Riverboat deal faces scrutiny

Thursday, Aug. 12, 2004 | 11:04 a.m.

ST. LOUIS -- President Casinos Inc. plans to sell its riverboat casino in downtown St. Louis to Penn National Gaming Inc. for $28 million, the companies said Wednesday. The deal is expected to close by mid-2005, but faces criticism from failed bidder Pinnacle Entertainment Inc. of Las Vegas.

The deal is subject to regulatory approvals from various agencies, including the Missouri Gaming Commission and the U.S. Bankruptcy Court in the Eastern District of Missouri, which is handling President Casinos Inc.'s reorganization. President and the President Casino on the Admiral have been operating under bankruptcy protection since June 2002.

The 70,000-square-foot President Casino is housed on the historic Admiral riverboat on the Mississippi River.

Under the bankruptcy process, other potential buyers could try to top Penn National's offer. The St. Louis Post-Dispatch reports that Pinnacle, which is seeking approval from the gaming commission for a $250 million casino and hotel project a few blocks from the President, might be one of the bidders.

Pinnacle Chairman Dan Lee said Tuesday that his company last week submitted a better offer than Penn National's, only to be rebuffed by President's investment banker and bondholders.

"That they chose to go with a different company is very curious and something we hope the bankruptcy judge will look at very closely," Lee said.