Casino Operator Offers Common Stock as an Award for Patronage

Pinnacle Entertainment Inc. (NYSE: PNK) has registered 20 million common shares valued at $2.49M in connection with the company's Owner’s Club Stock Program (Form S-3 filed 3/16/11, file 333-172884).  Pinnacle created the program within its "mychoice" customer loyalty program to provide customers who are individuals and who meet certain eligibility standards the opportunity to receive common stock as an award for their patronage of its casinos and as an incentive to continue such patronage. The company states that the program presents an opportunity for customers to develop a greater proprietary interest in the casinos.

Participants in the mychoice customer loyalty program earn points based on money spent on specified gambling activities at Pinnacle casinos.  The points accumulate in each participant’s mychoice account.  Customers who have earned or obtained 175,000 points under the mychoice customer loyalty program are eligible to apply for membership in the Owner’s Club Stock Program.  Customers who are accepted as members are granted a one-time award of common shares, either in a fixed amount or based on a fixed value, as selected by the President and CEO in his sole discretion.  At the commencement of the program, it is contemplated that new members will be awarded either 100 shares or a number of shares valued at $1,500.

There are three ways in which members may receive common stock under the Owner’s Club Stock Program once admitted as a member.  If a member already has a brokerage account, the member may instruct the broker to contact Pinnacle's transfer agent to request that the shares to be issued under the program be deposited into the brokerage account.  If a member does not already have a brokerage account, the member may establish a brokerage account with a registered broker-dealer and follow the procedure in the foregoing sentence, or the member may contact the transfer agent and elect to hold the shares in book entry form in an account with the transfer agent.  Members may sell common shares received under the Owner’s Club Stock Program at any time in privately negotiated transactions in compliance with applicable securities laws or into the public market.