Pinnacle CEO resigns amid probe of council meeting

AP News
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Posted: Nov 09, 2009 2:45 PM

Casino operator Pinnacle Entertainment Inc.'s CEO and chairman resigned Monday, less than a week after allegedly telling a St. Louis County Council member that voting in favor of another company's casino was the worst move of the council member's career.

Pinnacle said in a statement that Daniel R. Lee resigned "to pursue other business interests."

The company, which is based in Las Vegas, said Richard Goeglein will be interim chairman and John Giovenco interim CEO. Both are currently on its board. Pinnacle stock was trading at $9.16 a share Monday afternoon, up 44 cents, about 5 percent.

The Missouri State Highway Patrol, which performs investigations for the Missouri Gaming Commission, is looking into Lee's actions at a Tuesday St. Louis County Council meeting.

Pinnacle owns two casinos in downtown St. Louis, Lumiere Place and the President, and is developing a third, River City, in St. Louis County to open next year.

Lee allegedly asked County Council member Steve Stenger to vote against a zoning issue for a casino being developed by North County Development in the county. He allegedly became upset when Stenger voted in favor of it, approaching the council platform during the meeting and telling Stenger's assistant Stenger had made the worst move of his political career and that he wouldn't forget what Stenger had done.

"It's one thing to come in and ask for something," Stenger said Monday. "It's another to come in and pressure someone and then make threats when you don't get what you want."

Stenger, a Democrat, said Pinnacle has done a lot for his district of about 180,000 people in south St. Louis County and always had been "above board" in previous dealings. He said he looked forward to continuing work with Pinnacle.

Gene McNary, executive director of Missouri's Gaming Commission, said he didn't think the council incident was the reason for Lee's resignation but was "probably one of several factors" in Lee's decision.

Goeglein thanked Lee in a statement for leading Pinnacle's transition from a small casino company.

Pinnacle declined further comment on Lee's decision; a spokeswoman said she could not forward a request for comment to him.

The company said Goeglein held several executive positions with Holiday Corporation, and Giovenco has been both president and COO of both Sheraton Hotels Corp. and Hilton Gaming Corp.

The casino operator lost $21.9 million, or 37 cents per share, in its fiscal third quarter, which ended Sept. 30, compared with a loss of $11.8 million, or 20 cents per share, a year earlier. Revenue edged up 1 percent to $265.4 million.

Pinnacle imploded the Sands Casino Hotel in Atlantic City in October 2007 to make way for a new casino but put the project on hold when the economy soured.

Pinnacle also owns and operates casinos in Nevada, Louisiana, Indiana, Missouri and Argentina. In addition to the River City casino, Pinnacle is developing resorts in Lake Charles and Baton Rouge, La.