Sunday Talk: Pinnacle officials excited about future in Lake Charles

The pending acquisition of Ameristar by Pinnacle, which owns L’Auberge Casino Resort Lake Charles, has raised many questions.

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.

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 Jai-Alai, wherever else you want to have. That’s probably not going to happen.

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.