Geno Iafrate, executive vice president for Regional Operations, and Kerry Andersen, director of Media Relations and Public
Affairs, discussed the deal and Pinnacle’s plans when it is completed, with the
American Press: What prompted Pinnacle to purchase Ameristar?
Geno Iafrate:
Let’s start with Ameristar because I think a lot of the confusion that
occurred, a lot of the questions that are being generated
locally are primarily because of a lack of understanding of
Ameristar. Ameristar has no brand presence here or no recognition
here, and so for all intents and purposes, people think that
Ameristar is the 15th (gaming) license in Louisiana and the second
casino next to L’Auberge, right?
That’s not really the case. That’s a
part, a small part, of Ameristar. Ameristar is bigger than Pinnacle.
Ameristar has casino
operations in — they are based in Las Vegas, Nevada and they were
founded in Jackpot, Nevada, Craig Neilsen’s casino in Jackpot
is still there. They have a property in Blackhawk, Colorado. They
have property in Council Bluffs, Iowa. They have a property
in Kansas City, Missouri. They have a property in St. Louis,
Missouri, a property in East Chicago, Indiana and the property
that is being built here in Lake Charles.
When you think about that structure,
the real opportunity for Pinnacle was not specifically the property in
Lake Charles,
albeit that strategically is going to be important for us. The
opportunity was for us was to double the size of our company,
more than double the size of our company.
We were able to execute on our strategy of diversifying our company which will circle around to, was one of the reasons we
canceled the Sugar Cane Bay project in the first place which was lack of diversification of our company. So this project,
because of the size of Ameristar, inherently give us broad diversification across 13 jurisdictions. And Ameristar is No. 1
or No. 2 — oh, Vicksburg, Mississippi, I left out — No. 1 or No. 2 in every jurisdiction they do business in. So, a great
company.
We got to know them — we’ve known them —
but we really got to know them here in Lake Charles as we worked on
things like roadway
designs, site access. We’ve allowed them to have construction
access through our customer entrance. They brought trucks right
up L’Auberge Drive, right up our golf course.
So just in our relationship that we’ve
developed and gotten to know them here in Lake Charles, we found that
they were a lot
like us as a company. Almost like we’re looking in a mirror. That
culture — a lot of time it’s easy to add assets, it’s hard
to integrate cultures and our cultures were so similar it seemed
like a natural fit. It’s exciting.
There is the notion out there that the reason that the deal went down was that Pinnacle was just protecting its turf here
in Lake Charles.
Iafrate: That question is rooted in a lack of understanding of how big Ameristar is and how broadly distributed they are and diverse
they are, as well as us. A lot of people in the state of Louisiana, I meet people that don’t know that we own Boomtown in
Bossier (City), Boomtown in Harvey. If you know that L’Auberge opened in Baton Rouge, you assume that we own it because we
own L’Auberge here. But then beyond that we have Lumere Place in St. Louis, we have River City in St. Louis, we have River
Downs in Cincinnati, we have Belterra in Indiana. People don’t realize that Pinnacle is bigger than just Lake Charles.
We canceled Sugar Cane Bay, let’s go
back to that and I’ll tell you why we canceled Sugar Cane Bay and why it
makes sense
to have this project and complete this project. When Sugar Cane
Bay was first announced it was a grand idea, but the funding
never existed. Recognize that this is all prior regime of
Pinnacle. Pinnacle we think of as a start-up company, although our
roots go back for many, many years with Hollywood Park. Think of
the current Pinnacle Entertainment as being about three years
old. The start of that company was March of 2010 when our current
CEO, Anthony Sanfilippo, joined and really recreated our
company. Our company, prior to that was a development company. We
would just build properties and then move on, build another
property and move on, never really focus on operating our
businesses.
Now, we have become a quality operating
company that takes advantage of, selective advantage of development
opportunities.
Since 2010, we’ve added with the exact same assets, not counting
Baton Rouge, over 100 million dollars in incremental free
cash flow a year. So, financial strength, right? Our debt ratio
has been brought down pretty substantially since 2010, 2009
and 2010. So the financial strength of our company has changed
substantially since we canceled Sugar Cane Bay.
