River City makes a splash
St. Louis Post-Dispatch
March 2, 2010
by Tim Logan
There were a rope line and a red carpet. There were champagne and mimosas. There was even a woman, clad completely in gold sequins, dangling from the ceiling to pour you a drink.
It was a pretty good party for 10 on a Monday morning.
But, then, it's not every day you unveil a brand-new casino. And that's what Pinnacle Entertainment did Monday with its $380 million River City Casino: It christened its newest entry into the St. Louis gambling market with a dollop of spectacle.
The casino does not officially open to the public until 2 p.m. Thursday, but on Monday, Pinnacle launched a test run, with a sneak peek for about 400 local officials and business partners. And after Missouri Gaming Commission Executive Director Gene McNary presented the license and all the relevant speech-making was through, a team of women in turn-of-the-century riverboat costumes tore down the curtain and the guests streamed in.
What they saw was a 90,000-square-foot gambling floor -- the third-biggest in St. Louis -- with about 2,100 slot machines and a few dozen tables for blackjack, poker and craps. Compared with Pinnacle's dark and glitzy Lumière Place Casino downtown, River City is brighter and warmer, with rich red carpets and 1904 World's Fair-themed décor.
It is aimed more at locals, said Todd George, Pinnacle's St. Louis regional vice president. He said he hopes to draw people in with fun games and good, reasonably priced restaurants. It doesn't even have a hotel, though Pinnacle may build one as part of $75 million second phase required within three years.
Still, the question remains: Is St. Louis big enough for seven casinos?
Along with Lumière, River City is the second big one to open in a little more than two years. Since 2007, gaming companies have poured about $1.3 billion into the market, funding Pinnacle's two new properties plus big upgrades at the Casino Queen, Ameristar Casino in St. Charles and Harrah's in Maryland Heights. The area has added almost 3,000 slot machines.
That has some industry-watchers warning about "cannibalization."
River City's target market is south St. Louis County -- home to perhaps one-third of the customer base at the Casino Queen and Pinnacle's Lumière Place, noted Brian McGill, a gaming analyst at Janney Montgomery Scott, in a recent research note. The new place will also likely draw customers from Jefferson and St. Clair counties who now gamble at those two casinos.
George said he expects River City to do about $17 million a month in gambling revenue when it opens, and grow from there. That would make it the region's third-busiest casino, behind Harrah's and Ameristar, which have both averaged just under $25 million a month in gambling revenue over the last two years, according to the Gaming Commission.
Some of River City's profits will likely come from Lumière, where most experts predict business will dip a bit.
But having both casinos just 15 minutes apart, with shuttle buses running between them, will help Pinnacle "grow the pie," George said, and make St. Louis more of a destination for gamblers from around the Midwest.
"Our goal is to grow the market," he said. "It's always easier to do that than to try and steal other people's customers."
St. Louis is in a good spot for that sort of thing, said Kathleen "Kitty" Ratcliffe, president of the St. Louis Convention and Visitors Commission. While Lumière pulls conventioneers, sports fans and the downtown business crowd, River City is well-located for bus tours, she explained.
"This product is going to bring people here."
And McNary, of the Gaming Commission, noted that Lumière has grown faster than predicted, based largely on the strength of tourism.
"If we attract people with quality properties, (St. Louis) could become a destination city for gaming," he said.
So far, market saturation hasn't been a big worry. Missouri was one of the few states to see gambling revenue increase last year, and much of that growth came in the St. Louis market. Still, a recession is going on.
It hit while Pinnacle was building River City, and the company made some concessions to the changing times.
The restaurants are a bit less expensive than originally planned, George said. More of the slots are penny slots.
But there's still a shiny marble floor in the Grand Court and $25,000 custom-made chandeliers over the craps tables. And opening a new casino is still the kind of event -- even in these times -- that call for a woman dressed in gold sequins, hanging from the ceiling, pouring drinks on a Monday morning.
