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St. Louis & Casino Duke It Out

ST. LOUIS (CN) - Once allies, Pinnacle Entertainment and the City of St. Louis have filed dueling lawsuits against each other. St. Louis and Las Vegas-based Pinnacle are at odds over the city's chances of landing Missouri's 13th casino license and $50 million in new housing and retail development that Pinnacle promised to build in the 2004 agreement that paved the way for the $500 million Lumiere Place casino on the city's north side.

According to the agreement, St. Louis agreed to oppose any new casino development within 25 miles, aside from Pinnacle's River City Casino, which recently opened in south St. Louis County. Pinnacle agreed to build Lumiere Place and to put $50 million in development nearby.

In 2006, Pinnacle bought the President Casino, a neighbor to Lumiere Place, out of bankruptcy court. The move gave Pinnacle, who was noncommittal about the President Casino's future, control of both gambling licenses in the city.

The President Casino's performance continued to be poor, especially after Lumiere Place opened in 2007. In 2009, the Missouri Gaming Commission started trying to strip the casino's license due to poor performance.

Pinnacle fought back, with its biggest supporter the City of St. Louis. But Pinnacle changed course in March this year, announcing it planned to close the President. It said it would surrender the gaming license this June.

St. Louis then sought new entities to apply for the vacated license. But Pinnacle sent the city a letter, citing the 25-mile clause in the 2004 agreement, and asked it to stop.

The city refused.

In its complaint in City Court, St. Louis claims the 2004 agreement allowed for two gambling licenses within its boundaries. The city asks a judge to reaffirm its ability to pursue the $50 million in redevelopment promised by Pinnacle. St. Louis already has found three would-be casino builders, the St. Louis Post-Dispatch reported.

In its federal complaint, Pinnacle seeks an injunction prohibiting St. Louis from proceeding in its application process.

Pinnacle claims it has spent $500 million on Lumiere and can't risk a competitor so close.

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