Sugar Cane Bay was announced, the
funding never existed to build it. Never. So, it was a grand project
that did not have financial
backing. Along the way, it was extended, the date was pushed out,
right? Now this was all pre-me, but I’m just giving some
brief history backwards. At some point there was a change in
leadership at Pinnacle where Dan (Lee) left and then John Giovenco
was the interim CEO. At that point, John realized that the project
could not be funded and they made substantial changes to
the project that included some modifications, really downsized the
project. You guys probably remember this process. Again,
pre-me, began working on that modified project, started driving
piles, etcetera.
So now 2010, Anthony joins the company
and realizes that we are still on the tail end of the worse economic
conditions in
70 years, the great recession that we dealt with from 2007 to
2010. Our company had substantial exposure on the Texas border
and we were about to double down in Lake Charles. At the time, we
had a $250 million commitment in Baton Rouge.
We assessed all of that and decided that although we’re in the gambling business, we didn’t want to bet the entire company
on Lake Charles. It just wasn’t a prudent to make. We have a fiduciary responsibility to our shareholders and we felt like
that was a prudent decision.
So we canceled Sugar Cane Bay. We
raised the scale of the project in Baton Rouge from a 250 dollar million
project to a 368
million dollar project. Baton Rouge doesn’t have a Texas exposure,
so if something happens in Texas, Baton Rouge in unaffected
by it.
Then we began to focus on operation excellence throughout our organization and we were able to generate with the exact same
assets incremental 100 (million) to 120 million dollar in free cash flow while laying down debt all along.
Add a Retama Park acquisition in San
Antonio, Texas, which, once again, one of the primary questions always
asked of us by
analysts is what happens if Texas legalizes. We answered that
question. We have a presence in Texas now. We are close to having
a presence in Texas. We expect to close that deal January 31st and
begin operating that race track on February 1st, so just
a couple weeks away. And we want to diversity.
So, you put all that stuff together,
our financial strength, the general economic conditions of the world are
not great, but
better, the financial health of our company is substantially
better, solved for the diversification and the risk of having
too much exposed in one market, solved for because of the
Ameristar transaction. We are not outlaying cash to build a project
in Baton Rouge that isn’t generating any cash flow. It’s opened.
It opened on September 1st.
So our company now versus our company
in March of 2010 when we made the decision to cancel Sugar Cane Bay is a
fundamentally
different company. And now this project is a project that we can
be very excited about instead of scared to death of, if that
makes sense.
What does the acquisition of the 15th license mean for Lake Charles and the L’Auberge property and what your vision is to
do next door?
Iafrate:
We were working toward some things with Ameristar that I think were
going to be really exciting for both of our properties.
We were going to combine our golf and tennis. They have a license
condition to have an 18-hole golf course and a pro tennis
facility. We have already to come an agreement with Ameristar and
the Port (of Lake Charles) to jointly operate — we were
going to create a separate company — and jointly operate the golf
and tennis facilities, so we would have a collection of
four nine-hole courses instead of each of us having an 18-hole
golf course. Think of the synergies and the draw that that
creates as a golf destination.
We are already doing that pre-Ameristar
acquisition. So now, physically owning both of the facilities allows us
to integrate
the facilities to be much more seamless from a guest perspective.
We can market them jointly, we can create a connection between
them that is as seamless as can be. The buildings aren’t going to
probably physically be connected because of where they are
located. I don’t know that they are going to be physically
connected, but as far as pedestrian traffic, vehicle traffic,
potentially
some sort of automated people mover, whether that’s a train, a
bus, we’re still working on that. But our ability to integrate
those and have two complimentary facilities that increase the
offering, both for local guests as well as the draw for regional
and national guests.
We envision you checking into the hotel
at the Ameristar facility or the L’Auberge facility and being able to
charge stuff
to your room no matter what building you are in. We envision you
being able to gamble and earn comps at either facility and
use them frankly at any one of our facilities in the entire
country — all 15 properties with our one-card system.
The benefits both locally and regionally and nationally are substantial.
We’ve all seen the drawings that Ameristar had. How much of that will you embrace or will you sort of start all over?
Iafrate: Ameristar
is a separate company and they are going to continue construction as if
they have to remain a separate company.
It’s part of their fiduciary responsibility of their senior
leadership team and their board of directors to run their company
as if they are going to always run their company.
