Making the News

St. Louis Post-Dispatch

Originally Published:Tuesday, December 18, 2007

But considering the increasing competitiveness of the St. Louis market, it may not have been a coincidence, said Joseph Weinert, senior vice president of gambling industry consulting firm Spectrum Gaming Group.



"I'll tell you Harrah's is not shy about pumping capital into its casinos," Weinert said. "I would imagine Harrah's is saying, 'Hey, don't forget about us.'"

Pinnacle casino set to open

By Tim Barker
St. Louis Post-Dispatch

Call it the Dean Mason tug-of-war. It starts Wednesday night when the Lumière Place casino opens in downtown St. Louis.

The Effingham resident is what you might call the cream of the crop among casino customers in a market that generated nearly $1 billion in revenue last year. He and his wife are avid gamblers, spending as many as five days a month at St. Louis-area casinos. They wager enough to routinely qualify for free hotel rooms and other niceties at both the Casino Queen in East St. Louis and Harrah's in Maryland Heights.

They're eager to see Pinnacle Entertainment's $507 million casino up close. But they're not ready for a long-term commitment just yet. Not when they consider the relationship they've already built with Harrah's and the Queen.

"If we spent enough there to get good treatment, we'd have to pull away from one of those other two," Mason said. "I guess in our first three to four visits, we'll have to make that decision."

And so it goes every time a casino enters a market. Droves of casino patrons will flock to the new property to see what it has to offer and whether it's worth returning to.

The same thing happened in August when the Casino Queen debuted its $92 million boat-in-a-moat casino, replacing the company's old riverboat on the Mississippi River.

That month, the Queen's attendance soared more than 50 percent over August 2006 — gaining more than 100,000 new customers. It raked in nearly 30 percent more in gambling revenue. By November, that attendance gain had slipped to 30 percent, while revenue was up 26 percent.

"I would expect they'll go through the same thing," said Tom Monaghan, general manager of the Queen, which sits just across the river from Lumière. "January will be huge for them."

Pinnacle's new casino, however, needs quite a bit more than the 100,000-customer boost enjoyed by the Queen in August.

Industry observers suggest Pinnacle needs to perform on par with Harrah's and Ameristar in St. Charles, each of which reported attendance of more than 300,000 and revenue above $23 million in November.

That means stealing market share from the other casinos won't be enough, said Don Phares, professor emeritus of economics and public policy at the University of Missouri-St. Louis.

"I'm sure it will take some," Phares said. "But not enough to support Lumière by any means."

If not from other casinos, where will those customers come from?

"We really hope to be able to grow the market," said Todd George, general manager of Lumière Place.

He said the company is positioning itself to tackle niches that aren't as aggressively pursued by other casinos in the area. Among them, Lumière will go after conventioneers and other folks from out of town.

It's a job that will be made easier early next year when the company completes an underground tunnel offering easy access to the casino from America's Center and the Edward Jones Dome.

But there is at least one treasured segment the company won't be able to chase — the so-called high rollers who are willing to wager thousands of dollars at a time.

Missouri law limits to $500 the amount of chips a person can buy during a two-hour gambling session.

"Unfortunately, you really can't target the higher-end market with the loss limits," George said.

As long as those limits are in place, the company has said it won't be able to spend the money needed to bring in heavy-betting patrons from out of state. Yet that doesn't mean the casino won't be targeting the higher end of the St. Louis market, as demonstrated by the luxury 200-room Four Seasons hotel that will open early next year as part of the project.

Still, Pinnacle does need its share of local gamblers such as Charlie Buchholz, a real estate appraiser in Fenton. Buchholz is more of a casual gambler, who has a couple of outings each month but never worries about bumping up against those loss limits.

"That doesn't affect me," Buchholz said. "I've never lost that much or won that much."

Like many other gamblers in the area, he's eager to see what Pinnacle built for half a billion dollars. And while some point to the downtown location as a potential negative, he doesn't see it that way.

"I go downtown for other stuff, so it doesn't bother me," he said. "I'm sure everybody's going to go out and check it out."

What they find when they get there will be critical to the future of the casino, said William Thompson, a public-policy professor at the University of Nevada-Las Vegas and the author of several books on the gambling business. There are two factors, he said, that will decide whether gamblers want to return.

"You want the place that's going to be convenient and where you feel good about parking," Thompson said.

At the same time, the region's other casinos aren't exactly sitting idle while Pinnacle grabs the spotlight.

Along with the summer's opening of the new Casino Queen, both Harrah's and Ameristar are trotting out new offerings.

Ameristar is adding a 400-room hotel as part of a $265 million expansion. The hotel was supposed to open this month, but the company said recently that it has been delayed with a new timetable not yet announced.

During Christmas week, however, the company is debuting a 17,500-square-foot nightclub, Home St. Louis — inspired by a similarly named New York hot spot. The five-day grand opening will feature a variety of celebrities, including Wilmer Valderrama, Jaime Pressly and Kim Kardashian.

Harrah's, meanwhile, is launching its mega Eat Up! buffet, a $17 million affair that stretches the length of a football field and features seven distinct themes, including Italian, Asian and Churrascaria, a Brazilian steakhouse. The buffet opens Thursday, but there is an invitation-only preview the night before, which happens to be the same day Lumière Place is opening.

Harrah's spokesman Andrew Grieve downplayed the significance of the competing events.

"For us, it was just a matter of wanting to get it up in advance of the holidays," Grieve said. "That's just how the days fell."

But considering the increasing competitiveness of the St. Louis market, it may not have been a coincidence, said Joseph Weinert, senior vice president of gambling industry consulting firm Spectrum Gaming Group.

"I'll tell you Harrah's is not shy about pumping capital into its casinos," Weinert said. "I would imagine Harrah's is saying, 'Hey, don't forget about us.'"

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