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ST. LOUIS — Pinnacle Entertainment blinked.

After eight months of staring down powerful Missouri regulators over the fate of the President Casino, the Las Vegas-based gaming company agreed Wednesday to close the ailing downtown riverboat by July 1.

The move comes as a surprise, one that could have broad implications for St. Louis’ $1 billion-a-year casino industry.

Not because of the President itself. Business at the aging boat had declined so much that it captured just 2 percent of the local gambling market in February. With the President out of the picture, one of the state’s 13 licenses opens up for a much bigger, more lucrative casino somewhere in the state.

"Obviously, that’s something there will be some interest in," said Mike Winter, executive director of the Missouri Gaming Association, a casino trade group.

In a sign of how valuable Pinnacle considered the license, it offered to move, repair or replace the President, which sits in the Admiral riverboat and was due for a July hull inspection that it was widely expected to fail. Those solutions would have cost tens of millions of dollars.

But Pinnacle was rebuffed by the Missouri Gaming Commission, which said the company had little interest in operating a competitive casino just three blocks from Pinnacle’s new Lumi?re Place.

"I called that a ploy," commission Executive Director Gene McNary said Wednesday. "It was clear they were trying to keep the license to avoid competition."

The two sides wrangled in court last fall, and in January, the commission stepped up the pressure, moving to strip the license over weak financial performance. Pinnacle challenged that ruling, and local politicians lobbied against it in Jefferson City, warning that it set a dangerous precedent, and could cost St. Louis precious jobs and tax dollars.

But even as these public steps were being taken, talks were going on behind the scenes.

In the last few weeks, McNary said, Pinnacle general counsel Jack Godfrey reached out to the commission and proposed a deal. Pinnacle would give up the license. The commission would drop its disciplinary proceedings. Everyone would move on.

It is unclear what changed Pinnacle’s mind.

Supporters who were briefed on the decision say it rested, in part, on a desire not to alienate regulators, both in Missouri and other states like Louisiana and Indiana where Pinnacle owns casinos. That makes sense, said I. Nelson Rose, a gaming consultant and attorney in California.

"You don’t gain points by getting in fights with your regulator," he said. "If word gets around that (Pinnacle) likes to file lawsuits, well, all these people talk with each other."

But Godfrey said the decision came simply from shifting priorities. Pinnacle has opened two big, new casinos in St. Louis in a little more than two years. Pouring time and money into the President was no longer smart business.

"We looked at the situation and decided to allocate our resources to productive pursuits," he said.

That became official Wednesday at a carefully orchestrated meeting of the Gaming Commission, held on the sixth floor of the Pinnacle-owned Four Seasons Hotel. From the balcony, you could see the President floating on the riverfront.

Four members of the commission met behind closed doors for nearly an hour to discuss the deal. Then they came out and announced they had accepted it, 4-0 free online credit report.

What followed was a sometimes-awkward news conference, where commission Chairman Jim Mathewson and Godfrey traded the podium for questions.

"We sat down and worked out an agreement that we feel is the best solution for both sides," Mathewson said.

"We’ve sort of agreed to disagree and to resolve this matter," Godfrey said. "We are going to focus on increasing our revenue at our beautiful River City and Lumi?re Place properties."

Although the state and the company say they’re ready to move on, the city of St. Louis still has some serious questions.

Shutting down the President will cost the city about $2 million a year in tax revenue and could cost about 200 casino workers their jobs, said Rodney Crim, a top development aide to Mayor Francis Slay. And yet, Crim said, state officials never consulted with City Hall about it and shot down Pinnacle’s alternative plans.

"It’s been a strange process," Crim said. "We don’t know if there are already other plans in the works, but it’s something people should look more closely at."

There are no specific plans yet for a new casino, Mathewson and McNary said in an interview with the Post-Dispatch editorial board later Wednesday. But they do hope to award the license to a new, more lucrative casino eventually.

The commission will likely launch a market study and weigh social and environmental concerns, to see whether and where a new casino would make sense. Then it will invite casino operators to make proposals. The whole process could take a couple of years, and then more years before a casino is built and operating.

"It is going to take some time," Mathewson said. "There’s a heck of a process to go through before anyone can get a casino license."

And there is likely to be interest.

Before voters capped the number of licenses allowed in Missouri at 13, casinos were being proposed in Cape Girardeau and in Sugar Creek, east of Kansas City. Since then, controversy has been boiling about a proposal by some local developers to put a casino in north St. Louis County, near the confluence of the Missouri and Mississippi rivers. That effort won zoning approval last fall from St. Louis County, though no casino operator has publicly announced its involvement.

Meanwhile Pinnacle — which initially wanted to move the President to a site near the Chain of Rocks Bridge — left open the door to proposing another casino itself.

"We don’t know what the future may hold," Godfrey said. "We’ll see when the time arises."

The future doesn’t hold much for the President.

Gambling on the boat will wind down between now and July 1. Its roughly 200 employees will get a shot at jobs at other Pinnacle casinos. Pinnacle spokesmen say they don’t know yet what will happen to the Admiral.

But the long, strange standoff between the casino company and the state is over. The President is closing. And that, said Mathewson, is as it should be.

"I don’t think that President Casino was going to stay there under any circumstances," Mathewson said. "It just wasn’t going to happen."

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