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<SEC-DOCUMENT>0000950134-06-004548.txt : 20060308
<SEC-HEADER>0000950134-06-004548.hdr.sgml : 20060308
<ACCEPTANCE-DATETIME>20060308172348
ACCESSION NUMBER:		0000950134-06-004548
CONFORMED SUBMISSION TYPE:	10-K
PUBLIC DOCUMENT COUNT:		24
CONFORMED PERIOD OF REPORT:	20060101
FILED AS OF DATE:		20060308
DATE AS OF CHANGE:		20060308

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			LAKES ENTERTAINMENT INC
		CENTRAL INDEX KEY:			0001071255
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990]
		IRS NUMBER:				411913991
		STATE OF INCORPORATION:			MN
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-24993
		FILM NUMBER:		06674058

	BUSINESS ADDRESS:	
		STREET 1:		130 CHESHIERE LANE
		CITY:			MINNETONKA
		STATE:			MN
		ZIP:			55305
		BUSINESS PHONE:		6124499092

	MAIL ADDRESS:	
		STREET 1:		130 CHESHIRE LANE
		CITY:			MINNETONKA
		STATE:			MN
		ZIP:			55305

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	LAKES GAMING INC
		DATE OF NAME CHANGE:	19980929
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>c02716e10vk.htm
<DESCRIPTION>FORM 10-K
<TEXT>
<HTML>
<HEAD>
<TITLE>e10vk</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 2pt;color: #000000; background: #ffffff;">
<DIV style="width: 100%; border-top: 2.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 3pt;color: #000000; background: #ffffff;">
<DIV style="width: 100%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 14pt;color: #000000; background: #ffffff; margin-top: 4pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>UNITED STATES SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt;color: #000000; background: #ffffff;">
<B>Washington, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 3pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 18pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Form&nbsp;<FONT style="white-space: nowrap">10-K</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 12pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="14%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="83%">&nbsp;</TD>
</TR>

<TR style="font-size: 10pt;">
    <TD align="center" nowrap>(Mark One)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <FONT face="wingdings">&#254;
    </FONT></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <B>ANNUAL REPORT PURSUANT TO SECTION&nbsp;13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934</B></TD>
</TR>

<TR>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <B>For the fiscal year ended January&nbsp;1, 2006</B></TD>
</TR>

<TR>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <B>or</B></TD>
</TR>

<TR>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT face="wingdings">&#111;</FONT></B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <B>TRANSITION REPORT PURSUANT TO SECTION&nbsp;13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934</B></TD>
</TR>

<TR>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <B>For the transition period
    from&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to</B></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Commission File No.&nbsp;0-24993</B>
</DIV>

<DIV align="center" style="font-size: 24pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>LAKES ENTERTAINMENT, INC.</B>
</DIV>

<DIV align="center" style="font-size: 8pt;color: #000000; background: #ffffff;">
<I>(Exact name of registrant as specified in its charter)</I>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="57%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <B>Minnesota</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    <B>41-1913991</B></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <I>(State or other jurisdiction of<BR>
    incorporation or organization)</I></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    <I>(I.R.S., Employer<BR>
    Identification No.)</I></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>130 Cheshire Lane, Suite&nbsp;101, Minnetonka, Minnesota
55305</B>
</DIV>

<DIV align="center" style="font-size: 8pt;color: #000000; background: #ffffff;">
<I>(Address of principal executive offices)</I>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>(952)&nbsp;449-9092</B>
</DIV>

<DIV align="center" style="font-size: 8pt;color: #000000; background: #ffffff;">
<I>(Registrant&#146;s telephone number, including area code)</I>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Securities registered pursuant to Section&nbsp;12(b) of the
Act:</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>None.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Securities registered pursuant to Section&nbsp;12(g) of the
Act:</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="50%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="center" nowrap><B>Title of Each Class</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Name of Each Exchange on Which Registered</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Common Stock, $0.01&nbsp;par value</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    None</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule&nbsp;405 of the Securities
Act.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes&nbsp;<FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;<FONT face="wingdings">&#254;
</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Indicate by check mark if the registrant is not required to file
reports pursuant to Section&nbsp;13 or Section&nbsp;15(d) of the
Act.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes&nbsp;<FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;<FONT face="wingdings">&#254;
</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Indicate by check mark whether the registrant (1)&nbsp;has filed
all reports required to be filed by Section&nbsp;13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding
12&nbsp;months (or for such shorter period that the registrant
was required to file such reports) and (2)&nbsp;has been subject
to such filing requirements for the past
90&nbsp;days.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes&nbsp;<FONT face="wingdings">&#254;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;<FONT face="wingdings">&#111;
</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Indicate by check mark if disclosure of delinquent filers
pursuant to Item&nbsp;405 of
Regulation&nbsp;<FONT style="white-space: nowrap">S-K</FONT> is
not contained herein, and will not be contained, to the best of
the Registrant&#146;s knowledge, in definitive proxy or
information statements incorporated by reference in
Part&nbsp;III of this
Form&nbsp;<FONT style="white-space: nowrap">10-K</FONT> or any
amendment to this
Form&nbsp;<FONT style="white-space: nowrap">10-K.&nbsp;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;
</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, or a non-accelerated
filer. See definition of &#147;accelerated filer and large
accelerated filer&#148; in
Rule&nbsp;<FONT style="white-space: nowrap">12b-2</FONT> of the
Exchange Act. (Check one):
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
Large accelerated
filer&nbsp;<FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accelerated
filer&nbsp;<FONT face="wingdings">&#254;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-accelerated
filer&nbsp;<FONT face="wingdings">&#111;
</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Indicate by check mark whether the registrant is a shell company
(as defined in
Rule&nbsp;<FONT style="white-space: nowrap">12b-2</FONT> of the
Act).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes&nbsp;<FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;<FONT face="wingdings">&#254;
</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of February&nbsp;27, 2006, 22,349,909&nbsp;shares of the
Registrant&#146;s Common Stock were outstanding. Based upon the
last sale price of the Common Stock as reported on the NASDAQ
National Market on July&nbsp;1, 2005 (the last business day of
the Registrant&#146;s most recently completed second quarter),
the aggregate market value of the Common Stock held by
non-affiliates of the Registrant as of such date was
$249.5&nbsp;million. For purposes of these computations,
affiliates of the Registrant are deemed only to be the
Registrant&#146;s executive officers and directors. All share
and per share data for periods prior to May&nbsp;3, 2004 have
been retroactively restated to give effect to a two-for-one
stock split (the &#147;Stock Split&#148;) in the form of a 100%
stock dividend paid on May&nbsp;3, 2004 to shareholders of
record on April&nbsp;26, 2004.
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>DOCUMENTS INCORPORATED BY REFERENCE</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Portions of the Registrant&#146;s definitive Proxy Statement for
its 2006 Annual Meeting of Shareholders to be filed with the
Commission within 120&nbsp;days after the close of the
Registrant&#146;s fiscal year are incorporated by reference into
Part&nbsp;III of this Annual Report on
Form&nbsp;<FONT style="white-space: nowrap">10-K.
</FONT>
</DIV>

<DIV align="center" style="font-size: 3pt;color: #000000; background: #ffffff; margin-top: 4pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 100%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 4pt;color: #000000; background: #ffffff;">
<DIV style="width: 100%; border-top: 2.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Private Securities Litigation Reform Act</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Private Securities Litigation Reform Act of 1995 provides a
&#147;safe harbor&#148; for forward-looking statements. Certain
information included in this Annual Report on
Form&nbsp;<FONT style="white-space: nowrap">10-K</FONT> and
other materials filed or to be filed by the Company with the
United States Securities and Exchange Commission
(&#147;SEC&#148;) as well as information included in oral
statements or other written statements made or to be made by the
Company contain statements that are forward-looking, such as
plans for future expansion and other business development
activities as well as other statements regarding capital
spending, financing sources and the effects of regulation
(including gaming and tax regulation) and competition.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Such forward looking information involves important risks and
uncertainties that could significantly affect the anticipated
results in the future and, accordingly, actual results may
differ materially from those expressed in any forward-looking
statements made by or on behalf of the Company.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
These risks and uncertainties include, but are not limited to,
the re-listing of Lakes&#146; common stock on The Nasdaq Stock
Market; need for current financing to meet Lakes&#146;
operational and development needs; those relating to the
inability to complete or possible delays in completion of
Lakes&#146; 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 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&#146; expansion
goals; risks of entry into new businesses; reliance on
Lakes&#146; management; and the fact that the WPT Enterprises,
Inc. (Nasdaq: WPTE) (&#147;WPTE&#148;) shares held by Lakes are
currently not liquid assets, and there is no assurance that
Lakes will be able to realize value from these holdings equal to
the current or future market value of WPTE common stock. There
are also risks and uncertainties relating to WPTE that may have
a material effect on the Company&#146;s consolidated results of
operations or the market value of the WPTE shares held by the
Company, including WPTE&#146;s significant dependence on the
Travel Channel as a source of revenue; the potential that
WPTE&#146;s television programming will fail to maintain a
sufficient audience; difficulty of predicting the growth of
WPTE&#146;s online casino business, which is a relatively new
industry with an increasing number of market entrants; the risk
that WPTE may not be able to protect its entertainment concepts,
current and future brands and other intellectual property
rights; the risk that competitors with greater financial
resources or marketplace presence might develop television
programming that would directly compete with WPTE&#146;s
television programming; the risk that WPTE may not be able to
protect its entertainment concepts, current and future brands
and other intellectual property rights; risks associated with
future expansion into new or complementary businesses; the
termination or impairment of WPTE&#146;s relationships with key
licensing and strategic partners; and WPTE&#146;s dependence on
its senior management team. For more information, review the
Company&#146;s filings with the Securities and Exchange
Commission. For further information regarding the risks and
uncertainties, see the &#147;Risk Factors&#148; section in
Item&nbsp;1A of this Annual Report on
Form&nbsp;<FONT style="white-space: nowrap">10-K.
</FONT>
</DIV>

<!-- link1 "PART I" -->

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>PART&nbsp;I</B>
</DIV>

<!-- link2 "ITEM 1. BUSINESS" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>ITEM&nbsp;1.</B></TD>
    <TD>
    <B><I>BUSINESS</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Business Overview</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes Entertainment, Inc., a Minnesota corporation
(&#147;Lakes&#148; or the &#147;Company&#148;), has development
agreements for various Indian-owned casino properties and
intends to manage such casinos when applicable regulatory
approvals have been received and other contingencies have been
satisfied. Lakes is also involved in other business activities,
including development of a Company owned casino and the
purchase/license or development of new table game concepts for
licensing to other casinos. In addition, as of January&nbsp;1,
2006, Lakes owned approximately 62% of WPTE, a separate publicly
held media and entertainment company principally engaged in the
creation of branded entertainment and consumer products driven
by the development, production and marketing of gaming themed
televised programming, the licensing and sale of branded
products and the sale of corporate sponsorships. Lakes&#146;
consolidated financial statements include the
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">2

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<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
results of operations of WPTE, and in recent periods, all of
Lakes&#146; revenues have been derived from WPTE&#146;s business.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Indian Casino Business</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes&#146; primary business is to develop and manage
Indian-owned casino properties that offer the opportunity for
long-term development of related entertainment facilities,
including hotels, golf courses, theaters, recreational vehicle
parks and other complementary amenities. Lakes currently has
development and management agreements with five separate tribes
that include one new casino development project in Michigan, two
new casino development projects in California, and three new
casino development projects and two existing casino operations
in Oklahoma. Lakes, through various subsidiaries, has entered
into the following contracts for the development and management
of new casino operations, all of which are subject to various
regulatory approvals and in some cases resolution of legal
proceedings:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Lakes has contracts to develop and manage The Foothill Oaks
    Casino to be built on the Rancheria of the Shingle Springs Band
    of Miwok Indians (&#147;Shingle Springs Tribe&#148;) in El
    Dorado County, California, adjacent to U.S.&nbsp;Highway 50,
    approximately 30&nbsp;miles east of Sacramento, California (the
    &#147;Shingle Springs Casino&#148;).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Lakes has contracts to develop and manage the Four Winds Casino
    resort to be built on land placed into trust for the Pokagon
    Band of Potawatomi Indians (&#147;Pokagon Band&#148;) in New
    Buffalo Township, Michigan near State Highway 94. The casino
    location will be near the first Interstate 94 exit in
    southwestern Michigan and approximately 75&nbsp;miles east of
    Chicago (the &#147;Pokagon Casino&#148;).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Lakes has contracts to develop and manage a casino to be built
    on the Rancheria of the Jamul Indian Village (&#147;Jamul
    Tribe&#148;) located on Interstate 94, approximately
    20&nbsp;miles east of San&nbsp;Diego, California (the
    &#147;Jamul Casino&#148;).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Lakes has consulting agreements and management contracts with
    three wholly-owned subsidiaries of the Pawnee Tribal Development
    Corporation (&#147;Pawnee TDC&#148; referred to collectively as
    the &#147;Pawnee Nation&#148;) in connection with assisting the
    Pawnee Nation in developing, equipping and managing a new casino
    and the Pawnee Nation&#146;s existing Trading Post casino
    operation and the proposed casino operation at the Travel Plaza.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Lakes has consulting agreements and management contracts with
    the Iowa Tribe of Oklahoma (the &#147;Iowa Tribe&#148;) in
    connection with developing, equipping and managing a new casino
    and the Iowa Tribe&#146;s existing Cimarron casino.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Lakes has also explored, and is continuing to explore, numerous
    other development projects with Indian tribes.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes entered into consulting agreements and management
contracts with the Kickapoo Traditional Tribe of Texas (the
&#147;Kickapoo Tribe&#148;) effective as of January 2005 to
improve the performance of the Kickapoo Tribe&#146;s existing
Lucky Eagle Casino in Eagle Pass, Texas, located approximately
140&nbsp;miles southwest of San&nbsp;Antonio. During the third
quarter of fiscal 2005 the Company&#146;s relationship with the
Kickapoo Tribe deteriorated and in November 2005, Lakes and the
Kickapoo Tribe terminated their business relationship.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Non-Indian Casinos.</I> Lakes also explores opportunities to
develop and operate casinos that are not owned by Indian tribes.
Lakes has received various regulatory approvals to develop a
Company-owned casino near Vicksburg, Mississippi. Lakes does not
expect to have access to the capital necessary to make this a
viable project for the Company until such time that one of its
other casino projects is open and therefore, this is now planned
to be a 2007 project.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>WPT Enterprises, Inc.</I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
WPTE is a company engaged in the creation of branded
entertainment and consumer products driven by the development,
production, and marketing of televised programming based on
gaming themes. WPTE
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">3

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<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
developed and owns the World Poker
Tour<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>,
a television show based on a series of high-stakes poker
tournaments that airs on the Travel Channel in the United States
and in more than 140 territories globally. WPTE currently
licenses its brand to companies in the business of poker
equipment and instruction, apparel, publishing, electronic and
wireless entertainment, DVD/home entertainment, casino games,
and giftware.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>The &#147;World Poker Tour&#148; Tournaments, Television
    Series and Brand</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The World Poker Tour, or the WPT, is a sports league of
affiliated poker tournaments open to the public. There are
currently 17 regular WPT tournaments or tour stops on the
circuit which are all hosted by prestigious casinos and poker
rooms. Each season of tour stops culminates in the WPT World
Championship at the Bellagio Hotel and Casino in Las Vegas,
Nevada, which includes the winner of each of that season&#146;s
previous WPT tournaments. The World Poker Tour tournament tour
stops have attracted well-known and established professional and
amateur poker players on the poker circuit. WPTE also makes tour
stops accessible to the mainstream poker player by partnering
with casinos and poker rooms which host &#147;satellite&#148;
and &#147;super satellite&#148; poker tournaments in which the
winner or winners may ultimately earn a paid entry into
WPTE&#146;s main events. At WPTE&#146;s tour stops, WPTE films
the final table of participants competing for some of the poker
world&#146;s largest tournament prize pools. WPTE then edits the
footage from each tour stop into a
<FONT style="white-space: nowrap">two-hour</FONT> episode,
resulting in a series of two-hour episodes which are distributed
for telecast to both domestic and international television
audiences. In addition, WPTE films and produces special episodes
based on a variety of non-traditional poker tournaments, which
WPTE also distributes for telecast along with the episodes based
on the WPT regular tour stops.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The World Poker Tour brand has gained recognition through the
telecast of the World Poker Tour television series, which is
exhibited on the Travel Channel and subsequently on multiple
television networks around the world. Since its premiere during
the spring and summer of 2003, WPTE&#146;s television series has
become the Travel Channel&#146;s highest rated program, based on
data compiled by Nielsen Media Research that measure the number
of television households viewing the series&#146; episodes. The
following table describes the timing of Seasons One through Four
of the World Poker Tour series, including the delivery and
exhibition of the episodes each season:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="19%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
</TR>

<TR style="font-size: 7pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Date of TRV</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Agreement or</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Episodes</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7pt;">
    <TD align="left" nowrap><B>World Poker</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Option for</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(including</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Production Period and</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Initial Telecast of</B></TD><TD></TD>
</TR>

<TR style="font-size: 7pt;">
    <TD align="center" nowrap><B>Tour Season</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Season</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>specials)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Delivery of Episodes to TRV</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Episodes in Season</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Season One</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>January 2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>February 2002&nbsp;&#151; June 2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>March&nbsp;2003&nbsp;&#151; June 2003</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Season Two</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>August 2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>July 2003&nbsp;&#151; June 2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>December&nbsp;2003&nbsp;&#151; September 2004</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Season Three</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>May 2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>May 2004&nbsp;&#151; April 2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>October 2004&nbsp;&#151; August 2005</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Season Four</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>March 2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>May 2005&nbsp;&#151; April 2006 (expected)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>October 2005&nbsp;&#151; June 2006</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
WPTE believes it has strengthened the World Poker Tour brand
through WPTE&#146;s relationships with numerous prestigious
casinos, many of which have long-established poker tournaments,
WPTE&#146;s ability to attract well-known, established
professional poker players to WPTE&#146;s tournaments, and
WPTE&#146;s ability to build excitement and identification among
a core audience of amateur poker players by giving a broad range
of amateurs the ability to compete for seats at WPTE&#146;s
tournaments.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>WPTE&#146;s Business Segments</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
WPTE operates through four business units, WPT Studios, WPT
Consumer Products, WPT Corporate Alliances and WPT Online
Gaming, described in greater detail below:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <I>WPT Studios </I>generates revenue through the domestic and
    international licensing of telecast rights, as well as host fees
    from casinos and cardrooms that host the televised World Poker
    Tour events. The majority of WPTE&#146;s historical revenue has
    resulted from WPT Studios, which has represented approximately
    76% of WPTE&#146;s total revenues.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">4

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<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <I>WPT Consumer Products </I>generates revenue through the
    licensing of WPTE&#146;s brand to companies seeking to use the
    World Poker Tour brand and logo in the retail sales of their
    consumer products and through WPTE&#146;s direct sale of
    company-produced merchandise featuring WPTE&#146;s World Poker
    Tour brand.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <I>WPT Corporate Alliances </I>generates revenue through sales
    of corporate sponsorships that include elements of on-air
    visibility, online visibility, corporate live event sponsorship,
    promotional sponsorships and corporate hospitality events.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <I>WPT Online Gaming </I>generates revenue through WPTE&#146;s
    agreement with WagerWorks, Inc., or WagerWorks, a subsidiary of
    International Game Technology, pursuant to which WPTE granted to
    WagerWorks a license to utilize the WPT brand to create a
    WPT-branded online gaming website, WPTonline.com, which features
    an online poker room and an online casino with a broad selection
    of slots and table games. In exchange for the license to
    WagerWorks of WPTE&#146;s brand, WagerWorks shares with WPTE a
    percentage of all net revenue it collects from the operation of
    the online poker room and online casino. Although any internet
    user can access WPTonline.com via the World Wide Web, the
    website does not permit bets to be made from players in the U.S.
    and other restricted jurisdictions.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Development and Marketing of Table Games. </B>A division of
Lakes buys, patents and licenses rights for new table game
concepts to market/distribute and license to casinos. The
Company is continuing to test and market a number of games
including World Poker Tour &#147;All In Hold&#146;Em,&#148;
&#147;Rainbow Poker,&#148; &#147;Pyramid Poker&#148; and
&#147;Bonus Craps.&#148; The World Poker Tour &#147;All In
Hold&#146;Em&#148; game is currently operating in several
casinos across the United States. The Company&#146;s revenues
from this division are currently not significant.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Real Estate Holdings. </B>Lakes has parcels of land in
California related to its Indian casino projects with the Jamul
Tribe and Shingle Springs Tribe.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>History</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes is a Minnesota corporation formed in 1998 under the name
of GCI Lakes, Inc, which was changed to Lakes Gaming, Inc. in
August 1998 and to Lakes Entertainment, Inc. during 2002. Lakes
is the successor to the Indian gaming business of Grand Casinos,
Inc. (&#147;Grand Casinos&#148;) and became a public company
through a spin-off transaction in which shares of Lakes common
stock were distributed to the shareholders of Grand Casinos.
Before the spin-off, Grand Casinos had management contracts for
Grand Casino Hinckley and Grand Casino Mille Lacs, both
Indian-owned casinos in Minnesota. Those contracts ended before
the spin-off. After the spin-off, Lakes managed two Indian-owned
casinos in Louisiana previously managed by Grand Casinos. Lakes
managed the largest casino resort in Louisiana, Grand Casino
Coushatta, until the management contract expired in 2002. Lakes
also had a management contract for Grand Casino Avoyelles, which
was terminated through an early buyout of the contract effective
in 2000.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Indian Casino Business</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Development and Management of Shingle Springs Casino.</I>
Plans for the Shingle Springs Casino include an approximately
1,100,000&nbsp;square-foot facility (including approximately
85,000&nbsp;square feet of casino space) to be located adjacent
to the planned Shingle Springs Rancheria exit, approximately
30&nbsp;miles east of downtown Sacramento, on U.S.&nbsp;Highway
50 on the Shingle Springs Rancheria site. The Shingle Springs
Casino is currently planned to feature approximately 2,000 slot
machines and approximately 100 table games, as well as
restaurants, enclosed parking and other facilities.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2000, California voters approved an amendment to the State
Constitution, which allows for Nevada-style gaming on Indian
land and ratifies the agreement between the State and the Indian
tribes (Tribal Compact). Lakes acquired its initial interest in
the development agreement and management contract for the
Shingle Springs Casino from Kean Argovitz Resorts in 1999 and
formed a joint venture, in which the contracts were held,
between Lakes and Kean Argovitz Resorts&nbsp;&#151; Shingle
Springs, LLC (&#147;KAR&nbsp;&#151; Shingle Springs&#148;). On
January&nbsp;30, 2003, Lakes purchased the remaining
KAR&nbsp;&#151; Shingle Springs&#146; partnership interest in
the joint venture. In connection with the purchase transaction,
Lakes entered into separate
</DIV>

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<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
agreements with Kevin M. Kean and Jerry A. Argovitz, the
individual owners of KAR&nbsp;&#151; Shingle Springs (see
&#147;Agreements With Owners of KAR Entities&#148; below).
During July 2004, the National Indian Gaming Commission
(&#147;NIGC&#148;) notified Lakes that it approved the
Development and Management Contract between the Shingle Springs
Tribe and Lakes, allowing Lakes to manage a Class&nbsp;II and
Class&nbsp;III casino.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The development agreement provides for Lakes to make certain
pre-construction advances to the Shingle Springs Tribe in the
form of a transition loan and land loan up to a maximum amount
of $50.0&nbsp;million. Lakes is not required to fund these
amounts; however, if Lakes discontinued the funding prior to
fulfilling the obligation, Lakes would forfeit its rights under
the management contract. The principal balance of the transition
loan to the Shingle Springs Tribe as of January&nbsp;1, 2006 is
$37.9&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The agreement also provides for Lakes to arrange for financing
or, in its discretion, loan to the Shingle Springs Tribe in the
form of a facility loan for the costs of construction and
initial costs of operation up to a maximum of $300&nbsp;million.
In addition, Lakes will assist in the design, development and
construction of the facility as well as manage the pre-opening,
opening and continued operations of the casino and related
amenities for a period of seven years. As compensation for its
management services, Lakes will receive a management fee between
21% and 30% of net income of the operations annually for the
first five years, with a declining percentage in years six and
seven, as defined by the management contract. Lakes&#146;
management fee will be subordinated to senior indebtedness of
the Shingle Springs Casino and the minimum guaranteed payment to
the Shingle Springs Tribe. Generally, the order of priority of
payments from the Shingle Springs Casino&#146;s cash flows is as
follows: a certain minimum monthly guaranteed payment to the
Shingle Springs Tribe, repayment of various debt with interest
accrued thereon, management fee to Lakes, and other obligations,
with the remaining funds distributed to the Shingle Springs
Tribe. The management contract includes provisions that allow
the Shingle Springs Tribe to buyout the management contract
after four years from the opening date. The buyout amount is
based upon the previous twelve months of management fees earned
multiplied by the remaining number of years under the contract,
discounted back to the present value at the time the buyout
occurs. If the Shingle Springs Tribe elects to buy out the
contract, all outstanding amounts owed to Lakes become payable.
The Shingle Springs Tribe may terminate the agreement after five
years from the opening of the casino if any of certain required
elements of the project have not been developed.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Development of the casino resort will begin as soon as the
pending litigation, as discussed in Item&nbsp;3&nbsp;&#151;
&#147;Legal Proceedings&#148; and below is resolved and third
party financing is obtained. The Shingle Springs Tribe received
regulatory approval of new interchange construction for access
to the tribal land of the Shingle Springs Tribe. El Dorado
County (the county in which the reservation is located) and
another local group commenced litigation in federal and state
courts against the California regulatory agencies, attempting to
block the approval of the interchange. The federal lawsuit filed
by the County challenged the validity of the Environmental
Assessment prepared under the National Environmental Protection
Act by the NIGC, as required for the approval of the management
contract and as required by the Bureau of Indian Affairs for
construction of the road which would allow access to the Shingle
Springs Rancheria and site of the proposed casino project. The
federal lawsuit also challenged the validity of the Shingle
Springs Tribe and the qualification of the Shingle Springs
Rancheria as Indian lands which would allow gaming. In January
2005, the United States District Court for the Eastern District
of California issued a favorable ruling on all federal issues
with respect to the casino development planned by the Shingle
Springs Tribe. El Dorado County and the local opposition group
are appealing the federal favorable ruling related to the
project. Lakes expects the courts&#146; rulings to be upheld
based on consultation with third-party advisors and their
interpretation of the law. A separate California State court
case regarding the project is pending. See
Item&nbsp;3&nbsp;&#151; &#147;Legal Proceedings.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Development and Management of Pokagon Casino.</I> The Pokagon
Casino is planned to be developed on approximately
675&nbsp;acres of land owned by the Pokagon Band in New Buffalo
Township, Michigan, near the first Interstate 94 exit in
southwestern Michigan and approximately 75&nbsp;miles east of
Chicago. The facility will feature approximately 3,000 slot
machines and approximately 100 table games as well as multiple
restaurants and bars, a parking garage and other facilities. In
1999, Lakes and the Pokagon Band executed a development
agreement and management contract governing their relationship
during the development, construction and management of the
casino.
</DIV>

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<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The development agreement provides for Lakes to advance up to
approximately $73.0&nbsp;million for the purchase of land and
for the initial development phase of the project. The
development agreement for the Pokagon project also provides that
to the extent the Pokagon Band is unable to raise additional
funding from third parties at an interest rate not to exceed
13%, Lakes will be required to provide additional financing of
up to approximately $54.0&nbsp;million. Based on extensive
discussions with prospective lenders, it appears that
third-party financing will be available for this project;
however, there can be no assurance that third-party financing
will be available at the time the project begins construction.
Lakes is not required to fund these amounts. If, however, Lakes
discontinues the funding prior to fulfilling the obligation,
Lakes will forfeit its rights under the management contract.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of January&nbsp;1, 2006 the principal balance of the loan to
the Pokagon Band is $46.4&nbsp;million. The management contract
is subject to the approval of the NIGC and is for a term of five
years from the opening of the casino and may be for seven years
under certain circumstances. Lakes will receive 24% of net
income up to a certain threshold and 19% on net income over that
threshold, as a management fee. Lakes&#146; management fee will
be subordinated to senior indebtedness of the Pokagon Casino and
is subject to a minimum guaranteed monthly payment to the
Pokagon Band. Generally, the order of priority of payments from
the Pokagon Casino&#146;s cash flows is as follows: a certain
minimum monthly guaranteed payment to the Pokagon Band,
repayment of various debt with interest accrued thereon,
management fee to Lakes, and other obligations, with the
remaining funds distributed to the Pokagon Band. The Pokagon
Band may buy out the management contract after two years from
the opening date. The buyout amount is calculated based upon the
previous twelve months of management fees earned multiplied by
the remaining number of years under the management contract,
discounted back to the present value at the time the buyout
occurs. If the Pokagon Band elects to buy out the contract, all
outstanding amounts owed to Lakes become payable.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Various regulatory approvals are needed prior to commencement of
development activities. The United&nbsp;States Department of the
Interior issued a Finding of No Significant Impact
(&#147;FONSI&#148;) in 2001 and filed a legal notice of its
intent to place into trust 675&nbsp;acres near New Buffalo,
Michigan, on behalf of the Pokagon Band. Under federal law, a
<FONT style="white-space: nowrap">30-day</FONT> waiting period
was required for public comments to be made before the land in
trust process could be finalized.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During the <FONT style="white-space: nowrap">30-day</FONT>
waiting period, a lawsuit was filed in 2001 against the federal
government in the District Court of Columbia by a Michigan-based
group called &#147;Taxpayers of Michigan Against Casinos&#148;
(&#147;TOMAC&#148;) to stop the U.S.&nbsp;Department of Interior
from placing into trust the land for the casino site. In 2002,
the judge eliminated several of TOMAC&#146;s assertions, and in
2003, dismissed all remaining issues except for one. In March
2005, the federal judge dismissed the last remaining issue filed
by TOMAC making it possible for the land to be taken into trust
for the gaming project. During the required
<FONT style="white-space: nowrap">60-day</FONT> waiting period,
TOMAC filed for an appeal, which was held on December&nbsp;8,
2005. On January&nbsp;6, 2006, the United States Court of
Appeals for the District of Columbia Circuit ruled in favor of
the Pokagon Band by affirming the Federal District Court&#146;s
grant of summary judgment in the lawsuit by TOMAC versus the
U.S.&nbsp;Department of the Interior. On January&nbsp;27, 2006,
the Federal Government took official action to acquire the
Pokagon Band&#146;s
<FONT style="white-space: nowrap">675-acre</FONT> parcel of land
in New Buffalo Township, Michigan, into trust for the Pokagon
Band. This official action by the Department of the Interior
paves the way for the Pokagon Band to move forward with their
Four&nbsp;Winds Casino Resort project. Casino construction is
not planned to start until the development agreement and
management contract are approved by the Chairman of the NIGC and
third party financing is obtained, which could occur as early as
mid 2006.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Development and Management of Jamul Casino.</I> Lakes has a
contract to develop and manage a casino resort facility with the
Jamul Tribe on land owned by the Jamul Tribe near
San&nbsp;Diego, California. Lakes acquired its initial interest
in the development agreement and management contract for the
Jamul Casino from Kean Argovitz Resorts in 1999 and formed a
joint venture in which the contracts were held between Lakes and
Kean Argovitz Resorts&nbsp;&#151; Jamul, LLC
(&#147;KAR&nbsp;&#151; Jamul&#148;). On January&nbsp;30, 2003,
Lakes purchased the remaining KAR&nbsp;&#151; Jamul&#146;s
partnership interest in the joint venture. In connection with
the purchase transaction, Lakes entered into separate agreements
with the two individual owners of KAR&nbsp;&#151; Jamul. See
&#147;Agreements With Owners of KAR Entities&#148; below.
</DIV>

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<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The development agreement provides for Lakes to make certain
pre-construction advances to the Jamul Tribe up to
$30&nbsp;million. Lakes is not required to fund these amounts.
If, however, Lakes discontinues the funding prior to fulfilling
the obligation, Lakes would forfeit its rights under the
management contract. The principal balance of the loan to the
Jamul Tribe is $16.9&nbsp;million as of January&nbsp;1, 2006.
Lakes will receive a management fee between 18% and 30% of the
net income of the operations annually for seven years, subject
to regulatory approval of the management contract. Generally,
the order of priority of payments from the Jamul Casino&#146;s
cash flows is as follows: a certain minimum monthly guaranteed
payment to the Jamul Tribe, repayment of various debt with
interest accrued thereon, management fee to Lakes, and other
obligations, with the remaining funds distributed to the Jamul
Tribe. The Jamul Tribe may terminate the management contract
after five years from the opening date of the casino if any of
certain required elements of the project have not been developed.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2000, California voters approved an amendment to the State
Constitution, which allows for Nevada-style gaming on Indian
land and ratifies the Tribal Compact. Development of the casino
resort to be located on State Highway 94, approximately
20&nbsp;miles east of downtown San&nbsp;Diego, will begin once
various regulatory approvals are received. Plans for the casino
include approximately, 2,000 slot machines and approximately
85&nbsp;table games along with various restaurants and related
amenities. The Jamul Tribe has an approximate six-acre
reservation on which the casino will be built. The reservation
is located near San&nbsp;Diego, California. Lakes has also
acquired 101&nbsp;acres of land contiguous to the six-acres of
Rancheria land of which 82&nbsp;acres could be used for the
casino support facilities if the land is taken into trust. The
process of getting the land contiguous to the reservation placed
into trust has been slow. Therefore, during August of 2005, the
Jamul Tribe and Lakes formally announced plans to build the
casino on the approximately six acres of reservation land held
by the Jamul Tribe. Reservation land qualifies for gaming
without going through a land in trust process. The approximate
size of the casino and related guest amenities will not change
in total, as the casino was always planned to be built on the
reservation land. The approximate six-acre project will be built
on various levels to accommodate essentially all of the same
amenities that were planned for the project on the larger parcel
of land. Therefore, the design of the project was changed
significantly from a complex of lower-level buildings spread out
over a larger area to a multi-level resort built on a smaller
parcel of land. Total square footage, nature or cost of the
project are not expected to change significantly as it will be
primarily the same project being built on a smaller footprint.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes has consulted with third-party advisors as to the
architectural feasibility of the alternative plan and has been
assured that the project can be successfully built on the
reservation land. The Company has completed economic models for
each alternative and concluded that either would result in a
successful operation assuming that adequate financing can be
obtained. Therefore, the Company believes this project will be
successfully completed. The development agreement and management
contract is subject to approval by the NIGC and is currently in
the review process. A consulting agreement with the Jamul Tribe
is also under consideration. Construction of the casino could
begin in late 2006 with an estimated opening date of the casino
12&nbsp;months thereafter.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Consulting Agreement and Management Contract with the
Kickapoo Tribe.</I> As of November&nbsp;10, 2005, Lakes and the
Kickapoo Tribe terminated their business relationship. The
relationship between Lakes and the Kickapoo Tribe had begun to
deteriorate during the third quarter of fiscal 2005 and ended
with a decision to terminate the business relationship due to
different ideas on how to proceed with the project. Lakes was
assisting the Kickapoo Tribe with improving the performance of
the Kickapoo Tribe&#146;s gaming operations conducted at the
Kickapoo Tribe&#146;s existing Lucky Eagle Casino in Eagle Pass,
Texas (located approximately 140&nbsp;miles southwest of
San&nbsp;Antonio) under the terms of a gaming operations
consulting agreement. Lakes and the Kickapoo Tribe entered into
the gaming operations consulting agreement and a separate
management contract in December 2004, as amended and restated in
March 2005, effective as of January&nbsp;19, 2005. Lakes also
committed to provide advances to the Kickapoo Tribe of up to
$2.0&nbsp;million for business improvement purposes. As of
January&nbsp;&nbsp;1, 2006, Lakes had advanced approximately
$2.3&nbsp;million to the Kickapoo Tribe. Additionally, unpaid
invoices related to the project total approximately
$3.9&nbsp;million, some or all of which Lakes may be required to
pay. As a result of the terminated business relationship with
the Kickapoo Tribe, Lakes is working with the Kickapoo Tribe to
resolve all of the financial terms of the contracts, including
</DIV>

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<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
repayment of the advances and payment of the unpaid invoices,
and to formally terminate the gaming operations consulting
agreement, management contract and related ancillary agreements
relating to the project. The Company has been in discussions
with the Kickapoo Tribe but no agreement has been reached.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Gaming Development Consulting Agreements and Management
Contracts with three wholly-owned subsidiaries of the Pawnee
Tribal Development Corporation (&#147;Pawnee TDC)&#148; referred
to collectively as the &#147;Pawnee Nation&#148;.</I> In January
2005, Lakes entered into three gaming development and consulting
agreements (collectively &#147;Pawnee Development and Consulting
Agreements&#148;) and three separate management contracts
(collectively &#147;Pawnee Management Contracts&#148;) with
wholly-owned subsidiaries of Pawnee TDC in connection with
assisting the Pawnee Nation in developing, equipping and
managing three separate casino destinations.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The largest of the casino resort developments will be located on
approximately 800&nbsp;acres of Indian gaming land owned by the
Pawnee Nation in northern Oklahoma near the Kansas border. This
project is planned to include a large first class casino, hotel
and meeting space, multiple restaurants and bar venues, an
entertainment and event center, a golf course and various other
casino resort amenities. The first phase of the project is
planned to include approximately 1,200 gaming devices, 24 table
games, a poker room, various restaurants and bars, a 150-room
hotel and parking.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Pawnee Nation currently operates a &#147;Travel Plaza&#148;
at the intersection of U.S.&nbsp;Highway 412 and State
Highway&nbsp;18, approximately 25&nbsp;miles from Stillwater,
Oklahoma. The Pawnee Nation intends to expand the Travel Plaza
to include gaming and has engaged Lakes to assist with this
project. When expanded, the planned project will open with
approximately 200 gaming devices and a full service restaurant
and bar.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As compensation for the performance of its obligations under the
management contract for each of these two locations, Lakes is
entitled to receive a fee of 30% of net income of the respective
casino (as defined in the contract) for a period of five to
seven years, depending on the scope of the facilities, less any
amounts earned by any Company affiliate for consulting on these
two projects. The management contracts are subject to approval
of the NIGC and certain other conditions.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Pawnee Nation also operates its &#147;Trading Post&#148;
Casino, which currently includes approximately 66&nbsp;gaming
devices along with a retail convenience store and gas station in
the town of Pawnee, Oklahoma. Lakes will assist in the
management of this project and in its expansion if the Pawnee
Nation decides to expand the casino. As compensation for its
management services on this project, Lakes will receive a
management fee of approximately 30% of net income, as defined in
the agreement, based on the incremental net income produced at
this location during the length of the management contract,
expected to be from five to seven years, less any amounts earned
by any Company affiliate for consulting services performed at
the Trading Post, subject to regulatory approval and certain
other conditions.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Prior to the approval of the Pawnee Management Contracts by the
NIGC, Lakes will provide services under the Pawnee Development
and Consulting Agreements to each of the three Pawnee casino
projects. Under these agreements Lakes plans to provide advances
to the Pawnee Nation, if needed, from time to time to each
particular project for preliminary development costs as agreed
to by Lakes and the Pawnee Nation. Any advances made will accrue
interest at prime plus two percent and be repayable in 24 equal
monthly installments beginning on the 25th&nbsp;day following
the opening date for the project if the loan has not previously
been repaid through the project permanent financing. The Pawnee
Development Consulting Agreements are for 12&nbsp;years from the
effective date of the agreements or until the project
development fees and the project preliminary development loans
have been fully paid, whichever date is later, subject to early
termination. In addition to interest earned on the project
preliminary development loan, Lakes will receive a development
fixed fee equal to three percent of project costs at each
location and a monthly consulting flat fee for each of the three
projects of $5,000 for the Trading Post location, $25,000 for
the Travel Plaza location and $250,000 for the new casino per
month for 10&nbsp;years. The above development fixed fees shall
be paid on the opening date of each of the projects. No monthly
consulting fixed fee is earned or paid prior to the opening date
of the project. After the opening date of the project the
monthly consulting fixed fee shall be due and paid commencing on
the 25th&nbsp;day of the following calendar month and each
successive month.
</DIV>

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<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Pawnee Development and Consulting Agreements and Pawnee
Management Contracts are subject to NIGC review and include
provisions for an early buyout of the Pawnee Development and
Consulting Agreements and the Pawnee Management Contracts by the
Pawnee Nation.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Arrangement with Consultant.</I> The Company has executed an
agreement stipulating that Kevin Kean will be compensated for
consulting services (relating to the Pawnee Nation) rendered to
the Company. Under this arrangement, subject to Mr.&nbsp;Kean
obtaining certain regulatory approvals, Mr. Kean will receive
20% of the Company&#146;s fee compensation earned under the
Pawnee Development and Consulting Agreements and Pawnee
Management Contracts with the Pawnee Nation (i.e., six percent
of the incremental total net income or 20% of the Company&#146;s
30% share). This agreement provides that payments will be due to
Mr.&nbsp;Kean when the Company is paid by the Pawnee Nation.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Consulting Agreements and Management Contracts with the Iowa
Tribe of Oklahoma.</I> On March&nbsp;15, 2005, the Company,
through its wholly-owned subsidiaries, entered into consulting
agreements and management contracts with the Iowa Tribe of
Oklahoma, a federally recognized Indian Tribe, and the Iowa
Tribe of Oklahoma, a federally-chartered corporation
(collectively, the &#147;Iowa Tribe&#148;). The agreements are
effective as of January&nbsp;27, 2005. The Company will provide
consulting services to assist the Iowa Tribe with two separate
casino destinations in Oklahoma including (i)&nbsp;assisting in
developing a new first class casino and ancillary amenities and
facilities to be located on Indian land approximately
25&nbsp;miles northeast of Oklahoma City along Route 66 (the
&#147;Development Project&#148;); and (ii)&nbsp;consulting on
the refurbishment of and operational efforts at the Iowa
Tribe&#146;s existing Cimarron Casino, located in Perkins,
Oklahoma (the &#147;Cimarron Casino&#148;). The Company will
also provide management services for the Iowa Tribe&#146;s
casino operations at each location subject to regulatory
approval.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Each of the projects has a gaming consulting agreement
(&#147;Iowa Consulting Agreement&#148;) and a management
contract (&#147;Iowa Management Contract&#148;), independent of
the other project. Key terms relating to the agreements for the
projects are as follows:
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>The Development Project.</I> For its gaming development
consulting services under the Iowa Consulting Agreement related
to the Development Project, the Company will receive a
development fee of two percent of the project costs of the
Development Project, paid upon the opening of the Development
Project, and a flat monthly fee of $500,000 for a period of
120&nbsp;months commencing upon the opening of the Development
Project.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has agreed to make advances to the Iowa Tribe,
subject to a project budget to be agreed upon by the Company and
the Iowa Tribe and certain other conditions. The development
loan will be for preliminary development costs under the
Development Project budget. The Company has also agreed to use
reasonable efforts to assist the Iowa Tribe in obtaining
permanent financing for any projects developed under the Iowa
Consulting Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Iowa Management Contract for the Development Project is
subject to the approval of the NIGC and certain other
conditions. For its performance under the Iowa Management
Contract, the Company will be entitled to receive management
fees of approximately 30% of net income, as defined in the
agreement, for each month during the term of the Iowa Management
Contract, less any amounts earned by any Company affiliate for
consulting on the Development Project. The Iowa Management
Contract term is seven years from the first day that the Company
is able to commence management of the Development Project&#146;s
gaming operations under all legal and regulatory requirements
(the &#147;Commencement Date&#148;), provided that the Iowa
Tribe has the right to buy out the remaining term of the Iowa
Management Contract after the Development Project has been in
continuous operation for five years, for an amount based on the
then present value of estimated future management fees. If the
Iowa Tribe elects to buy out the contract, all outstanding
amounts owed to Lakes become payable if not already paid.
Subject to certain conditions, the Company agrees to make
advances for the Development Project&#146;s working capital
requirements, if needed, during the first six months after the
Commencement Date. The advances are to be repaid through an
operating note payable from revenues generated by future
operations of the Development Project bearing interest at two
percent over the prime rate. The Company also agrees to fund any
shortfall in certain minimum monthly Development Project
payments to the Iowa Tribe by means of non-interest bearing
advances under the same operating note.
</DIV>

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<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Cimarron Casino.</I> The Company has entered into a separate
gaming consulting agreement (&#147;Cimarron Consulting
Agreement&#148;) and management contract (&#147;Cimarron
Management Contract&#148;) with the Iowa Tribe with respect to
the Cimarron Casino. Many of the material provisions of these
two agreements are similar to those for the Development Project,
except that: (i)&nbsp;the Cimarron Consulting Agreement is
primarily for services related to the existing operations (with
the possibility of further development); (ii)&nbsp;the Company
was obligated to provide up to a $1&nbsp;million business
improvement loan rather than a preliminary development loan
(this loan was repaid in December 2005 with proceeds from the
permanent financing); (iii)&nbsp;the fee under the Cimarron
Consulting Agreement will consist entirely of a limited flat
monthly fee of $50,000; and (iv)&nbsp;the annual fee under the
Cimarron Management Contract will be 30% of net income in excess
of $4&nbsp;million (reduced by any amounts earned by any Company
affiliate for consulting services under the Cimarron Consulting
Agreement).
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Arrangement with Consultant.</I> The Company has executed an
agreement stipulating that Kevin Kean will be compensated for
his consulting services (relating to the Iowa Tribe) rendered to
the Company. Under this arrangement, subject to Mr.&nbsp;Kean
obtaining certain regulatory approvals, Mr.&nbsp;Kean will
receive 20% of the Company&#146;s fee compensation that is
received under the Iowa Consulting Agreement, Cimarron
Consulting Agreement, Iowa Management Contract and Cimarron
Management Contract with the Iowa Tribe (i.e., six&nbsp;percent
of the incremental total net income or 20% of the Company&#146;s
30% share). This agreement provides that payments will be due to
Mr.&nbsp;Kean when the Company is paid by the Iowa Tribe.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Agreements With Owners of KAR Entities.</I> The joint venture
entities that hold the management contracts for the Jamul and
Shingle Springs Casino resorts were previously jointly owned by
KAR&nbsp;&#151; California and KAR&nbsp;&#151; Shingle Springs
(together, the &#147;KAR Entities&#148;), respectively. Lakes
advanced $0.97&nbsp;million to each of the KAR Entities pursuant
to promissory notes dated May&nbsp;25, 1999 and July&nbsp;29,
1999 (collectively, the &#147;1999 Notes&#148;). At the time,
the KAR Entities held rights in development and management
contracts for the Jamul and Shingle Springs Casino projects. The
loans were part of overall transactions in which Lakes acquired
interests in those casino projects by entering into joint
ventures with the KAR Entities. Under the joint venture
arrangements, Lakes and the KAR Entities jointly formed the
companies to develop the casinos (&#147;Project Companies&#148;)
and the KAR Entities assigned their rights in the development
and management contracts to the Project Companies. As such, the
business purpose for the loans by Lakes was to acquire interests
in the subject casino projects, as the loans were a condition to
entering into the joint ventures.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;30, 2003, Lakes purchased the respective joint
venture interests of the KAR Entities. At the time of the
purchase, the KAR Entities owed Lakes $1.9&nbsp;million under
the 1999 Notes. As consideration for the purchase of the KAR
Entities&#146; partnership interest in Jamul and Shingle
Springs, Lakes forgave the amounts owed under the 1999 Notes of
$1.9&nbsp;million. In connection with the purchase transactions,
Lakes entered into separate agreements with Kevin M. Kean and
Jerry A. Argovitz, as individuals, the two owners of the KAR
Entities.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the agreement with Mr.&nbsp;Kean with respect to the KAR
Entities, Mr. Kean may elect to serve as a consultant to Lakes
during the term of each casino management contract if he is
found suitable by relevant gaming regulatory authorities. In
such event, Mr.&nbsp;Kean will be entitled to receive annual
consulting fees equal to 20% of the management fees received by
Lakes from the Jamul Casino operations and 15% of the management
fees received by Lakes from the Shingle Springs Casino
operations, less certain costs of these operations. If
Mr.&nbsp;Kean is found suitable by relevant gaming regulatory
authorities and elects to serve as a consultant, he will be
obligated to repay 50% of the notes receivable from the KAR
Entities. If Mr.&nbsp;Kean is not found suitable by relevant
gaming regulatory authorities or otherwise elects not to serve
as a consultant, he will be entitled to receive annual payments
of $1&nbsp;million from each of the Jamul and Shingle Springs
Casino projects during the term of the respective casino
management contracts (but not during any renewal term of such
management contracts).
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the agreement with Mr.&nbsp;Argovitz, if he is found
suitable by relevant gaming regulatory authorities, he may elect
to re-purchase his respective original equity interests in the
Lakes&#146; Subsidiaries and he will be entitled to obtain a 20%
equity interest in the Lakes&#146; entity that holds the rights
to the management contract with the Jamul Casino and a 15%
equity interest in the Lakes&#146; entity that holds the rights
to the management
</DIV>

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<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
contract with the Shingle Springs Casino. Upon obtaining this
interest, Mr.&nbsp;Argovitz will become obligated to repay 50%
of the 1999 Notes. If he is not found suitable or does not elect
to purchase equity interests in the Lakes Jamul or Shingle
Springs subsidiaries, Mr.&nbsp;Argovitz may elect to receive
annual payments of $1&nbsp;million from each of the Jamul and
Shingle Springs Casino projects from the date of election
through the term of the respective casino management contracts
(but not during any renewal term of such management contracts).
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Additionally, Mr.&nbsp;Kean owes Lakes $1.8&nbsp;million, which
resulted from Lakes&#146; guaranty of a second mortgage on
Mr.&nbsp;Kean&#146;s personal residential property. This
guaranty was originally an obligation of Grand Casinos
(Lakes&#146; predecessor) that was assumed by Lakes in
connection with its December&nbsp;31, 1998 spin-off from Grand
Casinos. In connection with the guaranty, Lakes took a
subordinated security position in the residential property.
Additionally, in October 1999, Lakes entered into an Agreement
for Indemnification with Mr. Kean wherein Lakes acknowledged
that it guaranteed the loan between Mr.&nbsp;Kean and the bank.
Pursuant to the guarantee agreement, if Lakes performed under
the guarantee, Lakes would be entitled to receive and retain all
monies otherwise payable to Mr.&nbsp;Kean with respect to his
interest in the KAR&nbsp;&#151; Jamul and KAR&nbsp;&#151;
Shingle Springs projects until Lakes has been reimbursed for all
monies it might pay to the bank in repayment of or to purchase
the Kean loan. In 2001, Mr.&nbsp;Kean defaulted on his payment
obligations under the mortgage, Lakes paid off the mortgage
pursuant to its guaranty obligations, and Lakes succeeded to the
bank&#146;s second mortgage position and to the bank&#146;s
security interest in Kean&#146;s shares of common stock in
another company (the value associated with the shares of common
stock is currently minimal). Lakes subsequently foreclosed on
the property and effected a sheriff&#146;s sale, which netted
enough proceeds to pay the first mortgage on the house and apply
some proceeds toward Mr.&nbsp;Kean&#146;s obligation to Lakes
under the second mortgage. As a result of these transactions,
the resulting net balance due from Mr.&nbsp;Kean was
approximately $1.8&nbsp;million and Lakes recorded a note
receivable in that amount in 2001. The note receivable is
carried on the consolidated balance sheet and included in other
long-term assets. Lakes has executed a Loan and Security
Agreement with Mr.&nbsp;Kean and his obligation is secured by
his interest in the Jamul and Shingle Springs Casino projects or
any other source of income due Mr.&nbsp;Kean by a Lakes entity.
Based on our evaluation that it is probable that each of these
projects will be successfully completed and given our history
and relationship with Mr.&nbsp;Kean and his involvement in those
and other projects, we believe the note will be repaid.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes has loaned Mr.&nbsp;Kean amounts in 2004 and 2005, which
are secured by the future operations of certain casino projects.
The outstanding amount of this loan was $1.0&nbsp;million and
$0.2&nbsp;million at January&nbsp;1, 2006 and January&nbsp;2,
2005, respectively. Mr.&nbsp;Kean has agreed that 50% of the
consulting fees or other payments payable to him under the
agreements with Lakes and its subsidiaries shall be applied
toward repayment of his indebtedness to Lakes from these
advances. In the event of a default under the agreements, 100%
of the fees and payments will be applied toward repayment of his
indebtedness to Lakes.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, Lakes has an outstanding note receivable with a
balance due of $0.1&nbsp;million and $0.25&nbsp;million at
January&nbsp;1, 2006, and January&nbsp;2, 2005, respectively,
from Mr.&nbsp;Kean.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Company-owned Casino Business</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As part of the Company&#146;s business strategy, Lakes also
seeks opportunities to develop and operate Company-owned casinos
where applicable laws permit.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In February 2005, Lakes announced that its request for gaming
site approval with respect to its proposed casino location in
Vicksburg, Mississippi had been granted by the Mississippi
Gaming Commission. The site, on the Mississippi River, contains
approximately 160&nbsp;acres located on Magnolia Road in
Vicksburg, Warren County, Mississippi. Lakes holds land purchase
options for this site. During July 2005, Lakes received approval
from the Mississippi Gaming Commission of its development plan
for an approximately $225&nbsp;million gaming project, to be
built on this site. Lakes&#146; approved plan allows for an
operation consisting of a 60,000&nbsp;square foot casino floor
which would include multiple bars, live entertainment, various
restaurants, 1,200 to 1,500 slot machines, table games, poker
room, valet parking and hotel rooms. This plan allows for
expanded gaming, additional hotel rooms, a Kid&#146;s Quest
child care facility, a nightclub, cigar lounge, banquet rooms,
and an event center. Lakes continues to work with all applicable
parties to obtain the necessary permits and obtain the various
land parcels on which to build the casino. Lakes does not expect
to have access to the
</DIV>

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<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
capital necessary to make this a viable project for the Company
until such time that one of its other casino projects is open
and therefore, this is now planned to be a 2007 project.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Table Games</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes has a division that buys, patents and licenses rights for
new table game concepts to market/distribute and license to
casinos. The Company is continuing to test and market a number
of new games, including World Poker Tour&#146;s &#147;All In
Hold&#146;Em,&#148; &#147;Rainbow Poker,&#148; &#147;Pyramid
Poker,&#148; and &#147;Bonus Craps.&#148; The World Poker
Tour&#146;s &#147;All In Hold&#146;Em&#148; game is currently
operating in several casinos across the United&nbsp;States. The
Company&#146;s revenues from this division are currently not
significant.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Competition</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The gaming industry is highly competitive. Gaming activities
include traditional land-based casinos; river boat and dockside
gaming; casino gaming on Indian land; state-sponsored video
lottery and video poker in restaurants, bars and hotels;
pari-mutuel betting on horse racing and dog racing; sports
bookmaking; and card rooms. The casinos to be managed or owned
by Lakes compete with all of these forms of gaming, and will
compete with any new forms of gaming that may be legalized in
additional jurisdictions, as well as with other types of
entertainment. Lakes also competes with other gaming companies
for opportunities to acquire legal gaming sites in emerging
gaming jurisdictions and for the opportunity to manage casinos
on Indian land. Some of the competitors of Lakes have more
personnel and greater financial and other resources than Lakes.
Further expansion of gaming could also significantly affect
Lakes&#146; business.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In California, Michigan and Oklahoma, the key areas targeted in
the near-term by Lakes, Indian gaming is very well-developed and
continues to flourish. California has by far the largest Indian
gaming industry of any state, generating an estimated
$5.3&nbsp;billion in gaming revenues in 2004, which represents
approximately one-fourth of all Indian gaming revenue in the
United States. There were 56 Indian licensed gaming facilities
in California in 2004, with a total of approximately 58,000 slot
machines and approximately 1,800 table games.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Indian gaming facilities in Michigan can offer all forms of
Class&nbsp;III gaming with the exception of sports wagering. The
Pokagon Casino will compete primarily with the riverboats that
operate in northern Indiana. There were five riverboats in
northern Indiana in 2005 generating over $1.3&nbsp;billion in
gaming revenue with a total of 8,596 slot machines and 283 table
games.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In November 2004, the State of Oklahoma approved a state gaming
compact that allows participating tribes to operate various
forms of Class&nbsp;II and Class&nbsp;III gaming devices and non
house-banked card games.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
According to the NIGC tribal data reports, from the end of 2003
through 2004, the number of Indian gaming operations has
increased by 37, or 11.2%, to 367 operations nationwide. During
this same period, tribal gaming revenues increased
$6.6&nbsp;billion, or 51%, to $19.4&nbsp;billion in the United
States. The NIGC reports gaming revenues on a regional basis and
Region&nbsp;V, which contains Kansas, Oklahoma and Texas, showed
the largest revenue increase of 185%. This was followed by
Region&nbsp;II, which contains California and Northern Nevada,
which increased 100% to $5.8&nbsp;billion in 2004 and is now the
highest grossing region. The Region&nbsp;II increases are due
largely to the emergence of casinos in California.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the market for televised poker tournaments, WPTE competes
with producers of several poker-related programs, including the
&#147;World Series of Poker,&#148; an annual event hosted by
Harrah&#146;s that airs on ESPN, &#147;Celebrity Poker
Showdown,&#148; which airs on Bravo and showcases celebrities
playing poker, and &#147;Late Night Poker,&#148; a U.K. based
program that airs on Fox. Fox also telecasts &#147;Poker
Superstars,&#148; a series of events featuring well-known
professional poker players. Additional poker-related programs
include the Full Tilt Poker.net Global Challenge on Fox, Poker
Royale and High Stakes Poker on the Game Show Network and the
National Heads-Up Poker Championship on NBC. In 2005,
Harrah&#146;s created the World Series of Poker national
circuit, taking place at several casinos operated by
Harrah&#146;s Entertainment, Inc. throughout the U.S. All
circuit championship events are currently taped for telecast on
ESPN. These and other producers of poker-related programming may
be well established and may have significantly greater resources
than WPTE. The World Poker Tour series differentiates its
programming schedule from competing shows by airing the
</DIV>

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<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
World Poker Tour series in prime time television during the same
timeslot each week. WPTE believes that this type of
&#147;appointment&#148; television helps build a following among
viewers. In addition to other poker-related programs, the World
Poker Tour series also competes with televised sporting events,
reality-based television programming and other televised
programming that airs during the same timeslot.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Regulation</B>
</DIV>

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    <TD width="3%"></TD>
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</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Gaming Regulation</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The ownership, management, and operation of gaming facilities
are subject to extensive federal, state, provincial, tribal
and/or local laws, regulations and ordinances, which are
administered by the relevant regulatory agency or agencies in
each jurisdiction (the &#147;Regulatory Authorities&#148;).
These laws, regulations and ordinances vary from jurisdiction to
jurisdiction, but generally pertain to the responsibility,
financial stability and character of the owners and managers of
gaming operations as well as persons financially interested or
involved in gaming operations. Certain basic provisions that are
currently applicable to Lakes in its management, development and
financing activities are described below.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Neither Lakes nor any subsidiary may own, manage or operate a
gaming facility unless proper licenses, permits and approvals
are obtained. An application for a license, permit or approval
may be denied for any cause that the Regulatory Authorities deem
reasonable. Most Regulatory Authorities also have the right to
license, investigate, and determine the suitability of any
person who has a material relationship with Lakes or any of its
subsidiaries, including officers, directors, employees, and
security holders of Lakes or its subsidiaries. In the event a
Regulatory Authority were to find a security holder to be
unsuitable, Lakes may be sanctioned, and may lose its licenses
and approvals if Lakes recognizes any rights in any entity with
such unsuitable person in connection with such securities. Lakes
may be required to repurchase its securities at fair market
value from security holders that the Regulatory Authorities deem
unsuitable. Lakes&#146; Articles of Incorporation authorize
Lakes to redeem securities held by persons whose status as a
security holder, in the opinion of the Lakes&#146; Board of
Directors, jeopardizes gaming licenses or approvals of Lakes or
its subsidiaries. Once obtained, licenses, permits, and
approvals must be periodically renewed and generally are not
transferable. The Regulatory Authorities may at any time revoke,
suspend, condition, limit, or restrict a license for any cause
they deem reasonable.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Fines for violations may be levied against the holder of a
license, and in certain jurisdictions, gaming operation revenues
can be forfeited to the state under certain circumstances. No
assurance can be given that any licenses, permits, or approvals
will be obtained by Lakes or its subsidiaries, or if obtained,
will be renewed or not revoked in the future. In addition, the
rejection or termination of a license, permit, or approval of
Lakes or any of its employees or security holders in any
jurisdiction may have adverse consequences in other
jurisdictions. Certain jurisdictions require gaming operators
licensed therein to seek approval from the state before
conducting gaming in other jurisdictions. Lakes and its
subsidiaries may be required to submit detailed financial and
operating reports to Regulatory Authorities.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The political and regulatory environment for gaming is dynamic
and rapidly changing. The laws, regulations, and procedures
pertaining to gaming are subject to the interpretation of the
Regulatory Authorities and may be amended. Any changes in such
laws, regulations, or their interpretations could have a
material adverse effect on Lakes.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Certain specific provisions to which Lakes is currently subject
are described below.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Indian Gaming</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The terms and conditions of management contracts for the
operation of Indian-owned casinos, and of all gaming on Indian
land in the United States, are subject to the Indian Gaming
Regulatory Authority (&#147;IGRA&#148;), which is administered
by NIGC, and also are subject to the provisions of statutes
relating to contracts with Indian tribes, which are administered
by the Secretary of the Interior (the &#147;Secretary&#148;) and
the Bureau of Indian Affairs (&#147;BIA&#148;). The regulations
and guidelines under which NIGC will administer the
</DIV>

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<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
IGRA are evolving. The IGRA and those regulations and guidelines
are subject to interpretation by the Secretary and NIGC and may
be subject to judicial and legislative clarification or
amendment.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes may need to provide the BIA or NIGC with background
information on each of its directors and each shareholder who
holds five percent or more of Lakes&#146; stock (&#147;5%
Shareholders&#148;), including a complete financial statement, a
description of such person&#146;s gaming experience, and a list
of jurisdictions in which such person holds gaming licenses.
Background investigations of key employees also may be required.
Lakes&#146; Articles of Incorporation contain provisions
requiring directors and 5% Shareholders to provide such
information.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The IGRA currently requires NIGC to approve management contracts
and certain collateral agreements for Indian-owned casinos.
Prior to NIGC assuming its management contract approval
responsibility, management contracts and other agreements were
approved by the BIA. The NIGC may review any of Lakes&#146;
management contracts and collateral agreements for compliance
with the IGRA at any time in the future. The NIGC will not
approve a management contract if a director or a 5% Shareholder
of the management company (i)&nbsp;is an elected member of the
Indian tribal government that owns the facility purchasing or
leasing the games; (ii)&nbsp;has been or is convicted of a
felony gaming offense; (iii)&nbsp;has knowingly and willfully
provided materially false information to the NIGC or the tribe;
(iv)&nbsp;has refused to respond to questions from the NIGC; or
(v)&nbsp;is a person whose prior history, reputation and
associations pose a threat to the public interest or to
effective gaming regulation and control, or create or enhance
the chance of unsuitable activities in gaming or the business
and financial arrangements incidental thereto.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, the NIGC will not approve a management contract if
the management company or any of its agents have attempted to
unduly influence any decision or process of tribal government
relating to gaming, or if the management company has materially
breached the terms of the management contract or the
tribe&#146;s gaming ordinance, or a trustee exercising due
diligence would not approve such management contract.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A management contract can be approved only after NIGC determines
that the contract provides, among other things, for
(i)&nbsp;adequate accounting procedures and verifiable financial
reports, which must be furnished to the tribe; (ii)&nbsp;tribal
access to the daily operations of the gaming enterprise,
including the right to verify daily gross revenues and income;
(iii)&nbsp;minimum guaranteed payments to the tribe, which must
have priority over the retirement of development and
construction costs; (iv)&nbsp;a ceiling on the repayment of such
development and construction costs; and (v)&nbsp;a contract term
not exceeding five years and a management fee not exceeding 30%
of profits; provided that the NIGC may approve up to a
seven-year term if NIGC is satisfied that the capital investment
required, the risk exposure, and the income projections for the
particular gaming activity justify the longer term.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The IGRA established three separate classes of tribal
gaming&nbsp;&#151; Class&nbsp;I, Class&nbsp;II, and
Class&nbsp;III. Class&nbsp;I includes all traditional or social
games played by a tribe in connection with celebrations or
ceremonies. Class&nbsp;II gaming includes games such as bingo,
pull-tabs, punch boards, instant bingo and card games that are
not played against the house. Class&nbsp;III gaming includes
casino-style gaming including table games such as blackjack,
craps and roulette, as well as gaming machines such as slots,
video poker, lotteries, and pari-mutuel wagering.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The IGRA prohibits substantially all forms of Class&nbsp;III
gaming unless the tribe has entered into a written agreement
with the state in which the casino is located that specifically
authorizes the types of commercial gaming the tribe may offer (a
&#147;tribal-state compact&#148;). The IGRA requires states to
negotiate in good faith with tribes that seek tribal-state
compacts, and grants Indian tribes the right to seek a federal
court order to compel such negotiations. Many states have
refused to enter into such negotiations. Tribes in several
states have sought federal court orders to compel such
negotiations under the IGRA; however, the Supreme Court of the
United States held in 1996 that the Eleventh Amendment to the
United States Constitution immunizes states from suit by Indian
tribes in federal court without the states&#146; consent.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Because Indian tribes are currently unable to compel states to
negotiate tribal-state compacts, Lakes may not be able to
develop and manage casinos in states that refuse to enter into
or renew tribal-state compacts.
</DIV>

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<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition to the IGRA, tribal-owned gaming facilities on
Indian land are subject to a number of other federal statutes.
The operation of gaming on Indian land is dependent upon whether
the law of the state in which the casino is located permits
gaming by non-Indian entities, which may change over time. Any
such changes in state law may have a material adverse effect on
the casinos managed by Lakes.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Title&nbsp;25, Section&nbsp;81 of the United States Code states
that &#147;no agreement shall be made by any person with any
tribe of Indians, or individual Indians not citizens of the
United States, for the payment or delivery of any money or other
thing of value in consideration of services for said Indians
relative to their lands unless such contract or agreement be
executed and approved&#148; by the Secretary or his or her
designee. An agreement or contract for services relative to
Indian lands that fails to conform with the requirements of
Section&nbsp;81 will be void and unenforceable. Any money or
other thing of value paid to any person by any Indian or tribe
for or on his or their behalf, on account of such services, in
excess of any amount approved by the Secretary or his or her
authorized representative will be subject to forfeiture.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Indian Trader Licensing Act, Title&nbsp;25,
Section&nbsp;261-64 of the United States Code (&#147;ITLA&#148;)
states that &#147;any person other than an Indian of the full
blood who shall attempt to reside in the Indian country, or on
any Indian reservation, as a trader, or to introduce goods, or
to trade therein, without such license, shall forfeit all
merchandise offered for sale to the Indians or found in his
possession, and shall moreover be liable to a penalty of
$500...&#148; No such licenses have been issued to Lakes to
date. The applicability of the ITLA to Indian gaming management
contracts is unclear. Lakes believes that the ITLA is not
applicable to its management contracts, under which Lakes
provides services rather than goods to Indian tribes. Lakes
further believes that the ITLA has been superseded by the IGRA.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Indian tribes are sovereign nations with their own governmental
systems which have primary regulatory authority over gaming on
land within the tribe&#146;s jurisdiction. Because of their
sovereign status, Indian tribes possess immunity from lawsuits
to which the tribes have not otherwise consented or otherwise
waived their sovereign immunity defense. Therefore, no
contractual obligations undertaken by tribes to Lakes would be
enforceable by Lakes unless the tribe has expressly waived its
sovereign immunity as to such obligations. Courts strictly
construe such waivers. Lakes has obtained immunity waivers from
each of the tribes to enforce the terms of its management
agreements, however, the scope of those waivers has never been
tested in court, and may be subject to dispute. Additionally,
persons engaged in gaming activities, including Lakes, are
subject to the provisions of tribal ordinances and regulations
on gaming. These ordinances are subject to review by NIGC under
certain standards established by the IGRA.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Non-gaming Regulations</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company and its subsidiaries are subject to certain federal,
state, and local safety and health laws, regulations and
ordinances that apply to non-gaming businesses generally, such
as the Clean Air Act, Clean Water Act, Occupational Safety and
Health Act, Resource Conservation Recovery Act and the
Comprehensive Environmental Response, Compensation and Liability
Act. The Company believes that it is currently in material
compliance with such regulations. The coverage and attendant
compliance costs associated with such laws, regulations and
ordinances may result in future additional cost to the
Company&#146;s operations.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Intellectual Property</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Trademarks</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes has several pending applications for registration of marks
used in connection with casino table games, but intends to
pursue registration under only two applications for the mark
FOUR THE
MONEY<SUP style="font-size: 85%; vertical-align: text-top"><FONT style="font-variant:SMALL-CAPS">tm</FONT></SUP>,
filed on September&nbsp;10, 2004 and November&nbsp;18, 2004. On
August&nbsp;1, 2005, Lakes filed an application for registration
of the service mark CARLOS
SOPRANO&#146;S<SUP style="font-size: 85%; vertical-align: text-top"><FONT style="font-variant:SMALL-CAPS">tm</FONT></SUP>
to be used in connection with restaurant and related
entertainment services.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">16

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Patents</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes owns or has exclusive rights to several United States
patents and patent applications for various casino games sold by
the Company. The issued patents expire at various times over the
next 10 to 20&nbsp;years.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Licenses</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes has an exclusive worldwide, royalty-bearing license to all
patent, copyright and other intellectual property rights related
to a casino table game developed by Sklansky Games, LLC, subject
to certain marketing restrictions. This license also includes
the right to use the trademark ALL-IN HOLD&#146;EM
POKER<SUP style="font-size: 85%; vertical-align: text-top"><FONT style="font-variant:SMALL-CAPS">tm</FONT></SUP>.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes also has an exclusive worldwide, royalty-bearing license
to use the name &#147;World Poker Tour&#148;, a tutorial video
and the trademark WORLD POKER TOUR and Design in connection with
any casino table game or video-enhanced table game used in any
legal commercial gaming establishment.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Both licenses will remain in effect as long as Lakes pays
minimum annual performance royalty payments, as defined in the
license agreements.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In March 2005, Lakes entered into a development and license
agreement, with an independent third party for the development
of an &#147;Automated System For Playing Live Casino Table
Games.&#148; Under the terms of the agreement Lakes provided
funding of $0.5&nbsp;million in fiscal 2005 for the development
of the game. Acceptance testing and regulatory approval will be
obtained upon completion of the designated product expected to
occur in mid 2006.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Real Estate Holdings</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes has parcels of land in California related to its Indian
casino projects with the Jamul Tribe and Shingle Springs Tribe.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Employees</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At January&nbsp;26, 2006, Lakes had approximately
40&nbsp;full-time employees. WPTE had approximately
83&nbsp;full-time employees. Lakes believes its relations with
employees are satisfactory.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has assembled a strong team of gaming industry
experts, well-versed in all aspects of casino development,
construction and management, many of whom were involved with the
success of Grand Casinos. The Lakes&#146; team has individual
specialists on staff mirroring each of the functional areas
found in a casino project, including the following:
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Gaming Operations</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Construction&nbsp;&#38; Development</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Finance/ Accounting</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Legal/ Regulatory</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Security</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Systems/ IT</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Food&nbsp;&#38; Beverage</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Retail</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Marketing</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Human Resources</TD>
</TR>

</TABLE>

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<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes&#146; management believes this team represents a valuable
asset that provides a competitive advantage in creating and
enhancing relationships with Indian tribes in the Indian casino
business and in the pursuit of non-Indian casino opportunities.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Website and Available Information</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our website is located at www.lakesentertainment.com.
Information on the website does not constitute part of this
Annual Report on
Form&nbsp;<FONT style="white-space: nowrap">10-K.
</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We make available, free of charge, our Annual Reports on
Form&nbsp;<FONT style="white-space: nowrap">10-K,</FONT> our
Quarterly Reports on
Form&nbsp;<FONT style="white-space: nowrap">10-Q,</FONT> our
Current Reports on
Form&nbsp;<FONT style="white-space: nowrap">8-K</FONT> and
amendments to such reports filed or furnished pursuant to
Section&nbsp;13(a) or 15(d) of the Securities and Exchange Act
of 1934 as soon as reasonably practicable after such forms are
filed with or furnished to the SEC. Copies of these documents
are available to our shareholders at our website or upon written
request to our Chief Financial Officer at 130 Cheshire Lane,
Suite&nbsp;101, Minnetonka, MN 55305.
</DIV>

<!-- link2 "ITEM 1A. RISK FACTORS" -->

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<TR>
    <TD width="10%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD><B>ITEM 1A.</B></TD>
    <TD>
    <B><I>RISK FACTORS</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>In addition to factors discussed elsewhere in this Annual
Report on
Form&nbsp;<FONT style="white-space: nowrap">10-K,</FONT> the
following are important factors that could cause actual results
or events to differ materially from those contained in any
forward-looking statement made by or on behalf of us.</I>
</DIV>

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    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Our common stock was delisted from the Nasdaq National
    Market effective August&nbsp;10, 2005 and there is no assurance
    that our common stock will be re-listed.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We received a Nasdaq Staff Determination letter on
April&nbsp;20, 2005, indicating that we were not compliant with
Nasdaq listing standards because we did not timely file our
Annual Report on
Form&nbsp;<FONT style="white-space: nowrap">10-K</FONT> for the
year ended January&nbsp;&nbsp;2, 2005 and our Quarterly Report
on Form&nbsp;<FONT style="white-space: nowrap">10-Q</FONT> for
the fiscal quarter ended April&nbsp;3, 2005 with the United
States Securities and Exchange Commission, referred to as the
SEC. As a result, our common stock was subject to delisting from
the Nasdaq National Market. The delisting notification is
standard procedure when a Nasdaq listed company fails to
complete a required filing in a timely manner. On August&nbsp;9,
2005, we received notice from the Nasdaq Stock Market Listing
Qualifications Department that the Nasdaq Listing Qualifications
Panel determined to delist our common stock from the Nasdaq
National Market effective as of the opening of business on
August&nbsp;10, 2005.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;22, 2005, we applied for re-listing of our
common stock with the Nasdaq Stock Market Listing Qualifications
Department as we are now current with the Nasdaq Marketplace
Rule&nbsp;No.&nbsp;4310(c)(14). There can be no assurance that
the Nasdaq Staff will grant our request for re-listing.
</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
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<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>The completion of our planned Indian and non-Indian casino
    development projects may be significantly delayed or prevented
    due to a variety of factors, many of which are beyond our
    control.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Although we have experience developing and managing casinos
owned by Indian tribes and located on Indian land, neither we
nor any of these individuals has developed or managed a casino
in the States of California, Michigan, or Oklahoma. The opening
of each of our proposed facilities will be contingent upon,
among other things, the completion of construction, hiring and
training of sufficient personnel and receipt of all regulatory
licenses, permits, allocations and authorizations. The scope of
the approvals required to construct and open these facilities
will be extensive, and the failure to obtain such approvals
could prevent or delay the completion of construction or opening
of all or part of such facilities or otherwise affect the design
and features of the proposed casinos.
</DIV>

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No assurances can be given that once a schedule for such
construction and development activities is established, such
development activities will begin or will be completed on time,
or any other time, or that the budget for these projects will
not be exceeded.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, the regulatory approvals necessary for the
construction and operation of casinos are often challenged in
litigation brought by government entities, citizens groups and
other organizations and
</DIV>

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individuals. Such litigation can significantly delay the
construction and opening of casinos. Certain of our casino
projects have been significantly delayed as a result of such
litigation, and there is no assurance that the litigation can be
successfully resolved or that our casino projects will not
experience further significant delays before resolution.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Major construction projects entail significant risks, including
shortages of materials or skilled labor, unforeseen engineering,
environmental and/or geological problems, work stoppages,
weather interference, unanticipated cost increases and
non-availability of construction equipment. These factors or
delays or difficulties in obtaining any of the requisite
licenses, permits, allocations and authorizations from
regulatory authorities could increase the total cost, delay or
prevent the construction or opening of any of these planned
casino developments or otherwise affect their design.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

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    <TD></TD>
    <TD>
    <B><I>Any significant delay in, or non-completion of, our
    planned Indian and non-Indian casino development projects could
    have a material adverse effect on our profitability.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Since the expiration of our management contract for Grand Casino
Coushatta (the last remaining Indian-owned casino managed by us)
on January&nbsp;16, 2002, we have generated minimal revenue from
our casino management activities. We have had minimal current
casino management-related operating revenue with which to offset
the investment costs associated with our current or future
casino development projects, delays in the completion of our
current development projects, or the failure of such projects to
be completed at all, may cause our operating results to
fluctuate significantly and may adversely affect our
profitability. In addition, once developed, no assurances can be
given that we will be able to manage these casinos on a
profitable basis or to attract a sufficient number of guests,
gaming customers and other visitors to make the various
operations profitable independently. With each project we are
subject to the risk that our investment may be lost if the
project cannot obtain adequate financing to complete development
and open the casino successfully. In some cases, we may be
forced to provide more financing than we originally planned in
order to complete development, increasing the risk to us in the
event of a default by the casino. In addition, because our
future growth in revenues and our ability to generate profits
will depend to a large extent on our ability to increase the
number of our managed casinos or develop new business
opportunities, the delays in the completion or the
non-completion of our current development projects may adversely
affect our ability to realize future growth in revenues and
future profits.
</DIV>

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    <TD width="3%"></TD>
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</TR>

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    <TD></TD>
    <TD>
    <B><I>The termination of our management contracts and consulting
    agreements with Indian tribes may have a material adverse effect
    on our results of operations and financial condition.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The terms of our current management contracts and consulting
agreements provide that such contracts may be terminated under
certain circumstances, including without limitation, upon the
failure to obtain NIGC approval for the project, the loss of
requisite gaming licenses, or an exercise by an Indian tribe of
its buyout option. Without the realization of new business
opportunities or new management contracts or consulting
agreements, management contract or consulting agreement
terminations could have a material adverse effect on our results
of operations and financial condition.
</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>If our current casino development projects are not
    completed or fail to successfully compete once completed, we may
    lack the funds to compete for and develop future gaming or other
    business opportunities which may have a material adverse effect
    on our results of operations.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The gaming industry is highly competitive. Gaming activities
include traditional land-based casinos; river boat and dockside
gaming; casino gaming on Indian land; state-sponsored lotteries
and video poker in restaurants, bars and hotels; pari-mutuel
betting on horse racing and dog racing; sports bookmaking; and
card rooms. The casinos to be managed or owned by us compete,
and will in the future compete, with all these forms of gaming,
and will compete with any new forms of gaming that may be
legalized in additional jurisdictions, as well as with other
types of entertainment.
</DIV>

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We also compete with other gaming companies for opportunities to
acquire legal gaming sites in emerging and established gaming
jurisdictions and for the opportunity to manage casinos on
Indian land. Many of our
</DIV>

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competitors have more personnel and may have greater financial
and other resources than us. Such competition in the gaming
industry could adversely affect our ability to attract customers
which would adversely affect our operating results. In addition,
further expansion of gaming into new jurisdictions could also
adversely affect our business by diverting customers from our
planned managed casinos to competitors in such jurisdictions.
</DIV>

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    <TD></TD>
    <TD>
    <B><I>We could be prevented from completing our current casino
    development projects or pursuing future development projects due
    to changes in the laws, regulations and ordinances (including
    tribal or local laws) that apply to gaming facilities or the
    inability of us or our key personnel, significant shareholders
    or joint venture partners to obtain or retain gaming regulatory
    licenses.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The ownership, management and operation of gaming facilities are
subject to extensive federal, state, provincial, tribal and/or
local laws, regulations and ordinances, which are administered
by the relevant regulatory agency or agencies in each
jurisdiction. These laws, regulations and ordinances vary from
jurisdiction to jurisdiction, but generally concern the
responsibility, financial stability and character of the owners
and managers of gaming operations as well as persons financially
interested or involved in gaming operations, and often require
such parties to obtain certain licenses, permits and approvals.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The rapidly-changing political and regulatory environment
governing the gaming industry (including gaming operations which
are conducted on Indian land) makes it impossible for us to
accurately predict the effects that an adoption of or changes in
the gaming laws, regulations and ordinances will have on us.
However, the failure of us, or any of our key personnel,
significant shareholders or joint venture partners, to obtain or
retain required gaming regulatory licenses could prevent us from
expanding into new markets, prohibit us from generating revenues
in certain jurisdictions, and subject us to sanctions and fines.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The political and regulatory environment in which we operate,
including with respect to gaming activities on Indian land, is
discussed in greater detail in this Annual Report on
Form&nbsp;<FONT style="white-space: nowrap">10-K</FONT> under
the caption &#147;Business-Regulation&#148; in Item&nbsp;1.
</DIV>

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    <TD></TD>
    <TD>
    <B><I>If the NIGC elects to modify the terms of our management
    contracts with Indian tribes or void such contracts altogether,
    our revenues from management contracts may be reduced or
    eliminated.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The NIGC has the power to require modifications to Indian
management contracts under certain circumstances or to void such
contracts or ancillary agreements including loan agreements if
the management company fails to obtain requisite approvals or to
comply with applicable laws and regulations. The NIGC has the
right to review each contract and has the authority to reduce
the term of a management contract or the management fee or
otherwise require modification of the contract, which could have
an adverse effect on us. Currently, only the Shingle Springs
management contract has been approved by the NIGC. The other
management contracts have not received final approval by the
NIGC and may require modification prior to receiving approval.
</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>If Indian tribes default on their repayment obligations or
    wrongfully terminate their management contracts with us, we may
    be unable to collect the amounts due.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have made, and may make, substantial loans to Indian tribes
for the construction, development, equipment and operations of
casinos to be managed by us. Our only recourse for collection of
indebtedness from an Indian tribe or money damages for breach or
wrongful termination of a management contract is from revenues,
if any, from casino operations. We have subordinated, and may in
the future subordinate, the repayment of loans made to an Indian
tribe and other distributions due from an Indian tribe
(including management fees) in favor of other obligations of the
Indian tribe to other parties related to the casino operations.
Accordingly, in the event of a default by an Indian tribe under
such obligations, our loans and other claims against the Indian
tribe will not be repaid until such default has been cured or
the Indian tribe&#146;s senior casino-related creditors have
been repaid in full.
</DIV>

