Pnk lgfrb presentation submittal

Kansas Lottery Gaming FacilityKansas Lottery Gaming Facility Review BoardReview Board

August 13, 2008August 13, 2008

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Pinnacle Proposal HighlightsPinnacle Proposal Highlights

Greatest Revenue GeneratorHighest gaming revenuesMost money for Kansas

Most TouristsLargest convention centerLargest and highest-quality hotel

Best LocationSuperior access and visibilitySchlitterbahn

Proven Gaming OperatorEleven casinos in operationExperience in similar markets

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Who is Pinnacle?Who is Pinnacle?

NYSE-traded gaming company with headquarters in Las Vegas, NevadaOperations in Missouri, Nevada, Louisiana, Indiana and ArgentinaBuild and operate high-quality casino destinations customized for each marketExperienced management team with extensive backgrounds in competitive gaming environmentsOver 8,600 employees$1 Billion in annual revenues

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INDIANAPOLISCINCINNATI

LEXINGTON

LOUISVILLE

DALLAS/FORT WORTH

AUSTIN

HOUSTONSAN ANTONIO

SACRAMENTO

SAN FRANCISCOOAKLAND

Pinnacle Properties

Pinnacle Development Sites

Large Regional Cities

NEW ORLEANS

BOSSIER CITY

INDIANA

RENO

SOUTH AMERICA

LAKE CHARLES

ATLANTIC CITY

PHILADELPHIA

CENTRAL CITY

HEADQUARTERS

CHICAGO

NEW YORK CITY

BATON ROUGE

DENVER

ST. LOUIS

Potential Future Development Sites

Pinnacle PropertiesPinnacle Properties

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BelterraBelterra Resort and Casino Resort and Casino –– VevayVevay, Indiana, Indiana

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LL’’AubergeAuberge du Lac du Lac –– Lake Charles, LouisianaLake Charles, Louisiana

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LL’’AubergeAuberge du Lac du Lac –– Lake Charles, LouisianaLake Charles, Louisiana

7 Lumiere Place: Casino Site

LumiLumiéérere Place Place –– St. Louis, MissouriSt. Louis, Missouri

8 Lumiere Place: Casino Site

LumiLumiéérere Place Place –– St. Louis, MissouriSt. Louis, Missouri

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LumiLumiéérere Place Place –– PerformancePerformance

Opened December 19, 2007Year 1 projected gaming win = $134.9MYear 1 (January 2008 – June 2008) actual gaming win = $80.0MOutperforming table game business

18.5% of table games in market30.0% of table game revenueTable games = high end play, tourism

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Internal Regulatory ProcessInternal Regulatory Process

Character, honesty, and integrityCredibility is most valuable currency in the gaming industryProven track record in other regulatory jurisdictionsComprehensive and effective compliance programProblem-Gaming Program

Member of AGASelf-ExclusionTraining, Training, Training

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Recent Capital Raising HistoryRecent Capital Raising HistoryMay 2003 $240 million credit facilitySept 2003 $135 million senior subordinated notesDec 2003 $300 million credit facilityFeb 2004 $128 million equity offeringMar 2004 $200 million senior subordinated notesAug 2004 $400 million amended credit facilityDec 2004 $100 million senior subordinated notesDec 2004 $84 million equity offeringDec 2005 $750 million credit facilityJan 2006 $189 million equity offeringNov 2006 $1 billion amended credit facilityJan 2007 $368 million equity offeringJune 2007 $385 million senior subordinated notes

TOTAL $4.3 Billion

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Pinnacle

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Site SelectionSite Selection

East side of I-435 allowed proximity to infrastructure without west-side traffic concerns66 acres allows for future expansionProximity to Schlitterbahn’s planned 1,600 hotel rooms creates unmatched destination

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Selected Selected JerdeJerde Partnership ProjectsPartnership Projects