At the moment, we are aware of the
plans and we have had some preliminary meetings where we get to see some
of the design
work, etcetera, but our influence is minimal. We don’t own them
yet. We have to continue through the process of regulatory
approval in each of the jurisdictions, shareholder approval by
Ameristar shareholders. We both have unanimous board approval
at this point. We need Ameristar shareholder approval and we need
FTC review which is always, publicly traded companies will
always be in that CD process. And then we need the jurisdictions,
the regulatory body between the jurisdictions to approve
ultimately the transaction.
We still expect to close sometime between late second quarter and the end of the third quarter, so sometime between June and
September is when we expect to close. A lot of it has to do with the timing of getting on each one of these various board
agendas and the like.
So at the moment we don’t own it. So
Ameristar continues to build it and build it to their specifications.
There will probably
be minimal physical change as far as location, number of hotel
room, height of tower, width of building, location of pool
— those things by the time you get to June or July, August or
September when we expect to close this deal, it will be pretty
set. Frankly, they are pretty set now, based on driving piles.
Will we paint a wall yellow instead of
red or blue instead of orange? Those are things when you get into those
design details
where you start picking out the curtains and the drapes and the
carpet, those are things that we will likely have influence
on, but the physical structure of the facility, I don’t know that
we are going to have a lot of influence on.
One
of the things that Ameristar changed was that there was going to be the
concept of a certain number of rooms, but there
was also going to be some kind of arena and they talked about it
had been their experience that people came to their casinos,
went to the shows and then didn’t go into the casino, so they
removed the arena but replaced it with additional rooms.
Iafrate: That’s true.
They went from something like 450 rooms to 700 rooms.
Iafrate: They went from 400 and 400-and-change to 700, 700 is the current number.
Would Pinnacle revert back?
Iafrate: Hotel rooms are critically important. We’re happy with the 700 hotel rooms.
As far as entertainment goes, it’s
early but I would tell you, look at the entertainment lineup at
L’Auberge. We are the premier
entertainment destination on the (Gulf) Coast. We run headliner
acts on a monthly basis. We run the Party by the Pool series,
we have the entertainment in Jack Daniels, there’s always the
piano lounge in Ember. I don’t think we’re starved for entertainment
in Lake Charles. L’Auberge, clearly, we’ve even done an event at
the Civic Center. L’Auberge clearly is the premier entertainment
provider for the Lake Charles area and Southwest Louisiana for
that matter.
I know that some of this is controlled by Ameristar, but what is your time lime? If you had your druthers, how quickly would
you like to see basically the facility up and running?
Iafrate:
The current timeline, I don’t remember the exact date, it’s mid-’14,
it’s summer of 14. There is a specific date, I don’t
remember what it is. It’s in the conditions of Ameristar’s
license. I think it’s July 1st. We just use summer of ’14 as the
language.
There’s a lot of work to do between now
and July of 2014. Not being directly in control of the project until a
minimum of
June and as late as September, I’m not sure we’re in a position to
be able to comment on the construction schedule. That would
be an Ameristar question. Once we are in control of it, I’m sure
we would be able to comment on the construction schedule.
Obviously, I want to open as soon as
possible, but we have a history of not opening things in phases. We open
when complete.
Baton Rouge is an example. We could have opened the casino first
and then finished the hotel. But our preference is to open
the full resort simultaneously.
Is that also somewhat of a challenge that this is going to be partially constructed and then basically they are going to hand
you the baton?
Iafrate: The general contractor doesn’t change. The general contractor is building to plans. They are going to keep building to plans.
They’re just going to get a check from somebody else, right? Yates Construction continues to be the GC and run the job.
Currently, the Ameristar construction
team, led by Jack Mohn, is overseeing the project. We don’t expect any
of that to change
between now and when we take over the project. Heck, it might not
change from now until the project opens. It’s just too early.
Jack and his team are doing an incredible job and they’re quality
guys, professional, great to work with. I wouldn’t be surprised
if that team was at the grand opening ceremony in 2014.
Are there any hurdles you have to clear with the state Gaming Regulatory Board?