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    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>A deterioration of our relationship with an Indian tribe
    could cause delays in the completion of a casino development
    project with that Indian tribe or even force us to abandon a
    casino development project altogether and prevent or
    significantly impede recovery of our investment therein.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Good personal and professional relationships with Indian tribes
and their officials are critical to our proposed and future
Indian-related gaming operations and activities, including our
ability to obtain, develop and effectuate management and other
agreements. As sovereign nations, Indian tribes establish their
own governmental systems under which tribal officials or bodies
representing an Indian tribe may be replaced by appointment or
election or become subject to policy changes. Replacements of
Indian tribe officials or administrations, changes in policies
to which an Indian tribe is subject, or other factors that may
lead to the deterioration of our relationship with an Indian
tribe may cause delays in the completion of a development
project with that Indian tribe or prevent the project&#146;s
completion altogether, which may have an adverse effect on the
results of our operations.
</DIV>

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    <TD></TD>
    <TD>
    <B><I>If funds from our operations are insufficient to support
    our cash requirements and we are unable to obtain additional
    financing in order to satisfy these requirements we may be
    forced to delay, scale back or eliminate some of our expansion
    and development goals, or cease our operations entirely.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We will require additional capital through either public or
private financings to meet operating expenses during 2006 and we
are currently considering various financing alternatives. On
February&nbsp;15, 2006 we closed on a $50&nbsp;million financing
facility with an affiliate of Prentice Capital Management, LP.
An initial draw of $25&nbsp;million was made under the facility,
another $10&nbsp;million is immediately available under the
facility and the remaining $15&nbsp;million can be drawn in
$5&nbsp;million increments subject to the satisfaction of
certain conditions. See Note&nbsp;18 to the Consolidated
Financial Statements included in Item&nbsp;8 of this Annual
Report on Form&nbsp;<FONT style="white-space: nowrap">10-K.
</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Even with this financing facility in place, as previously
announced, we will continue to explore additional financing
alternatives to fund our future operational and development
needs, including financing to meet our obligations related to
our casino projects as soon as regulatory approvals are received
and construction can begin. Such financings may not be available
when needed on terms acceptable to us or at all. Moreover, any
additional equity or debt financings may be dilutive to our
shareholders, and any debt financing may involve additional
restrictive covenants. An inability to raise such funds when
needed might require us to delay, scale back or eliminate some
of our expansion and development goals, or might require us to
cease our operations entirely. Our financial condition and
resources are discussed in greater detail in Item&nbsp;7
&#147;Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations&#148; of this Annual Report
on Form&nbsp;<FONT style="white-space: nowrap">10-K.
</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, the construction of our Indian casino projects may
depend on the ability of the Indian tribes to obtain financing
for the projects. If such financing cannot be obtained on
acceptable terms, it may not be possible to complete these
projects. In order to assist the Indian tribes, we may be
required to guarantee the Indian tribes&#146; debt financing or
otherwise provide support for the Indian tribes&#146;
obligations. Any guarantees by us or similar off-balance sheet
liabilities, if any, will increase our potential exposure in the
event of a default by any of these Indian tribes.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the Pokagon Casino project, we have agreed to finance all
phases of the project entirely from our own funds if financing
at an interest rate of 13% or less is not available from the
capital markets. If this occurs and we are required to provide
all financing, this would be an additional commitment of up to
approximately $54&nbsp;million. While it currently appears that
third-party financing will be available for this project, there
can be no assurance third-party financing will be available and
that we will not be required to provide this additional
financing.
</DIV>

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    <TD></TD>
    <TD>
    <B><I>If one or more of our Indian casino projects fail to open,
    the recorded assets related to those projects will be impaired
    and there will be a material adverse impact on our financial
    results.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We record assets related to Indian casino projects on our
consolidated balance sheet as long-term assets related to Indian
casino projects. The majority of our long-term assets related to
Indian casino projects are in
</DIV>

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the form of loans to the Indian tribes pursuant to our financing
agreements with varying degrees of collection risk, and with
repayment often dependent on the operating performance of each
gaming property. These loans are included as notes receivable on
the consolidated balance sheet, under the category
&#147;long-term assets related to Indian casino projects&#148;.
At January&nbsp;1, 2006, we had $152.8&nbsp;million in long-term
assets related to Indian casino projects, of which
$87.1&nbsp;million was in the form of notes receivable, which
are recorded at fair value on the consolidated balance sheet.
The notes receivable represented approximately 38% of our total
assets. See Note&nbsp;4 to the Consolidated Financial Statements
included in Item&nbsp;8 of this Annual Report on
Form&nbsp;<FONT style="white-space: nowrap">10-K.</FONT> The
loans are made to Indian tribes for pre-construction financing
related to gaming properties being developed by us. All of the
loans are subject to varying degrees of collection risk and
there is no established market. For the loans representing
indebtedness of Indian tribes, the repayment terms are specific
to each Indian tribe and are largely dependent upon the
operating performance of each gaming property. Repayments of
such loans are required to be made only if distributable profits
are available from the operation of the related casinos.
Repayments are also the subject of certain distribution
priorities specified in the management contracts. In addition,
repayment to us of the loans and the manager&#146;s fees under
our management contracts are subordinated to certain other
financial obligations of the respective Indian tribes.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Included in long-term assets related to Indian casino projects
are intangible assets related to the acquisition of the
management contract, land held for development and other costs
incurred in connection with opening the casino of
$46.1&nbsp;million, $16.2&nbsp;million and $3.4&nbsp;million,
respectively, at January&nbsp;1, 2006. It is possible that one
or more of our Indian casino projects will fail to open, which
will render the majority of the assets related to the failed
Indian casino project impaired. See our accounting policy within
Note&nbsp;1 of the Consolidated Financial Statements included in
Item&nbsp;8 of the Annual Report on
Form&nbsp;<FONT style="white-space: nowrap">10-K.
</FONT>
</DIV>

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    <TD></TD>
    <TD>
    <B><I>During September 2005, legislation was proposed to amend
    the Gambling Devices Act of 1962 which could negatively affect
    projected management/consulting fees from the Shingle Springs
    and Jamul Casino projects.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During September 2005, the Department of Justice proposed
legislation that would amend the Gambling Devices Act of 1962
(commonly referred to as the Johnson Act). The proposal seeks to
clarify the difference between Class&nbsp;II and Class&nbsp;III
machines. It prohibits Indian tribes from operating games that
resemble slot machines without a tribal-state compact. The
legislation proposes to amend the Johnson Act in three
significant ways. First, the definition of &#147;gaming
device&#148; in Section&nbsp;1171 of the Johnson Act would be
amended to clarify how the element of chance can be provided in
a gaming device. Second, Section&nbsp;1172 of the Johnson Act
would be amended to clarify that certain &#147;qualifying&#148;
technologic aids could be transported and used in Indian
country. Third, a new Section&nbsp;(d)&nbsp;would be added to
Section&nbsp;1175 of the Johnson Act to provide an express
exception to allow technological devices to be used in
Class&nbsp;II gaming.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This is only proposed legislation, but if passed it could affect
our planned casino operations for the Shingle Springs Tribe and
the Jamul Tribe and distributable management fees to us.
Class&nbsp;II machines are currently planned to be used at the
Shingle Springs and Jamul Casinos. If the legislation were
passed there is no assurance that substitute allowable
Class&nbsp;II machines would result in the same projected
operating results as the Class&nbsp;II machines currently
planned to be used and in use by the above-mentioned projects.
If this were to occur it could have a material adverse effect on
our results of operations and financial conditions.
</DIV>

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</TR>

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    <TD></TD>
    <TD>
    <B><I>Our entry into new businesses may result in future
    losses.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have announced that part of our strategy involves
diversifying into other businesses such as developing and owning
our own casino and the development and marketing of our own
table games. Such businesses involve business risks separate
from the risks involved in casino development and these
investments may result in future losses to us. These risks
include but are not limited to negative cash flow, initial high
development costs of new products and/or services without
corresponding sales pending receipt of corporate and regulatory
approvals, market introduction and acceptance of new products
and/or services, and obtaining regulatory approvals required to
conduct the new businesses. There is no assurance that
diversification activities will successfully add to our future
revenues and income.
</DIV>

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<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>We cannot guarantee the financial results of the expansion
    of the World Poker Tour business, which may negatively impact
    our financial results.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of January&nbsp;1, 2006, we, through our subsidiary Lakes
Poker Tour, LLC, owned approximately 62% of the outstanding
common stock of WPT Enterprises, Inc., referred to as WPTE. As a
result, our consolidated results include WPTE operations. In
fiscal 2004, our consolidated revenues of $17.6&nbsp;million,
were derived entirely from the WPTE business, mainly from
license fees for United States telecast of World Poker Tour
television episodes. In fiscal 2005 the majority of our
consolidated revenues of $18.2&nbsp;million were derived from
WPTE. WPTE has an agreement for a third season with the TRV, for
broadcast of the World Poker Tour series on cable television
which began airing in the fourth quarter of 2004 and continued
airing in 2005. TRV exercised its option for Season Four in
March 2005 and has options for three additional seasons.
WPTE&#146;s revenues were $18.1&nbsp;million for fiscal 2005
from the delivery of 13 Season Three episodes and five Season
Four episodes, international television licensing of the World
Poker Tour&#146;s Season One and Two and product licensing fees.
However, we can provide no assurance that WPTE will achieve its
forecasted revenues, that WPTE will be able to expand its
business, or that WPTE&#146;s operations will positively impact
our financial results because WPTE&#146;s business is subject to
many risks and uncertainties. The risks include, but are not
limited to, WPTE&#146;s short operating history, WPTE&#146;s
dependence on its agreements with TRV, continued public
acceptance of the World Poker Tour programming and brand,
protection of WPTE&#146;s intellectual property rights, and
WPTE&#146;s ability to successfully expand into new and
complementary business, including internet gaming.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>We are dependent on the ongoing services of our Chairman
    and Chief Executive Officer, Lyle Berman, and the loss of his
    services could have a detrimental effect on the pursuit of our
    business objectives, profitability and the price of our common
    stock.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our success will depend largely on the efforts and abilities of
our senior corporate management, particularly Lyle Berman, our
Chairman and Chief Executive Officer. The loss of the services
of Mr.&nbsp;Berman or other members of senior corporate
management could have a material adverse effect on us. We are in
the process of obtaining a $20&nbsp;million key man life
insurance policy on him.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Our Articles of Incorporation and Bylaws may discourage
    lawsuits and other claims against our directors.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our Articles of Incorporation and Bylaws provide, to the fullest
extent permitted by Minnesota law, that our directors shall have
no personal liability for breaches of their fiduciary duties to
us. In addition, our Bylaws provide for mandatory
indemnification of directors and officers to the fullest extent
permitted by Minnesota law. These provisions reduce the
likelihood of derivative litigation against our directors and
may discourage shareholders from bringing a lawsuit against
directors for a breach of their duty.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Our Articles of Incorporation contain provisions that
    could discourage or prevent a potential takeover, even if the
    transaction would be beneficial to our shareholders.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our Articles of Incorporation authorize our Board of Directors
to issue up to 200&nbsp;million shares of capital stock, the
terms of which may be determined at the time of issuance by the
Board of Directors, without further action by our shareholders.
The Board of Directors may authorize additional classes or
series of shares that may include voting rights, preferences as
to dividends and liquidation, conversion and redemptive rights
and sinking fund provisions that could adversely affect the
rights of holders of our common stock and reduce the value of
our common stock. In connection with closing on a
$50&nbsp;million financing facility in February 2006, our Board
of Directors authorized the creation of class of Series&nbsp;A
Convertible Preferred Stock with contingent conversion rights
and limited voting rights, and we issued an aggregate of
4,451,751&nbsp;shares of such preferred stock to an affiliate of
the lender. The Series&nbsp;A Convertible Preferred Stock and
any other class of preferred stock that may be authorized by our
Board of Directors for issuance in the future could make it more
difficult for a third party to acquire us, even if a majority of
our holders of common stock approved of such acquisition.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">23

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>The price of our common stock may be adversely affected by
    significant price fluctuations due to a number of factors, many
    of which are beyond our control.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The market price of our common stock has experienced significant
fluctuations and may continue to fluctuate in the future. The
market price of our common stock may be significantly affected
by many factors, including:
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    obtaining all necessary regulatory approvals for our casino
    development projects;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    litigation surrounding one or more of our casino developments;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    changes in requirements or demands for our services or
    WPTE&#146;s products;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the announcement of new products or product enhancements by us
    or our competitors;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    technological innovations by us or our competitors;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    quarterly variations in our or our competitors&#146; operating
    results;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    changes in prices of our or our competitors&#146; products and
    services;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    changes in our revenue and revenue growth rates;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    changes in earnings or (loss) per share estimates by market
    analysts or speculation in the press or analyst
    community;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    general market conditions or market conditions specific to
    particular industries.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>We have issued numerous options and warrants to acquire
    our common stock that could have a dilutive effect on our common
    stock.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of January&nbsp;1, 2006, we had options outstanding to
acquire 5.3&nbsp;million shares of our common stock, exercisable
at prices ranging from $3.25 to $18.16&nbsp;per share, with a
weighted average exercise price of approximately $6.03&nbsp;per
share and warrants outstanding to acquire up to 2&nbsp;million
shares of common stock. The warrants were cancelled effective
February&nbsp;15, 2006. During the terms of these options, the
holders will have the opportunity to profit from an increase in
the market price of our common stock with resulting dilution to
the holders of shares who purchased shares for a price higher
than the respective exercise or conversion price. In addition,
the increase in the outstanding shares of our common stock as a
result of the exercise or conversion of these options could
result in a significant decrease in the percentage ownership of
our common stock by the purchasers of its common stock.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On February&nbsp;15, 2006, we closed on a $50&nbsp;million
financing facility with an affiliate of Prentice Capital
Management, LP. As consideration for the financing, we issued to
an affiliate of Prentice Capital warrants to
purchase&nbsp;1.25&nbsp;million shares of common stock that can
be immediately exercised at $7.50&nbsp;per share. The warrants
are subject to customary anti-dilution protections. An
additional 1.25&nbsp;million warrants to purchase common stock
are exercisable at $7.50&nbsp;per share as additional draws
under the facility are made. Up to an additional
1.96&nbsp;million warrants to purchase common stock can be
exercised at $7.50&nbsp;per share upon the occurrence of certain
events relating to loan collateral. All warrants expire in
February 2013.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>The market price of our common stock may be reduced by
    future sales of our common stock in the public market.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Sales of substantial amounts of our common stock in the public
market that are not currently freely tradable, or even the
potential for such sales, could have an adverse effect on the
market price for shares of our common stock and could impair the
ability of purchasers of our common stock to recoup their
investment or make a profit. As of January&nbsp;1, 2006, these
shares consist of approximately 8.0&nbsp;million shares
beneficially owned by our executive officers and directors.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">24

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<!-- link2 "ITEM 1B. UNRESOLVED STAFF COMMENTS" -->

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<TR>
    <TD width="10%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD><B>ITEM 1B.</B></TD>
    <TD>
    <B><I>UNRESOLVED STAFF COMMENTS</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
None
</DIV>

<!-- link2 "ITEM 2. PROPERTIES" -->

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<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>ITEM&nbsp;2.</B></TD>
    <TD>
    <B><I>PROPERTIES</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Corporate Office Facility</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;2, 2002, as per the terms of an agreement with
Grand Casinos, Lakes purchased the corporate office building for
$6.4&nbsp;million, which is included as part of property and
equipment on the accompanying consolidated balance sheets as of
January&nbsp;1, 2006 and January&nbsp;2, 2005. Lakes occupies
approximately 22,000&nbsp;square feet of the 65,000&nbsp;square
foot building and has leased the remaining space to outside
tenants.
</DIV>

<!-- link2 "ITEM 3. LEGAL PROCEEDINGS" -->

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<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>ITEM&nbsp;3.</B></TD>
    <TD>
    <B><I>LEGAL PROCEEDINGS</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Slot Machine Litigation</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 1994, William H. Poulos filed a class-action lawsuit in the
United States District Court for the Middle District of Florida
against various parties, including Lakes&#146; predecessor,
Grand Casinos, and numerous other parties alleged to be casino
operators or slot machine manufacturers. This lawsuit was
followed by several additional lawsuits of the same nature
against the same, as well as additional defendants, all of which
were subsequently consolidated into a single class-action
pending in the United States District Court for the District of
Nevada. Following a court order dismissing all pending pleadings
and allowing the plaintiffs to re-file a single complaint, a
complaint has been filed containing substantially identical
claims, alleging that the defendants fraudulently marketed and
operated casino video poker machines and electronic slot
machines, and asserting common law fraud and deceit, unjust
enrichment and negligent misrepresentation and claims under the
federal Racketeering-Influenced and Corrupt Organizations Act.
Various motions were filed by the defendants seeking to have
this new complaint dismissed or otherwise limited. In December
1997, the Court, in general, ruled on all motions in favor of
the plaintiffs. The plaintiffs then filed a motion seeking class
certification and the defendants opposed it. In June 2002, the
District Court entered an order denying class certification. On
August&nbsp;10, 2004, the Ninth Circuit Court of Appeals
affirmed the District Court&#146;s denial of class
certification. On September&nbsp;14, 2005, the United States
District Court for the District of Nevada granted the
defendants&#146; motions for summary judgment, and judgment was
entered against the plaintiffs on that same day. The defendants
have moved to seek the payment of their costs and
attorneys&#146; fees. The motion has been fully briefed and is
pending before the Trial Court. The plaintiffs have appealed
from the judgment to the United States Court of Appeals for the
Ninth Circuit, and the briefing of the appeal is scheduled to be
completed by the end of March 2006.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has not recorded any liability for this matter, as
currently an estimate of any possible loss cannot be made.
Management currently believes the final outcome of this matter
is not likely to have a material adverse effect upon the
Company&#146;s consolidated financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>El Dorado County, California Litigation</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;3, 2003, El Dorado County filed an action in the
Superior Court of the State of California, seeking to prevent
the construction of a highway interchange that was approved by a
California state agency. The action, which was consolidated with
a similar action brought by Voices for Rural Living and others,
does not seek relief directly against Lakes. However, the
interchange is necessary to permit the construction of a casino
to be developed and managed by Lakes through a joint venture.
The casino will be owned by the Shingle Springs Tribe. The
matter was tried to the court on August&nbsp;22, 2003. On
January&nbsp;2, 2004, Judge Lloyd G. Connelly, Judge of the
Superior Court of the State of California, issued his ruling on
the matter denying the petition in all respects except one. As
to the one exception, the court sought clarification as to
whether the transportation conformity determination used to
determine the significance of the air quality impact of the
interchange operations considered the impact on attainment of
the state ambient air quality standard for ozone. The California
Department of Transportation (CalTrans) prepared and filed the
</DIV>

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<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
clarification addendum sought by the court. Prior to the
court&#146;s determination of the adequacy of the clarification,
El Dorado County and Voices for Rural Living appealed Judge
Connelly&#146;s ruling to the California Court of Appeals on all
of the remaining issues.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A ruling with respect to the addendum was issued June&nbsp;21,
2004 by the Superior Court of the State of California, County of
Sacramento. The ruling indicated that the addendum provided to
the court by CalTrans did not provide a quantitative showing to
satisfy the court&#146;s earlier request for a clarification on
meeting the state ambient ozone standard. The court recognized
that the information provided by CalTrans does qualitatively
show that the project may comply with the state standard, but
concluded that a quantitative analysis is necessary even though
the court recognized that the methodology for that analysis
&#147;is not readily apparent&#148;. In addition, the ruling
specifically stated, &#147;Moreover, such methodology appears
necessary for the CEQA analysis of transportation projects
throughout the state, including transportation projects for
which respondents (i.e., CalTrans) have approval
authority.&#148; CalTrans, the Shingle Springs Tribe and Lakes
responded to the court with a revised submission in August 2004.
Representatives of the California Air Resources Board and the
Sacramento Area Council of Governments filed declarations
supporting the revised submission to the court. Opposition to
that revised submission was filed, a hearing on the revised
submission took place on August&nbsp;&nbsp;20, 2004 and the
court again found the revised submission of CalTrans, the
Shingle Springs Tribe and Lakes to be inadequate. That ruling
was separately appealed to the California Court of Appeals (the
&#147;Court&#148;) and an oral argument for these appeals and
the appeals of El Dorado County and Voices of Rural Living was
held before the Court on August&nbsp;29, 2005.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Court issued its decision on the appeals on November&nbsp;8,
2005. The Court ruled in favor of CalTrans&#146; appeal,
rejecting the El Dorado County&#146;s argument that the
transportation conformity analysis did not conform to state
standards. The Court also rejected all but two of the legal
claims asserted in the appeal by El Dorado County and Voices for
Rural Living against the environmental impact report
(&#147;EIR&#148;) prepared by CalTrans for the interchange that
will connect Highway 50 to the Shingle Springs Rancheria. For
the remaining two issues, the Court held that CalTrans must
supplement its environmental analysis by adding some discussion
to the air quality chapter to further explain the project&#146;s
contribution to overall vehicular emissions in the region, and
that CalTrans also must evaluate whether a smaller casino and
hotel would reduce environmental impacts. The Court acknowledged
CalTrans lacks jurisdiction to require the Shingle Springs Tribe
to develop a smaller casino, but nevertheless required some
discussion of this alternative in the interchange EIR. On
December&nbsp;19, 2005, CalTrans filed a Petition for Review
with the Supreme Court of the State of California, and on
February&nbsp;8, 2006 the Supreme Court denied the Petition for
Review and ordered the Court of Appeals decision to be
depublished. CalTrans is now preparing to comply with the Court
of Appeals order.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has not recorded any liability for this matter as
management currently believes that the Court&#146;s rulings will
ultimately allow the project to commence. However, there can be
no assurance that the final outcome of this matter is not likely
to have a material adverse effect upon the Company&#146;s
consolidated financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Grand Casinos, Inc. Litigation</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In connection with the establishment of Lakes as a public
corporation on December&nbsp;31, 1998, via a distribution of its
common stock to the shareholders of Grand Casinos, the Company
and Grand Casinos entered into an agreement governing the
sharing or allocation of tax benefits accruing to Grand Casinos
and certain affiliated companies of Grand Casinos. Lakes
asserted claims against Grand Casinos for amounts to which Lakes
believed it was entitled under the tax sharing agreement. On
December&nbsp;1, 2004, Lakes entered into a settlement agreement
with Grand Casinos and its parent company, Park Place
Entertainment Corporation (now known as &#147;Harrah&#146;s
Entertainment, Inc.&#148;), pursuant to which Lakes received
$11.3&nbsp;million in December 2004 in satisfaction of its prior
claim and its future rights to the tax benefits that were the
subject of the dispute. Lakes will be required to provide
reimbursement for its share of the disallowed benefits. This
settlement income has been recorded as other income in the
consolidated statement of earnings (loss) for the year ended
January&nbsp;2, 2005. Lakes has not recorded any tax related to
the settlement payment of $11.3&nbsp;million, as Lakes believes
this settlement is not taxable to Lakes.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">26

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Louisiana Department of Revenue Litigation Tax Matter</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Louisiana Department of Revenue maintains a position that
Lakes owes additional Louisiana corporation income tax for the
period ended January&nbsp;3, 1999 and the tax years ended 1999
through 2001 and additional Louisiana corporation franchise tax
for the tax years ended 2000 through 2002. This determination is
the result of an audit of Louisiana tax returns filed by Lakes
for the tax periods at issue and relates to the reporting of
income earned by Lakes in connection with the managing of two
Louisiana-based casinos. On December&nbsp;20, 2004, the
Secretary of the Department of Revenue of the State of Louisiana
filed a petition to collect taxes in the amount of
$8.6&nbsp;million, excluding interest, against Lakes in the
19th&nbsp;Judicial District&nbsp;Court, East Baton Rouge Parish,
Louisiana (Docket No.&nbsp;527596, Section&nbsp;23). In the
petition to collect taxes the Department of Revenue of the state
of Louisiana asserts that additional corporation income tax and
corporation franchise tax are due by Lakes for the taxable
periods set forth above. Lakes maintains that it has remitted
the proper Louisiana corporation income tax and Louisiana
corporation franchise tax for the taxable periods at issue. On
February&nbsp;14, 2005, Lakes filed an answer to the petition to
collect taxes asserting all proper defenses and maintaining that
no additional taxes are owed and that the petition to collect
taxes should be dismissed. Management intends to vigorously
contest this action by the Louisiana Department of Revenue.
Lakes may be required to pay up to the $8.6&nbsp;million
assessment plus interest and legal fees of the State if Lakes is
not successful in this matter. The Company has recorded a
provision for its estimated settlement related to this
examination including accrued interest, which is included as
part of income taxes payable on the Company&#146;s consolidated
balance sheets.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>WPTE litigation with TRV</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In late 2005 and early 2006, WPTE was involved in a dispute with
the Travel Channel in connection with licensing the Professional
Poker
Tour<SUP style="font-size: 85%; vertical-align: text-top"><FONT style="font-variant:SMALL-CAPS">tm</FONT></SUP>,
or the
PPT<SUP style="font-size: 85%; vertical-align: text-top"><FONT style="font-variant:SMALL-CAPS">tm</FONT></SUP>
for telecast. Under the WPT agreements between WPTE and the
Travel Channel, the Travel Channel is afforded the right to
negotiate with WPTE with respect to certain types of programming
developed by WPTE during a sixty (60) day period. Pursuant to
the WPT agreements, WPTE had submitted the PPT to the Travel
Channel and began negotiations but failed to reach an agreement
with the Travel Channel within the allotted negotiation window.
Consequently, WPTE began discussions with other networks. While
WPTE later revived its attempts to reach a deal with the Travel
Channel after its exclusive bargaining window had ended, WPTE
ultimately received an offer from another network. WPTE
submitted this offer to the Travel Channel pursuant to its
contractual last right to match the deal as specified under the
WPT agreements. Thereafter, the Travel Channel sent letters to
WPTE and the other broadcaster asserting, among other things,
that WPTE was not entitled to complete a deal for the PPT with a
third party.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In response to the Travel Channel&#146;s communications, WPTE
filed suit in California Superior Court in September 2005,
alleging that the Travel Channel had interfered with WPTE&#146;s
prospective contractual relationship with a third party as well
as attempted to contravene WPTE&#146;s express contractual right
to produce non-World Poker Tour branded programs covering poker
tournaments. After a series of motions and cross-motions between
the parties, on January&nbsp;25, 2006, WPTE settled the dispute
and entered into a settlement agreement with the Travel Channel,
as well as agreements with the Travel Channel with respect to
certain amendments to the WPT agreements and the licensing of
the PPT for telecast on the Travel Channel.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Other Litigation</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes and its subsidiaries are involved in various other
inquiries, administrative proceedings, and litigation relating
to contracts and other matters arising in the normal course of
business. While any proceeding or litigation has an element of
uncertainty, management currently believes that the final
outcome of these matters, including the matters discussed above,
is not likely to have a material adverse effect upon the
Company&#146;s consolidated financial statements.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">27
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<!-- link2 "ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>ITEM&nbsp;4.</B></TD>
    <TD>
    <B><I>SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
None.
</DIV>

<!-- link1 "PART II" -->

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>PART&nbsp;II</B>
</DIV>

<!-- link2 "ITEM 5. MARKET FOR REGISTRANT&#146;S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>ITEM&nbsp;5.</B></TD>
    <TD>
    <B><I>MARKET FOR REGISTRANT&#146;S COMMON EQUITY, RELATED
    STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
    SECURITIES</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes became a publicly held company effective December&nbsp;31,
1998. The common stock began trading on the Nasdaq National
Market under the symbol LACO on January&nbsp;4, 1999.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes received a Nasdaq Staff Determination letter on
April&nbsp;20, 2005, indicating that the Company was not
compliant with Nasdaq listing standards because Lakes did not
timely file its Annual Report on
Form&nbsp;<FONT style="white-space: nowrap">10-K</FONT> for the
year ended January&nbsp;2, 2005 and its Quarterly Report on
Form&nbsp;<FONT style="white-space: nowrap">10-Q</FONT> for the
fiscal quarter ended April&nbsp;3, 2005 with the SEC. As a
result, Lakes&#146; common stock was subject to delisting from
the Nasdaq National Market. The delisting notification is
standard procedure when a Nasdaq listed company fails to
complete a required filing in a timely manner. On August&nbsp;9,
2005, Lakes received notice from the Nasdaq Stock Market Listing
Qualifications Department that the Nasdaq Listing Qualifications
Panel determined to delist Lakes&#146; common stock from the
Nasdaq National Market effective as of the opening of business
on August&nbsp;10, 2005.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes has applied for re-listing of its common stock with the
Nasdaq Stock Market Listing Qualifications Department as Lakes
has become current with the Nasdaq Marketplace
Rule&nbsp;No.&nbsp;4310(c)(14). There can be no assurance that
the Nasdaq Staff will grant Lakes&#146; request for re-listing.
Subsequent to Lakes&#146; delisting from the Nasdaq National
Market, quotations for Lakes&#146; common stock currently appear
on the OTC Bulletin&nbsp;Board (a quotation service for NASD
market makers) under the symbol LACO.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The high and low sales prices per share of the Company&#146;s
common stock for each full quarterly period within the two most
recent fiscal years are indicated below, as reported on the
Nasdaq National Market or on the OTC Bulletin&nbsp;Board or Pink
Sheets (Lakes&#146; common stock was traded on Pink Sheets
during a portion of fiscal 2005):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="57%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>First</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Second</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Third</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fourth</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Quarter</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Quarter</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Quarter</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Quarter</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Year Ended January&nbsp;1, 2006:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    High</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>19.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>17.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>18.99</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>10.32</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Low</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.48</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11.96</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.21</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Year Ended January&nbsp;2, 2005:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    High</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>15.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>17.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>11.43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>16.75</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Low</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.82</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.58</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.10</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On February&nbsp;27, 2006, the last reported sale price for the
common stock was $9.90&nbsp;per share. As of February&nbsp;27,
2006, the Company had approximately 923&nbsp;shareholders of
record.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During April of 2004, the Company&#146;s Board of Directors
declared a two-for-one stock split, payable in the form of a
100% stock dividend on Lakes&#146; outstanding common stock. The
stock dividend was paid on May&nbsp;3, 2004 to shareholders of
record as of April&nbsp;26, 2004.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a result of the stock split, shareholders received one
additional share of common stock for every share they held on
the record date. Upon completion of the split, the number of
common shares outstanding was approximately 22.2&nbsp;million.
In connection with the stock split, the Company introduced a
direct registration program to provide for uncertified shares
through Wells Fargo Shareowner Services, the Company&#146;s
transfer agent and registrar. As a result, the additional shares
were issued in &#147;book-entry&#148; form without stock
certificates and are registered on the books of the Company
maintained by Wells Fargo Shareowner Services.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">28

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
All share and per share data for periods prior to May&nbsp;3,
2004 have been retroactively restated to give effect to the
stock split.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has never paid any cash dividends with respect to
its common stock and the current policy of the Board of
Directors is to retain any earnings to provide for the growth of
the Company. Moreover, the Company is prohibited from paying
dividends on its common stock without the approval of a lender
under the terms of the Company&#146;s financing agreement with
the lender. See Note&nbsp;18 to the Consolidated Financial
Statements included in Item&nbsp;8 of this Annual Report of
Form&nbsp;<FONT style="white-space: nowrap">10-K.
</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The payment of cash dividends in the future, if any, will be at
the discretion of the Board of Directors and will depend upon
such factors as earnings levels, capital requirements, the
Company&#146;s overall financial condition, any other factors
deemed relevant by the Board of Directors, and will be subject
to lender approval.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
No repurchases of Lakes&#146; common stock were made during the
fourth quarter of Lakes&#146; fiscal year ended January&nbsp;1,
2006.
</DIV>

<!-- link2 "ITEM 6. SELECTED FINANCIAL DATA" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>ITEM&nbsp;6.</B></TD>
    <TD>
    <B><I>SELECTED FINANCIAL DATA</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Selected Financial Data presented below should be read in
conjunction with the Consolidated Financial Statements and notes
thereto included elsewhere in this Annual Report on
Form&nbsp;<FONT style="white-space: nowrap">10-K,</FONT> and in
conjunction with &#147;Management&#146;s Discussion and Analysis
of Financial Condition and Results of Operations&#148; included
in Item&nbsp;7 of this Annual Report on
Form&nbsp;<FONT style="white-space: nowrap">10-K.
</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The selected consolidated statement of operations data of the
Company and the balance sheet data of the Company are derived
from the Company&#146;s Consolidated Financial Statements.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="41%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>Fiscal Years Ended or as of:</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Jan.&nbsp;1,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Jan.&nbsp;2,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Dec.&nbsp;28,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Dec.&nbsp;29,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Dec.&nbsp;30,</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2006</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2001</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>(In millions, except per share amounts)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Results of Operations:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total revenue</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>35</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total operating loss</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(16</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(13</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(16</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net loss</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(12</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net loss per share&nbsp;&#151; basic and diluted</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(0.53</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(0.18</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(0.08</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(0.51</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(0.09</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Balance Sheet:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash and cash equivalents&nbsp;&#151; unrestricted</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>43</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>231</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>209</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>174</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>178</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>195</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total debt</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Shareholders&#146; equity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>178</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>183</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>162</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>163</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>174</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Selected quarterly financial information (Unaudited):</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Year ended January&nbsp;1, 2006 (in thousands, except per share
amounts):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="57%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>First</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Second</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Third</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fourth</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Quarter</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Quarter</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Quarter</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Quarter</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4,104</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6,601</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>2,131</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>5,386</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss from operations</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,802</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,815</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,713</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(124</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net earnings (loss)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,119</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,651</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,042</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,942</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Earnings (loss) per share:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Basic</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(0.10</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(0.25</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(0.32</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.13</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Diluted</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(0.10</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(0.25</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(0.32</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.12</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">29

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Year ended January&nbsp;2, 2005 (in thousands, except per share
amounts):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="54%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>First</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Second</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Third</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fourth</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Quarter</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Quarter</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Quarter</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Quarter</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4,140</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4,718</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>2,974</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>5,725</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss from operations</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,147</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,100</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,039</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,636</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net earnings (loss)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(392</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,602</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,215</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,168</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Earnings (loss) per share:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Basic</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(0.02</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(0.30</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(0.05</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.19</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Diluted</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(0.02</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(0.30</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(0.05</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.17</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<!-- link2 "ITEM 7. MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>ITEM&nbsp;7.</B></TD>
    <TD>
    <B><I>MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL
    CONDITION AND RESULTS OF OPERATIONS</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Overview</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes develops/finances Indian-owned casino properties and
intends to manage such casinos when applicable regulatory
approvals have been received and we have satisfied other
contingencies. Lakes currently has development (which includes
certain financing requirements) and management agreements with
three separate tribes for one new casino development project in
Michigan, two in California, and with two separate tribes in
Oklahoma for five various casino projects. Lakes is also
involved in other business activities including development of a
non-Indian casino in Mississippi and the development of new
table games for licensing to both Tribal and non-Tribal casinos.
In addition, as of January&nbsp;1, 2006, Lakes owned
approximately 62% of WPTE, a separate publicly held media and
entertainment company principally engaged in the development,
production and marketing of gaming themed televised programming,
the licensing and sale of branded products and the sale of
corporate sponsorships. Lakes&#146; consolidated financial
statements include the results of operations of WPTE, and in
recent periods, all of Lakes&#146; revenues have been derived
from WPTE&#146;s business.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
WPTE creates branded entertainment and consumer products driven
by the development, production and marketing of televised
programming based on gaming themes. WPTE&#146;s World Poker
Tour<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>,
or WPT, television series, based on a series of high-stakes
poker tournaments, airs in the U.S. on the Travel Channel and in
more than 140 territories globally. WPTE has four operating
units:
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>WPT Studios</I>, WPTE&#146;s multi-media entertainment
division, generates revenue through the domestic and
international licensing of broadcast and telecast rights and
through casino host fees. Since WPTE&#146;s inception, the WPT
Studios division has been responsible for approximately 76% of
total revenue. WPTE licenses the WPT series to The Travel
Channel, L.L.C. (TRV or Travel Channel) for telecast in the U.S.
under an exclusive license agreement. WPTE also has license
agreements for the distribution of WPTE&#146;s World Poker Tour
episodes in over 140 territories, for which WPTE receives
license fees, net of WPTE&#146;s agent&#146;s sales fee and
agreed upon sales and marketing expenses. In addition, WPTE
recently signed a license agreement with TRV to telecast
WPTE&#146;s new Professional Poker
Tour<SUP style="font-size: 85%; vertical-align: text-top"><FONT style="font-variant:SMALL-CAPS">tm</FONT></SUP>,
or
PPT<SUP style="font-size: 85%; vertical-align: text-top"><FONT style="font-variant:SMALL-CAPS">tm</FONT></SUP>,
series, which is expected to begin airing in the third quarter
of 2006. WPTE also collects annual host fees from the member
casinos that host World Poker Tour events (WPTE&#146;s member
casinos).
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
WPTE has entered into a series of agreements with TRV for the
U.S. distribution of the World Poker
Tour<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
(WPT)&nbsp;television series (the &#147;WPT Agreements&#148;).
Since WPTE&#146;s inception, fees from TRV under the WPT
Agreements have been responsible for approximately 61% of
WPTE&#146;s total revenue. For each season covered by the WPT
Agreements and related options, TRV has exclusive rights to
exhibit the episodes in that season an unlimited number of times
on its television network (or any other television network owned
by Discovery Communications) in the U.S.&nbsp;for four years
(three years for the episodes in Season One). WPTE has produced
three complete seasons of the World Poker Tour series under the
WPT Agreements, and Season Four is currently in production. TRV
also has options to license the following three seasons (Seasons
Five through Seven).
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">30
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the WPT Agreements, TRV pays fixed license fees for each
episode WPTE produces, which are payable at various times during
the pre-production, production and post-production process and
are recognized upon TRV&#146;s receipt and acceptance of the
completed episode. Television production costs related to WPT
episodes are generally capitalized and charged to the cost of
revenues as revenues are recognized. Therefore, the timing and
number of episodes involved in the various seasons of the series
affect the timing of the revenues and expenses of the WPT
Studios business. The following table describes the timing of
Seasons One through Four of the World Poker Tour series,
including the delivery and exhibition of the episodes each
season:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="19%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
</TR>

<TR style="font-size: 7pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Date of TRV</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Agreement or</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Episodes</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7pt;">
    <TD align="left" nowrap><B>World Poker</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Option for</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(including</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Production Period and</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Initial Telecast of</B></TD><TD></TD>
</TR>

<TR style="font-size: 7pt;">
    <TD align="center" nowrap><B>Tour Season</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Season</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>specials)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Delivery of Episodes to TRV</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Episodes in Season</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Season One</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>January 2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>February 2002&nbsp;&#151; June 2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>March&nbsp;2003&nbsp;&#151; June 2003</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Season Two</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>August 2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>July 2003&nbsp;&#151; June 2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>December&nbsp;2003&nbsp;&#151; September 2004</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Season Three</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>May 2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>May 2004&nbsp;&#151; April 2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>October 2004&nbsp;&#151; August 2005</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Season Four</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>March 2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>May 2005&nbsp;&#151; April 2006 (expected)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>October 2005&nbsp;&#151; June 2006</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
WPTE has also entered into an agreement with TRV for the U.S.
distribution of the PPT television series. Similar to the WPT
agreements and related options, TRV has exclusive rights to
exhibit the PPT episodes in that season an unlimited number of
times on its television network (or any other television network
owned by the Discovery Channel) in the U.S.&nbsp;for four years.
WPTE is currently in production on Season One of the PPT, and
TRV has options to license the following three seasons (Seasons
Two through Four). In accordance with WPTE&#146;s accounting
policy of not capitalizing production costs until a firm
commitment for distribution is in place, WPTE expensed
approximately $4.3&nbsp;million of production expenses related
to the Professional Poker Tour through January&nbsp;1, 2006.
With the agreement to telecast the PPT now complete WPTE will
capitalize additional expenses associated with the production of
the show beginning in the first quarter of 2006 to be expensed
as episodes are delivered to the Travel Channel.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Further, under the WPT and PPT Agreements, TRV has the right to
receive a percentage of WPTE&#146;s adjusted gross revenues from
international television licenses, product licensing and
publishing, merchandising and certain other sources, after
specified minimum amounts are met.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>WPT Consumer Products</I>, WPTE&#146;s branded consumer
products division, generates revenues principally through
royalties from the licensing of WPTE&#146;s brand to companies
seeking to use the World Poker Tour brand and logo in the retail
sales of their consumer products. In addition, this business
unit generates revenue from direct sales of company-produced
branded merchandise. WPTE has generated significant revenues
from existing licensees, including US Playing Card, mForma,
Jakks Pacific, and MDI. WPTE also has a number of licensees that
are developing new licensed products including slot machines
from IGT, and interactive television games from Pixel Play.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>WPT Corporate Alliances</I>, WPTE sponsorship and event
management division, generates revenue through corporate
sponsorship and management of televised and live events.
WPTE&#146;s sponsorship program uses the professional sports
model as a method to foster entitlement sponsorship
opportunities and naming rights to major corporations.
Anheuser-Busch has been the largest source of revenues through
its sponsorship of Seasons Two and Three of the World Poker Tour
series on TRV. During the third quarter of 2005, Anheuser-Busch
announced that its sponsorship in Season Four will now feature
its largest brand, Budweiser, as the official beer of the World
Poker Tour on the Travel Channel.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>WPT Online Gaming</I>, WPTE&#146;s online poker and casino
gaming division, generates revenue through WPTE&#146;s agreement
with WagerWorks, Inc. (&#147;WagerWorks&#148;) pursuant to which
WPTE granted to WagerWorks a license to utilize the WPT brand to
create a WPT-branded online gaming website, WPTonline.com, which
features an online poker room and an online casino with a broad
selection of slots and table games. In exchange for the license
to WagerWorks of WPTE&#146;s brand, WagerWorks shares with WPTE
a percentage of all net revenue it collects from the operation
of the online poker room and online casino.
</DIV>

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<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
Although any Internet user can access WPTonline.com via the
World Wide Web, the website does not permit bets to be made from
players in the U.S. and other restricted jurisdictions.
WPTonline.com officially launched on June&nbsp;29, 2005 and has
generated approximately $0.9&nbsp;million in revenue through
January&nbsp;1, 2006, compared to costs of revenues of
approximately $0.4&nbsp;million and sales and marketing expenses
of approximately $2.5&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Financial Overview</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the years ended January&nbsp;1, 2006 (&#147;fiscal
2005&#148;) and January&nbsp;2, 2005 (&#147;fiscal 2004&#148;),
Lakes&#146; consolidated revenues have been derived from the
WPTE business, mainly from license fees for domestic and
international telecast of World Poker Tour television episodes
and product licensing fees associated with the World Poker Tour
brand and logo. Domestic telecast license fees have depended on
the number of episodes delivered in a particular period.
Revenues from other parts of the WPTE business are relatively
small but continue to grow.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Results of Operations</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following discussion and analysis should be read in
conjunction with the consolidated financial statements and notes
thereto included elsewhere in this Annual Report on
Form&nbsp;<FONT style="white-space: nowrap">10-K</FONT> for the
year ended January&nbsp;1, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Fiscal Year Ended January&nbsp;1, 2006 Compared to Fiscal
Year Ended January&nbsp;2, 2005</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Revenues.</I> Total revenues were $18.2&nbsp;million for the
fiscal year ended January&nbsp;1, 2006 (&#147;2005&#148;)
compared to $17.6&nbsp;million for the fiscal year ended
January&nbsp;2, 2005 (&#147;2004&#148;), an increase of
$0.6&nbsp;million. Revenues for both years were derived
primarily from WPTE operations, primarily from television and
product license fees. WPTE receives fixed license payments from
TRV subject to satisfaction of production milestones and other
conditions. Domestic television license fees decreased
$5.1&nbsp;million in 2005 compared to 2004. The decrease is
attributable to the delivery of 13 episodes of Season Three and
five episodes of Season Four in fiscal 2005 compared to 24
episodes of Season Two and eight episodes of Season Three in
fiscal 2004. Product licensing revenues increased
$2.5&nbsp;million in 2005 compared to 2004. This increase is
primarily due to a full year of licensing efforts in 2005.
International television license fees increased
$1.7&nbsp;million due to increased distribution agreements in
fiscal 2005. Online gaming, host fees, sponsorship and
merchandise revenues also increased $1.4&nbsp;million in 2005
compared to 2004, of which $0.9&nbsp;million is due to the
online gaming launch during fiscal 2005. In 2005, we recognized
approximately $0.1&nbsp;million of consulting and development
fees related to our Indian casino business with none in the
prior year.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Selling and administrative expenses.</I> Selling, general and
administrative expenses increased $12.1&nbsp;million in 2005
compared to 2004. The increase was due to an increase of
approximately $7.4&nbsp;million related to WPTE and
$4.7&nbsp;million related to Lakes. The increase at WPTE was
primarily due to an additional $2.5&nbsp;million in sales and
marketing costs as a result of the WPTonline.com launch incurred
during 2005, $0.7&nbsp;million in additional licensing
commissions due to a full year of product licensing efforts and
$3.4&nbsp;million as a result of additional headcount, legal and
audit fees incurred during the 2005 period associated with
development, growth and regulatory compliance costs. The
increase at Lakes is due primarily to an increase in
professional fees of approximately $0.9&nbsp;million, additional
headcount related costs of $2.8&nbsp;million, and approximately
$0.8&nbsp;million in additional rent expense related to a
deficiency in the guaranteed residual value of the aircraft the
Company leases.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Production costs.</I> Production costs related to the WPT and
PPT television shows decreased by approximately
$0.3&nbsp;million in 2005 compared to 2004. The decrease was
primarily due to a fewer number of episodes being delivered to
the Travel Channel during 2005 compared to 2004 (18 episodes vs.
32 episodes, respectively), as well as decreased consultant
stock option expense of approximately $0.4&nbsp;million. This
decrease was partially offset by increases of $2.9&nbsp;million
in PPT production costs expensed, as well as the addition of
online gaming cost of revenues.
</DIV>

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<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Gross Margins.</I> Overall gross margins were 45% in 2005
compared to 42% in 2004. Domestic television licensing margins
were (9%) in 2005 compared to 22% in 2004 with the decrease due
primarily to an increase of approximately $2.9&nbsp;million in
production costs related to the PPT expensed in 2005. The
revenue increases in 2005 in product licensing and international
television helped contribute to the higher overall gross margins
in 2005.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Impairment losses.</I> Net impairment losses were
$0.9&nbsp;million in 2005 compared to $6.2&nbsp;million in 2004.
In 2005, Lakes recognized a $0.8&nbsp;million impairment charge
related to an investment in certain table games. Additionally,
in 2005, Lakes recognized a $0.1&nbsp;million impairment charge
and an unrealized loss on notes receivable of $6.2&nbsp;million
related to the termination of the agreement with the Kickapoo
Tribe. As of January&nbsp;1, 2006, Lakes owns approximately
18&nbsp;acres of land near the Kickapoo site with a cost basis
of approximately $0.7&nbsp;million. The Company is negotiating
with the Kickapoo Tribe to resolve all of the financial terms of
the contracts including the sale of the land owned by Lakes to
the Kickapoo Tribe, and to formally terminate the gaming
operations consulting agreement, management contract, and
related ancillary agreements relating to the project. In 2004,
Lakes recognized a $5.8&nbsp;million impairment charge related
to long-term assets related to the casino project with the
Nipmuc Nation of Massachusetts (&#147;Nipmuc Nation&#148;).
Lakes also recorded an unrealized loss on notes receivable of
$0.8&nbsp;million related to the fair value of the note
receivable from the Nipmuc Nation. Additionally in 2004, Lakes
recognized a net impairment charge of $1.0&nbsp;million related
to the sale of property in Las Vegas, Nevada and a gain of
$0.6&nbsp;million related to the write-off of an accrued
liability related to the casino project with the Cloverdale
Rancheria of Pomo Indians (&#147;the Cloverdale project&#148;)
which was only payable if the casino opened.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Net unrealized gain on notes receivable.</I> Net unrealized
gain on notes receivable was $5.2&nbsp;million and
$3.1&nbsp;million for 2005 and 2004, respectively, related to
the adjustment to estimated fair value of the Company&#146;s
notes receivable from Indian tribes. These fair value
calculations are determined based on current assumptions related
to the projects and management&#146;s evaluation of critical
milestones as discussed below under &#147;Accounting for
long-term assets related to Indian casino projects.&#148; During
2005, the net unrealized gain of $5.2&nbsp;million included
unrealized gains of approximately $11.4&nbsp;million, which were
partially offset by unrealized losses of approximately
$6.2&nbsp;million primarily related to the termination of the
agreement with the Kickapoo Tribe. The unrealized gains of
approximately $11.4&nbsp;million related primarily to increased
probability of opening related to the casino development
projects with the Pokagon Band in New Buffalo, Michigan and with
the Jamul Tribe near San&nbsp;Diego, California.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Other income.</I> Other income was $1.6&nbsp;million in 2005
compared to $12.1&nbsp;million in 2004. Interest income
increased $0.9&nbsp;million in 2005 compared to 2004, primarily
due to higher cash and short term investment balances, related
to the proceeds of WPTE&#146;s initial public offering in August
2004, outstanding for the entire fiscal 2005&nbsp;year. Other
income in 2004 included an $11.3&nbsp;million settlement
received in December 2004 related to a tax sharing agreement
entered into in 1998 with Grand Casinos, a subsidiary of Park
Place Entertainment, which was renamed Harrah&#146;s
Entertainment, Inc.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Taxes.</I> The Company recorded a tax benefit of
$1.2&nbsp;million in 2005 compared to a tax provision of
$4.0&nbsp;million in 2004. The loss before income taxes, equity
in earnings (loss) of unconsolidated investees and minority
interest was $14.9&nbsp;million for the period ended
January&nbsp;1, 2006 compared to $0.9&nbsp;million for the
period ended January&nbsp;2, 2005. In 2005, the Company
recognized a benefit of approximately $2.4&nbsp;million related
to the write-off of its long-term assets related to the Kickapoo
Tribe project of approximately $6.2&nbsp;million. The Company
has recorded a deferred tax asset related to other capital
losses in the amount of approximately $4.5&nbsp;million. The
realization of these benefits is dependent on the generation of
capital gains. The Company believes it will have sufficient
capital gains in the future to utilize these benefits. The
Company owns approximately 12.5&nbsp;million shares of WPTE
common stock with a minimal cost basis, which the capital gain
from the sale of a portion of these shares could be used against
the capital losses. Additionally, in accordance with Statement
of Financial Accounting Standards No.&nbsp;109, <I>Accounting
for Income Taxes (SFAS&nbsp;No.&nbsp;109)</I>, Lakes evaluated
the ability to utilize deferred tax assets arising from net
operating loss carry forwards, net deferred tax assets relating
to Lakes&#146; accounting for advances made to Indian tribes and
other ordinary items and determined that a valuation allowance
was appropriate at January&nbsp;1, 2006 and January&nbsp;2,
2005. Lakes evaluated all evidence and determined the negative
evidence relating to net losses generated over
</DIV>

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<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
the past four years outweighed the current positive evidence
that the Company believes exists surrounding its ability to
generate significant income from its long-term assets related to
Indian casino projects. The Company recorded a 100% valuation
allowance against these items at January&nbsp;1, 2006 and
January&nbsp;2, 2005 based upon the above factors. Included in
the loss before income taxes in 2004 is the settlement of
$11.3&nbsp;million related to the tax sharing agreement with
Grand Casinos. Lakes has not recorded any tax related to the
settlement payment of $11.3&nbsp;million because Lakes believes
this settlement is not taxable to Lakes.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Minority interest.</I> The minority interest portion of
WPTE&#146;s losses was $1.9&nbsp;million in 2005 compared to
$0.1&nbsp;million in 2004. The amount represents the minority
interest portion of WPTE net losses of $5.0&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Outlook.</I> It is currently contemplated that there will be
minimal operating revenues for 2006 from existing casino
development projects. The majority of Lakes&#146; revenues are
expected to come from WPTE in 2006. WPTE&#146;s revenues in the
first quarter of 2006 are forecasted to be in the range of $6.5
- -$7.0&nbsp;million. WPTE expects to deliver six episodes of
Season Four of the World Poker Tour in the first quarter of
2006, with the remainder of Season Four Episodes to be delivered
in the second quarter of 2006. Additionally, WPTE expects to
deliver the first four episodes of Season Five of the World
Poker Tour by the end of 2006. WPTE expects to deliver all
twenty-four episodes of Season One of the PPT during the first
three quarters of 2006, and the first five episodes of Season
Two of the PPT in the fourth quarter of 2006. Margins for the
PPT will be higher in the first few quarters of 2006 as certain
production costs have already been expensed. WPTE expects to
continue to increase sales and marketing expenses related to
WPTonline.com during 2006 in order to increase player traffic on
the site. Beginning in the first quarter of 2006, operating and
net income will be negatively impacted by the adoption of
FAS&nbsp;123R, requiring WPTE to expense employee stock options.
WPTE has engaged Thomas Weisel Partners LLC as its financial
advisor to assist it in exploring strategic alternatives,
including, but not limited to, the sale or merger of the
business with another entity offering strategic opportunities
for growth. There can be no assurance that the exploration of
strategic alternatives will result in a transaction.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Fiscal Year Ended January&nbsp;2, 2005 Compared to Fiscal
Year Ended December&nbsp;28, 2003</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Revenues.</I> Total revenues were $17.6&nbsp;million for the
fiscal year ended January&nbsp;2, 2005 (&#147;2004&#148;)
compared to $4.3&nbsp;million for the fiscal year ended
December&nbsp;28, 2003 (&#147;2003&#148;). Revenues for both
years were derived from WPTE operations, primarily from
television license fees related to the World Poker Tour
television series. WPTE receives fixed license payments from TRV
subject to satisfaction of production milestones and other
conditions. The increase in revenue is primarily due to
increased license fees relating to a greater number of Season
Two and Three episodes delivered to TRV during 2004, compared to
the license fees resulting from the Season One and Two episodes
delivered to TRV during 2003. In April 2004, TRV exercised its
option to broadcast Season Three and in March 2005, TRV
exercised its option for Season Four. TRV has options for three
additional seasons. WPTE began delivering Season Three episodes
in the fourth quarter of 2004 with the remaining episodes
delivered in the first and second quarter of fiscal 2005. Also
contributing to the increase is revenue of approximately
$1.8&nbsp;million related to WPTE host fees, sponsorship and
other revenue compared to $0.4&nbsp;million in 2003 due to
growth in these areas in 2004.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Selling, general and administrative expense.</I> Selling,
general and administrative expenses were $16.4&nbsp;million in
2004 compared to $6.9&nbsp;million in 2003. The increase of
$9.5&nbsp;million was primarily due to an increase of
approximately $4.7&nbsp;million related to WPTE&#146;s increased
headcount costs, professional service fees related to the public
offering of WPTE in 2004 and product licensing commissions. The
remaining increase of approximately $4.8&nbsp;million in 2004 is
due primarily to an increase in Lakes&#146; professional fees of
approximately $2.9&nbsp;million and approximately
$0.6&nbsp;million in additional rent expense related to an
expected deficiency in the guaranteed residual value of the
aircraft the Company leases. The increase in professional fees
is due to a reversal of an unused litigation accrual of
approximately $3.2&nbsp;million in 2003 related to the
Company&#146;s prior agreement to indemnify Grand Casinos in
connection with the Stratosphere litigation matters. The
remaining approximately, $1.3&nbsp;million increase primarily
related to increased travel in 2004 to support Lakes&#146;
business development initiatives.
</DIV>

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<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Production costs.</I> Production costs related primarily to
the WPT and PPT television shows were $10.2&nbsp;million in 2004
compared to $2.7&nbsp;million in 2003. WPTE production costs
increased $7.5&nbsp;million as compared to 2003. WPTE production
costs and related episode revenues are recognized in the period
the relative episode is delivered to TRV. The increase is due to
a greater number of episodes being delivered to TRV during 2004
as compared to 2003. The gross profit percentage increased in
2004 to 42% compared to 37% in 2003. The increased gross margin
is primarily due to WPTE selling more international television
licensing and product licensing as compared to 2003, which are
at higher margins.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Impairment losses.</I> Net impairment losses were
$6.2&nbsp;million in 2004 compared to $1.0&nbsp;million in 2003.
In 2004, Lakes recognized a $5.8&nbsp;million impairment charge
related to long-term assets related to the Nipmuc Nation
project. Lakes also recorded an unrealized loss on notes
receivable of $0.8&nbsp;million related to the fair value of the
note receivable from the Nipmuc Nation. In June 2004, the BIA
issued its final determination denying the Nipmuc Nation&#146;s
application for federal recognition. Although the Nipmuc Nation
is appealing the determination with the BIA, Lakes made a
decision to discontinue funding the project in the second
quarter of 2004. At that time, Lakes recorded the impairment
charge as an unrealized loss on notes receivable. Should the
Nipmuc Nation become federally recognized and successfully open
a casino operation (with or without Lakes&#146; assistance)
Lakes is contractually entitled to receive payment in full of
its advances and deferred interest. Additionally in 2004, Lakes
recognized a net impairment charge of $1.0&nbsp;million related
to the sale of property in Las Vegas, Nevada and a gain of
$0.6&nbsp;million related to the write-off of an accrued
liability related to the Cloverdale project of $0.6&nbsp;million
which was only payable if the casino opened. The Company also
recorded an unrealized loss on notes receivable of
$0.3&nbsp;million related to the estimated fair value of its
note receivable from the Cloverdale Rancheria. In 2003, Lakes
recognized an impairment charge of $1.0&nbsp;million related to
the sale of property in Las Vegas, Nevada.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Net unrealized gain on notes receivable.</I> Net unrealized
gain on notes receivable was $3.1&nbsp;million and
$3.5&nbsp;million for 2004 and 2003, respectively, related to
the adjustment to estimated fair value of the Company&#146;s
notes receivable from Indian tribes. These fair value
calculations are determined based on current assumptions and
management&#146;s evaluations of critical milestones related to
the projects as discussed below under &#147;Accounting for
long-term assets related to Indian casino projects.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Loss from operations.</I> The loss from operations was
$12.9&nbsp;million in 2004 compared to $3.4&nbsp;million in
2003. The increase in the loss from operations of
$9.5&nbsp;million in 2004 is due primarily to a net increase of
$5.2&nbsp;million related to impairment charges, an increase in
selling, general and administrative costs of $4.8&nbsp;million
related to Lakes, partially offset by a $1&nbsp;million
improvement in the operating results of WPTE. The net unrealized
gain on notes receivable decreased by $0.4&nbsp;million in 2004
compared to 2003.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Other income.</I> Other income was $12.1&nbsp;million in 2004
compared to $0.8&nbsp;million in 2003. Other income in 2004
included an $11.3&nbsp;million settlement received in December
2004 related to a tax sharing agreement entered into in 1998
with Grand Casinos, a subsidiary of Park Place Entertainment,
which was renamed Harrah&#146;s Entertainment, Inc.
(&#147;Harrah&#146;s&#148;). Under the terms of its tax sharing
agreement with Grand Casinos, any further tax benefits
subsequent to 1998 relating to capital losses resulting from the
write-off of its investment in Stratosphere would be shared
equally by Lakes and Grand Casinos, up to a benefit of
approximately $12.0&nbsp;million to Lakes. The investment in
Stratosphere was prior to Lakes&#146; spin-off from Grand
Casinos in December 1998. On December&nbsp;&nbsp;1, 2004, Lakes
entered into a settlement agreement with Grand Casinos. Lakes
received a cash payment of $11.3&nbsp;million in settlement of
the dispute, which was recorded as other income in the
consolidated statement of loss for the year ended
January&nbsp;2, 2005.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Taxes.</I> The Company recorded a tax provision of
$4.0&nbsp;million as of January&nbsp;&nbsp;2, 2005 compared to a
tax benefit of $1.0&nbsp;million as of December&nbsp;28, 2003.
The loss before income taxes, equity in earnings (loss) of
unconsolidated investees and minority interest was
$0.9&nbsp;million for the period ended January&nbsp;2, 2005
compared to a loss of $2.6&nbsp;million for the period ended
December&nbsp;28, 2003. Included in the loss before income taxes
in 2004 is the settlement of $11.3&nbsp;million related to the
tax sharing agreement with Grand Casinos. Lakes has not recorded
any tax related to the settlement payment of $11.3&nbsp;million,
as Lakes believes this settlement is not taxable to Lakes.
Additionally, in accordance with Statement of Financial
Accounting Standards No.&nbsp;109, <I>Accounting for Income
Taxes (SFAS&nbsp;No.&nbsp;109)</I>, Lakes evaluated the ability
to utilize
</DIV>

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<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
deferred tax assets arising from net operating loss carry
forwards, net deferred tax assets relating to Lakes&#146;
accounting for advances made to Indian tribes and other ordinary
items and determined that a valuation allowance was appropriate
at January&nbsp;2, 2005. Lakes evaluated all evidence and
determined the negative evidence relating to net losses
generated over the past three years outweighed the current
positive evidence that the Company believes exists surrounding
its ability to generate significant income from its long-term
assets related to Indian casino projects. The Company recorded a
100% valuation allowance against these items at January&nbsp;2,
2005 based upon the above factors. In addition, the Company
recognized a deferred tax asset for capital losses related to
asset impairment charges. The realization of these benefits is
dependent on the generation of capital gains. The Company
believes it will have sufficient capital gains in the future to
utilize these benefits due to its ownership of approximately
12.5&nbsp;million common shares of WPTE with minimal basis. As a
result of the above discussion of the Company&#146;s nature of
deferred tax assets, Lakes increased its net valuation allowance
by approximately $6.5&nbsp;million in 2004.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Equity in earnings (loss) of investments, net of tax.</I>
Lakes recognized equity in earnings of investments, net of tax
of $0.7&nbsp;million, which is primarily due to a gain
recognized by its 50% ownership interest in 2022&nbsp;Ranch,
LLC. The entity sold land in 2004, and Lakes&#146; share of the
gain was $0.7&nbsp;million, net of tax.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><U>Liquidity and Capital Resources</U></B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At January&nbsp;1, 2006, Lakes&#146; consolidated balance sheet
included unrestricted cash and cash equivalents and short-term
investment balances of $36.6&nbsp;million, comprised of
Lakes&#146; cash of $8.2&nbsp;million, WPTE cash of
$1.7&nbsp;million and WPTE short-term investments of
$26.7&nbsp;million. WPTE cash and investments will not be used
in Lakes&#146; business. As of January&nbsp;1, 2006, Lakes&#146;
has had minimal operating revenues from casino operations since
the expiration of the management contract with the Coushatta
Tribe in January 2002.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In August and September 2004, WPTE raised a total of
approximately $32.4&nbsp;million in cash proceeds from its
initial public offering, net of underwriting discounts and
estimated offering expenses. WPTE&#146;s cash resources are
expected to be used only for WPTE&#146;s business and will not
be available for Lakes&#146; casino projects or other non-WPTE
businesses. The initial public offering resulted in the
termination of Lakes&#146; obligation to fund WPTE operations
under a limited revolving note receivable. As of January&nbsp;1,
2006, Lakes holds approximately 12.5&nbsp;million shares or
approximately 62% of WPTE&#146;s common stock. Lakes&#146; could
sell shares of WPTE common stock to generate working capital,
subject to applicable securities laws.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December 2005, Lakes obtained a $20&nbsp;million financing
facility from the Lyle Berman Family Partnership
(&#147;Partnership&#148;) and received a $10&nbsp;million draw
on this facility on December&nbsp;16, 2005, which remained
outstanding as of January&nbsp;&nbsp;1, 2006 (see Note&nbsp;9 to
the Consolidated Financial Statements included in Item&nbsp;8 of
this Annual Report on
Form&nbsp;<FONT style="white-space: nowrap">10-K).
</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On February&nbsp;15, 2006 we closed on a $50&nbsp;million
financing facility with an affiliate of Prentice Capital
Management, LP. An initial draw of $25&nbsp;million was made
under the facility, another $10&nbsp;million is immediately
available under the facility and the remaining $15&nbsp;million
can be drawn in $5&nbsp;million increments subject to the
satisfaction of certain conditions (see Note&nbsp;18 to the
Consolidated Financial Statements included in Item&nbsp;8 of
this Annual Report on
Form&nbsp;<FONT style="white-space: nowrap">10-K).</FONT> All
amounts drawn against the facility will be repayable within
three years. Approximately $10.2&nbsp;million of the initial
draw was used to repay in full our December&nbsp;16, 2005, loan
from the Partnership. As a result of repaying the Partnership
loan prior to February&nbsp;28, 2006, the 2&nbsp;million common
stock purchase warrants previously issued to the Partnership
were terminated. Lakes plans to continue pursuing other
financing alternatives to fund its operational and development
needs, and the Company believes the assets of Lakes provide
sufficient collateral to obtain the necessary financing.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Other sources of cash for our development of casino projects
during fiscal 2005 and fiscal 2004 have been from the planned
sale of assets and a tax sharing settlement. During fiscal 2004,
the 2022 Ranch land, which was owned by Lakes and its joint
venture partner Land Baron West, LLC, was sold. Lakes received
cash in the amount of approximately $2.5&nbsp;million related to
the sale of the land as well as through the settlement of a
title dispute. Lakes received proceeds of $5.9&nbsp;million in
fiscal 2004 in connection with the sale of the Polo Plaza and
adjacent Travelodge property and received an additional
$5.0&nbsp;million during 2005, pursuant to an option
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">36

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
agreement with Metroflag. We expect that proceeds from the sale
of assets will decrease in future periods. Additionally in
December 2004, Lakes received $11.3&nbsp;million in settlement
of a tax sharing agreement with Grand Casinos.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our agreements with our tribal partners require that we provide
certain financing for project development in the form of loans.
These loans are interest bearing; however, the loans and related
interest are not due until the casino is built and has
established profitable operations. In the event that the casinos
are not built, our only recourse is to attempt to liquidate
assets of the development, if any, excluding any land in trust.
Approximately $24.1&nbsp;million of the loans due from the
Pokagon Band were used by the Pokagon Band to purchase the
project site. The Company&#146;s first deed of trust against
this property was relinquished when the BIA placed the land into
trust in January 2006. The Company holds a deed of trust against
related non-gaming land which has a cost basis of approximately
$13.2&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We currently believe that our casino development projects
currently in progress and included in the table below will be
constructed and achieve profitable operations; however, no
assurance can be made that this will occur. If this does not
occur, it is likely that Lakes would incur substantial or
complete losses on its notes receivable from Indian tribes and
related intangible assets associated with the acquisition of the
management contracts. In addition, if Lakes&#146; current casino
development projects are not completed or, upon completion, fail
to successfully compete in the highly competitive market for
gaming activities, Lakes may lack the funds to compete for and
develop future gaming or other business opportunities and
Lakes&#146; business could be adversely affected to the extent
that it may be forced to cease its operations entirely.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Following is a table summarizing remaining contractual
obligations as of January&nbsp;1, 2006 (including the Prentice
financing facility) (in millions):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="42%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>Payment Due by Period</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Less Than</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>More Than</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2" align="left" nowrap><B>Contractual Obligations</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>1&nbsp;Year</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>1-3&nbsp;Years</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>3-5&nbsp;Years</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>5&nbsp;Years</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Remaining Casino Development Commitment(1)(3)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Jamul Tribe</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Shingle Springs Tribe</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pokagon Band(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pawnee Nation&nbsp;&#151; Travel Plaza</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pawnee Nation&nbsp;&#151; Trading Post</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Employee obligations(5)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating leases(4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Prentice financing facility(6)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    WPTE operating leases(7)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    WPTE purchase obligations(8)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    WPTE employee obligations(9)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>70.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>39.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>5.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>26.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Lakes expects that it will require additional capital through
    public or private financings or the sale of some or all of
    Lakes&#146; shares of WPTE to meet the remaining casino
    development commitments. See table below detailing tribal casino
    development commitments.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    For the Pokagon Casino project, the Company has agreed to
    provide additional financing from its own funds if financing at
    an interest rate not to exceed 13% is not available from third
    parties. If this occurs and Lakes is required to provide all
    financing, this would be an additional commitment of up to
    approximately $54&nbsp;million. Currently, it appears that third
    party financing will be available for this project. However,
    there can be no assurance that third party financing will be
    available and that Lakes will not be required to provide this
    additional financing. The Company will be obligated to pay an
    amount</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">37

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD align="left">
    to an unrelated third party once the Pokagon Casino is open and
    Lakes is the manager of the casino. The amount is payable
    quarterly for five years and is only payable if Lakes is the
    manager of the casino. The payment is part of a settlement and
    release agreement associated with Lakes obtaining the management
    contract with the Pokagon Band. The maximum liability over the
    five-year period is approximately $11&nbsp;million. The Company
    will also be obligated to pay approximately $3.3&nbsp;million to
    an unrelated third party in accordance with the management
    contract with the Pokagon Band which is payable once the casino
    opens over 24&nbsp;months.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    Lakes may be required to provide a guarantee of tribal debt
    financing or otherwise provide support for the tribal
    obligations related to any of the projects. Any guarantees by
    Lakes or similar off-balance sheet liabilities will increase
    Lakes&#146; potential exposure in the event of a default by any
    of these tribes. No such guarantees or similar off-balance sheet
    liabilities existed at January&nbsp;1, 2006.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(4)&nbsp;</TD>
    <TD align="left">
    The Company leases an airplane, under a non-cancelable operating
    lease which was amended on May&nbsp;1, 2005. The new term is for
    a period of up to three years.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(5)&nbsp;</TD>
    <TD align="left">
    Employee obligations include the base salaries payable to Lyle
    Berman and Timothy Cope under their respective employment
    agreements.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(6)&nbsp;</TD>
    <TD align="left">
    On February&nbsp;15, 2006, Lakes closed on a $50&nbsp;million
    financing facility. Any funds drawn on the facility bear
    interest at the rate of 12%&nbsp;per annum, interest payable in
    arrears monthly, subject to adjustment based on the value of the
    collateral, and are due and payable in full on the third
    anniversary of the closing date (see Note&nbsp;18 to the
    Consolidated Financial Statements included in Item&nbsp;8 of
    this Annual Report on
    Form&nbsp;<FONT style="white-space: nowrap">10-K).
    </FONT></TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(7)&nbsp;</TD>
    <TD align="left">
    WPTE signed a new lease and moved into the new office space in
    April 2005 where the monthly lease payments started in
    March&nbsp;2005, at approximately $38,000, which escalate over
    the course of the lease up to approximately $45,000. The amount
    set forth in the table above assumes monthly lease payments
    through May 2011.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(8)&nbsp;</TD>
    <TD align="left">
    Purchase obligations include contractual obligations related to
    the establishment of WPTE&#146;s internet gaming site.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(9)&nbsp;</TD>
    <TD align="left">
    Employee obligation includes the base salaries payable to Steven
    Lipscomb, Audrey Kania and Robyn&nbsp;Moder under their
    respective employment agreements.</TD>
</TR>

</TABLE>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Casino Development Advances/ Commitments</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>As of January&nbsp;1, 2006</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="27%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Commitments</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>in Excess of</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Lakes&#146;</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Available</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Remaining</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Cash and</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Cash and</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Pre-Construction</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Land Held for</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Funding</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Funding</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Short-Term</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Short-Term</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Advances</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Development</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Funded</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Commitment</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Commitment</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Investments</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Investments</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap><B>(In millions)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Jamul Tribe(a)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>16.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>23.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>30.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Shingle Springs Tribe(b)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pokagon Band(c)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Iowa Tribe(d)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pawnee Nation&nbsp;&#151; Travel Plaza(e)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pawnee Nation&nbsp;&#151; Chilocco(f)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pawnee Nation&nbsp;&#151; Trading Post(g)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Kickapoo Tribe(h)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>108.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>16.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>124.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>157.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>37.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>8.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>29.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">38
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<DIV align="left" style="font-size: 3pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    (a)</TD>
    <TD></TD>
    <TD valign="top">
    Lakes plans to continue making advances on the remaining
    commitment to the Jamul Tribe on a monthly basis until the
    casino opens. Lakes plans to make advances of $6.5&nbsp;million
    during fiscal 2006, to fulfill its remaining commitment to the
    Jamul Tribe.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    (b)</TD>
    <TD></TD>
    <TD valign="top">
    Lakes plans to continue making advances on the remaining
    commitment to the Shingle Springs Tribe on a monthly basis until
    the casino opens. Lakes plans to make advances of
    $3.3&nbsp;million during fiscal 2006, to fulfill its remaining
    commitment to the Shingle Springs Tribe.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    (c)</TD>
    <TD></TD>
    <TD valign="top">
    Lakes is currently contractually obligated to make advances of
    $26.6&nbsp;million of which, approximately $25.0&nbsp;million is
    planned to be advanced prior to the start of construction which
    could begin as early as mid-2006.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    (d)</TD>
    <TD></TD>
    <TD valign="top">
    Additional amounts have and will be advanced to the Iowa Tribe
    for the new casino project based upon an approved budget yet to
    be finalized.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    (e)</TD>
    <TD></TD>
    <TD valign="top">
    Lakes made a commitment of $1.0&nbsp;million to the Pawnee
    Nation related to the Travel Plaza project based upon an
    approved budget.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    (f)</TD>
    <TD></TD>
    <TD valign="top">
    Lakes has been advancing funds to the Pawnee Nation related to
    the Chilocco project. The funding amount is based upon an
    approved budget, yet to be finalized. Additional amounts will
    continue to be advanced to the Pawnee Nation for the new casino
    project and Travel Plaza project based upon an approved budget
    yet to be finalized.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    (g)</TD>
    <TD></TD>
    <TD valign="top">
    Lakes made a commitment of $1.1&nbsp;million to the Pawnee
    Nation related to the Trading Post project based upon an
    approved budget.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    (h)</TD>
    <TD></TD>
    <TD valign="top">
    See discussion below under &#147;Description of each Indian
    casino project and evaluation of critical milestones&nbsp;&#151;
    Kickapoo Tribe&#148;.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During fiscal 2005, the Company incurred development costs of
approximately $6.0&nbsp;million relating to the non-Indian
casino it is developing in Vicksburg, Mississippi. These costs
are included in property and equipment as construction in
progress. The Company is working toward obtaining all necessary
approvals to move forward with this project. Lakes does not
expect to have access to the capital necessary to make this a
viable project for the Company until such time that one of its
other casino projects is open and therefore, this is now planned
to be a 2007 project.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During 2006, Lakes&#146; corporate costs, excluding WPTE which
is not expected to require additional capital from Lakes, will
approximate $19&nbsp;million, which includes $4.0&nbsp;million
of interest related to the financing facility entered into on
February&nbsp;15, 2006. Development project-related costs are
expected to approximate $40&nbsp;million during 2006 and include
approximately $25&nbsp;million related to the Pokagon project as
construction is estimated to begin in mid 2006. Lakes&#146; cash
balance, excluding WPTE cash, was approximately
$8.2&nbsp;million as of January&nbsp;1, 2006. Additionally, the
Company may be required to pay taxes up to approximately
$12&nbsp;million plus interest and penalties in fiscal 2006
related to two tax matters. Lakes will require additional
capital through public or private financings or the sale of some
or all of the Company&#146;s shares of WPTE to meet operating
expenses and development project-related costs during fiscal
2006 and the Company is currently considering various financing
alternatives. In December 2005, Lakes obtained a
$20&nbsp;million financing facility from the Lyle Berman Family
Partnership and received a $10&nbsp;million draw on this
facility on December&nbsp;16, 2005 (see Note&nbsp;9 to the
Consolidated Financial Statements included in Item&nbsp;8 of
this Annual Report on
Form&nbsp;<FONT style="white-space: nowrap">10-K).</FONT> On
February&nbsp;15, 2006 we closed on a $50&nbsp;million financing
facility with an affiliate of Prentice Capital Management, LP.
An initial draw of $25&nbsp;million was made under the facility,
another $10&nbsp;million is immediately available under the
facility and the remaining $15&nbsp;million can be drawn in
$5&nbsp;million increments subject to the satisfaction of
certain conditions. See Note&nbsp;18 to the Consolidated
Financial Statements included in Item&nbsp;8 of this Annual
Report on
Form&nbsp;<FONT style="white-space: nowrap">10-K.</FONT>
Approximately $10.2&nbsp;million of the initial draw was used to
repay in full our loan from the Partnership.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes plans to continue pursuing other financing alternatives,
and the Company believes the assets of Lakes provide sufficient
collateral to obtain the necessary financing. The assets of
Lakes include approximately 12.5&nbsp;million common shares of
WPTE that have an estimated fair value of $83.5&nbsp;million as
of February&nbsp;27, 2006, based on the public trading price, on
that date, which may not be indicative of what Lakes could
realize in a sale of its shares. The Company believes the shares
of WPTE could be the source or part of the collateral for the
additional financing.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">39

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<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our major use of cash over the past three years has been
pre-construction financing provided to our tribal partners.
Lakes also anticipates that it may incur additional
pre-construction costs which would require the Company to obtain
additional sources of financing. These development costs do not
include construction-related costs that would be incurred if any
of the projects were to begin construction during the next
twelve months. Management anticipates that it will be necessary
to raise additional capital when any of the projects begin
construction and believes such financing will be available based
on preliminary discussions with prospective lenders. However,
such financings may not be available when needed on terms
acceptable to Lakes or at all. Moreover, any additional equity
financings may be dilutive to Lakes&#146; shareholders, and any
debt financing may involve additional restrictive covenants. An
inability to raise such funds when needed might require Lakes to
delay, scale back or eliminate some of its expansion and
development goals.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, the construction of the Company&#146;s Indian
casino projects may depend on the ability of the tribes to
obtain financing for the projects. If such financing cannot be
obtained on acceptable terms, it may not be possible to complete
these projects, which could have a material adverse effect on
Lakes&#146; results of operations and financial condition. In
order to assist the tribes, Lakes may be required to guarantee
the tribes&#146; debt financing or otherwise provide support for
the tribes&#146; obligations. Guarantees by Lakes, if any, will
increase Lakes&#146; potential exposure in the event of a
default by any of these tribes.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the Pokagon Casino project, the Company has agreed to
finance all phases of the project entirely from its own funds if
financing at an interest rate of 13% or less is not available
from the capital markets. If this occurs and Lakes is required
to provide all financing, this would be an additional commitment
of up to approximately $54&nbsp;million. Currently, management
believes that third party financing will be available for this
project. However, there can be no assurance third party
financing will be available and that Lakes will not be required
to provide this additional financing.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a part of the transaction establishing Lakes as a separate
public company on December&nbsp;31, 1998, the Company agreed to
indemnify Grand Casinos through December&nbsp;28, 2004 against
all costs, expenses and liabilities incurred in connection with
or arising out of certain pending and threatened claims and
legal proceedings against Grand Casinos and to pay all related
settlements and judgments. The indemnification period expired on
December&nbsp;28, 2004 and Lakes does not have any further
obligations. Lakes incurred no costs related to this matter in
2004.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><U>Critical Accounting Policies and Estimates</U></B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations discusses our consolidated
financial statements, which have been prepared in accordance
with U.S.&nbsp;generally accepted accounting principles. The
preparation of these financial statements requires us to make
estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets
and liabilities at the balance sheet date and reported amounts
of revenue and expenses during the reporting period. On an
ongoing basis, we evaluate our estimates and judgments,
including those related to revenue recognition, long-term assets
related to Indian casino projects, deferred television costs,
investments, litigation costs and income taxes. We base our
estimates and judgments on historical experience and on various
other factors that are reasonable under the circumstances, the
results of which form the basis for making judgments about the
carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We believe the following critical accounting policies involve
the more significant judgments and estimates used in the
preparation of our consolidated financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Revenue recognition:</I></B> Revenue from the management
of Indian-owned casino gaming facilities is recognized in
accordance with our policy described below under the caption
&#147;Accounting for long-term assets related to Indian casino
projects.&#148;
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">40

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<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Revenue from the domestic and international distribution of
WPTE&#146;s television series is recognized as earned under the
following criteria established by the American Institute of
Certified Public Accountants Statement of Position
(SOP)&nbsp;No.&nbsp;00-2, <I>Accounting by Producers or
Distributors of Films</I>:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Persuasive evidence of an arrangement exists;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    The show/episode is complete, and in accordance with the terms
    of the arrangement, has been delivered or is available for
    immediate and unconditional delivery;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    The license period has begun and the customer can begin its
    exploitation, exhibition or sale;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    The seller&#146;s price to the buyer is fixed and
    determinable;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Collectibility is reasonably assured.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In accordance with the terms of the WPT and PPT agreements, WPTE
recognizes domestic television license revenues upon the receipt
and acceptance of completed episodes. However, due to
restrictions and practical limitations applicable to WPTE&#146;s
operating relationships with foreign networks, WPTE currently
does not consider collectibility of international television
license revenues to be reasonably assured until the
international distributor has received payment, and accordingly,
WPTE does not recognize such revenue until that time.
Additionally, WPTE presents international distribution license
fee revenues net of the distributor&#146;s fees, as the
distributor is the primary obligor in the transaction with the
ultimate customer pursuant to the Financial Accounting Standards
Board (FASB)&nbsp;Emerging Issues Task Force (EITF)&nbsp;99-19,
<I>Reporting Revenue Gross as a Principal versus Net as an
Agent.</I>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Product licensing revenues are recognized when the underlying
royalties from the sales of the related products are earned.
WPTE recognizes minimum revenue guarantees ratably over the term
of the license or as earned royalties based on actual sales of
the related products, if greater. WPTE presents product
licensing fees gross of licensing commissions, which are
recorded as selling and administrative expenses as WPTE is the
primary obligor in the transaction with the ultimate customer
pursuant to EITF&nbsp;99-19.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Online gaming revenues are recognized monthly based on detailed
statements received from WagerWorks, WPTE&#146;s online gaming
partner, for online poker and casino activity throughout the
previous month. In accordance with EITF&nbsp;99-19, WPTE
presents online gaming revenues gross of WagerWorks costs,
including WagerWorks management fee, royalties, credit card
processing and chargebacks that are recorded as cost of
revenues, since WPTE has the ability to adjust price and
specifications of the online gaming site, WPTE bears the
majority of the credit risk and WPTE is responsible for the
sales and marketing of the gaming site. The company includes
certain promotional expenses related to free bets and deposit
bonuses along with customer charge backs as deductions of
revenue. All other promotional expenses are generally recorded
as sales and marketing expenses
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Event hosting fees are paid by host casinos for the privilege of
hosting the events and are recognized as the episodes that
feature the host casino are aired, and sponsorship revenues are
recognized as the episodes that feature the sponsor are aired.
Licensing advances and guaranteed payments collected, but not
yet earned, by WPTE, as well as casino host fees and sponsorship
receipts collected prior to the airing of episodes, are
classified as deferred revenue in the accompanying balance
sheets.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Deferred television costs:</I></B> WPTE accounts for
deferred television costs in accordance to SOP
No.&nbsp;<FONT style="white-space: nowrap">00-2.</FONT> Deferred
television costs include capitalizable direct costs, production
overhead and development costs related to episodes of the WPT,
and are stated at the lower of cost or net realizable value
based on anticipated revenue. WPTE has not currently anticipated
any revenues in excess of those subject to existing contractual
relationships because WPTE has insufficient operating history to
enable such anticipation. Accordingly, television costs related
to the new PPT series were expensed as incurred since a
licensing agreement had not been executed and WPTE did not have
a firm distribution commitment for the series. However, in
January 2006, WPTE signed an agreement for the PPT with
Discovery Communications, Inc, the parent company of the Travel
Channel, therefore, on-going PPT television costs will be
capitalized beginning in the first quarter of 2006 and will be
expensed as episodes are delivered to the Travel Channel.
Marketing, distribution and general and administrative costs are
expensed as incurred. Capitalized television production costs
for each
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">41