Canal City Hakata, Fukuoka, JapanMorongo Casino Resort & Spa Cabazon, California

The Gateway, Salt Lake City, Utah

Palms Casino Resort

Las Vegas, NevadaBellagio Las Vegas, Nevada

Treasure Island Las Vegas, Nevada

Wynn Las Vegas, Nevada

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Project ComponentsProject Components

100,000-square-foot casino100,000 square foot convention center

Designed to expand to 200,000 square feet50,000 square foot entertainment venue

200 five-star hotel rooms300 four-star hotel roomsFull service spa and salonDining options ranging from gourmet to fast casualCenter island performance stage and nightclub

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CasinoCasino

100,000 square feet of gaming2,300 slots; 60 table games; 25 poker tablesDesigned for future expansionA casino is not a commodity; it requires operational expertise and knowledge to operate successfully

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Convention CenterConvention Center

Largest convention center of any applicant100,000 CONTIGUOUS square feetDesigned to expand to 200,000 square feetKey for mid-week and off-season hotel occupancy to create year-round destination

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HotelHotel

Largest hotel of any applicant500 total rooms, including:Experience developing luxury-branded hotels

Four Seasons Hotel at LumièrePlace in St. Louis

Schlitterbahn plansinclude 1,600 hotel rooms

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Restaurants and LoungesRestaurants and Lounges

Variety of outlets from casual to gourmetHistory of using nationally and locally renowned chefs

Hubert KellerJeff Ruby

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EntertainmentEntertainment

50,000 square-foot indoor venue for live events

4,000 seats

Existing network of entertainment booking for other Pinnacle propertiesOutdoor stage for live events

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RetailRetail

15,000 square feet of retailVillage West area is already a shopping destination with three million existing square feet of retailSchlitterbahn is building 750,000 square feet of retailGoal of boutique retail is to complementexisting retail, not compete with it

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SchlitterbahnSchlitterbahn

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SchlitterbahnSchlitterbahn

Travel Channel rated #1 place to “Cool Off in America”2007 Golden Ticket award for #1 indoor waterpark in the U.S.Named #1 water park in the U.S. by the Travel Channel (2006)Amusement Today magazine readers voted Schlitterbahn the world's best water park in 1998, an honor the park has received annually ever sinceSchlitterbahn was voted the nation's number one water park by the readers of Inside Trackmagazine in 1996Lead into travel channel video…

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Integrated Site PlanIntegrated Site Plan

Will create a strong super-regional destination with over 2,000 hotel rooms

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Family DestinationsFamily DestinationsDisneyland – Anaheim, CA

Downtown Disney

Disneyworld – Orlando, FLPleasure IslandMust be 21 to enter

Atlantis ParadiseIsland – Bahamas

Multiple resorthotelsWater parkintegratedwith casino

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Project ScheduleProject Schedule

September 2008: Management contract awardedNovember 2008: Kansas Racing & Gaming ratifies selectionJuly 2009: Temporary casino opens – Kansas begins receiving gaming revenuesEarly 2011: Permanent casino opens with all guaranteed components

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Senate Bill 66Senate Bill 66

“The board shall determine which contract best maximizes revenue, encourages tourism and otherwise serves the interests of the people of Kansas.”

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Senate Bill 66Senate Bill 66

“The board shall determine which contract best maximizes revenue, encourages tourism and otherwise serves the interests of the people of Kansas.”

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Most RevenuesMost RevenuesPinnacle will produce the highest revenues

Gaming revenue = $401.5MNon-Gaming revenue = $86.8M

Development and operating expertiseNo traffic congestion with existing development west of I-435MyChoice program

National database of 4.7 million GAMERSPinnacle will cross-market Kansas casino with its national network of existing casinos

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Senate Bill 66Senate Bill 66

“The board shall determine which contract best maximizes revenue, encourages tourism and otherwise serves the interests of the people of Kansas.”

