State revokes license of St. Louis casino, opens possibility for Cape casino

Thursday, January 28, 2010

Missouri gambling regulators voted Wednesday to close an aging St. Louis river boat casino, claiming the owners have intentionally slowed gambling and thus limited state revenue.

The decision again opens the possibility that Cape Girardeau could land a casino, local businessman David Knight said.

The Missouri Gaming Commission in Jefferson City voted 4-0 to revoke the license of the President Casino. It would close by July 1, but the casino still could request a hearing challenging the decision.

"There is a pattern of deliberately putting the President Casino in decline," commission chairman James Mathewson said.

Casino revenue has become a more important part of the state's economy since Missouri legalized casino gambling in 1993. State taxes on casinos go largely to education.

The commission's order for disciplinary action says the company has removed slot machines and game tables and reduced food options and staff. Revenue at the President Casino has declined 48 percent since Pinnacle bought the casino in 2006.

"That casino can generate more and should generate more," commission executive director Gene McNary said.

The order says decline in services has "turned a valuable gaming license into an unproductive and substandard casino operation which is harmful to our state and its people."

Closing the President Casino could affect the entire state by allowing another company to get a casino permit. The number of casinos allowed in Missouri was capped at 13 by a 2008-voter approved law.

McNary said Pinnacle is "holding the license hostage" and that other companies have expressed interest in buying the license.

Knight was seeking partners for a casino locally when the license limit was imposed. He and businessman Jim Riley own property along North Main Street they hoped to develop. Knight said the ruling confirms that casinos should be located throughout the state. The majority of Missouri's casinos are along Interstate 70 in St. Louis and Kansas City.

"Obviously the St. Louis market is saturated," he said.

Knight said he is ready to pursue the license regardless of whether the commission will consider licenses that were pending at the time the limit was set or require a new application.

"The outcome ultimately rests in the hands of the gaming commission as far as how they're going to treat the license," he said.

Commission spokeswoman LeAnn McCarthy said President Casino has 30 days to request a public hearing.

Pinnacle Entertainment Inc., which owns President Casino, is studying its legal options, said spokeswoman Pauline Yoshihashi.

"We are shocked and completely dismayed by the committee's actions," Yoshihashi said. "We've put forth viable plans to either repair or replace the vessel. We've dealt with them in good faith."

Yoshihashi said Pinnacle has paid millions in state and local tax revenue and has created thousands of jobs. She said the casino's decline is due to the economy.

St. Louis Mayor Francis Slay sent a letter to the commission Tuesday asking for the casino to stay open.

The President Casino sits on the century-old Admiral riverboat permanently moored on the Mississippi River near the Gateway Arch. It is the smallest casino among the six in the St. Louis area and the only one that sits on a riverboat and directly on the river. Flooding over the past several years has frequently forced temporary closures.

The boat needs significant repairs and is unlikely to be certified to carry passengers after July.

Pinnacle owns the nearby Lumiere Place casino. Mathewson said the company has a deliberate policy not to compete with the Lumiere.

In 2009, the President Casino took $23.3 million in revenue, compared with $181.1 million by Lumiere Place, according to the gaming commission.

"Pinnacle is not going to send people to the President when they have the Lumiere up the street," McNary said.

Last year, Pinnacle approached the commission about the possibility of moving the President Casino. No formal request was ever made, though, after the commission ruled that moving or replacing the President Casino would require Pinnacle to obtain a new license.

Staff writer Alaina Busch contributed to this report.

Pertinent address:

North Main Street

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