Iafrate: Ultimately,
the Louisiana Gaming Control Board would have to approve the
transaction, as will every other jurisdiction that
there is an Ameristar. Missouri will.. Nevada. Any jurisdiction
that they are in — Indiana, Mississippi, even the jurisdictions
that we already do business in like Indiana, Louisiana, there are
others, Missouri, even the place where we already do business,
the transition still have to be approved because it is a transfer
of the license.
But
you envision something seamless as opposed to if you were going to come
in at this point and, say the Ameristar deal was
going much quicker and you were going to make some changes to
these plans, those would all have to be approved by the Gaming
Board, would they not?
Iafrate:
It depends. If we change the size of the hotel room or the color of
the carpet, the Gaming Board has not interest in that
whatsoever. If we change — certain aspects of the facility that
are considered conditions of the license, if we were to modify
or change any of those conditions, then ultimately, we would need
Gaming Control approval. It’s like today there is a condition
that there will be an 18-hole golf course, there’s a condition
that there will be 700 hotel rooms, those type of things if
you wished to change any of those, even if we wanted to make the
bigger, even if we wanted to go to 900 hotel rooms, that’s
an interesting question. I know if I wanted to go down, I would,
but if I went up I’m not sure that the Gaming Control board
has interest in that.
Your workforce. When the new casino and resort is open, will they be interchangeable or will they two separate workforces?
Iafrate: It’s
pretty early in that planning process. I think it depends on the
position. Granted, there won’t be two entirely separate
accounting teams. Will I need extra accountants to handle a whole
another property? Probably. Will I need two completely separate
human resources teams? Probably not. But given the fact that I’m
going to come close to doubling the team member count, will
I need additional personnel in human resources? Probably.
And then when you get down to the
actual at the door, on the floor, line level-type positions, you have to
be duplicative.
I need a dealer at both places, I need a slot attendant at both
places, I need restaurant, I need chefs. It’s really in those
administrative functions and some of those senior level positions,
that probably don’t need to be duplicative. But as you
work your way down the organization, I’m going to need two of
everything.
You mentioned restaurants. Is it too early to talk about what kind of brands or restaurants you would have in the new facility?
Kerry Andersen: That’s all anybody really wants to know.
Iafrate: Ameristar has done a great job of putting a food and beverage package together. Although I’m aware of their food and beverage
package, I don’t think it would be appropriate for me to spill the beans on all the great work that they’ve done.
Generally, you’ll see the items that are pretty typical with a casino. There will be a great buffet. There will be a wonderful
24-hour cafe experience. There will be fine dining experience. There are many restaurants planned for this facilities that
are pretty exciting.
In line with it coming out on Sunday, the public has a perception that Texas is going to determine a lot of things. This is
not just about Lake Charles, this is nationwide. Why don’t you explain your position in Texas because the company has made
an investment there?
Iafrate: Yeah, we have. This resort that is about to be created here, will there be an impact of Texas legalizes gaming? It depends
on what form of gaming is legalized and where. It is kind of hard to answer that question directly.
Are they going do resorts in specific locations? Are they going to do slots at racetracks? Of they just going to do VLTs?
Are they going to do anything? Who knows?
This resort, having 1,700 hotel rooms,
over 3,000 slot machines, 150 table games, great restaurants, 36 holes
of golf, pro
tennis facilities, two fantastic resort pools, a beach, you start
to put all of this together on 500-plus acres with great
access, this becomes a pretty special destination that even with
Texas gaming, this thing takes a hit, but still is a pretty
spectacular place that I think we’re going to be enjoy for many,
many years. Our next generation is going to enjoy this thing,
regardless of what happens in Texas.
Now, we took a stand in Texas. We
bought, it’s an interesting structure. We basically are going to be the
manager, we bought
a 75-and-a- half percent ownership interest in a management group
that holds the license and manages the racetrack at Retama
Park. Now, the interesting piece of this structure is Retama Park
itself, the physical assets, the building, the dirt, etcetera,
is owned by a public-private corporation. It’s kind of unique to
Texas. It’s owned by the City of Selma. It’s called the Retama
Development Corporation. The Retama Development Corporation is
this public-private corporation owned by the city of Selma
that has a public board, meeting are open. That corporation,
Retama Development Corporation, technically owns Retama Park.
