Pinnacle to Grow, But No River Sale Comment

Pinnacle Entertainment won't say whether it has bought or will buy River Downs.

Pinnacle Entertainment Inc. reported a reduced net income loss for the third quarter and said it’s looking to expand into new markets while adhering to “disciplined capital-spend and return metrics.”

Pinnacle operates casinos in Indiana, Louisiana, Missouri, and Nevada. Its Indiana holding is Belterra, located adjacent the Ohio River across from Kentucky and not far from Cincinnati, Ohio.

Earlier in October sources told The Blood-Horse River Downs near Cincinnati had been sold to Pinnacle. At that time a company spokeswoman said officials wouldn’t comment on those reports, and during an Oct. 28 earnings teleconference, officials offered no confirmation.

“Could we comment? Yes,” Pinnacle president and chief executive officer Anthony Sanfilippo said. “Will we comment? No. But as we said before, we’re looking for (growth opportunities). Absolutely stay tuned. Our eighth property we’re opening in Baton Rouge (Louisiana) will not be our last property.”

In addressing the Belterra casino property, Sanfilippo said the facility would become more competitive when full-scale casinos and perhaps video lottery terminals at racetracks begin operating in neighboring Ohio. The casinos, including one in Cincinnati, are being built; racetrack VLTs have yet to move forward despite a 2009 directive by Gov. Ted Strickland.

River Downs is located east of Cincinnati on the Ohio River across from Kentucky. It would offer Pinnacle an Ohio presence, and one that would offer an opportunity for consolidation of some services with Belterra.

Las Vegas-based Pinnacle reported revenue of $287.79 million for the third quarter of 2010, up from $250.55 million for the same period in 2009. Net income loss for the quarter was $766,000, down from $21.9 million for the same three months last year.

“Company-wide, Pinnacle’s team members are fully committed to achieving operating excellence and, through constant analysis of our organization’s operating policies, our strategies to grow revenues and improve margins continue to evolve,” Sanfilippo said. “As a result, we are on track to achieve continued growth and are positioning Pinnacle to realize strong operating leverage from a recovery in consumer spending.

“With a continued focus on operating excellence initiatives that drive profitable revenue growth, growing free cash flow and a return-focused approach to expansion opportunities, Pinnacle is well-positioned to create new near- and long-term value for shareholders. We are exploring other opportunities to diversify Pinnacle’s operations by entering new markets while adhering to disciplined capital-spend and return metrics.”

Pinnacle has no racetrack holdings, though a few of its shareholders are said to have interests in horse racing.