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Pinnacle Entertainment’s revenue-generating properties

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Overview

Pinnacle Entertainment (PNK) owns and operates 15 gaming properties located in Colorado, Indiana, Iowa, Louisiana, Mississippi, Missouri, Nevada, and Ohio. The company also holds a management contract and majority interest in the racing license owner for Retama Park, a racetrack outside of San Antonio, Texas. In addition, Pinnacle Entertainment owns and operates a live, televised poker tournament series under the trade name Heartland Poker Tour.

Here are PNK’s reporting segments:

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Property contribution

In August 2013, PNK completed the acquisition of Ameristar Casinos for a total consideration of $2.8 billion, including assumed debt. This transaction added eight properties to PNK’s portfolio:

  • Ameristar Casino Hotel, Council Bluffs
  • Ameristar Casino Hotel, East Chicago
  • Ameristar Casino Hotel, Kansas City
  • Ameristar Casino Resort Spa, St. Charles
  • Ameristar Casino Hotel, Vicksburg
  • Ameristar Casino Resort Spa, Black Hawk
  • Cactus Petes Resort Casino
  • Horseshu Hotel & Casino

Four of PNK’s 15 gaming properties are in Louisiana. In 2013, PNK derived 47.6% of its revenues from these four casinos and 25.4% from L’Auberge Casino Resort in Lake Charles, Louisiana. The percentage of revenues from Louisiana decreased following the acquisition of the Ameristar properties.

PNK received 25.1% of its 2013 revenues from three casinos (excluding Lumiere Place) in the Missouri region, two of which PNK had acquired in August 2013 as part of the Ameristar transaction. Pinnacle Entertainment expects the percentage of its revenues from Missouri casinos to increase as a result of its purchase of the Ameristar St. Charles and Kansas City properties.

Casino operators often look to expand their property portfolios through acquisitions. Last year, Scientific Games (SGMS) purchased WMS Industries and Bally Technologies (BYI) acquired Shuffle Master. To learn more, read Why casino operators look for industry consolidation.

Investors who want to hold a diversified portfolio in leisure companies may invest in ETFs (or exchange-traded funds) like VanEck Vectors Gaming (BJK) and Consumer Discretionary Select Sector SPDR Fund (XLY).

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