Harrah's, Pinnacle Swap Casinos - Saturday 3rd of June 2006

Las Vegas Gaming Wire

LAS VEGAS Harrah's Entertainment and Pinnacle Entertainment officially swapped hurricane-damaged casinos Wednesday, a deal announced in April.

Pinnacle will acquire the gaming licenses for two riverboat casinos in Lake Charles, La., both of which were destroyed in late September by Hurricane Rita. Harrah's picks up Casino Magic in Biloxi, Miss., which has been closed since August, when it was destroyed by Hurricane Katrina. Pinnacle will also pay Harrah's $25 million.

The transaction is expected to close by the end of the year and is subject to regulatory approval.

In a statement, Pinnacle said it plans on keeping one of the riverboat casinos in Lake Charles, where the company operates the 1-year-old L'Auberge du Lac, and will look at moving the other boat to another location in Louisiana.

Pinnacle will also need passage of a ballot referendum in Lake Charles.

Pinnacle Chairman Dan Lee said the transaction allows the company to add to L'Auberge, which has reported $106.9 million in gaming revenue through April, the most of any casino facility in Louisiana.

Harrah's plans to reopen a portion of its Grand Casino in Biloxi, which is adjacent to the Casino Magic site, this summer. The company said its would announce plans this year for redeveloping the Grand Casino location.

Hurricane Katrina destroyed Casino Magic's gaming barge and extensively damaged the hotel complex.

The deal calls for each company to retain its insurance claims on their properties.

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