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<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
episode are expensed as revenues are recognized upon delivery
and acceptance by the Travel Channel of the completed episode.
WPTE management currently estimates that 100% of capitalized
television costs at January&nbsp;1, 2006 are expected to be
expensed by the end of fiscal 2006.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Investment: </I></B>Until October 2005, WPTE had an
investment (consisting of a 15% equity interest carried at
nominal cost basis) in and a loan receivable from PokerTek, a
company formed in August 2003 to develop and market the PokerPro
system, an electronic poker table designed to provide a fully
automated poker room environment, to tribal casinos, commercial
casinos and card clubs. As a result of PokerTek&#146;s initial
public offering in October 2005, WPTE&#146;s ownership interest
was diluted to 11.7% (See Note&nbsp;6 to the Consolidated
Financial Statements included in Item&nbsp;8 of this Annual
Report on
Form&nbsp;<FONT style="white-space: nowrap">10-K).</FONT>
WPTE&#146;s Executive Chairman of the Board, Lyle Berman, along
with his son Bradley Berman, who also sits on the WPTE&#146;s
Board of Directors, have personal investments in PokerTek and,
as of January&nbsp;1, 2006, hold a combined ownership of
approximately 9% in PokerTek. Lyle Berman also serves as
Chairman of the Board of PokerTek and received options to
purchase&nbsp;200,000&nbsp;shares of common stock in that
company.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As discussed in Note&nbsp;6 to the financial statements, WPTE
accounts for this investment as &#147;available for sale&#148;
pursuant to SFAS&nbsp;115, Accounting for Certain Investments in
Debt and Equity Securities, and adjusted the investment to
estimated fair market value of $10.6&nbsp;million at
January&nbsp;1, 2006 with a change in fair market value
accounted for as other comprehensive income in the statement of
stockholders&#146; equity.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Accounting for long-term assets related to Indian casino
    projects:</I></B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Notes&nbsp;Receivable:</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes is involved as the exclusive developer and manager of
Indian-owned casino projects. The Company has formal procedures
governing its evaluation of opportunities for potential
development projects that it follows before entering into
agreements to provide financial support for the development of
these properties. Lakes determines that there is probable future
economic benefit prior to recording any asset related to the
Indian casino project. No asset related to an Indian casino
project is recognized unless it is considered probable that the
project will be built and result in an economic benefit to Lakes
sufficient to recover the asset. Lakes initially evaluates the
following six factors involving critical milestones that affect
the probability of developing and operating a casino:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Has the U.S.&nbsp;Government&#146;s Bureau of Indian Affairs
    federally recognized the tribe as a tribe?</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Does the tribe hold or have the right to acquire land to be
    used for the casino site?</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Has the Department of the Interior put the land into trust
    for purposes of being used as a casino site?</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Has the tribe entered into a gaming agreement with the state
    in which the land is located, if required by the state?</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Has the tribe obtained approval by the National Indian Gaming
    Commission of the management agreement?</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Do other legal and political obstacles exist that could block
    development of the project and, if so, what is the likelihood of
    the tribe successfully prevailing?</I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition to the above factors, Lakes also considers economic
and qualitative factors affecting Lakes&#146; future economic
benefits from the project, including the following:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>An evaluation by Company management of the financial
    projections of the project given the project&#146;s geographic
    location and the feasibility of the project&#146;s success given
    such location;</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>The structure and stability of the tribal government;</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>The scope of the proposed project, including the physical
    scope of the contemplated facility and the expected financial
    scope of the related development;</I></TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">42
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>An evaluation of the proposed project&#146;s ability to be
    built as contemplated and the likelihood that financing will be
    available; and</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>The nature of the business opportunity to Lakes, including
    whether the project would be a financing, development and/or
    management opportunity.</I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The development phase of each relationship commences with the
signing of the respective contracts and continues until the
casinos open for business; thereafter, the management phase of
the relationship, governed by the management contract, continues
for a period of up to seven years. Lakes, as developer and
manager, has the exclusive right and obligation to develop,
manage, operate and maintain the casino and to train tribal
members and others in the operation and maintenance of the
casino during the term of the contract. The Company also makes
advances to the tribes to fund certain portions of the projects,
which bear interest generally at prime plus 1% or 2%. Repayment
of the advances and accrued interest is only required if the
casino is successfully opened and distributable profits are
available from the casino operations. Under the management
contract Lakes typically earns a management fee calculated as a
percentage of the net income of the operations. In addition,
repayment of the loans and the manager&#146;s fees under the
management contracts are subordinated to certain other financial
obligations of the respective operations. Generally, the order
of priority of payments from the casinos&#146; cash flows is as
follows: a certain minimum monthly priority payment to the
tribe, repayment of various senior debt associated with
construction and equipping of the casino with interest accrued
thereon, repayment of various debt with interest accrued thereon
due to Lakes, management fee to Lakes, and other obligations,
with the remaining funds distributed to the tribe.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company accounts for its advances to the tribes and its
management contracts as separate elements. The advances made to
the tribes are accounted for as structured notes in accordance
with the guidance contained in Emerging Issues Task Force
Consensus No.&nbsp;96-12 <I>Recognition of Interest Income and
Balance Sheet Classification of Structured Notes </I>(EITF
No.&nbsp;96-12). Because repayment of the notes is required only
if a casino is successfully opened, Lakes&#146; advances may be
at risk for reasons other than failure of the borrower to pay
the contractual amounts due because if the casinos are not built
the amounts due will not become contractually due. Accordingly,
pursuant to the guidance in EITF No.&nbsp;96-12, Lakes records
its advances to tribes at estimated fair value. Because the
stated rate of the notes receivable alone is not commensurate
with the risk inherent in these projects, the estimated fair
value of the notes receivable is generally less than the amount
advanced. At the date of each advance, the difference between
the estimated fair value of the note receivable and the actual
amount advanced is recorded as an intangible asset related to
the acquisition of the management contract. Subsequent to the
initial recording, the two assets are accounted for separately.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Subsequent to its initial recording at estimated fair value, the
note receivable portion of the advance is adjusted to its
current fair value at each balance sheet date based on current
assumptions related to the projects. The notes receivable are
not adjusted to an amount in excess of the contractual amount
due. Changes in estimated fair value are recorded as unrealized
gains or losses on notes receivable in the Company&#146;s
statement of operations.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The determination of estimated fair value requires that
assumptions be made and judgments be applied regarding casino
opening dates, interest rates, discount rates and probabilities
of the projects opening based on a review of critical
milestones. If casino opening dates, interest rates, discount
rates or the probabilities of the projects opening change
significantly, the estimated fair value of the related note
receivable is adjusted accordingly and the Company could
experience unrealized gains or losses that could be material.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Upon opening of the casino Lakes may conclude that it is no
longer reasonably possible that the advances to Indian tribes
would be at risk to not be repaid for reasons other than failure
of the borrower to pay the contractual amounts due. In such
situations, the notes receivable will be accounted for under the
effective interest method upon opening of the casino and will no
longer be adjusted to fair value at each balance sheet date. Any
difference between the then fair value of the advances and the
amount contractually due under the notes will be amortized into
income using the effective interest method over the remaining
term of the note. Such notes would then be evaluated for
impairment pursuant to Statement of Financial Accounting
Standards No.&nbsp;114 <I>&#147;Accounting by Creditors for
Impairment of a Loan.&#148;</I>
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">43

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Intangible Assets Related to Acquisition of Management
    Contracts:</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Intangible assets related to the acquisition of the management
contracts are accounted for using the guidance in Statement of
Financial Accounting Standards No.&nbsp;142 <I>Goodwill and
Other Intangible Assets </I>(FASB No.&nbsp;142). Pursuant to
that guidance, the assets are periodically evaluated for
impairment based on the estimated cash flows from the management
contract on an undiscounted basis. In the event the carrying
value of the intangible assets, in combination with the carrying
value of land held for development and other assets associated
with the Indian casino projects described below, were to exceed
the undiscounted cash flow, an impairment would be recorded.
Such an impairment would be measured based on the difference
between the fair value and carrying value of the assets. Lakes,
in accordance with FASB No.&nbsp;142, will amortize the
intangible assets related to the acquisition of the management
contracts under the straight-line method over the lives of the
contracts which will commence when the related casinos open. In
addition to the intangible asset associated with the cash
advances to tribes described above, these assets include actual
costs incurred to acquire Lakes&#146; interest in the projects
from third parties.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Land Held for Development</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Included in land held for development is land held for possible
transfer to Indian tribes for use in certain of the future
casino resort projects. In the event that this land is not
transferred to the tribes, the Company can sell it. Lakes
evaluates these assets for impairment in combination with
intangible assets related to acquisition of management contracts
and other assets related to the Indian casino projects as
discussed above.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Other</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Included in this category are costs incurred related to the
Indian casino projects, which have not yet been included as part
of the notes receivable because of timing of the payment of
these costs. These amounts will ultimately be allocated between
notes receivable and intangible assets related to the
acquisition of management contracts and will be evaluated for
changes in fair value or impairment, respectively, as described
above. These amounts vary from period to period due to timing of
payment of these costs.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, Lakes incurs certain costs related to the projects
that are not included in notes receivable, which are expensed as
incurred. These costs include salaries, travel and certain legal
costs.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The consolidated balance sheets as of January&nbsp;1, 2006 and
January&nbsp;2, 2005 include long-term assets related to Indian
casino projects of $152.8&nbsp;million and $125.6&nbsp;million,
respectively, primarily related to three separate projects. The
amounts are as follows by project (in thousands):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="48%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>January&nbsp;1, 2006</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Springs</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Pokagon</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Springs</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Jamul</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Band</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Tribe</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Tribe</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Other</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Notes receivable, at estimated fair value</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>44,028</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>26,550</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>12,957</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>3,527</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>87,062</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Intangible assets related to acquisition of management contracts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,356</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,755</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,872</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46,088</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Land held for development</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,836</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,643</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>769</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,248</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>93</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,600</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>828</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>839</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,360</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>62,477</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>55,741</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>28,300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6,240</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>152,758</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">44

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="48%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>January&nbsp;2, 2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Springs</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Pokagon</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Springs</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Jamul</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Band</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Tribe</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Tribe</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Other</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Notes receivable, at estimated fair value</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>35,931</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>21,775</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>9,345</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>67,066</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Intangible assets related to acquisition of management contracts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,604</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,698</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,789</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41,096</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Land held for development</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,772</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,661</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,433</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>71</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,315</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>638</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,024</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>53,606</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>48,560</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>23,433</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>125,619</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The key assumptions and criteria used in the determination of
the estimated fair value of the notes receivable are estimated
casino opening date, projected interest rates, discount rates
and probability of projects opening. The estimated casino
opening date used in the valuation reflects the weighted average
of three scenarios: a base case (which is based on the
Company&#146;s forecasted casino opening date) and one and two
years out from the base case. The projected interest rates are
based upon the one year U.S Treasury Bill spot yield curve per
Bloomberg and the specific assumptions on contract term, stated
interest rate and casino opening date. The discount rate for the
projects is based on the yields available on certain financial
instruments at the valuation date, the risk level of equity
investments in general, and the specific operating risks
associated with open and operating gaming enterprises similar to
each of the projects. In estimating this discount rate, market
data of other public gaming related companies is considered. The
probability applied to each project is based upon a weighting of
four different scenarios with the fourth scenario assuming the
casino never opens. The first three scenarios assume the casino
opens but applies different opening dates as discussed above.
The probability weighting applied to each scenario captures the
element of risk in these projects and is based upon the status
of each project, review of the critical milestones and
likelihood of achieving the milestones.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table provides the key assumptions used to value
the notes receivable at estimated fair value (dollars in
thousands):
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Pokagon Band:</I></B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="29%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="32%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="33%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>As of January&nbsp;1, 2006</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>As of January&nbsp;2, 2005</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Face value of note (principal and interest)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $61,827</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $55,747</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $(46,445 principal and $15,382 interest)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $(44,550 principal and $11,197 interest)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Estimated months until casino opens (weighted average of three
    scenarios)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    32&nbsp;months</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    33&nbsp;months</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Projected interest rate until casino opens</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    8.2%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    6.8%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Projected interest rate during the loan repayment term</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    8.2%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    8.2%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Discount rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    15%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    15%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Repayment terms of note</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    60&nbsp;months</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    60&nbsp;months</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Probability rate of casino opening (weighting of four scenarios)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    90%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    75%</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
See discussion included below under <U>&#147;Description of each
Indian casino project and evaluation of critical
milestones&nbsp;&#151; Pokagon Band.&#148;</U>
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">45

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Shingle Springs Tribe:</I></B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="29%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="32%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="33%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>As of January&nbsp;1, 2006</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>As of January&nbsp;2, 2005</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Face value of note (principal and interest)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $46,446</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $38,156</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $(37,905 principal and $8,541 interest)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $(33,076 principal and $5,080 interest)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Estimated months until casino opens (weighted average of three
    scenarios)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    37&nbsp;months</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    36&nbsp;months</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Projected interest rate until casino opens</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    9.2%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    7.9%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Projected interest rate during the loan repayment term</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    9.1%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    8.7%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Discount rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    15%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    15%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Projected repayment terms of note*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    24&nbsp;months</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    24&nbsp;months</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Probability rate of casino opening (weighting of four scenarios)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    70%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    70%</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>*&nbsp;</TD>
    <TD align="left">
    Payable in varying monthly installments based on contract terms
    subsequent to the casino opening.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
See discussion included below under &#147;Description of each
Indian casino project and evaluation of critical
milestones&nbsp;&#151; Shingle Springs.&#148;
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Jamul Tribe:</I></B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="29%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="32%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="33%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>As of January&nbsp;1, 2006</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>As of January&nbsp;2, 2005</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Face value of note (principal and interest)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $21,247</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $17,306</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $(16,858 principal and $4,389 interest)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $(14,467 principal and $2,839 interest)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Estimated months until casino opens (weighted average of three
    scenarios)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    34&nbsp;months</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    36&nbsp;months</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Projected interest rate until casino opens</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    9.2%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    7.9%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Projected interest rate during the loan repayment term</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    9.2%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    8.7%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Discount rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    15%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    15%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Repayment terms of note</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    84&nbsp;months</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    84&nbsp;months</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Probability rate of casino opening (weighting of four scenarios)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    80%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    75%</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
See discussion below included under the caption
&#147;Description of each Indian casino project and evaluation
of critical milestones&nbsp;&#151; Jamul Tribe&#148;.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">46

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table represents a sensitivity analysis prepared
by the Company of the notes receivable from the Jamul Tribe,
Pokagon Band and Shingle Springs Tribe, based upon a change in
the probability rate of the casino opening by five percentage
points and the estimated casino opening date by one year:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="18%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>


<TR style="font-size: 7pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>Sensitivity Analysis</B></TD><TD></TD>
</TR>

<TR style="font-size: 7pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fair Value</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>5% Less</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>One Year</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>5% Increased</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>One Year</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Notes Receivable</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Probable</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Delay</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Both</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Probability</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Sooner</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Both</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pokagon</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>44,028,057</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>$41,751,387</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>41,590,634</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>39,449,376</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>46,304,727</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>46,619,622</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>49,040,268</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Shingle Springs</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>26,549,694</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>$24,632,645</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>25,186,755</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>23,367,059</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>28,466,744</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>27,985,550</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>30,005,160</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Jamul</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>12,957,357</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>$12,175,960</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>12,322,455</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>11,580,739</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>13,738,755</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>13,626,227</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>14,449,428</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>83,535,109</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>78,559,991</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>79,099,844</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>$74,397,174</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>88,510,226</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>88,231,398</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>$93,494,857</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="18%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>


<TR style="font-size: 7pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>Sensitivity Analysis</B></TD><TD></TD>
</TR>

<TR style="font-size: 7pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fair Value</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>5% Less</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>One Year</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>5% Increased</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>One Year</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Notes Receivable</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Probable</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Delay</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Both</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Probability</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Sooner</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Both</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pokagon</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>35,931,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>$33,957,913</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>33,825,802</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>29,583,071</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>37,904,088</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>38,197,409</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>40,321,591</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Shingle Springs</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>21,775,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>$20,252,095</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>20,453,118</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>19,024,633</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>23,297,905</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>23,184,255</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>24,807,821</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Jamul</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>9,345,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>8,734,015</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>8,776,784</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>8,203,679</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>9,955,986</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>9,950,775</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>10,602,146</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>67,051,001</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>62,944,022</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>63,055,704</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>$56,811,384</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>71,157,979</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>71,332,440</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>$75,731,558</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The assumption changes used in the sensitivity analysis above
are hypothetical. The effect of the variation in the probability
assumption and estimated opening date on the estimated fair
value of the notes receivable from Indian tribes was calculated
without changing any other assumptions; in reality, changes in
these factors may result in changes in another. For example, the
change in probability could be associated with a change in
discount rate, which might magnify or counteract the
sensitivities.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following represents the nature of the advances to the
tribes. The table represents the total amount of advances, which
represent the principal amount of the notes receivable, as of
January&nbsp;1, 2006 and January&nbsp;2, 2005. The notes
receivable are carried on the consolidated balance sheets at
January&nbsp;1, 2006 and January&nbsp;2, 2005 at their estimated
fair values of $85.9&nbsp;million and $67.1&nbsp;million,
respectively.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="53%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>Balance at January&nbsp;1, 2006</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shingle</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>Advances Principal Balance</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Pokagon</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Springs</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Jamul</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Other</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Note&nbsp;Receivable, pre-construction(a)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>22,344</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>37,905</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>15,908</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>76,157</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Note&nbsp;Receivable, non&nbsp;&#151; gaming land(b)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,176</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,176</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Note&nbsp;Receivable, land(b)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,925</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>950</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,875</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Note&nbsp;Receivable, other(c)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,474</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,474</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>46,445</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>37,905</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>16,858</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4,474</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>105,682</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="54%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>Balance at January&nbsp;2, 2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shingle</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>Advances Principal Balance</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Pokagon</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Springs</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Jamul</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Other</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Note&nbsp;Receivable, pre-construction(a)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>20,449</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>33,076</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>13,517</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>67,042</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Note&nbsp;Receivable, non&nbsp;&#151; gaming land(b)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,176</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,176</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Note&nbsp;Receivable, land(b)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,925</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>950</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,875</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Note&nbsp;Receivable, other(c)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>44,550</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>33,076</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>14,467</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>92,113</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    (a)</TD>
    <TD></TD>
    <TD valign="top">
    Lakes funds certain costs incurred to develop the casino
    project. These costs relate to construction costs, legal fees in
    connection with various regulatory approvals and litigation,
    environmental costs and design</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">47

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    consulting, and Lakes, in order to obtain the development
    agreement and management contract, agrees to advance a monthly
    amount used by the tribe for a variety of tribal expenses.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    (b)</TD>
    <TD></TD>
    <TD valign="top">
    Lakes purchased land to be used and transferred to the tribe in
    connection with the casino project. At Pokagon, a portion of the
    land will be used by the tribe separate from the casino project
    land.</TD>
</TR>

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    (c)</TD>
    <TD></TD>
    <TD valign="top">
    Represents amounts advanced under the agreements with the Iowa
    Tribe and Pawnee Tribe.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The notes receivable pre-construction advances consist of the
following principal amounts advanced to the tribes at
January&nbsp;1, 2006 and January&nbsp;2, 2005 (in thousands):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="68%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>January&nbsp;1,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>January&nbsp;2,</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>Pokagon</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2006</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Monthly stipend</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>9,625</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>8,125</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Construction</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,635</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,580</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Legal</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,634</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,379</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Environmental</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>650</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>645</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Design</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,720</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>22,344</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>20,449</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="68%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>January&nbsp;1,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>January&nbsp;2,</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>Shingle Springs</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2006</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Monthly stipend</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6,390</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4,980</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Construction</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,623</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,605</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Legal</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,195</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,290</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Environmental</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,588</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,577</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Design</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,306</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,120</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Gaming license</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,426</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,226</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Lobbyist</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,377</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,278</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>37,905</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>33,076</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="68%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>January&nbsp;1,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>January&nbsp;2,</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>Jamul</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2006</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Monthly stipend</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>3,841</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>3,319</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Construction</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>326</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>159</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Legal</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,340</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,606</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Environmental</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,668</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,628</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Design</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,168</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,640</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Gaming license</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>511</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>429</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Lobbyist</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,054</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,736</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>15,908</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>13,517</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Lakes&#146; evaluation of impairment related to
    Lakes&#146; long-term assets related to Indian casino projects,
    excluding the notes receivable, which are valued at fair
    value:</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Management periodically evaluates the intangible assets, land
held for development and other costs associated with each of the
projects for impairment. The assets are periodically evaluated
for impairment based on the estimated cash flows from the
management contract on an undiscounted basis. In the event the
carrying value of the intangible assets, in combination with the
carrying value of land held for development and other assets
associated with the Indian casino projects were to exceed the
undiscounted cash flow, an
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">48

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
impairment would be recorded. Such impairment would be measured
based on the difference between the fair value and carrying
value of the assets.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The financial models prepared by management for each project are
based upon the scope of each of the projects, which are
supported by a feasibility study as well as a market analysis
where the casino will be built. Lakes&#146; (as its predecessor
Grand Casinos Inc.) began developing Indian casino projects in
1990 and demonstrated success from the day the first Indian
casino opened in 1991 through the expiration of its Coushatta
management contract in 2002. This success legitimizes many of
the key assumptions supporting the financial models. Projections
for each applicable casino development were developed based on
analysis of published information pertaining to the particular
markets in which the Company&#146;s Indian casinos will be
located. In addition, Lakes has many years of casino operations
experience within the Company, which provides a basis for its
revenue expectations. The projections were prepared by Lakes not
for purposes of the valuation at hand but rather for purposes of
Lakes&#146; and the tribes&#146; business planning.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The primary assumptions included within management&#146;s
financial model for each Indian casino project is as follows:
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Pokagon Band</I></B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="29%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="32%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="33%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>January&nbsp;1, 2006</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>January&nbsp;2, 2005</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    No. of Class&nbsp;III slot machines</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    3,000</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    3,000</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    No. of Table games</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    90 (decrease from fiscal 2005 is due to contractual terms)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    100</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    No. of Poker tables</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    20</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    20</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Win/ Class&nbsp;III slot machine/day&nbsp;&#151; 1st&nbsp;year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $275</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $275</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Win/ Table game/day&nbsp;&#151; 1st&nbsp;year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $1,444</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $1,300</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Win/ Poker game/day&nbsp;&#151; 1st&nbsp;year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $1,000</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $1,000</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Expected increase (decrease) in management fee cash
    flows<BR>&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Year 2&nbsp;&#151; 2.1%<BR>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Year 2&nbsp;&#151; (6.4)% (decrease due to debt assumptions)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Year 3&nbsp;&#151; 1.9%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Year 3&nbsp;&#151; 1.9%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Year 4&nbsp;&#151; 3.6%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Year 4&nbsp;&#151; 3.6%</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Year 5&nbsp;&#151; 2.8%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Year 5&nbsp;&#151; 2.8%</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
With regard to the Pokagon Casino project in southwest Michigan,
the competitive market consists primarily of five Northern
Indiana riverboats. The state of Indiana publicly reports
certain results from these riverboat casinos which supports the
underlying assumptions in our projections. Specifically, the
Northern Indiana trailing twelve months market average for slot
machine revenue has consistently been above $300 win per unit
per day or greater than $105,000&nbsp;per machine per year which
exceeds the $275 win per unit per day that we used in our
Pokagon Casino projections. Of the five casinos in the market,
two locations produced a win per unit less than our projections
with three casinos producing win per unit revenue amounts
greater than our forecast. The closest casino to our location
consistently produces approximately $330 win per unit per day.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">49

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Jamul Tribe</I></B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="46%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="32%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>January&nbsp;1, 2006</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>January&nbsp;2, 2005</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    No. of Class&nbsp;III slot machines</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    349</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    349</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    No. of Class&nbsp;II slot machines</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    1,651</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    1,651</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    No. of Table games</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    65</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    65</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    No. of Poker tables</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    10</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    10</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Win/ Class&nbsp;III slot machine/day&nbsp;&#151; 1st&nbsp;year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $307</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    $285</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Win/ Class&nbsp;II slot machine/day&nbsp;&#151; 1st&nbsp;year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $220</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    $200</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Win/ Table game/day&nbsp;&#151; 1st&nbsp;year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $1,100</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    $1,100</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Win/ Poker table/day&nbsp;&#151; 1st&nbsp;year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $650</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    $650</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Expected increase (decrease) in management fee cash flows</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Year 2&nbsp;&#151; 4.8%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Year 2&nbsp;&#151; (8.8)% (decrease due to debt assumptions)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Year 3&nbsp;&#151; 4.9%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Year 3&nbsp;&#151; 2.8%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Year 4&nbsp;&#151; 4.9%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Year 4&nbsp;&#151; 2.9%</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Year 5&nbsp;&#151; 4.0%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Year 5&nbsp;&#151; 1.9%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Year 6&nbsp;&#151; 1.2%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Year 6&nbsp;&#151; 2.8%</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Year 7&nbsp;&#151; 4.0%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Year 7&nbsp;&#151; 1.5%</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The San&nbsp;Diego market contains other Indian-owned casinos in
the surrounding area, each of which is self-managed. Because of
the proprietary nature of those operations no public information
is readily attainable. However, based on the apparent successful
nature of their operations (large casinos which continually
expand, new hotel developments, new golf courses, etc.) coupled
with our knowledge of their operations, we feel that our
forecast of operations is within the revenue metrics of the
market.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Shingle Springs Tribe</I></B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="26%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="32%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="33%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>January&nbsp;1, 2006</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>January&nbsp;2, 2005</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR bgcolor="#CCEEFF">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    No. of Class&nbsp;III slot machines</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    349</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    349</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    No. of Class&nbsp;II slot machines</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    1,651</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    1,651</TD>
</TR>

<TR bgcolor="#CCEEFF">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    No. of Table games</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    100</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    100</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    No. of Poker tables</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    20</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    20</TD>
</TR>

<TR bgcolor="#CCEEFF">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Win/ Class&nbsp;III slot machine/day</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR bgcolor="#CCEEFF">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; 1st&nbsp;year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $350</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    $350</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Win/ Class&nbsp;II slot machine/day</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; 1st&nbsp;year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $250</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    $250</TD>
</TR>

<TR bgcolor="#CCEEFF">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Win/ Table game/day&nbsp;&#151; 1st&nbsp;year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $1,275</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    $1,275</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Win/ Poker table/day&nbsp;&#151; 1st&nbsp;year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $624</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    $624</TD>
</TR>

<TR bgcolor="#CCEEFF">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Expected increase (decrease) in management fee cash flows</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Year 2&nbsp;&#151; 5.5%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Year 2&nbsp;&#151; (8.9)% (decrease due to debt assumptions)</TD>
</TR>

<TR>
    <TD colspan="2"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Year 3&nbsp;&#151; 4.3%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Year 3&nbsp;&#151; 3.6%</TD>
</TR>

<TR bgcolor="#CCEEFF">
    <TD colspan="2"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Year 4&nbsp;&#151; 3%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Year 4&nbsp;&#151; 3%</TD>
</TR>

<TR>
    <TD colspan="2"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Year 5&nbsp;&#151; 5.1%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Year 5&nbsp;&#151; 5.1%</TD>
</TR>

<TR bgcolor="#CCEEFF">
    <TD colspan="2"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Year 6&nbsp;&#151; (17)% (management fees</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Year 6&nbsp;&#151; (17)% (management fees</TD>
</TR>

<TR>
    <TD colspan="2"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    were reduced in years six and seven)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    were reduced in years six and seven)</TD>
</TR>

<TR bgcolor="#CCEEFF">
    <TD colspan="2"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Year 7&nbsp;&#151; 1.5%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Year 7&nbsp;&#151; 10.8%</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the Shingle Springs Sacramento market, there is one other
Indian casino that is managed by another public company.
Management considered the available information related to this
other Indian casino when projecting management fees from the
Shingle Springs Casino. Based on the apparent successful nature
of their operations coupled with our knowledge of their
operations, we feel that our forecast of operations is within
the revenue metrics of the market.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">50

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<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of January&nbsp;1, 2006 and January&nbsp;2, 2005 no
impairment was recognized on the Pokagon, Shingle Springs or
Jamul projects.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During the third quarter of fiscal 2005 the Company&#146;s
relationship with the Kickapoo Tribe deteriorated and in
November 2005, Lakes and the Kickapoo Tribe terminated their
business relationship. Lakes committed to provide advances to
the Kickapoo Tribe of up to $2.0&nbsp;million for business
improvement purposes. As of January&nbsp;1, 2006, Lakes had
advanced approximately $2.3&nbsp;million to the Kickapoo Tribe.
Additionally, unpaid invoices related to the project total
approximately $3.9&nbsp;million, some or all of which Lakes may
be required to pay. As a result of the terminated business
relationship with the Kickapoo Tribe, Lakes is negotiating with
the Kickapoo Tribe to resolve all of the financial terms of the
contracts including repayment of the advances and payment of the
unpaid invoices, the sale of the land owned by Lakes to the
Kickapoo Tribe, and to formally terminate the gaming operations
consulting agreement, management contract, and related ancillary
agreements relating to the project. During the second quarter of
2004, the BIA issued its final determination denying the Nipmuc
Nation&#146;s application for federal recognition. At that time,
Lakes recorded an impairment charge of $5.8&nbsp;million related
to long-term assets related to the Nipmuc Nation project.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Description of each Indian casino project and evaluation of
critical milestones:</B>
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Pokagon Band</I></B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Business arrangement</U>:</I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes, in July 1999, entered into a development agreement and
management contract with the Pokagon Band, a federally
recognized tribe with a compact with the State of Michigan, to
develop and manage a casino on approximately 675&nbsp;acres in
southwest Michigan. The first phase of the casino is planned to
include approximately 3,000 slot machines, 100 table games,
various restaurant and bar venues, enclosed parking, a childcare
facility and arcade, and various other resort amenities.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The development agreement provides for Lakes to advance up to
approximately $73.0&nbsp;million for purchase of land and for
the initial development phase of the project. The development
agreement for the Pokagon project also provides that to the
extent the Pokagon Band is unable to raise additional funding
from third parties at an interest rate not to exceed 13%, Lakes
will be required to provide additional financing of up to
approximately $54.0&nbsp;million. Based on extensive discussions
with prospective lenders, it appears that third party financing
will be available for this project; however, there can be no
assurance that third party financing will be available at the
time construction for the project begins. Lakes is not required
to fund these amounts; however, if Lakes discontinued the
funding prior to fulfilling the obligation, Lakes would forfeit
the rights under the management contract.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes will receive approximately 24% of net income up to a
certain level and 19% of the net income over that level, as a
management fee. The term of the management contract is currently
planned for five years beginning when the casino opens to the
public and may extend for a total of seven years under certain
circumstances. Payment of Lakes&#146; management fee will be
subordinated to senior indebtedness of the Pokagon casino. The
Pokagon Band may terminate the management contract after five
years from the opening of the casino if any of certain required
elements of the project have not been developed or certain
financial commitments to the Pokagon Band have not been met. The
Pokagon Band may also buy out the management contract provisions
after two years from the opening date. The buyout amount is
calculated based upon the previous 12&nbsp;months of management
fees earned multiplied by the remaining number of years under
the management contract, discounted back to the present value at
the time the buyout occurs. The management fee and length of
contract are subject to regulatory approval. The casino could
open as early as late 2007.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company will be obligated to pay an amount to an unrelated
third party once the Pokagon Casino is open and Lakes is the
manager of the casino. The amount is payable quarterly for five
years and is only payable if Lakes is the manager of the casino.
The payment is part of a settlement and release agreement
associated with Lakes obtaining the management contract with the
Pokagon Band. The maximum liability over the five-year period is
approximately $11&nbsp;million. The Company will also be
obligated to pay
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">51

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
approximately $3.3&nbsp;million in accordance with the
management contract with the Pokagon Band which is payable once
the casino opens over 24&nbsp;months.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Lakes&#146; evaluation of critical milestones:</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table outlines the status of each of the following
primary milestones necessary to complete the Pokagon project as
of the end of fiscal year 2003, 2004 and 2005. Both the positive
and negative evidence was reviewed during Lakes&#146; evaluation
of the critical milestones.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="22%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- Right VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- Right VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- Right VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>&nbsp;Critical Milestone</B></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>December&nbsp;28, 2003</B></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>January&nbsp;2, 2005</B></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>January&nbsp;1, 2006</B></TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <I>Federal recognition of the tribe</I></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Possession of usable land corresponding with needs based on
    the Company&#146;s project plan</I></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Usable land placed in trust by Federal government</I></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No&nbsp;&#151; The Pokagon Band and Lakes continued to provide
    support for the case and in January 2003 the federal judge
    dismissed all issues except for the final issue and requested
    additional information from the BIA.</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No&nbsp;&#151; The additional information was submitted by the
    BIA in August 2004 and the lawsuit was still pending resolution
    as of January&nbsp;2, 2005.</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes&nbsp;&#151; The additional information was submitted by the
    BIA in August 2004 and the lawsuit was still pending resolution
    as of January&nbsp;1, 2006. In March 2005 the federal judge
    dismissed the last remaining issue filed by Taxpayers of
    Michigan Against Casinos (TOMAC) and ruled in favor of the
    Pokagon Band allowing the land to be placed into trust by the
    BIA. During the required 60&nbsp;day waiting period, TOMAC filed
    for an appeal. The appeal hearing date was held on
    December&nbsp;8, 2005. On January&nbsp;6, 2006 the United States
    Court of Appeals for the District of Columbia Circuit ruled in
    favor of the Pokagon Band by affirming the Federal District
    Court&#146;s grant of summary judgment in the lawsuit by TOMAC
    versus the U.S.&nbsp;Department of the Interior. On
    January&nbsp;27, 2006, the Federal Government took official
    action to acquire the Pokagon Band&#146;s</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">52

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<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; ">

<TR style="font-size: 1pt;">
    <TD width="23%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD colspan="7" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>&nbsp;Critical Milestone</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>December&nbsp;28, 2003</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>January&nbsp;2, 2005</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>January&nbsp;1, 2006</B></TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD colspan="7" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    675-acre parcel of land in New Buffalo Township, Michigan, into
    trust for the Pokagon Band. This official action by the
    Department of the Interior paves the way for the Pokagon Band to
    move forward with their Four Winds Casino Resort project.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="7" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Usable county agreement, if applicable</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <I>Usable state compact that allows for gaming consistent with
    that outlined in the Company&#146;s project plan</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="7" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>NIGC approval of management contract in current and desired
    form</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, submitted to the NIGC for review in 2000.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, submitted to the NIGC for review in 2000 and approval is
    expected at approximately the same time the land is being placed
    into trust by the BIA.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, submitted to the NIGC for review in 2000 and approval is
    expected in April 2006 as the land was taken into trust by the
    BIA on January&nbsp;27, 2006.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="7" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Resolution of all litigation and legal obstacles</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, pending litigation regarding land in trust.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, pending litigation regarding land in trust.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No. However on January&nbsp;6, 2006 the United States Court of
    Appeals for the District of Columbia Circuit ruled in favor of
    the Pokagon Band by affirming the Federal District Court&#146;s
    grant of summary judgment in the lawsuit by TOMAC versus the
    U.S.&nbsp;Department of the Interior.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="7" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Financing for construction</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, however the Tribe engaged an investment banker to assist
    with obtaining financing.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, however the Tribe engaged an investment banker to assist
    with obtaining financing.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, however the Tribe engaged an investment banker to assist
    with obtaining financing, which we expect to occur as early as
    mid 2006.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="7" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">53

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; ">

<TR style="font-size: 1pt;">
    <TD width="23%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD colspan="7" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>&nbsp;Critical Milestone</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>December&nbsp;28, 2003</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>January&nbsp;2, 2005</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>January&nbsp;1, 2006</B></TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD colspan="7" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <I>Any other significant project milestones or contingencies,
    the outcome of which could have a material affect on the
    probability of project completion as planned</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No others known at this time by Lakes.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No others known at this time by Lakes.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No others known at this time by Lakes.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="7" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Lakes&#146; evaluation and conclusion regarding the above
    critical milestones and progress:</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Approximately $24.1&nbsp;million of the loans due from the
Pokagon Band were used by the Pokagon Band to purchase real
property comprising the project site. The Company&#146;s first
deed of trust against the gaming land portion of this property
(except for a small parcel worth approximately
$0.3&nbsp;million) was relinquished when the BIA placed the land
into trust in January 2006. The Company still holds a deed of
trust against the non-gaming land which has a cost basis of
approximately $13.2&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The estimated probability rate was increased from 75% to 90% in
fiscal 2005, due to an evaluation of all critical milestones and
due to the favorable federal judge ruling issued in March 2005
that will allow the land to be taken into trust by the Federal
Government. Subsequently the Taxpayers of Michigan Against
Casinos (&#147;TOMAC&#148;) filed for an appeal. The appeal
hearing date was held on December&nbsp;8, 2005. On
January&nbsp;6, 2006 the United States Court of Appeals for the
District of Columbia Circuit ruled in favor of the Pokagon Band
by affirming the Federal District Court&#146;s grant of summary
judgment in the lawsuit by the Taxpayers of Michigan Against
Casinos (TOMAC)&nbsp;versus the U.S.&nbsp;Department of the
Interior. On January&nbsp;27, 2006, the Federal Government took
official action to acquire the Pokagon Band&#146;s
<FONT style="white-space: nowrap">675-acre</FONT> parcel of land
in New Buffalo Township, Michigan, into trust for the Pokagon
Band. This official action by the Department of the Interior
paves the way for the Pokagon Band to move forward with their
Four Winds Casino Resort project. TOMAC has 90&nbsp;days from
the date of the decision to petition the U.S.&nbsp;Supreme Court
to review the decision.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Due to the delay related to this litigation the weighted average
estimated casino opening date was extended from October 2007 to
October 2008 during the year ended January&nbsp;1, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Pokagon Band became a federally recognized tribe through an
act of Congress prior to them entering into any agreements with
Lakes. As part of this congressional action the Federal
Government mandated that the Pokagon Band &#147;shall&#148; have
land taken into trust on their behalf.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 1999, Lakes entered into a development agreement and
management contract with the Pokagon Band. At that time the
Pokagon Band was federally recognized and they had a compact
with the State of Michigan. During 1999 and 2000, Lakes
purchased land on behalf of the Pokagon Band.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In January 2001, the U.S.&nbsp;Department of Interior issued a
finding of no significant impact and recommended that land be
taken into trust on behalf of the Pokagon Band. During the
required <FONT style="white-space: nowrap">30-day</FONT> waiting
period a lawsuit was filed by the TOMAC against the federal
government to stop the land in trust process. Lakes and the
Pokagon Band continued to provide support for this case and
believed it would be resolved in favor of the Band. The first
hearing before the federal judge took place on December 2001. In
March 2002, the judge eliminated several of TOMAC&#146;s
assertions and continued to review the remaining issues. In
January 2003, the Judge dismissed all remaining issues except
for one and requested additional information from the federal
government (&#147;BIA&#148;) to support their conclusions on
that one issue. Due to the fact that all issues except for one
had been dismissed, Lakes continued to believe that it was
probable that the land would be taken into trust and that the
casino would open. The BIA submitted the additional information
in August 2004; and in March 2005, the federal judge dismissed
the last remaining issue filed by TOMAC making it possible for
the land to be taken into trust for the gaming project. During
the required <FONT style="white-space: nowrap">60-day</FONT>
waiting period, TOMAC filed for an appeal. The appeal hearing
was held on December&nbsp;8, 2005. On January&nbsp;6, 2006 the
United States Court of Appeals for the District of Columbia
Circuit ruled in favor of the Pokagon Band by affirming the
Federal District Court&#146;s grant of summary judgment in the
lawsuit by TOMAC versus the
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">54

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
U.S.&nbsp;Department of the Interior. On January&nbsp;27, 2006,
the Federal Government took official action to acquire the
Pokagon Band&#146;s
<FONT style="white-space: nowrap">675-acre</FONT> parcel of land
in New Buffalo Township, Michigan, into trust for the Pokagon
Band. This official action by the Department of the Interior
paves the way for the Pokagon Band to move forward with their
Four Winds Casino Resort project. We expect approval of the
management contract by the NIGC as early as April 2006 because
the land was taken into trust by the BIA in January 2006. Once
the NIGC approves the management contract and permanent
financing is obtained Lakes will help the Pokagon Band build and
manage their casino development. Construction of the project
could begin as early as mid 2006 with an expected opening date
twelve months following the start of construction.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Shingle Springs</I></B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Business arrangement:</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Plans for the Shingle Springs Casino project include an
approximately 1,100,000&nbsp;square-foot facility (including
approximately 85,000&nbsp;square feet of casino space) to be
located adjacent to the planned Shingle Springs Rancheria exit,
approximately 35&nbsp;miles east of downtown Sacramento, on
U.S.&nbsp;Highway 50. The Shingle Springs Casino is currently
planned to feature approximately 2,000 gaming devices and
approximately 100 table games, as well as restaurants, enclosed
parking and other facilities.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes acquired its initial interest in the development and
management contracts for the Shingle Springs Casino from Kean
Argovitz Resorts- Shingle Springs, LLC (&#147;KAR&nbsp;&#151;
Shingle Springs&#148;) in 1999 and formed a joint venture, in
which the contracts were held, between Lakes and KAR&nbsp;&#151;
Shingle Springs. On January&nbsp;30, 2003, Lakes purchased the
remaining KAR&nbsp;&#151; Shingle Springs&#146; partnership
interest in the joint venture. In connection with the purchase
transaction, Lakes entered into separate agreements with the two
individual owners of KAR&nbsp;&#151; Shingle Springs (Kevin M.
Kean and Jerry A. Argovitz). Under the agreement with
Mr.&nbsp;Kean, Mr.&nbsp;Kean may elect to serve as a consultant
to Lakes during the term of the casino management contract if he
is found suitable by relevant gaming regulatory authorities. In
such event, Mr.&nbsp;Kean will be entitled to receive annual
consulting fees equal to 15% of the management fees received by
Lakes from the Shingle Springs Casino operations, less certain
costs of these operations. If Mr.&nbsp;Kean is not found
suitable by relevant gaming regulatory authorities or otherwise
elects not to serve as a consultant, he will be entitled to
receive annual payments of $1&nbsp;million from the Shingle
Springs Casino project during the term of the respective casino
management contract (but not during any renewal term of such
management contract).
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the agreement with Mr.&nbsp;Argovitz, if he is found
suitable by relevant gaming regulatory authorities he may elect
to re-purchase his respective original equity interest in the
Lakes&#146; subsidiary and then be entitled to obtain a 15%
equity interest in the Lakes&#146; entity that holds the rights
to the management contract with the Shingle Springs Casino. If
he is not found suitable or does not elect to purchase equity
interests in the Lakes&#146; subsidiary, Mr.&nbsp;Argovitz would
receive annual payments of $1&nbsp;million from the Shingle
Springs Casino project from the date of election through the
term of the respective casino management contract (but not
during any renewal term of such management contract).
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The development agreement provides for Lakes to make certain
pre-construction advances to the Shingle Springs Tribe in the
form of a transition loan and land loan up to a maximum amount
of $50.0&nbsp;million. Lakes is not required to fund these
amounts. If, however, Lakes discontinued the funding prior to
fulfilling the obligation, Lakes would forfeit the rights under
the management contract.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The agreement provides for Lakes to arrange for financing or, in
its discretion, loan funds to the Shingle Springs Tribe in the
form of a facility loan, for the costs of construction and
initial costs of operation up to a maximum currently of
$300&nbsp;million. In addition, Lakes will assist in the design,
development and construction of the facility as well as manage
the pre-opening, opening and continued operations of the casino
and related amenities for a period of seven years. As
compensation for its management services, Lakes will receive a
management fee between 21% and 30% of net income of the
operations annually for the first five years, with a declining
percentage in years six and seven, as that term is defined by
the management contract. Payment of Lakes&#146; management fee
will be subordinated to senior indebtedness of the Shingle
Springs Casino and minimum priority payment to the Shingle
Springs Tribe. The Shingle Springs Tribe may terminate the
agreement after five years from the opening of the casino if any
of certain required elements of the project
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">55

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<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
have not been developed. The management contract includes
provisions that allow the Shingle Springs Tribe to buy out the
management contract after four years from the opening date. The
buyout amount is calculated based upon the previous twelve
months of management fees earned multiplied by the remaining
number of years under the contract, discounted back to the
present value at the time the buyout occurs.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Lakes&#146; Evaluation of the Critical Milestones:</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table outlines the status of each of the following
primary milestones necessary to complete the Shingle Springs
project as of the end of fiscal year 2003, 2004 and 2005. Both
the positive and negative evidence was reviewed during
Lakes&#146; evaluation of the critical milestones.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="18%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- Right VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- Right VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- Right VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="24%">&nbsp;</TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>&nbsp;Critical Milestone</B></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>December&nbsp;28, 2003</B></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>January&nbsp;2, 2005</B></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>January&nbsp;1, 2006</B></TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <I>Federal recognition of the tribe</I></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD colspan="3" style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD colspan="3" style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <I>Possession of usable land corresponding with needs based on
    the Company&#146;s project plan</I></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
</TR>

<TR>
    <TD colspan="2" style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD colspan="3" style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD colspan="3" style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <I>Usable land placed in trust by Federal government</I></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Not necessary, as land is reservation land.</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Not necessary, as land is reservation land.</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Not necessary, as land is reservation land.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD colspan="3" style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD colspan="3" style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <I>Usable county agreement, if applicable</I></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    N/A</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    N/A</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    N/A</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD colspan="3" style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD colspan="3" style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <I>Usable state compact that allows for gaming consistent with
    that outlined in the Company&#146;s project plan</I></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD colspan="3" style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD colspan="3" style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <I>NIGC approval of management contract in current and desired
    form</I></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, submitted to the NIGC for review in 2000.</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes&nbsp;&#151; approval received in 2004.</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes&nbsp;&#151; approval received in 2004.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD colspan="3" style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD colspan="3" style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <I>Resolution of all litigation and legal obstacles</I></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, Federal and state litigation regarding approval of highway
    interchange, environmental issues and other issues.</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, Federal and state litigation regarding approval of highway
    interchange, environmental issues and other issues.</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, Federal and state litigation regarding approval of highway
    interchange, environmental issues and other issues.</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#151; See below.</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#151; See below.</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &#151; See below.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD colspan="3" style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD colspan="3" style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <I>Financing for construction</I></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, however the Shingle Springs Tribe has engaged investment
    banks to assist with obtaining financing.</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, however the Shingle Springs Tribe has engaged investment
    banks to assist with obtaining financing.</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, however the Shingle Springs Tribe has engaged investment
    banks to assist with obtaining financing.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">56

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<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; ">

<TR style="font-size: 1pt;">
    <TD width="19%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="24%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="24%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="24%">&nbsp;</TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD colspan="7" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>&nbsp;Critical Milestone</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>December&nbsp;28, 2003</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>January&nbsp;2, 2005</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>January&nbsp;1, 2006</B></TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD colspan="7" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="7" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD colspan="7">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <I>Any other significant project milestones or contingencies,
    the outcome of which could have a material affect on the
    probability of project completion as planned</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No others known at this time by Lakes.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No others known at this time by Lakes.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No others known at this time by Lakes.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="7" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Lakes&#146; evaluation and conclusion regarding the above
    critical milestones and progress:</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a result of delays related to litigation surrounding access
to the reservation via an interchange, the weighted average
estimated casino opening date was extended from January 2008 to
February 2009 during the year ended January&nbsp;1, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In January 2005, Lakes received a favorable ruling from the
federal court on all federal issues with respect to the casino
development planned by the Shingle Springs Tribe. The federal
favorable ruling related to the project is being appealed by El
Dorado County.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Shingle Springs Tribe is a federally recognized tribe, has a
compact with the State of California and owns approximately
160&nbsp;acres of reservation land on which the casino can be
built. During July 2004, Lakes received notification from the
NIGC that the development and management contract between the
Shingle Springs Tribe and Lakes, allowing Lakes to manage a
Class&nbsp;II and Class&nbsp;III casino, was approved by the
NIGC.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The most significant milestone yet to be achieved for this
project is commercial access to the reservation on which the
casino will be built. The Shingle Springs Tribe received state
regulatory approval of a necessary interchange to access the
tribal land during 2002. Neighboring El Dorado County and
another local group commenced litigation in federal and state
courts against the California regulatory agencies attempting to
block the approval of the interchange. During January of 2004,
the California Superior Court ruled in favor of the California
Department of Transportation (&#147;CalTrans&#148;) on all of El
Dorado County&#146;s claims challenging CalTrans&#146;
environmental review of the proposed casino project except that
the court asked for clarification on one issue. The one
remaining issue in the state case questions the state standards
for ozone requirements of all of CalTrans projects throughout
California. El Dorado County, Voices for Rural Living, CalTrans
and the Shingle Springs Tribe filed an appeal and oral arguments
on these appeals was heard in August 2005. In November 2005, the
California Court of Appeal (&#147;Court&#148;) issued its
decision on these appeals. The Court ruled in favor of
CalTrans&#146; appeal, rejecting the El Dorado County&#146;s
argument that the transportation conformity analysis did not
conform to state standards. The Court also rejected all but two
of the legal claims asserted in the appeal by El Dorado County
and Voices for Rural Living against the environmental impact
report (&#147;EIR&#148;) prepared by CalTrans for the
interchange that will connect Highway 50 to the Shingle Springs
Rancheria. For the remaining two issues, the Court held that
CalTrans must supplement its environmental analysis by adding
some discussion to the air quality chapter to further explain
the project&#146;s contribution to overall vehicular emissions
in the region, and that CalTrans also must evaluate whether a
smaller casino and hotel would reduce environmental impacts. On
December&nbsp;19, 2005, CalTrans filed a Petition for Review
with the Supreme Court of the State of California, and on
February&nbsp;8, 2006 the Supreme Court denied the Petition for
Review and ordered the Court of Appeals decision to be
depublished. CalTrans is preparing the necessary additional
information as requested by the Court for the two issues
described above. The Court acknowledged CalTrans lacks
jurisdiction to require the Shingle Springs Tribe to develop a
smaller casino, but nevertheless required some discussion of
this alternative in the interchange EIR. Construction of the
interchange and casino could begin as early as the end of 2006
with an estimated opening date approximately 14&nbsp;months
after the start of the construction.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">57

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<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the form of tribal-state compact first signed by the State
of California with both the Jamul and Shingle Springs tribes in
1999, each tribe is allowed to operate up to 350 Class&nbsp;III
slot machines without licenses from the state. This form of
compact allows tribes to operate up to an additional 1,650
Class&nbsp;II slot machines by obtaining licenses for the
devices from the state. Under these tribal-state compacts, there
is a state-wide limitation on the aggregate number of
Class&nbsp;III slot machine licenses that are available. Tribes
who have entered into new tribal-state compacts or amendments to
the 1999 form of tribal-state compact in general are allowed to
operate an unlimited number of Class&nbsp;II slot machines
without the need for obtaining additional licenses, subject to
the payment of additional fees to the state, including, in
recent cases, fees based on a percentage of slot &#147;net
win.&#148; Currently, neither the Jamul Tribe nor the Shingle
Springs Tribe have amended their tribal-state compacts. If the
compacts are not renegotiated and amended, the tribes could
operate under their existing compacts which allows for up to 350
Class&nbsp;III gaming devices and an unlimited number of
Class&nbsp;II gaming devices. Management believes that this
number of gaming devices is adequate to equip the planned
developments. Therefore, Lakes believes the availability of
additional slot licenses is not an issue that could prevent the
projects from progressing. The Shingle Springs project is
currently planned to open with 349 Class&nbsp;III slot machines
and approximate 1,650 Class&nbsp;II devices.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Jamul Tribe</I></B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Business arrangement</U>:</I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Jamul Tribe has an approximate six-acre reservation on which
the casino project is currently planned to be built. The
reservation is located near San&nbsp;Diego, California. Plans
for the casino include approximately 2,000 gaming devices and
approximately 85 table games along with various restaurants and
related amenities.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes acquired its initial interest in the development agreement
and management contracts for the Jamul casino from Kean Argovitz
Resorts-Jamul, LLC (&#147;KAR&nbsp;&#151; Jamul&#148;) in 1999
and formed a joint venture in which the contracts were held
between Lakes and KAR&nbsp;&#151; Jamul. On January&nbsp;30,
2003, Lakes purchased the remaining KAR&nbsp;&#151; Jamul&#146;s
partnership interest in the joint venture. In connection with
the purchase transaction, Lakes entered into separate agreements
with the two individual owners of KAR&nbsp;&#151; Jamul
(Mr.&nbsp;Kean and Mr.&nbsp;Argovitz). The term of the contract
is expected to be five or seven years. Under the agreement with
Mr.&nbsp;Kean, Mr.&nbsp;Kean may elect to serve as a consultant
to Lakes during the term of the casino management contract if he
is found suitable by relevant gaming regulatory authorities. In
such event, Mr.&nbsp;Kean will be entitled to receive annual
consulting fees equal to 20% of the management fees received by
Lakes from the Jamul Casino operations, less certain costs of
these operations. If Mr.&nbsp;Kean is not found suitable by
relevant gaming regulatory authorities or otherwise elects not
to serve as a consultant, he will be entitled to receive annual
payments of $1&nbsp;million from the Jamul Casino project during
the term of the respective casino management contract (but not
during any renewal term of such management contract).
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the agreement with Mr.&nbsp;Argovitz, if he is found
suitable by relevant gaming regulatory authorities he may elect
to re-purchase his respective original equity interest in the
Lakes&#146; subsidiary and then be entitled to obtain a 20%
equity interest in the Lakes&#146; entity that holds the rights
to the management contract with the Jamul Tribe. If he is not
found suitable or does not elect to purchase equity interests in
the Lakes&#146; subsidiary, Mr.&nbsp;Argovitz may elect to
receive annual payments of $1&nbsp;million from the Jamul Casino
project from the date of election through the term of the
respective casino management contract (but not during any
renewal term of such management contract).
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The development agreement provides for Lakes to make certain
pre-construction advances to the Jamul Tribe of up to
$30&nbsp;million. Lakes is not required to fund these amounts;
however, if Lakes discontinued the funding prior to fulfilling
the obligation, Lakes would forfeit the rights under the
management contract. Lakes will receive a management fee between
18% and 30% of net income of the operations annually for seven
years, subject to regulatory approval of the management contract
and subject to a minimum priority monthly payment to the Jamul
Tribe.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Jamul Tribe may terminate the management contract after five
years from the opening date of the casino if any of certain
required elements of the project have not been developed.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">58

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<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Lakes&#146; Evaluation of the Critical Milestones</U>:</I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table outlines the status of each of the following
primary milestones necessary to complete the Jamul project as of
the end of fiscal year 2003, 2004 and 2005. Both the positive
and negative evidence was reviewed during Lakes&#146; evaluation
of the critical milestones.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="22%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- Right VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- Right VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- Right VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>&nbsp;Critical Milestone</B></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>December&nbsp;28, 2003</B></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>January&nbsp;2, 2005</B></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>January&nbsp;1, 2006</B></TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <I>Federal recognition of the tribe</I></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Possession of usable land corresponding with needs based on
    the Company&#146;s project plan</I></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <I>Usable land placed in trust by Federal government</I></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes, six acres is reservation land held by the Jamul Tribe on
    which the casino will be built. There is an additional
    82&nbsp;acres contiguous to the reservation land pending BIA
    approval to be placed into trust that could be used for
    additional development of the project. The Jamul Tribe and Lakes
    were in the process of preparing an EIS, as described below and
    completing the land in trust application.</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes, six acres is reservation land held by the Jamul Tribe on
    which the casino will be built. There is an additional
    82&nbsp;acres contiguous to the reservation land pending BIA
    approval to be placed into trust that could be used for
    additional development of the project. The Jamul Tribe and Lakes
    prepared an EIS and trust application, which has been submitted
    to, reviewed and recommended for approval by the regional office
    of the BIA. The Washington,&nbsp;D.C. office of the BIA is
    currently reviewing the submission.</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes, six acres is reservation land held by the Jamul Tribe on
    which the casino will be built. There is an additional
    82&nbsp;acres contiguous to the reservation land pending BIA
    approval to be placed into trust that could be used for
    additional development of the project. The Jamul Tribe and Lakes
    prepared an EIS and trust application, which has been submitted
    to, reviewed and recommended for approval by the regional office
    of the BIA. The Washington,&nbsp;D.C. office of the BIA is
    currently reviewing the submission.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Usable county agreement, if applicable</I></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    N/A</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    N/A</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    N/A</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Usable state compact that allows for gaming consistent with
    that outlined in the Company&#146;s project plan</I></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>NIGC approval of management contract in current and desired
    form</I></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, submitted for approval by the NIGC in 2000 and approval is
    not expected to occur until the process to place land in trust
    by the BIA is complete.</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, submitted for approval by the NIGC in 2000. We are in
    communication with the NIGC and have responded to initial
    comments. Approval is not expected until the process to place
    land in</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, submitted for approval by the NIGC in 2000. We are in
    communication with the NIGC and have responded to initial
    comments. Approval is not expected until the process to place
    land in</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">59

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; ">

<TR style="font-size: 1pt;">
    <TD width="23%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD colspan="7" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>&nbsp;Critical Milestone</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>December&nbsp;28, 2003</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>January&nbsp;2, 2005</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>January&nbsp;1, 2006</B></TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD colspan="7" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    trust by the BIA is complete.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    trust by the BIA is complete.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="7" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Resolution of all litigation and legal obstacles</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    N/A there has been some local opposition regarding the project,
    although no formal legal action has been taken.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    N/A, there has been some local opposition regarding the project,
    although no formal legal action has been taken.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    N/A, there has been some local opposition regarding the project,
    although no formal legal action has been taken.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <I>Financing for construction</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, however, preliminary discussions with investment bankers
    regarding assisting in obtaining financing have taken place.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, however, preliminary discussions with investment bankers
    regarding assisting in obtaining financing have taken place.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="7" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Any other significant project milestones or contingencies,
    the outcome of which could have a material affect on the
    probability of project completion as planned</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No others known at this time by Lakes.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No others known at this time by Lakes.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No others known at this time by Lakes.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="7" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Lakes&#146; evaluation and conclusion regarding the above
    critical milestones and progress:</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a result of delays related to getting land contiguous to the
reservation placed into trust, the weighted average estimated
casino opening date was extended from January 2008 to November
2008 during the year ended January&nbsp;1, 2006. The probability
rate was increased from 75% at January&nbsp;2, 2005 to 80% at
January&nbsp;1, 2006 as a result of the Jamul Tribe and Lakes
formally announcing plans to build the casino on the approximate
six acres of reservation land held by the Jamul Tribe.
Reservation land qualifies for gaming without going through a
land in trust process.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Jamul Tribe is a federally recognized tribe with a compact
with the State of California and has an approximate six acre
reservation on which the casino is planned to be built. The
primary effort in this project has been to place approximately
82&nbsp;acres of land contiguous to the reservation into trust
for gaming. Lakes acquired 101&nbsp;acres of land contiguous to
the six acres of reservation land of which 19&nbsp;acres relate
to land with certain easements, which will not be accepted into
trust. The trust application, including an Environmental Impact
Statement (&#147;EIS&#148;), has been prepared, submitted to,
reviewed and recommended for approval by the regional office of
the BIA. The Washington,&nbsp;D.C. office of the BIA is
currently reviewing the submission to determine if the land
should be taken into trust. There has been some local opposition
regarding the project. An EIS is more rigorous to complete than
a more typical EA (Environmental Assessment). The EIS was more
intense and took longer to prepare but is considered a better
method to address all potential environmental concerns
surrounding this project and to mitigate potential future
opposition that may delay the project. The Jamul Tribe is in
process of preparing another EA which is being prepared under
guidelines of the State compact.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The process of getting the land contiguous to the reservation
placed into trust has been slow. Therefore, during August of
2005, the Jamul Tribe and Lakes formally announced plans to
build the casino on the approximately six acres of reservation
land held by the Jamul Tribe. Reservation land qualifies for
gaming without going through a land in trust process. The
approximate size of the casino and related guest amenities will
not change in total, as the casino was always planned to be
built on the reservation land. The approximate six-acre project
would be built on various levels to accommodate essentially all
of the same amenities that were planned for the project on the
larger parcel of land. Therefore, the design of the project
would change
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">60

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
significantly from a complex of lower-level buildings spread out
over a larger area to a multi-level resort built on a smaller
parcel of land. Total square footage, nature or cost of the
project are not expected to change significantly as it will be
primarily the same project being built on a smaller footprint.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes has consulted with third-party advisors as to the
architectural feasibility of the alternative plan and has been
assured that the project can be successfully built on the
reservation land. The Company has completed economic models for
each alternative and concluded that either would result in a
successful operation assuming that adequate financing can be
obtained. Therefore, the Company believes this project will be
successfully completed. The development agreement and management
contract is subject to approval by the NIGC and is currently in
the review process. A consulting agreement with the Jamul Tribe
is also under consideration. Construction of the casino could
begin in late 2006 with an estimated opening date of the casino
12&nbsp;months thereafter.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the form of tribal-state compact first signed by the State
of California with both the Jamul and Shingle Springs tribes in
1999, each tribe is allowed to operate up to 350 Class&nbsp;III
slot machines without licenses from the state. This form of
compact allows tribes to operate up to an additional 1,650
Class&nbsp;II slot machines by obtaining licenses for the
devices from the state. Under these tribal-state compacts, there
is a state-wide limitation on the aggregate number of
Class&nbsp;III slot machine licenses that are available to
tribes. Certain tribes have entered into new tribal-state
compacts or amendments to the 1999 form of tribal-state compact
that allow them to operate an unlimited number of Class&nbsp;II
slot machines without the need for obtaining additional
licenses, subject to the payment of additional fees to the
state, including in recent cases, fees based on a percentage of
slot &#147;net win.&#148; Currently, neither the Jamul tribe nor
the Shingle Springs tribe have amended their tribal-state
compacts. If the compacts are not renegotiated and amended the
tribes could operate under their existing compacts which allow
for up to 350 Class&nbsp;III gaming devices and an unlimited
number of Class&nbsp;II gaming devices. This number of gaming
devices is adequate to equip the planned developments.
Therefore, Lakes believes the availability of additional slot
licenses is not an issue that could prevent the projects from
progressing. The Jamul project is currently planned to open with
349 Class&nbsp;III slot machines and approximate 1,650
Class&nbsp;II devices.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Pawnee Nation of Oklahoma</I></B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Business arrangement</U>:</I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In January 2005, Lakes entered into three gaming development and
consulting agreements (collectively &#147;Pawnee Development and
Consulting Agreements&#148;) and three separate management
contracts (collectively &#147;Pawnee Management Contracts&#148;)
with three wholly-owned subsidiaries of the Pawnee Tribal
Development Corporation (&#147;Pawnee TDC)&#148; referred to
collectively as the &#147;Pawnee Nation&#148; in connection with
assisting the Pawnee Nation in developing, equipping and
managing three separate casino destinations.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The largest of the casino resort developments will be located on
approximately 800&nbsp;acres of Indian gaming land owned by the
Pawnee Nation in northern Oklahoma near the Kansas border. This
project is planned to include a large first class casino, hotel
and meeting space, multiple restaurants and bar venues, an
entertainment and event center, a golf course and various other
casino resort amenities. The first phase of the project is
planned to include approximately 1,200 gaming devices, 24 table
games, a poker room, various restaurants and bars, a 150-room
hotel and parking.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Pawnee Nation currently operates a &#147;Travel Plaza&#148;
at the intersection of U.S.&nbsp;Highway 412 and State
Highway&nbsp;18, approximately 25&nbsp;miles from Stillwater,
Oklahoma. The Pawnee Nation intends to expand the Travel Plaza
to include gaming and has engaged Lakes to assist with this
project. When expanded, the planned project will open with
approximately 200 gaming devices and a full service restaurant
and bar.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As compensation for the performance of its obligations under the
management contract for each of these two locations, Lakes shall
be entitled to receive a fee of 30% of net income of the
respective casino (as defined in the contracts) for a period of
five to seven years, depending on the scope of the facilities,
less any amounts earned by any Company affiliate for consulting
on the two projects. The management contracts are subject to
approval of the NIGC and certain other conditions.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">61

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<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Pawnee Nation also operates its &#147;Trading Post&#148;
Casino, which currently includes approximately 65 gaming devices
along with a retail convenience store and gas station in the
town of Pawnee, Oklahoma. Lakes will assist in the management of
this project and in its expansion if the Pawnee Nation decides
to expand the casino. As compensation for its management
services on this project, Lakes will receive a management fee of
approximately 30% of net income, as defined in the agreement,
based on the incremental net income produced at this location
during the length of the management contract, expected to be
from five to seven years, depending on the scope of the
facilities, less any amounts earned by any Company affiliate for
consulting on the two projects subject to regulatory approval
and certain other conditions.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Prior to the approval of the Pawnee Management Contracts by the
NIGC, Lakes will provide services under the Pawnee Development
and Consulting Agreements to each of the three Pawnee casino
projects. Under these agreements Lakes will provide advances to
the Pawnee Nation, if needed, from time to time to each
particular project for preliminary development costs as agreed
to by Lakes and the Pawnee Nation. Any advances made will accrue
interest at prime plus two percent and be repayable in 24 equal
monthly installments beginning on the 25th&nbsp;day following
the opening date for the project if the loan has not previously
been repaid through the project permanent financing. The Pawnee
Development and Consulting Agreements are for 12&nbsp;years from
the effective date of the agreements or until the project
development fees and the project preliminary development loans
have been fully paid, whichever date is later, subject to early
termination. In addition to interest earned on the project
preliminary development loan, Lakes will receive a development
fixed fee equal to three percent of project costs at each
location and a monthly consulting flat fee for each of the three
projects of $5,000 for the Trading Post location, $25,000 for
the Travel Plaza location and $250,000 for the new casino, per
month for 120&nbsp;months. The above development fixed fees
shall be paid on the opening date of each of the projects. No
monthly consulting fixed fee is earned or paid prior to the
opening date of the project. After the opening date of the
project the monthly consulting fixed fee shall be due and paid
commencing on the 25th&nbsp;day of the following calendar month
and each successive month.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Pawnee Development and Consulting Agreements and Pawnee
Management Contracts are subject to NIGC review and include
provisions for an early buyout of the Pawnee Development and
Consulting Agreements and the Pawnee Management Contracts by the
Pawnee Nation.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Arrangement with Consultant.</I> The Company has executed an
agreement stipulating that Kevin Kean will be compensated for
his consulting services (relating to the Pawnee Nation) rendered
to the Company. Under this arrangement, subject to Mr.&nbsp;Kean
obtaining certain regulatory approvals, Mr.&nbsp;Kean will
receive 20&nbsp;percent of the Company&#146;s fee compensation
earned under the Pawnee Development and Consulting Agreements
and Pawnee Management Contracts with the Pawnee Nation (i.e.,
six percent of the incremental total net income or
20&nbsp;percent of the Company&#146;s 30&nbsp;percent share).
This agreement provides that payments will be due to
Mr.&nbsp;Kean when the Company is paid by the Pawnee Nation.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Lakes&#146; Evaluation of the three Pawnee Nation
    Projects</U>:</I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table outlines the status of each of the following
primary milestones necessary to complete the Pawnee Nation
projects as of January&nbsp;1, 2006:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="22%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- Right VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- Right VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- Right VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>&nbsp;Critical Milestone</B></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>New Casino Project</B></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Travel Plaza</B></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Trading Post</B></TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <I>Federal recognition of the tribe</I></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Possession of usable land corresponding with needs based on
    the Company&#146;s project plan</I></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes, the Pawnee Nation currently holds land in trust where the
    new casino will be built.</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes, the Pawnee Nation is currently leasing land from tribal
    members, which is held in trust for the individual tribal
    members by the United States Government. The BIA approved the
    lease</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes, the Trading Post is currently open.</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">62

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<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; ">

<TR style="font-size: 1pt;">
    <TD width="23%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD colspan="7" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>&nbsp;Critical Milestone</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>New Casino Project</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Travel Plaza</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Trading Post</B></TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD colspan="7" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    documents on January&nbsp;13, 2006.</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="7" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Usable land placed in trust by Federal government</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes, the Pawnee Nation currently holds land in trust where the
    Chilocco Casino will be built.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes, the Pawnee Nation is currently leasing land from tribal
    members, which is held in trust for the individual tribal
    members by the United&nbsp;States Government. The BIA approved
    the lease documents on January&nbsp;13, 2006.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes, the Trading Post is currently open.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="7" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Usable county agreement, if applicable</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    N/A</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    N/A</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    N/A</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="7" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Usable state compact that allows for gaming consistent with
    that outlined in the Company&#146;s project plan</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="7" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>NIGC approval of management contract in current and desired
    form</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, submitted to the NIGC for review on March&nbsp;22, 2005. The
    NIGC approved publication of the Final EA in December 2005 and
    no comments were received during the required 30-day comment
    period from the public. The NIGC is now able to issue a FONSI
    and approve the management contract, which is expected to occur
    in the first quarter of 2006.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, submitted to the NIGC for review on March&nbsp;22, 2005. The
    NIGC approved publication of the Final EA in December 2005 and
    no comments were received during the required 30-day comment
    period from the public. The NIGC is now able to issue a FONSI
    and approve the management contract, which is expected to occur
    in the first quarter of 2006.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, submitted to the NIGC for review on March&nbsp;22, 2005.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="7" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Resolution of all litigation and legal obstacles</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    None at this time.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    None at this time.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    None at this time.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="7" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Financing for construction</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, preliminary discussions with lending institutions has
    occurred and the Pawnee Nation expects to issue a request for
    proposal in the first quarter of fiscal 2006.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, a preliminary proposal was received from a bank in December
    2005 and on- going discussions continue with an expected final
    proposal in the first quarter of fiscal 2006.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    None needed.</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">63

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<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; ">

<TR style="font-size: 1pt;">
    <TD width="23%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD colspan="7" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>&nbsp;Critical Milestone</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>New Casino Project</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Travel Plaza</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Trading Post</B></TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD colspan="7" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="7" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Any other significant project milestones or contingencies,
    the outcome of which could have a material affect on the
    probability of project completion as planned</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No others known at this time by Lakes.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, the acquisition of other tribal land needs to be approved by
    the BIA.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No others known at this time by Lakes.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="7" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Lakes&#146; evaluation and conclusion regarding the above
    critical milestones and progress:</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Long-term assets have been recorded as it is considered probable
that the three Pawnee Nation Projects will result in economic
benefit to Lakes sufficient to recover Lakes investment. Based
upon the above status of all primary milestones and the
projected fees to be earned under the consulting agreements and
management contracts, no impairment has been recorded. The
Pawnee Trading Post is currently open and operating and the
refurbishments were completed in the fourth quarter of fiscal
2005. The Pawnee Travel Plaza is currently open and expansion
could be completed to include gaming as early as mid 2006. The
Pawnee new casino project could open as early as mid 2007.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Iowa Tribe of Oklahoma</I></B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Business arrangement</U>:</I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On March&nbsp;15, 2005, the Company, through its wholly-owned
subsidiaries, entered into consulting agreements and management
contracts with the Iowa Tribe of Oklahoma, a federally
recognized Indian Tribe, and The Iowa Tribe of Oklahoma, a
federally-chartered corporation (collectively, the &#147;Iowa
Tribe&#148;). The agreements are effective as of
January&nbsp;27, 2005. The Company will provide consulting
services to assist the Iowa Tribe with two separate casino
destinations in Oklahoma including (i)&nbsp;assisting in
developing a new first class casino and ancillary amenities and
facilities to be located on Indian land approximately
25&nbsp;miles northeast of Oklahoma City along Route 66 (the
&#147;Development Project&#148;); and (ii)&nbsp;assisting with
operational efforts at the Iowa Tribe&#146;s existing Cimarron
Casino, located in Perkins Oklahoma (the &#147;Cimarron
Casino&#148;). The Company will also provide management services
for the Tribe&#146;s casino operations at each location subject
to regulatory approval.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Each of the projects has a gaming consulting agreement
(&#147;Iowa Consulting Agreement&#148;) and a management
contract (&#147;Iowa Management Contract&#148;), independent of
the other project. Key terms relating to the agreements for the
projects are as follows:
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>The Development Project.</I> For its gaming development
consulting services under the Iowa Consulting Agreement related
to the Development Project, the Company will receive a
development fee of two percent of the project costs of the
Development Project, paid upon the opening of the Development
Project, and a flat monthly fee of $500,000 for a period of
120&nbsp;months commencing upon the opening of the project.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has agreed to make advances to the Iowa Tribe,
subject to a project budget to be agreed upon by the Company and
the Iowa Tribe and certain other conditions. The development
loan will be for preliminary development costs under the
Development Project budget. The Company has also agreed to use
reasonable efforts to assist the Iowa Tribe in obtaining
permanent financing for any projects developed under the Iowa
Consulting Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Iowa Management Contract for the Development Project is
subject to the approval of the NIGC and certain other
conditions. For its performance under the Iowa Management
Contract, the Company will be entitled to receive management
fees of approximately 30% of net income, as defined in the
agreement, for each month during the term of the Iowa Management
Contract less any amounts earned by any Company affiliate for
consulting on the Development Project. The Iowa Management
Contract term is seven years from the first day that the Company
is able to commence management of the Development Project gaming
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">64

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<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
operations under all legal and regulatory requirements (the
&#147;Commencement Date&#148;), provided that the Iowa Tribe has
the right to buy out the remaining term of the Iowa Management
Contract after the Development Project has been in continuous
operation for 60&nbsp;months, for an amount based on the then
present value of estimated future management fees. If the Iowa
Tribe elects to buy-out the contract, all outstanding amounts
owed to Lakes become payable if not already paid. Subject to
certain conditions, the Company agrees to make advances for the
Development Project&#146;s working capital requirements, if
needed, during the first six months after the Commencement Date.
The advances are to be repaid through an operating note payable
from revenues generated by future operations of the Development
Project bearing interest at two percent over the prime rate. The
Company also agrees to fund any shortfall in certain minimum
monthly Development Project payments to the Iowa Tribe by means
of non-interest bearing advances under the same operating note.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Cimarron Casino.</I> The Company has entered into a separate
gaming consulting agreement (&#147;Cimarron Consulting
Agreement&#148;) and management contract (&#147;Cimarron
Management Contract&#148;) with the Iowa Tribe with respect to
the Cimarron Casino. Many of the material provisions of these
two agreements are similar to those for the Development Project,
except that: (i)&nbsp;the Cimarron Consulting Agreement is
primarily for services related to the existing operations (with
the possibility of further development); (ii)&nbsp;the Company
will provide up to a $1&nbsp;million business improvement loan
rather than a preliminary development loan; (iii)&nbsp;the fee
under the Cimarron Consulting Agreement will consist entirely of
a limited flat monthly fee of $50,000; and (iv)&nbsp;the annual
fee under the Cimarron Management Contract will be 30% of net
income in excess of $4&nbsp;million (reduced by any amounts
earned by any Company affiliate for consulting services under
the Cimarron Consulting Agreement).
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Arrangement with Consultant.</I> The Company has executed an
agreement stipulating that Kevin Kean will be compensated for
his consulting services (relating to the Iowa Tribe) rendered to
the Company. Under this arrangement, subject to Mr.&nbsp;Kean
obtaining certain regulatory approvals, Mr.&nbsp;Kean will
receive 20&nbsp;percent of the Company&#146;s fee compensation
that is received under the Iowa Consulting Agreement, Cimarron
Consulting Agreement, Iowa Management Contract and Cimarron
Management Contract with the Iowa Tribe (i.e., six percent of
the incremental total net income or 20&nbsp;percent of the
Company&#146;s 30 percent share). This agreement provides that
payments will be due to Mr.&nbsp;Kean when the Company is paid
by the Iowa Tribe.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Lakes&#146; Evaluation of the two Iowa Tribe
    Projects</U>:</I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table outlines the status of each of the following
primary milestones necessary to complete the Iowa Tribe projects
as of January&nbsp;1, 2006:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="31%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- Right VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- Right VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="31%">&nbsp;</TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Development Project</B></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Cimarron Casino</B></TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <I>Federal recognition of the tribe</I></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Possession of usable land corresponding with needs based on
    the Company&#146;s project plan</I></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes, the Iowa Tribe is currently leasing and acquiring land from
    tribal members, which is held in trust for the individual tribal
    members by the United States Government. These transactions will
    need to be approved by the BIA.</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes, currently an open casino.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Usable land placed in trust by Federal government</I></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes, the Iowa Tribe is currently leasing and acquiring land from
    tribal members, which is held in trust for the individual tribal
    members by the United States Government. These transactions will
    need to be approved by the BIA.</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes, currently an open casino.</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">65

<!-- PAGEBREAK -->
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; ">

<TR style="font-size: 1pt;">
    <TD width="32%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="31%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="31%">&nbsp;</TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Development Project</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Cimarron Casino</B></TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Usable county agreement, if applicable</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    N/A</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    N/A</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Usable state compact that allows for gaming consistent with
    that outlined in the Company&#146;s project plan</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>NIGC approval of management contract in current and desired
    form</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, submitted to the NIGC for review on April 22, 2005. An EA
    will be prepared in order for the management contract to be
    approved.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, submitted to the NIGC for review on April 22, 2005. The NIGC
    has provided comments on the initial management contract and the
    Iowa Tribe has issued a response and a revised management
    contract in January 2006.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Resolution of all litigation and legal obstacles</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    None at this time, the acquisition of other tribal land needs to
    be approved by the BIA.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    None at this time.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Financing for construction</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, preliminary discussions with lending institutions has
    occurred.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Permanent financing was obtained from a lending institution in
    December 2005 and Lakes was repaid all amounts outstanding under
    the business improvement loan.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Any other significant project milestones or contingencies,
    the outcome of which could have a material affect on the
    probability of project completion as planned</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No others known at this time by Lakes.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No others known at this time by Lakes.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Lakes&#146; evaluation and conclusion regarding the above
    critical milestones and progress:</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Long-term assets have been recorded as it is considered probable
that the two Iowa Tribe Projects will result in economic benefit
to Lakes sufficient to recover Lakes investment. Based upon the
above status of all primary milestones and the projected fees to
be earned under the consulting agreements and management
contracts, no impairment has been recorded. The Cimarron Casino
is currently open and refurbishment of the casino could be
completed as early as mid 2006. The Development Project could
open as early as late 2007.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Kickapoo Tribe</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes entered into consulting agreements and management
contracts with the Kickapoo Tribe effective January 2005 to
improve the performance of the gaming operations conducted at
the Kickapoo Tribe&#146;s existing Lucky Eagle Casino in Eagle
Pass, Texas, located approximately 140&nbsp;miles southwest of
San&nbsp;Antonio. During the third quarter of fiscal 2005 the
Company&#146;s relationship with the Kickapoo Tribe deteriorated
and in November 2005, Lakes and the Kickapoo Tribe terminated
their business relationship. Lakes recognized an impairment
charge of $0.1&nbsp;million related to the intangible asset
related to the acquisition of the management contract during the
third quarter of fiscal 2005. In addition during fiscal 2005,
the Company recorded an unrealized loss on notes receivable of
$6.2&nbsp;million related to the Kickapoo project. Included in
the $6.2&nbsp;million are unrealized losses of approximately
$3.9&nbsp;million related to project costs incurred that Lakes
may be required to pay as a result of the terminated
relationship, and approximately $2.3&nbsp;million related to
advances made by Lakes on the note receivable from the Kickapoo
Tribe. As of January&nbsp;1, 2006, Lakes owns approximately
18&nbsp;acres of land near the Kickapoo site with a cost basis
of approximately $0.7&nbsp;million.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">66

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company is negotiating with the Kickapoo Tribe to resolve
all of the financial terms of the contracts including repayment
of the advances, payment of unpaid project costs incurred, a
sale of the land owned by Lakes to the Kickapoo Tribe, and to
formally terminate the gaming operations consulting agreement,
management contract, and related ancillary agreements relating
to the project.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Nipmuc Nation</I></B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>Business arrangement:</I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In July 2001, Lakes entered into development and management
agreements with the Nipmuc Nation for a potential future casino
resort in the eastern United States.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Nipmuc Nation is a state-recognized tribe. In January 2001,
the Nipmuc Nation received a draft, preliminary factual finding
from the Assistant Secretary&nbsp;&#151; Indian Affairs
(&#147;AS&nbsp;&#151; IA&#148;) indicating that the Nipmuc
Nation was entitled to federal recognition. Based on these
facts, as well as the Company&#146;s evaluation of the
project&#146;s geographic location and the feasibility of the
project&#146;s success given such location, the structure and
stability of the tribal government, the scope of the proposed
project, including the physical scope of the contemplated
facility and the expected financial scope of the related
development, and the nature of the business opportunity, Lakes
entered into a development and management contract with the
Nipmuc Nation in July 2001.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table represents the status of each of the
critical milestones as of December&nbsp;28, 2003. Both the
positive and negative evidence was reviewed during Lakes&#146;
evaluation of the critical milestones.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="48%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- Right VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>&nbsp;Critical Milestone</B></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>December&nbsp;28, 2003</B></TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <I>Federal recognition of the tribe</I></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, see discussion below.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Possession of usable land corresponding with needs based on
    the Company&#146;s project plan</I></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes, Lakes had land options where the casino could be built
    pending BIA approval and placement into trust by the federal
    government.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Usable land placed in trust by Federal government</I></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, Lakes had land options on behalf of the Nipmuc Nation where
    the casino would be built pending BIA approval and placement
    into trust by the federal government. This process would occur
    after the pending resolution of federal recognition of the tribe</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Usable county agreement, if applicable</I></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    N/A</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Usable state compact that allows for gaming consistent with
    that outlined in the Company&#146;s project plan</I></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, The Nipmuc Nation did not have a compact with the state. The
    process for receiving a state compact would occur after
    resolution of federal recognition</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>NIGC approval of management contract in current and desired
    form</I></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, The process of receiving NIGC approval of the management
    contract would occur after the Nipmuc Nation received federal
    recognition, usable land was placed into trust with the federal
    government and a state compact was signed.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Resolution of all litigation and legal obstacles</I></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    None</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Financing for construction</I></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Any other significant project milestones or contingencies,
    the outcome of which could have a material affect on the
    probability of project completion as planned</I></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No others known at this time by Lakes.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">67