We manage Retama Park and own 75-and-a-half percent of the
management group. There’s 140-some-odd partners that own the other
24-and-a-half percent. We own almost all the outstanding debt of
the Retama Development Corporation. We hold the paper for
the physical assets. It’s a pretty interesting structure that we
are retaining at the moment.
It would depend on what happens in Texas. The greatest possible scenario for Texas is that they would have one physical casino
and it’s at Retama Park (laughter) and they have table games, slots, poker and bingo and
Ultimately, as a company we believe,
we’re in the gaming distribution business. We provide gaming
entertainment across multiple
jurisdictions and as a result of that, we support legalization or
expanding game in Texas. As to what that looks like, our
support would vary depending on what it looks like. If Texas wants
to put resort casinos or even racinos out there and they
want to have a 95 percent tax rate, we’re not interested. I still
have to run a business. So, it just depends. Broadly speaking,
we’re in support of expanded gaming in Texas but as to how much we
support that, it really depends on what version and where
and how and etcetera.
We do think there are three Class I
racetracks in Texas. There’s the one at Retama Park. There’s one in
Houston, Sam Houston,
Penn Gaming owns I believe 50 percent of that and the Horowitz
family owns the other 50 percent. And then there’s Lone Star
Park in Dallas which is owned by Global Gaming which is the
domestic business arm of the Chickasaw Nation, which owns WinStar
Casino in Oklahoma. Those are the three Class I tracks.
There are believe 15 licenses or so in
total in Texas, including in smaller markets, including dog tracks.
There are other
horse racing facilities and there’s dog facilities, not just at
that Class I level. Those Class I tracks, the restrictions
on them to get that license, they had to be in an population
center with greater than 2 million people when those licenses
were issued. There are even licenses in Texas that are dormant.
The Austin Jockey Club is an example. It holds the license,
but they don’t operate a facility. They pay a fee to maintain
their license without operating an actual track. ...
It’s
early in the game, but what are the talks from your vantage point on
branding? What’s new the new casino going to be
named? When is your office going to take over the PR (public
relations) aspect of that facility? Where is that at right now?
Iafrate: It
would be ultimately, because we are both publicly traded companies, we
won’t take over any direct operation of their facilities
anywhere until the deal closes. That’s the bottom line. They have
to continue to operate. Ameristar has to continue to operate
as a if they are a stand-alone company. We have to continue to
operate as if Ameristar is a stand-alone company.
Now we can plan through an integration
planning process, we can spend time planning. We are putting a group of
folks together
on the Ameristar side and on the Pinnacle side. These folks are
going to spend their time between now and the consummation
of the deal planning. What do we do the second that the deal
closes? And the reason that you do that now is that you don’t
want to wait six months. We’re expecting in six to nine months
we’re going to close the transaction. We want to have a plan
ready so that the second it closes, break out the plan and start
executing. We won’t have direct control until that time and
there is work being done on the brand. I don’t know. It’s too
early. Can I sit here and say it will be called Ameristar? No.
Can I tell you what the alternatives are? It’s just too early.
Do you think the lawsuit that has been filed in Las Vegas is going to hinder this process?
Iafrate:
I think that — I’m going to misquote these statistics but I’ll back off
of the statistics a little bit and I will be directionally
correct — I think somewhere 90-plus percent of any publicly traded
company, anytime there is a publicly traded company that
is involved in a merger or acquisition 90-percent-plus percent of
those transactions result in a lawsuit. And somewhere close
to zero result in any substantial action. I think it’s less than 5
percent actually result any form of action. It’s a process.
It’s just a process. I don’t think it would — no one appears to be
alarmed by it. Everybody expected it. It’s just part of
the process.
Going back to what you said before in explaining in how you already had a cooperative agreement with Ameristar, that has to
help as you move forward as oppose to another situation where you could be ...
Iafrate: An uncooperative agreement?
Well, you might be fighting tooth and nail so to speak.
Iafrate:
Yeah. The gaming space is such a highly regulated space, it’s not easy,
frankly probably darn near impossible, to have a
hostile takeover in a gaming company. It really has to be a
process that is welcomed by both parties to ever consummate. Frankly,
I think the decision is that when Ameristar senior executives and
Pinnacle senior executives and both Ameristar and Pinnacle’s
boards have a fiduciary responsibility to our shareholders. And
they believe and have voted as such that our two companies
are better together than we are apart. And that releases a
tremendous amount of value for the Ameristar shareholders and then
on a go forward basis, creates a tremendous amount of value for
the Pinnacle shareholders. It’s a great transaction. It’s
exciting.
