A Return To Boomtown

The Gulf Coast entertainment market continues to show signs of recovery in the wake of Hurricane Katrina, with Pinnacle Entertainment announcing a 200-room hotel at its Boomtown riverboat casino in the suburb of Harvey, La.

It will be the first hotel built for a New Orleans-area dockside gambling facility. The plans follow a sharp increase in customers for the riverboat, which lost competition and increased its winnings after Katrina closed several competing gambling venues in Louisiana and Mississippi.

Las Vegas-based Pinnacle also plans to add 250 units to its 750-room L’Auberge du Lac casino riverboat in Lake Charles.

The projects will be financed with an offering of 6 million newly issued shares of Pinnacle common stock, the company said.

Work is expected to begin on both later this year with completion in 2007.

With two of its New Orleans-area competitors closed and only three of the 13 casinos on the Mississippi Gulf Coast open, the Harvey casino has seen a sharp increase in gambling winnings. In July – the last full month before Katrina hit – Boomtown won $11.3 million. In November that figure totaled $21.7 million.

But there’s still competition left in the market.

In February, Harrah’s Entertainment will reopen a hotel for its downtown New Orleans land casino after being closed for Katrina. It will also compete with the Treasure Chest Casino in Kenner and the Belle of Orleans in New Orleans. The Belle has been closed since the hurricane.

Pinnacle officials wouldn’t provide further details until the stock offering was completed.