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<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Lakes&#146; evaluation and conclusion regarding the above
    critical milestones and progress:</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During the second quarter of 2004, the BIA issued its final
determination denying the Nipmuc Nation&#146;s application for
federal recognition. At that time, Lakes recorded an impairment
charge of $5.8&nbsp;million related to long-term assets related
to the Nipmuc Nation project. Lakes also recorded a realized
loss on notes receivable of $0.8&nbsp;million related to the
fair value of the note receivable from the Nipmuc Nation.
Although the Nipmuc Nation is appealing the determination with
the BIA, Lakes made a decision to discontinue funding the project
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Nipmuc Nation is a state recognized tribe. In January 2001,
the Nipmuc Nation received a draft, preliminary factual finding
from the AS&nbsp;&#151; IA indicating that the Nipmuc Nation was
entitled to federal recognition. This finding, however, did not
have the approval of the Office of the Solicitor of the
Department of Indian Affairs, as required, and in fact, the
Office of the Solicitor had approved the recommendation of the
BIA, which recommended a proposed negative finding. In September
2001, the Nipmuc Nation received the official proposed negative
finding, as evidenced by its publication in the October&nbsp;1,
2001 Federal Register. As required under law, the Nipmuc Nation
was permitted to challenge the proposed negative finding, which
the Nipmuc Nation chose to do. The Nipmuc Nation engaged
consultants and advisors, including the former Senior Historian
for the BIA Branch of Acknowledgement and Research to assist
them in submitting a formal response in September 2002. The
response was organized in a manner to address the four remaining
deficiencies outlined in the BIA&#146;s published proposed
negative finding. Indications to Lakes from the Nipmuc Nation
and its consultants and advisors throughout the process of
preparing the response were very positive about obtaining a
reversal of the proposed negative finding. During 2003, Lakes
continued to believe it was probable the Nipmuc Nation would
become a federally recognized tribe because Lakes received
advice from independent third-party consultants and advisors
that supported a favorable ruling. As a result of this analysis,
Lakes believed that, notwithstanding the proposed negative
finding, it was probable that the Nipmuc Nation would likely be
granted federal recognition based on additional genealogical
data and other information submitted by the Nipmuc Nation to the
BIA for reconsideration. During the second quarter of 2004,
however, the BIA issued its final determination denying the
Nipmuc Nation&#146;s application for federal recognition.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The other critical milestones relating to the project were
pending the above federal recognition issue discussed above but
Lakes believed it was probable the Nipmuc Nation would
eventually be successful in obtaining a compact with the State
if necessary, NIGC approval of the development and management
contract, land placed into trust by the BIA and third party
financing.
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Cloverdale Rancheria</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On August&nbsp;10, 2000, the Company entered into a joint
venture for the purpose of financing and developing gaming
facilities on Indian-owned land in California. Under the
agreement, Lakes formed a joint venture limited liability
company with MRD Gaming, a limited liability company
(&#147;MRD&#148;). The venture between Lakes and MRD held the
contract to finance casino facilities with the Cloverdale
Rancheria of Pomo Indians (&#147;Cloverdale Rancheria&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The planned site for the potential new casino development is
located on Highway 101 in Cloverdale, California, approximately
60&nbsp;miles north of San&nbsp;Francisco.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table represents the status of each of the
critical milestones as of December&nbsp;28, 2003. Both the
positive and negative evidence was reviewed during Lakes&#146;
evaluation of the critical milestones.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="49%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>&nbsp;Critical Milestone</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>December&nbsp;28, 2003</B></TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <I>Federal recognition of the tribe</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Possession of usable land corresponding with needs based on
    the Company&#146;s project plan</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No; However, the Cloverdale Rancheria had reached an agreement
    with a member of the tribe, to lease 12&nbsp;acres of Indian
    land for the purpose of conducting gaming. The tribe had the
    authority to conduct gaming on the site; however, the lease was
    subject to approval by the Secretary of the Interior.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">68

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<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; ">

<TR style="font-size: 1pt;">
    <TD width="49%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>&nbsp;Critical Milestone</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>December&nbsp;28, 2003</B></TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <I>Usable land placed in trust by Federal government</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, the land had not yet been put into trust. In a decision in
    1999, the Board of Indian Appeals in the Department of the
    Interior had held that the Secretary of the Interior had an
    obligation to accept title to the tribal members property in the
    name of the United States in trust for the tribal member,
    subject to the tribal member being able to convey marketable
    title to the United States. The process was delayed as a result
    of price negotiation between the tribe and the individual tribal
    member.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Usable county agreement, if applicable</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    N/A</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Usable state compact that allows for gaming consistent with
    that outlined in the Company&#146;s project plan</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No, according to the legal opinion, the Cloverdale Rancheria had
    not yet entered into a gaming compact with the State of
    California. However, the tribe intended to submit a request for
    a Class&nbsp;III gaming compact identical in all material
    respects to compacts entered into in 1999 by approximately 57
    Indian tribes and subsequently ratified by the State of
    California. Therefore, we believed that the compact was likely
    to be approved. Indian tribes have the right to operate
    Class&nbsp;II gaming operations without a compact with the state.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>NIGC approval of management contract in current and desired
    form</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    N/A, there was no management agreement between the Company and
    the Cloverdale Rancheria.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Resolution of all litigation and legal obstacles</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    None</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Financing for construction</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    No</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <I>Any other significant project milestones or contingencies,
    the outcome of which could have a material affect on the
    probability of project completion as planned</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Yes, the form of the agreement between the joint venture and the
    tribe received a &#145;declination&#145; letter from the NIGC
    thus allowing the project to go forward in accordance with the
    agreement.</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Lakes&#146; evaluation and conclusion regarding the above
    critical milestones and progress:</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During the fourth quarter of 2004, Lakes wrote-off its long-term
assets related to the Cloverdale project after determining that
it was not probable that the casino project would open.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
After further evaluation of the site, Lakes proposed to the
Cloverdale Rancheria that the agreements be changed to include a
management contract to assist the Cloverdale Rancheria with a
bigger and better project. The Cloverdale Rancheria offered a
counter proposal. Lakes and the Cloverdale Rancheria could not
reach agreement on a new management contract. The Cloverdale
Rancheria then notified the venture between Lakes and MRD during
2002 that the Cloverdale Rancheria wished to terminate the
relationship between the two parties. The partnership advised
the Cloverdale Rancheria that the partnership believed the
contract to be enforceable. In a written response, the
Cloverdale Rancheria acknowledged that although the partnership
loaned the Cloverdale Rancheria money and that it would endeavor
to repay the money in a timely manner, it believed there was no
valid, enforceable contract. Subsequently, the Cloverdale
Rancheria refused to respond to a formal confirmation request of
the money owed to Lakes and the Cloverdale Rancheria&#146;s
sovereign status makes enforcement of Lakes&#146; asserted
contractual rights difficult and uncertain.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;28, 2003, Lakes had an outstanding note
receivable of $0.3&nbsp;million. Additionally, Lakes had
recorded an accrued expense of $0.6&nbsp;million, which was on
the consolidated balance sheet as of December&nbsp;28, 2003. The
accrual represented a potential liability of Lakes to an
unrelated third party which
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">69
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<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
was payable upon the opening of the casino. During the fourth
quarter of 2004 Lakes determined successful completion of the
casino development was not likely given increased local
opposition to the planned casino project. Specifically the
County Board of Supervisors voted in February 2005 to oppose any
casino project in their County. Therefore, in 2004 the Company
recorded an unrealized loss on notes receivable of
$0.3&nbsp;million related to the fair value of its note
receivable from the Cloverdale Rancheria. Lakes also wrote-off
of an accrued liability related to the project of
$0.6&nbsp;million, which was only payable if the casino opened.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Litigation Costs:</I></B> The Company does not accrue for
estimated future litigation defense costs, if any, to be
incurred by the Company in connection with outstanding
litigation and other disputed matters but instead, records such
costs as the related legal and other services are rendered.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Income Taxes: </I></B>In accordance with Statement of
Financial Accounting Standards No.&nbsp;109, <I>Accounting for
Income Taxes (SFAS&nbsp;No.&nbsp;109)</I>, Lakes evaluated the
ability to utilize deferred tax assets arising from net
operating loss carry forwards, net deferred tax assets relating
to Lakes&#146; accounting for advances made to Indian tribes and
other ordinary items and determined that a valuation allowance
was appropriate at January&nbsp;1, 2006 and January&nbsp;2,
2005. Lakes evaluated all evidence and determined the negative
evidence relating to net losses generated over the past four
years outweighed the current positive evidence that the Company
believes exists surrounding its ability to generate significant
income from its long-term assets related to Indian casino
projects. The Company recorded a 100% valuation allowance
against these items at January&nbsp;1, 2006 and January&nbsp;2,
2005 based upon the above factors. The Company has established
deferred tax assets related to unrealized investment losses and
related carryovers as of January&nbsp;1, 2006 and
January&nbsp;2, 2005. The Company believes it will have
sufficient capital gains in the foreseeable future to utilize
these benefits due to significant appreciation in its investment
in WPTE. The Company owns approximately 12.5&nbsp;million shares
of WPTE common stock valued at approximately $83.5&nbsp;million
as of February&nbsp;27, 2006 based upon the closing stock price
as reported by Nasdaq on February&nbsp;27, 2006 of $6.69.
Lakes&#146; basis in the WPTE common stock is minimal.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Stock-based compensation: </I></B>To date, we have
accounted for equity-based employee compensation under the
recognition and measurement principles of Accounting Principles
Board (&#147;APB&#148;) Opinion No.&nbsp;25, <I>Accounting for
Stock Issued to Employees </I>and related Interpretations.
However, Statement of Financial Accounting Standards
No.&nbsp;123 (revised 2004), <I>Share-Based Payment
</I>(SFAS&nbsp;No.&nbsp;123R) was issued in December 2004 and
requires that compensation cost related to share-based employee
compensation transactions be recognized in the financial
statements. Share-based employee compensation transactions
within the scope of SFAS&nbsp;No.&nbsp;123R include stock
options, restricted stock plans, performance-based awards, stock
appreciation rights and employee share purchase plans. We have
not completed our evaluation or determined the future impact of
adopting SFAS&nbsp;No.&nbsp;123R, which may be material to our
results of operations when adopted, effective for fiscal year
2006, beginning on January&nbsp;2, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I>Other Recent Accounting Pronouncements: </I></B>In May
2005, the FASB issued SFAS&nbsp;No.&nbsp;154, Accounting Changes
and Error Corrections, a replacement of APB Opinion No.&nbsp;20
and SFAS&nbsp;No.&nbsp;3. SFAS&nbsp;No.&nbsp;154 replaces APB
Opinion No.&nbsp;20, Accounting Changes and
SFAS&nbsp;No.&nbsp;3, Reporting Accounting Changes in Interim
Financial Statements and changes the requirement for the
accounting for and reporting of a change in accounting
principles whenever the newly adopted standard does not include
specific transition provisions. The provisions of
SFAS&nbsp;No.&nbsp;154 will be effective for accounting changes
made in the fiscal year beginning after December&nbsp;15, 2005.
We do not presently expect to enter into any accounting changes
in the foreseeable future that would be affected by adopting
SFAS&nbsp;No.&nbsp;154 when it becomes effective.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><U>Seasonality</U></B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company believes that the operations of all casinos to be
managed by the Company will be affected by seasonal factors,
including holidays, weather and travel conditions. WPTE&#146;s
license revenues are affected by the timetable for delivery of
episodes to TRV.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">70

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<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><U>Regulation and Taxes</U></B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company and the casinos to be managed by the Company are
subject to extensive regulation by state gaming authorities. The
Company will also be subject to regulation, which may or may not
be similar to current state regulations, by the appropriate
authorities in any jurisdiction where it may conduct gaming
activities in the future. Changes in applicable laws or
regulations could have an adverse effect on the Company.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The gaming industry represents a significant source of tax
revenues to regulators. From time to time, various federal
legislators and officials have proposed changes in tax law, or
in the administration of such law, affecting the gaming
industry. It is not possible to determine the likelihood of
possible changes in tax law or in the administration of such
law. Such changes, if adopted, could have a material adverse
effect on the Company&#146;s future financial position, results
of operations and cash flows.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><U>Off-Balance Sheet Arrangements</U></B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has no off-balance sheet arrangements that have or
are reasonably likely to have a current or future effect on its
financial condition, changes in financial condition, revenues or
expenses, results of operations, liquidity, capital expenditures
or capital resources that is material to investors, except for
the financing commitments previously discussed.
</DIV>

<!-- link2 "ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="10%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD><B>ITEM&nbsp;7A.</B></TD>
    <TD>
    <B><I>QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET
    RISK</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s financial instruments include cash and cash
equivalents and marketable securities. The Company&#146;s main
investment objectives are the preservation of investment capital
and the maximization of after-tax returns on its investment
portfolio. Consequently, the Company invests with only
high-credit-quality issuers and limits the amount of credit
exposure to any one issuer. The Company does not use derivative
instruments for speculative or investment purposes.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s cash and cash equivalents are not subject to
significant interest rate risk due to the short maturities of
these instruments. As of January&nbsp;1, 2006, the carrying
value of the Company&#146;s cash and cash equivalents
approximates fair value. The Company also holds short-term
investments consisting of marketable debt securities
(principally consisting of commercial paper, corporate bonds,
and government securities) having a weighted average duration of
one year or less. Consequently, such securities are not subject
to significant interest rate risk.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s primary exposure to market risk associated
with changes in interest rates involves the Company&#146;s
long-term assets related to Indian casino projects in the form
of notes receivable due from its tribal partners for the
development and construction of Indian-owned casinos. The loans
earn interest based upon a defined reference rate. The floating
interest rate will generate more or less interest income if
interest rates rise or fall.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes&#146; notes receivable from Indian tribes related to
properties under development bear interest generally at prime
plus one percent or two percent, however, the interest is only
payable if the casino is successfully opened and distributable
profits are available from casino operations. Lakes records its
notes receivable at fair value and subsequent changes in fair
value are recorded as income or expense in the Company&#146;s
consolidated statement of operations. As of January&nbsp;1,
2006, Lakes had $87.1&nbsp;million of notes receivable, at fair
value with a floating interest rate (principal amount of
$105.7&nbsp;million, excluding advances to the Kickapoo Tribe).
Based on the applicable current reference rates and assuming all
other factors remain constant, interest income for a twelve
month period would be approximately $9.3&nbsp;million. A
reference rate increase of 100&nbsp;basis points would result in
an increase in interest income of $1.1&nbsp;million. A
100&nbsp;basis point decrease in the reference rate would result
in a decrease of $1.1&nbsp;million in interest income over the
same twelve-month period.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">71

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<!-- link2 "ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>ITEM&nbsp;8.</B></TD>
    <TD>
    <B><I>FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA</I></B></TD>
</TR>

</TABLE>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>INDEX TO CONSOLIDATED FINANCIAL STATEMENTS</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="90%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Page</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Report of Independent Registered Public Accounting Firm</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Report of Independent Registered Public Accounting Firm</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>74</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidated Balance Sheets as of January&nbsp;1, 2006 and
    January&nbsp;2, 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>75</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidated Statements of Loss for the fiscal years ended
    January&nbsp;1, 2006, January&nbsp;2, 2005 and December&nbsp;28,
    2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>76</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidated Statements of Comprehensive Loss for the fiscal
    years ended January&nbsp;1, 2006, January&nbsp;2, 2005 and
    December&nbsp;28, 2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>77</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidated Statements of Shareholders&#146; Equity for the
    fiscal years ended January&nbsp;1, 2006, January&nbsp;2, 2005
    and December&nbsp;28, 2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>78</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidated Statements of Cash Flows for the fiscal years ended
    January&nbsp;1, 2006, January&nbsp;2, 2005 and December&nbsp;28,
    2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>79</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Notes to Consolidated Financial Statements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>80</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">72

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<!-- link1 "REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON FINANCIAL STATEMENTS" -->

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><U>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING</U></B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B><U>FIRM ON FINANCIAL STATEMENTS</U></B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Board of Directors
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
Lakes Entertainment, Inc. and Subsidiaries
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
Minnetonka, Minnesota
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have audited the accompanying consolidated balance sheet of
Lakes Entertainment, Inc. and Subsidiaries (the Company) as of
January&nbsp;1, 2006, and the related consolidated statement of
loss, comprehensive loss, shareholders&#146; equity and cash
flows for the year then ended. These financial statements are
the responsibility of the Company&#146;s management. Our
responsibility is to express an opinion on these financial
statements based on our audit.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial
position of Lakes Entertainment, Inc. and Subsidiaries as of
January&nbsp;1, 2006, and the results of its operations and its
cash flows for the year then ended, in conformity with
accounting principles generally accepted in the United States.
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    /s/ Piercy Bowler Taylor&nbsp;&#38; Kern</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Piercy Bowler Taylor&nbsp;&#38; Kern, Certified Public
Accountants
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
and Business Advisors a Professional Corporation
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Las Vegas, Nevada
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
February&nbsp;17, 2006
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">73

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<!-- link1 "Report of Independent Registered Public Accounting Firm" -->

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Report of Independent Registered Public Accounting Firm</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
To the Board of Directors and Shareholders of Lakes
Entertainment, Inc.:
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
Minnetonka, Minnesota
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have audited the accompanying consolidated balance sheets of
Lakes Entertainment, Inc. and subsidiaries (the
&#147;Company&#148;) as of January&nbsp;2, 2005, and the related
consolidated statements of loss, comprehensive loss,
shareholders&#146; equity, and cash flows for each of the two
years in the period ended January&nbsp;2, 2005. These financial
statements are the responsibility of the Company&#146;s
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In our opinion, such consolidated financial statements present
fairly, in all material respects, the financial position of
Lakes Entertainment Inc. and subsidiaries as of January&nbsp;2,
2005, and the results of their operations and their cash flows
for each of the two years in the period ended January&nbsp;2,
2005 in conformity with accounting principles generally accepted
in the United States of America.
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    DELOITTE&nbsp;&#38; TOUCHE LLP</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Minneapolis, Minnesota
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
November&nbsp;30, 2005
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">74

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<!-- link1 "Consolidated Balance Sheets" -->

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Consolidated Balance Sheets</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>January&nbsp;1, 2006 and January&nbsp;2, 2005</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="63%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>January&nbsp;1,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>January&nbsp;2,</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2006</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>(In thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="10" align="center" valign="top">
    <B>ASSETS</B></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current Assets:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash and cash equivalents</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>9,912</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>28,717</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    (balance includes $1.7&nbsp;million and $4.5&nbsp;million of WPT
    Enterprises, Inc. cash)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Short-term investments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,735</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28,930</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    (balance includes $26.7&nbsp;million and $27.8&nbsp;million of
    WPT Enterprises, Inc. short-term investments)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts receivable, net of allowance of $0.1&nbsp;million and
    $0.1&nbsp;million</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,072</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,038</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred tax asset</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>137</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Prepaid expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>614</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,233</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other current assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,130</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,159</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total current assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42,463</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>62,214</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Property and equipment, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,451</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,795</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term assets related to Indian casino projects:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Notes receivable from Indian tribes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>87,062</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67,066</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Land held for development</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,248</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,433</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Intangible assets related to acquisition of management
    contracts, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46,088</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41,096</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,360</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,024</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total long-term assets related to Indian casino projects</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>152,758</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>125,619</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other assets:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Investments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,640</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,093</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred tax asset</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,852</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,278</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other long-term assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,446</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,090</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total other assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,938</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,461</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Total Assets</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>230,610</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>209,089</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="10">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="10" align="center" valign="top">
    <B>LIABILITIES AND SHAREHOLDERS&#146; EQUITY</B></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current Liabilities:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>8,394</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>780</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income taxes payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,933</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,457</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued payroll and related costs</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,125</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>891</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred revenue</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,280</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other accrued expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,159</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,449</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total current liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,761</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,857</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term liabilities, related party</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Total Liabilities</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37,761</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,857</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Commitments and Contingencies</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Common shares issued by subsidiary subject to repurchase</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>618</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Minority interest in subsidiary</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,466</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,222</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Shareholders&#146; Equity:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capital stock, $.01&nbsp;par value; authorized
    200,000&nbsp;shares; 22,300 and 22,253 common shares issued and
    outstanding at January&nbsp;1, 2006, and January&nbsp;2, 2005,
    respectively</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>223</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>223</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Additional paid-in-capital</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>154,301</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>157,895</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Retained earnings</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,410</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,280</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accumulated other comprehensive gain (loss)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,449</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Total shareholders&#146; equity</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>178,383</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>183,392</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Total Liabilities and Shareholders&#146; Equity</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>230,610</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>209,089</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
See notes to financial statements.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">75

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<!-- link1 "Consolidated Statements of Loss" -->

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>Consolidated Statements of Loss</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>Years ended January&nbsp;1, 2006, January&nbsp;2, 2005 and
December&nbsp;28, 2003</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="54%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(In thousands, except per share data)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Revenues:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    License fee income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>14,887</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>15,785</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>3,884</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Host fees, sponsorship and other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,176</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,772</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>384</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consulting and development fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>159</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,222</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,557</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,268</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Costs and Expenses:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Selling, general and administrative</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28,553</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,447</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,918</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Production costs</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,987</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,244</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,687</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net impairment losses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>882</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,244</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>469</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>598</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>547</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Costs and Expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39,891</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,533</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,152</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Net unrealized gain on notes receivable</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,215</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,054</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,452</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Loss From Operations</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(16,454</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(12,922</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,432</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Other Income (Expense):</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,631</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>775</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>632</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest expense, related party</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(66</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Legal settlement received</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>158</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total other income, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,564</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,065</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>790</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Loss before income taxes, equity in earnings (loss) of
    unconsolidated investees and minority interest in net income
    (loss) of subsidiary</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(14,890</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(857</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,642</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income tax provision (benefit)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,161</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,042</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,017</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Loss before equity in earnings (loss) of unconsolidated
    investees and minority interest in net income (loss) of
    subsidiary</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(13,729</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,899</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,625</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity in earnings (loss) of investees, net of tax</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>748</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(144</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Loss before minority interest</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(13,721</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,151</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,769</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Minority interest in net loss of subsidiary</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,851</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>110</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Net Loss</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(11,870</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(4,041</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(1,769</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Loss per share&nbsp;&#151; basic and diluted</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(0.53</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(0.18</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(0.08</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Weighted average common shares outstanding&nbsp;&#151; basic
    and diluted</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,109</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,314</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
See notes to financial statements.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">76

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<!-- link1 "Consolidated Statements of Comprehensive Loss" -->

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Consolidated Statements of Comprehensive Loss</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>Years ended January&nbsp;1, 2006, January&nbsp;2, 2005 and
December&nbsp;28, 2003</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="61%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(In thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Net Loss</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(11,870</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(4,041</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(1,769</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Other comprehensive earnings (loss), net of tax:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unrealized gains (losses) on securities:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unrealized holding gains (losses) during the period</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,455</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Comprehensive Loss</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(1,415</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(4,047</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(1,769</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
See notes to financial statements.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">77

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<!-- link1 "Consolidated Statements of Shareholders&#146; Equity" -->

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>Consolidated Statements of Shareholders&#146; Equity</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>Years ended January&nbsp;1, 2006, January&nbsp;2, 2005 and
December&nbsp;28, 2003</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="29%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Accumulated</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Other</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Common Stock</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Additional</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Comprehensive</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Paid-in-</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Retained</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Earnings</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shareholders&#146;</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amount</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Capital</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Earnings</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Loss)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Equity</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>(In thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance, December&nbsp;30, 2002</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,276</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>213</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>131,418</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>31,090</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>162,721</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Issuance of stock on options exercised&nbsp;&#151; net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>198</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>567</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>569</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tax benefits from exercise of common stock options</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>306</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>306</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net loss</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,769</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,769</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance, December&nbsp;28, 2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,474</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>215</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>132,291</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,321</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>161,827</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other comprehensive loss, net of tax</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Issuance of stock on options exercised&nbsp;&#151; net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>779</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,576</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,584</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Subsidiary stock options issued to consultants and employees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,574</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,574</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net proceeds from issuance of common stock by subsidiary</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,454</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,454</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net loss</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,041</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,041</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance, January&nbsp;2, 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,253</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>223</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>157,895</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,280</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>183,392</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other comprehensive earnings, net of tax</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,455</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,455</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Issuance of stock on options exercised&nbsp;&#151; net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>47</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>150</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Subsidiary stock options issued to consultants and employees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>703</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>703</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net proceeds from issuance of common stock by subsidiary</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Expiration of repurchase commitment of subsidiary common shares</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>619</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>619</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net increase in minority interest in subsidiary equity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,095</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,095</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net loss</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11,870</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11,870</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance, January&nbsp;1, 2006</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>223</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>154,301</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>13,410</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>10,449</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>178,383</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
See notes to financial statements.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">78

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<!-- link1 "Consolidated Statements of Cash Flows" -->

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>Consolidated Statements of Cash Flows</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>Years ended January&nbsp;1, 2006, January&nbsp;2, 2005 and
December&nbsp;28, 2003</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="58%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(In thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>OPERATING ACTIVITIES:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net loss</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(11,870</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(4,041</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(1,769</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Adjustments to reconcile net loss to net cash provided by (used
    in) operating activities:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>469</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>598</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>547</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stock-based compensation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>796</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,366</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net impairments losses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>882</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,244</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net unrealized gains on notes receivable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,215</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,054</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,452</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Minority interest in net income (loss) of subsidiary</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,851</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(110</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity in (earnings)&nbsp;loss of unconsolidated investees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,207</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>244</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred income taxes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,437</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(555</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>580</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Change in valuation allowance related to deferred income taxes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,455</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Increases in operating (assets)&nbsp;and liabilities:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts receivable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,034</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,025</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(922</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Prepaid expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>619</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(825</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,584</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(780</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>694</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,633</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income taxes payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,476</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,758</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>970</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,128</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(80</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>193</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred revenue</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,870</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,775</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>345</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other accrued expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,056</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,929</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,294</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net Cash Provided by (Used in) Operating Activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(13,011</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,406</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,775</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>INVESTING ACTIVITIES:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Short-term investments, purchases</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(42,450</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(29,936</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Short-term investments, sales/maturities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44,616</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Proceeds from sale of land held under contract for sale</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,612</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,765</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Purchase of land held under contract for sale</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,273</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Proceeds from sale of land held for development</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Increases in long-term assets related to Indian casino projects</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(16,276</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(16,386</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(18,446</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Collection on receivable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,482</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Investments in investees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(577</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(859</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Proceeds from investees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>850</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,683</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Decrease in restricted cash</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,906</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Increase in restricted cash</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(244</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Increases in other long-term assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,107</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(283</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(363</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Purchase of property and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,573</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(886</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(77</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net Cash Provided by (Used in) Investing Activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(15,944</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(40,017</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,135</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>FINANCING ACTIVITIES:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Proceeds from issuance of common stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,584</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>874</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net proceeds from issuance of common stock by subsidiary</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,404</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Proceeds from issuance of long-term debt</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net Cash Provided by in Financing Activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35,988</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>874</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Net Increase (Decrease) in Cash and Cash Equivalents</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(18,805</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,377</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,234</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Cash and Cash Equivalents&nbsp;&#151; Beginning of Period</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28,717</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,340</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,106</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Cash and Cash Equivalents&nbsp;&#151; End of Period</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>9,912</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>28,717</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>25,340</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash paid during the period for:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income taxes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>256</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Noncash investing and financing activities:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capitalized television costs related to subsidiary stock options
    issued to consultants</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>117</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>208</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Acquisitions of long-term assets and advances related to Indian
    casino projects financed by vendors with accounts payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(5,743</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(1,047</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>1,487</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Acquisitions of property and equipment financed by vendors with
    accounts payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(743</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
See notes to financial statements.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">79

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<!-- link1 "NOTES TO CONSOLIDATED FINANCIAL STATEMENTS" -->

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>January&nbsp;1, 2006, January&nbsp;2, 2005 and
December&nbsp;28, 2003</B>
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>1.</B></TD>
    <TD>
    <B>Nature of Business and Summary of Significant Accounting
    Policies:</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes Entertainment, Inc., a Minnesota corporation
(&#147;Lakes&#148; or the &#147;Company&#148;), was established
as a public corporation on December&nbsp;31, 1998, via a
distribution (the &#147;Distribution&#148;) of its common stock,
par value $.01&nbsp;per share (the &#147;Common Stock&#148;) to
the shareholders of Grand Casinos, Inc. (&#147;Grand
Casinos&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes has development agreements for various Indian-owned casino
properties and intends to manage such casinos when applicable
regulatory approvals have been received and other contingencies
have been satisfied. Lakes is also involved in other business
activities, including development of a Company-owned casino and
the purchase/license or development of new table game concepts
for licensing to other casinos. In addition, as of
January&nbsp;1, 2006, Lakes owned approximately 62% of WPT
Enterprises, Inc. (&#147;WPTE&#148;), a separate publicly-held
media and entertainment company principally engaged in the
development, production and marketing televised programming
based on gaming themes, the licensing and sale of branded
products, the sale of corporate sponsorships and a
recently-launched online gaming venture. Lakes&#146; audited
consolidated financial statements include the results of
operations of WPTE, and in recent periods, all of Lakes&#146;
revenues have been derived from WPTE&#146;s business.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes, through various subsidiaries, has entered into the
following contracts for the development and management of new
casino operations, all of which are subject to various
regulatory approvals and in some cases resolution of legal
proceedings:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Lakes has contracts to develop and manage The Foothill Oaks
    Casino to be built on the Rancheria of the Shingle Springs Band
    of Miwok Indians (&#147;Shingle Springs Tribe&#148;) in El
    Dorado County, California, adjacent to U.S.&nbsp;Highway 50,
    approximately 30&nbsp;miles east of Sacramento, California (the
    &#147;Shingle Springs Casino&#148;).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Lakes has contracts to develop and manage the Four Winds Casino
    resort to be built on land placed into trust for the Pokagon
    Band of Potawatomi Indians (&#147;Pokagon Band&#148;) in New
    Buffalo Township, Michigan near Interstate 94. The casino
    location will be near the first Interstate 94 exit in
    southwestern Michigan and approximately 75&nbsp;miles east of
    Chicago (the &#147;Pokagon Casino&#148;).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Lakes has contracts to develop and manage a casino to be built
    on the Rancheria of the Jamul Indian Village (&#147;Jamul
    Tribe&#148;) located on State Highway 94, approximately
    20&nbsp;miles east of San&nbsp;Diego, California (the
    &#147;Jamul Casino&#148;).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Lakes has consulting agreements and management contracts with
    three wholly-owned subsidiaries of the Pawnee Tribal Development
    Corporation (&#147;Pawnee TDC&#148; referred to collectively as
    the &#147;Pawnee Nation&#148;) in connection with assisting the
    Pawnee Nation in developing, equipping and managing a new casino
    and the Pawnee Nation&#146;s Trading Post and Travel Plaza
    casino operations.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Lakes has consulting agreements and management contracts with
    the Iowa Tribe of Oklahoma (the &#147;Iowa Tribe&#148;) in
    connection with developing, equipping and managing a new casino
    and the Tribe&#146;s existing Cimarron casino.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Use of estimates</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could
differ from those estimates, Significant estimates that are
particularly susceptible to change materially within the next
12&nbsp;months relate to revenue and related cost recognition
relative to television
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">80

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
production activity, realizability of notes receivable and other
long-term assets related to Indian casino projects, income tax
liabilities, and deferred income tax asset valuation allowances.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Year end</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has a 52- or
<FONT style="white-space: nowrap">53-week</FONT> accounting
period ending on the Sunday closest to December&nbsp;31 of each
year. The Company&#146;s fiscal years for the periods shown on
the accompanying consolidated statements of loss ended on
January&nbsp;1, 2006 (2005), January&nbsp;2, 2005 (2004), and
December&nbsp;28, 2003 (2003).
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Basis of presentation</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The accompanying consolidated financial statements include the
accounts of Lakes and its wholly owned and majority-owned
subsidiaries. An investment representing less than 50% of voting
interests is accounted for on the equity method. All significant
intercompany balances and transactions have been eliminated in
consolidation.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Revenue recognition</I></B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>License fee income</U>:</I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Revenue from the domestic and international distribution of
WPTE&#146;s television series is recognized as earned under the
following criteria established by the American Institute of
Certified Public Accountants Statement of Position
(SOP)&nbsp;No.&nbsp;00-2, <I>Accounting by Producers or
Distributors of Films</I>:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp; </TD>
    <TD align="left">
    Persuasive evidence of an arrangement exists;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp; </TD>
    <TD align="left">
    The show/episode is complete, and in accordance with the terms
    of the arrangement, has been delivered or is available for
    immediate and unconditional delivery;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp; </TD>
    <TD align="left">
    The license period has begun and the customer can begin its
    exploitation, exhibition or sale;</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp; </TD>
    <TD align="left">
    The seller&#146;s price to the buyer is fixed and
    determinable;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp; </TD>
    <TD align="left">
    Collectibility is reasonably assured.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Domestic television </I>revenue is recognized upon the
receipt and acceptance of completed episodes by the Travel
Channel, LLC (&#147;TRV&#148;) in accordance with the terms of
the contract.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>International television </I>revenues for international
distribution of the television series are recognized as earned
under the criteria of SOP 00-2, which is noted above. WPTE
presents international distribution license fee revenues net of
the distributor&#146;s fees.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Product licensing </I>revenues are recognized when the
underlying royalties from the sales of the related products are
earned. WPTE recognizes minimum revenue guarantees ratably over
the term of the license or as earned royalties based on actual
sales of the related products, if greater.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Host fees, sponsorship and other</U>:</I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Event hosting fees </I>are paid by host casinos for the
privilege of hosting the events and are recognized as the
episodes that feature the host casino are aired, and
<I>sponsorship revenues </I>are recognized as the episodes that
feature the sponsor are aired.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Online gaming </I>revenues are recognized monthly based on
detailed statements received from WagerWorks, WPTE&#146;s online
gaming service provider, for online poker and casino activity
throughout the previous month. In accordance with Emerging
Issues Task Force (EITF)&nbsp;99-19, WPTE presents online gaming
revenues gross of WagerWorks costs, including WagerWorks
management fee, royalties, credit card
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">81

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
processing and chargebacks that are recorded as cost of
revenues, since WPTE has the ability to adjust price and
specifications of the online gaming site, WPTE bears the
majority of the credit risk and WPTE is responsible for the
sales and marketing of the gaming site. The company includes
certain promotional expenses related to free bets and deposit
bonuses along with customer charge backs as deductions of
revenue. All other promotional expenses are generally recorded
as sales and marketing expenses.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Deferred revenue</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Licensing advances and guaranteed payments collected, but not
yet earned by WPTE, as well as host fee and sponsorship
receipts, collected prior to the airing of episodes, are
classified as deferred revenue in the accompanying balance
sheets. Deferred revenue is derived from three primary sources:
Domestic Television, Product Licensing and Host Fees. Deferred
revenue represents advanced payments received from TRV and
product licensees, and deposits paid by casinos in order to
secure a poker tournament date with the World Poker Tour as a
host site. Deferred revenue was approximately $5.2&nbsp;million
and $3.3&nbsp;million at January&nbsp;1, 2006 and
January&nbsp;2, 2005, respectively.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Minority interest in subsidiary</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of January&nbsp;1, 2006, the $14.5&nbsp;million minority
interest balance on the accompanying balance sheet represents an
approximately 38% outside ownership interest in WPTE.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Common shares subject to repurchase</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2004, WPTE inadvertently violated certain securities laws in
connection with its initial public offering that could have
required WPTE to repurchase shares sold in the offering, and the
proceeds from the sale of these shares were reported on the
balance sheet at approximately $0.6&nbsp;million as of
January&nbsp;2, 2005 as a liability. However, in 2005,
WPTE&#146;s repurchase obligation with respect to such shares
expired, and these proceeds have since been reclassified as
permanent equity.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Cash equivalents</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Cash equivalents consist of money market funds and other highly
liquid instruments with original maturities of three months or
less.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Short-term investments</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company follows the provisions of Statement on Financial
Accounting Standards (SFAS)&nbsp;No.&nbsp;115, <I>Accounting for
Certain Investments in Debt and Equity Securities </I>and has
classified all of its investments as available for sale, whereby
investments are reported at fair value, with unrealized gains
and losses reported as a component of accumulated other
comprehensive earnings (loss), net of income taxes, in the
accompanying statements of comprehensive earnings (loss). Market
value is determined by the most recently traded price of the
security at the balance sheet date. Net realized gains or losses
are determined on the specific identification cost method.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Fair values of financial instruments</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The carrying amounts for cash and cash equivalents approximate
fair value because of the short maturity, generally less than
three months, of these instruments. The fair values of
investment securities have been determined using values supplied
by independent pricing services. The carrying amount of debt
approximates its fair value at January&nbsp;1, 2006 based upon
other available financing.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Notes receivable from Indian tribes are carried at estimated
fair value determined as described below in the accounting
policy under the heading &#147;Long-term assets related to
Indian casino projects.&#148;
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">82

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<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Deferred television costs</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
WPTE accounts for its television costs pursuant to SOP
No.&nbsp;<FONT style="white-space: nowrap">00-2.</FONT>
Television costs include capitalizable direct costs, production
overhead and development costs and are stated at the lower of
cost or net realizable value based on anticipated revenue.
Production overhead costs include costs that are directly
related to production and are incremental costs. These costs
primarily include office facilities and insurance related to
production. Production overhead office facilities costs are
determined based on percentage of space used and are allocated
to television costs based on number of episodes. Production
overhead insurance costs are allocated to television costs based
on number of episodes. WPTE has not currently anticipated any
revenues in excess of those subject to existing contractual
relationships. Capitalized television production costs for each
episode are expensed as revenues are recognized upon delivery
and acceptance of the completed episode.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Property and equipment</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Property and equipment is stated at cost less accumulated
depreciation. Depreciation and amortization of property and
equipment is computed using the straight-line method over the
following estimated useful lives:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="82%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Building</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>40&nbsp;years</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Leasehold improvements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>6&nbsp;years</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Furniture and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>2-10&nbsp;years</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the case of leasehold improvements, estimated useful lives
are limited to the term of the lease, including period covered
by renewal options considered likely to be exercised.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Long-term assets related to Indian casino projects</I></B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Notes receivable</U>:</I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes is involved as the exclusive developer and manager of
Indian-owned casino projects. The Company has formal procedures
governing its evaluation of opportunities for potential
development projects that it follows before entering into
agreements to provide financial support for the development of
these properties. Lakes determines that there is probable future
economic benefit prior to recording any asset related to the
Indian casino project. No asset related to an Indian casino
project is recognized unless it is considered probable that the
project will be built and result in an economic benefit to Lakes
sufficient to recover the asset. Lakes initially evaluates the
following six factors involving critical milestones that affect
the probability of developing and operating a casino:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Has the U.S.&nbsp;Government&#146;s Bureau of Indian Affairs
    federally recognized the tribe as a tribe?</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Does the tribe hold or have the right to acquire land to be
    used for the casino site?</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Has the Department of the Interior put the land into trust
    for purposes of being used as a casino site?</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Has the tribe entered into a gaming agreement with the state
    in which the land is located, if required by the state?</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Has the tribe obtained approval by the National Indian Gaming
    Commission of the management agreement?</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Do other legal and political obstacles exist that could block
    development of the project and, if so, what is the likelihood of
    the tribe successfully prevailing?</I></TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">83

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<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition to the above factors, Lakes also considers economic
and qualitative factors affecting Lakes&#146; future economic
benefits from the project, including the following:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>An evaluation by Company management of the financial
    projections of the project given the project&#146;s geographic
    location and the feasibility of the project&#146;s success given
    such location;</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp; </TD>
    <TD align="left">
    <I>The structure and stability of the tribal government;</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp; </TD>
    <TD align="left">
    <I>The scope of the proposed project, including the physical
    scope of the contemplated facility and the expected financial
    scope of the related development;</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp; </TD>
    <TD align="left">
    <I>An evaluation of the proposed project&#146;s ability to be
    built as contemplated and the likelihood that financing will be
    available; and</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp; </TD>
    <TD align="left">
    <I>The nature of the business opportunity to Lakes, including
    whether the project would be a financing, development and/or
    management opportunity.</I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The development phase of each relationship commences with the
signing of the respective contracts and continues until the
casinos open for business; thereafter, the management phase of
the relationship, governed by the management contract, continues
for a period of up to seven years. Lakes, as developer and
manager, has the exclusive right and obligation to develop,
manage, operate and maintain the casino and to train tribal
members and others in the operation and maintenance of the
casino during the term of the contract. The Company also makes
advances to the tribes to fund certain portions of the projects,
which bear interest generally at prime plus 1% or 2%. Repayment
of the advances and accrued interest is only required if the
casino is successfully opened and distributable profits are
available from the casino operations. Under the management
contract Lakes typically earns a management fee calculated as a
percentage of the net income of the operations. In addition,
repayment of the loans and the manager&#146;s fees under the
management contracts are subordinated to certain other financial
obligations of the respective operations. Generally, the order
of priority of payments from the casinos&#146; cash flows is as
follows: a certain minimum monthly priority payment to the
tribe, repayment of various senior debt associated with
construction and equipping of the casino with interest accrued
thereon, repayment of various debt with interest accrued thereon
due to Lakes, management fee to Lakes, and other obligations,
with the remaining funds distributed to the tribe.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company accounts for its advances to the tribes and its
management contracts as separate elements. The advances made to
the tribes are accounted for as structured notes in accordance
with the guidance contained in Emerging Issues Task Force
Consensus No.&nbsp;96-12 <I>Recognition of Interest Income and
Balance Sheet Classification of Structured Notes </I>(EITF
No.&nbsp;96-12). Because repayment of the notes is required only
if a casino is successfully opened, Lakes&#146; advances may be
at risk for reasons other than failure of the borrower to pay
the contractual amounts due because if the casinos are not built
the amounts due will not become contractually due. Accordingly,
pursuant to the guidance in EITF No.&nbsp;96-12, Lakes records
its advances to tribes at estimated fair value. Because the
stated rate of the notes receivable alone is not commensurate
with the risk inherent in these projects, the estimated fair
value of the notes receivable is generally less than the amount
advanced. At the date of each advance, the difference between
the estimated fair value of the note receivable and the actual
amount advanced is recorded as an intangible asset related to
the acquisition of the management contract. Subsequent to the
initial recording, the two assets are accounted for separately.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Subsequent to its initial recording at estimated fair value, the
note receivable portion of the advance is adjusted to its
current fair value at each balance sheet date based on current
assumptions related to the projects. The notes receivable are
not adjusted to an amount in excess of the contractual amount
due. Changes in estimated fair value are recorded as unrealized
gains or losses on notes receivable in the Company&#146;s
statement of operations.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The determination of estimated fair value requires that
assumptions be made and judgments be applied regarding casino
opening dates, interest rates, discount rates and probabilities
of the projects opening based on
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">84

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
a review of critical milestones. If casino opening dates,
interest rates, discount rates or the probabilities of the
projects opening change significantly, the estimated fair value
of the related note receivable is adjusted accordingly and the
Company could experience unrealized gains or losses that could
be material.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Upon opening of the casino Lakes may conclude that it is no
longer reasonably possible that the advances to Indian tribes
would be at risk to not be repaid for reasons other than failure
of the borrower to pay the contractual amounts due. In such
situations, the notes receivable will be accounted for under the
effective interest method upon opening of the casino and will no
longer be adjusted to fair value at each balance sheet date. Any
difference between the then fair value of the advances and the
amount contractually due under the notes will be amortized into
income using the effective interest method over the remaining
term of the note. Such notes would then be evaluated for
impairment pursuant to Statement of Financial Accounting
Standards No.&nbsp;114 <I>&#147;Accounting by Creditors for
Impairment of a Loan.&#148;</I>
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><U>Intangible assets related to acquisition of management
    contracts:</U></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Intangible assets related to the acquisition of the management
contracts are accounted for using the guidance in Statement of
Financial Accounting Standards No.&nbsp;142 <I>Goodwill and
Other Intangible Assets </I>(FASB No.&nbsp;142). Pursuant to
that guidance, the assets are periodically evaluated for
impairment based on the estimated cash flows from the management
contract on an undiscounted basis. In the event the carrying
value of the intangible assets, in combination with the carrying
value of land held for development and other assets associated
with the Indian casino projects described below, were to exceed
the undiscounted cash flow, an impairment would be recorded.
Such an impairment would be measured based on the difference
between the fair value and carrying value of the assets. Lakes,
in accordance with FASB No.&nbsp;142, will amortize the
intangible assets related to the acquisition of the management
contracts under the straight-line method over the lives of the
contracts which will commence when the related casinos open. In
addition to the intangible asset associated with the cash
advances to tribes described above, these assets include actual
costs incurred to acquire Lakes&#146; interest in the projects
from third parties.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><U>Land held for development</U></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Included in land held for development is land held for possible
transfer to Indian tribes for use in certain of the future
casino resort projects. In the event that this land is not
transferred to the tribes, the Company can sell it. Lakes
evaluates these assets for impairment in combination with
intangible assets related to acquisition of management contracts
and other assets related to the Indian casino projects as
discussed above.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><U>Other</U></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Included in this category are costs incurred related to the
Indian casino projects, which have not yet been included as part
of the notes receivable because of timing of the payment of
these costs. These amounts will ultimately be allocated between
notes receivable and intangible assets related to the
acquisition of management contracts and will be evaluated for
changes in fair value or impairment, respectively, as described
above. These amounts vary from period to period due to timing of
payment of these costs.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, Lakes incurs certain costs related to the projects
that are not included in notes receivable, which are expensed as
incurred. These costs include salaries, travel and certain legal
costs.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Stock based compensation</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At January&nbsp;1, 2006, Lakes has stock-based employee and
directors&#146; compensation plans (see Note&nbsp;11) and WPTE
has one stock-based employee compensation plan. To date, the
Company has accounted for those plans under the recognition and
measurement principles of APB Opinion No.&nbsp;25, <I>Accounting
for Stock Issued to Employees</I>, and related Interpretations.
Compensation expense for stock option grants issued to employees
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">85

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
is recorded to the extent the fair market value of the stock on
the date of grant exceeds the option price. Compensation expense
for restricted stock grants is measured based on the fair market
value of the stock on the date of grant. The compensation
expense is amortized ratably over the vesting period of the
awards.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company accounts for equity-based consultant compensation
according to the recognition and measurement principles of
EITF&nbsp;96-18, <I>Accounting for Equity Instruments that are
Issued to Other Than Employees for Acquiring, or in Conjunction
with Selling, Goods or Service (EITF&nbsp;96-18) and
</I>Statement of Financial Accounting Standards No.&nbsp;123,
<I>Accounting for Stock-Based Compensation
(SFAS&nbsp;No.&nbsp;123).</I> Compensation expense for stock
option grants issued to consultants is recorded at the fair
market value of the options at the measurement date, defined as
the date the options vest and services have been provided.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All stock-based consultant compensation expenses are capitalized
television costs of WPTE and are included as costs of revenue
upon delivery and acceptance of completed episodes.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table illustrates the effect on net income and
earnings per share if the Company had applied the fair value
recognition provisions to stock-based employee compensation (in
thousands, except per share data).
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="64%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net loss:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    As reported</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(11,870</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(4,041</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(1,769</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Less: total stock-based compensation expense determined under
    the fair value method, net of related tax effects</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,118</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,346</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,652</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pro forma</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(15,988</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(6,387</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(3,421</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net loss:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    As reported&nbsp;&#151; basic and diluted</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(0.53</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(0.18</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(0.08</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pro forma&nbsp;&#151; basic and diluted</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(0.72</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(0.29</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(0.16</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Weighted average fair value of Lakes&#146; options granted</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>7.93</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>5.14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4.32</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Weighted average fair value of WPTE options granted</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>8.77</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>5.52</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.63</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Compensation expense of $0.8&nbsp;million and $1.2&nbsp;million
in 2005 and 2004, respectively related to stock options issued
to consultants has not been included in the tables above as
these options are already recorded at fair market value and
included in the reported net loss.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The fair value of each award under the option plans is estimated
on the date of grant using the Black-Scholes option-pricing
model. The following assumptions were used to estimate the fair
value of options:
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Lakes&#146; stock options</U>:</I></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="61%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Risk-free interest rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.47%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.24%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.27%</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Expected life</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>10&nbsp;years</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>10&nbsp;years</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>10&nbsp;years</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Volatility</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>62.7%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67.66%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42.47%</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dividend yield</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">86

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>WPTE stock options</U>:</I></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="61%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002*</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Risk-free interest rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.04%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.05%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.49%</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Expected life</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>5&nbsp;years</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>5&nbsp;years</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>5&nbsp;years</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Expected dividend yield</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Annualized volatility</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>99.30%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46.13%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 1pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>*&nbsp;</TD>
    <TD align="left">
    No WPTE options were granted in 2003.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December 2004, the FASB issued Statement of Financial
Accounting Standards No.&nbsp;123 (revised 2004), Share-Based
Payment (SFAS&nbsp;No.&nbsp;123(R)), which amends FASB Statement
No.&nbsp;123 and supersedes APB Opinion No.&nbsp;25,
<I>Accounting for Stock Issued to Employees.</I>
SFAS&nbsp;No.&nbsp;123(R) requires all companies to measure
compensation expense for all share-based payments (including
employee stock options) at fair value and recognize the expense
over the related service period. Additionally, excess tax
benefits, as defined in SFAS&nbsp;No.&nbsp;123(R), will be
recognized as an addition to paid-in capital and will be
reclassified from operating cash flows to financing cash flows
in the consolidated statements of cash flows.
SFAS&nbsp;No.&nbsp;123(R) will be effective for fiscal year 2006
beginning on January&nbsp;2, 2006. Depending on the transitional
option selected by management, there could be a retroactive
effect on the Company&#146;s financial statements of adopting
the new standard. However, we are continuing to evaluate the
effect that SFAS&nbsp;No.&nbsp;123(R) will have on our financial
position and results of operations.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Income taxes</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company accounts for income taxes under the provisions of
Statement of Financial Accounting Standards No.&nbsp;109,
<I>Accounting for Income Taxes (SFAS&nbsp;No.&nbsp;109).</I>
Under this method, the Company determines deferred tax assets
and liabilities based upon the difference between the financial
statement and tax bases of assets and liabilities using enacted
tax rates in effect for the year in which the differences are
expected to affect taxable income. The tax consequences of
events recognized in the current year&#146;s consolidated
financial statements are included in determining income taxes
currently payable. However, because tax laws and financial
accounting standards differ in their recognition and measurement
of assets, liabilities, equity, revenue, expenses, gains and
losses, differences arise between the amount of taxable income
and pretax financial income for a year and between the tax bases
of assets or liabilities and their reported amounts in the
consolidated financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Because it is assumed that the reported amounts of assets and
liabilities will be recovered and settled, respectively, a
difference between the tax basis of an asset or a liability and
its reported amount in the balance sheet will result in a
taxable or a deductible amount in some future years when the
related liabilities are settled or the reported amounts of the
assets are recovered, hence giving rise to deferred tax assets
and liabilities. The Company must then assess the likelihood
that deferred tax assets will be recovered from future taxable
income and, to the extent management believes that recovery is
not likely, they must establish a valuation allowance. The
Company recorded a 100&nbsp;percent valuation allowance against
all deferred income tax assets as of January&nbsp;1, 2006 and
January&nbsp;2, 2005 except for deferred tax assets related to
unrealized investment losses and carryovers (see Note&nbsp;10).
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Advertising</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Advertising costs of approximately $1.6&nbsp;million were
expensed as incurred and included in selling, general and
administrative expenses in 2005, and such costs were nominal in
2004 and 2003, respectively.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">87

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Litigation costs</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company does not accrue for future litigation defense costs,
if any to be incurred by the Company in connection with
outstanding litigation and other dispute matters but rather
records such costs when the legal and other services are
rendered.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Stock split</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During April of 2004, the Company&#146;s Board of Directors
declared a two-for-one stock split, payable in the form of a
100% stock dividend on outstanding common stock. The stock
dividend was paid on May&nbsp;3, 2004 to shareholders of record
as of April&nbsp;26, 2004. All share and per share data
reflected in the accompanying consolidated financial statements
has been retroactively restated to give effect to the stock
split.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Loss per share</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For all periods, basic loss per share (EPS)&nbsp;is calculated
by dividing net loss by the weighted average common shares
outstanding. Diluted EPS reflects the effect of all potentially
dilutive common shares outstanding by dividing net loss by the
weighted average of all common and potentially dilutive shares
outstanding. Stock options that could potentially dilute
earnings (loss) per share in the future of 5,307,626, 5,193,676
and 4,326,602&nbsp;shares in 2005, 2004 and 2003, respectively,
were not included in the computation of diluted loss per share
because the effects would have been anti-dilutive for the
periods presented.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Concentrations of credit risk (see Note&nbsp;12 for other
    concentrations)</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The financial instruments that subject the Company to
concentrations of credit risk consist principally of long-term
assets related to Indian casino projects in the form of notes
receivable due from Indian tribes (See Note&nbsp;4). The notes
receivable are primarily with the Pokagon Band, the Shingle
Springs Tribe and the Jamul&nbsp;Tribe. Lakes manages this risk
by evaluating the feasibility of the projects, including
likelihood the project will open and be financially successful,
before making advances to the Indian tribes. In the event these
obligations become uncollectible, the maximum losses to be
sustained would be the carrying value of the notes plus the net
carrying value of the unamortized intangible assets. (See also
Note&nbsp;14 regarding commitments for future advances.)
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Reclassifications</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Certain amounts in the 2004 and 2003 consolidated financial
statements have been reclassified to conform to the 2005
presentation.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Managements&#146; Financial Plans</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During 2006, Lakes&#146; corporate costs, excluding WPTE which
is not expected to require additional capital from Lakes, will
approximate $19&nbsp;million, which includes approximately
$4.0&nbsp;million of interest related to the financing facility
entered into on February&nbsp;15, 2006. Development
project-related costs are expected to approximate
$40&nbsp;million during 2006 and include approximately
$25&nbsp;million related to the Pokagon project as construction
is estimated to begin in mid 2006. Lakes&#146; cash balance,
excluding WPTE cash, was approximately $8.2&nbsp;million as of
January&nbsp;1, 2006. Additionally, the Company may be required
to pay taxes up to approximately $12&nbsp;million plus interest
and penalties in fiscal 2006 related to two tax matters.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December 2005, Lakes obtained a $20&nbsp;million financing
facility from the Lyle Berman Family Partnership
(&#147;Partnership&#148;) and received a $10&nbsp;million draw
on this facility on December&nbsp;16, 2005 (see Note&nbsp;9). On
February&nbsp;15, 2006 (see Note&nbsp;18), Lakes closed on a
$50&nbsp;million financing facility with an affiliate of
Prentice Capital Management, LP. An initial draw of
$25&nbsp;million was made under the facility, another
$10&nbsp;million is immediately available under the facility and
the remaining $15&nbsp;million can be drawn in
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">88

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
$5&nbsp;million increments subject to the satisfaction of
certain conditions. All amounts drawn against the facility will
be repayable within three years. Approximately
$10.2&nbsp;million of the initial draw was used to repay in full
the loan from the Partnership.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes will require additional capital through either public or
private financings to meet operating expenses and development
project-related costs during fiscal 2006 and the Company is
currently considering various financing alternatives. The
Company believes the assets of Lakes provide sufficient
collateral to obtain the necessary financing. The assets of
Lakes include, in addition to the long-term assets related to
Indian casino projects, common shares of WPTE that have an
estimated fair value of over $83.5&nbsp;million as of
February&nbsp;27, 2006. This estimated value is based on the
public trading price, which may not be indicative of what Lakes
could realize in a sale of its shares. The Company believes the
shares of WPTE could be the source or part of the collateral for
additional financing.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>2.</B></TD>
    <TD>
    <B>WPT Enterprises, Inc. initial public offering</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2004, the Securities and Exchange Commission declared
effective a registration statement of WPTE that registered the
offer and sale of up to 4,000,000&nbsp;shares of WPTE common
stock, at $8.00&nbsp;per share, in WPTE&#146;s initial public
offering and an additional 600,000&nbsp;shares of WPTE common
stock that were sold by the underwriters involved in the
offering exercise related to their over-allotment option.
Proceeds from the sale of the 4,600,000&nbsp;shares were
$32.4&nbsp;million, net of estimated offering expenses and
underwriting discounts. These proceeds were used to expand
WPTE&#146;s entertainment production business and for its
working capital. There were no selling shareholders
participating in the offering. Net proceeds in excess of the
amount allocated to minority interest have been reflected as
additional
<FONT style="white-space: nowrap">paid-in</FONT>-capital in the
Company&#146;s financial statements. Lakes did not recognize a
gain on this transaction.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In connection with WPTE&#146;s initial public offering on
August&nbsp;9, 2004, WPTE issued to its lead underwriter, a
warrant to purchase up to a total of 400,000&nbsp;shares of
common stock at an exercise price of $12.80 for a period of four
years. The warrant was not exercisable during the first year
after the date of the offering and remains outstanding. The
value attributable to the warrants was considered in the
determination of net proceeds of the offering.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of January&nbsp;1, 2006, Lakes&#146; consolidated balance
sheet included unrestricted cash and cash equivalents and
short-term investment balances of $36.6&nbsp;million. Included
in this amount was WPTE cash and cash equivalents and short-term
investments of $28.4&nbsp;million.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>3.</B></TD>
    <TD>
    <B>Short-term investments</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of January&nbsp;1, 2006, the cost, gross unrealized gains and
losses and fair value of short-term investments were as follows
(in thousands):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="54%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Gross</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Gross</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Unrealized</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Unrealized</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fair</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Cost</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Gains</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Losses</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Value</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;treasury and agency securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>8,766</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(89</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>8,677</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Certificates of deposit</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>155</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>154</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Short-term municipal bonds</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,900</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,900</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Corporate bonds</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,072</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(68</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,004</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>26,893</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(158</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>26,735</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">89

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of January&nbsp;2, 2005, the cost, gross unrealized gains and
losses and fair value of short-term investments were as follows
(in thousands):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="54%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Gross</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Gross</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Unrealized</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Unrealized</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fair</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Cost</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Gains</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Losses</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Value</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;treasury and agency securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>13,161</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(23</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>13,151</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Certificates of deposit</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>155</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>154</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Short-term municipal bonds</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,625</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,625</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Corporate preferred securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>28,941</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(24</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>28,930</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All of the investments with unrealized losses had been in a loss
position for less than one year and are not considered to be
other-than-temporarily impaired.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>4.</B></TD>
    <TD>
    <B>Long-term assets related to Indian casino
    projects&nbsp;&#151; Notes receivable</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The majority of the assets related to Indian casino projects are
in the form of notes receivable due from the Indian tribes
pursuant to the Company&#146;s development and management
agreements. The repayment terms of the loans are specific to
each Indian tribe and are dependent upon the operating
performance of each gaming facility. Repayments of the loans are
required to be made only if distributable profits are available
from the operation of the related casinos. In addition,
repayment of the loans and the manager&#146;s fees under the
management contracts are subordinated to certain other financial
obligations of the respective operations. Generally, the order
of priority of payments from the casinos&#146; cash flows is as
follows: a certain minimum monthly priority payment to the
Indian tribe, repayment of senior debt associated with
construction and equipping of the casino with interest accrued
thereon, repayment of various debt with interest accrued thereon
due to Lakes, management fee to Lakes, and other obligations,
with the remaining funds distributed to the Indian tribe.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">90

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Information with respect to the notes receivable account
activity at fair value is summarized as follows, (in thousands):
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Indian casino projects under development:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="41%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shingle</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Pokagon</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Springs</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Jamul</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Nipmuc</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Other</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance as of December&nbsp;30, 2002</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>30,194</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>7,899</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6,599</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>561</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>291</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>45,544</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total advances during fiscal 2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,260</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,393</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,844</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>819</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,319</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Allocation to intangible asset related to management contract</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,580</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,075</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,148</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(712</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,515</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Changes in estimated fair value</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,497</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,382</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>515</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,452</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance as of December&nbsp;28, 2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>32,371</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>14,599</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>8,810</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>713</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>307</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>56,800</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total advances during fiscal 2004</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,820</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,648</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,131</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>472</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,091</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Allocation to intangible asset related to management contract</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,413</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,160</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(891</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(410</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,879</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Changes in estimated fair value</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,153</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,688</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(705</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(775</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(307</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,054</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance as of January&nbsp;2, 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>35,931</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>21,775</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>9,345</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>67,066</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total advances during fiscal 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,894</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,829</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,391</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,453</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,567</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total advances and project costs incurred related to the
    Kickapoo contract during fiscal 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,251</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,251</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Allocation to intangible asset related to management contract</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(752</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,057</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,083</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,145</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,037</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Changes in estimated fair value</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,955</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,304</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,047</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,215</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance as of January&nbsp;1, 2006</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>44,028</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>26,550</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>12,957</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>3,527</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>87,062</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The key assumptions and criteria used in the determination of
the estimated fair value of the notes receivable are estimated
casino opening date, projected interest rates, discount rates
and probability of projects opening. The estimated casino
opening date used in the valuation reflects the weighted average
of three scenarios: a base case (which is based on the
Company&#146;s forecasted casino opening date) and one and two
years out from the base case. The projected interest rates are
based upon the one year U.S.&nbsp;Treasury Bill spot yield curve
per Bloomberg and the specific assumptions on contract term,
stated interest rate and casino opening date. The discount rate
for the projects is based on the yields available on certain
financial instruments at the valuation date, the risk level of
equity investments in general, and the specific operating risks
associated with open and operating gaming enterprises similar to
each of the projects. In estimating this discount rate, market
data of other public gaming related companies is considered. The
probability applied to each project is based upon a weighting of
four different scenarios with the fourth scenario assuming the
casino never opens. The first three scenarios assume the casino
opens but applies different opening dates as discussed above.
The probability weighting applied to each scenario captures the
element of risk in these projects and is based upon the status
of each project, review of the critical milestones and
likelihood of achieving the milestones.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">91

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The terms and assumptions used to value the notes receivable at
fair value are as follows by Indian casino project (dollars in
thousands):
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pokagon
Band:</I></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="30%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="21%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>As of January&nbsp;1, 2006</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>As of January&nbsp;2, 2005</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>As of December&nbsp;28, 2003</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Face value of note (principal and interest)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    $61,827</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    $55,747</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    $50,054</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    $(46,445 principal and<BR>
    $15,382 interest)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    $(44,550 principal and<BR>
    $11,197 interest)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    $(41,729 principal and<BR>
    $8,325 interest)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stated interest rate, not to exceed 10% (prime plus 1%)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    8.25%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    6.25%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    5.0%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Estimated months until casino opens (weighted average of three
    scenarios)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    32&nbsp;months</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    33&nbsp;months</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    34&nbsp;months</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Projected interest rate until casino opens</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    8.2%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    6.8%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    6.4%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Projected interest rate during the loan repayment term</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    8.2%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    8.2%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    9.0%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Discount rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    15%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    15%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    15%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Repayment terms of note</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    60&nbsp;months</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    60&nbsp;months</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    60&nbsp;months</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Probability rate of casino opening (weighting of four scenarios)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    90%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    75%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    70%</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Approximately $24.1&nbsp;million of the loans due from the
Pokagon Band were used by the Pokagon Band to purchase real
property comprising the project site. The Company&#146;s first
deed of trust against the gaming land portion of this property
(except for a small parcel worth approximately
$0.3&nbsp;million) was relinquished when the BIA placed the land
into trust in January 2006. The Company still holds a deed of
trust against the non-gaming land which has a cost basis of
approximately $13.2&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The estimated probability rate was increased from 75% to 90% in
fiscal 2005, due to an evaluation of all critical milestones and
due to the favorable federal judge ruling issued in March 2005
that will allow the land to be taken into trust by the Federal
Government. Subsequently the Taxpayers of Michigan Against
Casinos (&#147;TOMAC&#148;) filed for an appeal. The appeal
hearing date was held on December&nbsp;8, 2005. On
January&nbsp;6, 2006, the United States Court of Appeals for the
District of Columbia Circuit ruled in favor of the Pokagon Band
by affirming the Federal District Court&#146;s grant of summary
judgment in the lawsuit by the Taxpayers of Michigan Against
Casinos (TOMAC)&nbsp;versus the U.S.&nbsp;Department of the
Interior. On January&nbsp;27, 2006, the Federal Government took
official action to acquire the Pokagon Band&#146;s
<FONT style="white-space: nowrap">675-acre</FONT> parcel of land
in New Buffalo Township, Michigan, into trust for the Pokagon
Band. This official action by the Department of the Interior
paves the way for the Pokagon Band to move forward with their
Four Winds Casino Resort project. TOMAC has 90&nbsp;days from
the date of the decision to Petition the U.S.&nbsp;Supreme Court
to review the decision.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Due to the delay related to this litigation the weighted average
estimated casino opening date was extended from October 2007 to
September 2008 during the year ended January&nbsp;1, 2006.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">92

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shingle
Springs Tribe:</I></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="30%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="21%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>As of January&nbsp;1, 2006</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>As of January&nbsp;2, 2005</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>As of December&nbsp;28, 2003</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Face value of note (principal and interest)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $46,446</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $38,156</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $27,252</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $(37,905 principal and</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $(33,076 principal and</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $(24,428 principal and</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $8,541 interest)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $5,080 interest)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $2,824 interest)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stated interest rate (prime plus 2%)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    9.25%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    7.25%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    6.0%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Estimated months until casino opens (weighted average of three
    scenarios)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    37&nbsp;months</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    36&nbsp;months</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    37&nbsp;months</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Projected interest rate until casino opens</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    9.2%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    7.9%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    7.6%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Projected interest rate during the loan repayment term</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    9.1%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    8.7%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    9.6%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Discount rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    15%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    15%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    15%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Projected repayment terms of note*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    24&nbsp;months</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    24&nbsp;months</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    24&nbsp;months</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Probability rate of casino opening (weighting of four scenarios)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    70%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    70%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    65%</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>*&nbsp;</TD>
    <TD align="left">
    Payable in varying monthly installments based on contract terms
    subsequent to the casino opening.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a result of delays related to litigation surrounding access
to the reservation via an interchange, the weighted average
estimated casino opening date was extended from January 2008 to
February 2009 during the year ended January&nbsp;1, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The most significant milestone yet to be achieved for this
project is commercial access to the reservation on which the
casino will be built. The Shingle Springs Tribe received state
regulatory approval of a necessary interchange to access the
tribal land during 2002. Neighboring El Dorado County and
another local group commenced litigation in Federal and State
Courts against the California regulatory agencies attempting to
block the approval of the interchange. During January of 2004,
the California Superior Court ruled in favor of California
Department of Transportation (&#147;CalTrans&#148;) on all of El
Dorado County&#146;s claims challenging CalTrans&#146;
environmental review of the proposed casino project except that
the court asked for clarification on one issue. The one
remaining issue in the state case questions the state standards
for ozone requirements of all of CalTrans projects throughout
California. El Dorado County, Voices for Rural Living, CalTrans
and the Shingle Springs Tribe filed an appeal and oral arguments
on these appeals were heard in August 2005.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In November 2005, the California Court of Appeal
(&#147;Court&#148;) issued its decision on these appeals. The
Court ruled in favor of CalTrans&#146; appeal, rejecting the El
Dorado County&#146;s argument that the transportation conformity
analysis did not conform to state standards. The Court also
rejected all but two of the legal claims asserted in the appeal
by El Dorado County and Voices for Rural Living against the
environmental impact report (&#147;EIR&#148;) prepared by
CalTrans for the interchange that will connect Highway 50 to the
Shingle Springs Rancheria. For the remaining two issues, the
Court held that CalTrans must supplement its environmental
analysis by adding some discussion to the air quality chapter to
further explain the project&#146;s contribution to overall
vehicular emissions in the region, and that CalTrans also must
evaluate whether a smaller casino and hotel would reduce
environmental impacts. The Court acknowledged CalTrans lacks
jurisdiction to require the Tribe to develop a smaller casino,
but nevertheless required some discussion of this alternative in
the interchange EIR. On December&nbsp;19, 2005, CalTrans filed a
Petition for Review with the Supreme Court of the
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">93

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
State of California, and on February&nbsp;8, 2006 the Supreme
Court denied the Petition for Review and ordered the Court of
Appeals decision to be depublished. CalTrans is preparing the
necessary additional information as requested by the Court for
the two issues described above.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In January 2005, Lakes received a favorable ruling from the
federal court on all federal issues with respect to the casino
development planned by the Shingle Springs Tribe. The federal
favorable ruling related to the project is being appealed by El
Dorado County.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Jamul
Tribe:</I></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="30%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="21%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>As of January&nbsp;1, 2006</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>As of January&nbsp;2, 2005</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>As of December&nbsp;28, 2003</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Face value of note (principal and interest)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $21,247</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $17,306</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $14,163</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $(16,858 principal and</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $(14,467 principal and</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $(12,236 principal and</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $4,389 interest)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $2,839 interest)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    $1,927 interest)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stated interest rate (prime plus 2%)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    9.25%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    7.25%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    6.0%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Estimated months until casino opens (weighted average of three
    scenarios)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    34&nbsp;months</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    36&nbsp;months</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    36&nbsp;months</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Projected interest rate until casino opens</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    9.2%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    7.9%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    7.6%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Projected interest rate during the loan repayment term</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    9.2%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    8.7%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    9.6%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Discount rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    15%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    15%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    15%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Repayment terms of note*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    84&nbsp;months</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    84&nbsp;months</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    12&nbsp;months</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Probability rate of casino opening (weighting of four scenarios)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    80%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    75%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    75%</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>*&nbsp;</TD>
    <TD align="left">
    The contract was amended in October 2004, which changed the
    repayment terms of the notes to seven years.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a result of delays related to getting land contiguous to the
reservation placed into trust, the weighted average estimated
casino opening date was extended from January 2008 to November
2008 during the year ended January&nbsp;1, 2006. The probability
rate was increased from 75% at January&nbsp;2, 2005 to 80% at
January&nbsp;1, 2006 as a result of the Jamul Tribe and Lakes
formally announcing plans to build the casino on the approximate
six acres of reservation land held by the Jamul Tribe.
Reservation land qualifies for gaming without going through a
land in trust process.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">94

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nipmuc
Tribe:</I></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="29%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>As of January&nbsp;1, 2006</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>As of January&nbsp;2, 2005</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>As of December&nbsp;28, 2003</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Face value of note (principal and interest)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    $7,0068</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    $6,513</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    $5,295</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    $(5,461 principal and $1,607 interest)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    $(5,461 principal and $1,052 interest)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    $(4,634 principal and $661 interest)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stated interest rate (prime plus 2%)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    9.25%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    7.25%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    6.0%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Months until casino opens</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    72&nbsp;months</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Projected interest rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    until casino opens</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    8.7%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Projected interest rate during the loan repayment term</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    10.8%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Discount rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    33%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Repayment terms of note</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    60&nbsp;months</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Probability rate of casino opening</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    65%</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During the second quarter of 2004, the BIA issued its final
determination denying the Nipmuc Nation&#146;s application for
federal recognition. Although the Nipmuc Nation is appealing the
determination with the BIA, Lakes made a decision to discontinue
funding the project. Lakes recorded an unrealized loss on notes
receivable of $0.8&nbsp;million during the second quarter of
2004 related to the fair value of the note receivable from the
Nipmuc Nation. Lakes also recorded an impairment charge of
$5.8&nbsp;million during the second quarter of 2004 related to
other long-term assets related to the Nipmuc Nation Indian
casino project. As further background, the Nipmuc Nation is a
state-recognized tribe. In January 2001, the Nipmuc Nation
received a draft, preliminary factual finding from the Assistant
Secretary&nbsp;&#151; Indian Affairs (&#147;AS-IA&#148;) that
the Nipmuc&nbsp;Nation was entitled to federal recognition.
Based on these facts, as well as the Company&#146;s evaluation
of the project&#146;s geographic location and the feasibility of
the project&#146;s success given such location, the structure
and stability of the tribal government, the scope of the
proposed project, including the physical scope of the
contemplated facility and the expected financial scope of the
related development, and the nature of the business opportunity,
Lakes entered into a development and management contract with
the Nipmuc Nation in July 2001. The January 2001 draft,
preliminary factual finding from the AS&nbsp;&#151; IA indicated
that the Nipmuc&nbsp;Nation was entitled to federal recognition,
however, it did not have the approval of the Office of the
Solicitor of the Department of Indian Affairs, as required, and
the Office of the Solicitor had approved the recommendation of
the BIA, which recommended a proposed negative finding. In
September 2001, the Nipmuc Nation received the official proposed
negative finding, as evidenced by its publication in the
October&nbsp;1, 2001 Federal Register. As required under law,
the Nipmuc Nation was permitted to challenge the proposed
negative finding, which the Nipmuc Nation chose to do. The
Nipmuc Nation engaged consultants and advisors, including the
former Senior Historian for the BIA Branch of Acknowledgement
and Research to assist them in submitting a formal response in
September 2002. The response was organized in a manner to
address the four remaining deficiencies outlined in the
BIA&#146;s published proposed negative finding. Indications to
Lakes from the Nipmuc Nation and its consultants and advisors
throughout the process of preparing the response were positive
about obtaining a reversal of the proposed negative finding.
Based on this analysis, the Company believed that,
notwithstanding the proposed negative finding, the Nipmuc Nation
would likely be granted federal recognition based on additional
genealogical data and other information submitted by the tribe
to the BIA for reconsideration. During the second quarter of
2004, however, the BIA issued its final determination denying
the Nipmuc Nation&#146;s application for federal recognition.
Should the Nipmuc Nation
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">95

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
become federally recognized and open and operate a casino
successfully (with or without Lakes&#146; assistance) Lakes is
entitled to receive payment in full of its notes receivable and
deferred interest.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Other notes receivable from Indian tribes:</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Included in other notes receivable from Indian tribes are
amounts advanced under agreements with the Iowa Tribe and Pawnee
Tribe. Additionally, included in other in the above table for
fiscal 2005 are amounts related to consulting agreements and
management contracts entered into by Lakes with the Kickapoo
Tribe effective January 2005 to improve the performance of the
gaming operations conducted at the Kickapoo&nbsp;Tribe&#146;s
existing Lucky Eagle Casino in Eagle Pass, Texas, located
approximately 140&nbsp;miles southwest of San&nbsp;Antonio.
During the third quarter of fiscal 2005 the Company&#146;s
relationship with the Kickapoo Tribe deteriorated and in
November 2005, Lakes and the Kickapoo Tribe terminated their
business relationship. Lakes recognized an impairment charge of
$0.1&nbsp;million related to the intangible asset related to the
acquisition of the management contract during the third quarter
of fiscal 2005. In addition during fiscal 2005, the Company
recorded an unrealized loss on notes receivable of
$6.2&nbsp;million related to the Kickapoo project. Included in
the $6.2&nbsp;million are unrealized losses of approximately
$3.9&nbsp;million related to project costs incurred that Lakes
may be required to pay as a result of the terminated
relationship, and approximately $2.3&nbsp;million related to
advances made by Lakes on the note receivable from the Kickapoo
Tribe. As of January&nbsp;1, 2006, Lakes owns approximately
18&nbsp;acres of land near the Kickapoo site with a cost basis
of approximately $0.7&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company is negotiating with the Kickapoo Tribe to resolve
all of the financial terms of the contracts including repayment
of the advances, payment of unpaid project costs incurred, a
sale of the land owned by Lakes to the Kickapoo Tribe, and to
formally terminate the gaming operations consulting agreement,
management contract, and related ancillary agreements relating
to the project.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Although various litigation and regulatory issues have caused
delays to the Company&#146;s remaining development projects,
management believes it is probable that these pending projects
will ultimately be completed and no additional impairments have
been recorded.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>5.</B></TD>
    <TD>
    <B>Long-term assets related to Indian casino
    projects&nbsp;&#151; Intangible assets related to the
    acquisition of management contract</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
These intangible assets are related to the acquisition of the
management contracts and are periodically evaluated for
impairment after they are initially recorded as described in
Note&nbsp;1. They include portions of advances to tribes
allocated to these management contracts and approximately
$5.4&nbsp;million of additional costs incurred to acquire
Lakes&#146; interest in the management contracts from third
parties as of January&nbsp;1, 2006 and January&nbsp;2, 2005.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">96

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Information with respect to the intangible assets related to the
acquisition of management contracts account activity by project
is summarized as follows, (in thousands):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="43%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shingle</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Pokagon</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Springs</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Jamul</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Nipmuc</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Other</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance as of December&nbsp;30, 2002</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>14,550</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6,462</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>3,751</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>3,407</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>28,170</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Payments to third parties for acquisition of management contract
    and other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>61</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,001</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>999</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,061</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Allocation of advances made to Indian tribes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,580</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,075</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,148</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>712</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,515</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance as of December&nbsp;28, 2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>16,191</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>12,538</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>5,898</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4,119</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>38,746</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Payments to third parties for acquisition of management contract
    and other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Allocation of advances made to Indian tribes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,413</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,160</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>891</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>410</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,879</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Impairment loss</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,529</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,529</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance as of January&nbsp;2, 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>17,604</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>16,698</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6,789</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>41,096</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Payments to third parties for acquisition of management contract
    and other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>49</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Allocation of advances made to Indian tribes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>752</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,057</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,083</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,145</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,037</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Impairment loss</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(94</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(94</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance as of January&nbsp;1, 2006</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>18,356</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>18,755</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>7,872</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>1,105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>46,088</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes will amortize the intangible assets related to the
acquisition of the management contracts under the straight-line
method over the lives of the contracts in accordance with FASB
No.&nbsp;142, which will commence when the related casinos open.
There has been no amortization expense to date related to these
intangible assets. Based on current estimates of project opening
dates and estimated length of management contracts, the Company
expects to recognize amortization expense of $0,
$1.9&nbsp;million, $7.1&nbsp;million, $7.6&nbsp;million and
$7.6&nbsp;million during 2006, 2007, 2008, 2009 and 2010,
respectively.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During 2005, Lakes recognized a $0.1&nbsp;million impairment
charge related to its intangible asset related to the
acquisition of the management contract with the Kickapoo Tribe,
see Note&nbsp;4 for a description of the 2005 write-off of all
assets related to the Kickapoo Tribe project. During 2004, Lakes
recognized a $4.5&nbsp;million impairment charge related to its
intangible asset related to the acquisition of the management
contract with the Nipmuc Nation. See Note&nbsp;4 for a
description of the 2004 write-off of all assets related to the
Nipmuc Nation.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">97

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>6.</B></TD>
    <TD>
    <B>Long-term investments</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Information with respect to long-term investments on the
consolidated balance sheets is summarized as follows, (in
thousands):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="60%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>January&nbsp;1, 2006</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>January&nbsp;2, 2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Investment in Metroflag Polo, LLC</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>5,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Investment in Pokertek</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,627</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,093</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>10,640</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6,093</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><U>Membership interest in Metroflag Polo, LLC</U></I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The amount represented an investment in property located in Las
Vegas. The investment was carried at its estimated net
realizable value of $5.0&nbsp;million at January&nbsp;2, 2005.
This investment relates to land sold by Lakes to Metroflag Polo,
LLC (&#147;Metroflag&#148;) in 2001.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On July&nbsp;15, 2005, the Company received a $5.0&nbsp;million
payment from Metroflag Polo, LLC (&#147;Metroflag&#148;), in
full satisfaction of the Company&#146;s membership interest in
Metroflag, which approximated the carrying value of the asset.
Accordingly, no gain or loss was recorded in fiscal 2005 related
to this transaction.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><U>Investment in PokerTek </U></I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Until October&nbsp;14, 2005, WPTE had an investment, (consisting
of a 15% equity interest carried at its nominal cost basis) in
and a loan receivable from PokerTek, a company that offers an
electronic poker table called the PokerPro system that provides
a fully automated poker room environment to tribal and
commercial casinos and card clubs. On October&nbsp;14, 2005,
PokerTek announced its public offering of 2,000,000&nbsp;shares
of common stock at a price of $11&nbsp;per share. Concurrently
with the public offering, WPTE&#146;s ownership interest was
diluted to 11.7% (1,080,000&nbsp;shares), and PokerTek repaid
WPTE the outstanding loan amount at its maturity value of
$186,000. WPTE&#146;s shares in PokerTek are restricted, thus
prohibiting any sale of such shares in the market for six
months. Nevertheless, in accordance with Statement of Financial
Accounting Standards (SFAS)&nbsp;No.&nbsp;115, <I>Accounting for
Certain Investments in Debt and Equity Securities</I>, WPTE
adjusted its investment to fair market value and classified it
as &#147;available for sale&#148;. The net unrealized gains and
losses from this investment are accounted for in a separate
component of shareholder&#146;s equity.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;20, 2006, WPTE entered into an agreement to sell
630,000&nbsp;shares of PokerTek&#146;s common stock held by
WPTE, at a price per share of $9.03. WPTE closed the transaction
on February&nbsp;28, 2006, and received proceeds of
approximately $5.7&nbsp;million. As a result, WPTE now has a
4.75% ownership interest in PokerTek.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>7.</B></TD>
    <TD>
    <B>Deferred television costs</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of January&nbsp;1, 2006 and January&nbsp;2, 2005 deferred
television costs consist of the following and are included in
other current assets (in thousands):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="80%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    In-production</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>1,122</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>911</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Development and pre-production</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>398</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>1,520</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>917</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">98

