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July 30, 2014

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Pinnacle, Harrah’s plan to exchange damaged casinos

Pinnacle Entertainment Inc. will get what's left of Harrah's Entertainment Inc.'s Lake Charles casino complex in Louisiana, while Harrah's will take over what's left of Casino Magic in Biloxi, Miss., under a deal announced Wednesday.

Las Vegas-based Pinnacle said it would use one of Harrah's two dockside riverboat license to add a second casino to its L'Auberge gambling resort in Lake Charles, which has been a major hit with players since its opening a year ago, becoming the top revenue-garner among Louisiana's 12 riverboats.

The company would not specify where it would use the other license in Louisiana. Pinnacle also will get Harrah's 263-room hotel in Lake Charles.

Las Vegas-based Harrah's will take over Casino Magic Biloxi and receive a payment of $25 million, Pinnacle said.

Harrah's Lake Charles sustained heavy damage to both of its casino boats from Hurricane Rita on Sept. 25, while Casino Magic Biloxi's gambling barge was destroyed and its hotel severely damaged by Hurricane Katrina on Aug. 29.

Both companies will retain their insurance claims, Pinnacle said.

"We enjoyed being part of the Biloxi community for many years and hope to return to Mississippi and some point in the future," Pinnacle Chairman Daniel Lee said in a statement.

The two companies said they hope to close the deal during the fourth quarter.

The deal will have to be approved by gambling regulators in Louisiana and Mississippi. To locate a second boat at L'Auberge, Pinnacle also will have to win passage of a local-option referendum in Calcasieu Parish.

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On the Net:

Pinnacle Entertainment Inc.: http://www.pnkinc.com

Harrah's Entertainment Inc.: http://www.harrahs.com

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