Pinnacle Entertainment

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International Guild of Hospitality & Restaurant Managers

Pinnacle Entertainment (NYSE:PNK)

3800 Howard Hughes Parkway, Suite 1800
Las Vegas, NV 89109 Phone: (702) 784-7777
Fax: (702) 784-7778
WEB: http://www.pinnacle-entertainment-inc.com/
Email: http://www.pinnacle-entertainment-inc.com/contact.asp
Employees (last reported count): 5,866

Pinnacle Entertainment Inc. is a diversified gaming company that owns and operates seven casinos (four with hotels) in Indiana, Louisiana, Mississippi, Nevada and Argentina, and is pursuing the development of a hotel and casino resort in Lake Charles, Louisiana. The Company also receives lease income from two card club casinos, both in the Los Angeles metropolitan area, and, until June 30, 2001, interest income with cash flow participation from an Indian gaming facility in Yakima, Washington. The Company's active subsidiaries at December 31, 2001 were Boomtown, Inc., which has three active subsidiaries: Boomtown Hotel & Casino, Inc., Louisiana Gaming Enterprises, Inc. and Louisiana - I Gaming L.P.; Casino Magic Corp., which has three active subsidiaries: Biloxi Casino Corp., Casino Magic of Louisiana, Corp. and Casino Magic Neuquen S.A.; HP/Compton, Inc.; Realty Investment Group, Inc., and Belterra Resort Indiana, LLC.

The Company began as a gaming, sports and entertainment company engaged in the operation of thoroughbred and greyhound racing facilities. Pinnacle Entertainment is the successor to the Hollywood Park Turf Club, organized in 1938. Pinnacle Entertainment was incorporated in 1981 under the name Hollywood Park Realty Enterprises, Inc.; in 1992, as part of a restructuring, was renamed Hollywood Park, Inc., and in February 2000, changed its name to Pinnacle Entertainment, Inc.

Belterra Casino Resort

Belterra Casino Resort opened on October 27, 2000 on 315 acres of land adjacent to the Ohio River near Vevay, Indiana. The property features a cruising riverboat casino, the Miss Belterra, with 38,000 square feet of casino space, 1,344 slot machines and 45 table games. The property also features a 15-story, 308-room hotel with 11 suites, six restaurants, retail area, a 1,500-seat entertainment showroom, a spa and a Tom Fazio designed 18-hole championship golf course (which opened in July 2001). The property provides 2,000 parking spaces, most of which are in a multi-level parking structure.

Prior to August 2001, the Company owned a 97% interest in the Belterra Casino Resort, with the remaining 3% held by a non-voting local partner. In November 2000, the Company entered into an agreement with the local partner whereby the local partner had the right to require the Company to purchase, for a purchase price determined in accordance with the agreement, its entire ownership interest in the Belterra Casino Resort at any time on or after January 1, 2001. In July 2001, the local partner exercised the right to require the Company to purchase the remaining 3% ownership interest held by the partner. In August 2001, the remaining payment was made to the partner and, as such, the Belterra Casino Resort is now wholly owned by the Company.

Boomtown Reno

Boomtown Reno is a land-based facility that has been operating for over 30 years on 569 acres near Verdi, Nevada. The hotel features 318 rooms, and the 45,000-square-foot casino contains 1,477 slot machines and 38 table games. The property features four restaurants, an 80-seat lounge, a 25,000-square-foot amusement center, 10,250 square feet of meeting space and an indoor pool. In addition to the casino/ hotel, the property also includes a full-service truck stop, a gas station/ mini-mart, a 203-space RV park and 1,351 parking spaces.

The Company owns the 569 acres in Verdi, Nevada, on which Boomtown Reno is located, with current operations of Boomtown Reno presently utilizing approximately 61 acres. Of the 508 excess acres, the Company considers approximately 250 acres suitable for development. The Company may seek to sell such excess acreage to interested developers or investors. The Company owns all of the improvements and facilities at the property, including the casino, hotel, truck stop, recreational vehicle park and service station, along with the related water rights.

Boomtown New Orleans

Boomtown New Orleans opened in Harvey, Louisiana, in August 1994 on a 54-acre site located approximately 10 miles from downtown New Orleans. Boomtown New Orleans is a dockside riverboat gaming facility that features a riverboat, the Boomtown Belle II, containing 1,467 slot machines and 44 table games and a land-based pavilion comprised of 88,000 square feet and features two restaurants, a deli, a 350-seat nightclub, 21,000 square feet of meeting space, a banquet facility and an amusement center. The facility also provides 1,729 parking spaces.

In 2001, in response to the legislation enacted in April 2001 enabling all riverboat casinos in southern Louisiana to remain dockside at all times, the Company commenced a project that included the renovation of the pavilion building and the third deck of the dockside riverboat casino. Such renovation also included adding 300 new slot machines and the construction of a high-limit table games area on the third deck of the riverboat casino and the renovation of various food and beverage outlets in the pavilion building adjacent to the dockside riverboat casino. The Company owns the 54 acres in Harvey, Louisiana, the riverboat and land-based facilities that are utilized by Boomtown New Orleans.