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of January&nbsp;1, 2006 and January&nbsp;2, 2005, overhead
costs of $0.3&nbsp;million and $0.2&nbsp;million, respectively,
were included in deferred television costs. Based upon
management&#146;s estimates as of January&nbsp;1, 2006,
approximately 100% of deferred television costs are expected to
be recognized during fiscal 2006.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property and equipment,
net</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table summarizes the components of property and
equipment, at cost (in thousands):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="77%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Building</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6,444</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6,407</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Leasehold improvements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>595</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Furniture and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,164</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,469</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Construction in progress</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,030</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,233</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,876</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Less accumulated depreciation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,782</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,081</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>13,451</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6,795</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At January&nbsp;1, 2006, construction in progress relates to
pre-construction costs, primarily architecture and engineering
costs associated with a Company-owned planned casino project in
Vicksburg, Mississippi. In February 2005, Lakes received gaming
site approval by the Mississippi Gaming Commission with respect
to its proposed casino location. Lakes plans to develop the
project on an approximately
<FONT style="white-space: nowrap">160-acre</FONT> site on the
Mississippi River, located on Magnolia Road in Vicksburg, Warren
County, Mississippi, for which Lakes holds land purchase
options. In connection with the planned development of the
casino, Lakes has recorded $0.5&nbsp;million related to land
options, which are carried on the consolidated balance sheet in
other long-term assets. During July 2005, Lakes received
approval from the Mississippi Gaming Commission of its
development plan for an approximately $225&nbsp;million gaming
project to be built on this site.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>9.</B></TD>
    <TD>
    <B>Long-term debt&nbsp;&#151; related party</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;16, 2005, Lakes closed on a $20&nbsp;million
financing facility with the Partnership (see Note&nbsp;1). An
initial draw of $10&nbsp;million was made under the facility on
December&nbsp;16, 2005, and the remaining $10&nbsp;million could
be drawn in $5&nbsp;million increments over time as needed. Any
funds drawn under the facility bear interest at the rate of
12%&nbsp;per annum and are due and payable on the third
anniversary of the first advance drawn. In consideration for the
financing facility, Lakes issued to the Partnership warrants for
the purchase of up to 2&nbsp;million shares of its common stock
at a purchase price of $7.88&nbsp;per share that expire in
December 2012. The warrants will not become exercisable if
Lakes&#146; borrowings under the facility do not exceed
$10&nbsp;million in the aggregate and all amounts owed under the
facility are repaid in full on or before February&nbsp;28, 2006.
On February&nbsp;16, 2006 the facility was repaid in full with
part of the proceeds of the new financing, which terminated all
agreements relating to the Partnership financing facility,
including cancellation of the 2&nbsp;million warrants (see
Note&nbsp;18).
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
No commitment fees, closing fees or loan servicing fees were
assessed or paid in connection with the facility. Lyle Berman,
Lakes&#146; Chairman and Chief Executive Officer, does not have
an ownership or other beneficial interest in the Partnership.
Neil Sell, a Director of Lakes, is one of the trustees of the
irrevocable trusts for the benefit of Lyle Berman&#146;s
children that are the partners in the Partnership.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">99

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>10.</B></TD>
    <TD>
    <B>Income taxes</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The provision (benefit) for income taxes attributable to losses
for 2005, 2004 and 2003 consist of the following (in thousands):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="65%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Years Ended</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Federal</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(124</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>132</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(3,777</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    State</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(115</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>173</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(3,777</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,046</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,869</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,760</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(1,161</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4,042</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(1,017</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reconciliations of the statutory federal income tax rate to the
Company&#146;s actual rate based on losses before income taxes
for 2005, 2004 and 2003 are summarized as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="69%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Statutory federal tax rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(35.0</TD>
    <TD align="left" valign="bottom" nowrap>)%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(35.0</TD>
    <TD align="left" valign="bottom" nowrap>)%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(35.0</TD>
    <TD align="left" valign="bottom" nowrap>)%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    State income taxes, net of federal income taxes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1.2</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(164.2</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1.8</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tax exempt income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(.1</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1.0</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Change in valuation allowance*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>984.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Change in state tax rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>123.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Legal settlement received</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(459.5</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other, net (primarily related to stock option exercise benefit
    in&nbsp;2005)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1.7</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7.8</TD>
    <TD align="left" valign="bottom" nowrap>)%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>471.6</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(38.5</TD>
    <TD align="left" valign="bottom" nowrap>)%</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    *</TD>
    <TD></TD>
    <TD valign="top">
    Does not consider the tax effect of unrealized holding gains of
    $10.4 million and the exercise of employee stock options of
    $12.0&nbsp;million during 2005.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">100

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s deferred income tax liabilities and assets
are as follows (in thousands):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="73%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current deferred tax asset:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Subsidiary stock option expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>257</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>541</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accruals, reserves and other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>433</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>776</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Valuation allowances</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(690</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,180</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>137</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Non-current deferred taxes:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unrealized investment losses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6,852</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4,278</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred interest on notes receivable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,878</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,784</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unrealized gains on notes receivable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,366</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,083</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net operating loss carryforwards</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,983</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,952</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(593</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>571</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Valuation allowances</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(17,902</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(9,224</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net non-current deferred tax asset</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6,852</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4,278</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes evaluated the ability to utilize deferred tax assets
arising from net operating loss carry forwards, deferred tax
assets and other ordinary items and determined that a valuation
allowance was appropriate at January&nbsp;1, 2006 and
January&nbsp;2, 2005. Lakes evaluated all evidence and
determined net losses generated over the past three years
outweighed the current positive evidence that the Company
believes exists surrounding its ability to generate significant
income from its long-term assets related to Indian casino
projects. Therefore, the Company recorded a 100% valuation
allowance against these items at January&nbsp;1, 2006, and
January&nbsp;2, 2005. However, the Company has recognized a
deferred tax asset related to capital losses during 2001 to
2005. The realization of these benefits is dependant on the
generation of capital gains. The Company believes it will have
sufficient capital gains in the foreseeable future to utilize
these benefits due to significant appreciation in its investment
in WPTE, which has a minimal cost basis and could be sold at a
substantial gain. The Company owns approximately
12.5&nbsp;million shares of WPTE common stock valued at
approximately $74.1&nbsp;million as of January&nbsp;1, 2006
based upon the closing stock price as reported by Nasdaq on
December&nbsp;30, 2005 of $5.94.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company is currently under examination for income and
franchise tax matters. See Note&nbsp;14 regarding the IRS tax
audit and the Louisiana Department of Revenue tax litigation
matter.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At January&nbsp;1, 2006, Lakes had approximately
$17.9&nbsp;million of federal and $27.9&nbsp;million of state
net operating losses and WPTE had approximately
$17.2&nbsp;million of federal and $17.3&nbsp;million of state
net operating losses. The Lakes federal net operating loss will
begin to expire in 2023 and the state net operating loss will
expire at various times depending on specific state laws.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>11.</B></TD>
    <TD>
    <B>Stock options:</B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><U>Lakes Stock Option Plans:</U></I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes has a Stock Option and Compensation Plan and a Director
Stock Option Plan, which was carried forward from Lakes&#146;
predecessor Grand Casinos. These plans granted non-qualified
stock options to officers, directors and employees of Lakes. No
options have been granted under these plans since
December&nbsp;31, 1998, the date of Lakes&#146; spin-off from
Grand Casinos.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Additionally, Lakes has a 1998 Stock Option and Compensation
Plan and a 1998&nbsp;Director Stock Option Plan, which are
approved to grant up to an aggregate of 5.0&nbsp;million shares
and 0.5&nbsp;million shares, respectively,
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">101

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
of incentive and non-qualified stock options to officers,
directors, and employees. Under the stock options granted under
the 1998 option plans, the options vest in equal installments
over four-year and five-year periods, beginning on the first
anniversary of the date of each grant and continue on each
subsequent anniversary date until the option is fully vested.
The employee must be employed by Lakes on the anniversary date
in order to vest in any shares that year. To the extent options
are vested, the option shall be exercisable for ten years from
the date of grant. If the employee is terminated (voluntarily or
involuntarily) prior to vesting of any stock option, any options
remaining to vest as of the date of termination will be
forfeited.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Information with respect to these stock option plans is
summarized as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="39%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Number of Common Shares</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Lakes</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Weighted</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Options</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Available</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Ave. Exercise</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Outstanding</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Exercisable</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>for Grant</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Price</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance at December&nbsp;29, 2002</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,048,258</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,429,258</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,732,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4.54</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Granted</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>60,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(60,000</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.18</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Canceled</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(583,688</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>149,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.16</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Exercised</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(197,968</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.41</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance at December&nbsp;28, 2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,326,602</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,317,402</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,821,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4.51</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Granted</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,655,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,655,000</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.35</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Additional shares authorized</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Canceled</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(9,400</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.51</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Exercised</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(778,526</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.60</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance at January&nbsp;2, 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,193,676</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,591,276</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>266,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>5.72</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Granted</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>171,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(171,500</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.48</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Canceled</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Exercised</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(57,550</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.68</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance at January&nbsp;1, 2006</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,307,626</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,153,476</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>94,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6.03</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="26%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Options Exercisable at</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Options Outstanding at January&nbsp;1, 2006</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>January&nbsp;1, 2006</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Weighted Average</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Remaining</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Weighted-Average</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Weighted-</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>Range of Exercises Prices</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Outstanding</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Contractual Life</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Exercise Price</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Exercisable</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Average Price</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    $&nbsp;(3.25&nbsp;&#151; &nbsp;3.63)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>289,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.5&nbsp;years</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>3.45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>192,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>3.49</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;&nbsp;(3.63&nbsp;&#151; &nbsp;5.45)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,542,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.2&nbsp;years</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,498,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.24</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;&nbsp;(5.45&nbsp;&#151; &nbsp;7.26)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>649,926</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.2&nbsp;years</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.81</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>619,926</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.74</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;&nbsp;(7.26&nbsp;&#151; &nbsp;9.08)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,528,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.6&nbsp;years</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>814,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.13</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;&nbsp;(9.08&nbsp;&#151; 10.90)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>52,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.7&nbsp;years</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.60</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;(10.90&nbsp;&#151; 12.71)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>81,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.9&nbsp;years</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11.43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11.34</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;(12.71&nbsp;&#151; 14.53)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>95,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.1&nbsp;years</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;(14.53&nbsp;&#151; 16.34)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.0&nbsp;years</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16.11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;(16.34&nbsp;&#151; 18.16)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>65,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.2&nbsp;years</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17.91</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,307,626</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.7&nbsp;years</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6.03</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,153,476</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>5.24</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">102

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><U>WPTE stock option plan:</U></I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
World Poker Tour, LLC, a majority-owned subsidiary of Lakes and
predecessor entity of WPTE, adopted the 2002 Option Plan (the
2002 Plan) which was approved to issue up to an aggregate of
1,120,000&nbsp;shares in connection with option grants to
employees and consultants. The options become exercisable in
quarterly installments on each of the first four anniversaries
of the date of the grant and expire six years after being
exercisable. The employee must be employed by WPTE on the
anniversary date in order to vest in any shares that year. If
the employee is terminated (voluntarily or involuntarily) prior
to vesting of any unit option, any options remaining to vest as
of the date of termination will be forfeited.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In connection with the conversion to a corporation, WPTE adopted
the 2004 Stock Incentive Plan that is authorized to grant stock
awards to purchase up to 3,120,000&nbsp;shares of common stock,
including the options to purchase up to 1,120,000&nbsp;shares of
common stock issued to employees and consultants that were
previously outstanding under the 2002 Plan at the time of
conversion. Under the stock options granted in 2004 under the
2004 option plan, the options vest in equal installments over
three-year and five-year periods, beginning on the first
anniversary of the date of each grant and will continue on each
subsequent anniversary date until the option is fully vested.
The employee must be employed by WPTE on the anniversary date in
order to vest in any shares that year. If the employee is
terminated (voluntarily or involuntarily) prior to vesting of
any stock option, any options remaining to vest as of the date
of termination will be forfeited. To the extent options are
vested, the option shall be exercisable for ten years from the
date of grant.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Information with respect to WPTE&#146;s stock option plans is
summarized as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="38%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Number of Common Shares</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Options</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Available for</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Weighted Avg.</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Outstanding</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Exercisable</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Grant</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Exercise Price</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Balance at December&nbsp;29, 2002</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,120,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.0049</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Granted</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Exercised</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Balance at December&nbsp;28, 2003</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,120,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>280,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.0049</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Authorized</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Granted</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,441,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,441,000</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.18</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Exercised</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Balance at January&nbsp;2, 2005</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,561,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>560,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>559,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4.61</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Authorized</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Granted</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>443,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(443,000</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12.75</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Forfeited</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(167,667</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>167,667</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11.99</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Exercised</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(678,333</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.04</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Balance at January&nbsp;1, 2006</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,158,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>620,333</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>283,667</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>7.14</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">103

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 18pt; ">

<TR style="font-size: 1pt;">
    <TD width="35%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Options Exercisable at</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Options Outstanding at January&nbsp;1, 2006</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>January&nbsp;1, 2006</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Weighted Avg.</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Weighted</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Remaining</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Weighted Avg.</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Avg.</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>Range of Exercise Prices</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Outstanding</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Contractual Life</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Exercise Price</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Exercisable</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Price</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    $0.0049</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>445,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.0049</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>165,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.0049</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    $7.95-9.92</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,373,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.63</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>8.04</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>446,667</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>8.04</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    $11.95-14.51</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>286,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.78</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>12.18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,666</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>14.51</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    $15.05-19.50</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>53,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>16.41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    $(.0049-19.50)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,158,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>7.14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>620,333</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6.00</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For stock options issued to employees, deferred stock
compensation for the options is measured at the stocks&#146;
fair value in excess of the exercise price on the date of grant
and is being amortized over the vesting period of four years. In
connection with these grants, WPTE recorded deferred
compensation of $2,500, as options granted under the 2002 plan
had an exercise price less than the fair value of the underlying
share on the date of grant.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For options issued to consultants, compensation expense is
measured at the option&#146;s fair value. Fair value is measured
when the options vest in annual installments on each of the
first four anniversaries of the date of the grant. Compensation
expense is estimated in periods prior to vesting based on the
then current fair value. Changes in the estimated fair value of
unvested options are recorded in the periods the change occurs.
Compensation expense for options issued to consultants was
$0.8&nbsp;million in 2005, $1.4&nbsp;million in 2004,
respectively. All of these expenses are capitalized television
costs and are included as costs of revenue upon delivery and
acceptance of completed episodes.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Restricted shares issued</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On March&nbsp;4, 2002, WPTE granted 2.4&nbsp;million shares to
its President under a management agreement. The shares vest in
four equal installments annually beginning February&nbsp;25,
2003, and are fully vested at February&nbsp;25, 2006. In
connection with this grant, WPTE recorded deferred compensation
of $19,200. WPTE recognized compensation expense of $4,800 in
2005, $4,800 in 2004 and $4,800 in 2003 for shares earned based
upon services provided under the management agreement.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>12.</B></TD>
    <TD>
    <B>Concentrations</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under WPTE&#146;s agreements with TRV, it granted TRV an
exclusive license to broadcast and telecast its programs on
television in the United States during seasons one and two of
the World Poker Tour television series and options to acquire
similar licenses for the episodes comprising each of the seasons
three through seven, which will not be completed until 2009. In
May 2004 and March 2005, TRV exercised its options with respect
to seasons three and four, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under these agreements, WPTE is required to deliver each episode
of the World Poker Tour television series by a specific delivery
date. If WPTE fails to timely deliver an episode, TRV has the
right to reject that episode and be reimbursed for the related
per-episode license fee. As a result, untimely delivery of one
or more episodes by WPTE may have a material adverse effect on
WPTE&#146;s financial condition, results of operations and cash
flow.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TRV&#146;s decision to exercise its options may be affected by,
among other things, WPTE&#146;s ability to deliver episodes in a
timely manner, as well as the quality of the programming and its
continued acceptance by the viewing public. Since the revenue
from the TRV has represented approximately 61% of total
historical WPTE revenue, a decision by TRV not to exercise its
options for future seasons would have a material adverse effect
on WPTE&#146;s financial condition, results of operations and
cash flow, especially if this decision were made prior
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">104

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
to the material growth of other WPTE revenue streams (for
example, from the sale of branded merchandise). Even following
the growth of other revenue streams, the failure to maintain a
broadcast license agreement would be detrimental to the
visibility and viability of the World Poker Tour brand.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
See Note&nbsp;14 regarding resolution of WPTE litigation with
TRV.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>13.</B></TD>
    <TD>
    <B>Employee retirement plan:</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes has a section&nbsp;401(k) employee savings plan for all
full-time employees. The savings plan allows eligible
participants to defer, on a pre-tax basis, a portion of their
salary and accumulate tax-deferred earnings as a retirement
fund. Lakes matches employee contributions up to a maximum of 4%
of participating employees&#146; gross wages. The Company
contributed $0.10&nbsp;million, $0.10&nbsp;million and
$0.11&nbsp;million during 2005, 2004 and 2003, respectively.
Company contributions are vested over a period of five years.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2004, WPTE established a section&nbsp;401(k) employee savings
plan for all eligible full-time employees. WPTE has the ability,
at management&#146;s sole discretion, to match employee
contributions. WPTE made no matching contribution during 2005 or
2004.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Effective December 2005, WPTE&#146;s post production group,
comprising approximately 27% of WPTE&#146;s workforce, began
operating under a collective bargaining agreement with the
International Alliance of Theatrical Stage Employees (IATSE).
Under the agreement, WPTE is obligated to make payments to the
Motion Picture Industry and Health Plans. Contributions to date
have been minimal. The agreement expires in November 2007.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>14.</B></TD>
    <TD>
    <B>Commitments and contingencies:</B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Lakes&#146; Commitments and Contingencies</I></B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Operating lease</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company leases an airplane, under a non-cancelable operating
lease. Rent expense, under this lease, exclusive of real estate
taxes, insurance, and maintenance expense was $1.5&nbsp;million,
$1.1&nbsp;million and $0.6&nbsp;million for 2005, 2004 and 2003,
respectively. The airplane lease was amended on May&nbsp;1,
2005, which allows for a base term of one year and two one-year
renewal terms. Approximate future minimum lease payments due
under this lease are $1.6&nbsp;million, of which
$0.7&nbsp;million, $0.7&nbsp;million and $0.2&nbsp;million are
payable in 2006, 2007 and 2008, respectively. Under the lease
agreement, the Company has the option of renewing the lease,
purchasing the airplane at amounts which range from
approximately $5.2&nbsp;million to $5.8&nbsp;million or
facilitating the sale of the aircraft at the end of each term
included in the up to three-year lease term; however at the
conclusion of the lease, the Company is required to either
purchase the airplane or facilitate the sale of the airplane.
The Company&#146;s airplane lease contains a residual value
guarantee of $5.2&nbsp;million at the end of the three-year
lease term.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>IRS tax audit</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company is under audit by the Internal Revenue Service
(&#147;IRS&#148;) for the fiscal years ended 2001 and 2000. The
IRS is challenging the treatment of income categorized as a
capital gain. If the Company is unsuccessful in sustaining its
position the Company may be required to pay up to approximately
$3.2&nbsp;million plus accrued interest and penalties related to
tax on ordinary income. The Company originally carried back
capital losses to offset the capital gain. If the Company were
to be unsuccessful in sustaining its capital gain position it
could use the capital losses in the future to offset future
capital gains, if any, prior to their expiration. Management
believes that the final outcome of this matter is not likely to
have a material adverse effect upon the Company&#146;s future
consolidated financial position or results of operations.
However, it may have a significant effect on cash flows in the
period of settlement.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">105

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Tribal commitments</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s management contracts with its tribal partners
require the Company to provide financial support related to
project development, in the form of loans.
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Tribal Casino Development Advances/ Commitments</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>As of January&nbsp;1, 2006</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="50%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Pre-Construction</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Land Held for</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Remaining</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Advances</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Development</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Commitment</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(In millions)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Jamul Tribe</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>16.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Shingle Springs Tribe</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pokagon Band</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Iowa Tribe</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pawnee Nation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Kickapoo Tribe</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>2.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the Pokagon Casino project, the Company has agreed to
provide additional financing from its own funds if financing to
the Pokagon Band at an interest rate not to exceed 13% is not
available from third parties. If this occurs and Lakes is
required to provide all financing, this would be an additional
commitment of up to approximately $54&nbsp;million. Based on
discussions with prospective lenders the Company presently
believes that third-party financing will be available for this
project. However, there can be no assurance that third-party
financing will be available at the time the project begins
construction. Lakes is not required to fund these amounts. If,
however, Lakes discontinued the funding prior to fulfilling the
obligation, Lakes will forfeit the rights under the management
contract.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company will be obligated to pay an amount to an unrelated
third party once the Pokagon Casino is open and Lakes is the
manager of the casino. The amount is payable quarterly for five
years and is only payable if Lakes is the manager of the casino.
The payment is part of a settlement and release agreement
associated with Lakes obtaining the management contract with the
Pokagon Band. The maximum liability over the five-year period is
approximately $11&nbsp;million. The Company will also be
obligated to pay approximately $3.3&nbsp;million in accordance
with the management contract with the Pokagon Band which is
payable once the casino opens over 24&nbsp;months.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes may be required to provide a guarantee of tribal debt
financing or otherwise provide support for the tribal
obligations related to any of the projects. Any guarantees by
Lakes or similar off-balance sheet liabilities will increase
Lakes&#146; potential exposure in the event of a default by any
of these tribes.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Employment agreements</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes has entered into employment agreements with certain key
employees of the Company. The agreements provide for certain
benefits to the employee as well as severance if the employee is
terminated without cause or due to a &#147;constructive
termination&#148; as defined in the agreements. The severance
amounts depend upon the term of the agreement and can be up to
three years of base salary and three years of bonus calculated
as the average bonus earned in the previous two years. If such
termination occurs within two years of a change of control as
defined in the agreements by the Company without cause or due to
a constructive termination, the employee will receive a lump sum
payment equal to two times the annual base salary and
bonus/incentive compensation along with insurance costs, 401k
matching contributions and certain other benefits. In the event
the employee&#146;s employment terminates for any reason,
including death, disability, expiration of an initial term,
non-renewal by the Company with or without cause, by the
employee with notice, due to constructive termination, all
unvested stock options vest at the date of termination and remain
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">106

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<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
exercisable for two years. The agreements provide for a base
salary, bonus, stock options and other customary benefits.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>WPTE Commitments</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
WPTE has an employment agreement with Steven Lipscomb, Founder,
President and Chief Executive Officer of WPTE, under which it
has agreed to pay an annualized base salary of $500,000
commencing as of December&nbsp;29, 2003, and expiring on
December&nbsp;29, 2006, and Mr.&nbsp;Lipscomb will be eligible
to participate in an annual bonus pool of up to 10% of
WPTE&#146;s net profits and an additional bonus equal to 5% of
WPTE&#146;s annual net profits above $3.0&nbsp;million in such
fiscal year. WPTE also granted Mr.&nbsp;Lipscomb options to
purchase&nbsp;600,000&nbsp;shares of WPTE&#146;s common stock at
$8.00&nbsp;per share on August&nbsp;9, 2004, which options will
vest in equal installments over three years.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As mentioned in Note&nbsp;11, Mr.&nbsp;Lipscomb was previously
granted 2,400,000&nbsp;shares. The shares vest in four equal
installments annually beginning February&nbsp;25, 2003. During
2005, Mr.&nbsp;Lipscomb sold 755,000&nbsp;shares, and a result,
1,645,000 remain outstanding. Additionally, the forfeiture
restrictions on the remaining 600,000&nbsp;shares lapsed on
February&nbsp;25, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Effective March&nbsp;1, 2005, WPTE entered into a seventy-five
month operating lease agreement for office space. Aggregate
lease payments began at approximately $460,000 annually and
escalate to approximately $530,000 annually over the lease term.
Future minimum lease payments will be approximately
$0.5&nbsp;million in each of the next five years. In addition,
WPTE has an option to renew the lease for the entire premises
for a period of five years exercisable not later than twelve
months prior to the lease expiration date. Under such renewal,
rent would be adjusted to market rates.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><U>Legal proceedings</U></B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Slot machine litigation</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 1994, William H. Poulos filed a class-action lawsuit in the
United States District Court for the Middle District of Florida
against various parties, including Lakes&#146; predecessor,
Grand Casinos, and numerous other parties alleged to be casino
operators or slot machine manufacturers. This lawsuit was
followed by several additional lawsuits of the same nature
against the same, as well as additional defendants, all of which
were subsequently consolidated into a single class-action
pending in the United States District Court for the District of
Nevada. Following a court order dismissing all pending pleadings
and allowing the plaintiffs to re-file a single complaint, a
complaint has been filed containing substantially identical
claims, alleging that the defendants fraudulently marketed and
operated casino video poker machines and electronic slot
machines, and asserting common law fraud and deceit, unjust
enrichment and negligent misrepresentation and claims under the
federal Racketeering-Influenced and Corrupt Organizations Act.
Various motions were filed by the defendants seeking to have
this new complaint dismissed or otherwise limited. In December
1997, the Court, in general, ruled on all motions in favor of
the plaintiffs. The plaintiffs then filed a motion seeking class
certification and the defendants opposed it. In June 2002, the
District Court entered an order denying class certification. On
August&nbsp;10, 2004, the Ninth Circuit Court of Appeals
affirmed the District Court&#146;s denial of class
certification. On September&nbsp;14, 2005, the United States
District Court for the District of Nevada granted the
defendants&#146; motions for summary judgment, and judgment was
entered against the plaintiffs on that same day. The defendants
have moved to seek the payment of their costs and
attorneys&#146; fees. The motion has been fully briefed and is
pending before the Trial Court. The plaintiffs have appealed
from the judgment to the United States Court of Appeals for the
Ninth Circuit, and the briefing of the appeal is scheduled to be
completed by the end of March 2006.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">107

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<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has not recorded any liability for this matter, as
currently an estimate of any possible loss cannot be made.
Management currently believes the final outcome of this matter
is not likely to have a material adverse effect upon the
Company&#146;s consolidated financial statements.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>El Dorado County, California litigation</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;3, 2003, El Dorado County filed an action in the
Superior Court of the State of California, seeking to prevent
the construction of a highway interchange that was approved by a
California state agency. The action, which was consolidated with
a similar action brought by Voices for Rural Living and others,
does not seek relief directly against Lakes. However, the
interchange is necessary to permit the construction of a casino
to be developed and managed by Lakes through a joint venture.
The casino will be owned by the Shingle Springs Tribe. The
matter was tried to the court on August&nbsp;22, 2003. On
January&nbsp;2, 2004, Judge Lloyd G. Connelly, Judge of the
Superior Court of the State of California, issued his ruling on
the matter denying the petition in all respects except one. As
to the one exception, the court sought clarification as to
whether the transportation conformity determination used to
determine the significance of the air quality impact of the
interchange operations considered the impact on attainment of
the state ambient air quality standard for ozone. The California
Department of Transportation (CalTrans) prepared and filed the
clarification addendum sought by the court. Prior to the
court&#146;s determination of the adequacy of the clarification,
El Dorado County and Voices for Rural Living appealed Judge
Connelly&#146;s ruling to the California Court of Appeals on all
of the remaining issues.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A ruling with respect to the addendum was issued June&nbsp;21,
2004 by the Superior Court of the State of California, County of
Sacramento. The ruling indicated that the addendum provided to
the court by CalTrans did not provide a quantitative showing to
satisfy the court&#146;s earlier request for a clarification on
meeting the state ambient ozone standard. The court recognized
that the information provided by CalTrans does qualitatively
show that the project may comply with the state standard, but
concluded that a quantitative analysis is necessary even though
the court recognized that the methodology for that analysis
&#147;is not readily apparent&#148;. In addition, the ruling
specifically stated, &#147;Moreover, such methodology appears
necessary for the CEQA analysis of transportation projects
throughout the state, including transportation projects for
which respondents (i.e., CalTrans) have approval
authority.&#148; CalTrans, the Shingle Springs Tribe and Lakes
responded to the court with a revised submission in August 2004.
Representatives of the California Air Resources Board and the
Sacramento Area Council of Governments filed declarations
supporting the revised submission to the court. Opposition to
that revised submission was filed, a hearing on the revised
submission took place on August&nbsp;20, 2004 and the court
again found the revised submission of CalTrans, the Shingle
Springs Tribe and Lakes to be inadequate. That ruling was
separately appealed to the California Court of Appeals (the
&#147;Court&#148;) and an oral argument for these appeals and
the appeals of El Dorado County and Voices of Rural Living was
held before the Court on August&nbsp;29, 2005.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Court issued its decision on the appeals on November&nbsp;8,
2005. The Court ruled in favor of CalTrans&#146; appeal,
rejecting the El Dorado County&#146;s argument that the
transportation conformity analysis did not conform to state
standards. The Court also rejected all but two of the legal
claims asserted in the appeal by El Dorado County and Voices for
Rural Living against the environmental impact report
(&#147;EIR&#148;) prepared by CalTrans for the interchange that
will connect Highway 50 to the Shingle Springs Rancheria. For
the remaining two issues, the Court held that CalTrans must
supplement its environmental analysis by adding some discussion
to the air quality chapter to further explain the project&#146;s
contribution to overall vehicular emissions in the region, and
that CalTrans also must evaluate whether a smaller casino and
hotel would reduce environmental impacts. The Court acknowledged
CalTrans lacks jurisdiction to require the Shingle Springs Tribe
to develop a smaller casino, but nevertheless required some
discussion of this alternative in the interchange EIR. On
December&nbsp;19, 2005, CalTrans filed a Petition for Review
with the Supreme Court of the State of California, and on
February&nbsp;8, 2006 the Supreme Court denied the Petition for
Review and ordered
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">108

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<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
the Court of Appeals decision to be depublished. CalTrans is now
preparing to comply with the Court of Appeals order.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has not recorded any liability for this matter as
management currently believes that the Court&#146;s rulings will
ultimately allow the project to commence. However, there can be
no assurance that the final outcome of this matter is not likely
to have a material adverse effect upon the Company&#146;s
consolidated financial statements.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Grand Casinos, Inc. litigation</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In connection with the establishment of Lakes as a public
corporation on December&nbsp;31, 1998, via a distribution of its
common stock to the shareholders of Grand Casinos, the Company
and Grand Casinos entered into an agreement governing the
sharing or allocation of tax benefits accruing to Grand Casinos
and certain affiliated companies of Grand Casinos. Lakes
asserted claims against Grand Casinos for amounts to which Lakes
believed it was entitled under the tax sharing agreement. On
December&nbsp;1, 2004, Lakes entered into a settlement agreement
with Grand Casinos and its parent company, Park Place
Entertainment Corporation (now known as &#147;Harrah&#146;s
Entertainment, Inc.&#148; or &#147;Harrah&#146;s&#148;),
pursuant to which Lakes received $11.3&nbsp;million in December
2004 in satisfaction of its prior claim and its future rights to
the tax benefits that were the subject of the dispute. Lakes
will be required to provide reimbursement for its share of the
disallowed benefits. This settlement income has been recorded as
other income in the consolidated statement of earnings (loss)
for the year ended January&nbsp;2, 2005. Lakes has not recorded
any tax related to the settlement payment of $11.3&nbsp;million,
as Lakes believes this settlement is not taxable to Lakes.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Louisiana Department of Revenue litigation tax
    matter</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Louisiana Department of Revenue maintains a position that
Lakes owes additional Louisiana corporation income tax for the
period ended January&nbsp;3, 1999 and the tax years ended 1999
through 2001 and additional Louisiana corporation franchise tax
for the tax years ended 2000 through 2002. This determination is
the result of an audit of Louisiana tax returns filed by Lakes
for the tax periods at issue and relates to the reporting of
income earned by Lakes in connection with the managing of two
Louisiana-based casinos. On December&nbsp;20, 2004, the
Secretary of the Department of Revenue of the State of Louisiana
filed a petition to collect taxes in the amount of
$8.6&nbsp;million, excluding interest, against Lakes in the
19th&nbsp;Judicial District Court, East Baton Rouge Parish,
Louisiana (Docket No.&nbsp;527596, Section&nbsp;23). In the
petition to collect taxes the Department of Revenue of the state
of Louisiana asserts that additional corporation income tax and
corporation franchise tax are due by Lakes for the taxable
periods set forth above. Lakes maintains that it has remitted
the proper Louisiana corporation income tax and Louisiana
corporation franchise tax for the taxable periods at issue. On
February&nbsp;14, 2005, Lakes filed an answer to the petition to
collect taxes asserting all proper defenses and maintaining that
no additional taxes are owed and that the petition to collect
taxes should be dismissed. Management intends to vigorously
contest this action by the Louisiana Department of Revenue.
Lakes may be required to pay up to the $8.6&nbsp;million
assessment plus interest if Lakes is not successful in this
matter. The Company has recorded a provision for its estimated
settlement related to this examination including accrued
interest, which is included as part of income taxes payable on
the Company&#146;s consolidated balance sheets.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>WPTE litigation with TRV</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On September&nbsp;19, 2005, WPTE filed suit in the California
Superior Court seeking to keep the Travel Channel from
interfering with WPTE&#146;s prospective contractual
relationship with third party networks in connection with the
sale of the broadcast rights to the PPT, and to clarify and
enforce WPTE&#146;s rights with respect to the WPT. Under
WPTE&#146;s existing agreement with TRV for the World Poker Tour
program (the &#147;WPT Agreements&#148;), TRV is afforded the
right to negotiate exclusively with WPTE with respect to certain
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">109

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<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
types of programming developed by WPTE during a 60&nbsp;day
period. Pursuant to the WPT Agreements, WPTE submitted the PPT
to TRV and began negotiations but failed to reach an agreement
with TRV within the allotted negotiation window. Consequently,
WPTE began discussions with other networks. While WPTE later
revived its attempts to reach a deal with TRV after TRV&#146;s
exclusive bargaining window had ended, WPTE ultimately received
an offer from ESPN. WPTE submitted this offer to TRV pursuant to
TRV&#146;s contractual last right to match the deal as specified
under the WPT Agreements. Thereafter, TRV sent letters to WPTE
and ESPN asserting, among other things, that WPTE was not
entitled to complete a deal for the PPT with a third party.
Following TRV&#146;s letters, WPTE filed suit on
September&nbsp;19, 2005, alleging that TRV breached the WPT
Agreements and interfered with WPTE&#146;s prospective
contractual relationship with ESPN, and seeking a judicial
declaration of WPTE&#146;s rights under the WPT Agreements to
produce non-World Poker Tour branded programs covering poker
tournaments. Subsequent to WPTE filing, ESPN withdrew its offer
to WPTE to acquire the broadcast rights to the PPT. On
September&nbsp;22, 2005, TRV and Discovery Communications, Inc.
filed an answer and cross-complaint and subsequently filed a
motion for judgment on the pleadings and an
&#147;anti-SLAPP&#148; motion, both of which were denied on
November&nbsp;10, 2005. On January&nbsp;25, 2006, the parties
settled the lawsuit and TRV entered into an agreement with WPTE
to air the PPT television series.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Other litigation</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes and its subsidiaries are involved in various other
inquiries, administrative proceedings, and litigation relating
to contracts and other matters arising in the normal course of
business. While any proceeding or litigation has an element of
uncertainty, management currently believes that the final
outcome of these matters, including the matters discussed above,
is not likely to have a material adverse effect upon the
Company&#146;s consolidated financial statements.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>15.</B></TD>
    <TD>
    <B>Related party transactions</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes, through its subsidiaries Lakes Jamul, Inc. and Lakes
Shingle Springs, Inc. respectively, advanced $0.97&nbsp;million
to each of KAR-California and KAR-Shingle Springs (the &#147;KAR
Entities&#148;) pursuant to promissory notes dated in 1999
(collectively, the &#147;1999 Notes&#148;). At the time, the KAR
Entities held rights in development and management contracts for
the Jamul and Shingle Springs casino projects. The loans were
part of overall transactions in which Lakes acquired interests
in those casino projects by entering into joint ventures with
the KAR Entities. Under the joint venture arrangements, Lakes
and the KAR Entities jointly formed the companies to develop the
casinos (&#147;Project Companies&#148;) and the KAR Entities
assigned their rights in the development and management
contracts to the Project Companies. As such, the business
purpose for the loans by Lakes was to acquire interests in the
subject casinos projects, as the loans were a condition to
entering into the joint ventures.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2003, Lakes purchased the respective joint venture interests
of the KAR Entities. At the time of the purchase, the KAR
Entities owed Lakes $1.9&nbsp;million under the 1999 Notes. As
consideration for the purchase of the KAR Entities&#146;
partnership interest in Jamul and Shingle Springs, Lakes forgave
the amounts owed under the 1999 Notes of $1.9&nbsp;million.
Lakes recorded the $1.9&nbsp;million as part of its long-term
assets related to the Jamul and Shingle Springs Indian casino
projects described in Note&nbsp;1. In connection with the
purchase transactions, Lakes entered into separate agreements
with Kevin M. Kean and Jerry A. Argovitz, the two individual
owners of the KAR Entities. Under these agreements, Lakes
forgave the notes receivable from the KAR Entities subject to
the agreements of Messrs.&nbsp;Kean and/or Argovitz to assume
the obligations under the notes in certain circumstances.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the agreement with Mr.&nbsp;Kean, Mr.&nbsp;Kean may elect
to serve as a consultant to Lakes during the term of each casino
management contract if he is found suitable by relevant gaming
regulatory authorities. In such event, Mr.&nbsp;Kean will be
entitled to receive annual consulting fees equal to 20% of the
management fees received by Lakes from the Jamul casino
operations and 15% of the management fees received by Lakes from
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">110

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<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
the Shingle Springs casino operations, less certain costs of
these operations. If Mr.&nbsp;Kean is found suitable by relevant
gaming regulatory authorities and elects to serve as a
consultant, he will be obligated to repay 50% of the notes
receivable from the KAR Entities. If Mr.&nbsp;Kean is not found
suitable by relevant gaming regulatory authorities or otherwise
elects not to serve as a consultant, he will be entitled to
receive annual payments of $1&nbsp;million from each of the
Jamul and Shingle Springs casino projects during the term of the
respective casino management contracts (but not during any
renewal term of such management contracts).
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the agreement with Mr.&nbsp;Argovitz, if Mr.&nbsp;Argovitz
is found suitable by relevant gaming regulatory authorities, he
may elect to re-purchase his respective original equity interest
in the Lakes&#146; Subsidiaries and he will be entitled to
obtain a 20% equity interest in the Lakes&#146; entity that
holds the rights to the management contract with the Jamul
casino and a 15% equity interest in Lakes&#146; management
contract with the Shingle Springs casino. Upon obtaining this
interest, Mr.&nbsp;Argovitz will become obligated to repay 50%
of the 1999 Notes. If he is not found suitable or does not elect
to purchase equity interests in the Lakes Subsidiaries,
Mr.&nbsp;Argovitz may elect to receive annual payments of
$1&nbsp;million from each of the Jamul and Shingle Springs
casino projects from the date of election through the term of
the respective casino management contracts (but not during any
renewal term of such management contracts).
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, the KAR Entities owe Lakes $1.3&nbsp;million as of
January&nbsp;1, 2006, and January&nbsp;2, 2005. These amounts
represent the KAR Entities&#146; portion of non-reimbursed costs
related to the Jamul and Shingle Springs projects. The partners
of the KAR Entities will repay these amounts from future
revenues earned from the projects.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes guaranteed a loan of $2&nbsp;million to Kevin Kean and
received collateral, which included a subordinated interest in
Mr.&nbsp;Kean&#146;s personal residence and shares of common
stock. This guaranty was originally an obligation of Grand
Casinos (Lakes&#146; predecessor) that was assumed by Lakes in
connection with its December&nbsp;31, 1998 spin-off from Grand
Casinos. In addition, Lakes received collateral from Kevin Kean
consisting of Mr.&nbsp;Kean&#146;s economic interest in the
Shingle Springs and Jamul projects of 15% and 20%, respectively.
In January 2001, Mr.&nbsp;Kean defaulted under the loan. On
March&nbsp;26, 2001 Lakes paid $2.2&nbsp;million in full
repayment of Mr.&nbsp;Kean&#146;s loan. In September 2001, Lakes
foreclosed on Mr.&nbsp;Kean&#146;s personal residence and
effected a sheriff&#146;s sale. As a result of these
transactions, the resulting net balance due from Mr.&nbsp;Kean
was approximately $1.8&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company determined that Mr.&nbsp;Kean&#146;s obligation to
Lakes is similar to a collateral dependent loan and that the
asset impairment assessment guidance in SFAS&nbsp;No.&nbsp;114
is appropriate. At the time of the default, the present value of
expected future cash flows of Mr.&nbsp;Kean&#146;s collateral
discounted for the inherent risks in those future cash flows
exceeded the amount of Mr.&nbsp;Kean&#146;s $1.8&nbsp;million
obligation. Therefore, no impairment was recorded at the time of
default.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company calculated the fair value of this collateral by
determining the present value of expected future cash flows of
Mr.&nbsp;Kean&#146;s collateral discounted for the inherent
risks in those future cash flows. This calculation resulted in a
fair value of the collateral, which exceeded
Mr.&nbsp;Kean&#146;s obligation of $1.8&nbsp;million as of
January&nbsp;1, 2006, and January&nbsp;2, 2005. Therefore, no
impairment has been recorded.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes continues to monitor the collectibility of this note on a
quarterly basis and as of January&nbsp;1, 2006 and
January&nbsp;2, 2005 concluded that repayment was probable based
upon Mr.&nbsp;Kean&#146;s remaining economic interests in the
Jamul and Shingle Springs projects. Lakes also advanced
Mr.&nbsp;Kean $0.8&nbsp;million and $0.2&nbsp;million in 2005
and 2004 respectively as consideration for assisting Lakes in
obtaining and entering into development and management contracts
for new casino projects. These amounts are included as part of
other long-term assets on the consolidated balance sheets. The
advances are evidenced by a loan that is secured by the future
operations of certain casino projects in which Mr.&nbsp;Kean is
directly involved in. The outstanding amount of this loan was
$1.0&nbsp;million and $0.2&nbsp;million at January&nbsp;1, 2006,
and January&nbsp;2, 2005, respectively. Mr.&nbsp;Kean has agreed
that 50% of the consulting fees or other payments payable to him
under the agreements
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">111

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<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
with Lakes and its subsidiaries shall be applied toward
repayment of his indebtedness to Lakes. In the event of a
default under the agreements, 100% of the fees and payments will
be applied toward repayment of his indebtedness to Lakes.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, Lakes has an outstanding note from Kevin Kean of
$0.1&nbsp;million and $0.25&nbsp;million at January&nbsp;1,
2006, and January&nbsp;2, 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes has entered into a license agreement with Sklansky Games,
LLC (&#147;Sklansky&#148;) pursuant to which Lakes is developing
a World Poker Tour No Limit Texas Hold&#146;Em casino table game
that uses certain of Sklansky&#146;s intellectual property
rights. Lakes had also entered into a license agreement with
WPTE pursuant to which Lakes has obtained a license to utilize
the World Poker Tour name and logo in connection with a casino
table game. Under the terms of this agreement, if Lakes elects
to proceed with its development of the casino table game, Lakes
will be required to pay WPTE a specified minimum annual royalty
payment of 10% of gross revenues, and Sklansky a specified
minimum annual royalty payment of 30% of the gross revenue Lakes
receives from its sale or lease of the game. Also, Lakes,
through one of its wholly-owned subsidiaries, holds an indirect
majority ownership in WPTE. Lyle Berman and his son, Bradley
Berman, own 28% and 44% equity interests in Sklansky,
respectively. Lyle Berman also serves as Chairman of WPTE, and
Bradley Berman is a member of WPTE&#146;s Board of Directors.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Effective as of February&nbsp;24, 2004, WPTE entered into a
non-exclusive license agreement with G-III Apparel Group. Ltd.
(&#147;G-III&#148;). Morris Goldfarb, a Lakes director, is also
a director, Chairman of the Board and Chief Executive Officer of
G-III. Under the agreement, G-III licenses the World Poker Tour
name, logo and trademark from WPTE in connection with
G-III&#146;s production of certain types of apparel for
distribution in authorized channels within the United States,
its territories and possessions and in certain circumstances,
Canada. As consideration for this non-exclusive license, G-III
pays royalties and certain other fees to WPTE. As of
January&nbsp;1, 2006, G-III paid WPTE approximately
$0.3&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As discussed in Note&nbsp;6, WPTE owned approximately 11.7% of
PokerTek at January&nbsp;1, 2006. Lyle Berman along with his son
Bradley Berman, who is an employee of Lakes and sits on the
Board of Directors of WPTE, made personal investments in
PokerTek, and as of January&nbsp;1, 2006, held a combined
ownership of approximately 9% of PokerTek. In addition, Lyle
Berman agreed to serve as Chairman of the Board of PokerTek and
received 200,000 stock options in the company.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">112

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<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>16.</B></TD>
    <TD>
    <B>Segment Information</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lakes&#146; principal business is the development and management
of gaming-related properties. Additionally, the Company is the
majority owner of WPTE (see Note&nbsp;1). Substantially all of
Lakes&#146; and WPTE&#146;s operations are conducted in the
United States. Episodes of the World Poker series are
distributed internationally by a third party distributor.
Lakes&#146; segments reported below (in millions) are the
segments of the Company for which separate financial information
is available and for which operating results are evaluated by
the chief operating decision-maker in deciding how to allocate
resources and in assessing performance. The amounts in Corporate
and Eliminations below have not been allocated to the other
segments because these costs are not easily allocable and to do
so would not be practical.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="46%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>Industry Segments</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Casino</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>World Poker</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Corporate&nbsp;&#38;</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>projects</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Tour</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Eliminations</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Consolidated</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>2005</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenue</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>18.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>18.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net impairment charges</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating earnings (loss)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6.1</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(14.5</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(16.5</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>160.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>230.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>2004</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenue</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>17.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>17.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net impairment charges</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating earnings (loss)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3.4</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(10.2</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(12.9</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>127.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>209.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>2003</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenue</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net impairment charges</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating earnings (loss)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(0.3</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6.3</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3.4</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>118.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>53.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>174.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>0.5</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>17.</B></TD>
    <TD>
    <B>Net impairment charges</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Net impairment charges of $0.9&nbsp;million, $6.2&nbsp;million
and $1.0&nbsp;million were recognized during 2005, 2004 and
2003, respectively. The net impairment losses related to the
following (in thousands):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="71%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term assets related to the Nipmuc Nation Indian casino
    project (see Note&nbsp;4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>5,832</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term assets related to the Kickapoo Tribe casino project
    (see Note&nbsp;4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>94</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Sale of land in Las Vegas</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>788</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(588</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Net Impairment Charges</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>882</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6,244</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>1,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">113

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>LAKES ENTERTAINMENT, INC. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>18.</B></TD>
    <TD>
    <B>Subsequent events</B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><U>Lakes&#146; financing facility</U>:</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On February&nbsp;15, 2006, Lakes closed on a $50&nbsp;million
financing facility with an affiliate of Prentice Capital
Management, LP. An initial draw of $25&nbsp;million was made
under the facility, another $10&nbsp;million is immediately
available under the facility and the remaining $15&nbsp;million
can be drawn in $5&nbsp;million increments subject to certain
conditions. Any funds drawn on the facility bear interest at the
rate of 12%&nbsp;per annum, interest payable in arrears monthly,
subject to adjustment based on the value of the collateral, and
are due and payable in full on the third anniversary of the
closing date. Lakes may prepay the facility in whole or in part
without penalty at any time. Lakes received net proceeds of
approximately $12.1&nbsp;million after repaying the Partnership
facility with accrued interest and after costs and fees
associated with the Prentice financing facility. Approximately
$10.2&nbsp;million of the initial draw was used to repay in full
Lakes&#146; December&nbsp;16, 2005 loan from the Partnership
(Note&nbsp;9).
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The $50&nbsp;million financing facility is secured by most of
the assets of Lakes and certain of its subsidiaries (other than
WPTE), including all of Lakes&#146; shares of WPTE. Lakes is
permitted to sell up to 3&nbsp;million of the approximate
12.5&nbsp;million WPTE shares it owns without application to
reduction of the amounts owing under the financing facility,
subject to certain conditions. As consideration for the
financing, Lakes issued to an affiliate of Prentice Capital
warrants to purchase&nbsp;1.25&nbsp;million shares of common
stock that can be immediately exercised at $7.50&nbsp;per share.
The warrants are subject to customary anti-dilution protections.
An additional 1.25&nbsp;million warrants to purchase common
stock are exercisable at $7.50&nbsp;per share as additional
draws under the facility are made. Up to an additional
1.96&nbsp;million warrants to purchase common stock can be
exercised at $7.50&nbsp;per share upon the occurrence of certain
events relating to loan collateral. All warrants expire in
February, 2013. The lender has demand registration rights with
respect to the Lakes common stock underlying the warrants and,
upon certain events, the WPTE shares pledged by Lakes to the
lender. Lakes has agreed to pay substantially all of the costs
incurred in the preparation and filing of these registration
statements. Lakes is in the process of valuing the warrants
which will be recorded as a debt discount with the value
recorded as additional paid in capital.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><U>WPTE agreements with the TRV: </U></I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
WPTE entered into an agreement with Discovery Communications,
Inc. (the parent company to the TRV) in January 2006, pursuant
to which TRV agreed to license the U.S.&nbsp;rights to telecast
Season One of the Professional Poker
Tour<SUP style="font-size: 85%; vertical-align: text-top"><FONT style="font-variant:SMALL-CAPS">tm</FONT></SUP>
(PPT)&nbsp;events. The agreement provides the TRV with
successive one-year options to acquire the exclusive license to
telecast the episodes produced in connection with Seasons Two
through Four of the PPT. Additionally, upon termination of the
agreement, TRV&#146;s revenue share percentage declines over the
following four years. There is no revenue share percentage
beginning in the fifth year following the termination of the
agreement.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">114

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<!-- link2 "ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>ITEM&nbsp;9.</B></TD>
    <TD>
    <B><I>CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
    ACCOUNTING AND FINANCIAL DISCLOSURE</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Not applicable.
</DIV>

<!-- link2 "ITEM 9A. CONTROLS AND PROCEDURES" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="10%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD><B>ITEM&nbsp;9A.</B></TD>
    <TD>
    <B><I>CONTROLS AND PROCEDURES</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Disclosure Controls and Procedures</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the supervision and with the participation of our
management, including our Chief Executive Officer and Chief
Financial Officer, we conducted an evaluation of our disclosure
controls and procedures, as such term is defined under
Rules&nbsp;<FONT style="white-space: nowrap">13a-15(e)</FONT> or
<FONT style="white-space: nowrap">15d-15(e)</FONT> promulgated
under the Securities Exchange Act of 1934, as amended (the
&#147;Exchange Act&#148;), as of the end of the period covered
by this report. Based on this evaluation, our Chief Executive
Officer and Chief Financial Officer concluded that our
disclosure controls and procedures are effective.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Management&#146;s Annual Report on Internal Control over
Financial Reporting</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our management is responsible for establishing and maintaining
adequate internal control over financial reporting (as defined
in Rules&nbsp;<FONT style="white-space: nowrap">13a-15(f)</FONT>
and <FONT style="white-space: nowrap">15d-5(f)</FONT> under the
Exchange Act). Our management assessed the effectiveness of our
internal control over financial reporting as of January&nbsp;1,
2006. In making this assessment, our management used the
criteria set forth by the Committee of Sponsoring Organizations
of the Treadway Commission (&#147;COSO&#148;) in Internal
Control-Integrated Framework. Our management has concluded that,
as of January&nbsp;1, 2006, our internal control over financial
reporting is effective based on these criteria. Piercy Bowler
Taylor&nbsp;&#38; Kern, the independent registered public
accounting firm that audited the consolidated financial
statements included in this Annual Report on
Form&nbsp;<FONT style="white-space: nowrap">10-K</FONT> has
issued an attestation report on management&#146;s assessment of
our internal control over financial reporting, which is included
in this Annual Report on
Form&nbsp;<FONT style="white-space: nowrap">10-K.
</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our management, including our Chief Executive Officer and Chief
Financial Officer, does not expect that our internal control
over financial reporting will prevent all error and all fraud. A
control system, no matter how well conceived and operated, can
provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Further, the design of
a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered
relative to their costs. Because of the inherent limitations in
all control systems, no evaluation of controls can provide
absolute assurance that all control issues and instances of
fraud, if any, within Lakes have been detected. Lakes&#146;
internal control over financial reporting, however, are designed
to provide reasonable assurance that the objectives of internal
control over financial reporting are met.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Changes in Internal Control Over Financial Reporting</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a result of discussions with the staff of the Securities and
Exchange Commission on the Company&#146;s Annual Report on Form
<FONT style="white-space: nowrap">10-K</FONT> for the fiscal
year ended December&nbsp;28, 2003, during the fourth quarter of
2005 the Company re-evaluated and changed its accounting
methodology surrounding its contractual relationships with
Indian tribes, including the implementation of internal control
procedures supporting the new accounting methodology. These
changes were made prior to filing the Company&#146;s Annual
Report on Form <FONT style="white-space: nowrap">10-K</FONT> for
fiscal 2004 and the Quarterly Reports on Form
<FONT style="white-space: nowrap">10-Q</FONT> for the first
three quarters of fiscal 2005, all of which were filed in
December&nbsp;2005. There have been no other changes to our
internal control over financial reporting since the
implementation of the new accounting methodology.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">115

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<!-- link1 "REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER FINANCIAL REPORTING" -->

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>ON INTERNAL CONTROL OVER FINANCIAL REPORTING</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 8pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Board of Directors
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
Lakes Entertainment, Inc. and Subsidiaries
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
Minnetonka, Minnesota
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have audited management&#146;s assessment, included in the
accompanying Management Report on Internal Control Over
Financial Reporting, that Lakes Entertainment, Inc. and
Subsidiaries (the Company) maintained effective internal control
over financial reporting as of January&nbsp;1, 2006, based on
criteria established in <I>Internal Control&nbsp;&#151;
Integrated Framework </I>issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). The
Company&#146;s management is responsible for maintaining
effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over
financial reporting. Our responsibility is to express an opinion
on management&#146;s assessment and an opinion on the
effectiveness of the company&#146;s internal control over
financial reporting based on our audit.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether effective internal control
over financial reporting was maintained in all material
respects. Our audit included obtaining an understanding of
internal control over financial reporting, evaluating
management&#146;s assessment, testing and evaluating the design
and operating effectiveness of internal control, and performing
such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable
basis for our opinion.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A company&#146;s internal control over financial reporting is a
process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with
generally accepted accounting principles. A company&#146;s
internal control over financial reporting includes those
policies and procedures that (1)&nbsp;pertain to the maintenance
of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the
company; (2)&nbsp;provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company
are being made only in accordance with authorizations of
management and directors of the company; and (3)&nbsp;provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the
company&#146;s assets that could have a material effect on the
financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In our opinion, management&#146;s assessment that Lakes
Entertainment, Inc. and Subsidiaries maintained effective
internal control over financial reporting as of January&nbsp;1,
2006, is fairly stated, in all material respects, based on
criteria established in <I>Internal Control&nbsp;&#151;
Integrated Framework </I>issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). Also in our
opinion, the Company maintained, in all material respects,
effective internal control over financial reporting as of
January&nbsp;1, 2006, based on criteria established in
<I>Internal Control&nbsp;&#151; Integrated Framework </I>issued
by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO).
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have also audited, in accordance with the standards of the
Public Company Accounting Oversight Board (United States), the
consolidated financial statements of Lakes Entertainment, Inc.
and Subsidiaries and our report dated February&nbsp;17, 2006,
expressed an unqualified opinion thereon.
</DIV>

<DIV style="margin-top: 8pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    /s/ Piercy Bowler Taylor&nbsp;&#38; Kern</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 8pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Piercy Bowler Taylor&nbsp;&#38; Kern, Certified Public
Accountants
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
and Business Advisors a Professional Corporation
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 8pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Las Vegas, Nevada
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">
February&nbsp;17, 2006
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">116

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<!-- link2 "ITEM 9B. OTHER INFORMATION" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="10%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD><B>ITEM 9B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></TD>
    <TD>
    <B><I>OTHER INFORMATION</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
None.
</DIV>

<!-- link1 "PART III" -->

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>PART&nbsp;III</B>
</DIV>

<!-- link2 "Item 10. Directors and Executive Officers of the Registrant." -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;10.</B></TD>
    <TD>
    <B><I>Directors and Executive Officers of the Registrant.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has adopted a code of ethics that applies to the
Company&#146;s employees, including its principal executive
officer, principal financial officer, principal accounting
officer or controller, and persons performing similar functions.
The Company will provide, free of charge, a copy of this code of
ethics upon written request sent to our Secretary at 130
Cheshire Lane, Suite&nbsp;101, Minnetonka, MN 55305.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The other information required by this Item&nbsp;10 is
incorporated herein by reference to the discussions under the
sections captioned &#147;Proposal for Election of
Directors&#148;, &#147;Executive Compensation&nbsp;&#151;
Executive Officers of Lakes Entertainment&#148; and
&#147;Section&nbsp;16(a) Beneficial Reporting Compliance&#148;
to be included in the Company&#146;s definitive Proxy Statement
for its 2006 Annual Meeting of Shareholders to be filed with the
Securities and Exchange Commission.
</DIV>

<!-- link2 "Item 11. Executive Compensation." -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;11.</B></TD>
    <TD>
    <B><I>Executive Compensation.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The information required by this Item&nbsp;11 is incorporated
herein by reference to the discussions under the sections
captioned &#147;Executive Compensation,&#148; but excluding the
discussion included under the subsection captioned
&#147;Executive Compensation&nbsp;&#151; Stock Performance
Graph,&#148; to be included in the Company&#146;s definitive
Proxy Statement for its 2006 Annual Meeting of Shareholders to
be filed with the Securities and Exchange Commission.
</DIV>

<!-- link2 "Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters." -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;12.</B></TD>
    <TD>
    <B><I>Security Ownership of Certain Beneficial Owners and
    Management and Related Stockholder Matters.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The information required by this Item&nbsp;12 is incorporated
herein by reference to the discussion under the section
captioned &#147;Voting Securities and Principal Holders
Thereof&#148; to be included in the Company&#146;s definitive
Proxy Statement for its 2006 Annual Meeting of Shareholders to
be filed with the Securities and Exchange Commission.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><U>EQUITY COMPENSATION PLAN INFORMATION</U></B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Lakes Entertainment, Inc. 1998 Stock Option and Compensation
Plan (the &#147;1998 Employee Plan&#148;) and the
1998&nbsp;Director Stock Option Plan (the
&#147;1998&nbsp;Director Plan&#148;) permit the grant of up to a
maximum of 5,000,000&nbsp;shares and 500,000&nbsp;shares of
common stock, respectively, as of the end of fiscal 2005.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The 1998 Employee Plan is designed to integrate compensation of
our executives (including officers and directors but excluding
directors who are not also full-time employees) with our
long-term interests and those of our shareholders and to assist
in the retention of executives and other key personnel. Under
the 1998&nbsp;Director Plan, we may issue equity awards to
members of our Board of Directors, who are not also our
employees or employees of our subsidiaries. The 1998 Employee
Plan and 1998&nbsp;Director Plan have each been approved by our
shareholders.
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In connection with our establishment as a public corporation,
which occurred pursuant to a distribution of our common stock to
the then shareholders of Grand Casinos (the
&#147;Distribution&#148;), we issued options to purchase our
common stock to the holders of then-outstanding options to
purchase common stock of Grand Casinos. These
Distribution-related options were treated as awards granted
outside of the 1998 Employee Plan and the 1998&nbsp;Director
Plan, and we did not seek shareholder approval for the
Distribution-related option grants apart from the approval
obtained from the shareholders of Grand Casinos for the overall
public distribution of our common stock.
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">117

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table provides certain information as of
January&nbsp;1, 2006 with respect to our equity compensation
plans:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="39%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number of Securities</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Remaining Available</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Securities to be</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>for Future Issuance</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Issued Upon</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Under Equity</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Exercise of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Weighted-Average</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Compensation Plans</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Outstanding</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Exercise Price of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Excluding</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Options, Warrants</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Outstanding Options,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Securities Reflected</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2" align="left" nowrap><B>Plan Category</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>and Rights</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Warrants and Rights</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>in First Column)</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity compensation plans approved by shareholders:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1998 Employee Plan</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,350,700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,500</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1998 Director Plan</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>317,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>7.13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>75,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,667,700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6.09</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>94,500</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity Compensation plans not approved by shareholders:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Distribution&nbsp;&#151; related Stock Option</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>639,926</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>5.59</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Warrants to Partnership</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>7.88</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,639,926</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>7.32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    TOTAL</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,307,626</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6.53</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>94,500</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<!-- link2 "Item 13. Certain Relationships and Related Transactions" -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;13.</B></TD>
    <TD>
    <B><I>Certain Relationships and Related Transactions</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The information required by this Item&nbsp;13 is incorporated
herein by reference to the discussion under the section
captioned &#147;Certain Relationships and Related
Transactions&#148; to be included in the Company&#146;s
definitive Proxy Statement for its 2006 Annual Meeting of
Shareholders to be filed with the Securities and Exchange
Commission.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<!-- link2 "Item 14. Principal Accountant Fees and Services" -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;14.</B></TD>
    <TD>
    <B><I>Principal Accountant Fees and Services</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The information required by this Item&nbsp;14 is incorporated
herein by reference to the discussion under the subsections
captioned &#147;Independent Registered Public Accounting
Firm&nbsp;&#151; Audit and Non-Audit Fees&#148; and
&#147;Independent Registered Public Accounting Firm&nbsp;&#151;
Pre-Approval of Audit and Non-Audit Services&#148; to be
included in the Company&#146;s definitive Proxy Statement for
its 2006 Annual Meeting of Shareholders to be filed with the
Securities and Exchange Commission.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<!-- link1 "PART IV" -->

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>PART&nbsp;IV</B>
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<!-- link2 "ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES" -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="10%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD><B>ITEM&nbsp;15.</B></TD>
    <TD>
    <B><I>EXHIBITS AND FINANCIAL STATEMENT SCHEDULES</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)(1) Consolidated Financial Statements:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="90%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Page</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Report of Independent Registered Public Accounting Firm</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Report of Independent Registered Public Accounting Firm</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>74</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidated Balance Sheets as of January&nbsp;1, 2006 and
    January&nbsp;2, 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>75</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidated Statements of Loss for the fiscal years ended
    January&nbsp;1, 2006, January&nbsp;2, 2005 and December&nbsp;28,
    2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>76</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidated Statements of Comprehensive Loss for the fiscal
    years ended January&nbsp;1, 2006, January&nbsp;2, 2005 and
    December&nbsp;28, 2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>77</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidated Statements of Shareholders&#146; Equity for the
    fiscal years ended January&nbsp;1, 2006, January&nbsp;2, 2005
    and December&nbsp;28, 2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>78</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidated Statements of Cash Flows for the fiscal years ended
    January&nbsp;1, 2006, January&nbsp;2, 2005 and December&nbsp;28,
    2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>79</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Notes to Consolidated Financial Statements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>80</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)(2)&nbsp;None
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">118

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)(3)&nbsp;Exhibits:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3" align="center" nowrap><B>Exhibits</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Description</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>2</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Agreement and Plan of Merger by and among Hilton, Park Place
    Entertainment Corporation, Gaming Acquisition Corporation, Lakes
    Gaming, Inc., and Grand Casinos, Inc. dated as of June&nbsp;30,
    1998. (Incorporated herein by reference to Exhibit&nbsp;2.2 to
    Lakes&#146; Form 10 Registration Statement as filed with the
    Securities and Exchange Commission (the &#147;Commission&#148;)
    on October&nbsp;23, 1998 (the &#147;Lakes Form 10&#148;)).</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>3</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Articles of Incorporation of Lakes Entertainment, Inc. (as
    amended through May&nbsp;4, 2004). (Incorporated herein by
    reference to Exhibit&nbsp;3.1 to Lakes&#146; Report on
    Form&nbsp;10-Q for the fiscal quarter ended April&nbsp;4, 2004.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>3</TD>
    <TD align="left" valign="top" nowrap>.2</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Lakes Entertainment, Inc. Certificate of Designation of
    Series&nbsp;A Convertible Preferred Stock dated
    February&nbsp;21, 2006. (Incorporated herein by reference to
    Exhibit&nbsp;3.1 to Lakes&#146; Current Report on Form&nbsp;8-K
    filed with the Commission on February&nbsp;22, 2006.).</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>3</TD>
    <TD align="left" valign="top" nowrap>.3</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    By-laws of Lakes Gaming, Inc. (Incorporated herein by reference
    to Exhibit&nbsp;3.2 to the Lakes Form&nbsp;10.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>4</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Rights Agreement, dated as of May&nbsp;12, 2000, between Lakes
    Gaming, Inc. and Norwest Bank Minnesota, National Association,
    as Rights Agent. (Incorporated herein by reference to
    Exhibit&nbsp;4.1 to Lakes&#146; Form&nbsp;8-K filed May&nbsp;16,
    2000.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Distribution Agreement by and between Grand Casinos, Inc. and
    Lakes Gaming, Inc., dated as of December&nbsp;31, 1998.
    (Incorporated herein by reference to Exhibit&nbsp;10.1 to
    Lakes&#146; Form&nbsp;8-K filed January&nbsp;8, 1999.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.2</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Employee Benefits and Other Employment Matters Allocation
    Agreement by and between Grand Casinos, Inc. and Lakes Gaming,
    Inc., dated as of December&nbsp;31, 1998. (Incorporated herein
    by reference to Exhibit&nbsp;10.2 to Lakes&#146; Form&nbsp;8-K
    filed January&nbsp;8, 1999.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.3</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Intellectual Property License Agreement by and between Grand
    Casinos, Inc. and Lakes Gaming, Inc., dated as of
    December&nbsp;31, 1998. (Incorporated herein by reference to
    Exhibit&nbsp;10.5 to Lakes&#146; Form&nbsp;8-K filed
    January&nbsp;8, 1999.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.4</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Tax Allocation and Indemnity Agreement by and between Grand
    Casinos, Inc. and Lakes Gaming, Inc., dated as of
    December&nbsp;31, 1998. (Incorporated herein by reference to
    Exhibit&nbsp;10.3 to Lakes&#146; Form&nbsp;8-K filed
    January&nbsp;8, 1999.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.5</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Intentionally omitted.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.6</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Intentionally omitted.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.7</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Intentionally omitted.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.8</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Lakes Gaming, Inc. 1998 Stock Option and Compensation Plan.
    (Incorporated herein by reference to Annex&nbsp;G to the Joint
    Proxy Statement/ Prospectus of Hilton Hotels Corporation and
    Grand dated and filed with the Commission on October&nbsp;14,
    1998 (the &#145;Joint Proxy Statement&#148;) which is attached
    to the Lakes Form 10 as Annex&nbsp;A.) *</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.9</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Lakes Gaming, Inc. 1998&nbsp;Director Stock Option Plan.
    (Incorporated herein by reference to Annex&nbsp;H to the Joint
    Proxy Statement which is attached to the Lakes Form 10 as
    Annex&nbsp;A.) *</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.10</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Intentionally omitted.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.11</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Intentionally omitted.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.12</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Intentionally omitted.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.13</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Intentionally omitted.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.14</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Intentionally omitted.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.15</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Intentionally omitted.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.16</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Intentionally omitted.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.17</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Intentionally omitted.</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">119

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; ">

<TR style="font-size: 1pt;">
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3" align="center" nowrap><B>Exhibits</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Description</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.18</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Memorandum of Agreement Regarding Gaming Development and
    Management Agreements dated as of the 15th&nbsp;day of February,
    2000, by and between the Jamul Indian Village and Lakes
    KAR&nbsp;&#151; California, LLC, a Delaware limited liability
    company. (Incorporated herein by reference to Exhibit&nbsp;10.68
    to Lakes&#146; Report on Form&nbsp;10-K for the fiscal year
    ended January&nbsp;2, 2000.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.19</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Operating Agreement of Lakes Kean Argovitz Resorts&nbsp;&#151;
    California, LLC dated as of the 25th&nbsp;day of May, 1999, by
    and between Lakes Jamul, Inc. and Kean Argovitz
    Resorts&nbsp;&#151; Jamul, LLC. (Incorporated herein by
    reference to Exhibit&nbsp;10.69 to Lakes&#146; Report on
    Form&nbsp;10-K for the fiscal year ended January&nbsp;2, 2000.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.20</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Promissory Note dated as of the 15th&nbsp;day of February, 2000,
    by and among the Jamul Indian Village and Lakes KAR&nbsp;&#151;
    California, LLC, a Delaware limited liability company.
    (Incorporated herein by reference to Exhibit&nbsp;10.70 to
    Lakes&#146; Report on Form&nbsp;10-K for the fiscal year ended
    January&nbsp;2, 2000.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.21</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Security Agreement dated as of the 25th&nbsp;day of May, 1999,
    by and between Lakes Jamul, Inc., a Minnesota corporation and
    Lakes Kean Argovitz Resorts&nbsp;&#151; California, LLC, a
    Delaware limited liability company. (Incorporated herein by
    reference to Exhibit&nbsp;10.71 to Lakes&#146; Report on
    Form&nbsp;10-K for the fiscal year ended January&nbsp;2, 2000.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.22</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Management Agreement between the Shingle Springs Band of Miwok
    Indians and Kean Argovitz Resorts&nbsp;&#151; Shingle Springs,
    LLC, dated as of the 11th&nbsp;day of June, 1999. (Incorporated
    herein by reference to Exhibit&nbsp;10.72 to Lakes&#146; Report
    on Form&nbsp;10-K for the fiscal year ended January&nbsp;2,
    2000.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.23</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Development Agreement between the Shingle Springs Band of Miwok
    Indians and Kean Argovitz Resorts&nbsp;&#151; Shingle Springs,
    LLC, dated as of the 11th&nbsp;day of June, 1999. (Incorporated
    herein by reference to Exhibit&nbsp;10.73 to Lakes&#146; Report
    on Form&nbsp;10-K for the fiscal year ended January&nbsp;2,
    2000.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.24</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Management Agreement dated as of the 29th&nbsp;day of July,
    1999, by and among Lakes Shingle Springs, Inc., a Minnesota
    corporation and Lakes KAR&nbsp;&#151; Shingle Springs, LLC, a
    Delaware limited liability company. (Incorporated herein by
    reference to Exhibit&nbsp;10.74 to Lakes&#146; Report on
    Form&nbsp;10-K for the fiscal year ended January&nbsp;2, 2000.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.25</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Operating Agreement of Lakes KAR&nbsp;&#151; Shingle Springs,
    LLC dated as of the 29th&nbsp;day of July, 1999, by Lakes
    Shingle Springs, Inc. and Kean Argovitz Resorts&nbsp;&#151;
    Shingle Springs, LLC. (Incorporated herein by reference to
    Exhibit&nbsp;10.75 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2000.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.26</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Assignment and Assumption Agreement between Kean Argovitz
    Resorts&nbsp;&#151; Shingle Springs, LLC, a Nevada limited
    liability company, and Lakes KAR&nbsp;&#151; Shingle Springs,
    LLC, a Delaware limited liability company, dated as of the
    11th&nbsp;day of June, 1999. (Incorporated herein by reference
    to Exhibit&nbsp;10.76 to Lakes&#146; Report on Form&nbsp;10-K
    for the fiscal year ended January&nbsp;2, 2000.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.27</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Assignment and Assumption Agreement and Consent to Assignment
    and Assumption, by and between Lakes Gaming, Inc., a Minnesota
    corporation, and Kean Argovitz Resorts&nbsp;&#151; Shingle
    Springs, LLC, a Nevada limited liability company, dated as of
    the 11th&nbsp;day of June, 1999. (Incorporated herein by
    reference to Exhibit&nbsp;10.77 to Lakes&#146; Report on
    Form&nbsp;10-K for the fiscal year ended January&nbsp;2, 2000.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.28</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Security Agreement dated as of the 29th&nbsp;day of July, 1999,
    by and between Lakes Shingle Springs, Inc., a Minnesota
    corporation, and Lakes KAR&nbsp;&#151; Shingle Springs, LLC, a
    Delaware limited liability company. (Incorporated herein by
    reference to Exhibit&nbsp;10.78 to Lakes&#146; Report on
    Form&nbsp;10-K for the fiscal year ended January&nbsp;2, 2000.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.29</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Promissory Note dated as of the 29th&nbsp;day of July, 1999, by
    and among Kean Argovitz Resorts&nbsp;&#151; Shingle Springs,
    LLC, a Nevada limited liability company, and Lakes Shingle
    Springs, Inc., a Minnesota corporation. (Incorporated herein by
    reference to Exhibit&nbsp;10.79 to Lakes&#146; Report on
    Form&nbsp;10-K for the fiscal year ended January&nbsp;2, 2000.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.30</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Pledge Agreement dated as of the 29th&nbsp;day of July, 1999, by
    and between Kean Argovitz Resorts&nbsp;&#151; Shingle Springs,
    LLC, a Nevada limited liability company and Lakes Shingle
    Springs, Inc., a Minnesota corporation. (Incorporated herein by
    reference to Exhibit&nbsp;10.80 to Lakes&#146; Report on
    Form&nbsp;10-K for the fiscal year ended January&nbsp;2, 2000.)</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">120

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; ">

<TR style="font-size: 1pt;">
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3" align="center" nowrap><B>Exhibits</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Description</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.31</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Member Control Agreement of Metroplex-Lakes, LLC, by and between
    Grand Casinos Nevada&nbsp;I, Inc., Metroplex, LLC, and
    Metroplex-Lakes, LLC dated as of April&nbsp;25, 2000.
    (Incorporated herein by reference to Exhibit&nbsp;10.2 to
    Lakes&#146; Report on Form&nbsp;10-Q for the fiscal quarter
    ended July&nbsp;2, 2000.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.32</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Member Control Agreement of Pacific Coast Gaming&nbsp;&#151;
    Santa Rosa, LLC. (Incorporated herein by reference to
    Exhibit&nbsp;10.4 to Lakes&#146; Report on Form&nbsp;10-Q for
    the fiscal quarter ended October&nbsp;1, 2000.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.33</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Promissory Note, dated as of October&nbsp;12, 2000, by and
    between Pacific Coast Gaming&nbsp;&#151; Santa Rosa, LLC, a
    Minnesota limited liability company, and Lakes Cloverdale, LLC,
    a Minnesota limited liability company. (Incorporated herein by
    reference to Exhibit&nbsp;10.6 to Lakes&#146; Report on
    Form&nbsp;10-Q for the fiscal quarter ended October&nbsp;1,
    2000.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.34</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Intentionally omitted.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.35</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Intentionally omitted.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.36</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Intentionally omitted.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.37</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    First Amended and Restated Lakes Note, dated as of
    October&nbsp;16, 2000, by and between the Pokagon Band of
    Potawatomi Indians and Great Lakes of Michigan, LLC, a Minnesota
    limited liability company. (Incorporated herein by reference to
    Exhibit&nbsp;10.10 to Lakes&#146; Report on Form&nbsp;10-Q for
    the fiscal quarter ended October&nbsp;1, 2000.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.38</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Intentionally omitted.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.39</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Intentionally omitted.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.40</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Intentionally omitted.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.41</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Intentionally omitted.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.42</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Intentionally omitted.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.43</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Purchase Agreement, dated as of December&nbsp;28, 2001, by and
    among Grand Casinos Nevada&nbsp;I, Inc., a Minnesota
    corporation, and Metroflag Polo, LLC, a Nevada limited liability
    company. (Incorporated herein by reference to Exhibit&nbsp;10.56
    to Lakes&#146; Report on Form&nbsp;10-K for the fiscal year
    ended December&nbsp;30, 2001.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.44</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Promissory Note dated as of the 28th&nbsp;day of December 2001,
    by and among Metroflag Polo, LLC, a Nevada limited liability
    company, and Grand Casinos Nevada&nbsp;I, Inc., a Minnesota
    corporation. (Incorporated herein by reference to
    Exhibit&nbsp;10.57 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended December&nbsp;30, 2001.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.45</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Deed of Trust, Assignment of Leases and Rents and Security
    Agreement, dated December&nbsp;28, 2001, by and among Metroflag
    Polo, LLC, Lawyers Title of Nevada, Inc. as trusted, and Grand
    Casinos Nevada&nbsp;I, Inc. as beneficiary. (Incorporated herein
    by reference to Exhibit&nbsp;10.58 to Lakes&#146; Report on
    Form&nbsp;10-K for the fiscal year ended December&nbsp;30, 2001.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.46</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Purchase Agreement, dated as of December&nbsp;28, 2001, by and
    among Grand Casinos Nevada&nbsp;I, Inc., a Minnesota
    corporation, and Metroflag BP, LLC, a Nevada limited liability
    company. (Incorporated herein by reference to Exhibit&nbsp;10.59
    to Lakes&#146; Report on Form&nbsp;10-K for the fiscal year
    ended December&nbsp;30, 2001.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.47</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Promissory Note dated as of the 28th&nbsp;day of December 2001,
    by and among Metroflag BP, LLC, a Nevada limited liability
    company and Grand Casinos Nevada&nbsp;I, Inc., a Minnesota
    corporation. (Incorporated herein by reference to
    Exhibit&nbsp;10.60 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended December&nbsp;30, 2001.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.48</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Promissory Note dated as of the 28th&nbsp;day of December 2001,
    by and among Metroflag BP, LLC, a Nevada limited liability
    company, and Grand Casinos Nevada&nbsp;I, Inc., a Minnesota
    corporation. (Incorporated herein by reference to
    Exhibit&nbsp;10.61 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended December&nbsp;30, 2001.)</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">121

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; ">

<TR style="font-size: 1pt;">
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3" align="center" nowrap><B>Exhibits</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Description</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.49</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Leasehold Deed of Trust, Assignment of Leases and Rents and
    Security Agreement, dated December&nbsp;28, 2001, by and among
    Metroflag BP, LLC, Lawyers Title of Nevada, Inc. as trustee, and
    Grand Casinos Nevada&nbsp;I, Inc. and Grand Casinos, Inc. as
    beneficiaries. (Incorporated herein by reference to
    Exhibit&nbsp;10.62 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended December&nbsp;30, 2001.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.50</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Leasehold Deed of Trust, Assignment of Leases and Rents and
    Security Agreement, dated December&nbsp;28, 2001 by and among
    Metroflag BP, LLC, Lawyers Title of Nevada, Inc. as trustee, and
    Grand Casinos Nevada&nbsp;I, Inc. as beneficiary. (Incorporated
    herein by reference to Exhibit&nbsp;10.63 to Lakes&#146; Report
    on Form&nbsp;10-K for the fiscal year ended December&nbsp;30,
    2001.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.51</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Buyout and Release Agreement (Shingle Springs Project) dated as
    of January&nbsp;30, 2003, by and among Kean Argovitz
    Resorts&nbsp;&#151; Shingle Springs, L.L.C., Lakes
    KAR&nbsp;&#151; Shingle Springs, L.L.C., Lakes Entertainment,
    Inc., a Minnesota corporation, and Lakes Shingle Springs, Inc.
    (Incorporated herein by reference to Exhibit&nbsp;10.64 to
    Lakes&#146; Report on Form&nbsp;10-K for the fiscal year ended
    December&nbsp;29, 2002.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.52</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Consent and Agreement to Buyout and Release
    (Argovitz&nbsp;&#151; Shingle Springs Project) dated as of
    January&nbsp;30, 2003, by and among Jerry A. Argovitz, Lakes
    KAR&nbsp;&#151; Shingle Springs, L.L.C., Lakes Entertainment,
    Inc. and Lakes Shingle Springs, Inc. (Incorporated herein by
    reference to Exhibit&nbsp;10.65 to Lakes&#146; Report on
    Form&nbsp;10-K for the fiscal year ended December&nbsp;29, 2002.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.53</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Consent and Agreement to Buyout and Release (Kean&nbsp;&#151;
    Shingle Springs Project) dated as of January&nbsp;30, 2003, by
    and among Kevin M. Kean, Lakes KAR&nbsp;&#151; Shingle Springs,
    L.L.C., Lakes Entertainment, Inc. and Lakes Shingle Springs,
    Inc. (Incorporated herein by reference to Exhibit&nbsp;10.66 to
    Lakes&#146; Report on Form&nbsp;10-K for the fiscal year ended
    December&nbsp;29, 2002.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.54</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Shingle Springs Consulting Agreement dated as of
    January&nbsp;30, 2003, by and between Kevin M. Kean and Lakes
    KAR&nbsp;&#151; Shingle Springs, L.L.C. (Incorporated herein by
    reference to Exhibit&nbsp;10.67 to Lakes&#146; Report on
    Form&nbsp;10-K for the fiscal year ended December&nbsp;29, 2002.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.55</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Buyout and Release Agreement (Jamul Project) dated as of
    January&nbsp;30, 2003, by and among Kean Argovitz
    Resorts&nbsp;&#151; Jamul, L.L.C., Lakes Kean Argovitz
    Resorts&nbsp;&#151; California, L.L.C., Lakes Entertainment,
    Inc., a Minnesota corporation, and Lakes Jamul, Inc.
    (Incorporated herein by reference to Exhibit&nbsp;10.68 to
    Lakes&#146; Report on Form&nbsp;10-K for the fiscal year ended
    December&nbsp;29, 2002.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.56</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Consent and Agreement to Buyout and Release
    (Argovitz&nbsp;&#151; Jamul Project) dated as of
    January&nbsp;30, 2003, by and among Jerry A. Argovitz, Lakes
    Kean Argovitz Resorts&nbsp;&#151; California, L.L.C., Lakes
    Entertainment, Inc., a Minnesota corporation, and Lakes Jamul,
    Inc. (Incorporated herein by reference to Exhibit&nbsp;10.69 to
    Lakes&#146; Report on Form&nbsp;10-K for the fiscal year ended
    December&nbsp;29, 2002.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.57</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Consent and Agreement to Buyout and Release (Kean&nbsp;&#151;
    Jamul Project) dated as of January&nbsp;30, 2003, by and among
    Kevin M. Kean, Lakes Kean Argovitz Resorts&nbsp;&#151;
    California, L.L.C., Lakes Entertainment, Inc., a Minnesota
    corporation, and Lakes Jamul, Inc. (Incorporated herein by
    reference to Exhibit&nbsp;10.70 to Lakes&#146; Report on
    Form&nbsp;10-K for the fiscal year ended December&nbsp;29, 2002.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.58</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Jamul Consulting Agreement dated as of January&nbsp;30, 2003, by
    and between Kevin M. Kean and Lakes Kean Argovitz
    Resorts&nbsp;&#151; California, L.L.C. (Incorporated herein by
    reference to Exhibit&nbsp;10.71 to Lakes&#146; Report on
    Form&nbsp;10-K for the fiscal year ended December&nbsp;29, 2002.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.59</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Loan and Security Agreement dated as of January&nbsp;30, 2003,
    by and among Lakes California Land Development, Inc., Lakes
    Entertainment, Inc., Lakes Shingle Springs, Inc., Lakes Jamul,
    Inc., Lakes KAR Shingle Springs, L.L.C., Lakes Kean Argovitz
    Resorts&nbsp;&#151; California, L.L.C. and Kevin M. Kean.
    (Incorporated herein by reference to Exhibit&nbsp;10.72 to
    Lakes&#146; Report on Form&nbsp;10-K for the fiscal year ended
    December&nbsp;29, 2002.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.60</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Acquisition Master Agreement dated January&nbsp;22, 2003, by and
    between The Travel Channel, L.L.C. and World Poker Tour, L.L.C.
    (portions of this exhibit have been omitted pursuant to a
    request for confidential treatment and have been filed
    separately with the Commission pursuant to Rule&nbsp;24b-2 of
    the Securities Exchange Act of 1934). (Incorporated herein by
    reference to Exhibit&nbsp;10.1 to Lakes&#146; report on
    Form&nbsp;10-Q for the fiscal quarter ended March&nbsp;30, 2003.)</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">122

