Pinnacle Entertainment Debates Casino Path in New Jersey
Pinnacle Entertainment's plan to build a hotel and casino complex in Atlantic City is up in the air, with the possibilities including a major delay before construction begins, or even the cancellation of the project. Dan Lee, CEO of Pinnacle, said Wednesday that the land acquired in Atlantic City by his company will most likely be used to build a major casino, but that the odds of that happening are close to only even money.
Pinnacle purchased the site of the former Sands Casino Hotel and promoted a plan to create a new casino opening by late 2011, or early the following year. However, now the decision on whether to continue forward may not be made until as late as 2010, pushing any opening date back by years.
In his conference call discussing first quarter earnings, Lee mentioned several potential results for the acreage: proceeding as planned, selling the land, taking on a partner and building the casino as a joint venture, or selling Pinnacle to a larger entity.
Cost projections have risen to as high as $2 billion, while credit shortages continue to make construction planning problematic. Still, Lee sees the project as the probable outcome, even if it takes longer than originally thought.
When questioned if Pinnacle might be interested in bidding for the Tropicana, Lee denied any thoughts in that direction.
Economic conditions, bad as they currently are, will not last forever. As Steve Wynn so astutely pointed out last week, casino management is a long-term business, and goals and decisions should be set accordingly, rather than reacting in knee-jerk fashion to upswings and downturns.
