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Al Moe

Ameristar To Sell 8 Casinos to Pinnacle

By December 29, 2012

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Pinnacle entertainment plans to spend $2.8 billion to acquire Ameristar's eight casinos before the end of 2013. It's surprising, since Pinnacle is actually smaller than Ameristar (less than $1 billion in market cap), but deals like this are never over until the final papers are signed, and right now that's a long ways away.

Pinnacle anticipates revenues of about $1.2 billion this year and has successfully grown from the owner of Hollywood Park Turf Club in Inglewood, California (sold in the late 1990's) to a seven-property casino group with nearly 8,000 employees. Ameristar started as the owner of a single casino in Jackpot, Nevada (Cactus Pete's), and has taken a similar route to success.

Over the years Ameristar has acquired casinos, but had the most success when building their own properties. They are headquartered in Paradise, Nevada and have two properties in Jackpot, Nevada (Cactus Pete's and Horseshu) as well as another six in the Midwest: Council Bluffs, Iowa - East Chicago, Indiana - Vicksburg, Mississippi, Black Hawk, Colorado - Vicksburg and St. Charles, Missouri - and a property under construction in Lake Charles, Louisiana.

Pinnacle anticipates a cost savings by consolidating HR and management divisions for several properties in close proximity to each other. Any savings can be a plus for players, and it is likely that if the deal is finalized, the player's club and complimentary programs for each casino will be merged. Currently, MGM and Ameristar are sharing their reward club information with each other to allow advanced marketing for each company. How that relationship would continue if MGM does not become a player in this acquisition remains to be seen.

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