It is technically, I want to cover
this, though, because we’ve been saying this. It is technically, by
definition, an acquisition.
Pinnacle is acquiring all of Ameristar’s outstanding stock and
assuming all of Ameristar’s debt. But we are not treating it
— technically it’s an acquisition, but practically we’re treating
it as a merger.
Ameristar is a fantastic company. Great
properties. No. 1 or No. 2 in every one of their markets. We expect to
learn a lot
from Ameristar’s operators and to be able take the things that
Ameristar does great and make them part of our new combined
company and take the things that Pinnacle does great and make them
part of our new combined company. And then have a new Pinnacle
on a go-forward basis that starts the second that the deal closes.
I don’t know L’Auberge’s impact on the Baton Rouge market has been, but you’ve got Beau Rivage in Mississippi and there are
lot of people that live in New Orleans and in Baton Rouge that have preferred in the past to go there rather than staying
in Louisiana. You might have that same deal if Texas ever legalizes. At Beau Rivage, you have a pretty fine facility.
Iafrate:
We’re really proud of the Baton Rouge team and our property. We opened
September first and December numbers (aren’t out yet),
we have not seen December market numbers yet, but the first three
months of operation, September, October and November, our
facility grew that market by approximately 60 percent which really
has been our point in Baton Rouge all along. We have said
that the Baton Rouge market is much bigger than the two boats that
get reported at the Belle and the Hollywood. We’ve always
said that the market is much bigger than what is reported than the
Baton Rouge market.
You take those two boats — what are
those guys doing? — 12, 13 million (dollars) a month, call it 15 million
combined. Then
you have to throw in Paragon which doesn’t report up in
Marksville. That place is probably doing 12 (million). Call it 25
million a month between those three facilities. You go down to New
Orleans and you are throwing a another, call it 10 or 15
million in New Orleans per business. I’d call it 15 million. Now
you have a 40 million market in Baton Rouge and then you
take another 5 to 10 million that is going to Harrah’s in New
Orleans and kind of staying in those properties.
The Baton Rouge market is not a 15
million market. It’s a 45 to 50 million dollar (a month) market. Over
the last three months,
we’ve been able play that out. We’re not going 13 to 14 million a
month split three ways. We’re now doing 22, 23, 25 million
split three ways with us getting the vast majority of that.
We have been excited about the
performance of that property. Similarly in Lake Charles, the Houston
market is very under-penetrated
and it was under-penetrated when we canceled Sugar Cane Bay. We
didn’t cancel Sugar Cane Bay because we didn’t think the business
wasn’t there. We thought that it was too much of a risk to put
that type of additional exposure in Lake Charles, given the
profile of our company at the time. The profile of Pinnacle is in a
completely different place than it was in 2010 and the
Ameristar transaction, given all the other assets that come along —
the other seven facilities — that come along with this
deal. If you sit and think about it and you take out a map of the
United States and put all of the locations of both Pinnacle
properties and Ameristar properties, you go ‘‘Oh, I get it.’’ ...
What ground have we not covered?
Iafrate:
I think ultimately the message is exciting. It’s exciting for Lake
Charles, for Calcasieu Parish, for Southwest Louisiana
and Louisiana as a whole. This is north of a 500 million dollar
investment. It’s going to create somewhere and I don’t know
exactly how many jobs — but somewhere in 16, 17, 1,800 new
additional jobs. It’s a little less than L’Auberge because of the
hotel size. We have a thousand rooms versus 700. It’s an easy
1,600 new jobs for Lake Charles. Great careers. High-paying
jobs.
Pinnacle and L’Auberge’s team, I think, we have proven our commitment to provide a great place for our team members to work,
to have long, rewarding careers. An incredible place for our guests to come and have wonderful experiences.
I think the thing we are most proud of
is we are dedicated to making sure Lake Charles is a better place to
everyone to live.
You see our civic volunteer commitment throughout the community is
something that we are very, very proud of. We think that
adding another 1,600 people that can do cancer walks and those
families, it is just another great deal for us and great benefit
for Lake Charles, Calcasieu Parish, Southwest Louisiana and the
state of Louisiana.