Casino Magic Biloxi

Casino Magic Biloxi is a dockside barge located on 16 acres on the Mississippi Gulf Coast and features a dockside casino barge. The facility began operation in June 1993. The property is situated on the beach of the Gulf of Mexico. In 1998, the Company opened a 378-room hotel, including 86 suites, at the property. The property features a 49,260-square-foot casino providing 1,312 slot machines and 35 table games. The facility also contains four restaurants, 6,600 square feet of convention space and a health club. The property currently provides 1,315 parking spaces.

Of the 16 acres on which Casino Magic Biloxi is located, the Company owns approximately 4.5 acres and leases approximately 11.5 acres, including approximately 6.4 acres of submerged tidelands leased from the state of Mississippi. The tidelands are under a 10-year lease that expires on May 31, 2003, with an option to extend the term for five years under the same terms and conditions, subject to the renegotiation of annual rent. The remaining leased land is leased pursuant to leases that expire on June 30, 2003, each with options to extend the terms thereof for additional five-year periods. The Company owns the barge on which the casino is located and all of the land-based facilities, including the hotel.

Casino Magic Bossier City

Casino Magic Bossier City is a dockside facility located in Bossier City, Louisiana. Gaming is conducted on a dockside riverboat casino that does not cruise. The dockside riverboat casino provides 1,148 slot machines and 36 table games. In December 1998, the Company opened a 188-room hotel, including four master suites and 88 junior suites, adjacent to the land-based pavilion. The facility provides 2,100 parking spaces.

Casino Magic Bossier City is located on 23 acres of land owned by the Company, adjacent to the Red River in Bossier City, Louisiana. The Company owns the 23 acres of land, dockside riverboat casino, hotel, parking structure and other land-based facilities on the property. The Company leases approximately one acre of water bottoms from the state of Louisiana pursuant to a lease due to expire in September 2006.

Casino Magic Argentina

The Company operates two land-based casinos in the cities of Neuquen and San Martin de los Andes in the Province of Neuquen, Argentina. The larger of the two casinos is located in the city of Neuquen and contains 38 table games, 484 slot machines and a 384-seat bingo facility. The smaller facility, located in San Martin de los Andes, has 12 table games and 100 slot machines. The Company does not own any real property at these sites.

The casinos opened in 1995 and are operated under a 12-year concession agreement with the Province that expires in December 2006. In August 2001, the Company and the Province entered into an agreement whereby the concession contract will be extended for an additional 15 years if Casino Magic Argentina invests in the development of a new casino facility and related amenities in accordance with the terms of the agreement. Due to political and economic instability in Argentina, including the currency devaluation in January 2002, the Company is considering its long-term options regarding Argentina.

California Card Club Leases

The Company receives lease income from two card clubs in the Los Angeles, California, area: the Hollywood Park-Casino and the Crystal Park Casino. The Company leases the Hollywood Park-Casino from Churchill Downs California Company, a wholly owned subsidiary of Churchill Downs Incorporated, and subleases it to an unaffiliated third party operator. The Crystal Park Casino is owned by the Company and is leased to an affiliate of the card club operator that leases and operates the Hollywood Park-Casino. The Hollywood Park-Casino and Crystal Park Casino are not operated by the Company because public corporations that are not qualified California Racetrack Associations may not directly operate gambling enterprises in California.

The Hollywood Park-Casino is located in Inglewood, California, and is part of the complex that includes the Hollywood Park Race Track. The Hollywood Park-Casino contains approximately 30,000 square feet of card club gaming space, offering 120 table games, and 30,000 square feet of retail and restaurant space. Since September 1999, the Hollywood Park-Casino has been leased from Churchill Downs California Company, a wholly owned subsidiary of Churchill Downs Incorporated, and is subleased to an unaffiliated third-party operator.

The Crystal Park Casino, located on 20 acres in Compton, California, opened in October 1996. The Crystal Park Casino contains approximately 40,000 square feet of gaming and banquet space with 21 gaming tables. The adjoining hotel contains 237 rooms, including 32 suites. The Company owns the approximately twenty acres on which the casino facility, adjoining hotel and parking is located. Prior to February 2001, the Company leased the adjoining hotel and approximate 35 acres of unimproved land from the city of Compton under a 50-year lease. In February 2001, in order to obtain full title to the property, the Company purchased the hotel tower and approximately 14 acres of the leased land.

The primary competitors to the Belterra Casino Resort in the Ohio River Valley are the Grand Victoria riverboat casino in Rising Sun, operated by Hyatt, the Caesar's riverboat casino in Harrison County, operated by Park Place Entertainment, and the Argosy riverboat casino in Lawrenceburg. Casino Magic Bossier City competes directly with four other dockside riverboat gaming facilities, one of which, the Hollywood Casino, opened in December 2000, and another of which, Harrah's Casino, opened a new 500-room hotel tower in January 2001. The Horseshoe Casino and the Isle of Capri Casino are its other competitors. Boomtown New Orleans directly competes with two other dockside riverboat casinos, Bally's and Treasure Chest, and Harrah's Jazz land-based casino and entertainment facility in downtown New Orleans. Casino Magic Biloxi competes primarily with the MGM/Mirage Resorts Beau Rivage Resort.

Disclaimer:
The data included within the Financial section is solely for information and does not construe a recommendation and/or endorsement by IGHRM or its members to invest funds with any of the companies listed. You are strongly advised to obtain professional advice with qualified individuals or corporations for any investments of funds.

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