Pnk lgfrb presentation submittal

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Kansas Racing & Gaming Commission
Casino Proposal
http://krgc.ks.gov/

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Pnk lgfrb presentation submittal

  1. 1. Kansas Lottery Gaming Facility Review Board August 13, 2008
  2. 2. Pinnacle Proposal Highlights Greatest Revenue Generator Highest gaming revenues Most money for Kansas Most Tourists Largest convention center Largest and highest-quality hotel Best Location Superior access and visibility Schlitterbahn Proven Gaming Operator Eleven casinos in operation Experience in similar markets 1
  3. 3. Who is Pinnacle? NYSE-traded gaming company with headquarters in Las Vegas, Nevada Operations in Missouri, Nevada, Louisiana, Indiana and Argentina Build and operate high-quality casino destinations customized for each market Experienced management team with extensive backgrounds in competitive gaming environments Over 8,600 employees $1 Billion in annual revenues 2
  4. 4. Pinnacle Properties RENO INDIANA CENTRAL CITY SACRAMENTO NEW YORK CITY OAKLAND CHICAGO PHILADELPHIA SAN FRANCISCO DENVER INDIANAPOLIS HEADQUARTERS CINCINNATI ST. LOUIS LEXINGTON BOSSIER CITY LOUISVILLE ATLANTIC CITY DALLAS/FORT WORTH BATON ROUGE AUSTIN SAN ANTONIO HOUSTON SOUTH AMERICA Pinnacle Properties Pinnacle Development Sites NEW ORLEANS Potential Future Development Sites Large Regional Cities 33 LAKE CHARLES
  5. 5. Belterra Resort and Casino – Vevay, Indiana 4
  6. 6. L’Auberge du Lac – Lake Charles, Louisiana 5
  7. 7. L’Auberge du Lac – Lake Charles, Louisiana 6
  8. 8. Lumiére Place – St. Louis, Missouri 7 Lumiere Place: Casino Site
  9. 9. Lumiére Place – St. Louis, Missouri 8 Lumiere Place: Casino Site
  10. 10. Lumiére Place – Performance Opened December 19, 2007 Year 1 projected gaming win = $134.9M Year 1 (January 2008 – June 2008) actual gaming win = $80.0M Outperforming table game business 18.5% of table games in market 30.0% of table game revenue Table games = high end play, tourism 9
  11. 11. Internal Regulatory Process Character, honesty, and integrity Credibility is most valuable currency in the gaming industry Proven track record in other regulatory jurisdictions Comprehensive and effective compliance program Problem-Gaming Program Member of AGA Self-Exclusion Training, Training, Training 10
  12. 12. Recent Capital Raising History May 2003 $240 million credit facility Sept 2003 $135 million senior subordinated notes Dec 2003 $300 million credit facility Feb 2004 $128 million equity offering Mar 2004 $200 million senior subordinated notes Aug 2004 $400 million amended credit facility Dec 2004 $100 million senior subordinated notes Dec 2004 $84 million equity offering Dec 2005 $750 million credit facility Jan 2006 $189 million equity offering Nov 2006 $1 billion amended credit facility Jan 2007 $368 million equity offering June 2007 $385 million senior subordinated notes TOTAL $4.3 Billion 11
  13. 13. Pinnacle 12
  14. 14. Site Selection East side of I-435 allowed proximity to infrastructure without west-side traffic concerns 66 acres allows for future expansion Proximity to Schlitterbahn’s planned 1,600 hotel rooms creates unmatched destination 13
  15. 15. Selected Jerde Partnership Projects Morongo Casino Resort & Spa The Gatew an kuoka, Jap Cabazon, California ay, Salt La Hakata, Fu Utah ke City, Canal City Palms Casino Resort Bellagio Treasure Island Wynn Las Vegas, Nevada Las Vegas, Nev evada ada Las Vegas, Nevada Las Vegas, N 14
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  19. 19. Project Components 100,000-square-foot casino 100,000 square foot convention center Designed to expand to 200,000 square feet 50,000 square foot entertainment venue 200 five-star hotel rooms 300 four-star hotel rooms Full service spa and salon Dining options ranging from gourmet to fast casual Center island performance stage and nightclub 18
  20. 20. Casino 100,000 square feet of gaming 2,300 slots; 60 table games; 25 poker tables Designed for future expansion A casino is not a commodity; it requires operational expertise and knowledge to operate successfully 19
  21. 21. Convention Center Largest convention center of any applicant 100,000 CONTIGUOUS square feet Designed to expand to 200,000 square feet Key for mid-week and off-season hotel occupancy to create year-round destination 20
  22. 22. Hotel Largest hotel of any applicant 500 total rooms, including: Experience developing luxury-branded hotels Four Seasons Hotel at Lumière Place in St. Louis Schlitterbahn plans include 1,600 hotel rooms 21
  23. 23. Restaurants and Lounges Variety of outlets from casual to gourmet History of using nationally and locally renowned chefs Hubert Keller Jeff Ruby 22
  24. 24. Entertainment 50,000 square-foot indoor venue for live events 4,000 seats Existing network of entertainment booking for other Pinnacle properties Outdoor stage for live events 23
  25. 25. Retail 15,000 square feet of retail Village West area is already a shopping destination with three million existing square feet of retail Schlitterbahn is building 750,000 square feet of retail Goal of boutique retail is to complement existing retail, not compete with it 24
  26. 26. Schlitterbahn 25
  27. 27. Schlitterbahn Travel Channel rated #1 place to “Cool Off in America” 2007 Golden Ticket award for #1 indoor waterpark in the U.S. Named #1 water park in the U.S. by the Travel Channel (2006) Amusement Today magazine readers voted Schlitterbahn the world's best water park in 1998, an honor the park has received annually ever since Schlitterbahn was voted the nation's number one water park by the readers of Inside Track magazine in 1996 Lead into travel channel video… 26
