Delta Downs Legislation Draws Casino Company's Ire

by Hector San Miguel

Pinnacle Entertainment officials alleges legislation to provide more aisle space for the gaming parlor at the Delta Downs in Vinton, La., is actually an effort to expand the casino at the racetrack owned and operated by Boyd Gaming.

The bill, which is said to be a simple safety measure, has already passed the Louisiana Senate. It was approved May 22 by a House committee and now goes to the House floor.

The bill, sponsored by Sen. James David Cain would give Delta Downs the authority to increase aisle space between slot machines from 36 inches to 42 inches. The aisles are considered emergency evacuation routes not included in the 15,000 square feet of gaming space allowed in the slots parlor. The racino would lose gaming space if it tried to widen its aisles without the legislation.

Officials with Pinnacle Entertainment, which wants to build a $325-million casino resort in nearby Lake Charles, are outraged about the bill because they claim it would give Delta Downs an unfair advantage in the marketplace. They claim Delta Downs will use the additional space to add more slot machines to the 1,500 machines now in place.

As a result, Pinnacle officials said they are giving second thoughts to their plans to build the resort. The Louisiana Gaming Control Board recently gave its approval to Pinnacle's construction contracts. The company wants to break ground in June but is waiting for a permit from the Army Corps of Engineers.

Pinnacle president Dan Lee said the legislation is "scary, and we will have to take a serious look at it. We have to ask ourselves if this is a jurisdiction in which we can operate."

Lee said the early riverboat casinos in Lake Charles were able to recoup their investments in a couple of years, but Pinnacle is going to invest $325 million. No other casinos will have spent as much, so it will take longer to pay off the debt, he said.

Delta Downs, located less than 10 miles from the Texas border, has been a top cash generator for Boyd Gaming of Las Vegas. It has negatively impacted business at four riverboat casinos in Lake Charles. Lee said he wonders what might be next with so many changes in the gaming laws in Louisiana.

Wade Hundley, Pinnacle's chief operating officer, testified May 22 against the Cain bill in the House committee. He told legislators the bill changes the level playing field and gives Delta Downs a competitive advantage while riverboats have to operate in their current space limitations.

"If the aisles are cramped at Delta Downs, it's their own doing," Hundley said. "They have crammed machines into every nook and cranny."

Hundley said a riverboat casino has 30,000 square feet of gaming space and about 2,000 gaming positions. A racetrack half that size has 1,600 gaming positions, he said.

"There is something odd in that double standard," Hundley said. "This allows tracks to be as large as they want to be. They have no limits on their buildings. It's a daunting position for us."

Hundley said the legislature should set a maximum number of machines for riverboats and racetracks.

Billy Rimes, a lobbyist for Pinnacle, said the Cain bill was sold as a safety measure in the Senate, and an amendment by Rep. Ernest Wooton would give riverboats the same safety opportunity. Wooton's amendment was rejected by a 6-1 vote.

Tom McPherson, vice president of governmental affairs for Boyd Gaming, said there would no additional slot machines would be installed if the Cain bill passes. He said after the meeting his company has no problem giving riverboats authority for wider aisles, but the Cain legislation isn't the way to do it.