacle shares rose 6 cents, or 0.25 percent, Wednesday to close at $24.31.

Ruggiero said Delta Downs, a racetrack and casino in Vinton, about 25 miles west of Lake Charles and operated by Boyd Gaming Corp., also cut into Isle of Capri and Harrah's customer base. The recently remodeled racino grew its gaming revenues by 17.8 percent in July, reporting $14 million compared with $11.9 million a year ago.