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Thursday, March 28, 2024 | Back issues
Courthouse News Service Courthouse News Service

Court Tosses Antitrust Claim Against Harrah’s

(CN) - The 5th Circuit dismissed an antitrust lawsuit accusing Harrah's Operating Co. and Pinnacle Entertainment of conspiring to monopolize riverboat gambling in Louisiana.

State law limits the number of riverboat casinos to 15, six of which are held by Harrah's and Pinnacle.

As landlord, Jebaco leased two Lake Charles berths to Players Lake Charles in exchange for a cut of the per-patron fees. Harrah's bought Players in 2000 and continued paying Jebaco a portion of the rent.

Some of Harrah's riverboats were damaged by Hurricane Rita in 2005, prompting Harrah's to place them on the market.

Jebaco bid on the boats and associated gaming licenses, but was knocked out of the running by Pinnacle's $70 million bid.

Jebaco said the purchase price was far higher than the property's reasonable value and accused Harrah's and Pinnacle of trying to corner the gambling market.

Harrah's and Pinnacle earn about 60 percent of all gaming revenue in the state, according to Jebaco.

The district court dismissed the federal antitrust claims, but declined to rule on Jebaco's state-law claims.

The New Orleans-based appeals court affirmed the lower court's ruling on different grounds, saying Jebaco lacked antitrust standing.

"Jebaco's inability to enter the casino market was not a product of antitrust injury," Chief Judge Edith Jones wrote. "It was not the type of injury the antitrust laws were designed to prevent, nor did it flow from the alleged anticompetitive conduct."

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