Pinnacle buys Harrahs Lake Charles

Pinnacle Entertainment has signed a definitive agreement under
which it will acquire certain Lake Charles, Louisiana gaming assets of
Harrah’s Entertainment.The agreement, which formalizes a
letter of intent announced on April 17, also calls for the sale of certain
of Pinnacle’s Casino Magic Biloxi assets to a subsidiary of Harrah’s
Entertainment.
  Under the agreement, Pinnacle will acquire two gaming subsidiaries of
Harrah’s, which own two casino boats, related licenses and permits, and a
263-room hotel. Harrah’s Lake Charles was severely damaged by Hurricane
Rita in September 2005. Harrah’s will acquire Pinnacle’s Casino Magic
Biloxi site and certain related assets, and receive an additional payment
of approximately $25 million from Pinnacle. Casino Magic Biloxi has been
closed since being struck by Hurricane Katrina on Aug. 29, 2005, which
destroyed the gaming barge and extensively damaged the hotel complex. Each
company will retain its insurance claims.
  “The purchase of Harrah’s Lake Charles will allow us to build on our
success at L’Auberge du Lac, which just marked its first-year anniversary
and is now the state’s leading generator of riverboat gaming revenues,”
said Daniel R. Lee, Chairman and Chief Executive Officer. “In addition to
expanding L’Auberge with a 250-room hotel project, we plan to add another
riverboat casino in the Lake Charles area. We are also exploring options
for the other license elsewhere in Louisiana. We enjoyed being a part of
the Biloxi community for many years and hope to return to Mississippi at
some point in the future.”
  The definitive agreement is subject to receipt of all required
regulatory approvals, as well as the passage of a local-option referendum
in Lake Charles that the Company anticipates will be on the ballot in late
September. If those conditions are satisfied, the transaction is expected
to close in the fourth quarter of 2006.
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