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; ">

<TR style="font-size: 1pt;">
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3" align="center" nowrap><B>Exhibits</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Description</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.61</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Amendment to Member Control Agreement of Pacific Coast
    Gaming&nbsp;&#151; Santa Rosa, LLC (Incorporated herein by
    reference to Exhibit&nbsp;10.2 to Lakes&#146; Report on
    Form&nbsp;10-Q for the fiscal quarter ended March&nbsp;30, 2003.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.62</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Amendment dated July&nbsp;25, 2003 to Acquisition Master
    Agreement dated January&nbsp;22, 2003, by and between The Travel
    Channel, LLC and World Poker Tour, LLC (portions of this exhibit
    have been omitted pursuant to a request for confidential
    treatment and have been filed separately with the Commission
    pursuant to Rule&nbsp;24b-2 of the Securities Exchange Act of
    1934) (Incorporated herein by reference to Exhibit&nbsp;10.1 to
    Lakes&#146; Report on Form&nbsp;10-Q for the fiscal quarter
    ended September&nbsp;28, 2003.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.63</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Master Agreement, dated as of August&nbsp;22, 2003, by and
    between World Poker Tour, LLC and the Travel Channel, LLC
    (incorporated by reference to Exhibit&nbsp;10.2 to the
    registration statement on Form&nbsp;S-1 of WPT Enterprises, Inc.
    filed with the Commission on April&nbsp;15, 2004.) **</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.64</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Letter dated as of April&nbsp;12, 2004, from the Travel Channel,
    LLC to World Poker Tour, LLC (incorporated by reference to
    Exhibit&nbsp;10.3 to the registration statement on Form&nbsp;S-1
    of WPT Enterprises, Inc. filed with the Commission on
    April&nbsp;15, 2004.)**</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.65</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    First Amended and Restated Memorandum of Agreement Regarding
    Gaming Development and Management Agreement between Shingle
    Springs Band of Miwok Indians, a Federally Recognized Tribe and
    Lakes KAR Shingle Springs, LLC, a Delaware Limited Liability
    Company, dated October&nbsp;13, 2003, as amended June&nbsp;16,
    2004, as approved by the National Indian Gaming Commission on
    July&nbsp;19, 2004. (Incorporated herein by reference to
    Exhibit&nbsp;10.1 to Lakes&#146; Report on Form&nbsp;10-Q for
    the fiscal quarter ended October&nbsp;3, 2004.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.66</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Amendment No.&nbsp;5 dated August&nbsp;18, 2004 to Acquisition
    Master Agreement dated August&nbsp;22, 2003, by and between The
    Travel Channel, LLC and WPT Enterprises, Inc. (f/k/a World Poker
    Tour, LLC) (incorporated by reference from Exhibit&nbsp;10.2 to
    Form&nbsp;10-Q of WPT Enterprises, Inc. for the fiscal quarter
    ended October&nbsp;3, 2004 (portions of this exhibit have been
    omitted pursuant to a request for confidential treatment and
    have been filed separately with the Commission pursuant to
    Rule&nbsp;24b-2 of the Securities Exchange Act of 1934.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.67</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Settlement Agreement by and between Lakes Entertainment, Inc.
    and Grand Casinos, Inc. and Park Place Entertainment Corporation
    (now known as Caesar&#146;s Entertainment, Inc.) dated
    December&nbsp;1, 2004. (Incorporated herein by reference to
    Exhibit&nbsp;10.67 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.68</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Letter agreement by and between Metroflag Polo, LLC and Grand
    Casinos Nevada&nbsp;I, Inc., dated December&nbsp;14, 2004.
    (Incorporated herein by reference to Exhibit&nbsp;10.68 to
    Lakes&#146; Report on Form&nbsp;10-K for the fiscal year ended
    January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.69</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Second Amended and Restated Management Agreement by and between
    the Pokagon Band of Potawatomi Indians and Great Lakes Gaming of
    Michigan, LLC, a Minnesota limited liability company (F/K/A
    Great Lakes of Michigan, LLC), dated as of December&nbsp;22,
    2004. (Incorporated herein by reference to Exhibit&nbsp;10.69 to
    Lakes&#146; Report on Form&nbsp;10-K for the fiscal year ended
    January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.70</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Second Amended and Restated Development Agreement by and between
    the Pokagon Band of Potawatomi Indians and Great Lakes Gaming of
    Michigan, LLC, a Minnesota limited liability company (F/K/A
    Great Lakes of Michigan, LLC), dated as of December&nbsp;22,
    2004. (Incorporated herein by reference to Exhibit&nbsp;10.70 to
    Lakes&#146; Report on Form&nbsp;10-K for the fiscal year ended
    January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.71</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Second Amended and Restated Lakes Development Note by the
    Pokagon Band of Potawatomi Indians in favor of Great Lakes
    Gaming of Michigan, LLC, a Minnesota limited liability company
    (F/K/A Great Lakes of Michigan, LLC), dated as of
    December&nbsp;22, 2004. (Incorporated herein by reference to
    Exhibit&nbsp;10.71 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.72</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Second Amended and Restated Transition Loan Note by the Pokagon
    Band of Potawatomi Indians in favor of Great Lakes Gaming of
    Michigan, LLC, a Minnesota limited liability company (F/K/A
    Great Lakes of Michigan, LLC), dated as of December&nbsp;22,
    2004. (Incorporated herein by reference to Exhibit&nbsp;10.72 to
    Lakes&#146; Report on Form&nbsp;10-K for the fiscal year ended
    January&nbsp;2, 2005.)</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">123

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; ">

<TR style="font-size: 1pt;">
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3" align="center" nowrap><B>Exhibits</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Description</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.73</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Lakes Facility Note by the Pokagon Band of Potawatomi Indians in
    favor of Great Lakes Gaming of Michigan, LLC, a Minnesota
    limited liability company (F/K/A Great Lakes of Michigan, LLC),
    dated as of December&nbsp;22, 2004. (Incorporated herein by
    reference to Exhibit&nbsp;10.73 to Lakes&#146; Report on
    Form&nbsp;10-K for the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.74</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Lakes Working Capital Advance Note by the Pokagon Band of
    Potawatomi Indians in favor of Great Lakes Gaming of Michigan,
    LLC, a Minnesota limited liability company (F/K/A Great Lakes of
    Michigan, LLC), dated as of December&nbsp;22, 2004.
    (Incorporated herein by reference to Exhibit&nbsp;10.74 to
    Lakes&#146; Report on Form&nbsp;10-K for the fiscal year ended
    January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.75</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Lakes Minimum Payments Note by the Pokagon Band of Potawatomi
    Indians in favor of Great Lakes Gaming of Michigan, LLC, a
    Minnesota limited liability company (F/K/A Great Lakes of
    Michigan, LLC), dated as of December&nbsp;22, 2004.
    (Incorporated herein by reference to Exhibit&nbsp;10.75 to
    Lakes&#146; Report on Form&nbsp;10-K for the fiscal year ended
    January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.76</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Second Amended and Restated Non-Gaming Land Acquisition Line of
    Credit by and between the Pokagon Band of Potawatomi Indians and
    Great Lakes Gaming of Michigan, LLC, a Minnesota limited
    liability company (F/K/A Great Lakes of Michigan, LLC), dated as
    of December&nbsp;22, 2004. (Incorporated herein by reference to
    Exhibit&nbsp;10.76 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.77</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Dominion Account&nbsp;Agreement by and between the Pokagon Band
    of Potawatomi Indians and Great Lakes Gaming of Michigan, LLC, a
    Minnesota limited liability company (F/K/A Great Lakes of
    Michigan, LLC), dated as of December&nbsp;22, 2004.
    (Incorporated herein by reference to Exhibit&nbsp;10.77 to
    Lakes&#146; Report on Form&nbsp;10-K for the fiscal year ended
    January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.78</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Second Amendment to Account&nbsp;Control Agreement by and among
    the Pokagon Band of Potawatomi Indians and Great Lakes Gaming of
    Michigan, LLC, a Minnesota limited liability company (F/K/A
    Great Lakes of Michigan, LLC), and U.S.&nbsp;Bank National
    Association, F/K/A Firstar Bank, N.A., dated as of
    December&nbsp;22, 2004. (Incorporated herein by reference to
    Exhibit&nbsp;10.78 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.79</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    First Amendment to Assignment and Assumption Agreement by and
    among the Pokagon Band of Potawatomi Indians and Great Lakes
    Gaming of Michigan, LLC, a Minnesota limited liability company
    (F/K/A Great Lakes of Michigan, LLC), dated as of
    December&nbsp;22, 2004. (Incorporated herein by reference to
    Exhibit&nbsp;10.79 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.80</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Reaffirmation of Guaranties and Mortgages by and among Pokagon
    Properties, LLC, a Delaware limited liability company and
    Filbert Land Development, LLC, an Indiana limited liability
    company and Great Lakes Gaming of Michigan, LLC, a Minnesota
    limited liability company (F/K/A Great Lakes of Michigan, LLC),
    dated as of December&nbsp;22, 2004. (Incorporated herein by
    reference to Exhibit&nbsp;10.80 to Lakes&#146; Report on
    Form&nbsp;10-K for the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.81</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Second Amendment to Pledge and Security Agreement by and among
    Great Lakes Gaming of Michigan, LLC, a Minnesota limited
    liability company, Lakes Entertainment, Inc., f/k/a Lakes
    Gaming, Inc., a Minnesota corporation, and the Pokagon Band of
    Potawatomi Indians dated as of December&nbsp;22, 2004.
    (Incorporated herein by reference to Exhibit&nbsp;10.81 to
    Lakes&#146; Report on Form&nbsp;10-K for the fiscal year ended
    January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.82</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Security Agreement by and between the Pokagon Band of Potawatomi
    Indians and Great Lakes Gaming of Michigan, LLC, a Minnesota
    limited liability company (F/K/A Great Lakes of Michigan, LLC),
    dated as of December&nbsp;22, 2004. (Incorporated herein by
    reference to Exhibit&nbsp;10.82 to Lakes&#146; Report on
    Form&nbsp;10-K for the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.83</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    First Amendment to Unlimited Guaranty by and among Lakes
    Entertainment, Inc., f/k/a Lakes Gaming, Inc., a Minnesota
    corporation and Lakes Gaming and Resorts, LLC, a Minnesota
    limited liability company, and the Pokagon Band of Potawatomi
    Indians dated as of December&nbsp;22, 2004. (Incorporated herein
    by reference to Exhibit&nbsp;10.83 to Lakes&#146; Report on
    Form&nbsp;10-K for the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">124

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<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; ">

<TR style="font-size: 1pt;">
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3" align="center" nowrap><B>Exhibits</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Description</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.84</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Second Amended and Restated Indemnity Agreement by and between
    the Pokagon Band of Potawatomi Indians and Great Lakes Gaming of
    Michigan, LLC, a Minnesota limited liability company (F/K/A
    Great Lakes of Michigan, LLC), dated as of December&nbsp;22,
    2004. (Incorporated herein by reference to Exhibit&nbsp;10.84 to
    Lakes&#146; Report on Form&nbsp;10-K for the fiscal year ended
    January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.85</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Tribal Agreement by and among the Pawnee Nation of Oklahoma, a
    federally recognized Indian Tribe, the Pawnee Tribal Development
    Corporation, a tribally-chartered corporation, and Lakes Pawnee
    Consulting, LLC, a Minnesota limited liability company, dated
    January&nbsp;12, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.85 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.86</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Tribal Agreement by and among the Pawnee Nation of Oklahoma, a
    federally recognized Indian Tribe, the Pawnee Tribal Development
    Corporation, a tribally-charted corporation, and Lakes Pawnee
    Management, LLC, a Minnesota limited liability company, dated
    January&nbsp;12, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.86 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.87</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Gaming Development Consulting Agreement by and between the
    Pawnee Trading Post Gaming Corporation, a wholly-owned
    subsidiary of the Pawnee Tribal Development Corporation, and
    Lakes Pawnee Consulting, LLC, a Minnesota limited liability
    company, dated January&nbsp;12, 2005. (Incorporated herein by
    reference to Exhibit&nbsp;10.87 to Lakes&#146; Report on
    Form&nbsp;10-K for the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.88</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Pawnee Note by the Pawnee Trading Post Gaming Corporation, a
    wholly-owned subsidiary of the Pawnee Tribal Development
    Corporation, in favor of Lakes Pawnee Consulting, LLC, a
    Minnesota limited liability company, dated January&nbsp;12,
    2005. (Incorporated herein by reference to Exhibit&nbsp;10.88 to
    Lakes&#146; Report on Form&nbsp;10-K for the fiscal year ended
    January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.89</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Dominion Account&nbsp;Agreement by and between the Pawnee
    Trading Post Gaming Corporation, a wholly-owned subsidiary of
    the Pawnee Tribal Development Corporation, and Lakes Pawnee
    Consulting, LLC, a Minnesota limited liability company, dated
    January&nbsp;12, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.89 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.90</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Security Agreement by and between the Pawnee Trading Post Gaming
    Corporation, a wholly-owned subsidiary of the Pawnee Tribal
    Development Corporation, and Lakes Pawnee Consulting, LLC, a
    Minnesota limited liability company, dated January&nbsp;12,
    2005. (Incorporated herein by reference to Exhibit&nbsp;10.90 to
    Lakes&#146; Report on Form&nbsp;10-K for the fiscal year ended
    January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.91</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Management Agreement for a Gaming Facility and Related Ancillary
    Facilities by and between the Pawnee Trading Post Gaming
    Corporation, a wholly-owned subsidiary of the Pawnee Tribal
    Development Corporation, each created under the Constitution of
    and a governmental subdivision of the Pawnee Nation of Oklahoma,
    a federally recognized Indian Tribe, and Lakes Pawnee
    Management, LLC, a Minnesota limited liability company, dated
    January&nbsp;12, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.91 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.92</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Operating Note by the Pawnee Trading Post Gaming Corporation, a
    wholly-owned subsidiary of the Pawnee Tribal Development
    Corporation, in favor of Lakes Pawnee Management, LLC, a
    Minnesota limited liability company, dated January&nbsp;12,
    2005. (Incorporated herein by reference to Exhibit&nbsp;10.92 to
    Lakes&#146; Report on Form&nbsp;10-K for the fiscal year ended
    January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.93</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Dominion Account&nbsp;Agreement by and between the Pawnee
    Trading Post Gaming Corporation, a wholly-owned subsidiary of
    the Pawnee Tribal Development Corporation, and Lakes Pawnee
    Management, LLC, a Minnesota limited liability company, dated
    January&nbsp;12, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.93 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.94</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Security Agreement by and between the Pawnee Trading Post Gaming
    Corporation, a wholly-owned subsidiary of the Pawnee Tribal
    Development Corporation, and Lakes Pawnee Management, LLC, a
    Minnesota limited liability company, dated January&nbsp;12,
    2005. (Incorporated herein by reference to Exhibit&nbsp;10.94 to
    Lakes&#146; Report on Form&nbsp;10-K for the fiscal year ended
    January&nbsp;2, 2005.)</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">125

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; ">

<TR style="font-size: 1pt;">
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3" align="center" nowrap><B>Exhibits</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Description</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.95</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Indemnity Agreement by and between the Pawnee Trading Post
    Gaming Corporation, a wholly-owned subsidiary of the Pawnee
    Tribal Development Corporation, and Lakes Pawnee Management,
    LLC, a Minnesota limited liability company, dated
    January&nbsp;12, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.95 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.96</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Gaming Development Consulting Agreement by and between the
    Pawnee Travel Plaza Gaming Corporation, a wholly-owned
    subsidiary of the Pawnee Tribal Development Corporation, and
    Lakes Pawnee Consulting, LLC, a Minnesota limited liability
    company, dated January&nbsp;12, 2005. (Incorporated herein by
    reference to Exhibit&nbsp;10.96 to Lakes&#146; Report on
    Form&nbsp;10-K for the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.97</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Pawnee Note by the Pawnee Travel Plaza Gaming Corporation, a
    wholly-owned subsidiary of the Pawnee Tribal Development
    Corporation, in favor of Lakes Pawnee Consulting, LLC, a
    Minnesota limited liability company, dated January&nbsp;12,
    2005. (Incorporated herein by reference to Exhibit&nbsp;10.97 to
    Lakes&#146; Report on Form&nbsp;10-K for the fiscal year ended
    January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.98</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Dominion Account&nbsp;Agreement by and between the Pawnee Travel
    Plaza Gaming Corporation, a wholly-owned subsidiary of the
    Pawnee Tribal Development Corporation, and Lakes Pawnee
    Consulting, LLC, a Minnesota limited liability company, dated
    January&nbsp;12, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.98 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.99</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Security Agreement by and between the Pawnee Travel Plaza Gaming
    Corporation, a wholly-owned subsidiary of the Pawnee Tribal
    Development Corporation, and Lakes Pawnee Consulting, LLC, a
    Minnesota limited liability company, dated January&nbsp;12,
    2005. (Incorporated herein by reference to Exhibit&nbsp;10.99 to
    Lakes&#146; Report on Form&nbsp;10-K for the fiscal year ended
    January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.100</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Management Agreement for a Gaming Facility and Related Ancillary
    Facilities by and between the Pawnee Travel Plaza Gaming
    Corporation, a wholly-owned subsidiary of the Pawnee Tribal
    Development Corporation, each created under the Constitution of
    and a governmental subdivision of the Pawnee Nation of Oklahoma,
    a federally recognized Indian Tribe, and Lakes Pawnee
    Management, LLC, a Minnesota limited liability company, dated
    January&nbsp;12, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.100 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.101</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Operating Note by the Pawnee Travel Plaza Gaming Corporation, a
    wholly-owned subsidiary of the Pawnee Tribal Development
    Corporation, in favor of Lakes Pawnee Management, LLC, a
    Minnesota limited liability company, dated January&nbsp;12,
    2005. (Incorporated herein by reference to Exhibit&nbsp;10.101
    to Lakes&#146; Report on Form&nbsp;10-K for the fiscal year
    ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.102</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Dominion Account&nbsp;Agreement by and between the Pawnee Travel
    Plaza Gaming Corporation, a wholly-owned subsidiary of the
    Pawnee Tribal Development Corporation, and Lakes Pawnee
    Management, LLC, a Minnesota limited liability company, dated
    January&nbsp;12, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.102 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.103</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Security Agreement by and between the Pawnee Travel Plaza Gaming
    Corporation, a wholly-owned subsidiary of the Pawnee Tribal
    Development Corporation, and Lakes Pawnee Management, LLC, a
    Minnesota limited liability company, dated January&nbsp;12,
    2005. (Incorporated herein by reference to Exhibit&nbsp;10.103
    to Lakes&#146; Report on Form&nbsp;10-K for the fiscal year
    ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.104</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Indemnity Agreement by and between the Pawnee Travel Plaza
    Gaming Corporation, a wholly-owned subsidiary of the Pawnee
    Tribal Development Corporation, and Lakes Pawnee Management,
    LLC, a Minnesota limited liability company, dated
    January&nbsp;12, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.104 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.105</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Gaming Development Consulting Agreement by and between the
    Pawnee Chilocco Gaming Corporation, a wholly-owned subsidiary of
    the Pawnee Tribal Development Corporation, and Lakes Pawnee
    Consulting, LLC, a Minnesota limited liability company, dated
    January&nbsp;12, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.105 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">126

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; ">

<TR style="font-size: 1pt;">
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3" align="center" nowrap><B>Exhibits</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Description</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.106</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Pawnee Note by the Pawnee Chilocco Gaming Corporation, a
    wholly-owned subsidiary of the Pawnee Tribal Development
    Corporation, in favor of Lakes Pawnee Consulting, LLC, a
    Minnesota limited liability company, dated January&nbsp;12,
    2005. (Incorporated herein by reference to Exhibit&nbsp;10.106
    to Lakes&#146; Report on Form&nbsp;10-K for the fiscal year
    ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.107</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Dominion Account&nbsp;Agreement by and between the Pawnee
    Chilocco Gaming Corporation, a wholly-owned subsidiary of the
    Pawnee Tribal Development Corporation, and Lakes Pawnee
    Consulting, LLC, a Minnesota limited liability company, dated
    January&nbsp;12, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.107 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.108</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Security Agreement by and between the Pawnee Chilocco Gaming
    Corporation, a wholly-owned subsidiary of the Pawnee Tribal
    Development Corporation, and Lakes Pawnee Consulting, LLC, a
    Minnesota limited liability company, dated January&nbsp;12,
    2005. (Incorporated herein by reference to Exhibit&nbsp;10.108
    to Lakes&#146; Report on Form&nbsp;10-K for the fiscal year
    ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.109</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Management Agreement for a Gaming Facility and Related Ancillary
    Facilities by and between the Pawnee Chilocco Gaming
    Corporation, a wholly-owned subsidiary of the Pawnee Tribal
    Development Corporation, a governmental subdivision of the
    Pawnee Nation of Oklahoma, a federally recognized Indian Tribe,
    and Lakes Pawnee Management, LLC, a Minnesota limited liability
    company, dated January&nbsp;12, 2005. (Incorporated herein by
    reference to Exhibit&nbsp;10.109 to Lakes&#146; Report on
    Form&nbsp;10-K for the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.110</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Operating Note by the Pawnee Chilocco Gaming Corporation, a
    wholly-owned subsidiary of the Pawnee Tribal Development
    Corporation, in favor of Lakes Pawnee Management, LLC, a
    Minnesota limited liability company, dated January&nbsp;12,
    2005. (Incorporated herein by reference to Exhibit&nbsp;10.110
    to Lakes&#146; Report on Form&nbsp;10-K for the fiscal year
    ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.111</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Dominion Account&nbsp;Agreement by and between the Pawnee
    Chilocco Gaming corporation, a wholly-owned subsidiary of the
    Pawnee Tribal Development Corporation, and Lakes Pawnee
    Management, LLC, a Minnesota limited liability company, dated
    January&nbsp;12, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.111 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.112</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Security Agreement by and between the Pawnee Chilocco Gaming
    Corporation, a wholly-owned subsidiary of the Pawnee Tribal
    Development Corporation, and Lakes Pawnee Management, LLC, a
    Minnesota limited liability company, dated January&nbsp;12,
    2005. (Incorporated herein by reference to Exhibit&nbsp;10.112
    to Lakes&#146; Report on Form&nbsp;10-K for the fiscal year
    ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.113</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Indemnity Agreement by and between the Pawnee Chilocco Gaming
    Corporation, a wholly-owned subsidiary of the Pawnee Tribal
    Development Corporation, and Lakes Pawnee Management, LLC, a
    Minnesota limited liability company, dated January&nbsp;12,
    2005. (Incorporated herein by reference to Exhibit&nbsp;10.113
    to Lakes&#146; Report on Form&nbsp;10-K for the fiscal year
    ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.114</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Gaming Operations Consulting Agreement by and between KTTT
    Enterprises, a wholly-owned subsidiary of and a governmental
    instrument of the Kickapoo Traditional Tribe of Texas, a
    federally-recognized Indian Tribe, and Lakes Kickapoo
    Consulting, LLC, a Minnesota limited liability company, dated
    January&nbsp;19, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.114 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.115</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Tribal Agreement by and between Kickapoo Traditional Tribe of
    Texas, a federally-recognized Indian Tribe, and Lakes Kickapoo
    Consulting, LLC, a Minnesota limited liability company, dated
    January&nbsp;19, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.115 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.116</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    KTTT Note by KTTT Enterprises, a wholly-owned subsidiary of and
    a governmental instrument of the Kickapoo Traditional Tribe of
    Texas, a federally recognized Indian Tribe, in favor of Lakes
    Kickapoo Consulting, LLC, a Minnesota limited liability company,
    dated January&nbsp;19, 2005. (Incorporated herein by reference
    to Exhibit&nbsp;10.116 to Lakes&#146; Report on Form&nbsp;10-K
    for the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">127

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; ">

<TR style="font-size: 1pt;">
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3" align="center" nowrap><B>Exhibits</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Description</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.117</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Security Agreement by and between KTTT Enterprises, a
    wholly-owned subsidiary of and a governmental instrument of the
    Kickapoo Traditional Tribe of Texas, a federally-recognized
    Indian Tribe, and Lakes Kickapoo Consulting, LLC, a Minnesota
    limited liability company, dated January&nbsp;19, 2005.
    (Incorporated herein by reference to Exhibit&nbsp;10.117 to
    Lakes&#146; Report on Form&nbsp;10-K for the fiscal year ended
    January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.118</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Tribal Agreement by and between Kickapoo Traditional Tribe of
    Texas, a federally-recognized Indian Tribe, and Lakes Kickapoo
    Management, LLC, a Minnesota limited liability company, dated
    January&nbsp;19, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.118 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.119</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Management Agreement for a Gaming Facility and Related Ancillary
    Facilities by and between KTTT Enterprises, a wholly-owned
    subsidiary of and a governmental instrument of the Kickapoo
    Traditional Tribe of Texas, a federally-recognized Tribe, in
    favor of Lakes Kickapoo Management, LLC, a Minnesota limited
    liability company, dated January&nbsp;19, 2005. (Incorporated
    herein by reference to Exhibit&nbsp;10.119 to Lakes&#146; Report
    on Form&nbsp;10-K for the fiscal year ended January&nbsp;2,
    2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.120</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Operating Note by KTTT Enterprises, a wholly-owned subsidiary of
    and a governmental instrument of the Kickapoo Traditional Tribe
    of Texas, a federally-recognized Indian Tribe, in favor of Lakes
    Kickapoo Management, LLC, a Minnesota limited liability company,
    dated January&nbsp;19, 2005. (Incorporated herein by reference
    to Exhibit&nbsp;10.120 to Lakes&#146; Report on Form&nbsp;10-K
    for the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.121</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Security Agreement by and between KTTT Enterprises, a
    wholly-owned subsidiary of and a governmental instrument of the
    Kickapoo Traditional Tribe of Texas, a federally-recognized
    Indian Tribe, and Lakes Kickapoo Management, LLC, a Minnesota
    limited liability company, dated January&nbsp;19, 2005.
    (Incorporated herein by reference to Exhibit&nbsp;10.121 to
    Lakes&#146; Report on Form&nbsp;10-K for the fiscal year ended
    January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.122</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Gaming Development Consulting Agreement (Cimarron Casino) by and
    among the Iowa Tribe of Oklahoma, a federally-chartered
    corporation, the Iowa Tribe of Oklahoma, a federally-recognized
    Indian tribe, and Lakes Iowa Consulting, LLC, a Minnesota
    limited liability company, dated January&nbsp;27, 2005.
    (Incorporated herein by reference to Exhibit&nbsp;10.122 to
    Lakes&#146; Report on Form&nbsp;10-K for the fiscal year ended
    January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.123</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Iowa Corp Note (Cimarron Casino) by the Iowa Tribe of Oklahoma,
    a federally-chartered corporation, and Lakes Iowa Consulting,
    LLC, a Minnesota limited liability company, dated
    January&nbsp;27, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.123 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.124</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Dominion Account&nbsp;Agreement (Cimarron Casino) by and between
    the Iowa Tribe of Oklahoma, a federally-chartered corporation,
    and Lakes Iowa Consulting, LLC, a Minnesota limited liability
    company, dated January&nbsp;27, 2005. (Incorporated herein by
    reference to Exhibit&nbsp;10.124 to Lakes&#146; Report on
    Form&nbsp;10-K for the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.125</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Security Agreement (Cimarron Casino) by and among the Iowa Tribe
    of Oklahoma, a federally-chartered corporation, the Iowa Tribe
    of Oklahoma, a federally-recognized Indian tribe, and Lakes Iowa
    Consulting, LLC, a Minnesota limited liability company, dated
    January&nbsp;27, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.125 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.126</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Tribal Agreement (Cimarron Casino) by and between the Iowa Tribe
    of Oklahoma, a federally-recognized Indian tribe, and Lakes Iowa
    Consulting, LLC, a Minnesota limited liability company, dated
    January&nbsp;27, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.126 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.127</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Management Agreement for a Gaming Facility and Related Ancillary
    Facilities (Cimarron Casino) by and among the Iowa Tribe of
    Oklahoma, a federally-chartered corporation, the Iowa Tribe of
    Oklahoma, a federally-recognized Indian tribe, and Lakes Iowa
    Management, LLC, a Minnesota limited liability company, dated
    January&nbsp;27, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.127 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">128

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; ">

<TR style="font-size: 1pt;">
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3" align="center" nowrap><B>Exhibits</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Description</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.128</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Operating Note (Cimarron Casino) by the Iowa Tribe of Oklahoma,
    a federally-chartered corporation, in favor of Lakes Iowa
    Management, LLC, a Minnesota limited liability company, dated
    January&nbsp;27, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.128 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.129</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Dominion Account&nbsp;Agreement (Cimarron Casino) by and between
    the Iowa Tribe of Oklahoma, a federally-chartered corporation,
    and Lakes Iowa Management, LLC, a Minnesota limited liability
    company, dated January&nbsp;27, 2005. (Incorporated herein by
    reference to Exhibit&nbsp;10.129 to Lakes&#146; Report on
    Form&nbsp;10-K for the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.130</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Security Agreement (Cimarron Casino) by and among the Iowa Tribe
    of Oklahoma, a federally-chartered corporation, the Iowa Tribe
    of Oklahoma, a federally-recognized Indian tribe, and Lakes Iowa
    Management, LLC, a Minnesota limited liability company, dated
    January&nbsp;27, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.130 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.131</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Indemnity Agreement (Cimarron Casino) by and among the Iowa
    Tribe of Oklahoma, a federally-chartered corporation, the Iowa
    Tribe of Oklahoma, a federally-recognized Indian tribe, and
    Lakes Iowa Management, LLC, a Minnesota limited liability
    company, dated January&nbsp;27, 2005. (Incorporated herein by
    reference to Exhibit&nbsp;10.131 to Lakes&#146; Report on
    Form&nbsp;10-K for the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.132</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Tribal Agreement (Cimarron Casino) by and between the Iowa Tribe
    of Oklahoma, a federally-recognized Indian tribe, and Lakes Iowa
    Management, LLC, a Minnesota limited liability company, dated
    January&nbsp;27, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.132 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.133</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Gaming Development Consulting Agreement (New Project) by and
    among the Iowa Tribe of Oklahoma, a federally-chartered
    corporation, the Iowa Tribe of Oklahoma, a federally-recognized
    Indian tribe, and Lakes Iowa Consulting, LLC, a Minnesota
    limited liability company, dated January&nbsp;27, 2005.
    (Incorporated herein by reference to Exhibit&nbsp;10.133 to
    Lakes&#146; Report on Form&nbsp;10-K for the fiscal year ended
    January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.134</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Iowa Corp Note (New Project) by the Iowa Tribe of Oklahoma, a
    federally-chartered corporation, in favor of Lakes Iowa
    Consulting, LLC, a Minnesota limited liability company, dated
    January&nbsp;27, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.134 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.135</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Dominion Account&nbsp;Agreement (New Project) by and between the
    Iowa Tribe of Oklahoma, a federally-chartered corporation, and
    Lakes Iowa Consulting, LLC, a Minnesota limited liability
    company, dated January&nbsp;27, 2005. (Incorporated herein by
    reference to Exhibit&nbsp;10.135 to Lakes&#146; Report on
    Form&nbsp;10-K for the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.136</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Security Agreement (New Project) by and among the Iowa Tribe of
    Oklahoma, a federally-chartered corporation, the Iowa Tribe of
    Oklahoma, a federally-recognized Indian tribe, and Lakes Iowa
    Consulting, LLC, a Minnesota limited liability company, dated
    January&nbsp;27, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.136 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.137</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Tribal Agreement (New Project) by and between the Iowa Tribe of
    Oklahoma, a federally-recognized Indian tribe, and Lakes Iowa
    Consulting, LLC, a Minnesota limited liability company, dated
    January&nbsp;27, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.137 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.138</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Management Agreement for a Gaming Facility and Related Ancillary
    Facilities (New Project) by and among the Iowa Tribe of
    Oklahoma, a federally-chartered corporation, the Iowa Tribe of
    Oklahoma, a federally-recognized Indian tribe, and Lakes Iowa
    Management, LLC, a Minnesota limited liability company, dated
    January&nbsp;27, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.138 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.139</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Operating Note (New Project) by the Iowa Tribe of Oklahoma, a
    federally-chartered corporation, in favor of Lakes Iowa
    Management, LLC, a Minnesota limited liability company, dated
    January&nbsp;27, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.139 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">129

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; ">

<TR style="font-size: 1pt;">
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3" align="center" nowrap><B>Exhibits</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Description</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.140</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Dominion Account&nbsp;Agreement (New Project) by and between the
    Iowa Tribe of Oklahoma, a federally-chartered corporation, and
    Lakes Iowa Management, LLC, a Minnesota limited liability
    company, dated January&nbsp;27, 2005. (Incorporated herein by
    reference to Exhibit&nbsp;10.140 to Lakes&#146; Report on
    Form&nbsp;10-K for the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.141</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Security Agreement (New Project) by and among the Iowa Tribe of
    Oklahoma, a federally-chartered corporation, the Iowa Tribe of
    Oklahoma, a federally-recognized Indian tribe, and Lakes Iowa
    Management, LLC, a Minnesota limited liability company, dated
    January&nbsp;27, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.141 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.142</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Indemnity Agreement (New Project) by and among the Iowa Tribe of
    Oklahoma, a federally-chartered corporation, the Iowa Tribe of
    Oklahoma, a federally-recognized Indian tribe, and Lakes Iowa
    Management, LLC, a Minnesota limited liability company, dated
    January&nbsp;27, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.142 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.143</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Tribal Agreement (New Project) by and between the Iowa Tribe of
    Oklahoma, a federally-recognized Indian tribe, and Lakes Iowa
    Management, LLC, a Minnesota limited liability company, dated
    January&nbsp;27, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.143 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.144</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Letter agreement by and between Metroflag Polo, LLC and Grand
    Casinos Nevada&nbsp;I, Inc., dated March&nbsp;17, 2005.
    (Incorporated herein by reference to Exhibit&nbsp;10.144 to
    Lakes&#146; Report on Form&nbsp;10-K for the fiscal year ended
    January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.145</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    First Amendment to Loan and Security Agreement by and among
    Lakes California Land Development, Inc., Lakes Entertainment,
    Inc., Lakes Shingle Springs, Inc., Lakes Jamul, Inc., Lakes KAR
    Shingle Springs, LLC, Lakes Kean Argovitz Resorts-California,
    LLC and collectively, Lakes Pawnee Consulting, LLC, Lakes Pawnee
    Management, LLC, Lakes Kickapoo Consulting, LLC, Lakes Kickapoo
    Management, LLC, Lakes Iowa Consulting, LLC, Lakes Iowa
    Management, LLC, and Kevin Kean, a resident of the state of
    Nevada, dated June&nbsp;2, 2005. (Incorporated herein by
    reference to Exhibit&nbsp;10.145 to Lakes&#146; Report on
    Form&nbsp;10-K for the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.146</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Consulting Agreement by and among Kevin M. Kean, Lakes Kickapoo
    Consulting, LLC, a Minnesota limited liability company and Lakes
    Kickapoo Management, LLC, a Minnesota limited liability company,
    dated June&nbsp;2, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.146 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.147</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Consulting Agreement by and among Kevin M. Kean, Lakes Pawnee
    Consulting, LLC a Minnesota limited liability company, and Lakes
    Pawnee Management, LLC, a Minnesota limited liability company,
    dated June&nbsp;2, 2005. (Incorporated herein by reference to
    Exhibit&nbsp;10.147 to Lakes&#146; Report on Form&nbsp;10-K for
    the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.148</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Consulting Agreement by and among Kevin M. Kean, Lakes Iowa
    Consulting, LLC, a Minnesota limited liability company, and
    Lakes Iowa Management, LLC, a Minnesota limited liability
    company, dated June&nbsp;2, 2005. (Incorporated herein by
    reference to Exhibit&nbsp;10.148 to Lakes&#146; Report on
    Form&nbsp;10-K for the fiscal year ended January&nbsp;2, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.149</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Loan Agreement dated as of December&nbsp;15, 2005 among Lakes
    Entertainment, Inc., a Minnesota corporation, Lakes Poker Tour,
    LLC, a Minnesota limited liability company, and Lyle Berman
    Family Partnership, a Minnesota general Partnership
    (Incorporated herein by reference to Exhibit&nbsp;10.1 to
    Lakes&#146; Current Report on Form&nbsp;8-K filed with the
    Commission on December&nbsp;21, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.150</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Note dated December&nbsp;15, 2005 by Lakes Entertainment, Inc.
    and Lakes Poker Tour, LLC in favor of Lyle Berman Family
    Partnership. (Incorporated herein by reference to
    Exhibit&nbsp;10.2 to Lakes&#146; Current Report on Form&nbsp;8-K
    filed with the Commission on December&nbsp;21, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.151</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Common Stock Purchase Warrant dated December&nbsp;15, 2005 by
    Lakes Entertainment, Inc. in favor of Lyle Berman Family
    Partnership. (Incorporated herein by reference to
    Exhibit&nbsp;10.3 to Lakes&#146; Current Report on Form&nbsp;8-K
    filed with the Commission on December&nbsp;21, 2005.)</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">130

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; ">

<TR style="font-size: 1pt;">
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3" align="center" nowrap><B>Exhibits</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Description</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.152</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Registration Rights Agreement dated as of December&nbsp;16, 2005
    among WPT Enterprises, Inc., a Delaware corporation, Lakes
    Entertainment, Inc. and Lakes Poker Tour, LLC. (Incorporated
    herein by reference to Exhibit&nbsp;10.4 to Lakes&#146; Current
    Report on Form&nbsp;8-K filed with the Commission on
    December&nbsp;21, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.153</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Guaranty Agreement dated December&nbsp;15, 2005 by various
    subsidiaries of Lakes Entertainment, Inc. in favor of Lyle
    Berman Family Partnership. (Incorporated herein by reference to
    Exhibit&nbsp;10.5 to Lakes&#146; Current Report on Form&nbsp;8-K
    filed with the Commission on December&nbsp;21, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.154</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Guaranty Security Agreement dated December&nbsp;15, 2005 among
    Lakes Entertainment, Inc., various subsidiaries of Lakes
    Entertainment, Inc. and Lyle Berman Family Partnership.
    (Incorporated herein by reference to Exhibit&nbsp;10.6 to
    Lakes&#146; Current Report on Form&nbsp;8-K filed with the
    Commission on December&nbsp;21, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.155</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Stock Pledge Agreement dated December&nbsp;15, 2005 among Lakes
    Poker Tour, LLC in favor of Lyle Berman Family Partnership.
    (Incorporated herein by reference to Exhibit&nbsp;10.7 to
    Lakes&#146; Current Report on Form&nbsp;8-K filed with the
    Commission on December&nbsp;21, 2005.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.156</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Financing Agreement dated as of February&nbsp;15, 2006 among
    Lakes Entertainment, Inc., various subsidiaries of Lakes
    Entertainment, Inc., and PLKS Funding, LLC. (Incorporated herein
    by reference to Exhibit&nbsp;10.1 to Lakes&#146; Current Report
    on Form&nbsp;8-K filed with the Commission on February&nbsp;22,
    2006.)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.157</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Securities Purchase Agreement dated as of February&nbsp;15, 2006
    between Lakes Entertainment, Inc. and PLKS Holdings, LLC
    including the Schedule of Buyers. (Incorporated herein by
    reference to Exhibit&nbsp;10.2 to Lakes&#146; Current Report on
    Form&nbsp;8-K filed with the Commission on February&nbsp;22,
    2006.).</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.158</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Registration Rights Agreement dated as of February&nbsp;15, 2006
    between Lakes Entertainment, Inc. and PLKS Holdings, LLC
    including schedules and exhibits thereto. (Incorporated herein
    by reference to Exhibit&nbsp;10.3 to Lakes&#146; Current Report
    on Form&nbsp;8-K filed with the Commission on February&nbsp;22,
    2006.).</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.159</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Common Stock Purchase Warrant dated February&nbsp;15, 2006 by
    Lakes Entertainment, Inc. in favor of PLKS Holdings, LLC.
    (Incorporated herein by reference to Exhibit&nbsp;10.4 to
    Lakes&#146; Current Report on Form&nbsp;8-K filed with the
    Commission on February&nbsp;22, 2006.).</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.160</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Security Agreement dated as of February&nbsp;15, 2006 among
    Lakes Entertainment, Inc. and various subsidiaries of Lakes
    Entertainment, Inc. in favor or PLKS Funding, LLC. (Incorporated
    herein by reference to Exhibit&nbsp;10.5 to Lakes&#146; Current
    Report on Form&nbsp;8-K filed with the Commission on
    February&nbsp;22, 2006.).</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.161</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Pledge Agreement dated as of February&nbsp;15, 2006 among Lakes
    Entertainment, Inc. and various subsidiaries of Lakes
    Entertainment, Inc. in favor PLKS Funding, LLC. (Incorporated
    herein by reference to Exhibit&nbsp;10.6 to Lakes&#146; Current
    Report on Form&nbsp;8-K filed with the Commission on
    February&nbsp;22, 2006.).</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.162</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Mortgage, Assignment of Leases and Rents, Security Agreement and
    Fixture Filing dated as of February&nbsp;15, 2006 by Lakes
    Entertainment, Inc. in favor PLKS Funding, LLC. (Incorporated
    herein by reference to Exhibit&nbsp;10.7 to Lakes&#146; Current
    Report on Form&nbsp;8-K filed with the Commission on
    February&nbsp;22, 2006.).</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.163</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Deed of Trust, Assignment of Leases and Rents, Security
    Agreement and Fixture Filing dated as of February&nbsp;15, 2006
    by Lakes Kean Argovitz Resorts-California, L.L.C. (Trustor) to
    Fidelity National Title Insurance Company (Trustee) for the
    benefit of PLKS Funding, LLC (Beneficiary). (Incorporated herein
    by reference to Exhibit&nbsp;10.8 to Lakes&#146; Current Report
    on Form&nbsp;8-K filed with the Commission on February&nbsp;22,
    2006.).</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.164</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Deed of Trust, Assignment of Leases and Rents, Security
    Agreement and Fixture Filing dated as of February&nbsp;15, 2006
    by Lakes Kar Shingle Springs, L.L.C. (Trustor) to Fidelity
    National Title Insurance Company (Trustee) for the benefit of
    PLKS Funding, LLC (Beneficiary). (Incorporated herein by
    reference to Exhibit&nbsp;10.9 to Lakes&#146; Current Report on
    Form&nbsp;8-K filed with the Commission on February&nbsp;22,
    2006.).</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">131

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; ">

<TR style="font-size: 1pt;">
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3" align="center" nowrap><B>Exhibits</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Description</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.165</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Deed of Trust, Assignment of Leases and Rents, Security
    Agreement and Fixture Filing dated as of February&nbsp;15, 2006
    by Lakes Shingle Springs, Inc. (Trustor) to Fidelity National
    Title Insurance Company (Trustee) for the benefit of PLKS
    Funding, LLC (Beneficiary). (Incorporated herein by reference to
    Exhibit&nbsp;10.10 to Lakes&#146; Current Report on
    Form&nbsp;8-K filed with the Commission on February&nbsp;22,
    2006.).</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.166</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Employment Agreement dated as of February&nbsp;15, 2006 between
    Lakes Entertainment, Inc.(including its subsidiaries and
    affiliates) and Lyle Berman. (Incorporated herein by reference
    to Exhibit&nbsp;10.11 to Lakes&#146; Current Report on
    Form&nbsp;8-K filed with the Commission on February&nbsp;22,
    2006.).*</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.167</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Employment Agreement dated as of February&nbsp;15, 2006 between
    Lakes Entertainment, Inc. (including its subsidiaries and
    affiliates) and Timothy J. Cope. (Incorporated herein by
    reference to Exhibit&nbsp;10.12 to Lakes&#146; Current Report on
    Form&nbsp;8-K filed with the Commission on February&nbsp;22,
    2006.).*</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.168</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Lease Intended as Security dated as of December&nbsp;3, 1999
    between Banc of America Leasing&nbsp;&#38; Capital, LLC and
    Lakes Gaming, Inc. (now known as Lakes Entertainment, Inc.), as
    amended on February&nbsp;11, 2000, May&nbsp;12, 2000 and
    May&nbsp;1, 2005.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.169</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Conditional Release and Termination Agreement dated as of
    May&nbsp;20, 1999 by and between Lakes Gaming, Inc. (now known
    as Lakes Entertainment, Inc.), and Casino Resources Corporation,
    a Minnesota corporation as amended on July&nbsp;1, 1999.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.170</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Third Amended and Restated Management Agreement by and between
    the Pokagon Band of Potawatomi Indians and Great Lakes Gaming of
    Michigan, LLC, a Minnesota limited liability company (F/K/A
    Great Lakes of Michigan, LLC, dated as of January&nbsp;25, 2006.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.171</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Third Amended and Restated Development Agreement by and between
    the Pokagon Band of Potawatomi Indians and Great Lakes Gaming of
    Michigan, LLC, a Minnesota limited liability company (F/K/A
    Great Lakes of Michigan, LLC) dated as of January&nbsp;25, 2006.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.172</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Third Amended and Restated Pledge and Security Agreement dated
    as of January&nbsp;25, 2006 among Great Lakes Gaming of
    Michigan, LLC, Lakes Entertainment, Inc. and Pokagon Band of
    Potawatomi Indians.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.173</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Third Amended and Restated Account&nbsp;Control Agreement dated
    as of January&nbsp;25, 2006 among Great Lakes Gaming of
    Michigan, LLC, Lakes Entertainment, Inc., Pokagon Band of
    Potawatomi Indians and U.S.&nbsp;Bank National Association
    (without exhibits).</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.174</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Third Amended and Restated Lakes Development Note by the Pokagon
    Band of Potawatomi Indians in favor of Great Lakes Gaming of
    Michigan, LLC dated as of January&nbsp;25, 2006.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.175</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    First Amended and Restated Lakes Facility Note by the Pokagon
    Band of Potawatomi Indians in favor of Great Lakes Gaming of
    Michigan, LLC dated as of January&nbsp;25, 2006.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.176</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    First Amended and Restated Security Agreement by and between the
    Pokagon Band of Potawatomi Indians and Great Lakes Gaming of
    Michigan, LLC dated as of January&nbsp;25, 2006.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.177</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    First Amended and Restated Lakes Working Capital Advance Note by
    the Pokagon Band of Potawatomi Indians in favor of Great Lakes
    Gaming of Michigan, LLC dated as of January&nbsp;25, 2006.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.178</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    First Amended and Restated Lakes Minimum Payments Note by the
    Pokagon Band of Potawatomi Indians in favor of Great Lakes
    Gaming of Michigan, LLC dated as of January&nbsp;25, 2006.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.179</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Third Amended and Restated Non-Gaming Land Acquisition Line of
    Credit Agreement by and between the Pokagon Band of Potawatomi
    Indians and Great Lakes Gaming of Michigan, LLC dated as of
    January&nbsp;25, 2006.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.180</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Third Amended and Restated Transition Loan Note by the Pokagon
    Band of Potawatomi Indians in favor of Great Lakes Gaming of
    Michigan, LLC dated as of January&nbsp;25, 2006.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.181</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Third Amended and Restated Indemnity Agreement by and between
    Pokagon Band of Potawatomi Indians and Great Lakes Gaming of
    Michigan, LLC dated as of January&nbsp;25, 2006.</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">132

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; ">

<TR style="font-size: 1pt;">
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3" align="center" nowrap><B>Exhibits</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Description</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.182</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Second Amended and Restated Unlimited Guaranty by and among
    Lakes Entertainment, Inc., Lakes Gaming and Resorts, LLC and
    Pokagon Band of Potawatomi Indians dated as of January&nbsp;25,
    2006.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.183</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Second Amended and Restated Assignment and Assumption Agreement
    by and among Lakes Entertainment, Inc., Lakes Gaming and
    Resorts, LLC and Pokagon Band of Potawatomi Indians dated as of
    January&nbsp;25, 2006.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10</TD>
    <TD align="left" valign="top" nowrap>.184</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Reaffirmation of Guaranties and Mortgages by and among Pokagon
    Properties, LLC, Filbert Land Development, LLC and Great Lakes
    Gaming of Michigan, LLC dated as of January&nbsp;25, 2006.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Subsidiaries of the Company.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>23</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Consent of Independent Registered Public Accounting Firm dated
    March&nbsp;3, 2006.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>23</TD>
    <TD align="left" valign="top" nowrap>.2</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Consent of Independent Registered Public Accounting Firm dated
    March&nbsp;3, 2006.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>31</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Certification of Chief Executive Officer under Section&nbsp;302
    of the Sarbanes-Oxley Act</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>31</TD>
    <TD align="left" valign="top" nowrap>.2</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Certification of Chief Financial Officer under Section&nbsp;302
    of the Sarbanes-Oxley Act</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>32</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Certification of Chief Executive Officer and Chief Financial
    Officer under Section&nbsp;906 of the Sarbanes-Oxley Act</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>*&nbsp;</TD>
    <TD align="left">
    Management Compensatory Plan or Arrangement</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>**&nbsp;</TD>
    <TD align="left">
    Confidential treatment has been requested as to certain portions
    of this exhibit pursuant to Rule&nbsp;406 of the Securities Act
    of 1933, as amended.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">133

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<!-- link1 "SIGNATURES" -->

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>SIGNATURES</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to the requirements of Section&nbsp;13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    LAKES ENTERTAINMENT, INC.</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <I>Registrant</I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 72pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="40%"></TD>
    <TD width="2%"></TD>
    <TD width="58%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>By:&nbsp;</TD>
    <TD align="left">
    /s/ LYLE BERMAN</TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 3pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <DIV style="width: 47%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">

</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Name:&nbsp;Lyle Berman</TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="40%"></TD>
    <TD width="8%"></TD>
    <TD width="52%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>Title:</TD>
    <TD align="left">
    Chairman of the Board and</TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Chief Executive Officer</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Dated as of March 8, 2006
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities indicated as
of March 8, 2006.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="41%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="3" align="center" nowrap><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Title</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    /s/ Lyle Berman<BR>
    <HR size="1" noshade>Lyle Berman</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Chairman of the Board and Chief Executive Officer (Principal
    Executive Officer)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    /s/ Timothy J. Cope<BR>
    <HR size="1" noshade>Timothy J. Cope</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Chief Financial Officer and Director<BR>
    (Principal Financial and Accounting Officer)</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    /s/ Morris Goldfarb<BR>
    <HR size="1" noshade>Morris Goldfarb</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Director</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    /s/ Ronald Kramer<BR>
    <HR size="1" noshade>Ronald Kramer</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Director</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    /s/ Ray Moberg<BR>
    <HR size="1" noshade>Ray Moberg</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Director</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    /s/ Neil I. Sell<BR>
    <HR size="1" noshade>Neil I. Sell</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Director</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    /s/ Larry C. Barenbaum<BR>
    <HR size="1" noshade>Larry C. Barenbaum</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Director</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">134

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.168
<SEQUENCE>2
<FILENAME>c02716exv10w168.txt
<DESCRIPTION>LEASE INTENDED AS SECURITY
<TEXT>
<PAGE>
                                                                  Exhibit 10.168

                                                                   LESSEE'S COPY

                           LEASE INTENDED AS SECURITY

     LEASE INTENDED AS SECURITY ("Lease") dated as of December 3, 1999, between
BANC OF AMERICA LEASING & CAPITAL, LLC, a Delaware limited liability company
with its principal office at 2059 Northlake Parkway, Tucker, Georgia 30084
("Lessor") and LAKES GAMING, INC., a Minnesota corporation, with its principal
office at 130 Cheshire Boulevard, Minnetonka, Minnesota 55305 ("Lessee").

     Lessor agrees to acquire and lease and sell to Lessee and Lessee agrees to
hire and purchase from Lessor certain personal property (the "Aircraft")
described in the Appendix (the "Appendix") attached hereto and made a part
hereof, on the terms and conditions set forth herein and in the Appendix.

Section 1. Procurement Delivery and Acceptance.

     1.1 On a date to be agreed upon by Lessor and Lessee (the "Delivery Date"),
Lessor will purchase from and lease back to Lessee for an amount equal to the
agreed upon value of the Aircraft, and Lessee will sell to and lease back from
Lessor the Aircraft.

     1.2 The obligation of Lessor to make payments for the Aircraft is subject
to the following conditions:

          (a) Lessee shall have delivered to Lessor not earlier than the tenth
(10th) and not later than the first (1st) Business Day (as defined in Paragraph
F of the Appendix) prior to the proposed Delivery Date, an irrevocable notice (a
"Delivery Date Notice") substantially in the form of Exhibit A, specifying (i)
the proposed Delivery Date, (ii) a description of the Aircraft to be purchased
on such Delivery Date and the location thereof, (iii) the aggregate Purchase
Price of the Aircraft, and (iv) wire transfer instructions for the disbursement
of funds;

          (b) Prior to the Completion Date, Lessor shall have received an
Appraisal to its satisfaction opining:

               (i) as to the appraised value of the Aircraft on the Delivery
     Date, on the Completion Date and at the end of the applicable Base Term and
     all applicable Renewal Terms; and

               (ii) that the average remaining economic useful life of the
     Aircraft is not less than 6.75 years.

          (c) Lessee shall have accepted the Aircraft on its Delivery Date and
executed and delivered to Lessor for the Aircraft accepted by Lessee, a Lease
Schedule and Acceptance Certificate in the form of Exhibit B (a "Schedule")
confirming the Delivery Date of the Aircraft and the acceptance of the Aircraft
as of its Delivery Date. The Schedule to be executed and delivered by Lessee on
the Delivery Date shall set forth:

               (i) in Annex I thereto, a description of and the initial Purchase
     Price for the Aircraft; and

               (ii) in Annex II thereto, the Applicable Percentage Amounts, a
     schedule of the installments of Fixed Rent, the Payment Dates therefor
     payable during the Base Term and during each Renewal Term, the Schedule
     Balance of such Schedule as of the Delivery Date (such Applicable
     Percentage, schedule of payments of Fixed Rents and Schedule Balance to be
     adjusted

<PAGE>

     by the Lessor on the Completion Date based upon the then Purchase Price
     using the same assumptions and methods of calculation as used in producing
     the original Applicable Percentage, schedule of payments of Fixed Rents and
     Schedule Balance, except for the changes in Purchase Price and any changes
     to appraised values and the remaining economic useful life of the Aircraft
     as determined by the Appraisal) therefor and as of each Payment Date in the
     Base Term and each Renewal Term, assuming in each case that all
     installments of Fixed Rent due and payable thereunder to and including such
     Payment date have been paid;

     Annex I and II to the Schedule shall be prepared by Lessor, and the items
     set forth by Lessor in such Schedule (including any adjustment thereto
     under clause (ii) above) shall be conclusive and binding upon Lessee for
     all purposes hereunder;

          (d) On or prior to the Delivery Date, Lessor shall have received from
Lessee duly executed UCC financing statements, and such financing statements
shall have been filed in all places deemed necessary or desirable by Lessor in
order to perfect the security interest granted pursuant to the Lease with
respect to the Aircraft and any related collateral being delivered on or after
such Delivery Date;

          (e) There shall exist no Event of Default nor any event which, with
notice or lapse of time or both, would become an Event of Default (a "Default");

          (f) On or before its Delivery Date, Lessor shall have received in form
and substance satisfactory to it (i) a Bill of Sale on FAA Form AC 8050-2 (or
other form approved by or acceptable to the FAA) covering the Aircraft, dated
the Delivery Date, executed by Lessee and naming Lessor as buyer, (ii) a
warranty Bill of Sale in the form of Exhibit C-1 with respect to the Aircraft,
and an Assignment of Warranties in the form of Exhibit C-2, each dated the
Delivery Date, and (iii) an application for Aircraft Registration on AC Form
8050-1, or such other form as may be approved by the FAA on the Delivery Date.

          (g) Lessor shall receive evidence, satisfactory to Lessor, that the
Aircraft is free and clear of all claims, liens, security interests and
encumbrances;

          (h) On or prior to the Delivery Date and any Advance, Lessee shall
have paid to Lessor any Transaction Costs not previously paid;

          (i) Each of the representations and warranties made by Lessee
hereunder shall be true on and as of the Delivery Date and the date of any
Advance;

          (j) No material adverse change in Lessee's financial condition shall
have occurred since the date hereof;

          (k) Resolution of any environmental issues;

     If any of the foregoing conditions is not met, Lessor shall have no
obligation to either Lessee or any third party to make any payments for the
Aircraft.

     Any attempted or purported sale of an Aircraft by Lessee to Lessor after
its Delivery Date shall not be effective whether or not accepted by Lessor, and
Lessor shall not incur any obligations with respect to the Aircraft, including
the obligation to pay for the Aircraft.


                                        2

<PAGE>

     1.3 Lessee represents, warrants and covenants with respect to the Aircraft
that (a) the Seller has the right to sell the Aircraft (b) both the Aircraft and
Lessee's rights, title and interest in the Aircraft are, or will be as of its
Delivery Date, free from all claims, liens, security interests and encumbrances,
(c) Lessee will defend the sale against claims and demands of all persons and
(d) the Purchase Price of the Aircraft is equal to its fair market value at the
time of the sale.

     1.4 As soon as possible, but no later than the Delivery Date, Lessee shall
deliver or cause to be delivered to Lessor the following documents, in form and
substance satisfactory to Lessor:

          (a)  evidence of Lessee's authority to enter into and perform its
               obligations under this Lease;

          (b)  a certificate as to the incumbency of the person or persons
               authorized to execute and deliver this Lease and any other
               agreements or documents required hereunder or thereunder,
               including specimen signatures of such persons;

          (c)  certificates of insurance, including loss payable and other
               endorsements complying with, or other evidence acceptable to
               Lessor that Lessee has complied with, Section 7;

          (d)  opinion of counsel to Lessee, substantially in the form of
               Exhibit D and the opinion of special aviation counsel to Lessor
               satisfactory to Lessor; and

          (e)  any other documents specified in the Appendix and such other
               documents as Lessor may reasonably request.

Section 2. Term. Rent and Payment.

     2.1 The term of this Lease as to the Aircraft shall commence on its
Delivery Date and continue as specified in the Appendix.

     2.2 Lessee shall pay to Lessor rent for the Aircraft in the amounts and at
the times set forth in the Appendix.

     2.3 Rent and all other sums due Lessor hereunder shall be paid at the
principal office of Lessor set forth above.

     2.4 This Lease is a net lease and Lessee shall not be entitled to any
abatement or reduction of rent or any setoff against rent, whether arising by
reason of any past, present or future claim of any nature by Lessee against
Lessor or otherwise. Except as otherwise expressly provided herein, this Lease
shall not terminate, nor shall the obligations of Lessor or Lessee be otherwise
affected by reason of (a) any defect in, damage to, loss of possession or use or
destruction of the Aircraft, however caused, (b) the attachment of any lien,
encumbrance, security interest or other right or claim of any third party to the
Aircraft, (c) any prohibition or restriction of or interference with Lessee's
use of the Aircraft by any person or entity, (d) the insolvency of or the
commencement by or against Lessee of any bankruptcy, reorganization or similar
proceeding, or (e) any other cause, whether similar or dissimilar to the
foregoing, any present or future law to the contrary notwithstanding. It is the
intention of the parties that all rent and other amounts payable by Lessee
hereunder shall be payable in all events in the manner and at the times herein
provided unless Lessee's obligations in respect thereof have been terminated
pursuant to the express provisions of this Lease.


                                        3

<PAGE>

     2.5 Payments shall be applied in the following order: (a) expenses,
including allocated time charges of internal counsel for Lessor and any other
attorneys' fees; (b) interest on late payments; and (c) rent and all other sums
due hereunder. Payments shall be evidenced by entries in records maintained by
Lessor which shall be presumptively correct.

Section 3. Disclaimer of Warranties.

     LESSEE ACKNOWLEDGES AND AGREES THAT (1) THE AIRCRAFT, INCLUDING EACH ENGINE
IS OF A SIZE, DESIGN, CAPACITY AND MANUFACTURE SELECTED BY AND ACCEPTABLE TO
LESSEE AND SUITABLE FOR ITS PURPOSES, (2) LESSOR IS NOT A MANUFACTURER OR A
DEALER IN PROPERTY OF SUCH KIND, (3) THE AIRCRAFT, INCLUDING EACH ENGINE IS
LEASED HEREUNDER SUBJECT TO ALL APPLICABLE LAWS AND GOVERNMENT REGULATIONS NOW
IN EFFECT OR HEREAFTER ADOPTED AND IN THE STATE AND CONDITION OF EVERY PART
THEREOF WHEN THE SAME FIRST BECAME SUBJECT TO THIS LEASE, WITHOUT REPRESENTATION
OR WARRANTY OF ANY KIND BY LESSOR, AND (4) LESSOR LEASES THE AIRCRAFT INCLUDING,
EACH ENGINE AS-IS WITHOUT WARRANTY OR REPRESENTATION EITHER EXPRESS OR IMPLIED,
AND LESSOR EXPRESSLY DISCLAIMS ANY WARRANTY, EXPRESS OR IMPLIED, AS TO (i)
TITLE, AIRWORTHINESS, CONDITION, FITNESS FOR USE FOR A PARTICULAR PURPOSE,
DESIGN, VALUE, OPERATION OR MERCHANTABILITY THEREOF, (ii) QUALITY OF MATERIAL OR
WORKMANSHIP, ABSENCE OF LATENT OR OTHER DEFECTS WHETHER OR NOT DISCERNIBLE,
(iii) ABSENCE OF AN INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, (iv)
ABSENCE OF ANY OBLIGATION BASED ON STRICT LIABILITY IN TORT, (v) LESSOR'S TITLE
THERETO OR (vi) ANY OTHER MATTER WHATSOEVER, IT BEING AGREED THAT ALL SUCH RISKS
ARE TO BE BORNE BY LESSEE. The provisions of this Section 3 have been negotiated
by Lessor and Lessee and are intended to be a complete exclusion and negation of
any representations or warranties of Lessor, express or implied, with respect to
the Airframe and each Engine that may arise pursuant to any law now or hereafter
in effect, or otherwise.

Section 4. Possession. Use and Maintenance.

     4.1 Lessee agrees not to maintain, repair, overhaul, use or operate the
Airframe, any Engine or any Part in violation of any law, treaty or statute or
any rule, regulation or order of any government or Government Body having
jurisdiction (domestic or foreign) over Lessee or the Aircraft, or in violation
of any airworthiness certificate, license or registration relating to the
Airframe, any Engine or any Part issued by any such authority. If such laws,
treaties, statutes, rules, regulations or orders require alteration of the
Airframe, any Engine or any Part, Lessee will conform thereto or obtain
conformance therewith at no expense to Lessor and will maintain the same in
proper operating condition under such laws, treaties, statutes, rules,
regulations and orders. Lessee also agrees not to fly the Aircraft, or suffer
the Aircraft to be flown or the Airframe or any Engine to be located (i) in any
area excluded from coverage by any insurance required by Section 7, (ii) in any
country with which the United States does not maintain diplomatic relations, or
(iii) in any area of actual or threatened armed hostilities unless fully covered
to Lessor's reasonable satisfaction by war risk insurance or unless the Aircraft
is operated or used under contract with the Government of the United States
under which contract that Government assumes liability and provides indemnity in
an amount not less than the amount of insurance and providing coverage,
supported by the full faith and credit of the United States, as full and
complete as otherwise required by Section 7 for any damage, loss, destruction or
failure to return possession thereof at the end of the term of such contract and
for injury to Persons and damage to Property of others. The Aircraft shall at
all times be and remain registered in accordance with the laws of the United
States.


                                        4

<PAGE>

     Lessee shall not sublease, or otherwise in any manner deliver, relinquish
or transfer possession of the Airframe or any Engine or any part thereof or any
part of Lessee's rights hereunder to any Person without the prior written
consent of Lessor except, if no Default or Event of Default exists, Lessee may,
without the prior written consent of Lessor, deliver possession of the Airframe
or any Engine to the manufacturer thereof for testing or other similar purposes
or to any organization for service, repair, maintenance or overhaul work or for
alterations or modifications in or additions to such Airframe or Engines, to the
extent required or permitted by this Lease.

     4.2 During the Lease Term, and until purchase or sale of the Aircraft in
compliance with this Lease, Lessee, at its own cost and expense, shall:

          (i) service, repair, maintain, test and overhaul each Item of
Equipment so as to keep such Item of Equipment in good operating condition and,
ordinary wear and tear excepted, in the same condition as when delivered to
Lessee hereunder, and so as to comply with each of the following standards:

               (A) to establish and keep the Aircraft in compliance with (1)
Lessee's FAA-approved maintenance program, which shall include a corrosion
control program (the "Maintenance Program"'), that is, with respect to the
Airframe, either a phased maintenance program (a "Phased Maintenance Program")
or a periodic medium and heavy block-hour interval overhaul program (a
"Block-Time Maintenance Program") and that provides for all FAA required
inspection, servicing, overhaul and replacement of all Aircraft components; (2)
all applicable airworthiness directives issued by the FAA; and (3) all
manufacturer's mandatory service bulletins;

               (B) to keep the Aircraft in such condition as may be necessary to
enable the airworthiness certification of such Aircraft to be maintained in good
standing at all times under the Federal Aviation Act; and

               (C) to keep the Aircraft maintained, serviced, repaired, tested
or overhauled in at least the same manner and with the same care as used by
Lessee with similar aircraft owned, leased by Lessee and maintained under the
same approved maintenance program;

          (ii) not install replacement components with excessive wear or
exchange components on or of the Aircraft for other aircraft components in
Lessee's possession for use on aircraft that will remain in Lessee's possession
after such return in order to reduce or avoid future maintenance requirements;
and

          (iii) maintain in the English language all records, logs and other
materials required by the FAA, and any other Government Body having jurisdiction
over any Item of Equipment or Lessee, to be maintained in respect of each Item
of Equipment so as to enable operation of the Aircraft under the laws of the
United States, which records logs and materials will conform to good commercial
practice for records regarding all maintenance carried out with respect to the
Aircraft.

     Lessor agrees that, so long as no Default or Event of Default exists,
Lessee shall have the benefit of and shall be entitled to enforce, either in its
own name or in the name of Lessor, acting as agent or assignee of Lessor, for
the use and benefit of Lessee, any and all vendor's, manufacturer's or
subcontractor's warranties or servicing obligations, including any rights to
instructions and data, in respect of the Aircraft and Lessor shall execute and
deliver such further instruments as may be necessary to enable Lessee to obtain
customary warranty service furnished for the Aircraft by such vendor,
manufacturer or subcontractor. Lessor shall have no other obligation or duty
with respect to any of such matters.


                                        5

<PAGE>

     4.3 Lessee, at its own expense, will make (or cause to be made) such
alterations and modifications in and additions to the Aircraft as may be
required from time to time to meet the applicable standards of the FAA. In
addition, Lessee, at its own expense, may from time to time make such
alterations and modifications in and additions to the Airframe or any Engine as
Lessee may deem desirable in the proper conduct of its business if such
alterations, modifications or additions do not diminish the value, residual
values, utility or useful life, of the Aircraft, or impair the condition or
airworthiness thereof, below the value, residual values, utility, condition,
airworthiness or useful life, thereof immediately before such alteration,
modification or addition assuming the Airframe or such Engine was then of the
value, residual values, utility, condition and airworthiness required to be
maintained by the terms hereof. Title to all parts incorporated or installed in
or attached or added to the Aircraft as the result of such alteration,
modification or addition shall, without further act, vest in Lessor and such
parts shall become Parts and shall become subject to this Lease.

     4.4 Lessee will not directly or indirectly create, incur, assume or suffer
to exist any Lien on or with respect to the Airframe or any Engine or Part or
Records or title thereto or any interest therein except Permitted Encumbrances.
Lessee shall promptly, at its own expense, take such action as may be necessary
to duly discharge any such Lien not excepted above arising at any time with
respect to the Airframe or any Engine or Part.

     4.5 If Lessor supplies Lessee with labels, plates or other markings stating
that the Aircraft is leased from Lessor, Lessee shall affix and keep the same on
a prominent place on the Aircraft during the term of this Lease.

     4.6 Upon prior notice to Lessee, Lessor shall have the right at all
reasonable times to inspect the Aircraft, observe its use and inspect records
related thereto.

Section 5. General Tax Indemnity.

     5.1 Lessee shall pay or reimburse Lessor for, and indemnify and hold Lessor
harmless from, all fees (including, but not limited to, license, documentation,
recording or registration fees), and all sales, use, gross receipts, property,
occupational, value-added or other taxes, levies, imposts, duties, assessments,
charges or withholdings of any nature whatsoever, together with any penalties,
fines or additions to tax, or interest thereon (all of the foregoing being
hereafter referred to as "Impositions"), arising at any time before or during
the term of this Lease, or upon any termination of this Lease or return of the
Aircraft to Lessor, and levied or imposed on Lessor, directly or otherwise, by
any federal, state or local government or taxing authority in the United States
or by any foreign country or foreign or international taxing authority on or
with respect to (a) the Aircraft, (b) the exportation, importation,
registration, purchase, ownership, delivery, leasing, possession, use,
operation, storage, maintenance, repair, transportation, return, sale, transfer
of title or other disposition thereof, (c) the rents, receipts, or earnings
arising from the Aircraft or (d) this Lease or any payment made hereunder,
excluding, however, taxes measured by Lessor's net income imposed or levied by
the United States or any state thereof but not excluding any such net income
taxes that by the terms of the statute imposing such tax expressly relieve
Lessee or Lessor from the payment of any Impositions Lessee would otherwise have
been obligated to pay, reimburse or indemnify.

     5.2 Lessee shall pay on or before the time or times prescribed by law any
Impositions (except any Impositions excluded by Section 5.1), but Lessee shall
have no obligation to pay any such Imposition while Lessee is contesting such
Imposition in good faith and by appropriate legal proceedings and the nonpayment
thereof does not, in the opinion of Lessor, adversely affect the title,
property, use, disposition or other rights of Lessor with respect to the
Aircraft. If any Impositions (except any Imposition excluded


                                        6

<PAGE>

by Section 5.1) is charged or levied against Lessor directly and paid by Lessor,
Lessee shall reimburse Lessor on presentation of an invoice therefor.

     5.3 If Lessor is not entitled to a corresponding and equal deduction with
respect to any Imposition Lessee is required to pay or reimburse under Section
5.1 or 5.2 and the payment or reimbursement constitutes income to Lessor, then
Lessee shall also pay to Lessor the amount of any Imposition Lessor is obligated
to pay in respect of (a) such payment or reimbursement by Lessee and (b) any
payment by Lessee made pursuant to this Section 5.3.

     5.4 Lessee shall prepare and file, in a manner satisfactory to Lessor, any
reports or returns required with respect to the Aircraft. Lessee shall furnish
on Lessor's request reports or returns so filed.

Section 6. Risk of Loss, Casualty, Waiver and Indemnity.

     6.1 During the Lease Term, and until purchase or sale of the Aircraft in
compliance with this Lease, Lessee shall bear the risk of damage, loss, theft or
destruction, partial or complete, of the Aircraft including the Airframe, Engine
and any Part from whatsoever source arising (whether or not any insurance
proceeds are payable in respect of, or are sufficient to cover, such damage,
loss, theft or destruction) and any and all replacements, repairs or
substitutions thereof shall be at the cost and expense of Lessee and shall
constitute accessions thereto and title thereto shall vest and remain in Lessor.
Except as otherwise provided in Section 6.2, Lessee, at its own cost and
expense, shall during the Lease Term promptly replace all Parts that may from
time to time become worn out, lost, stolen, destroyed, seized, confiscated,
damaged beyond repair or permanently rendered unfit for use for any reason
whatsoever. In addition, in the ordinary course of maintenance, service, repair,
overhaul or testing, Lessee may remove any Parts from the Aircraft, whether or
not worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond
repair or permanently rendered unfit for use. However, Lessee shall replace such
Parts as promptly as practicable with replacement Parts. Any replacement Part
shall be free and clear of ail Liens except Permitted Encumbrances and shall be
in as good a condition as, and have a value and utility at least equal to, the
Part it replaces, assuming such replaced Part was in the condition and repair
required to be maintained by the terms hereof.

     All Parts at any time removed from the Airframe or any Engine shall remain
subject to this Lease, no matter where located, until such Parts are replaced by
Parts incorporated or installed in or attached to the Airframe or such Engine
and that meet the requirements for replacement Parts specified above.
Immediately upon any replacement Part becoming incorporated or installed in or
attached to the Airframe or any Engine or Propeller as above provided, without
further act, (A) title to the replaced Part shall thereupon vest in Lessee, free
and clear of all rights of Lessor and shall no longer be deemed a Part
hereunder; (B) title to such replacement Part shall thereupon vest in Lessor;
and (C) such replacement Part shall become subject to this Lease and be deemed
part of the Airframe or such Engine, as the case may be, for all purposes hereof
to the same extent as the Parts originally incorporated or installed in or
attached to the Airframe or such Engine.

     6.2 If the Aircraft is worn out, lost, stolen, destroyed or irreparably
damaged, from any cause whatsoever, or taken or requisitioned by condemnation or
otherwise (any such occurrence being hereinafter called a "Casualty Occurrence")
before or during the term of this Lease as to the Aircraft, Lessee shall give
Lessor prompt notice thereof. On the first rent payment date after such Casualty
Occurrence or, if there is no such rent payment date, 30 days after the Casualty
Occurrence, Lessee shall pay to Lessor, in addition to any amounts then due and
owing, an amount equal to the Lease Balance (as hereinafter defined) for the
Aircraft plus any termination charges and interest on late payments required
under the Appendix ("Other Charges").


                                        7

<PAGE>

          "Lease Balance" shall mean, as of any determination date, the
     aggregate Purchase Price of the Aircraft, minus all amounts of Fixed Rent
     (as defined in Paragraph F of the Appendix) actually paid to the date of
     determination.

     Upon the making of such payment by Lessee in respect of the Aircraft, the
rent for the Aircraft shall cease to accrue, the term of this Lease as to the
Aircraft shall terminate and Lessee shall be entitled to possession of the
Aircraft. If Lessor receives the Lease Balance and Other Charges for the
Aircraft, Lessee shall be entitled to the proceeds of any recovery in respect of
the Aircraft, from insurance or otherwise, and Lessor, subject to the rights of
any insurer insuring the Aircraft as provided herein, shall execute and deliver,
to Lessee, or to its assignee or nominee, a bill of sale (without
representations or warranties except that the Aircraft is free and clear of all
claims, liens, security interests and other encumbrances by or in favor of any
person claiming by, through or under Lessor) for the Aircraft, and such other
documents as may be required to release the Aircraft from this Lease and to
transfer title thereto to Lessee or such assignee or nominee, in such form as
may reasonably be requested by Lessee, all at Lessee's expense. Except as
provided in this Section 6.2, Lessee shall not be released from its obligations
hereunder in the event of, and shall bear the risk of, any Casualty Occurrence
to the Aircraft before or during the term of this Lease with respect to the
Aircraft.

     6.3 Upon a Casualty Occurrence with respect to an Engine, whether or not
then installed on the Airframe, provided such occurrence does not or is not
deemed to constitute or happen in connection with a Casualty Occurrence with
respect to the Aircraft described in Section 6.2, Lessee shall give Lessor
prompt written notice thereof and shall promptly (but in no event later than 30
days after such Casualty Occurrence), duly convey to Lessor, as replacement for
the Engine with respect to which such Casualty Occurrence occurred, good and
marketable title to another engine of the same manufacturer and of the same or
an improved model and suitable for installation and use on the Airframe, as the
case may be, and either then owned by Lessee or acquired by Lessee for such
replacement, free and clear of all Liens except Permitted Encumbrances, and
having a value and utility at least equal to, and being in as good a condition
as, the Engine with respect to which such Casualty Occurrence occurred (assuming
such Engine was of the value and utility and in the condition and repair as
required by the terms hereof immediately before such Casualty Occurrence), and
in such case, Lessee at its own expense, will promptly (i) furnish Lessor, with
a full warranty bill of sale, in form and substance satisfactory to Lessor, with
respect to such Replacement Engine and assigning to Lessor the benefit of such
standard manufacturer's and vendor's warranties as are then available and
assignable to Lessor with respect to such Replacement Engine, (ii) cause a
supplement hereto, in form and substance satisfactory to Lessor subjecting such
Replacement Engine to the terms of this Lease, to be duly executed by Lessee and
recorded as may be necessary or as Lessor may request pursuant to the Federal
Aviation Act, (iii) furnish Lessor with such evidence of Lessee's good and
marketable title to such Replacement Engine and of compliance with the insurance
provisions of Section 7 with respect to such Replacement Engine as may be
necessary or as Lessor may reasonably request, (iv) furnish Lessor with an
opinion of Lessee's counsel to the effect that the instruments transferring
title to the Replacement Engine have been duly authorized and delivered, the
Replacement Engine is free and clear of all Liens other than Permitted
Encumbrances and has been validly subjected to the Lease, the instruments
subjecting such Replacement Engine to the Lease have been duly filed for
recordation pursuant to the Federal Aviation Act, and no further action filing
or recording is necessary or advisable in order to establish the interest of
Lessor in such Replacement Engine, and (v) take such other action and provide
such further assurances as may be necessary or as Lessor may reasonably request
with respect to such Replacement Engine in order that such Replacement Engine is
duly and properly subjected to the Lease. Upon full compliance by Lessee with
this Section 6.3, Lessor will transfer to Lessee all Lessor's right, title and
interest, as-is, where-is, without recourse or warranty, express or implied, in
and to the Engine with respect to which such Casualty Occurrence occurred.


                                        8

<PAGE>

     6.4 Lessee waives and releases any claim now or hereafter existing against
Lessor, any company controlled by, controlling, or under common control with
Lessor and all of their directors, officers, employees, agents, attorneys,
successors and assigns (each, an "Indemnified Person") on account of, and shall
indemnify, reimburse and hold each Indemnified Person harmless from, any and all
claims (including, but not limited to, claims based on or relating to copyright,
trademark or patent infringement, environmental liability, negligence, strict
liability in tort, statutory liability or violation of laws), losses, damages,
obligations, penalties, liabilities, demands, suits, judgments or causes of
action, and all legal proceedings, and any reasonable costs or expenses in
connection therewith, including reasonable attorneys' fees, including reasonable
allocated time charges of internal counsel, in each case imposed on, incurred by
or asserted against the Indemnified Person in any way relating to or arising in
any manner out of (a) the registration, purchase, taking or foreclosure of a
security interest in, or the ownership, delivery, condition, lease, assignment,
storage, transportation, possession, use, operation, return, repossession, sale
or other disposition of, the Aircraft, before or during the term of this Lease
as to the Aircraft, (b) any alleged or actual defect in the Aircraft (whether
arising from the material or any article used therein, the design, testing, use,
maintenance, service, repair or overhaul thereof or otherwise) regardless of
when such defect is discovered or alleged, whether or not the Aircraft is in
Lessee's possession and no matter where it is located or (c) this Lease or any
other related document, the enforcement hereof or thereof or the consummation of
the transactions contemplated hereby or thereby.

Section 7. Insurance.

     Lessee, at its own cost and expense, shall keep the Aircraft insured
against all risks, in no event for less than the Lease Balance (as such term is
defined in Section 6.2) with respect to the Aircraft, and shall maintain public
liability insurance against such risks and for such amounts as Lessor may
require. All such insurance shall be in such form and with such companies as
Lessor shall approve, shall specify Lessor as additional insured and Lessee as
insured and shall provide that such insurance may not be canceled as to Lessor
or altered in any way that would affect the interest of Lessor without at least
30 days prior written notice to Lessor (10 days in the case of nonpayment of
premium). All insurance shall be primary, without right of contribution from any
other insurance carried by Lessor and shall not be invalidated by the action or
inaction of Lessee or any other person. All insurance shall contain a "breach of
warranty" provision satisfactory to Lessor, and shall provide that all amounts
payable by reason of loss or damage to the Aircraft shall be payable solely to
Lessor.

Section 8. Default.

     8.1 The following shall constitute events of default ("Events of Default")
hereunder:

          (a)  Lessee fails to make any payments to Lessor when due hereunder;

          (b)  Any representation or warranty of Lessee contained herein or in
               any document furnished to Lessor in connection herewith is
               incorrect or misleading in any material respect when made;

          (c)  Lessee fails to observe or perform any other covenant, agreement
               or warranty made by Lessee hereunder and such failure continues
               for 10 days after written notice thereof to Lessee;

          (d)  Any default occurs under any other agreement for borrowing money
               or receiving credit in excess of $1,000,000 under which Lessee
               may be obligated as borrower, if such default consists of the
               failure to pay any indebtedness when due or if such


                                        9

<PAGE>

               default gives the holder of the indebtedness the right to
               accelerate the indebtedness;

          (e)  Lessee makes an assignment for the benefit of creditors or files
               any petition or action under any bankruptcy, reorganization,
               insolvency or moratorium law, or any other law or laws for the
               relief of, or relating to, debtors;

          (f)  Any involuntary petition is filed under any bankruptcy statute
               against Lessee or any receiver, trustee, custodian or similar
               official is appointed to take possession of the properties of
               Lessee, unless such petition or appointment is set aside or
               withdrawn or ceases to be in effect within 60 days from the date
               of the filing or appointment;

          (g)  Lessee liquidates, dissolves, or enters into any partnership,
               joint venture, (other than in its ordinary course of business)
               consolidation, merger, or other combination, or sells, leases or
               dispose of a substantial portion of its business or assets; or

     8.2 If any Event of Default occurs, Lessor, at its option, may:

          (a)  proceed by appropriate court action or actions either at law or
               in equity, to enforce performance by Lessee of the applicable
               covenants of this Lease or to recover damages for the breach
               thereof; or

          (b)  by notice in writing to Lessee terminate this Lease, whereupon
               Lessee shall remain liable as hereinafter provided, and Lessor
               may, at its option, do any one or more of the following: (i)
               declare the Lease Balance and all Other Charges immediately due
               and payable and recover any damages and expenses in addition
               thereto Lessor sustains by reason of the breach of any covenant,
               representation or warranty contained in this Lease other than for
               the payment of rent; (ii) enforce the security interest given
               hereunder pursuant to the Uniform Commercial Code or any other
               law; (iii) enter upon the premises where any of the Aircraft may
               be and take possession of all or any of the Aircraft; and (iv)
               require Lessee to return the Aircraft as provided in Section 9.

