<DOCUMENT>
<TYPE>EX-10.81
<SEQUENCE>16
<FILENAME>c92713exv10w81.txt
<DESCRIPTION>SECOND AMENDMENT TO PLEDGE AND SECURITY AGREEMENT
<TEXT>
<PAGE>
                                                                   Exhibit 10.81

                                                               EXECUTION VERSION

                SECOND AMENDMENT TO PLEDGE AND SECURITY AGREEMENT

     This Agreement is made as of the 22nd day of December, 2004, by and among
Great Lakes Gaming of Michigan, LLC, a Minnesota limited liability company
("Great Lakes"), Lakes Entertainment, Inc., f/k/a Lakes Gaming, Inc., a
Minnesota corporation ("Lakes"), and the Pokagon Band of Potawatomi Indians (the
"Band").

                                   WITNESSETH:

     WHEREAS, the Band and Lakes entered into a Development Agreement dated as
of July 8, 1999 (the "1999 Development Agreement") and a Management Agreement
dated as of July 8, 1999 (the "1999 Management Agreement"; collectively, with
the 1999 Development Agreement, the "1999 Agreements"), pursuant to which the
Band engaged Lakes to, among other things, assist the Band in the design,
development, construction and management of a gambling casino and certain
related amenities (as defined in the 1999 Development Agreement, the
"Facility"); and

     WHEREAS, pursuant to the 1999 Development Agreement Lakes agreed to make
certain payments and advances to the Band, including without limitation the
Transition Loan, the Lakes Development Loan and the Non-Gaming Land Acquisition
Line of Credit (collectively the "Lakes Loans"), and the Scholarship Program
Fee, and has agreed to perform development services with regard to the Facility,
all on the terms set out in that Agreement; and

     WHEREAS, pursuant to the 1999 Management Agreement Lakes agreed to manage
the Facility on the terms set out in that Agreement; and

     WHEREAS, Lakes assigned its rights and obligations under the 1999
Agreements to Great Lakes pursuant to an Assignment and Assumption Agreement
dated as of October 16, 2000, subject to the terms and conditions set out in
that Agreement; and

     WHEREAS, the 1999 Agreements were amended and restated by First Amended and
Restated Development Agreement dated as of October 16, 2000 and by First Amended
and Restated Management Agreement dated as of October 16, 2000 (the "First
Amended and Restated Agreements"); and

     WHEREAS, the obligations of Lakes and Great Lakes to the Band under the
First Amended and Restated Agreements were secured by a Pledge and Security
Agreement between Lakes and the Band (the "Security Agreement") and by an
Account Control Agreement among Lakes, the Band and Firstar (the "Control
Agreement"), each dated as of July 8, 1999 and as each was amended by first
amendments dated as of October 16, 2000; and

<PAGE>

     WHEREAS, Great Lakes, Lakes and the Band have entered into a Second Amended
and Restated Development Agreement dated as of December 22, 2004 and a Second
Amended and Restated Management Agreement dated as of December 22, 2004 (the
"Second Amended and Restated Agreements"); and

     WHEREAS, the parties wish to amend the Security Agreement to reflect the
execution of the Second Amended and Restated Agreements, and to provide that the
Security Agreement will secure the obligations of Lakes and Great Lakes to the
Band under the Second Amended and Restated Agreements;

     NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:

1.   Recitals True. The above recitals are true.

2.   Defined Terms. Capitalized terms used but not otherwise defined herein and
     defined in the Security Agreement shall have the same meaning herein as
     therein.

3.   Amendment to Security Agreement. The Security Agreement is amended as
     follows:

     a.   All references to the term "Control Agreement" shall refer to the
          Control Agreement among Lakes, the Band and Firstar Bank of Minnesota,
          N.A., n/k/a U.S. Bank, National Association, as assumed by Great Lakes
          under the Assignment and Assumption Agreement dated as of October 16,
          2000, and as amended by First Amendment dated as of October 16, 2000
          and by Second Amendment dated as of December 22, 2004.

     b.   The definition of "Secured Obligations" in Section 1(a) of the
          Security Agreement is amended so that it reads in its entirety as
          follows:

               "'Secured Obligations' includes (i) the obligations of Great
               Lakes and Lakes to the Band under or relating to the Agreements,
               and (ii) the obligations of Lakes and LG&R under their Guaranty
               to the Band dated October 16, 2000, as amended by First Amendment
               dated as of December 22, 2004."

4.   Reservation of Rights. By entering into this Agreement, the Band does not
     waive or affect any rights against Lakes under the Security Agreement or
     the Control Agreement.

