A $50 million cut in Pinnacle Entertainment Inc.'s investment in the company's second riverboat casino-hotel project in Lake Charles was approved Tuesday by state gambling regulators.
Without objection, the Louisiana Gaming Control Board agreed to allow Pinnacle to spend a minimum of $300 million _ down from the original $350 million on the Sugarcane Bay project, which is being built next to Pinnacle's L'Auberge Du Lac riverboat casino-hotel.
Las Vegas-based Pinnacle also agreed to finish the project by the end of June 2011, although company officials said it was possible that gambling could begin earlier.
Cliff Kortman, Pinnacle's executive vice president for development, said the redesign consisted mostly of configuring the new 400-room hotel so it can share some functions with the existing 1,000-room hotel, such as a check-in area. The reconfigured hotel also will have less restaurant and retail space than previously planned.
Without substantially changing the project, Pinnacle can increase its rate of return on its investment during financially difficult times, company officials said.
"What we think we are bringing you is a stronger project than before," said Jack Godfrey, the company's general counsel.
L'Auberge Du Lac has been a major success for Pinnacle, typically drawing in more winnings from gamblers than any of Louisiana's other 12 riverboat casinos. Although the hotel is nearly filled every weekend, there has been a noticeable drop in weekday business during the economic downturn, Kortman said.
"People are tightening their belts and not coming as often," Kortman said.
Pinnacle competes in the Lake Charles market, an attraction to Texas gamblers, with two riverboat casinos operated by Isle of Capri Casinos Inc., the Delta Downs track casino and a popular Indian reservation casino in nearby Kinder.
The company also is planning to add a third riverboat casino in Baton Rouge. Besides L'Auberge Du Lac, Pinnacle owns the Boomtown casinos in the New Orleans suburb of Harvey and in Bossier City.