     8.3 Lessor shall have any and all rights given to a secured party by law,
and may, but is not required to, sell the Aircraft in one or more sales. Lessor
may purchase at such sale. Lessee acknowledges that sales for cash or on credit
to a wholesaler, retailer or user of the Aircraft, or at public or private
auction, are all commercially reasonable. The proceeds of such sale shall be
applied in the following order: First, to the reasonable expenses of retaking,
holding, preparing for sale and selling, including the allocated time charges,
costs and expenses of internal counsel of or for Lessor and any other attorneys'
fees and expenses incurred by Lessor; Second, to the amounts, except those
specified below, which under the terms of this Lease are due or have accrued;
Third, to Other Charges; and Fourth, to the Lease Balance. Any surplus shall be
paid to the person or persons entitled thereto. If there is a deficiency, Lessee
will promptly pay the same to Lessor.

     8.4 Lessee agrees to pay all allocated time charges, costs and expenses of
internal counsel for Lessor and any other attorneys' fees, expenses or
out-of-pocket costs incurred by Lessor in enforcing this Lease.


                                       10

<PAGE>

     8.5 The remedies hereunder provided in favor of Lessor shall not be deemed
exclusive, but shall be cumulative, and shall be in addition to all other
remedies in its favor existing at law or in equity.

     8.6 If Lessee fails to perform any of its agreements contained herein,
Lessor may perform such agreement, and Lessee shall pay the expenses incurred by
Lessor in connection with such performance, upon demand.

Section 9. Return of Aircraft.

     If Lessor rightfully demands possession of the Aircraft pursuant to this
Lease or otherwise, Lessee, at its expense, shall forthwith deliver possession
of the Aircraft to Lessor, at the option of Lessor (a) by delivering the
Aircraft, appropriately protected and in the condition required by Section 4, to
Lessor at such place as may be specified by Lessor.

     Upon return of the Aircraft to Lessor or any purchaser

     a) The Airframe will have completed the next scheduled heaviest maintenance
inspection within 25 hours of return;

     b) All airworthiness directives will be terminated where possible, and all
service bulletins complied with, in each case applicable to the Airframe, any
Engine any Part or the related records;

     c) All aspects of the applicable corrosion control program will be complete
to date;

     d) All landing gear will have been overhauled within three months prior to
return;

     e) All hard time components will have been overhauled or refurbished within
25 hours of return; and

     f) The Engines shall not have been used more than 25 hours or cycles since
a complete overhaul or refurbishment.

Section 10. Assignment.

     Lessor may at any time assign or transfer all or any of the right, title or
interest of Lessor in and to this Lease, and the rights, benefits and advantages
of Lessor hereunder, including the rights to receive payment of rent or any
other payment hereunder, Lessor's title to the Aircraft and any and all
obligations of Lessor in connection herewith. Lessor may disclose to any
potential or actual assignee or transferee any information in the possession of
Lessor or any Affiliate relating to Lessee or this Lease. Any such assignment or
transfer shall be subject and subordinate to this Lease and the rights and
interests of Lessee hereunder. No assignment of this Lease or any right or
obligation hereunder may be made by Lessee or any assignee of Lessee without the
prior written consent of Lessor.

Section 11. Ownership, Security Interest and Further Assurances.

     Unless assigned by Lessor, or applicable law otherwise provides, title to
and ownership of the Aircraft shall remain in Lessor as security for the
obligations of Lessee hereunder until Lessee has fulfilled all of its
obligations hereunder. Lessee hereby grants to Lessor a continuing security
interest in the Aircraft to secure the payment of all sums due hereunder. Lessee
confirms there is no pending litigation, tax claim, proceeding or dispute that
may adversely affect its financial condition or impair its


                                       11

<PAGE>

ability to perform its obligations hereunder. Lessee will, at its expense,
maintain its legal existence in good standing and do any further act and
execute, acknowledge, deliver, file, register and record any further documents
Lessor may reasonably request in order to protect Lessor's title to and security
interest in the Aircraft and Lessor's rights and benefits under this Lease.

Section 12. Late Payments.

     Lessee shall pay to Lessor, on demand, interest at the rate set forth in
the Appendix on the amount of any payment not made when due hereunder from the
date due until payment is made.

Section 13. Effect of Waiver.

     No delay or omission to exercise any right, power or remedy accruing to
Lessor upon any breach or default of Lessee hereunder shall impair any such
right, power or remedy nor shall it be construed to be a waiver of any such
breach or default, or an acquiescence therein or of or in any similar breach or
default thereafter occurring, nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of Lessor of any breach or default under this Lease must
be in writing specifically set forth.

Section 14. Survival of Covenants.

     All obligations of Lessee under Sections 1, 2, 4, 5, 6, 7, 8, 9, 12 and the
Appendix shall survive the expiration or termination of this Lease to the extent
required for their full observance and performance.

Section 15. Applicable Law.

     This Lease shall be governed by and construed under the laws of Georgia, to
the jurisdiction of which, and of federal courts in Georgia, the parties hereto
submit.

Section 16. Financial Information.

     Lessee shall

          (a) keep its books and records in accordance with generally accepted
accounting principles and practices consistently applied and shall deliver to
Lessor its annual audited financial statements, including without limitation
Lessee's SEC form 10-K. within 30 days of filing, and such other financial
statements and information as Lessor may reasonably request;

          (b) as soon as available but not later than 60 days after the end of
each of the first 3 fiscal quarters of the Lessee the unaudited consolidated
balance sheet of Lessee and its subsidiaries as at the end of such fiscal
quarter, and the unaudited consolidated statement of income and retained
earnings and of changes in cash flow of Lessee and its subsidiaries for such
fiscal quarter and that portion of the fiscal year ending with such quarter,
certified by a responsible officer of Lessee as being prepared in accordance
with generally accepted accounting principles and complete and correct and
fairly presenting the financial condition and results of operations of Lessee
and its subsidiaries;


                                       12

<PAGE>

          (c) as soon as available but no later than 120 days after the end of
each of its fiscal years, a complete copy of an audit report of Lessee and its
subsidiaries which shall include at least the consolidated balance sheet of
Lessee and its subsidiaries as of the close of such year, and the consolidated
statement of income and retained earnings and of changes in cash flows of Lessee
for such year, prepared in accordance with generally accepted accounting
principles and fairly presenting the Lessee's financial position and results of
operations, certified by Deloitte-Touche, or other independent public accounting
firm of recognized national standing selected by Lessee and satisfactory to
Lessor. Such certificate shall not be qualified or limited because of restricted
or limited examination by such accountant of any material portion of Lessee's
records.

Credit information relating to Lessee may be disseminated among Lessor and any
of its affiliates and any of their respective successors and assigns.

Section 17. Notices.

     All demands, notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given when personally delivered, when
received by facsimile or when deposited in the mail, first class postage
prepaid, or delivered to a telegraph office, charges prepaid, addressed to each
party at the address set forth below the signature of such party on the
signature page, or at such other address as may hereafter be furnished in
writing by either party to the other.

Section 18. Counterparts.

     Two counterparts of this Lease have been executed by the parties hereto.
One counterpart has been prominently marked "Lessor's Copy". One counterpart has
been prominently marked "Lessee's Copy". Only the counterpart marked "Lessor's
Copy" shall evidence a monetary obligation of Lessee.

Section 19. Transaction Costs.

     Lessee agrees to reimburse any legal expenses of Lessor (including
allocated time charges of internal counsel for Lessor and other attorneys fees)
and any out-of-pocket costs incurred in connection with the preparation and
negotiation of lease documents (whether or not a lease is ever executed by
Lessee) and any documents required in connection therewith.

Section 20. Effect and Modification of Lease.

     This Lease exclusively and completely states the rights of Lessor and
Lessee with respect to the leasing of the Aircraft and supersedes all prior
agreements, oral or written, with respect thereto. No variation or modification
of this Lease shall be valid unless in writing.

Section 21, Truth in Leasing.

     THE AIRCRAFT, AS EQUIPMENT BECAME SUBJECT TO THE MAINTENANCE REQUIREMENTS
OF PART 91 OF THE FEDERAL AVIATION REGULATIONS ("FARS") UPON THE REGISTRATION OF
THE AIRCRAFT WITH THE FEDERAL AVIATION ADMINISTRATION. LESSEE CERTIFIES THAT THE
AIRCRAFT WILL BE MAINTAINED AND INSPECTED UNDER PART 91 OF THE FARS FOR
OPERATIONS TO BE CONDUCTED UNDER THIS AGREEMENT. UPON EXECUTION OF THIS
AGREEMENT, AND DURING THE TERM HEREOF, LESSEE CERTIFIES THAT LESSEE SHALL BE
REPSONSIBLE FOR THE OPERATIONAL CONTROL OF


                                       13

<PAGE>

THE AIRCRAFT UNDER THIS AGREEMENT. LESSEE FURTHER CERTIFIES THAT IT UNDERSTANDS
ITS RESPONSIBILITIES FOR COMPLIANCE WITH APPLICABLE FARS. THE PARTIES HERETO
ACKNOWLEDGE THAT AN EXPLANATION OF FACTORS BEARING ON OPERATIONAL CONTROL AND
PERTINENT FARS MAY BE OBTAINED FROM THE NEAREST FEDERAL AVIATION ADMINISTRATION
FLIGHT STANDARD DISTRICT OFFICE, GENERAL AVIATION DISTRICT OFFICE OR AIR CARRIER
DISTRICT OFFICE.


                                       14

<PAGE>

     The parties hereto have executed this Lease as of the day and year first
above written.

BANC OF AMERICA LEASING & CAPITAL, LLC   LAKES GAMING, INC.


By /s/ JERRY D. HOLMES                   By /s/ TIMOTHY COPE
   -----------------------------------      ------------------------------------
Title Vice President                     Title  CFO
                                               ---------------------------------


By  JERRY D. HOLMES                      By  TIMOTHY COPE
   -----------------------------------      ------------------------------------
Title  VICE PRESIDENT                    Title  CFO
      --------------------------------         ---------------------------------

Address: 555 California Street
         4th Floor
         San Francisco, CA 94104
         Attn: Contract Administration #15811
         Fax: (415)765-7373

<PAGE>

                                                                     FEB 18 2000

================================================================================

                  FIRST AMENDMENT TO LEASE INTENDED AS SECURITY

                             dated February 11, 2000

                                     between

                      BANG AMERICA LEASING & CAPITAL, LLC,
                                    as Lessor

                                       and

                               LAKES GAMING, INC.,
                                    as Lessee

================================================================================

<PAGE>

                  FIRST AMENDMENT TO LEASE INTENDED AS SECURITY

     THIS FIRST AMENDMENT TO LEASE INTENDED AS SECURITY, dated February 11, 2000
(this "Amendment") between BANC OF AMERICA LEASING & CAPITAL, LLC, a Delaware
limited liability company ("Lessor"), and LAKES GAMING, INC., a Minnesota
corporation ("Lessee"), amends that certain Lease Intended as Security dated as
of December 3, 1999 (the "Lease") as supplemented by Lease Schedule and
Acceptance Certificate dated as of December 3, 1999 ("Lease Schedule"; the
Lease, as supplemented by Lease Schedule, being referred to herein as the
"Lease"), in each case between the Lessor and the Lessee.

                                   WITNESSETH:

     WHEREAS, except as otherwise defined in this Amendment, capitalized terms
used herein and not otherwise defined herein shall have the meanings attributed
thereto in the Lease as amended hereby;

     WHEREAS, pursuant to the Lease, Lessee has leased from Lessor the Aircraft;

     WHEREAS, a counterpart of the Lease to which was attached and made a part
thereof a counterpart of Lease Schedule, was recorded with the Federal Aviation
Administration on December 6, 1999 under conveyance number 2A279206;

     WHEREAS, Lessor and Lessee desire to amend the Lease in certain respects.

     NOW, THEREFORE, in consideration of the mutual agreements contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

     SECTION 1. Amendment to Paragraph F of the Appendix to Lease Intended as
Security.

     1.1 Amendment to Clause 1. Clause 1 of Paragraph F of the Appendix to Lease
Intended as Security is hereby amended to be read in its entirety as follows:

     "1. Interim Rent. On each Payment Date during the Interim Term, Lessee
     shall pay to Lessor arrears rent for the Aircraft (the "Interim Rent") in
     an amount equal to the sum of (i) an amount equal to interest accrued at
     the Interest Rate on the portion of the Lease Balance outstanding on the
     first day of the Rent Period for which Interim Rent is being paid, plus
     (ii) an amount equal to interest accrued at the Interest Rate on the
     portion of the Lease Balance advanced after the first day of the Rent
     Period specified in the preceding clause (i)."

<PAGE>

     1.2 Amendment to Certain Definitions. The definitions of "LIBO Rate" and
"Rent Period" appearing in Clause 3 of Paragraph F of the Appendix to Lease
Intended as Security are hereby amended to be read in their entirety as follows:

          "LIBO Rate" shall mean, relative to any Rent Period with respect to
     the Lease Balance (or, during the Interim Term, the portion of the Lease
     Balance to which such Rent Period applies) and each Schedule Balance, the
     rate of interest equal to the average (rounded upwards, if necessary, to
     the nearest 1/16 of 1%) of the rates per annum at which Dollar deposits in
     immediately available funds are offered by Bank of America, National
     Association's LIBOR Office in the London interbank market as at or about
     11:00 a.m. London time two Business Days prior to the beginning of such
     Rent Period for delivery on the first day of such Rent Period, and in an
     amount approximately equal to the amount of the Lease Balance (or, during
     the Interim Term, the portion of the Lease Balance to which such Rent
     Period applies) and for a period equal to one month.

          "Rent Period" shall mean, (i) for the Interim Term and with respect to
     that portion of the Lease Balance advanced at the commencement of the
     Interim Term or on or prior to the first day of such Rent Period, the
     period beginning on the first day of the Interim Term and ending on (but
     excluding) the date which numerically corresponds to such date one month
     thereafter and each consecutive one-month period thereafter, with each such
     successive period ending on the date which numerically corresponds to the
     date on which such period commenced or, if earlier, the Base Date, (ii) for
     the Interim Term and with respect to that portion of the Lease Balance
     advanced after the first day of a Rent Period specified in clause (i)
     hereof, the period beginning on the date of such advance and ending on (but
     excluding) the last day of such Rent Period, (iii) for the Base Term and
     any Renewal Term the period beginning on the first day of such Base Term
     and ending on (but excluding) the date which numerically corresponds to
     such date one month thereafter and each consecutive one-month period
     thereafter, with each such period ending on the date which numerically
     corresponds to the date on which such period commenced; provided, however,
     that (a) if such Rent Period would otherwise end on a day which is not a
     Business Day, then such Rent period shall end on the next following
     Business Day, unless (solely for purposes of determining Rent periods in
     connection with calculating Variable Rent on a LIBO Rate basis) such next
     following Business Day is the first Business Day of a calendar month, in
     which case such Rent period shall end on the Business Day immediately
     preceding such numerically corresponding day, and (b) no Rent Period may
     end later than the last day of the Lease Term.

     SECTION 2. Miscellaneous.

     2.1 Continued Effectiveness of Lease. Except as modified hereby, all of the
terms and conditions of the Lease shall remain in full force and effect.


                                        2

<PAGE>

     2.2 Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA, WITHOUT REGARD TO THE
CONFLICTS OF LAWS PRINCIPLES OF SUCH STATE.

     2.3 Counterparts. This Amendment may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the
same agreement.

                  [Remainder of Page Intentionally Left Blank]


                                        3

<PAGE>

     IN WITNESS WHEREOF, Lessor and Lessee have caused this Amendment to be
executed by their duly authorized representatives as of the date first above
written.

                                        LESSOR:

                                        BANC OF AMERICA LEASING & CAPITAL, LLC


                                        By: /s/ Albert Z. Norona
                                            ------------------------------------
                                        Name: Albert Z. Norona
                                        Title: Vice President


                                        LESSEE:

                                        LAKES GAMING, INC.


                                        By: /s/ Timothy Cope
                                            ------------------------------------
                                        Name: Timothy Cope
                                              ----------------------------------
                                        Title: CFO
                                               ---------------------------------

<PAGE>

================================================================================

                 SECOND AMENDMENT TO LEASE INTENDED AS SECURITY

                               dated May 12, 2000

                                     between

                      BANC AMERICA LEASING & CAPITAL, LLC,
                                    as Lessor

                                       and

                               LAKES GAMING, INC.,
                                    as Lessee

================================================================================

<PAGE>

                 SECOND AMENDMENT TO LEASE INTENDED AS SECURITY

     THIS SECOND AMENDMENT TO LEASE INTENDED AS SECURITY, dated May 12, 2000
(this "Amendment") between BANC OF AMERICA LEASING & CAPITAL, LLC, a Delaware
limited liability company ("Lessor"), and LAKES GAMING, INC., a Minnesota
corporation ("Lessee"), amends that certain Lease Intended as Security dated as
of December 3, 1999 (as amended through the date hereof, the "Lease") as
supplemented by Lease Schedule and Acceptance Certificate dated as of December
3, 1999 ("Lease Schedule"; the Lease, as supplemented by Lease Schedule, being
referred to herein as the "Lease"), in each case between the Lessor and the
Lessee.

                                   WITNESSETH:

     WHEREAS, except as otherwise defined in this Amendment, capitalized terms
used herein and not otherwise defined herein shall have the meanings attributed
thereto in the Lease as amended hereby;

     WHEREAS, pursuant to the Lease, Lessee has leased from Lessor the Aircraft;

     WHEREAS, a counterpart of the Lease to which was attached and made a part
thereof a counterpart of Lease Schedule, was recorded with the Federal Aviation
Administration on December 6, 1999 under conveyance number 2A279206; and

     WHEREAS, Lessor and Lessee desire to amend the Lease to in certain
respects.

     NOW, THEREFORE, in consideration of the mutual agreements contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

     SECTION 1 Amendment to Paragraph B of the Appendix to Lease Intended as
Security.

     1.1 Amendment to Paragraph B of the Appendix to Lease Intended as Security.
Paragraph B of the Appendix to Lease Intended as Security is hereby amended by
inserting the following sentence at the end thereof:

     The Purchase Price with respect to the Aircraft is set forth on Annex II to
the Schedule."

     SECTION 2. Amendment to Annex II to Lease Schedule and Acceptance
Certificate.

     2.1 Amendment to Annex II to Lease Schedule and Acceptance Certificate.
Annex II to Lease Schedule and Acceptance Certificate is hereby deleted in its
entirety and replaced with the Annex II to Lease Schedule and Acceptance
Certificate attached to this Amendment.

<PAGE>

     SECTION 3. Miscellaneous.

     3.1 Continued Effectiveness of Lease. Except as modified hereby, all of the
terms and conditions of the Lease shall remain in full force and effect.

     3.2 Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA, WITHOUT REGARD TO THE
CONFLICTS OF LAWS PRINCIPLES OF SUCH STATE.

     3.3 Counterparts. This Amendment may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the
same agreement.

            [The remainder of this page is intentionally left blank.]


                                        2

<PAGE>

     IN WITNESS WHEREOF, Lessor and Lessee have caused this Amendment to be
executed by their duly authorized representatives as of the date first above
written.

                                        LESSOR:

                                        BANC OF AMERICA LEASING & CAPITAL, LLC


                                        By: /s/ Albert Z. Norona
                                            ------------------------------------
                                        Name: Albert Z. Norona
                                        Title: Vice President


                                        LESSEE:

                                        LAKES GAMING, INC.


                                        By: /s/ Timothy J. Cope
                                            ------------------------------------
                                        Name: Timothy J. Cope
                                              ----------------------------------
                                        Title: CFO
                                               ---------------------------------

<PAGE>

                                                                        ANNEX II
                                                                              TO
                                                   LEASE SCHEDULE AND ACCEPTANCE
                                                                     CERTIFICATE

Delivery Date:  December 3, 1999
Purchase Price: $8,500,000
Base Date:      May 1, 2000

     "Applicable Percentage" shall mean, with respect to the end of the Base
Term and each Renewal Term, the percentage set forth below opposite each such
date:

<TABLE>
<CAPTION>
End of                Applicable Percentage
- ------                ---------------------
<S>                   <C>
Base Term                     76.26%
First Renewal Term            75.47%
Second Renewal Term           73.91%
</TABLE>

     The percentage used to calculate the Recourse Deficiency Amount with
respect to the Aircraft described in this Schedule shall be 16.33%.

     Fixed Rent Payments & Schedule Balance:

<TABLE>
<CAPTION>
       Payment   Fixed Rent          (A)
Year    Number    Principal   Schedule Balance
- ----   -------   ----------   ----------------
<S>    <C>       <C>          <C>
  1        1      15,499.18
           2      15,604.87
           3      15,711.28
           4      15,818.41
           5      15,926.27
           6      16,034.87
           7      16,144.20
           8      16,254.29
           9      16,365.12
          10      16,476.71
          11      16,589.06
          12      16,702.18
  2       13      16,816.07
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
       Payment   Fixed Rent          (A)
Year    Number    Principal   Schedule Balance
- ----   -------   ----------   ----------------
<S>    <C>       <C>          <C>
          14      16,930.73
          15      17,046.18
          16      17,162.41
          17      17,279.44
          18      17,397.26
          19      17,515.89
          20      17,635.32
          21      17,755.58
          22      17,876.65
          23      17,998.54
          24      18,121.27
  3       25      18,244.83
          26      18,369.24
          27      18,494.50
          28      18,620.61
          29      18,747.58
          30      18,875.41
          31      19,004.12
          32      19,133.70
          33      19,264.17
          34      19,395.53
          35      19,527.78
          36      19,660.93     7,870,000.00
  4       37      13,643.20
          38      13,736.23
          39      13,829.89
          40      13,924.19
          41      14,019.14
          42      14,114.73
          43      14,210.98
          44      14,307.88
          45      14,405.44
          46      14,503.67
          47      14,602.56
          48      14,702.14     7,700,000.00
  5       49      12,840.66
          50      12,928.21
          51      13,016.37
          52      13,105.12
          53      13,194.48
          54      13,284.45
</TABLE>


                                        2

<PAGE>

<TABLE>
<CAPTION>
       Payment   Fixed Rent          (A)
Year    Number    Principal   Schedule Balance
- ----   -------   ----------   ----------------
<S>    <C>       <C>          <C>
          55      13,375.04
          56      13,466.24
          57      13,558.06
          58      13,650.51
          59      13,743.59
          60      13,837.30    7,540,000.00
</TABLE>


                                        3

<PAGE>

                  THIRD AMENDMENT TO LEASE INTENDED AS SECURITY

     THIS THIRD AMENDMENT TO LEASE INTENDED AS SECURITY, dated May 1, 2005 (this
"Amendment") Between BANC OF AMERICA LEASING & CAPITAL, LLC, a Delaware limited
liability company ("Lessor") and LAKES ENTERTAINMENT, INC. a Minnesota
corporation ("Lessee"), amends that certain Lease Intended as Security dated as
of December 3, 1999 (as amended through the date hereof, the "Lease") as
supplemented by Lease Schedule and Acceptance Certificate dated as of December
3, 1999 ("Lease Schedule"; the lease, as supplemented by Lease Schedule, being
referred to herein as the "Lease"), in each case between the Lessor and the
Lessee.

                                   WITNESSETH:

     WHEREAS, except as otherwise defined in this Amendment, capitalized terms
used herein and not otherwise defined herein shall have the meanings attributed
thereto in the Lease as amended hereby;

     WHEREAS, pursuant to the Lease, Lessee has leased from the Lessor the
Aircraft;

     WHEREAS, a counterpart of the Lease to which was attached and made a part
thereof a counterpart of lease Schedule, was recorded with the Federal Aviation
Administration on December 6, 1999 under conveyance number 2A279206; and

     WHEREAS, Lessor and Lessee desire to amend the Lease in certain respects.

     NOW, THEREFORE, in consideration of the mutual agreements contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

SECTION 1. Amendment to the Appendix to Lease Intended as Security.

     1.1 Paragraph B is hereby deleted in its entirety and replaced with the
     following:

          "Purchase Price" with respect to the Aircraft shall mean the amount
          set forth in Annex II to Lease Schedule and Acceptance Certificate."

     1.2 The first four sentences of Paragraph C shall be deleted in their
     entirety and replaced with the following:

          The Lease Term for the Aircraft shall consist of a Base Term and any
          applicable Renewal Terms. The "Base Date" shall be the date set forth
          in Annex II to Lease Schedule and Acceptance Certificate. The Base
          Term for the Aircraft shall commence on its Base Date and continue for
          one (1) year."

     1.3 Subparagraphs 1, 2 and 3 of Paragraph D are hereby deleted in their
     entirety and replaced with the following:

<PAGE>

          "The Lessor agrees to make an advance ("Advance") to the Lessee on the
          Base Date in the amount of the Purchase Price."

     1.4 Paragraph F is hereby amended as follows:

          (a)  All references and definitions pertaining to Interim Rent and all
               other defined terms and definitions relating to Interim Rent are
               deleted in their entirety.

          (b)  The definition of "Interest Rate" set forth in Paragraph F of the
               Appendix to Lease Intended as Security is hereby deleted in its
               entirety and replaced with the following:

          "Interest Rate shall mean, with respect to any Rent Period, the rate
          per annum equal to the sum of (i) the LIBO Rate for such Rent Period,
          plus (ii) 2.25%.

SECTION 2. Amendment to Lease Intended as Security

     2.1 Section 2.5 shall be deleted in its entirety and replaced with the
     following:

          "Payments shall be applied in the following order: (a) expenses and
          attorneys fees except those attorneys fees associated with the
          negotiation and execution of the Third Amendment to Lease Intended as
          Security; (b) interest on late payments; and (c) rent and all other
          items due hereunder. Payments shall be evidenced by entries in records
          made by Lessor."

SECTION 3. Amendment to Lease Schedule and Acceptance Certificate.

     3.1 The first two sentences of Paragraph 2 are hereby deleted in their
     entirety and replaced with the following:

     "The Lease Term of this Schedule shall commence on the Base Date set forth
     in Annex II. The Applicable Percentage and the Lease Balance as to each
     Payment Date are set forth, respectively, in Annex II (as the same may be
     adjusted pursuant to Section 1.2(c)(ii) of the Lease)."

     3.2 The reference to Interim Rent in the first sentence of Paragraph 3 is
     deleted in its entirety.

SECTION 4. Amendment to Annex II to Lease Schedule and Acceptance Certificate.

     4.1 Annex II to Lease Schedule and Acceptance Certificate is hereby deleted
     in its entirety and replaced with the Annex II to Lease Schedule and
     Acceptance Certificate attached is the Amendment.

SECTION 5. Miscellaneous

     5.1 Continued Effectiveness of Lease. Except as modified hereby, all of the
     terms and conditions of the Lease shall remain in full force and effect.

<PAGE>

     5.2 Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUCTED IN
     ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA, WITHOUT REGARD TO THE
     CONFLICTS OF LAWS PRINCIPLES OF SUCH STATE.

     5.3 Counterparts. This Amendment may be executed by the parties hereto in
     separate counterparts, each of which when so executed and delivered shall
     be an original, but all such counterparts shall together constitute but one
     and the same agreement.

                  [Remainder of Page Intentionally Left Blank]

<PAGE>

IN WITNESS WHEREOF, Lessor and Lessee have caused this Amendment to be executed
by their duly authorized representatives as of the date first above written.

                                        LESSOR:

                                        BANC OF AMERICA LEASING & CAPITAL LLC


                                        By: /s/ ALBERT Z. NORONA
                                            ------------------------------------
                                        Name: ALBERT Z. NORONA
                                              ----------------------------------
                                        Title: VICE PRESIDENT
                                               ---------------------------------


                                        LESSEE:

                                        LAKES ENTERTAINMENT, INC.


                                        By: /s/ TIMOTHY J. COPE
                                            ------------------------------------
                                        Name: TIMOTHY J. COPE
                                              ----------------------------------
                                        Title: CFO
                                               ---------------------------------

<PAGE>

                                                                        ANNEX II
                                                                              TO
                                                   LEASE SCHEDULE AND ACCEPTANCE
                                                                     CERTIFICATE

     Purchase Price: $6,105,000.00

     Base Date:      May 1, 2005

          "Applicable Percentage" shall mean, with respect to the end of the
Base Term and each Renewal Term, the percentage set forth below opposite each
such date:

<TABLE>
<CAPTION>
      End of          Applicable Percentage   Recourse Deficiency Amount
      ------          ---------------------   --------------------------
<S>                   <C>                     <C>
Base Term                    81.03%                     13.97%
First Renewal Term           76.73%                     13.27%
Second Renewal Term          72.43%                     12.57%
</TABLE>

          The percentage used to calculate the Recourse Deficiency Amount with
respect to the Aircraft described in this Schedule shall mean the percentages
set forth above.

     Fixed Rent Payments & Schedule Balance:

<TABLE>
<CAPTION>
       Payment    Payment    Fixed Rent     Schedule
Year    Number      Date      Principal      Balance
- ----   -------   ---------   ----------   ------------
<S>    <C>       <C>         <C>          <C>
  1       1      6/1/2005     24,793.47   6,080,206.53
          2      7/1/2005     24,908.76   6,055,297.76
          3      8/1/2005     25,024.59   6,030,273.17
          4      9/1/2005     25,140.95   6,005,132.21
          5      10/1/2005    25,257.86   5,979,874.35
          6      11/1/2005    25,375.30   5,954,499.04
          7      12/1/2005    25,493.30   5,929,005.74
          8      1/1/2006     25,611.84   5,903,393.89
          9      2/1/2006     25,730.94   5,877,662.95
         10      3/1/2006     25,850.59   5,851,812.35
         11      4/1/2006     25,970.79   5,825,841.56
         12      5/1/2006     26,091.56   5,799,749.99
  2      13      6/1/2006     24,793.47   5,774,956.52
</TABLE>

<PAGE>

<TABLE>
<S>    <C>       <C>         <C>          <C>
         14      7/1/2006     24,908.76   5,750,047.76
         15      8/1/2006     25,024.59   5,725,023.16
         16      9/1/2006     25,140.95   5,699,882.21
         17      10/1/2006    25.257.86   5,674,624.35
         18      11/1/2006    25,375.31   5,649,249.04
         19      12/1/2006    25,493.30   5,623,755.74
         20      1/1/2007     25,611.85   5,598,143.88
         21      2/1/2007     25,730.94   5,572,412.94
         22      3/1/2007     25,850.59   5,546,562.35
         23      4/1/2007     25,970.80   5,520,591.55
         24      5/1/2007     26,091.56   5,494,499.98
  3      25      6/1/2007     24,793.48   5,469,706.50
         26      7/1/2007     24,908.76   5,444,797.74
         27      8/1/2007     25,024.59   5,419,773.15
         28      9/1/2007     25,140.95   5,394,632.20
         29      10/1/2007    25,257.86   5,369,374.34
         30      11/1/2007    25,375.31   5,343,999.03
         31      12/1/2007    25,493.30   5,318,505.74
         32      1/1/2008     25,611.85   5,292,893.89
         33      2/1/2008     25,730.94   5,267,162.95
         34      3/1/2008     25,850.59   5,241,312.36
         35      4/1/2008     25,970.80   5,215,341.56
         36      5/1/2008     26,091.56   5,189,250.00
</TABLE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.169
<SEQUENCE>3
<FILENAME>c02716exv10w169.txt
<DESCRIPTION>CONDITIONAL RELEASE AND TERMINATION AGREEMENT
<TEXT>
<PAGE>
                                                                  Exhibit 10.169

                  CONDITIONAL RELEASE AND TERMINATION AGREEMENT

          THIS CONDITIONAL RELEASE AND TERMINATION AGREEMENT (the Termination
Agreement") is made this 20 day of May, 1999, by and between Lakes Gaming. Inc.,
a Minnesota corporation ("Lakes") and Casino Resource Corporation, a Minnesota
corporation ("CRC").

                                   WITNESSETH

          WHEREAS, Lakes and CRC executed that certain Memorandum of
Understanding, dated as of December 29, 1998 (the "Memorandum"), pursuant to
which they each, evidenced their intention to negotiate in good faith towards
the execution of a joint venture agreement, on the terms and subject to the
conditions set forth in the Memorandum, for purposes of seeking to obtain an
Indian, gaming management and, development agreement (the "Management
Agreement") with the Pokagon Band of Potawatomi Indians (the "Tribe"), for
planned casinos in Michigan and Indiana;

          WHEREAS, as of the date hereof, the parties have not executed a joint
venture agreement, nor has the Tribe awarded Lakes by CRC the Management
Agreement;

          WHEREAS, it is the understanding of the parties hereto, that the Tribe
may or may not be amenable to awarding the Management Agreement solely to Lakes
so long as Lakes terminates its affiliation with CRC with respect to such
Management Agreement: and

          WHEREAS, in the event the Tribe determines to award the Management
Agreement to Lakes, and such selection, is conditioned on the CRC's
noninvolvement in the management or development of the casinos, the parties,
wish to terminate the Memorandum and release each from, any and all liability
and claims they might otherwise have against each other related to or otherwise
arising out of Ac transactions contemplated by the Memorandum, in each case on
the terms and subject to the conditions set forth herein.

          NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and promises set forth herein, the parties intending to be legally
bound hereby agree as follows:

          1. Subject to the conditions set forth in Section 3 below, Lakes
hereby acquits, and forever discharges CRC, and each of its officers, directors,
employees mid affiliates, and its and their respective successors and assigns of
and from all actions, causes of actions, claims, suits, debts, dues, account,
bonds, covenants, contracts, agreements, judgments, damages and costs whatsoever
in law or in equity arising out of the Memorandum and the transactions
contemplated thereby, which Lakes can, shall or may have from the beginning of
the world to the date of these presents.

          2. Subject to the conditions set forth in Section 3 below, CRC hereby
releases, acquits, and forever discharges Lakes, and each of its officers,
directors, employees and affiliates.

                                  Confidential

<PAGE>

                                   SCHEDULE I

<TABLE>
<CAPTION>
AMOUNT PAYABLE   WHEN PAYABLE
- --------------   ------------
<S>              <C>
                 Michigan Casino
  $ 4,000,000    Year 1 - Payable $1,000,000 quarterly in arrears
  $ 4,000,000    Year 2 - Payable $1,000,000 quarterly in arrears
  $ 4,000,000    Year 3 - Payable $1,000,000 quarterly in arrears
  $ 4,000,000    Year 4 - Payable $1,000,000 quarterly in arrears
  $ 4,000,000    Year 5 - Payable $1,000,000 quarterly in arrears
                 Indiana Casino
  $ 2,000,000    Year 1 - Payable $500,000 quarterly in arrears
  $ 2,000,000    Year 2 - Payable $500,000 quarterly in arrears
  $ 2,000.000    Year 3 - Payable $500,000 quarterly in arrears
  $ 2,000,000    Year 4 - Payable $500,000 quarterly in arrears
  S 2,000,000    Year 5 - Payable $500,000 quarterly in arrears
  -----------
  $30,000,000    Total
</TABLE>

None of the above payments shall exceed on an annual basis twenty percent (20%)
of Lakes Gaming Management Fee. If these payments during Year 1 exceed 20% of
Lakes annual Management Fee, a credit will be given on the following years
payments.

Both parties agree that at the end of the five year period, an average annual
Management Fee will be calculated, with any appropriate adjustments made so as
to assure that both Lakes Gaming and CRC that the amounts payable on Schedule I
are no less than the amounts listed payable, but no greater than 20% of the
Lakes Management Fee received by Lakes over the five year period. However, the
overriding formula shall be that the fee paid to CRC shall be no more than 20%
of the five year Management Fee received by Lakes.

<PAGE>

                        AMENDMENT TO CONDITIONAL RELEASE
                           AND TERMINATION AGREEMENT

          THIS AMENDMENT TO CONDITIONAL RELEASE AND TERMINATION AGREEMENT (the
"Amendment") is made this 1st day of July, 1999, by and between Lakes Gaming,
Inc., a Minnesota corporation ("Lakes") and Casino Resource Corporation, a
Minnesota corporation ("CRC").

                                   BACKGROUND

          Lakes and CRC executed that certain Memorandum of Understanding, dated
as of December 29, 1998 (the "Memorandum"), pursuant to which they each
evidenced their intention to negotiate in good faith towards the execution of a
joint venture agreement, on the terms and subject to the conditions set forth in
the Memorandum. The Joint Venture intended to seek to obtain an Indian gaming
management and development agreement (the "Management Agreement") with the
Pokagon Band of Potawatomi Indians (the "Tribe"), for planned casinos in
Michigan and Indiana.

          It was the understanding of the parties that the Tribe might be
amenable to awarding the Management Agreement to Lakes if CRC terminated its
affiliation with Lakes and the proposed Joint Venture with, respect to the
Management Agreement.

          Based on the foregoing understanding, the parties entered into a
Conditional Release and Termination Agreement dated May 20, 1999 (the
"Termination Agreement").

          Subsequent to the entering into of the Termination Agreement, the
Tribe determined to negotiate exclusively with Lakes with a view to entering a
Management Agreement.

          As part of the negotiations with the Tribe. The Tribe required that
the Termination Agreement between Lakes and CRC be modified so that CRC would
not be receiving any payments based on the revenues received by Lakes under the
Management Agreement.

          In order to comply with the requirements of the Tribe, Lakes and CRC
determined to amend the Termination Agreement and fix the payments from Lakes to
CRC in full satisfaction of Lakes' financial obligations to CRC under the
Memorandum and Termination Agreement.

          NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, and intending to be legally bound hereby, the parties
hereto agree as follows:

<PAGE>

          1. Paragraph 5 of the Termination Agreement be and the same is hereby
restated in its entirety as follows:

               5. In consideration of CRC's prompt termination, withdrawal and
disassociation from its relationship with each of Lakes, the proposed Joint
Venture and the Tribe under the Memorandum or the Management Agreement. Lakes
agrees to pay in full satisfaction of any and all obligations it owes to CRC the
aggregate maximum sum of $16,100,000 (assuming the Casino is opened in the New
Buffalo area) payable as follows:

                    5.1 $2 million shall be payable upon the later to occur of
the signing of a Management Agreement and ratification of' same by the new
Tribal Council pertaining to the proposed Michigan casino (as ratification is
defined in the development agreement between the Tribe and Lakes, attached
hereto as Exhibit B). Except for a change in the location not contemplated
herein; any changes in the Management Agreement that the Tribe or Lakes Gaiming,
Inc. might make in the Management Agreement will have no bearing on the payment
to Casino Resource Corporation. The payment to Casino Resource Corporation will
be triggered by the release of or payment of any funds, in excess of an
aggregate of $250,000, by Lakes Gaming under their Management Agreement to the
Tribe. Lakes Gaming, Inc. agrees to notify and pay CRC within 24 hours of the
payment of funds, as described above. Lakes shall be given credit for a
$2,604,923 million payment against the maximum $16.1 million aggregate amount in
recognition of present valuing the advance cash payment being made.

                    5.2 $10,995,077 or the adjusted lesser amount per this
Agreement shall be payable as set forth on Schedule A, attached hereto. Such
payments shall commence on the last day of the calendar quarter in which the
Tribe's Michigan casino opens, and continue only so long as Lakes Gaming, Inc.
or an affiliate is and continues to be the manager and the casino is open.

                    5.3 Notwithstanding the foregoing, in the event the Tribe's
Michigan casino is not substantially ready to open on or before June 30, 2004,
and the Tribe has not granted an extension to open the casino within six months
to Lakes, CRC shall repay to Lakes the $2 million paid to CRC pursuant to
Paragraph 5.1 above, together with simple interest at the rate of 10% per annum
from and after July 1, 2004. Such payment of principal and interest shall be
made on July 30, 2004. If however, the Tribe's Michigan casino opens after the
provisions of this subsection 5.3 become effective, and Lakes or an affiliate of
Lakes is the manager, on such date, Lakes shall pay back to CRC any principal
paid by CRC to Lakes pursuant to this Section 5.3 and CRC shall be released of
any further payments to Lakes under this Section 5.3 except for any unpaid
interest due.

                    5.4 Notwithstanding anything herein to the contrary, in the
event the Tribe's Michigan casino is opened in the Benton Harbor area, the
payments pursuant to Paragraph 5.2 above, shall be reduced from $10,995,077 to
$7,095,077 and that amount shall be paid to CRC as follows: 16.1% of the amount
shall be paid in year 1 on a quarterly basis in


                                      (2)

<PAGE>

arrears; 17.7% of the amount shall be paid in year 2 on a quarterly basis in
arrears; 21.2% of the amount shall be paid in year 3 on a quarterly basis in
arrears; 22.1% of the amount shall be paid in year 4 on a quarterly basis in
arrears; and 23.0% of the amount shall be paid in year 5 on a quarterly basis in
arrears. In the event the Tribe's Michigan casino is opened in the Hartford
area, the payments pursuant to Paragraph 5.2 above, stall be reduced from
$10,995,077 to $3,515,077 and that amount shall be paid to CRC as follows: 16.1%
of the amount shall be paid in year 1 on a quarterly basis in arrears; 17.7% of
the amount shall be paid in year 2 on a quarterly basis in arrears; 21.2% of The
amount shall be paid in year 3 on a quarterly basis in arrears; 22.1 % of the
amount shall be paid in year 4 on a quarterly basis in arrears; and 23.0% of the
amount shall be paid in year 5 on a quarterly basis in arrears. All payments are
conditioned on the facts that the Casino is open and Lakes is the manager.

                    5.5 At the end of the calendar quarter in which the Tribe's
Indiana casino is opened, if ever, Lakes shall pay CRC an aggregate of $2.5
million payable quarterly in the amount of $125,000 (without interest) each (but
only if Lakes, or an affiliate of Lakes, is, all the time the payment is due,
serving as the manager or developer of such casino and the casino is open.

                    5.6 Any payments made pursuant to this Paragraph 5 may be
prepaid, at any time, by Lakes for the "present value" of the remaining payments
due, using 10% as the discount rate."

                    5.7 Should Lakes fail to make any payments due CRC under
this Section 5 as and when due, or within 10 business days after written notice
of nonpayment has been given by CRC to Lakes, all remaining payments shall be
and become immediately due and payable.

                    5.8 The releases in Section 2 of the Termination Agreement
shall not apply to any payment due under this Section 5 or agreement contained
in the Amendment to Conditional Release and Termination Agreement.

          2. It is understood by the parties that any costs incurred in
obtaining the Management Agreement will be borne by Lakes Gaming, Inc. as the
sole manager and developer of the gaming facility.

          3. Sections 3, 4, 6,7 and 8 of the Termination Agreement be and they
are hereby stricken in their entirety and shall be of no further force or
effect. Notwithstanding the deletion of Section 3 of the Termination Agreement,
the parties hereto agree that the mutual releases set forth in Sections 1 and 2
of the Termination Agreement (the effectiveness of which were conditioned on the
occurrence of events identified in Section 3 of the Termination Agreement) are
effective, valid and binding.


                                       (3)

<PAGE>

          4. CRC will execute a release in form and substance satisfactory to
the Tribe as called for in Section 11.4 (V of the Development Agreement) between
Lakes and the Tribe.

          5. The remaining teems and provisions of the Termination Agreement be
and the same are hereby ratified, approved and confirmed.

          6. This Amendment and Termination Agreement contains the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof and supersedes any inconsistent provisions in the Termination
Agreement or Memorandum.

          7. This Amendment shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns.

          8. Both parties represent and warrant that they ate duly authorized by
their respective Board of Directors to execute this Amendment.

          9. CRC agrees to execute Certification as called for in the Management
Agreement in Section 10.3.4.

          IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date and year first above written.

LAKES GAMING, INC.                      CASINO RESOURCE CORPORATION


By /s/ Lyle Berman                      By /s/ John J. Pilger
   ----------------------------------      -------------------------------------
   Lyle Berman, CEO                        John J. Pilger. CEO


                                       (4)

<PAGE>

                                    EXHIBIT A
              10.6 MILLION ESTIMATED INCOME DUE CRC BY LAKES GAMING

<TABLE>
<CAPTION>
            Year 3      Year 4      Year 5      Year 6      Year 7
          0.1608105    0.176614    0.211619    0.220828    0.230128      Total
          ---------   ---------   ---------   ---------   ---------   ----------
<S>       <C>         <C>         <C>         <C>         <C>         <C>
1st Qtr     442,031     485,471     581,692     607,005     632,569    2,748,768
2nd Qtr     442,031     485,471     581,692     607,005     632,569    2,748,768
3rd Qtr     442,031     485,471     581,692     607,005     632,569    2,748,768
4th Qtr     442,031     485,471     581,692     607,005     632,569    2,748,773
          ---------   ---------   ---------   ---------   ---------   ----------
          1,768,124   1,941,884   2,326,768   2,428,020   2,530,276   10,995,077
          =========   =========   =========   =========   =========   ==========
</TABLE>

<PAGE>

                                   CERTIFICATE

     The undersigned Casino Resource Corporation ("CRC") certifies to the
Pokagon Band of Potawatomi Indians (the "Band") and Lakes Gaming, Inc. as
follows:

     1. Neither CRC nor any Insider of CRC has engaged the services of any
     member of the Pokagon Band, for consideration or otherwise. In connection
     with or in any way related to a Casino.

     2. Neither CRC nor any Insider of CRC has attempted to influence any member
     of the Band, including any member of the Band government, directly or
     indirectly, concerning consideration of any Proposal.

     3. Unless described in writing attached hereto to the best of its knowledge
     neither CRC nor any Insider of CRC employs, as an employee, consultant or
     otherwise, any member of the Band, or any member of the Immediate Family of
     any Band member.

     4. Neither CRC nor any Insider of CRC has paid any fee, consideration or
     other remuneration of any kind to any member of the Band or any member of
     the Immediate Family of any Band member in connection with any Proposal,
     the Casino, or Band's gaming activity generally.

     5. Unless described in writing attached hereto to the best of CRC's
     knowledge neither CRC nor any Insider of CRC has any agreement, written or
     oral, to employ, as an employee, consultant or otherwise, any member of the
     Band or any member of the Immediate Family of any Band member.

     6. Neither CRC nor any Insider of CRC has any agreement, written or oral,
     to pay any fee, consideration or other remuneration of any kind to any
     member of the Band or any member of the Immediate Family of any Band member
     in connection with any Proposal, the Casino, or Band's gaming activity
     generally.

     For purposes of this Certificate the following definitions control:

     "Casino" means a casino to be owned or operated by the Band in Michigan.

          "Immediate Family" means a person's spouse, children, step-children,
          parents, including spouse's parents, siblings, grandparents, including
          spouse's grandparents, and grandchildren, including
          step-grandchildren.

          "Insider" has the meaning defined in 11 U.S.C. Section 101(31),
          assuming

<PAGE>

          CRC were the debtor in that definition.

          "Proposal" means any proposal submitted to the Band by CRC or Lakes
          relating to a Casino.

     CRC understands that the Band and Lakes Gaming, Inc. are relying on this
Certificate in closing on a Development Agreement, a Management Agreement and
related documents of near or even date.

Dated: July 7, 1999

Witness:                                Casino Resource Corporation


/s/ Robert J. Allen                     by: /s/ John J. Pilger
- -------------------------------------       ------------------------------------
V.P.                                    its CEO

<PAGE>

                                 GENERAL RELEASE

     Casino Resource Corporation ("CRC"), for itself and its officers,
employees, directors, attorneys, agents, shareholders, successors and assigns
(collectively "Releasors"), hereby releases and discharges the Pokagon Band of
Potawatomi Indians (the "Band"), its council members, officers, employees,
attorneys, agents, successors and assigns, and all members of the Band, their
respective heirs, personal representatives and assigns (collectively
"Releasees"), from any and all debts, demands, actions, causes of action,
attachments, liens, contracts, agreements, promises, doings, omissions,
variances, damages, claims, rights, liabilities, suits at law, in equity, and
administrative law, which now exist or may in the future result from the
existing state of facts, whether known or unknown, whether direct or indirect,
of whatever kind or nature, which each of them have or may have against
Releasees as of the date hereof or which may in the future arise from the
existing state of things.

     This Release contains the entire Agreement relating to such Release and
supersedes all prior oral and written Agreements between the parties hereto on
the subject matter hereof. There are no oral understandings or agreements
between the parties hereto. The terms of this Release are contractual and are
not a mere recital. No cross release shall be inferred from this release.

     The person executing this Release on behalf of CRC warrants that he is duly
authorized to do so.

     This Release is governed by the law of the State of Michigan.

<PAGE>

     This Release may be executed in counterparts, all of which together shall
be one original.

                          CAUTION: READ BEFORE SIGNING

Dated: July 7, 1999

Witness:

                                        Casino Resource Corporation


/s/ Robert J. Allen                     by: /s/ John J. Pilger
- -------------------------------------       ------------------------------------
    V.P.                                its: CEO

                                        print name: John J. Pilger

State of Mississippi
Hancock, County                         July 7, 1999

     Personally appeared before me the above named John J. Pilger CEO of Casino
Resource Corporation, and swore that the foregoing was his free act and deed in
his said capacity and the free act and deed of that corporation.


                                        /s/ V.P. Hall
                                        ----------------------------------------
                                        Notary Public

2551                                    (STAMP)


                                       -2-

<PAGE>

and its and their respective successors and assigns of and from all actions,
causes of actions, claims, suits, debts, dues, accounts, bonds, covenants,
contracts, agreements, judgments, damages and costs whatsoever in law or in
equity arising out of the Memorandum and the transactions contemplated thereby,
which CRC can, shall or may have from the beginning of the world to the date of
these presents.

          3. The effectiveness of the foregoing releases are conditioned on the
occurrence of each of the following:

               (a) The Tribe shall award Lakes or one of its affiliates the
Management Agreement for either or both of the Tribe's planned casinos in
Michigan or Indiana.

               (b) The Tribe shall request, either orally or in writing, for any
reason or for no reason, and either before or after awarding of the Management
Agreement, that Lakes disassociate itself from CRC or any of its officers,
directors or employees.

          4. In the event the conditions set forth in Section 3 occur, the
Memorandum shall be of no further force or effect, and CRC covenants and agrees
with Lakes that it will promptly withdraw from the Tribal selection process and
terminate any interest it may have or otherwise be entitled to under the
Memorandum or any Management Agreement, subject to the payment by Lakes of the
consideration set forth in Section 5.

          5. In consideration of CRC's prompt termination, withdrawal and
disassociation from its relationship with each of Lakes and the Tribe under the
Memorandum or the Management Agreement Lakes agrees to pay CRC not less than a
sum equal to twenty percent (20%) of any management fee or like fee that Lakes'
actually earns and collects under any Management Agreement with the Tribe, (i)
up to an annual maximum payment of $4 million to CRC or an aggregate maximum
payment of $20 million to CRC with respect to the Tribe's planned Michigan
casino, and (ii) not less than a sum equal to twenty percent (20%) of any
management fee or like fee that Lakes' actually earns and collects under any
Management Agreement with the Tribe, up to an annual maximum payment of $2
million to CRC or an aggregate maximum payment of $10 million to CRC with
respect to the Tribe's planned Indiana casino, in each case pursuant to the
terms of Schedule I attached hereto.

          6. Notwithstanding anything to the contrary contained herein, in the
Memorandum or in the Management Agreement, the calculation of Lakes' management
fee or like fee shall be made without regard to the receipt by Lakes at any time
of interest income from the Tribe on any amount of outstanding indebtedness to
the Tribe or any principal payments made by the Tribe on such indebtedness. It
is the further agreed by the parties hereto, that any amounts owing from Lakes
to CRC under this Agreement, shall only be paid by Lakes following Lakes' prior
receipt and collection of such management fee from the Tribe, and any risk of
Lakes' noncollection, risk of setoff or other forfeiture of the management fee
or like fee, for whatever reason, any reason or no reason shall be borne 80%
by Lakes and 20% by CRC, and such nonreceipt or noncollection shall reduce the
amount of consideration payable by Lakes or any affiliate of Lakes owing to CRC
under Section 5 hereof.


                                       (2)

<PAGE>

          7. All monies due CRC under this Termination Agreement are further
conditioned upon, due and payable only if received by Lakes, or its subsidiary
or affiliate. If for any reason or for no reason Lakes, a subsidiary of Lakes,
or an affiliate of Lakes does not receive management fee income or like fee from
the venture then nothing is due or payable or does not earn a management fee.

          8. Further, if NIGC does not approve the proposed Management Agreement
between Lakes and the Pokagon Band alone, then both parties agree to negotiate
in good faith, and Lakes agrees to compensate CRC in a like manner, mirroring
the terms of this Termination Agreement, and subject to NIGC approval.

          IN WITNESS WHEREOF, the parties have executed this agreement as of
the date set forth above.


LAKES GAMING, INC.                      CASINO RESOURCE CORPORATION


By /s/ Lyle Berman                      By /s/ John J. Pilger
   ----------------------------------      -------------------------------------
Its CEO                                 Its CEO


                                       (3)
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.170
<SEQUENCE>4
<FILENAME>c02716exv10w170.txt
<DESCRIPTION>THIRD AMENDED AND RESTATED MANAGEMENT AGREEMENT
<TEXT>
<PAGE>

                                                                  Exhibit 10.170

                                                                  EXECUTION COPY

                           THIRD AMENDED AND RESTATED

                              MANAGEMENT AGREEMENT

                                   BETWEEN THE

                       POKAGON BAND OF POTAWATOMI INDIANS

                                      AND

           GREAT LAKES GAMING OF MICHIGAN, LLC, (F/K/A GREAT LAKES OF
                                 MICHIGAN, LLC)

                          DATED AS OF JANUARY 25, 2006

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                           <C>
1. RECITALS ...............................................................    1

2. DEFINITIONS ............................................................    3
   "Agreement" ............................................................    3
   "Agreements" ...........................................................    3
   "Affiliate" ............................................................    3
   "Assignment and Assumption Agreement" ..................................    4
   "Band Event of Default" ................................................    4
   "Band Gaming Ordinance" ................................................    4
   "Band Interest Rate" ...................................................    4
   "Band Representatives" .................................................    4
   "Band Working Capital Advances" ........................................    4
   "Bank Closing" .........................................................    4
   "Bank Lender" ..........................................................    4
   "Bank Loan" ............................................................    4
   "BIA" ..................................................................    4
   "Business Board" .......................................................    4
   "Buy-Out Option" .......................................................    4
   "Calculation Year" .....................................................    5
   "Capital Budget" .......................................................    5
   "Capital Replacement(s)" ...............................................    5
   "Capital Replacement Reserve" ..........................................    5
   "Change of Control" ....................................................    5
   "Class II Gaming" ......................................................    5
   "Class III Gaming" .....................................................    5
   "Collateral Agreements" ................................................    5
   "Commencement Date" ....................................................    5
   "Compact" ..............................................................    5
   "Compensation" .........................................................    5
   "Confidential Information" .............................................    5
   "Constitution" .........................................................    6
   "Corporate Commission" .................................................    6
   "CRC" ..................................................................    6
   "Development Agreement" ................................................    6
   "Development Expenditures" .............................................    6
   "Disbursement Accounts" ................................................    6
   "Dominion Account" .....................................................    6
   "Dominion Agreement" ...................................................    6
   "Effective Date" .......................................................    6
   "Emergency Condition" ..................................................    6
   "Enterprise" ...........................................................    6
   "Enterprise Accounts" ..................................................    7
   "Enterprise Employee" ..................................................    7
   "Enterprise Employee Policies" .........................................    7
</TABLE>


                                        i

<PAGE>

<TABLE>
<S>                                                                           <C>
   "Enterprise Investment Policy" .........................................    7
   "Equipment Lender" .....................................................    7
   "Equipment Loan" .......................................................    7
   "Facility" .............................................................    7
   "Financial Support" ....................................................    7
   "Fiscal Year" ..........................................................    7
   "Furnishings and Equipment" ............................................    7
   "Gaming" ...............................................................    8
   "Gaming Regulatory Authority" or "GRA" .................................    8
   "Gaming Site" ..........................................................    8
   "Guaranty Reserve" .....................................................    8
   "General Manager" ......................................................    8
   "Generally Accepted Accounting Principles" or "GAAP" ...................    8
   "Governmental Action" ..................................................    8
   "Great Lakes" ..........................................................    8
   "Gross Gaming Revenue (Win)" ...........................................    8
   "Gross Revenues" .......................................................    9
   "House Bank" ...........................................................    9
   "IGRA" .................................................................    9
   "Insider" ..............................................................    9
   "Internal Control Systems" .............................................    9
   "Lakes" ................................................................    9
   "Lakes Certification" ..................................................    9
   "Lakes Development Loan" ...............................................    9
   "Lakes Development Note" ...............................................    9
   "Lakes Facility Loan" ..................................................    9
   "Lakes Facility Note" ..................................................    9
   "Lakes Refinancing Guaranty" ...........................................    9
   "Lakes Security Agreement" .............................................    9
   "Lakes Worldng Capital Advance Note" ...................................   10
   "Lakes Working Capital Advances" .......................................   10
   "Legal Requirements" ...................................................   10
   "Limited Recourse" .....................................................   10
   "Loans" ................................................................   11
   "Local Agreement" ......................................................   11
   "Manager" ..............................................................   11
   "Manager's Internal Expenses" ..........................................   11
   "Manager's Representatives" ............................................   11
   "Management Agreement" .................................................   11
   "Management Fee" .......................................................   11
   "Manager Event of Default" .............................................   11
   "Managing Officer" .....................................................   11
   "Marks" ................................................................   11
   "Material Adverse Change" ..............................................   11
   "Material Breach" ......................................................   11
   "Member of the Band Government" ........................................   11
</TABLE>


                                       ii

<PAGE>

<TABLE>
<S>                                                                           <C>
   "Minimum Balance" ......................................................   12
   "Minimum Guaranteed Monthly Payment" ...................................   12
   "Minimum Guaranteed Payment Advances" ..................................   12
   "Minimum Payment Note" .................................................   12
   "Monthly Distribution Payment" .........................................   12
   "National Indian Gaming Commission" or "NIGC" ..........................   12
   "Net Revenues" .........................................................   12
   "Net Revenues (gaming)" ................................................   12
   "Net Revenues (other)" .................................................   13
   "NIGC Approval" ........................................................   13
   "Non-Gaming Land Acquisition Line of Credit" ...........................   13
   "Operating Budget and Annual Plan" .....................................   13
   "Operating Expenses" ...................................................   14
   "Operating Supplies" ...................................................   15
   "Permitted Taxes" ......................................................   15
   "Plans and Specifications" .............................................   15
   "Pokagon Council" ......................................................   15
   "Pokagon Fund" .........................................................   15
   "Pre-Opening Budget" ...................................................   15
   "Pre-Opening Expenses" .................................................   16
   "Project" ..............................................................   16
   "Promotional Allowances" ...............................................   16
   "Relative" .............................................................   16
   "Remaining Loan Availability Amount" ...................................   16
   "Reserve Amount" .......................................................   16
   "Restoration Act" ......................................................   16
   "Restricted Territory" .................................................   16
   "Specific Performance Restriction" .....................................   16
   "State" ................................................................   16
   "Subsequent Gaming Facility Revenues" ..................................   16
   "Term" .................................................................   16
   "Transition Loan Note" .................................................   17
   "Tribal Distributions" .................................................   17

3. ENGAGEMENT; BUSINESS BOARD; COMPLIANCE .................................   17
   3.1.   Engagement of Manager ...........................................   17
   3.2.   Term ............................................................   17
   3.3.   Status of Gaming Site ...........................................   19
   3.4.   Creation and Operation of Business Board ........................   20
   3.5.   Manager Compliance with Law; Licenses ...........................   20
   3.6.   Compliance with Compact .........................................   20
   3.7.   Fire and Safety .................................................   20
   3.8.   Compliance with the National Environmental Policy Act ...........   20
   3.9.   Commencement Date ...............................................   21

4. BUSINESS AND AFFAIRS OF THE ENTERPRISE .................................   21
   4.1.   Manager's Authority and Responsibility ..........................   21
</TABLE>


                                       iii

<PAGE>

<TABLE>
<S>                                                                           <C>
   4.2.   Duties of Manager ...............................................   21
   4.3.   Damage, Condemnation or Impossibility of the Enterprise .........   22
   4.4.   Alcoholic Beverages and Tobacco Sales ...........................   22
   4.5.   Employees .......................................................   22
   4.6.   No Manager Internal Expenses; Limitation on Manager Payments ....   24
   4.7.   GRA Expenses ....................................................   25
   4.8.   Employee Background Checks ......................................   25
   4.9.   Indian Preference Recruiting and Training; Local Preference .....   25
   4.10.  Pre-Opening .....................................................   26
   4.11.  Operating Budget and Annual Plan ................................   27
   4.12.  Capital Budgets .................................................   29
   4.13.  Capital Replacements ............................................   30
   4.14.  Capital Replacement Reserve .....................................   30
   4.15.  Periodic Contributions to Capital Replacement Reserve ...........   30
   4.16.  Use and Allocation of Capital Replacement Reserve ...............   31
   4.17.  [intentionally omitted] .........................................   31
   4.18.  Internal Control Systems ........................................   31
   4.19.  Banking and Bank Accounts .......................................   31
   4.20.  Insurance .......................................................   33
   4.21.  Accounting and Books of Account .................................   34
   4.22.  Annual Audit ....................................................   36
   4.23.  Manager's Contractual Authority .................................   36
   4.24.  Retail Shops and Concessions ....................................   36
   4.25.  Entertainment Approvals .........................................   36
   4.26.  Litigation ......................................................   36

5. MANAGEMENT FEE, DISBURSEMENTS, AND OTHER PAYMENTS BY MANAGER ...........   37
   5.1.   Management Fee ..................................................   37
   5.2.   Fee Subordinated ................................................   37
   5.3.   Disbursements ...................................................   38
   5.4.   Adjustment to Bank Account ......................................   38
   5.5.   Payment of Fees and Band Disbursement ...........................   39
   5.6.   Minimum Guaranteed Monthly Payment ..............................   39
   5.7.   Payment of Net Revenues .........................................   41
   5.8.   Harrah's Termination Agreement ..................................   41
   5.9.   Band Indemnification - Indiana Casino ...........................   41
   5.10.  Maximum Dollar Amount for Recoupment ............................   41

6. ENTERPRISE NAME; MARKS .................................................   42
   6.1.   Enterprise Name .................................................   42
   6.2.   Marks ...........................................................   42
   6.3.   Signage .........................................................   42

7. TAXES ..................................................................   42
   7.1.   State and Local Taxes ...........................................   42
</TABLE>


                                       iv

<PAGE>

<TABLE>
<S>                                                                           <C>
   7.2.   Band Taxes ......................................................   42
   7.3.   Compliance with Internal Revenue Code ...........................   43

8. BUY-OUT OPTION .........................................................   43

9. EXCLUSIVITY; NON-COMPETITION ...........................................   43
   9.1.   Exclusivity in Michigan .........................................   43
   9.2.   Indiana Casino ..................................................   43
   9.3.   Non-Competition .................................................   44
   9.4.   Permitted Assignment; Change of Control .........................   44
   9.5.   Restrictions on Collateral Development ..........................   45

10. REPRESENTATIONS, WARRANTIES, AND COVENANTS ............................   45
   10.1.  Representations and Warranties of the Band ......................   45
   10.2.  Band Covenants ..................................................   46
   10.3.  Representations and Warranties of Manager and Lakes .............   47
   10.4.  Manager Covenants ...............................................   48
   10.5.  No Liens ........................................................   49
   10.6.  Permitted Liens .................................................   50
   10.7.  Brokerage .......................................................   50

11. DEFAULT ...............................................................   51
   11.1.  Events of Default by the Band ...................................   51
   11.2.  Events of Default by Manager ....................................   51
   11.3.  Material Breach; Right to Cure ..................................   52

12. TERMINATION ...........................................................   53
   12.1.  Voluntary Termination ...........................................   53
   12.2.  Termination if No NIGC Approval .................................   53
   12.3.  Manager Right to Terminate on Band Event of Default .............   53
   12.4.  Band Right to Terminate on Manager Event of Default .............   53
   12.5.  Band Right to Terminate for Material Adverse Change .............   53
   12.6.  Termination if Manager License Withdrawn or on Conviction .......   55
   12.7.  Termination on Buy-Out ..........................................   55
   12.8.  Involuntary Termination Due to Changes in Legal Requirements ....   55

13. DISPUTE RESOLUTION; LIQUIDATED DAMAGES ................................   56
   13.1.  Band's Waiver of Sovereign Immunity and Consent to Suit .........   56
   13.2.  Arbitration .....................................................   57
   13.3.  Limitation of Actions ...........................................   58
   13.4.  Damages on Termination for Failure to Obtain NIGC Approval ......   59
   13.5.  Liquidated Damages and Limitations on Remedies ..................   59
   13.6.  Manager Continuing Obligations ..................................   59
   13.7.  Termination of Exclusivity ......................................   60
   13.8.  Remedies ........................................................   60
   13.9.  Band Injunctive Relief ..........................................   60
   13.10. No Setoff Against Payments to Band ..............................   60
   13.11. Indemnification on Termination ..................................   60
   13.12. Fees not Damages ................................................   61
</TABLE>


                                        v

<PAGE>

<TABLE>
<S>                                                                           <C>
   13.13. Undistributed Net Revenues ......................................   61
   13.14. Damages for Governmental Action .................................   61

14. CONSENTS AND APPROVALS ................................................   61
   14.1.  Band ............................................................   61
   14.2.  Manager .........................................................   61
   14 3.  Business Board ..................................................   61

15. DISCLOSURES ...........................................................   61
   15.1.  Shareholders and Directors ......................................   61
   15.2.  Warranties ......................................................   62
   15.3.  Disclosure Amendments ...........................................   63
   15.4.  Breach of Manager's Warranties and Agreements ...................   63

16. NO PRESENT LIEN, LEASE OR JOINT VENTURE ...............................   63

17. CONCLUSION OF THE MANAGEMENT TERM .....................................   64

18. MISCELLANEOUS .........................................................   64
   18.1.  Situs of the Contracts ..........................................   64
   18.2.  Notice ..........................................................   64
   18.3.  Relationship ....................................................   65
   18.4.  Further Actions .................................................   65
   18.5.  Waivers .........................................................   65
   18.6.  Captions ........................................................   66
   18.7.  Severability ....................................................   66
   18.8.  Advances ........................................................   66
   18.9.  Third Party Beneficiary .........................................   66
   18.10. Survival of Covenants ...........................................   66
   18.11. Estoppel Certificate ............................................   66
   18.12. Periods of Time; Time of Essence ................................   66
   18.13. Exhibits ........................................................   66
   18.14. Successors and Assigns ..........................................   67
   18.15. Confidential and Proprietary Information ........................   67
   18.16. Patron Dispute Resolution .......................................   67
   18.17. Modification ....................................................   67
   18.18. Entire Agreement ................................................   67
   18.19. Government Savings Clause .......................................   69
   18.20. Preparation of Agreement ........................................   70
   18.21. Consents ........................................................   70
   18.22. Execution .......................................................   70
   18.23. Limited Joinder .................................................   70
</TABLE>


                                       vi

<PAGE>

                                LIST OF EXHIBITS

Exhibit A Gaming Site
Exhibit B Pending Band Litigation


                                       vii

<PAGE>

                                                                  EXECUTION COPY

                 THIRD AMENDED AND RESTATED MANAGEMENT AGREEMENT

     THIS THIRD AMENDED AND RESTATED MANAGEMENT AGREEMENT has been entered into
as of January 25, 2006, by and between the POKAGON BAND OF POTAWATOMI INDIANS
(the "Band"), and GREAT LAKES GAMING OF MICHIGAN, LLC, a Minnesota limited
liability company (f/k/a Great Lakes of Michigan, LLC) ("Manager" or "Great
Lakes") for the operation of a gaming facility in the State of Michigan.

1.   RECITALS

1.1. The Band, pursuant to 25 U.S.C. Sections 1300j et seq. (the "Restoration
     Act"), is a federally recognized Indian tribe recognized as eligible by the
     Secretary of the Interior for the special programs and services provided by
     the United States to Indians because of their status as Indians and is
     recognized as possessing powers of self-government.

1.2. As authorized by the Restoration Act, the Band intends to acquire the
     Gaming Site in the State of Michigan, to be held by the federal government
     in trust for the Band, on which the Band intends to construct and operate a
     permanent Class III gaming facility (the "Facility"); and the Band will
     possess sovereign governmental powers over the Gaming Site pursuant to the
     Band's recognized powers of self government, and the Band desires to use
     the Gaming Site to improve the economic conditions of its members.

1.3. Upon the transfer of the Gaming Site to the United States in trust for the
     Band, the Band will possess sovereign powers over the Gaming Site pursuant
     to the Band's recognized powers of self-government.

1.4. The Band desires to use the Gaming Site and the Facility to improve the
     economic conditions of its members, to enable it to serve the social,
     economic, educational and health needs of the Band, to increase the
     revenues of the Band and to enhance the Band's economic self sufficiency
     and self determination.

1.5. The Band wishes to establish an Enterprise, as hereinafter defined, to
     conduct Class II and Class III Gaming as hereinafter defined on the Gaming
     Site. This Agreement sets forth the manner in which the Enterprise will be
     managed.

1.6. Manager has agreed to certain terms and has represented to the Band that it
     has the managerial and financial capacity to provide and to secure
     financing for the funds necessary to develop and construct the Facility, as
     defined herein, and to commence the operation of the Enterprise on the
     Gaming Site.


                                        1

<PAGE>

1.7. The Band is seeking technical experience and expertise for the operation of
     the Enterprise and instruction for members of the Band in the operation of
     the Enterprise. Manager is willing, and has represented to the Band that it
     is able, to provide such experience, expertise and instruction.

1.8. The Band desires to grant Manager the exclusive right and obligation to
     develop, manage, operate and maintain the Enterprise as described in this
     Agreement and to train Band members and others in the operation and
     maintenance of the Enterprise during the term of this Agreement. Manager
     wishes to perform these functions for the Band.

1.9. The Band and Lakes Entertainment, Inc., f/k/a Lakes Gaming, Inc. ("Lakes")
     entered into a Management Agreement dated as of July 8, 1999 (the
     "Management Agreement").

1.10. Lakes has assigned its rights and obligations under the Management
     Agreement to Great Lakes pursuant to an Assignment and Assumption Agreement
     dated as of October 16, 2000, subject to certain terms and conditions.

1.11. Great Lakes and the Band entered into a First Amended and Restated
     Management Agreement dated as of October 16, 2000 (the "First Amended
     Management Agreement").

1.12. Great Lakes and the Band entered into a Second Amended and Restated
     Management Agreement dated as of December 22, 2004 (the "Second Amended
     Management Agreement").

1.13. Pursuant to a Third Amended and Restated Development Agreement of near or
     even date, Great Lakes has agreed to furnish certain additional financing
     and to provide certain other assistance with regard to the Facility. For
     example:

     -    The cost of developing, constructing and equipping the Initial Phase
          of the Project is now understood as totaling approximately
          $298,000,000, which will be financed as follows: the Lakes Development
          Loan in the amount of $46,000,000, and an additional $252,000,000 to
          be provided by an Equipment Loan and a Bank Loan. To the extent that
          the Band is unable to raise additional funding of $252,000,000 from
          third parties at an interest rate not to exceed 13% (the "252MM
          Shortfall"), Great Lakes shall provide $54,000,000 (or such lesser
          amount as may be necessary to make up the 252MM Shortfall) through, at
          its option, a direct loan, third party loans enabled by credit
          enhancements provided by Great Lakes, or third-party loans with
          interest subsidies provided by Great Lakes, in each case an interest
          rate not to exceed 13%, such $54,000,000 loan and the Lakes
          Development Loan to be subordinated to certain other third-party
          financing.


                                        2

<PAGE>

          Great Lakes shall not have any other responsibility to fund, or
          provide credit enhancements or interest subsidies for, the 252MM
          Shortfall (if any); and

     -    Great Lakes has funded under the Lakes Development Loan approximately
          $23,653,525 as of January 25, 2006 for long-lead-time items and to
          permit the Band to start preliminary site work that can be done now
          under local and/or county or state permits and, to the extent
          necessary, permits from the Band or the federal government.

Great Lakes and the Band have agreed that the term of this Agreement shall begin
on the date this Agreement, the Development Agreement (if required) and the
Lakes Development Note (if required) are approved by the Chairman of the NIGC,
and/or the BIA (if required), and continue until, unless earlier terminated in
accordance with its terms, seven (7) years from commencement of Gaming at the
Initial Phase of the Facility, provided that the Term of the Management
Agreement will be five (5) years from the Commencement Date if (a) the
Development Expenditures of the Initial Phase of the Facility are equal to or
more than $138,000,000, and (b) Lakes' Financial Support for such Initial Phase
has not exceeded $46,000,000, as provided in Section 3.2 of this Agreement.

1.14. This Agreement is entered into pursuant to the Indian Gaming Regulatory
     Act of 1988, PL 100-497, 25 U.S.C. Section 2701 et seq. (the "IGRA") as
     that statute may be amended. All gaming conducted at the Facility will at
     all times comply with the IGRA, applicable Band law and the Compact.

1.15. This Third Amended and Restated Management Agreement incorporates certain
     amendments to the First Amended Management Agreement and the Second Amended
     Management Agreement agreed to by the parties and is intended to conform
     this Agreement to the requirements of the National Indian Gaming
     Commission.

2.   DEFINITIONS

As they are used in this Agreement, the terms listed below shall have the
meaning assigned to them in this Section:

     "AGREEMENT" shall mean this Management Agreement.

     "AGREEMENTS" shall mean this Agreement and the Development Agreement.

     "AFFILIATE" means as to Manager or Lakes, any corporation, partnership,
limited liability company, joint venture, trust department or agency or
individual controlled by,


                                        3

<PAGE>

under common control with, or which directly or indirectly controls, Manager or
Lakes; and as to the Band, any corporation, partnership, limited liability
company, joint venture, trust department or agency or individual controlled by,
under common control with, or which directly or indirectly controls, the Band.

     "ASSIGNMENT AND ASSUMPTION AGREEMENT" means the Assignment and Assumption
Agreement among Manager, Lakes and the Band dated as of October 16, 2000, as
amended by First Amendment dated as of December 22, 2004 and a Second Amended
and Restated Assignment and Assumption Agreement dated as of January 25, 2006.

     "BAND EVENT OF DEFAULT" has the meaning described in Section 11.1.

     "BAND GAMING ORDINANCE" shall mean the ordinance and any amendments thereto
to be enacted by the Band, which authorizes and regulates Class II and Class III
Gaming on Indian lands subject to the governmental power of the Band.

     "BAND INTEREST RATE" shall mean the lesser of (a) Wall Street Journal prime
rate as of the Bank Closing plus 1%, or (b) 10%.

     "BAND REPRESENTATIVES" shall mean the persons designated by the Pokagon
Council to sit on the Business Board.

     "BAND WORKING CAPITAL ADVANCES" shall have the meaning set out in Section
5.3.2 below.

     "BANK CLOSING" means the closing on the Bank Loan.

     "BANK LENDER" shall mean one or more financial institutions agreed upon by
the parties to provide certain funding necessary to design, construct, and equip
the Facility, and provide start-up capital for the Enterprise.

     "BANK LOAN" shall have the meaning defined in the Development Agreement.

     "BIA" shall mean the Bureau of Indian Affairs of the Department of the
Interior of the United States of America.

     "BUSINESS BOARD" shall mean the decision making body created pursuant to
Section 3.4 of this Agreement.

     "BUY-OUT OPTION" shall mean the Band's option to buy out this Agreement
under Section 8.


                                        4

<PAGE>

     "CALCULATION YEAR" shall mean the twelve (12) month period commencing on
the Commencement Date and each successive twelve (12) month period.

     "CAPITAL BUDGET" shall mean the capital budget described in Section 4.12.

     "CAPITAL REPLACEMENT(S)" shall mean any alteration or rebuilding or
renovation of the Facility, and any replacement of Furnishings and Equipment,
the cost of which is capitalized and depreciated rather than being expensed
under GAAP.

     "CAPITAL REPLACEMENT RESERVE" shall mean the reserve described in Section
4.14, into which periodic contributions are paid pursuant to Section 4.15.

     "CHANGE OF CONTROL" shall have the meaning set out in Section 9.4.3.

     "CLASS II GAMING" shall mean Class II Gaming as defined in the IGRA.

     "CLASS III GAMING" shall mean Class III Gaming as defined in the IGRA.

     "COLLATERAL AGREEMENTS" shall mean any agreements defined as collateral
agreements under 25 USC Section 271l(a)(3) and regulations issued thereto at 25
C.F.R. Section 502.5.

     "COMMENCEMENT DATE" shall mean the first date that Gaming is conducted
pursuant to the terms of the Management Agreement in a Facility, including
Gaming conducted on completion of the Initial Phase of the Facility.

     "COMPACT" shall mean the Compact between the Band and the State dated
December 3, 1998 and approved in 64 Fed. Reg. No. 32, Thursday, February 18,
1999, at 8111, as the same may, from time to time, be amended; or such other
compact or consent decree that may be substituted therefor.

     "COMPENSATION" shall mean the direct salaries and wages paid to, or accrued
for the benefit of, any employee, including incentive compensation, together
with all fringe benefits payable to or accrued for the benefit of such executive
or other employee, including employer's contribution under F.I.C.A.,
unemployment compensation or other employment taxes, pension fund contributions,
workers' compensation, group life, accident and health insurance premiums and
costs, and profit sharing, severance, retirement, disability, relocation,
housing and other similar benefits.

     "CONFIDENTIAL INFORMATION" shall mean the information described in Section
18.15.


                                        5

<PAGE>

     "CONSTITUTION" shall mean the document or documents which govern the
actions of the Band and, upon enactment, the Constitution of the Pokagon Band of
Potawatomi Indians as ultimately approved by the Band and approved by the
Secretary of the Interior.

     "CORPORATE COMMISSION" shall mean a body corporate and politic established,
at the Band's discretion, by the Pokagon Council to own the Enterprise and such
other businesses and assets as the Band may deem appropriate.

     "CRC" means Casino Resource Corporation, a Minnesota corporation and its
Insiders.

     "DEVELOPMENT AGREEMENT" shall mean the agreement dated as of July 8, 1999
between Lakes and the Band, as assumed by Manager under the Assignment and
Assumption Agreement and as amended and restated by the First Amended and
Restated Development Agreement dated as of October 16, 2000, by the Second
Amended and Restated Development Agreement dated as of December 22, 2004 and the
Third Amended and Restated Development Agreement dated as of January 25, 2006.

     "DEVELOPMENT EXPENDITURES" shall have the meaning defined in the
Development Agreement.

     "DISBURSEMENT ACCOUNTS" shall mean the bank account or accounts described
in Section 4.19.3.

     "DOMINION ACCOUNT" mean the collateral account in favor of Great Lakes
established under Section 4.19.2.

     "DOMINION AGREEMENT" shall have the meaning defined in the Development
Agreement.

     "EFFECTIVE DATE" shall have the meaning provided in Section 18.22.

     "EMERGENCY CONDITION" shall have the meaning set forth in Section 4.13.

     "ENTERPRISE" shall mean the enterprise of the Band created by the Band to
engage in Class II and Class III Gaming at the Facility, and which shall include
all gaming at the Facility and any other lawful commercial activity allowed in
the Facility, including but not limited to the sale of alcohol, tobacco, gifts
and souvenirs; provided, however, the Enterprise shall only include any hotel
operated by the Band, ancillary non-Gaming activity within the Facility, or
other commercial enterprise conducted by the Band which is not generally related
to Class II or Class III Gaming if such hotel, non-Gaming activity or other
commercial enterprise (a) is financed by, or through the guaranty of, Manager,
(b) is specifically included within the Initial Scope of Work or the Final Scope
of Work


                                        6

<PAGE>

or is not a material expansion of the Initial Scope of Work or the Final Scope
of Work, or (c) is specified by the Business Board and the Pokagon Council as
being included in the Enterprise, in which case depreciation and other expenses
relating to such hotel, non-Gaming activity or other commercial enterprise shall
be an Operating Expense, all related revenues shall be included in Gross
Revenues, and interest on all related financing shall be paid by the Enterprise;
and provided further that the Enterprise shall not include a tribal gift/craft
business which the Band may elect to operate, rent free, on an area of about
2,400 square feet at the Facility. The design and operation of such gift/craft
shop shall be consistent with the theme and quality of the Facility, and the
location of such gift/craft shop shall be approved by the Business Board.

     "ENTERPRISE ACCOUNTS" shall mean those accounts described in Section
4.19.1.

     "ENTERPRISE EMPLOYEE" shall mean all employees who work at the Facility.

     "ENTERPRISE EMPLOYEE POLICIES" shall mean those employee policies described
in Section 4.5.2.

     "ENTERPRISE INVESTMENT POLICY" SHALL have the meaning described in Section
4.19.1.

     "EQUIPMENT LENDER" shall mean the entity making the Equipment Loan.

     "EQUIPMENT LOAN" shall have the meaning provided in the Development
Agreement.

     "FACILITY" shall mean all buildings, structures, and improvements located
on the Gaming Site and all fixtures, Furnishings and Equipment attached to,
forming a part of, or necessary for the operation of the Enterprise.

     "FINANCIAL SUPPORT" shall have the meaning described in Section 3.2.1.

     "FISCAL YEAR" shall mean commencing as of the Commencement Date, each
twelve (12) month period or portion thereof ending on September 30 of each year
as currently used by the Band as the fiscal year for its financial statements.

     "FURNISHINGS AND EQUIPMENT" shall mean all furniture, furnishings and
equipment required for the operation of the Enterprise in accordance with the
standards set forth in this Agreement, including, without limitation:

     (i)  cashier, money sorting and money counting equipment, surveillance and
          communication equipment, and security equipment;

     (ii) slot machines, video games of chance, table games, keno equipment and
          other gaming equipment;


                                        7

<PAGE>

     (iii) office furnishings and equipment;

     (iv) hotel equipment (to the extent a hotel is included in the Enterprise);

     (v)  specialized equipment necessary for the operation of any portion of
          the Enterprise for accessory purposes, including equipment for
          kitchens, laundries, dry cleaning, cocktail lounges, restaurants,
          public rooms, commercial and parking spaces, child care, arcades and
          recreational facilities; and

     (vi) all other furnishings and equipment hereafter located and installed in
          or about the Facility which are used in the operation of the
          Enterprise in accordance with the standards set forth in this
          Agreement.

     "GAMING" shall mean any and all activities defined as Class II and Class
III Gaming.

     "GAMING REGULATORY AUTHORITY" or "GRA" shall mean the Band body created
pursuant to the Band Gaming Ordinance to regulate the Class II and Class III
Gaming of the Band in accordance with the Compact, the IGRA and the Band Gaming
Ordinance.

     "GAMING SITE" shall mean the parcels of land in New Buffalo, Michigan
described on the attached Exhibit A.

     "GUARANTY RESERVE" shall have the meaning described in Section
9.2.1(a)((ii)(A) of the Development Agreement.

     "GENERAL MANAGER" shall mean the person employed by the Band to direct the
operation of the Enterprise.

     "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" or "GAAP" shall mean the
principles defined by the Financial Accounting Standards Board.

     "GOVERNMENTAL ACTION" means any resolution, ordinance, statute, regulation,
order or decision of the Band or any instrumentality or agency of the Band,
regardless of how constituted, that has the force of law.

