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Pinnacle Entertainment says L’Auberge du Lac in Lake Charles will be the model for the Riviere casino development they hope to bring to Baton Rouge, and they like to show it off.

“Walk aboard a (gambling) boat in Baton Rouge, pick one, then think of this moment,” says L’Auberge spokeswoman Kerry Andersen while walking through the resort’s main hallway into the casino.

As dictated by state law, the 30,000-square-foot gambling area is over water, in a “riverboat” that sits in a giant bathtub made of Belgian steel (gambling boats don’t cruise anymore). By design, the transition to the boat from the hotel/restaurant/shopping complex that surrounds it looks and feels seamless, and the wide walkways and 22-foot ceilings of the single-level casino make older multi-level boats seem cramped by comparison.

The 770,000-square-foot, $400 million-plus L’Auberge property sits on 227 acres on Contraband Bayou and includes six restaurants, several high-end shops, a pool with a cabana courtyard, an ice cream parlor, a Starbucks, a video arcade, a marina, a spa and exercise facility, a ballroom that can be converted into a 1,500-seat event venue, a 750-room, 26-story hotel and an 18-hole golf course. By Andersen’s estimate, at least 70% of L’Auberge’s customers come from the Houston area, which helps explain the faux-Texas Hill Country décor, the Houston-based Vietnamese chain restaurant and the stack of Houston Chronicle newspapers at the VIP check-in.

Pinnacle has been cleared in principle by the state Gaming Control Board to build Baton Rouge’s third casino. On Oct. 10, the Metro Council will consider putting a casino referendum on the ballot, perhaps as early as February. If approved, Pinnacle says the casino could open its doors within two years.

If that happens, the two gambling companies that are already here will be faced with a stark choice: redouble their efforts to compete with the new guys, or give up and shove off. So the question becomes, would a third casino necessarily push one or both of the other Baton Rouge boats out of town? And, if so, given what Pinnacle says it’s bringing, would anyone care?

Tropicana Casinos and Resorts, which owns the Belle of Baton Rouge, declined to comment for this story. But Penn National Gaming, which owns Hollywood Casino, has mounted a frontal assault on the Pinnacle interlopers.

“This market is not large enough to support a third riverboat,” says Penn National spokesman Eric Shippers, citing a study it commissioned by LSU economist Loren Scott. “All you’re really doing is cannibalizing the existing market.”

Photo by Brian Baiamonte

BELLE OF THE BALL: The Belle of Baton Rouge Casino touts its three-deck riverboat, 300-room Sheraton Baton Rouge Convention Center Hotel, restaurants and lounges and special events such as concerts and boxing.

Baton Rouge is not a “destination” gaming market that can attract large numbers of tourists. To get here, out-of-state gamblers have to drive past casinos in Lake Charles to the west, Shreveport to the north and the Mississippi Gulf Coast and New Orleans to the east. Gamblers in Baton Rouge are almost all locals, although Pinnacle says Riviere would at least stand a chance of attracting people from outside the metro area.

Shippers argues Shreveport or Lake Charles could better support the gaming license Pinnacle wants to use here. Penn National officials admit the Hollywood Casino boat is outdated, and say there’s a possibility the company might bring a newer boat from Lawrenceburg, Ind., to Baton Rouge. Shippers wouldn’t or couldn’t say whether Pinnacle entering the market would make that new investment more or less likely.

But he did question whether the proposed Riviere location along the Mississippi River near Gardere Lane is suitable for a casino. Baton Rouge is making a concerted effort to create a vibrant downtown entertainment district, and the two existing boats are part of that effort, he says. Building a casino out near the suburbs that would force out the current players would detract from downtown’s revitalization, he says. Opponents also question whether the local infrastructure can handle it, and whether it’s a good idea to put a casino so close to a residential area.

“Where is it more appropriate for this kind of economic development to occur?” Shippers asks rhetorically.

“We didn’t want to be downtown,” Pinnacle president Wade Hundley says. “We wanted to distance ourselves from the two existing properties.” He says many locals aren’t impressed with the existing casinos, and he didn’t want locals thinking Pinnacle was bringing “just another downtown boat.”

Eventually, Pinnacle hopes to build an entire village on the 550 or so acres they’ve purchased, but only the first phase of the project has Control Board approval and a commitment from Pinnacle: a $250 million project anchored by a new single-level gambling boat, an adjoining 100-room hotel, restaurants and lounges, an entertainment venue and a landscaped park. Hundley says despite a smaller hotel, a couple fewer restaurants and lack of a golf course, Phase One of Riviere will be comparable in quality to L’Auberge.

He says the company is already talking to developers about the second phase, including a golf course, hotel expansion and residential development, and could possibly begin construction on future phases before the casino opens in 2010. Hundley acknowledges the local skepticism over whether Pinnacle will ever build what they say they will, and says they faced the same problem in Lake Charles. The 2002 local referendum allowing the L’Auberge casino passed with 57% of the vote, while a 2006 referendum to build the companion Sugarcane Bay resort next door sailed through at about 67%, he says, which shows people liked what they did the first time.

“We’re a real company doing real things,” Hundley says. “We stand by what we’ve done in the past.” He says their own research shows a new casino would significantly grow the local market because Riviere will be far superior to what’s available now and would attract locals who normally do their gambling in, say, Biloxi, or who don’t gamble at all.

Photo by Brian Baiamonte

YOU’RE THE STAR: Hollywood Casino highlights its gaming, live entertainment and dining options, but officials with parent company Penn National Gaming believe this area is unable to support a third riverboat.

“We don’t think (the other boats) will leave,” he says. “They’ll make less, but they’ll remain profitable.” Hundley says he expects the other companies to step up their games and compete.

Scott, a longtime proponent of free markets, generally touts the value of competition. But he points out Louisiana has never had a free market for gambling.

“We decided back in the ’90s that it’s not going to be a free market,” Scott says. Instead, the state allocated 15 available licenses throughout the state in such a way that each would be expected to thrive. Studies at the time showed Baton Rouge was—at best—a two-boat market. In exchange for having a protected market, the casinos agreed to be taxed at the extraordinary rate of 21.5%. That’s on revenue, not profit.

“That’s a pretty darn high price to pay,” Scott says. “Now they’ve gone and changed the game around.”

Scott’s study shows Pinnacle would grow the local market, but not nearly enough to support three casinos. At least one, and very possibly both, of the existing boats would go down. There simply aren’t enough gambling dollars in the Baton Rouge area to go around, he believes.

“Those two casinos anchor both ends of downtown,” he says. “Anyone interested in the development of the downtown area should be worried about this.”

Scott’s study, dated July 2006, says if Casino Rouge (now Hollywood) leaves the market first, it’s possible the Belle of Baton Rouge might still be financially viable, but if the Belle leaves first, the other boat still wouldn’t make it. And if both boats leave, Scott predicts total gaming revenue would decline even if Riviere thrives.