2007 Annual Report - Ameristar Casinos, Inc.

Cactus Petes and The Horseshu have long held Four Diamond and Three Diamond ratings, respectively, from theAmerican Automobile Association. The hotel at Cactus Petes is currently undergoing renovation. The project isexpected to be completed by Memorial Day 2008.The properties are located on Nevada State Highway 93, a major regional north-south route, and serve customersprimarily from Idaho, and secondarily from Oregon, Washington, Montana, northern California and thesouthwestern Canadian provinces.Growth StrategiesWe anticipate that our growth will come from disciplined expansions at selected properties and through strategicacquisitions and new developments.We continuously review the operating performance of each of our existing properties and the feasibility ofenhancing their performance through targeted capital expenditure programs. In doing so, we assess the anticipatedrelative costs and benefits of the projects under consideration, the availability of cash flows and debt financing tofund capital expenditures and competitive and other relevant factors. For example, we believe there are substantialfurther growth opportunities that will be realized from the expansions currently underway at our properties in St.Charles, Black Hawk and Vicksburg and contemplated at Council Bluffs and East Chicago. See “Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations” for further informationregarding our ongoing and planned internal capital improvement projects.In addition to internal expansion opportunities, we selectively evaluate external expansion opportunities tobroaden our overall distribution and increase scale and diversification. We focus on the potential acquisition ofexisting casino-entertainment properties that can be improved through the implementation of our development andoperational expertise. We also consider new development opportunities in existing and emerging domestic andselect international markets. Longer term, we may consider large development projects in major national markets.Although our preference is to own and operate each of our gaming properties, we may also evaluate expansionopportunities involving management contracts or joint ventures.MarketsThe following table presents a summary of the market characteristics and market performance of our Ameristarbrandedproperties as of December 31, 2007.AmeristarSt. CharlesAmeristarKansas CityAmeristarCouncil BluffsAmeristarVicksburgAmeristarBlack Hawk (1)Adult population – within50 miles ............................. 1.9 million 1.5 million 700,000 400,000 2.0 millionAdult population – within100 miles ........................... 2.8 million 2.0 million 1.2 million 1.0 million 2.8 millionNo. of market participants ... 6 4 3 4 202007 annual market gamingrevenue – $ in millions ...... $ 1,000.4 $ 720.8 $ 470.9 $ 277.9 $ 581.42007 market growth rate...... 0.9% 0.9% -1.5% -4.3% 4.9%2007 market share................ 30.0% 35.1% 37.6% 46.0% 16.6%2006 market share................ 30.7% 36.3% 38.5% 46.5% 14.5%2007 market share rank #2 #1 #2 #1 Not reported____________(1)The Colorado Limited Gaming Control Commission reports the Black Hawk and Central City, Coloradomarkets separately. The Black Hawk information in this table excludes six casinos in Central City, adjacent toBlack Hawk, which generated $79.8 million in total gaming revenue in 2007.8