Pinnacle turns focus to CEO search
Now that regional casino operator Pinnacle Entertainment has cleared up its Missouri issues, the company can concentrate on finding a permanent chief executive.
In a week’s time, Las Vegas-based Pinnacle opened a $380 million glimmering suburban St. Louis casino and struck a deal to close an older downtown riverboat.
Shareholders, who have seen Pinnacle’s stock price fall 37 percent in the past 52 weeks, want stability.
Pinnacle has been run by interim Chief Executive Officer John Giovenco since Nov. 9, when Dan Lee resigned after a public dispute with a St. Louis elected official.
In the following five months, the company scaled back a Louisiana casino, killed a planned $3 billion Atlantic City project, reduced corporate expenses by millions, and took care of St. Louis.
MorganJoseph gaming analyst Justin Sebastiano said shutting down the President Casino, an aging property Pinnacle acquired out of bankruptcy for $46 million in 2006, was a no-brainer. The boat was bought to protect a nearby $407 million investment.
“This defensive measure prevented other casino operators from operating a casino that literally would be a stone’s throw away from Lumiere Place,” he said.
The President generated modest cash flow. But the opening of Lumiere crushed the casino’s results.
Striking an agreement with gaming officials to close the casino by July and surrender the license means it could be 18 months before Lumiere Place has neighboring competition, if ever.
Sebastiano said groups from Kansas City and northern St. Louis County might petition Missouri gaming regulators for the license.
“This time line is predicated on credit markets being cooperative,” he said.
Meanwhile, Pinnacle can focus on its CEO search. Sources said a choice is near.
An early flirtation with former Las Vegas Sands Corp. President Bill Weidner appears over. Some pointed toward a former Harrah’s Entertainment executive with regional market experience.
Giovenco, the former president of Hilton Gaming, wants the job full time. His selection may not appease jittery stockholders.
Macquarie Securities gaming analyst Joel Simkins provided insight into Japan-based slot machine manufacturer Konami Gaming, now a key player in the gaming equipment business that could rival American companies in key markets.
“Konami anticipates that jurisdictional expansion on both a domestic and international basis should create a number of systems opportunities,” Simkins said.
Konami executives said three Canadian provinces are seeking systems deals this year.
Howard Stutz’s Inside Gaming column appears Sundays. He can be reached at hstutz@reviewjournal.com or 702-477-3871. He blogs at lvrj.com/blogs/stutz.