5.   Warranties and Representations - Great Lakes and Lakes. Each of Great Lakes
     and Lakes warrants, represents and covenants to the Band that:

     a.   The Control Agreement and the Security Agreement each constitute the
          legal, valid and binding obligation of Great Lakes and Lakes, and are
          fully enforceable in accordance with their terms;


                                        2

<PAGE>

     b.   Neither the execution or delivery of this Agreement nor fulfillment of
          or compliance with the terms and provisions hereof will conflict with,
          or result in a breach of the terms, conditions or provisions of,
          constitute a default under or result in the creation of any lien,
          charge or encumbrance upon any property or assets of Lakes or Great
          Lakes under any agreement or instrument to which they or either of
          them is now a party or by which they may be bound; and

     c.   The Band has, and at all times until the termination of the Control
          Agreement in accordance with Section 8 thereof shall have, a first
          perfected security interest in the Account and all cash, financial
          assets and investment property credited to the Account.

6.   Further Assurances. From time to time hereafter, Lakes, Great Lakes and the
     Band will execute and deliver, or will cause to be executed and delivered,
     such additional instruments, certificates or documents, and will take all
     such actions, as may reasonably be requested by the other party or parties,
     for the purpose of implementing or effectuating the provisions of this
     Agreement.

7.   Governing Law. This Agreement shall be interpreted in accordance with the
     law of the internal law of Minnesota.

8.   Amendments, Assignments, Etc. Any provision of this Agreement may be
     amended if, but only if, such amendment is in writing and is signed by each
     of the parties hereto. No modification shall be implied from course of
     conduct. Great Lakes may not further assign its rights in the Account and
     its obligations under the Control Agreement without the written consent of
     the Band.

9.   Gender and Number; Counterparts. Whenever the context so requires the
     masculine gender shall include the feminine and/or neuter and the singular
     number shall include the plural, and conversely in each case. This
     Agreement may be executed in separate counterparts and said counterparts
     shall be deemed to constitute one binding document.

10.  Notices to Great Lakes. Great Lakes agrees that any notice or demand upon
     it shall be deemed to be sufficiently given or served if it is in writing
     and is personally served or in lieu of personal service is mailed by first
     class certified mail, postage prepaid, or be overnight mail or courier
     service, addressed to Great Lakes at the address of Lakes and with copies
     set forth in ' 12 of the Control Agreement.

11.  Arbitration; Limited Waiver of Sovereign Immunity. Any disputes under this
     Agreement shall be subject to arbitration as provided in Section 14.2 of
     the Development Agreement; provided that any demand for arbitration shall
     be made within 30 days after a notice of default, denominated as such, is
     given under this Agreement. The Band's limited waiver of sovereign immunity
     in Sections 14.1 and 14.3 of the Development Agreement shall apply to this
     Agreement; provided that the liability of the Band under any judgment shall
     always be


                                       3

<PAGE>

     Limited Recourse, and in no instance shall any enforcement of any kind
     whatsoever be allowed against any assets of the Band other than the limited
     assets of the Band specified in the definition of Limited Recourse and
     Section 14.3(a) of the Development Agreement.

12.  Ratification. Except as expressly modified in this Agreement, the Security
     Agreement is ratified and confirmed and remains in full force and effect.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the 22nd day of December, 2004.

WITNESS:
                                        GREAT LAKES GAMING OF MICHIGAN, LLC


                                        BY: /s/ Timothy J. Cope
-------------------------------------       ------------------------------------
                                        NAME: Timothy J. Cope
                                        ITS: President


                                        LAKES ENTERTAINMENT, INC., f/k/a LAKES
                                        GAMING, INC.


                                        BY: /s/ Timothy J. Cope
-------------------------------------       ------------------------------------
                                        NAME: Timothy J. Cope
                                        ITS: President


                                        THE POKAGON BAND OF POTAWATOMI INDIANS


                                        BY: /s/ John Miller
-------------------------------------       ------------------------------------
                                            John Miller
                                        ITS: Council Chairman


                                        BY: /s/ Dan Rapp
-------------------------------------       ------------------------------------
                                            Daniel Rapp
                                        ITS: Secretary


                                       4

<PAGE>

Seen and consented to:

                                        LAKES GAMING AND RESORTS, LLC


                                        BY:
-------------------------------------       ------------------------------------
                                        NAME: Timothy J. Cope
                                        ITS: President


                                        5
</TEXT>
</DOCUMENT>