  28. 28. Integrated Site Plan Will create a strong super- regional destination with over 2,000 hotel rooms 27
  29. 29. Family Destinations Disneyland – Anaheim, CA Downtown Disney Disneyworld – Orlando, FL Pleasure Island Must be 21 to enter Atlantis Paradise Island – Bahamas Multiple resort hotels Water park integrated with casino 28
  30. 30. Project Schedule September 2008: Management contract awarded November 2008: Kansas Racing & Gaming ratifies selection July 2009: Temporary casino opens – Kansas begins receiving gaming revenues Early 2011: Permanent casino opens with all guaranteed components 29
  31. 31. Senate Bill 66 “The board shall determine which contract best maximizes revenue, encourages tourism and otherwise serves the interests of the people of Kansas.” 30
  32. 32. Senate Bill 66 “The board shall determine which contract best maximizes revenue, encourages tourism and otherwise serves the interests of the people of Kansas.” 31
  33. 33. Most Revenues Pinnacle will produce the highest revenues Gaming revenue = $401.5M Non-Gaming revenue = $86.8M Development and operating expertise No traffic congestion with existing development west of I-435 MyChoice program National database of 4.7 million GAMERS Pinnacle will cross-market Kansas casino with its national network of existing casinos 32
  34. 34. Senate Bill 66 “The board shall determine which contract best maximizes revenue, encourages tourism and otherwise serves the interests of the people of Kansas.” 33
  35. 35. Most Tourists Pinnacle will draw the most tourists Number of tourist visits = 441K Total tourist spend = $86.3M Largest hotel of any applicant Largest convention center of any applicant With adjacent Schlitterbahn project, will create a national destination with over 2,000 hotel rooms 34
  36. 36. Senate Bill 66 “The board shall determine which contract best maximizes revenue, encourages tourism and otherwise serves the interests of the people of Kansas.” 35
  37. 37. Economic Impact Create 2,000 union construction jobs Employ 1,500 people Generate over $17 million/year in new property taxes, including Over $7 million/year for the KCK (USD #500) school district Pinnacle Proposal is the ONLY gaming proposal in the USD #500 school district Attract millions of incremental new visitors Purchase over $50 million in annual goods and services from local suppliers 36
  38. 38. School District Comparison Students Free/Reduced Graduation Lunch Rate Kansas City, 18,203 82% 78% Kansas (USD #500) Bonner 2,337 35% 88% Springs/Edwa rdsville (USD #204) Piper (USD 1,530 8% 97% #203) 37 Source: Kansas State Department of Education
  39. 39. GVA Marquette Revenue Projections Gaming revenue = $366.5M Total tourist gaming win = $71.9M 38
  40. 40. GVA Marquette Site Evaluation 39
  41. 41. GVA Marquette Site Comparison “We believe the Pinnacle site is the superior site among the five sites evaluated. A casino at this location, in combination with the Schlitterbahn attraction and lodging units, would create a unique gaming destination that would expand the regional gaming market, thus maximizing the amount of revenue generated by visitors from outside the local market… For these reasons we believe that this site is likely to generate the highest gaming revenues of the five sites evaluated.” 40
  42. 42. Casino Expertise Proven casino operating expertise Operate 13,000 gaming positions across 13 properties Proven casino development expertise Over $1 billion of new casino/hotel development within the past 3 years Kansas needs an operator that can generate the most gaming revenues Well-established competition in Missouri Able to generate higher gaming revenues than our competitors Least traffic congestion Rewards program linked to national network of properties Best complement to existing tourism destination 41
  43. 43. Applicant Comparison Major Tribal Racinos Countries/S Hotel Slot Table Commericial Casinos tates Rooms Machines Games Casinos Pinnacle 9 N/A N/A 6 2,634 10,695 360 Cordish/ 0 0 1 1 0 2,000 0 Speedway Golden 4 0 0 2 70 1,668 40 Gaming Mohegans/ 0 1 1 2 1,176 8,400 318 Red 42
  44. 44. Project Comparison Municipality Hotel Convention Traffic School District Rooms Center Impact Pinnacle Kansas City, 500 100,000 Negligible KCK (USD #500) Kansas Cordish/ Kansas City, 300 58,000 Significant Bonner (USD Speedway Kansas #204) Mohegans/ Kansas City, 350 35,500 Significant Piper (USD #203) Red Kansas Golden Edwardsville, 300 35,000 Moderate Bonner (USD Gaming Kansas #204) 43
  45. 45. Pinnacle Commitments Work with local communities to have lasting positive effect on neighborhood Strive to be excellent corporate citizen with dedication to local charities and community service Community enhancement projects Commitment to Wyandotte County: $1 million upon opening $1 million ANNUALLY during operations Aggressive diversity goals in hiring and working with minorities and women Convert Western Wyandotte County from a regional destination into a national destination Convention Center Luxury Hotel World-Class Casino 44
  46. 46. Conclusion HIGHEST Revenues Best site Experience, experience, experience Most Tourists Largest hotel Largest convention center Adjacent to Schlitterbahn Best Interests of Kansas Proven track record Keep our promises 45
  47. 47. Kansas Lottery Gaming Facility Review Board August 13, 2008

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