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Most TouristsMost Tourists

Pinnacle will draw the most touristsNumber of tourist visits = 441KTotal tourist spend = $86.3M

Largest hotel of any applicantLargest convention center of any applicantWith adjacent Schlitterbahn project, will create a national destination with over 2,000 hotel rooms

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Senate Bill 66Senate Bill 66

“The board shall determine which contract best maximizes revenue, encourages tourism and otherwise serves the interests of the people of Kansas.”

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Economic ImpactEconomic Impact

Create 2,000 union construction jobsEmploy 1,500 peopleGenerate over $17 million/year in new property taxes, including

Over $7 million/year for the KCK (USD #500) school districtPinnacle Proposal is the ONLY gaming proposal in the USD #500 school district

Attract millions of incremental new visitorsPurchase over $50 million in annual goods and services from local suppliers

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School District ComparisonSchool District ComparisonStudents Free/Reduced

LunchGraduation Rate

Kansas City, Kansas (USD #500)

18,203 82% 78%

Bonner Springs/Edwa rdsville (USD #204)

2,337 35% 88%

Piper (USD #203)

1,530 8% 97%

Source: Kansas State Department of Education

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GVA Marquette Revenue ProjectionsGVA Marquette Revenue Projections

Gaming revenue = $366.5MTotal tourist gaming win = $71.9M

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GVA Marquette Site EvaluationGVA Marquette Site Evaluation

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GVA Marquette Site ComparisonGVA Marquette Site Comparison

“We believe the Pinnacle site is the superior site among the five sites evaluated. A casino at this location, in combination with the Schlitterbahn attraction and lodging units, would create a unique gaming destination that would expand the regional gaming market, thus maximizing the amount of revenue generated by visitors from outside the local market… For these reasons we believe that this site is likely to generate the highest gaming revenues of the five sites evaluated.”

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Casino ExpertiseCasino Expertise

Proven casino operating expertiseOperate 13,000 gaming positions across 13 properties

Proven casino development expertiseOver $1 billion of new casino/hotel development within the past 3 years

Kansas needs an operator that can generate the most gaming revenues

Well-established competition in Missouri

Able to generate higher gaming revenues than our competitors

Least traffic congestionRewards program linked to national network of properties

Best complement to existing tourism destination

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Applicant ComparisonApplicant ComparisonMajor Commericial Casinos

Tribal Casinos

Racinos Countries/S tates

Hotel Rooms

Slot Machines

Table Games

Pinnacle 9 N/A N/A 6 2,634 10,695 360

Cordish/ Speedway

0 0 1 1 0 2,000 0

Golden Gaming

4 0 0 2 70 1,668 40

Mohegans/ Red

0 1 1 2 1,176 8,400 318

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Project ComparisonProject ComparisonMunicipality Hotel

RoomsConvention Center

Traffic Impact

School District

Pinnacle Kansas City, Kansas

500 100,000 Negligible KCK (USD #500)

Cordish/ Speedway

Kansas City, Kansas

300 58,000 Significant Bonner (USD #204)

Mohegans/ Red

Kansas City, Kansas

350 35,500 Significant Piper (USD #203)

Golden Gaming

Edwardsville, Kansas

300 35,000 Moderate Bonner (USD #204)

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Pinnacle CommitmentsPinnacle CommitmentsWork with local communities to have lasting positive effect on neighborhoodStrive to be excellent corporate citizen with dedication to local charities and community service

Community enhancement projectsCommitment to Wyandotte County:

$1 million upon opening$1 million ANNUALLY during operations

Aggressive diversity goals in hiring and working with minorities and womenConvert Western Wyandotte County from a regional destination into a national destination

Convention CenterLuxury HotelWorld-Class Casino

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ConclusionConclusion

HIGHEST RevenuesBest siteExperience, experience, experience

Most TouristsLargest hotelLargest convention centerAdjacent to Schlitterbahn

Best Interests of KansasProven track recordKeep our promises

Kansas Lottery Gaming FacilityKansas Lottery Gaming Facility Review BoardReview Board

August 13, 2008August 13, 2008