Andersen: It’s an opportunity for our existing team members who live here and are from here to move up within the company and advance
into management positions and that’s very exciting. ...
Iafrate: It’s going to be a special place. We’re excited. You’ve seen the designs and the presentation. It’s cool. It really is cool.
It kind of has a Hotel Del Coronado, Tommy Bahama vibe going. It’s a neat place.
So do you think it will appeal to someone who may not like the decor of L’Auberge?
Andersen: The Texas lodge.
Iafrate: We have that Texas hill country. L’Auberge’s more of a comfortable elegance kind of feel where currently the Ameristar project
is more of a island, Tommy Bahama kind of vibe.
It might appeal to a younger clientele?
Iafrate: I don’t know. I think the demographic at L’Auberge is such that we have something for everybody. If you look at the complements
of things, we have Jack Daniels, the Glow Bar, Ember, Party by the Pool, Match Box 20, then Tony Bennett.
Andersen: Then Englebert (Humperdinck)
Iafrate: You look at how we program L’Auberge, there is something for everybody all the way from a 5-year-old hanging out in the Lazy
River and the Arcade or the Ice Cream shop, all up to the 105-year-old, there’s all kind of stuff going on.
...
Everyone sees our gaming revenue
numbers because they are reported every month. This is the second year,
2012, was the second
year in a row that L’Auberge Lake Charles was the top No. 1
revenue producing casino in the state of Louisiana. If you think
about a number of years ago, people thought that it was a
no-brainer that we would be the No. 1 riverboat in the state of
Louisiana, but everybody excluded — there’s that one little
land-based casino down at the end of Canal Street in New Orleans
that is substantially bigger than us. They have over 2,000 slot
machines, they’re land-based, they are not bound by the
30,000-square-foot
restriction and they are in the city that has a heckuva lot of
tourism compared to Lake Charles. It has four time the population
of Lake Charles. A national destination. Airlift in and out, on
and on and on.
We’ve beaten them two years in a row.
We’re not the No. 1 riverboat in the state of Louisiana, we’re the No. 1
casino from
a revenue standpoint in the state of Louisiana. And we’re very
proud of that. Our team members here in Lake Charles and the
community should be very proud of that, that everybody has done
very hard work at that.
(There
was) a story a couple of weeks ago that shows that the Lake Charles
market, which is y’all, supersedes Reno (Nevada).
Most people would think that you go to Reno, you’re going to have
action. We’re over Reno, we’re over New Orleans, we’re over
Shreveport, we’re 13th or 14th in the nation according to the
American Gaming Association. How does that make you feel from
a business standpoint and from a legacy standpoint that your
product rivals some of the biggest stuff, especially Reno, which
has that tradition of being in the casino gaming market?
Iafrate: We’re proud of our facility
here. We’re proud of our team, more than 2,000 dedicated team members
here. We don’t
measure ourselves against other markets and other facilities. We
just try to be the premier resort destination in Southwest
Louisiana and we try to attract people from all over the place.
It’s exciting. It feels good and you can be proud when you
look at the scoreboard to be in that No. 1 spot, but you’ve got to
focus on every day being better than you were yesterday
and making sure we have the best service professionals in the
business and we are providing magical, memorable moments to
our guests and we’re doing the right thing in the community to
make sure it’s the great place for everybody to live. We keep
executing on those things, the rest of it kind of works out,
right?
... We publish every month the gaming
revenue numbers. What we don’t publish are the non-gaming revenues, the
revenue we generate
in our shows in or in our restaurants or in our retail shapes.
That category of revenue, that non-gaming revenue, has been
a huge driver of our success here in Lake Charles. We have created
among the highest quality retail experience in the region.
We have incredible food and beverage facilities, great nightlife
entertainment. I’m as proud of the non-gaming stuff as I
am of the gaming operations here in Lake Charles.
I hear all the time all the time from people, ‘‘I don’t gamble, but I love going to Ember.’’ I can’t wait to go watch a game
at Jack Daniels.’’ Or ‘‘The pool was fantastic, or the pool, or the barber shop.’’ Right? It is a fully integrated resort
destination. It’s not all about gaming at L’Auberge. That’s the piece that we get very excited about.