MINNEAPOLIS, May 13, 2010 (BUSINESS WIRE) --Lakes Entertainment, Inc. (NASDAQ: LACO) announced today that it
entered into a termination agreement ("Termination Agreement") with the
Iowa Tribe of Oklahoma, its governmental components and
instrumentalities ("Tribe") terminating all agreements with the Tribe,
including a note under which approximately $5.0 million was advanced to
the Tribe, effective May 1, 2010. Lakes previously announced that the
Tribe had decided not to pursue the proposed Ioway Casino with a
subsidiary of Lakes Entertainment.
The Termination Agreement provides for the Iowa Tribe to pay to Lakes a
total of $4.5 million in the following manner: $1 million to be paid
within two days of execution of the Termination Agreement, and the sum
of $3.5 million to be paid in 15 equal monthly installments commencing
on June 15, 2010 and on the 15th day of each of the next 14
months. The Iowa Tribe is permitted to make prepayments on the
outstanding amount at a 6% discount during the first twelve months after
the execution of the Termination Agreement.
Lakes was operating under a Gaming Development Consulting Agreement
("Consulting Agreement") with the Tribe to provide development
consulting services related to the proposed Ioway Casino development.
Lakes was not receiving any compensation for its consulting services
under the Consulting Agreement.
Lakes was also managing the Cimarron Casino for the Tribe under a
management agreement approved by the National Indian Gaming Commission
("Management Agreement"). The Cimarron casino consists of approximately
375 slot machines and a snack bar. Lakes was receiving an annual
management fee for its services in an amount equal to 30% of the net
total revenues (as defined in the Management Contract) of the Cimarron
Casino in excess of $4 million.
About Lakes Entertainment
Lakes Entertainment, Inc. currently has development and management or
financing agreements with three separate Tribes for casino operations in
Michigan and California, for a total of three separate casino sites.
Lakes is currently managing the Four Winds Casino Resort for the Pokagon
Band of Potawatomi Indians and the Red Hawk Casino for the Shingle
Springs Band of Miwok Indians. Lakes is also involved in other business
activities, including the licensing of table games to Tribal and
non-Tribal casinos.
The Private Securities Litigation Reform Act of 1995 provides a safe
harbor for forward-looking statements. Certain information included in
this press release (as well as information included in oral statements
or other written statements made or to be made by Lakes Entertainment,
Inc.) contains statements that are forward-looking, such as statements
relating to plans for future expansion and other business development
activities as well as other capital spending, financing sources and the
effects of regulation (including gaming and tax regulation) and
competition. Such forward-looking information involves important risks
and uncertainties that could significantly affect anticipated results in
the future and, accordingly, such results may differ from those
expressed in any forward-looking statements made by or on behalf of the
company. These risks and uncertainties include, but are not limited to,
need for potential future financing to meet Lakes' development needs;
those relating to the inability to complete or possible delays in
completion of Lakes' casino projects, including various regulatory
approvals and numerous other conditions which must be satisfied before
completion of these projects; possible termination or adverse
modification of management or development contracts; Lakes operates in a
highly competitive industry; possible changes in regulations; reliance
on continued positive relationships with Indian tribes and repayment of
amounts owed to Lakes by Indian tribes; possible need for future
financing to meet Lakes' expansion goals; risks of entry into new
businesses; and reliance on Lakes' management. For more information,
review the company's filings with the Securities and Exchange Commission.
SOURCE: Lakes Entertainment, Inc.
Lakes Entertainment, Inc.
Investor Relations:
Timothy Cope, 952-449-7030
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