     "GREAT LAKES" means Great Lakes Gaming of Michigan, LLC, a Minnesota
limited liability company (f/k/a Great Lakes of Michigan, LLC).

     "GROSS GAMING REVENUE (WIN)" shall mean the net win from gaming activities
which is the difference between gaming wins and losses before deducting costs
and expenses.


                                        8

<PAGE>

     "GROSS REVENUES" shall mean all revenues of any nature derived directly or
indirectly from the Enterprise including, without limitation, Gross Gaming
Revenue (Win), food and beverage sales and other rental or other receipts from
lessees, sublessees, licensees and concessionaires (but not the gross receipts
of such lessees, sublessees, licensees and concessionaires provided that such
lessees, sublessees, licensees and concessionaires are not Affiliates or
Insiders of Manager or Lakes), and revenue recorded from Promotional Allowances,
but excluding any Permitted Taxes.

     "HOUSE BANK" shall mean the amount of cash, chips, tokens and plaques that
Manager from time to time determines necessary to have at the Facility daily to
meet its cash needs.

     "IGRA" shall mean the Indian Gaming Regulatory Act of 1988, PL 100-497, 25
U.S.C. Section 2701 et seq. as it may from time to time be amended.

     "INSIDER" has the meaning defined in 11 U.S.C. Section 101(31), assuming
Manager and Lakes were both the debtor in that definition, and shall include
persons or entities that become Insiders after the date of this Agreement,
whether as the result of a merger, acquisition, restructuring or otherwise.
"INTERNAL CONTROL SYSTEMS" shall mean the systems described in Section 4.18.

     "LAKES" shall mean both Lakes Entertainment, Inc., f/k/a Lakes Gaming,
Inc., a Minnesota corporation, and Lakes Gaming and Resorts, LLC, a Minnesota
limited liability company. "LAKES CERTIFICATION"HAS the meaning defined in
Section 15.1 of this Agreement.

     "LAKES DEVELOPMENT LOAN" shall have the meaning defined in the Development
Agreement.

     "LAKES DEVELOPMENT Note" shall have the meaning defined in the Development
Agreement.

     "LAKES FACILITY LOAN" shall mean the Loan to be made by Great Lakes to the
Band pursuant to Section 9.2.4 of the Development Agreement. The Lakes Facility
Loan shall not include any loan to the extent it is subject to a Lakes
Refinancing Guaranty.

     "LAKES FACILITY Note" shall have the meaning defined in the Development
Agreement.

     "LAKES REFINANCING GUARANTY"SHALL have the meaning defined in the
Development Agreement.

     "LAKES SECURITY AGREEMENT" shall have the meaning defined in the
Development Agreement.


                                        9

<PAGE>

     "LAKES WORKING CAPITAL ADVANCE NOTE" shall have the meaning defined in the
Development Agreement.

     "LAKES WORKING CAPITAL ADVANCES" shall have the meaning set out in Section
5.3.1 below.

     "LEGAL REQUIREMENTS" shall mean any and all present and future judicial,
administrative, and tribal rulings or decisions, and any and all present and
future federal, state, local and tribal laws, ordinances, rules, regulations,
permits, licenses and certificates, in any way applicable to the Band, Manager,
the Gaming Site, the Facility and the Enterprise, including without limitation,
the IGRA, the Compact, and the Band Gaming Ordinance.

     "LIMITED RECOURSE" shall mean that all Loans and all liabilities of the
Band under or related to the Agreements and the other Transaction Documents, the
Enterprise or the Gaming Regulatory Authority, and any related awards, judgments
or decrees, shall be payable solely out of undistributed or future Net Revenues
of the Enterprise and shall be a limited recourse obligation of the Band, with
no recourse to tribal assets other than such Net Revenues (except (i), as to the
Equipment Loan, a security interest in the Furnishings and Equipment purchased
with Equipment Loan proceeds, (ii) a security interest in the Furnishings and
Equipment to the extent proceeds of the Lakes Development Loan or the Lakes
Facility Loan were used to fund acquisition of Furnishings and Equipment, and as
otherwise permitted under Section 9.2.l(j) of the Development Agreement, (iii)
if the Commencement Date does not occur, Subsequent Gaming Facility Revenues to
the extent provided in the Development Agreement, (iv) mortgages on the
Non-Gaming Lands prior to their transfer into trust, and (v) after the
Commencement Date occurs, funds on deposit in the Dominion Account to the extent
provided in Section 9.2.1 (j) of the Development Agreement and the Dominion
Agreement, or in any other dominion agreement executed by the Band). In no event
shall Great Lakes, Lakes or any lender or other claimant have recourse to (a)
the physical property of the Facility (other than Furnishings and Equipment
subject to the security interest securing the Equipment Loan and the security
interest of Great Lakes, if any), (b) Tribal Distributions, (c) assets of the
Band purchased with Tribal Distributions, (d) revenues or assets of any other
gaming facility owned or operated by the Band, or (e) any other asset of the
Band (other than (i) as to the Transition Loan and the Non-Gaming Acquisition
Line of Credit, if the Commencement Date does not occur, Subsequent Gaming
Facility Revenues to the extent provided in the Development Agreement, (ii) as
to the Lakes Development Note and the Non-Gaming Acquisition Line of Credit,
mortgages on the Non-Gaming Lands prior to their transfer into trust, (iii)
funds on deposit in the Dominion Account to the extent provided in the
Agreements, the Dominion Agreement and any other dominion agreement executed by
the Band, and (iv) such Net Revenues of the Enterprise).


                                       10

<PAGE>

     "LOANS" shall mean the Lakes Development Loan, the Lakes Facility Loan, the
Lakes Working Capital Advances, the Minimum Payment Note, the Bank Loan and the
Equipment Loan.

     "LOCAL AGREEMENT" shall mean the agreement among the Band, the City of New
Buffalo and the Township of New Buffalo dated as of February 15, 2000.

     "MANAGER" shall mean Great Lakes Gaming of Michigan, LLC.

     "MANAGER'S INTERNAL EXPENSES" shall mean Manager's and Lakes' corporate
overhead, including without limitation salaries or benefits of any of Manager's
and Lakes' officers and employees, whether or not they perform services for the
Project or the Enterprise, and any travel or other expenses of Manager's and
Lakes' employees.

     "MANAGER'S REPRESENTATIVES" shall mean the persons designated by Manager to
sit on the Business Board.

     "MANAGEMENT AGREEMENT" shall mean this Agreement and may be referred to
herein as the "Agreement".

     "MANAGEMENT FEE shall mean the management fee described in Section 5.1.

     "MANAGER EVENT OF DEFAULT" has the meaning described in Section
11.2."MANAGING OFFICER" shall mean the person designated by Manager to serve as
a liaison between Manager and the Band and to serve on the Business Board.

     "MARKS" means all trade names, trade marks and service marks used by the
Facility or the Enterprise.

     "MATERIAL ADVERSE CHANGE" shall mean a material adverse change in Lakes' or
Great Lakes' financial condition which materially and substantially impairs
Lakes' or Great Lakes' respective ability to perform under the Agreements and
the Guaranty.

     "MATERIAL BREACH" means a failure of any party to perform any material duty
or obligation on its part, if such party fails to (i) cure the specified default
within thirty (30) days following receipt of the notice provided under Section
11.3, or (ii) if the default is not capable of being cured within 30 days,
commences such cure within 30 days, proceeds diligently to complete the cure,
and completes the cure no later than 90 days after receipt of such notice.

     "MEMBER OF THE BAND GOVERNMENT" shall mean any member of the Pokagon
Council, the GRA or any independent board or body created to oversee any aspect
of Gaming and any Pokagon court official.


                                       11

<PAGE>

     "MINIMUM BALANCE" shall mean the amount described in Section 4.19.1.

     "MINIMUM GUARANTEED MONTHLY PAYMENT" shall mean the payment due the Band
each month commencing in the month after the Commencement Date occurs in
accordance with 25 U.S.C. Section 271 l(b)(3) and Section 5.6 hereof.

     "MINIMUM GUARANTEED PAYMENT ADVANCES" shall have the meaning set out in
Section 5.6.2 and shall be subject to repayment to the limited extent provided
in that section.

     "MINIMUM PAYMENT NOTE" shall have the meaning defined in the Development
Agreement.

     "MONTHLY DISTRIBUTION PAYMENT" shall have the meaning set forth in Section
5.5.

     "NATIONAL INDIAN GAMING COMMISSION" OR "NIGC" means the commission
established pursuant to 25 U.S.C. Section 2704.

     "NET REVENUES" shall mean the sum of "Net Revenues (gaming)" and "Net
Revenues (other)".

     "NET REVENUES (GAMING)" shall mean the Gross Gaming Revenue (Win), of the
Enterprise from Class II or Class III gaming less all gaming related Operating
Expenses, excluding the Management Fee, and less the retail value of any
Promotional Allowances, and less the following revenues actually received by the
Enterprise and included in Gross Revenues:

     (i)  any gratuities or service charges added to a customer's bill:

     (ii) any credits or refunds made to customers, guests or patrons;

     (iii) any sums and credits received by the Enterprise for lost or damaged
          merchandise;

     (iv) any sales taxes, excise taxes, gross receipt taxes, admission taxes,
          entertainment taxes, tourist taxes or charges received from patrons
          and passed on to a governmental or quasi governmental entity,
          including without limitation any Permitted Taxes;

     (v)  any proceeds from the sale or other disposition of furnishings and
          equipment or other capital assets;

     (vi) any fire and extended coverage insurance proceeds other than for
          business interruption;

     (vii) any condemnation awards other than for temporary condemnation; and


                                       12

<PAGE>

     (viii) any proceeds of financing or refinancing.

It is intended that this provision be consistent with 25 U.S.C. Section 2703(9).

     "NET REVENUES (OTHER)" shall mean all Gross Revenues of the Enterprise from
all other sources in support of Class II or Class III gaming not included in
"Net Revenues (gaming)," such as food and beverage, hotel, entertainment and
retail (in each case, only to the extent such Gross Revenues are derived from
activities included in the Enterprise, in accordance with the definition
thereof), less all Operating Expenses, excluding the Management Fee and less the
retail value of Promotional Allowances, if any, and less the following revenues
actually received by the Enterprise and included in Gross Revenues:

     (i)  any gratuities or service charges added to a customer's bill;

     (ii) any credits or refunds made to customer, guests or patrons;

     (iii) any sums and credits received by the Enterprise for lost or damaged
          merchandise;

     (iv) any sales taxes, excise taxes, gross receipt taxes, admission taxes,
          entertainment taxes, tourist taxes or charges received from patrons
          and passed on to a governmental or quasi governmental entity,
          including without limitation any Permitted Taxes;

     (v)  any proceeds from the sale or other disposition of furnishing and
          equipment or other capital assets;

     (vi) any fire and extended coverage insurance proceeds other than for
          business interruption;

     (vii) any condemnation awards other than for temporary condemnation; and

     (viii) any proceeds of financing or refinancing.

It is intended that this provision be consistent with 25 U.S.C. Section 2703(9).

     "NIGC APPROVAL" means the written approval by the NIGC of this Agreement.

     "NON-GAMING LAND ACQUISITION LINE OF CREDIT" shall have the meaning defined
in the Development Agreement.

     "OPERATING BUDGET AND ANNUAL PLAN" shall mean the operating budget and plan
described in Section 4.11.


                                       13

<PAGE>

     "OPERATING EXPENSES" shall mean all expenses of the operation of the
Enterprise (but, as to hotels and other non-casino activities, only to the
extent such Operating Expenses are incurred in activities included in the
Enterprise, in accordance with the definition thereof), pursuant to GAAP,
including but not limited to the following:

     (i)  the Compensation of Enterprise Employees;

     (ii) Operating Supplies for the Enterprise;

     (iii) utilities;

     (iv) repairs and maintenance of the Facility (excluding Capital
          Replacements)

     (v)  interest on the Loans and all other loans or capital leases pertaining
          to the Facility and the Enterprise, but shall exclude interest on the
          Non-Gaming Land Acquisition Line of Credit and the Transition Loan;

     (vi) interest on installment contract purchases or other interest charges
          on debt approved by the Business Board;

     (vii) insurance and bonding;

     (viii) advertising and marketing, including busing and transportation of
          patrons to the Facility;

     (ix) accounting, audit, legal and other professional fees;

     (x)  security costs;

     (xi) operating lease payments for Furnishings and Equipment to the extent
          approved by the Business Board, and capital lease payments to the
          extent approved by the Business Board and properly expensed under
          GAAP;

     (xii) trash removal;

     (xiii) cost of goods sold;

     (xiv) other expenses designated as Operating Expenses in accordance with
          the accounting standards as referred to in Section 4.21.3;

     (xv) expenses specifically designated as Operating Expenses in this
          Agreement;

     (xvi) depreciation and amortization of the Facility based on an assumed 30
          year life, and depreciation and amortization of all other assets in
          accordance with GAAP;


                                       14

<PAGE>

     (xvii) recruiting and training expenses;

     (xviii) fees due to the NIGC under the IGRA;

     (xix) any required payments to or on behalf of the State, any local
          governments or the Pokagon Fund made by or on behalf of the Enterprise
          or the Band pursuant to the Compact or any related consent decree, or
          pursuant to the Local Agreement;

     (xx) any budgeted charitable contributions by the Enterprise for the
          benefit of charities located or providing services in the vicinity of
          the Gaming Site which are approved by the Business Board;

     (xxi) Pre-opening expenses shall be capitalized and treated as an expense
          during the first year after opening; and

     (xxii) charges, assessments, fines or fees imposed by governmental entities
          of the Band which are reasonably related to the cost of Tribal
          governmental regulation of public health, safety or welfare, or the
          integrity of Tribal gaming operations.

but Operating Expenses shall not include any portion of Manager's Internal
Expenses or Permitted Taxes (other than as described in clause xxiii above).

     "OPERATING SUPPLIES" shall mean food and beverages (alcoholic and
nonalcoholic) and other consumable items used in the operation of a casino, such
as playing cards, tokens, chips, plaques, dice, fuel, soap, cleaning materials,
matches, paper goods, stationary and all other similar items.

     "PERMITTED TAXES" shall mean taxes, fees, assessments or other charges
imposed by the Band that are permitted under Section 7.2.

     "PLANS AND SPECIFICATIONS" shall mean the final Plans and Specifications
approved for the Facility as described in the Development Agreement.

     "POKAGON COUNCIL" shall mean the duly elected, governing legislative body
of the Band described pursuant to Public Law 102-323 or, at the option of the
Band, a designee committee or council created pursuant to resolution or
ordinance of the Pokagon Council.

     "POKAGON FUND" shall mean the non-profit corporation established pursuant
to the Local Agreement.

     "PRE-OPENING BUDGET" shall have the meaning described in Section 4.10.


                                       15

<PAGE>

     "PRE-OPENING EXPENSES" shall have the meaning described in Section 4.10.

     "PROJECT" shall have the meaning described in Section 4.1 of the
Development Agreement.

     "PROMOTIONAL ALLOWANCES" shall mean the retail value of complimentary food,
beverages, merchandise, and tokens for gaming, provided to patrons as
promotional items.

     "RELATIVE" shall mean an individual residing in the same household who is
related as a spouse, father, mother, son or daughter.

     "REMAINING LOAN AVAILABILITY AMOUNT" SHALL have the meaning described in
Section 9.2.1(a)((ii)(A) of the Development Agreement.

     "RESERVE AMOUNT" shall have the meaning described in Section
9.2.1(a)((ii)(A) of the Development Agreement.

     "RESTORATION ACT" shall mean 25 U.S.C. Sections 1300j et seq.

     "RESTRICTED TERRITORY" shall mean the States of Ohio, Illinois, Indiana and
Michigan.

     "SPECIFIC PERFORMANCE RESTRICTION" shall mean that no arbitrator or court
shall have the power to compel, overturn, negate or in any manner modify any
Governmental Action; but such restriction shall not prevent an arbitrator from
determining that the taking of any Governmental Action or the failure to take
any Governmental Action, which is not caused by a breach of Great Lakes or
Lakes' obligations under the Agreements or the Guaranty, constitutes a breach of
this Agreement by the Band or the impairment of rights of Great Lakes under this
Agreement; and which therefore results in liability on the part of the Band for
damages in favor of Great Lakes as provided in this Agreement and enforcement of
the obligations of the Band to Great Lakes, including any security agreements
and collateral instruments, in accordance with their terms.

     "STATE" shall refer to the State of Michigan.

     "SUBSEQUENT GAMING FACILITY REVENUES" means gaming revenues from a gaming
facility (including the Facility) owned or operated by the Band in Michigan, but
only to the following extent: (i) all Class III Gaming Net Revenue, and (ii)
Class II Gaming Net Revenue to the extent that such Class II Net Revenue exceeds
$1,000,000.

     "TERM" shall mean the term of this Agreement as described in Section 3.2.


                                       16

<PAGE>

     "TRANSITION LOAN NOTE" shall have the meaning defined in the Development
Agreement.

     "TRIBAL DISTRIBUTIONS" shall mean Monthly Distribution Payments, Minimum
Guaranteed Monthly Payments and any other payments received by the Band from the
Enterprise pursuant to or in connection this Agreement.

2.1. Terms defined in the Development Agreement not otherwise defined in this
Agreement shall have the same meaning herein as therein.

3. ENGAGEMENT; BUSINESS BOARD; COMPLIANCE

In consideration of the mutual covenants contained in this Agreement, the
parties agree and covenant as follows:

3.1. Engagement of Manager. The Band hereby retains and engages Manager as the
exclusive manager of the Enterprise pursuant to the terms and conditions of this
Agreement, and Manager hereby accepts such retention and engagement, subject to
receipt of all necessary regulatory approvals.

3.2. Term. The term of this Agreement shall begin on the date this Agreement,
the Development Agreement (if required) and the Lakes Development Note (if
required) are approved by the Chairman of the NIGC, and/or the BIA if required,
and continue until, unless earlier terminated in accordance with its terms,
seven (7) years from commencement of Gaming at the Initial Phase of the
Facility, provided that the Term of the Management Agreement will be five (5)
years from the Commencement Date if (i) the Development Expenditures of the
Initial Phase of the Facility are equal to or more than $138,000,000, and (ii)
Lakes' Financial Support for such Initial Phase has not exceeded $46,000,000.

     3.2.1. "Financial Support"shall be defined for purposes of this subsection
          as the sum of the following:

               (a)  the maximum amount of principal outstanding under the Lakes
                    Development Loan and the Lakes Facility Loan (if provided
                    directly by Great Lakes) as of the Commencement Date or any
                    time prior thereto, plus the amount of any Guaranty Reserves
                    established with respect thereto that are outstanding as of
                    the Commencement Date, plus

               (b)  subject to the limits provided in Section 3.2.2(d), the
                    maximum amount, as of the Commencement Date or any time
                    prior thereto, of the greater of the principal


                                       17

<PAGE>

                    amounts outstanding or the principal amounts of the
                    commitments under any other Loans (including the Lakes
                    Facility Loan if provided by a party other than Great Lakes)
                    for which Great Lakes or Lakes have with the consent of the
                    Band provided guaranties or other credit enhancements
                    (including without limitation, any construction completion
                    guaranty granted by Great Lakes or Lakes as a credit
                    enhancement of the Bank Loan and/or Equipment Loan) or
                    interest subsidies, excluding the portion of guarantees,
                    credit enhancements or interest subsidies to the extent of
                    the maximum amount of any Guaranty Reserves, as of the
                    Commencement Date or any time prior thereto, that have been
                    established under Section 9.2.1(a)(ii)(A) of the Development
                    Agreement with respect thereto; plus

               (c)  subject to the limits provided in Section 3.2.2(d), if as of
                    the Commencement Date, any guarantees or credit enhancements
                    previously provided by Great Lakes or Lakes at the request
                    of or consented to by the Band with respect to any
                    Construction Documents (other than the Road Service
                    Agreement, which the parties intend to terminate) remain in
                    existence and have not been terminated or released in
                    writing, the Reserve Amount (as defined in Section
                    9.2.1(a)(ii)(A) of the Development Agreement) as of the
                    Commencement Date for any such guaranteed or enhanced
                    obligations remaining unpaid, regardless of whether a
                    Guaranty Reserve was in fact established therefor; provided
                    that the amount of any Reserve Amount shall be reduced by
                    the amount of cash collateral posted by Lakes or Great Lakes
                    to secure any such guaranty, credit enhancement or interest
                    subsidy, the amount advanced by Lakes or Great Lakes for
                    such cash collateral being an advance under the Lakes
                    Development Loan.

     3.2.2. For purposes of calculating Financial Support:

               (a)  The advances outstanding under the Lakes Development Loan
                    shall be deemed to equal $46,000,000 if at the time of the
                    Commencement Date the sum of advances previously made
                    thereunder in


                                       18

<PAGE>

                    accordance with the terms of the Development Agreement and
                    the amount of any Guaranty Reserves established under
                    Section 9.2.1(a)(ii)(A) of the Development Agreement is less
                    than $46,000,000;

               (b)  If the Band has previously repaid any amount under the Lakes
                    Development Loan and/or the Lakes Facility Loan, such
                    calculation shall include any advances made on such Loan(s)
                    by Great Lakes but which were repaid by the Band on or prior
                    to the Commencement Date;

               (c)  Such calculation shall exclude the Non-Gaming Acquisition
                    Line of Credit and the Transition Loan; interest, fees and
                    expenses under any Loan; and any portion of the Bank Loan,
                    the Equipment Loan or any other indebtedness related to the
                    Enterprise to the extent of the amount of any Lakes
                    Refinancing Guaranty related thereto (i.e. the amount of any
                    such obligation of the Band guaranteed or for which a credit
                    enhancement has been provided by Great Lakes or Lakes and
                    which amount has been used to refinance any portion of the
                    Lakes Development Loan, the Lakes Facility Loan and/or any
                    other obligation of the Band to Great Lakes)); and

               (d)  Financial Support under or relating to guaranties or other
                    credit enhancements or interest subsidies shall not exceed
                    (i) any contractual limitation or cap on Lakes or Great
                    Lakes' liability under such guaranties or other credit
                    enhancements, or (ii) the present value of any such interest
                    subsidy as of the closing on the Bank Loan or the Equipment
                    Loan, as applicable.

3.3. Status of Gaming Site. The Band represents and covenants that it will
acquire the Gaming Site in accordance with the terms of the Development
Agreement, and will maintain the Gaming Site throughout the Term as land held in
Trust by the United States of America for the benefit of the Band, eligible as a
location upon which Class II and Class III Gaming can occur. The Band covenants,
during the term hereof, that Manager shall and may peaceably have complete
access to and presence in the Facility in accordance with the terms of this
Agreement, free from molestation, eviction and disturbance by the Band or by any
person or entity; provided, however, that such right of


                                       19

<PAGE>

access to and presence in the Facility shall cease upon the termination of this
Agreement pursuant to its terms.

3.4. Creation and Operation of Business Board. Manager and the Band agree to
create a Business Board comprised of an equal number of persons representing and
designated by the Band and the Manager. Unless otherwise agreed by the Band and
the Manager, the Business Board shall have four (4) members. Any member of the
Business Board may designate another person to exercise authority as a member by
written notice signed by such Business Board member and given in accordance with
Section 18.2 of this Agreement. The Business Board shall remain active during
the entire term of this Agreement. Within thirty (30) days following the date of
this Agreement, each party shall give the other notice of the individuals
initially designated by each to serve on the Business Board. The Business Board
shall have the obligations, rights and powers described in this Agreement. In
order to be effective, any action of the Business Board must be the result of
mutual agreement of a majority of the Business Board members or their designees
at a meeting at which both Band Representatives (or their duly designated
designees) are present; or, in the event of action by written consent, by
consent signed by both Band Representatives (or their designees) and at least
one Manager Representative (or his/her designee). In the event mutual agreement
cannot be reached, the appropriate action shall be determined in the manner
provided in Article 13.

3.5. Manager Compliance with Law; Licenses. Manager and Lakes each covenant that
it will at all times comply with Legal Requirements, including the Band Gaming
Ordinance, the IGRA, the Compact, State statutes, to the extent applicable, and
any licenses issued under any of the foregoing. The Band shall not unreasonably
withhold, delay, withdraw, qualify or condition such licenses as the Band is
authorized to grant.

3.6. Compliance with Compact. The parties shall at times comply with the
provisions of the Compact.

3.7. Fire and Safety. Manager shall ensure that the Facility shall be
constructed and maintained in compliance with all fire and safety statutes,
ordinances, and regulations which would be applicable if the Facility were
located outside of the jurisdiction of the Band although those requirements
would not otherwise apply within that jurisdiction. Nothing in this Section
shall grant any jurisdiction to the State or any political subdivision thereof
over the Gaming Site or the Facility. The Band shall be responsible for
arranging fire protection and police services for the Facility.

3.8. Compliance with the National Environmental Policy Act. With the assistance
of Manager, the Band shall supply the NIGC with all information necessary for
the NIGC to comply with any regulations of the NIGC issued pursuant to the
National Environmental Policy Act (NEPA).


                                       20

<PAGE>

3.9. Commencement Date. Manager shall memorialize the Commencement Date in a
writing signed by Manager and delivered to the Band and to the Chairman of the
NIGC.

4. BUSINESS AND AFFAIRS OF THE ENTERPRISE

4.1. Manager's Authority and Responsibility. Manager shall conduct and direct
all business and affairs in connection with the day-to-day operation, management
and maintenance of the Enterprise and the Facility, including the establishment
of operating days and hours. It is the parties' intention that the Enterprise be
open 24 hours daily, seven days a week. Manager is hereby granted the necessary
power and authority to act, through the General Manager, in order to fulfill all
of its responsibilities under this Agreement. Nothing herein grants or is
intended to grant Manager a titled interest to the Facility or to the
Enterprise. Manager hereby accepts such retention and engagement. The Band shall
have the sole proprietary interest in and ultimate responsibility for the
conduct of all Gaming conducted by the Enterprise, subject to the rights and
responsibilities of Manager under this Agreement.

4.2. Duties of Manager. In managing, operating, maintaining and repairing the
Enterprise and the Facility, under this Agreement, Manager's duties shall
include, without limitation, the following:

     4.2.1. Physical Duties. Manager shall use reasonable measures for the
          orderly physical administration, management, and operation of the
          Enterprise and the Facility, including without limitation cleaning,
          painting, decorating, plumbing, carpeting, grounds care and such other
          maintenance and repair work as is reasonably necessary.

     4.2.2. Compliance with Band Ordinances. Manager shall comply, and, as
          applicable, shall cause Lakes to comply, with all duly enacted
          statutes, regulations and ordinances of the Band, subject to the
          provisions of Section 10.2.1.

     4.2.3. Required Filings. Manager shall comply with all applicable
          provisions of the Internal Revenue Code including, but not limited to,
          the prompt filing of any cash transaction reports and W-2G reports
          that may be required by the Internal Revenue Service of the United
          States or under the Compact.

     4.2.4. Contracts in Band's Name Doing Business as the Enterprise and at
          Arm's Length. Contracts for the operations of the Enterprise shall be
          entered into in the name of the Band, doing business as the
          Enterprise, and signed by the General Manager. Any contract requiring
          an expenditure in any year in excess of $50,000, or such higher amount
          as may be set by the Business Board, shall be approved by the Business


                                       21

<PAGE>

          Board. No contracts, of any amount, for the supply of goods or
          services to the Enterprise shall be entered into with an Affiliate or
          Insider of the Manager unless that affiliation is disclosed to and
          approved by the Business Board, and the contract terms are no less
          favorable for the Enterprise than could be obtained from a
          nonaffiliated contractor. Nothing contained in this Section 4.2.4
          shall be deemed to be or constitute a waiver of the Band's sovereign
          immunity.

     4.2.5. Enterprise Operating Standards. Manager shall use its best efforts
          to operate the Enterprise in a proper, efficient and competitive
          manner in accordance with operating standards which are consistent
          with the highest operating standards of the casino, hospitality and
          resort industries.

     4.2.6. Security. Manager shall provide for appropriate security for the
          operation of the Enterprise. All aspects of the Facility security
          shall be the responsibility of Manager. Any security officer shall at
          the request of the Business Board be bonded and insured in an amount
          commensurate with his or her enforcement duties and obligations. The
          cost of any charge for security and increased public safety services
          will be an Operating Expense.

4.3. Damage, Condemnation or Impossibility of the Enterprise. Damage to or
destruction or condemnation of the Facility or the Enterprise shall be governed
by the provisions of Section 13.8 of the Development Agreement.

4.4. Alcoholic Beverages and Tobacco Sales. During the term of this Agreement
alcoholic beverages may be served at the Facility if permissible in accordance
with applicable law. The parties acknowledge that no enabling Band legislation
for the sale of alcoholic beverages is now in force, and that such legislation
would be necessary in order to serve alcoholic beverages at the Facility. If
such legislation is subsequently enacted, and if other requisite approvals are
obtained, the Band and Manager may mutually agree to include service of such
beverages within the Enterprise. Tobacco may be sold at the Facility subject to
and in accordance with the Band's licensing requirements, if any.

4.5. Employees.

     4.5.1. Manager's Responsibility. Manager shall have, subject to the terms
          of this Agreement, the exclusive responsibility and authority to
          direct the selection, control and discharge of all employees
          performing regular services for the Enterprise in connection with the
          maintenance, operation, and management of the Enterprise and the
          Facility and any activity upon the Gaming Site; and the sole
          responsibility for determining whether a prospective employee is
          qualified and the


                                       22

<PAGE>

          appropriate level of Compensation to be paid, except that the Gaming
          Commission shall have the exclusive right to determine licensing
          qualifications.

     4.5.2. Enterprise Employee Policies. Manager shall prepare a draft of
          personnel policies and procedures (the "Enterprise Employee
          Policies"), including a job classification system with salary levels
          and scales, which policies and procedures shall be in compliance with
          applicable Band law and subject to approval by the Business Board.
          Enterprise employees are employed on an "at-will" basis and, unless
          expressly stated otherwise, nothing contained in this Agreement or the
          Enterprise Employee Policies shall be construed to affect the
          "at-will" nature of employment with the Enterprise. The Enterprise
          Employee Policies shall include a grievance procedure in order to
          establish fair and uniform standards for the Enterprise employees,
          which will include procedures for the resolution of disputes between
          the Enterprise and Enterprise employees. At a minimum, the Enterprise
          Employee Policies shall provide for an employee grievance process
          which provides the following: A written "Board of Review" process will
          be created by the Enterprise's general manager to provide Enterprise
          employees with a procedure for bringing grievances involving
          substantial work related issues to the attention of Enterprise
          management so they may be promptly and permanently resolved in a fair
          and equitable manner. The Board of Review process will be available to
          all Enterprise employees except: (a) job applicants, temporary
          employees, and part-time employees; (b) employees at the director
          level and above; and (c) employees discharged for actions involving
          violations of tribal law, including tribal gaming regulations, or
          federal, state, or local law. Enterprise employees will be eligible to
          use the Board of Review process if they have: (i) completed an initial
          period of employment not to exceed ninety (90) work shifts; (ii)
          concluded all required preliminary procedures before seeking a Board
          of Review hearing; (iii) completed a Board of Review hearing request
          form; and (iv) submitted the hearing request form within the allotted
          time frame to the Enterprise human resources department and a copy to
          the head of their home department in the Enterprise. The Enterprise's
          human resources department shall be responsible for determining the
          composition of the hearing panel and for establishing hearing rules
          and procedures, in each case subject to the provisions of the
          Enterprise Employee Policies. The Board of Review will be empowered to
          make a range of decisions necessary to fully resolve the grievance,
          including reinstatement (with or without backpay) or upholding the
          employee's discharge. The Board of Review's decision on the grievance
          will be final and binding for the employee and the


                                       23

<PAGE>

          Enterprise, and there will be no appeal beyond the Board of Review
          except as may be expressly provided in the Enterprise Employee
          Policies. Manager shall be responsible for administering the
          Enterprise Employee Policies. Any amendments to the Enterprise
          Employee Policies must be consistent with this subsection and shall
          not be effective unless they are approved by the Business Board.

     4.5.3. Senior Employees. The selection of the General Manager, Chief
          Financial Officer, Casino Manager, and Human Resources Manager of the
          Enterprise, or the functionally equivalent positions, shall be subject
          to consultation between, and agreement by, Manager, the Business Board
          and the Pokagon Council. All such Employees shall be Enterprise
          Employees.

     4.5.4. Enterprise Employees. The terms of employment of all Enterprise
          Employees shall be structured as though all labor, employment, and
          unemployment insurance laws applicable in the State which would apply
          to Enterprise Employees if they were not working on an Indian
          reservation would also apply to Enterprise Employees; except that the
          Band reserves the right to by ordinance establish a workman's
          compensation trust fund and worker's compensation system instead of
          adopting Michigan workers compensation law, and to adopt other laws
          and regulations that might preempt otherwise applicable law.

     4.5.5. Removal of Employees. Manager will act in accordance with the
          Enterprise Employee Policies with respect to the discharge, demotion
          or discipline of any Enterprise Employee.

     4.5.6. Band Employees. All Enterprise Employees shall be employees of the
          Band.

4.6. No Manager Internal Expenses; Limitation on Manager Payments. No Manager
Internal Expenses shall be paid by the Enterprise. No officer, director,
shareholder or employee of Manager or Lakes shall be compensated by wages from
or contract payments by the Enterprise for their efforts or for any work which
they perform under this Agreement. Neither Manager nor Lakes shall receive any
payments from the Enterprise other than loan repayments (whether under the Lakes
Development Note, the Lakes Facility Note, for other advances in accordance with
this Agreement, or as subrogee after paying on any Loan guarantee) and the
Management Fee to be paid to Manager under Section 5.1. Manager Internal
Expenses may be paid from Management Fees and loan repayments after they have
been received by Manager. Nothing in this subsection shall restrict the ability
of an employee of the Enterprise to purchase or hold stock in Lakes where (a)
such stock is publicly held, and (b) such employee acquires, on


                                       24

<PAGE>

a cumulative basis, less than five percent (5%) of the outstanding stock in the
corporation.

4.7. GRA Expenses. The funding of the operation of the Gaming Regulatory
Authority shall, prior to the Commencement Date, be a start up expense of the
Enterprise and thereafter shall be an Operating Expense. The budget for the GRA
shall reflect the reasonable cost of regulating the Enterprise. Disputes between
the parties relating to GRA costs shall be resolved pursuant to the provisions
of Article 13 of this Agreement. The decisions and actions of the GRA as to
Manager shall be subject to the provisions of Article 13 hereof, including
without limitation the Specific Performance Restriction.

4.8. Employee Background Checks. A background investigation shall be conducted
by the GRA in compliance with all Legal Requirements, to the extent applicable,
on each applicant for employment as soon as reasonably practicable. No
individual whose prior activities, criminal record, if any, or reputation,
habits and associations are known to pose a threat to the public interest, the
effective regulation of Gaming, or to the gaming licenses of Manager or Lakes,
or to create or enhance the dangers of unsuitable, unfair, or illegal practices
and methods and activities in the conduct of Gaming, shall knowingly be employed
by Manager, Lakes or the Band. The background investigation procedures employed
by the GRA shall be formulated in consultation with Manager and shall satisfy
all regulatory requirements independently applicable to Manager and Lakes. Any
cost associated with obtaining such background investigations shall constitute
an Operating Expense, provided, however, the costs of background investigations
relating to Manager, Lakes and the shareholders, officers, directors or
employees of Manager, Lakes or their Affiliates shall be borne solely by
Manager, shall be nonrefundable, shall not be treated as part of the Lakes
Development Loan or as Operating Expenses of the Enterprise, and shall not
exceed $50,000.

4.9. Indian Preference. Recruiting and Training; Local Preference.

     4.9.1. Indian Preference. In order to maximize benefits of the Enterprise
          to the Band, Manager shall, during the term of this Agreement, to the
          maximum extent reasonably possible under applicable law, including,
          but not limited to the Indian Civil Rights Act, 25 U.S.C. Section
          1301, et seq., give preference in recruiting, training and employment
          to qualified members of the Band, their spouses, and children in all
          job categories of the Enterprise, including senior management. Manager
          shall:

          4.9.1.1. conduct job fairs and skills assessment meetings for Band
          members;

          4.9.1.2. in consultation with and subject to the approval of the Band,
          develop a management training program for Band members or people
          selected by the Band. This program shall be structured to provide


                                       25

<PAGE>

          appropriate training for those participating to assume full managerial
          control at the conclusion of the Term of this Agreement; and

          4.9.1.3. within two hundred seventy (270) days of the Commencement
          Date, Manager shall develop and present to the Band for its approval,
          a training plan designed so that, by the end of the Term of the
          Agreement, all Enterprise Employees will be Band members or others
          designated by the Band.

     4.9.2. Local Preference. Manager shall also give preference to residents of
          the community in which the Gaming Site is located and in hiring and
          purchasing shall comply with Section 4 of the Local Agreement. Any
          such preference shall be junior to the Indian Preference established
          under Section 4.9.1.

     4.9.3. Final Determination. Final determination of the qualifications of
          Band members and all other persons for employment shall be made by
          Manager, subject to any licensing requirements of the Gaming
          Regulatory Authority. Not later than 90 days prior to the Commencement
          Date, Manager shall develop and present to the Band for its approval a
          training plan designed to meet the goals set out in this section.

4.10. Pre-Opening. Nine months prior to the scheduled Commencement Date, Manager
shall commence implementation of a pre-opening program which shall include all
activities necessary to financially and operationally prepare the Facility for
opening. To implement the pre-opening program, Manager shall prepare a
comprehensive pre-opening budget which shall be submitted to the Business Board
for its approval no later than seven months prior to the scheduled Commencement
Date ("Pre-Opening Budget"). The Pre-Opening Budget shall identify expenses
which Manager anticipates to be necessary or desirable in order to prepare the
Facility for the Commencement Date, including without limitation, cash for
disbursements, Furnishings and Equipment and Operating Supplies, hiring,
training, relocation and temporary lodging of employees, advertising and
promotion, office overhead and office space (whether on or off the Gaming Site),
and travel and business entertainment (including opening celebrations and
ceremonies) ("Pre-Opening Expenses"). The Band recognizes that the Pre-Opening
Budget has been prepared well in advance of Commencement and is intended only to
be a reasonable estimate, subject to variation due to a number of factors, some
of which will be outside of Manager's control (e.g. the time of completion,
inflationary factors and varying conditions for the goods and services
required). The Band agrees that the Pre-Opening Budget may be modified from time
to time, subject to approval of the Business Board in accordance with the
procedure established by Section 4.11 of this Agreement for adjustments to the
Operating Budget and Annual Plan.


                                       26

<PAGE>

4.11. Operating Budget and Annual Plan. Manager shall, prior to the scheduled
Commencement Date, submit to the Business Board for its approval a proposed
Operating Budget and Annual Plan for the Fiscal Year commencing on the
Commencement Date. Thereafter, Manager shall, not less than 30 days prior to the
commencement of each full or partial Fiscal Year, submit to the Business Board
for its approval a proposed Operating Budget and Annual Plan for the ensuing
full or partial Fiscal Year, as the case may be. The Operating Budget and Annual
Plan shall include a projected income statement, balance sheet, and projection
of cash flow for the Enterprise, with detailed justifications explaining the
assumptions used therein. The Operating Budget and Annual Plan shall include,
without limitation, a schedule of repairs and maintenance (other than Capital
Replacements), a business and marketing plan for the Fiscal Year, and the
Minimum Balance which must remain in the Enterprise Accounts and the House Bank
as of the end of each month during the Fiscal Year to assure sufficient monies
for working capital purposes, and detail of other expenditures proposed to be
authorized under the Operating Budget and Annual Plan.

The Operating Budget and Annual Plan for the Enterprise will be comprised of the
following:

     4.11.1. A statement of the estimated income and expenses for the coming
          Fiscal Year, including estimates as to Gross Revenues and Operating
          Expenses for such Fiscal Year, such operating budget to reflect the
          estimated results of the operation during each month of the subject
          Fiscal Year;

     4.11.2. Either as part of the statement of the estimated income and
          expenses referred to Section 4.11.1, or separately, budgets (and
          timetables and requirements of Manager) for:

          4.11.2.1. repairs and maintenance;

          4.11.2.2. Capital Replacements;

          4.11.2.3. Furnishings and Equipment;

          4.11.2.4. advertising and business promotion programs for the
          Enterprise;

          4.11.2.5. the estimated cost of Promotional Allowances; and

          4.11.2.6. a business and marketing plan for the subject Fiscal Year.

     4.11.3. The Business Board's approval of the Operating Budget and Annual
          Plan shall not be unreasonably withheld or delayed. Manager shall meet
          with the Business Board to discuss the proposed Operating Budget and


                                       27

<PAGE>

          Annual Plan and the Business Board's approval shall be deemed given
          unless a specific written objection thereto is delivered by the Band
          Representatives to Manager within thirty (30) days after Manager and
          the Business Board have met to discuss the proposed Operating Budget
          and Annual Plan. If the Band Representatives for any reason decline to
          meet with Manager to discuss a proposed Operating Budget and Annual
          Plan after not less than twenty (20) days written notice, the Band
          Representatives shall be deemed to have consented unless a specific
          written objection is delivered to Manager within thirty (30) days
          after the date of the proposed meeting. The Business Board shall
          review the Operating Budget and Annual Plan on a line-by-line basis,
          if requested by the Band Representative.

     4.11.4. If the initial proposed Operating Budget and Annual Plan contains
          disputed budget item(s), the Band Representatives on the Business
          Board and the Manager agree to cooperate with each other in good faith
          to resolve the disputed or objectionable proposed item(s). In the
          event that the Band Representatives on the Business Board and the
          Manager are not able to reach mutual agreement concerning any disputed
          or objectionable item(s) within a period of fifteen (15) days after
          the date the Band Representatives on the Business Board provide
          written notice of the Band's objection to Manager, either party shall
          be entitled to submit the dispute to arbitration in accordance with
          Article 13. If the Band Representatives on the Business Board and the
          Manager are unable to resolve the disputed or objectionable item(s)
          prior to the commencement of the applicable Fiscal Year, the
          undisputed portions of the proposed Operating Budget and Annual Plan
          shall be deemed to be adopted and approved and the corresponding line
          item(s) contained in the Operating Budget and Annual Plan for the
          preceding Fiscal Year shall be adjusted as set forth herein and shall
          be substituted in lieu of the disputed item(s) in the proposed
          Operating Budget and Annual Plan. Those line items which are in
          dispute shall be determined by increasing the preceding Fiscal Year's
          actual expense for the corresponding line items by an amount
          determined by Manager which does not exceed the Consumer Price Index
          for All Urban Consumers published by the Bureau of Labor Statistics of
          the United States Department of Labor, U.S. City Average, all items
          (1997-98 = 100) for the Fiscal Year prior to the Fiscal Year with
          respect to which the adjustment to the line item(s) is being
          calculated or any successor or replacement index thereto. The
          resulting Operating Budget and Annual Plan obtained in accordance with
          the preceding sentence shall be deemed to be the Operating Budget and
          Annual Plan in effect until such time as Manager and the Band
          Representatives on the Business Board have resolved the items objected


                                       28

<PAGE>

          to by the Band Representatives on the Business Board or an arbitrator
          has rendered his award on the dispute.

     4.11.5. Adjustments to Operating Budget and Annual Plan and Capital Budget.
          Manager may, after notice to and approval by the Business Board,
          revise the Operating Budget and Annual Plan and the Capital Budget
          from time to time, as necessary, to reflect any unpredicted
          significant changes, variables or events or to include significant,
          additional, unanticipated items of expense. Expenditures shall not
          materially vary from the approved budgets nor exceed the aggregate
          Operating Budget and Annual Plan (as approved by the Business Board,
          and revised with the reasonable approval of the Business Board) absent
          the written consent of the Business Board; provided that the Band
          recognizes that (a) the absolute amounts of expenditures may exceed
          budgeted amounts if the volume of business at the Facility exceeds
          projections, (b) the relative amounts of income and expense may vary
          from budgeted amounts if the volume of business is less than
          projected, and (c) Manager does not guarantee the economic performance
          shown in budgets. Manager shall submit a revision of the Operating
          Budget and Annual Plan to the Business Board for review on a quarterly
          or other appropriate basis.

4.12. Capital Budgets. Manager shall, not less than 30 days prior to the
commencement of each Fiscal Year, or partial Fiscal Year, submit to the Business
Board a recommended capital budget (the "Capital Budget") describing the present
value, estimated useful life and estimated replacement costs for the ensuing
full or partial year, as the case may be, for the physical plant, furnishings,
equipment, and ordinary capital replacement items, all of which are defined to
be any items, the cost of which is capitalized and depreciated, rather than
expended, using GAAP ("Capital Replacements") as shall be required to operate
the Enterprise in accordance with sound business practices. Capital Replacements
in the Capital Budget in an aggregate sum equal to or less than the sum of the
Capital Replacement Reserve for the Fiscal Year shall be approved by the
Business Board; and any amounts in excess of the Capital Replacement Reserve for
the Fiscal Year shall be subject to approval of the Pokagon Council in its sole
discretion. The Pokagon Council, Business Board, and Manager shall meet to
discuss the proposed Capital Budget and the Business Board and Pokagon Council
shall be required to make specific written objections to a proposed Capital
Budget in the same manner and within the same time periods specified in Section
4.11.4 with respect to an Operating Budget and Annual Plan. The Busmess Board
and Pokagon Council shall not unreasonably withhold or delay its consent. Unless
the Pokagon Council, Business Board, and Manager otherwise agree, Manager shall
be responsible for the design and installation of Capital Replacements, subject
to the Business Board's approval and ratification by the Pokagon Council and
right to inspect.


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<PAGE>

4.13. Capital Replacements. The Band shall effect and expend such amounts for
any Capital Replacements as shall be required, in the course of the operation of
the Enterprise, to maintain, at a minimum, the Enterprise in compliance with any
Legal Requirements and to comply with Manager's recommended programs for
renovation, modernization and improvement intended to keep the Enterprise
competitive in its market; or to correct any condition of an emergency nature,
including without limitation, maintenance, replacements or repairs which are
required to be effected by the Band, which in Manager's sole discretion requires
immediate action to preserve and protect the Facility, assure its continued
operation, and/or protect the comfort, health, safety and/or welfare of the
Facility's guests or employees (an "Emergency Condition"); provided, however,
that the Band shall be under no obligation to fund Capital Replacements in
aggregate amount greater than its periodic required contributions to the Capital
Replacement Reserve described in Section 4.15. Manager is authorized to take all
steps and to make all expenditures from the Disbursement Accounts described in
Section 4.19.3 (in the case of non-capitalized repairs and maintenance), or
Capital Replacement Reserve described at Section 4.14 (in the case of
expenditures for Capital Replacements), as it deems necessary to repair and
correct any Emergency Condition, regardless whether such provisions have been
made in the Capital Budget or the Operating Budget and Annual Plan for any such
expenditures; or the cost thereof may be advanced by Manager and reimbursed from
future revenues. Design and installation of Capital Replacements shall be
effected in a time period and subject to such conditions as the Business Board
may establish to minimize interference with or disruption of ongoing operations.

4.14. Capital Replacement Reserve. Manager shall establish a Capital Replacement
Reserve on the books of account of the Enterprise, and the periodic
contributions of cash required by Section 4.15 shall be deposited by the
Enterprise into an account (the "Capital Replacement Reserve") established in
the Band's name at a bank designated by the Business Board in accordance with
Section 4.19.1 of this Agreement. All amounts in the Capital Replacement Reserve
shall be invested in interest bearing investments in accordance with the
Enterprise Investment Policy to the extent that availability of funds, when
required, is not thereby impaired. Interest earned on amounts deposited in the
Capital Replacement Reserve shall be credited to the Capital Replacement Reserve
and shall be available for payment of expenditures for Capital Replacements to
the Facility. Manager shall draw on the Capital Replacement Reserve for Capital
Replacements to purchase those items included in the Capital Budget approved by
the Business Board or such emergency additions, repairs or replacements as shall
be required to correct an Emergency Condition.

4.15. Periodic Contributions to Capital Replacement Reserve. In accordance with
Section 5.5 of this Agreement, Manager shall make monthly deposits into the
Capital Replacement Reserve in amounts equivalent to an annual rate of 1% (one
percent) of Gross Revenues during the first twelve (12) month period after the
Commencement Date and equivalent to an annual rate of 3% (three percent) of
Gross Revenues during the remainder of the


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<PAGE>

Fiscal Year in which such twelve (12) month period ends and during each
successive Fiscal Year over the remainder of the Term; such reserve shall be
funded out of Monthly Distribution Payments. The cash amounts required to be so
deposited shall be calculated and deposited into the Capital Replacement
Reserve, in arrears, no later than the twenty-first (21st) day of the month
immediately following the month with respect to which a deposit is made. If any
adjustment of Gross Revenues is made as result of an audit or for other
accounting reasons, a corresponding adjustment in the Capital Replacement
Reserve deposit shall be made. In addition, all proceeds from the sale of
capital items no longer needed for the operation of the Enterprise, and the
proceeds of any insurance received in reimbursement for any items previously
paid from the Capital Replacement Reserve, shall be deposited into the Capital
Replacement Reserve upon receipt.

4.16. Use and Allocation of Capital Replacement Reserve. Any expenditures for
Capital Replacements which have been budgeted and previously approved may be
paid from the Capital Replacement Reserve without further approval from the
Business Board. Any amounts remaining in the Capital Replacement Reserve at the
close of any year shall be carried forward and retained in the Capital
Replacement Reserve until fully used. If the amounts in the Capital Replacement
Reserve at the end of any year plus the anticipated contributions to the Capital
Replacement Reserve for the next ensuing year are not sufficient to pay for
Capital Replacements authorized by the Capital Budget for such ensuing year,
then additional funds, in the amount of the projected deficiency, may be
advanced by the Manager and reimbursed by the Enterprise from future revenues.

4.17. [intentionally omitted]

4.18. Internal Control Systems. Manager shall install systems for monitor of all
funds (the "Internal Control Systems"), which systems shall comply with all
Legal Requirements, and shall be submitted to the Business Board and the Band
Regulatory Authority for approval in advance of implementation, which approval
shall not be unreasonably withheld. The Band shall retain the right to review
all Internal Control Systems and any changes instituted to the Internal Control
Systems of the Enterprise. The Band shall have the right to retain an auditor to
review the adequacy of the Internal Control Systems prior to the Commencement
Date. The cost of such review shall be a Pre-Opening Expense. Any significant
changes in such systems after the Commencement Date also shall be subject to
review and approval by the Gaming Regulatory Authority. The Gaming Regulatory
Authority and Manager shall have the right and duty to maintain and police the
Internal Control Systems in order to prevent any loss of proceeds from the
Enterprise. The Gaming Regulatory Authority shall have the right to inspect and
oversee the Internal Control System at all times. Manager shall install a closed
circuit television system to be used for monitoring the cash handling activities
of the Enterprise sufficient to meet all Legal Requirements.

4.19. Banking and Bank Accounts.


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<PAGE>

     4.19.1. Enterprise Accounts. The Business Board shall select, and the
          Pokagon Council shall approve, a bank or banks for the deposit and
          maintenance of funds and shall establish in such bank or banks
          accounts as Manager deems appropriate and necessary in the course of
          business and as consistent with this Agreement, including the Dominion
          Account ("Enterprise Accounts"). Establishment of any Enterprise Bank
          Account shall be subject to the approval of the Business Board. The
          sum of money agreed to by the Business Board to be maintained in the
          Enterprise Bank Account(s) to serve as working capital for Enterprise
          operations, shall include all sums needed for the House Bank, and all
          sums needed to accrue for payment of expenses not paid on a monthly
          basis (the "Minimum Balance"). Manager shall propose a policy for
          investing funds in excess of the Minimum Balance (the "Enterprise
          Investment Policy"), which shall be subject to the approval of the
          Business Board.

     4.19.2. Daily Deposits to Dominion Account. Manager shall establish for the
          benefit of the Band in the Enterprise's name a Dominion Account, which
          shall be subject to the lien and security interest of Manager to the
          extent provided in Section 9.2.l(j) of the Development Agreement and
          the Dominion Agreement. Manager shall collect all Gross Revenues and
          other proceeds connected with or arising from the operation of the
          Enterprise, the sale of all products, food and beverage, and all other
          activities of the Enterprise and deposit the related cash daily into
          the Dominion Account at least once during each 24-hour period unless
          otherwise agreed by the Business Board. All money received by the
          Enterprise on each day that it is open must be counted at the close of
          operations for that day or at least once during each 24-hour period.
          Manager agrees to obtain a bonded transportation service to effect the
          safe transportation of the daily receipts to the bank, which expense
          shall constitute an Operating Expense.

     4.19.3. Disbursement Accounts. Manager shall establish for the benefit of
          the Band in the Enterprise's name one or more Disbursement Accounts.
          Manager shall, consistent with and pursuant to the approved annual
          Operating Budget and Annual Plan and Capital Budget, have
          responsibility and authority for making all payments for Operating
          Expenses, debt service, Management Fees, and Tribal Distributions from
          the Disbursement Accounts.

     4.19.4. No Cash Disbursements. Manager shall not make any cash
          disbursements from the Enterprise Accounts except for the payment of
          cash prizes from the House Bank; and except for such cash


                                       32

<PAGE>

          disbursements from the House Bank, any and all payments or
          disbursements by the Manager shall be made by check or wire transfer
          drawn against an Enterprise Bank Account.

     4.19.5. Transfers Between Accounts. Manager has the authority to transfer
          funds from and between the Enterprise Accounts to the Disbursement
          Accounts in order to pay Operating Expenses and to pay debt service
          pursuant to the Loans, to invest funds in accordance with the
          Enterprise Investment Policy, and to pay the Management Fees and
          Tribal Distributions pursuant to this Agreement, and to make other
          payments required by Section 5.5 below.

     4.19.6. Transfers from Dominion Account to Disbursement Accounts. Manager
          agrees that, notwithstanding any provision of the Dominion Agreement
          or any Band Event of Default or any default by the Band under the
          Dominion Agreement, it shall make or permit timely transfers from the
          Dominion Account to Disbursement Accounts of all funds needed to pay
          (a) Operating Expenses; (b) the Minimum Guaranteed Monthly Payment;
          (c) all Loans, as well any other third party loans to which Manager
          has subordinated in writing; (d) deposits into the Capital Replacement
          Reserve pursuant to Section 4.15 of this Management Agreement; (e)
          maintenance of the Minimum Balance, and any other reserves approved by
          the Business Board with the written consent of Manager; and (f) claims
          of third parties granted priority over Manager under the Agreements,
          if the events occur which trigger that priority. Manager further
          agrees that, prior to any Band Event of Default, it shall make timely
          transfers to Disbursement Accounts to enable the Monthly Distribution
          Payment to be made to the Band when due, and otherwise in accordance
          with this Agreement.

4.20. Insurance. Manager, on behalf of the Band, shall arrange for, obtain and
maintain, or cause its agents to maintain, with responsible insurance carriers
licensed to do business in the State, insurance satisfactory to Manager and the
Business Board covering the Facility and the operations of the Enterprise,
naming the Band, the Enterprise and Manager as insured parties. Manager shall
recommend to the Business Board the minimum amounts of insurance coverage for
the Enterprise, which shall be subject to the reasonable approval of the Band
but shall be no less than the following:

     4.20.1. Commercial General Liability Insurance, including coverage for
          incidental contracts, on an occurrence basis with minimum limits of
          liability of not less than One Million Dollars ($1,000,000) per
          occurrence and Two Million Dollars ($2,000,000) in the aggregate for
          bodily injury and/or property damage.


                                       33

<PAGE>

     4.20.2. Property Insurance in an amount adequate to cover the full
          replacement value of all buildings, personal property, decorations,
          trade fixtures, furnishings, equipment, alterations, leasehold
          improvements and betterments, and all other contents located or placed
          in the Facility. Coverage shall insure against those risks of loss as
          are commonly covered under the Insurance Services Offices Special
          Cause of Loss form.

     4.20.3. Boiler or Machinery Insurance covering all pressure vessels,
          boilers, air conditioning equipment or similar equipment, if any, in,
          on, adjoining, above or beneath the Facility.

     4.20.4. Business Income Insurance covering at least those risks referred to
          in subparagraph 4.20.2.

     4.20.5. Worker's Compensation Insurance including statutory coverage and
          employers liability in an amount not less than one million
          ($1,000,000) per person covering all employees as required by the laws
          of Michigan or of the United States.

     4.20.6. Crime coverage - Employee Dishonesty coverage; Loss inside/outside
          the premises coverage; Depositor's forgery coverage; Computer Fraud
          coverage. Coverage shall include any employee welfare, 401k plan or
          pension benefit as required under ERISA.

     4.20.7. Automobile liability insurance including hired and non-owned
          liability for not less than One Million Dollars ($1,000,000.00)
          combined single limit for bodily injury and property damage. Such
          non-owned and hired liability insurance shall include coverage for
          physical damage.

     4.20.8. If liquor is to be sold or dispensed, a policy of liquor liability
          insurance with limits of not less than One Million Dollars
          ($1,000,000.00) per occurrence.

     4.20.9. Umbrella or Excess Liability insurance with limits of not less that
          Ten Million Dollars ($10,000,000.00) per occurrence and Ten Million
          Dollars ($10,000,000.00) annual aggregate providing excess limits over
          the Commercial General Liability, Employers Liability, Automobile
          Liability and Liquor Liability described above.

     4.20.10. All of the above insurance shall be written by one or more
          responsible insurance companies with an A.M. Best Ratings of A-8 or
          better.

4.21. Accounting and Books of Account.


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<PAGE>

     4.21.1. Statements. Manager shall prepare and provide to the Band on a
          monthly, quarterly, and annual basis, operating statements on behalf
          of the Enterprise. The operating statements shall comply with all
          Legal Requirements and shall include an income statement, statement of
          cash flows, and balance sheet for the Enterprise. Such statements
          shall include the Operating Budget and Annual Plan and Capital Budget
          projections as comparative statements, and, after the first full year
          of operation, will include comparative statements from the comparable
          period for the prior year; and shall reflect in accordance with GAAP
          all amounts collected and received and all expenses, deductions and
          disbursements made therefrom in connection with the Enterprise.

     4.21.2. Books of Account. Manager shall maintain full and accurate books of
          account on behalf of the Enterprise at an office in the Facility and
          at such other location as may be determined by Manager. The GRA and
          other designated representatives of the Pokagon Council shall have
          immediate access to the daily operations of the Enterprise and shall
          have the unlimited right to inspect, examine, and copy all such books
          and supporting business records. Such rights may be exercised through
          the Gaming Regulatory Authority or through an agent, employee,
          attorney, or independent accountant acting on behalf of the Band.

     4.21.3. Accounting Standards. Manager shall maintain the books and records
          on behalf of the Enterprise reflecting the operations of the
          Enterprise in accordance with Generally Accepted Accounting Principles
          consistently applied and shall adopt and follow the fiscal accounting
          periods utilized by the Enterprise in its normal course of business
          (i.e., a month, quarter and year prepared in accordance with the
          Fiscal Year). The accounting systems and procedures shall comply with
          Legal Requirements and, at a minimum:

          4.21.3.1. include an adequate system of internal accounting controls;

          4.21.3.2. permit the preparation of financial statements in accordance
          with GAAP;

          4.21.3.3. be susceptible to audit in accordance with GAAP and all
          requirements of IGRA and the NIGC:

          4.21.3.4. permit the calculation and payment of the Management Fee
          described in Section 5 below and the calculation by the Tribe and the
          NIGC of annual fees payable under 25 C.F.R. Section 514.1; and


                                       35

<PAGE>

          4.21.3.5. provide for the allocation of operating expenses or overhead
          expenses among the Band, the Enterprise, and any other user of shared
          facilities and services.

          4.21.3.6. All monthly internal and annual audited financial statements
          shall show separately the Net Revenue (Gaming) and related Operating
          Expenses and the Net Revenue (Other) and related Operating Expenses,
          as well as Net Revenue and Operating Expenses for the entire
          Enterprise.

4.22. Annual Audit. An independent certified public accounting firm selected by
the Band which is a "Big Four" accounting firm with not less than five (5) years
auditing experience with gaming enterprise operations shall perform an annual
audit of the books and records of the Enterprise and of all contracts for
supplies, services or concessions reflecting Operating Expenses, and shall
provide such other services as the Business Board shall designate. The Band, the
BIA and the NIGC shall also have the right to perform special audits of the
Enterprise on any aspect of the Enterprise at any time without restriction. The
costs incurred for such audits shall constitute an Operating Expense. Such
audits shall be provided by the Band to all applicable federal and state
agencies, as required by law, and may be used by Manager for reporting purposes
under federal and state securities laws, if required. All audited financial
statements shall conform to all requirements of IGRA and the NIGC and, to the
extent required by Legal Requirements, shall segregate gaming revenue and
expenses from non-gaming revenue and expenses.

4.23. Manager's Contractual Authority. Manager is authorized to make, enter into
and perform in the name of and for the account of the Band, doing business as
the Enterprise, such contracts deemed necessary by Manager to perform its
obligations under this Agreement, provided such contracts comply with the terms
and conditions of this Agreement, including, but not limited to, Section 4.2.4,
and provided such contracts do not obligate the Enterprise to pay sums not
approved in the Operating Budget and Annual Plan or the Capital Budget.

4.24. Retail Shops and Concessions. The Business Board shall approve in advance
in writing the specific type or types of shops or concessions to be authorized
for inclusion in the Facility.

4.25. Entertainment Approvals. The Pokagon Council may require that the Business
Board approve in advance in writing entertainment and/or sporting events to
provide at the Facility.

4.26. Litigation. Except for disputes between the Band and Manager, and claims
relating to the Band's status as a Tribe or the trust status of the Gaming Site,
Manager shall bring and/or defend and/or settle any claim or legal action
brought against Manager,


                                       36

<PAGE>

the Enterprise or the Band, individually, jointly or severally, or any
Enterprise Employee, in connection with the operation of the Enterprise if the
basis of such claim or legal action was within the scope of Manager's authority
under the Agreements; except that bringing litigation or arbitration relating to
claims in excess of $100,000 must be approved by the Business Board and, as to
claims in excess of $500,000, by the Pokagon Council (which consent shall not be
unreasonably withheld); and Manager shall furnish such information regarding
claims, litigation and arbitration as the Band may request. Subject to the
Band's approval of legal counsel, Manager shall retain and supervise legal
counsel, accountants and such other professionals, consultants and specialists
as Manager deems appropriate to assert or defend any such claim or cause of
action. All liabilities, costs and expenses, including reasonable attorneys'
fees and disbursements incurred in defending and/or settling any such claim or
legal action which are not covered by insurance and which, as to Manager, relate
to acts or omissions of Manager within the scope of its authority under the
Agreements, shall be an Operating Expense, or, if incurred prior to the
Commencement Date, shall be a Pre-Opening Expense. Nothing contained herein is a
grant to Manager of the right to waive the Band's or the Enterprise's sovereign
immunity. That right is strictly reserved to the Band, and shall at the option
of the Pokagon Council be asserted by the Band through its counsel (whose fees
and expenses relating to the Enterprise shall be an Operating Expense). Any
settlement of a third party claim or cause of action shall require approval of
the Business Board and, as to claims in excess of $100,000 not covered by
insurance, by the Pokagon Council (which consent shall not be unreasonably
withheld).

5.   MANAGEMENT FEE, DISBURSEMENTS, AND OTHER PAYMENTS BY MANAGER

5.1. Management Fee. Subject to the provisions of Section 5.5, on or before the
twenty first (21st) day of each month after the month in which the Commencement
Date occurs, Manager is authorized by the Band to pay itself from the Enterprise
Bank Account(s) a fee as follows: 24% of the Net Revenues of the Enterprise in
the period from the Commencement Date until the first day of the month next
following the Commencement Date (which shall constitute the commencement of the
next Fiscal Year), payable on or before the twenty-first day of that next month;
then 24% of the Net Revenues of each succeeding month, payable monthly in
arrears, until the Net Revenues in a Fiscal Year have totaled $80 million; and
thereafter 19% of Net Revenues of each succeeding month, payable monthly in
arrears, to the extent that aggregate Net Revenues in such Fiscal Year exceed
$80 million. To the extent that aggregate Net Revenues reach $80 million during
a month, the fee shall be prorated.

5.2. Fee Subordinated. The Management Fee shall be subordinated to the Bank
Loan, the Equipment Loan, any other third-party loans or equipment leases
pertaining to the Enterprise, and the Minimum Guaranteed Monthly Payment.
Manager agrees to execute and deliver subordination agreements evidencing such
subordination in form reasonably


                                       37

<PAGE>

acceptable to the Bank Lender, the Equipment Lender, or any other third-party
lender or equipment lessor.

5.3. Disbursements. As and when received by the Enterprise, Gross Revenues shall
be deposited in the Dominion Account created pursuant to Section 4.19.2 of this
Agreement. There shall, in turn, be disbursed by Manager, on a monthly basis,
for and on behalf of the Band, funds from the Enterprise Bank Account(s) in
accordance with Section 4.19.6 of this Agreement to pay, to the extent
available, Operating Expenses and, subject to the terms of Section 5.5, required
deposits into the Capital Replacement Reserve for Capital Replacements. Manager
will reserve funds in the Enterprise in amounts equal to the Minimum Balance.
Additionally, to cover any operating cash shortfall, the Band and the Manager
shall advance monies to the Enterprise sufficient to cover any operating cash
shortfall, such advances being made by the Band and Manager as follows: all such
operating cash shortfalls shall be covered by Manager until six months after the
Commencement Date (provided that Manager shall not be required to make advances
at any time that outstanding advances under this subsection total more than
$2,000,000); thereafter, any such shortfalls shall be covered by the Band.

     5.3.1. Any advances made by Manager under this subsection (the "Lakes
          Working Capital Advances") shall be evidenced by the Lakes Working
          Capital Advance Note, shall accrue interest at an annual rate equal to
          the Band Interest Rate from the date that advances are made, and shall
          be repaid as provided in Section 5.5 below. Any amounts outstanding on
          termination of this Management Agreement on account of Lakes Working
          Capital Advances shall be payable on the same terms as the Lakes
          Development Loan under the Development Agreement. The Lakes Working
          Capital Advance Note shall be a Limited Recourse obligation of the
          Band and shall be secured by the Dominion Agreement and the Lakes
          Security Agreement.

     5.3.2. Any advances made by the Band under this subsection (the "Band
          Working Capital Advances") shall accrue interest at an annual rate
          equal to the Band Interest Rate from the date that advances are made,
          and shall be repaid as provided in Section 5.5 below.

5.4. Adjustment to Bank Account. After the disbursements pursuant to Section 5.3
and establishment of any additional reserves for future disbursements as Manager
deems necessary and as are approved by the Business Board, taking into account
anticipated cash flow and Operating Costs of the Enterprise, any excess funds
remaining in the Enterprise Bank Account(s) over the Minimum Balance, the
Capital Replacement Reserve, and such additional reserves as may be approved by
the Business Board shall be disbursed monthly in accordance with Section 5.5.


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<PAGE>

5.5. Payment of Fees and Band Disbursement. Within twenty one (21) days after
the end of each calendar month of operations, Manager shall calculate Gross
Revenues, Operating Expenses, and Net Revenues of the Enterprise for the
previous month's operations and the Fiscal Year's operations to date. Such Net
Revenues shall be disbursed from the Enterprise Bank Account(s) prior to a Band
Event of Default to the extent available in the following order of priority:

     5.5.1. the Minimum Guaranteed Monthly Payment described in Section 5.6;

     5.5.2. Principal due on the Lakes Working Capital Advance Note;

     5.5.3. Principal due to the Band on account of Band Working Capital
          Advances;

     5.5.4. Principal due on the Minimum Payments Note (subject to the
          provisions of Section 5.6.2);

     5.5.5. Current principal and any other payments due on all Loans (and if
          payments are due quarterly, a reserve equal to one third of the
          scheduled quarterly payment shall be deposited in a designated
          Enterprise Bank Account for such payment, and may be invested in
          accordance with the Enterprise Investment Policies pending payment);

     5.5.6. Capital Replacement Reserve contributions as described in Section
          4.15; and

     5.5.7. The Management Fee.

All remaining Net Revenues (the "Monthly Distribution Payment") shall be
distributed to the Band, prior to a Band Event of Default and such notice as
Manager may be required to give before exercising rights under the Dominion
Agreement, at the same time the Management Fee is paid. After a Band Event of
Default and the giving of such notice, payments shall be made in accordance with
Section 4.19.6 above and, to the extent not inconsistent with that subsection,
the Dominion Agreement, prior to payments of any remaining Net Revenues to the
Band.

5.6. Minimum Guaranteed Monthly Payment.

     5.6.1. The Enterprise shall, subject to the provisions of Sections 5.6.2
          through 5.6.5, pay the Band $1,000,000 per month (the "Minimum
          Guaranteed Monthly Payment"), beginning on the Commencement Date and
          continuing for the remainder of the Term. The Minimum Guaranteed
          Monthly Payment shall be payable to the Band in arrears on the twenty
          first (21st) day of each calendar month following the month in which
          the Commencement Date occurs, which payment shall have priority


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<PAGE>

          over the Management Fee. If the Commencement Date is a date other than
          the first day of a calendar month, the first payment will be prorated
          from the Commencement Date to the end of the month. Minimum Guaranteed
          Monthly Payments shall also be prorated if gaming is conducted at the
          Facility for any other partial months.

     5.6.2. Minimum Guaranteed Monthly Payments shall be deducted from any
          Monthly Distribution Payments to be received by the Band under Section
          5.5 above in any given month; provided, however, that if the Net
          Revenues in a given month are less than $1,000,000, Manager shall pay
          the funds necessary to compensate for the deficiency from its own
          funds (the "Minimum Guaranteed Payment Advances"); and provided
          further that the Minimum Guaranteed Monthly Payments shall be reduced
          to $10,000 per month for the remaining months during each Calculation
          Year after the Band has received in such Calculation Year total Net
          Revenue distributions of $12,000,000. Pursuant to Section 5.5.4,
          Manager shall be entitled to recoup from the Band's Monthly
          Distribution Payment in succeeding months of a Calculation Year any
          Minimum Guaranteed Payment Advances made under this paragraph in that
          same Calculation Year, but in no event shall this recoupment payment
          result in the Band's receiving less than its Minimum Guaranteed
          Monthly Payment in any month. Manager shall not otherwise be entitled
          to reimbursement from the Enterprise or the Band for Minimum
          Guaranteed Payment Advances and shall not be entitled to charge any
          interest on any Minimum Guaranteed Payment Advances made hereunder.
          Minimum Guaranteed Monthly Payments shall have priority over
          retirement of development and construction costs. Minimum Guaranteed
          Payment Advances shall not have such priority, shall not accrue
          interest, and shall be evidenced by the Minimum Payments Note. The
          Minimum Payments Note shall be secured by Great Lakes' security
          interest in the Dominion Account, but such security interest shall not
          alter its priority of payment under Section 5.5 or the limitations on
          recoupment imposed under this Section 5.6.2.

     5.6.3. The obligation to make Minimum Guaranteed Monthly Payments shall
          cease upon termination of this Agreement, unless the Agreement is
          terminated by the Band for a Material Breach by the Manager.

     5.6.4. The Minimum Guaranteed Monthly Payment shall be reduced
          prospectively from $1,000,000 to $500,000 upon the opening, if any, of
          a casino in Indiana owned by the Band, on the same cumulative basis as
          provided in Section 5.6.2.


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<PAGE>

     5.6.5. Except as provided in this Section 5.6 with regard to cumulation of
          payments in any Calculation Year or otherwise specifically provided in
          this Agreement, Manager's obligation to pay the Band the Minimum
          Guaranteed Monthly Payment is unconditional and shall not be affected
          by the actual level of funds generated by the Enterprise. Minimum
          Guaranteed Monthly Payments shall also be prorated if gaming is
          conducted at the Facility for any partial months.

5.7. Payment of Net Revenues. The Net Revenues paid to the Band pursuant to this
Article 5 shall be payable to the Band bank account specified by the Pokagon
Council in a notice to Manager pursuant to Section 18.2.

5.8. Harrah's Termination Agreement. Manager shall pay out of its Management Fee
all obligations of the Band to make payments under Sections 1.4.1 and 1.4.3 (as
it pertains to interest on payments due under Section 1.4.1) of the Termination
Agreement dated September 12, 1998 between the Band and Harrah's Southwest
Michigan Casino Corporation (the "Harrah's Termination Agreement"), and shall
indemnify and hold the Band harmless against all loss, liability and expense
relating to its liability under those sections of the Harrah's Termination
Agreement. Such payments shall not constitute Operating Expenses of the Gaming
Facility and shall not be reimbursed by the Band or the Enterprise.

5.9. Band Indemnification - Indiana Casino. The Band shall, to the extent not
prohibited under the IGRA and NIGC regulations, indemnify Manager against any
decrease in Management Fee caused by an Indiana casino owned or operated by the
Band, provided that (a) the alleged reduction in fees shall be measured against
the Management Fees actually earned by Manager in the 12-month period preceding
the date on which the Manager notifies the Band of the claim for indemnification
under this section, without giving effect to any subsequent actual or projected
increase in such fees over that level; and (b) in any arbitration relating to
such a claim, Manager must prove its claim by clear and convincing evidence. The
Band and Manager recognize that the NIGC has not approved, and will not by its
approval of this Agreement approve, any increase in the management fee payable
to Manager under this Agreement as a result of the indemnification provided
under this section; and further agree that the sum of payments to Manager under
this section and management fees paid to Manager under Section 5.1 of this
Agreement shall in no event exceed 30% of actual Net Revenues unless an
amendment of this Agreement is first approved by the NIGC.

5.10. Maximum Dollar Amount for Recoupment. The maximum dollar amount for
recoupment of the development and construction costs of the Facility and the
Enterprise shall be the aggregate amount of (a) all Loans made under Section 9.2
of the Development Agreement, including the Lakes Development Loan, the Bank
Development Loan, the Lakes Facility Loan and the Equipment Loan, plus (b) all
amounts loaned under the


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<PAGE>

Minimum Payments Note, the Lakes Working Capital Advance Note, the Non-Gaming
Land Acquisition Line of Credit and the Transition Loan Note, provided that such
aggregate amount shall not exceed $379,500,000.

6.   ENTERPRISE NAME; MARKS

6.1. Enterprise Name. The Enterprise shall be operated under the name "Four
Winds Casino Resort," or such other business name as may be approved by the
Manager and the Band (the "Enterprise Name").

6.2. Marks. All Marks shall be approved by the Business Board and shall be
subject to the reasonable approval of the Pokagon Council. Prior to the
Commencement Date and from time to time during the Term hereof, Manager agrees
to take such actions on behalf of the Band as are reasonably necessary to
register and protect all Marks.

6.3. Signage. Manager shall erect and install in accordance with local codes and
regulations appropriate signs in, on or about the Facility, including, but not
limited to, signs bearing Marks as part of the Enterprise Name. The costs of
purchasing, leasing, transporting, constructing, maintaining and installing the
required signs and systems, and of registering and protecting all Marks, shall
be part of the Operating Expenses.

7.   TAXES

7.1. State and Local Taxes. If the State or any local government attempts to
impose any tax including any possessor interest tax upon any party to this
Agreement or upon the Enterprise, the Facility or the Gaming Site, the Pokagon
Band may direct the Enterprise, in the name of the appropriate party or parties
in interest, to resist such attempt through legal action. The costs of such
action and the compensation of legal counsel shall be an Operating Expense of
the Enterprise. Any such tax shall constitute an Operating Expense of the
Enterprise. This section shall in no manner be construed to imply that any party
to this Agreement or the Enterprise is liable for any such tax.

7.2. Band Taxes. The Band agrees that neither it nor any agent, agency,
affiliate or representative of the Band will impose any taxes, fees, assessments
or other charges of any nature whatsoever on payments of any debt service on any
Loan or on debt service on any other financing for the Facility or for the
Enterprise, or on the revenues of the Enterprise or the Facility, or on the
Management Fee as described in Section 5.1 of this Agreement; but the Band
reserves the right to otherwise impose usual and customary taxes and fees on
transactions at or in connection with the Facility or on the Facilities'
employees, officers, directors, vendors and patrons. Without limiting the
foregoing, the Band shall be specifically permitted to impose (a) charges,
assessments, fines or fees imposed by governmental entities of the Band which
are reasonably related to the cost of Tribal governmental regulation of public
health, safety or welfare, or the integrity of Tribal gaming operations, and (b)
other taxes, charges, assessments or fees imposed


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<PAGE>

against the Enterprise or property of the Enterprise, or sales, use, excise,
hotel occupancy and other similar taxes (excluding taxes, charges, assessments
or fees against real or personal property of the Facility or on gaming revenues
or earnings) of such types and percentage amounts not to exceed those imposed by
any state or local government within the Restricted Territory.

7.3. Compliance with Internal Revenue Code. Manager shall comply with all
applicable provisions of the Internal Revenue Code.

8.   BUY-OUT OPTION

     The Band shall have the right, beginning two years after the Commencement
Date, to buy out the remaining term of this Agreement (the "Buyout Option"),
provided that such buyout includes repayment in full of all outstanding debt
owed by the Band to Manager, including without limitation the Lakes Development
Loan, the Lakes Facility Loan (to the extent made by Manager), the Transition
Loan, the Non-Gaming Land Acquisition Line of Credit, and either repayment of
the Bank Development Loan, the Lakes Facility Loan and the Equipment Loan (to
the extent they are guaranteed by Manager or are subject to credit enhancements
furnished by Manager) or release of Manager's and Lakes' guarantees and other
credit enhancements, if any, relating to those Loans. The Buyout Option price
shall be determined by multiplying the average monthly Management Fee earned
during the 12 month period prior to exercise of the Buyout by the number of
months remaining in the term of this Agreement, and discounting future payments
at a discount rate equal to the Band Interest Rate. The Band shall not be
required in connection with its exercise of the Buyout Option to pay any
termination fee or to make any payment related to the value of gaming equipment,
amenities, or any other asset of the Facility or the Enterprise.

9.   EXCLUSIVITY; NON-COMPETITION

9.1. Exclusivity in Michigan. The Band shall deal exclusively with Manager for
gaming development on Indian lands in Michigan from the date of execution of
this Agreement through the earlier of five years from the Commencement Date or
termination or buyout of the Agreements.

9.2. Indiana Casino. Manager and Lakes recognize that the Band intends to
develop a casino in Indiana, and that the Band shall have no obligations to
Manager or Lakes in that regard; except that the Band agrees that, if it decides
to engage an outside manager to develop or operate an Indiana casino, it shall
discuss contracting with Manager for such development or operation for 45 days
before soliciting proposals from third parties as to management or development
of that casino. No obligation to enter into an agreement with Manager shall be
implied from this undertaking, and the Band shall retain full and absolute
discretion in that regard.


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<PAGE>

9.3. Non-Competition. Manager and Lakes each agree that for five years after
execution of the Agreements or the Term of the Agreements, whichever is greater,
neither it nor any of their respective present or future Insiders will without
the prior written approval of the Pokagon Council directly or indirectly in the
Restricted Territory develop, operate, consult with regard to, or be in any way
affiliated with any non-Indian gaming facility, any Class II or III Gaming
facility or any other kind of gaming, or any hotels or other amenities related
to such gaming or facility; except that Insiders shall not include (a) Kids
Quest, Grand Casinos, Inc., or Innovative Gaming Corp. by reason of (i) the
service of (A) Lyle Berman as director or employee (without management
responsibility) of such entities,, or (ii) any stock ownership of Manager or
Lakes in such entities; or (b) any entity because of the investment banking
services of Ron Kramer, a director of Lakes. References in this section shall
include such entity's successor, whether by merger, acquisition or otherwise.

9.4. Permitted Assignment; Change of Control.

     9.4.1. Manager may not assign its rights under this Agreement without the
          Band's prior written consent, except that Manager may assign its
          rights under such Agreement, but not its obligations, to a wholly
          owned subsidiary of Lakes.

     9.4.2. The Band may not assign its rights under this Agreement; except that
          the Band may, without the consent of Manager, but subject to approval
          by the Secretary of the Interior or the Chairman of the NIGC or his
          authorized representative, if required, assign this Agreement and the
          assets of the Enterprise to a Corporate Commission or other
          instrumentality of the Band organized to conduct the business of the
          Project and the Enterprise for the Band that assumes all obligations
          herein. No assignment authorized hereunder shall be effective until
          all necessary governmental approvals have been obtained. No such
          assignment shall relieve the Band of any obligation hereunder, unless
          otherwise agreed by Manager or the holder of such obligation.

     9.4.3. The Band shall be entitled to terminate the Agreements if Manager or
          Lakes undergoes a Change of Control or if Great Lakes ceases to be a
          wholly-owned subsidiary of Lakes, in each case without the prior
          written consent of the Band. The Band shall not be required to prepay
          any amounts advanced by Manager, Lakes or any third party in the event
          of such termination, and such obligations shall remain payable in
          accordance with their payment terms. Manager and Lakes agree to notify
          the Band in writing within 30 days after the occurrence of any event
          described in Clauses I or II in the definition of Change of Control,
          and within 30 days of Manager's knowledge of any event described in


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<PAGE>

          Clauses III or IV of that definition. "Change of Control," for
          purposes of this provision, means (I) the merger, consolidation or
          other business combination of Manager or Lakes with, or acquisition of
          all or substantially all of the assets of Manager or Lakes by, any
          other entity, except that (A) Manager may merge with any other entity
          wholly owned by Lakes if the surviving entity assumes the obligations
          of Manager under the Agreements, and (B) Lakes Gaming and Resorts, LLC
          may merge with any other entity wholly owned by Lakes if the surviving
          entity assumes the obligations of Lakes Gaming and Resorts, LLC under
          the Guaranty, provided that in each case Lakes shall remain liable
          under the Guaranty; (II) Lyle Berman's ceasing to be either Chief
          Executive Officer or Chairman of the Board of Lakes (other than on
          account of death or disability, and except as provided at the end of
          this definition); (III) the acquisition by any person or affiliated
          group of persons not presently a shareholder of Manager of beneficial
          ownership of 30% or more in interest of the outstanding voting stock
          of Lakes, as determined under 17 CFR Sections 240.13d-3 or 240.16a-l;
          or (IV) the acquisition by any person or affiliated group of persons
          not presently a shareholder of Lakes of beneficial ownership of 10% or
          more in interest of the outstanding voting stock of Lakes, as
          determined under 17 CFR Sections 240.13d-3 or 240.16a-l, if a majority
          of the Board of Directors of Lakes is replaced within two years after
          such acquisition by directors not nominated and approved by the Board
          of Directors.

9.5. Restrictions on Collateral Development. Manager and Lakes each agree that
for five years after execution of the Agreements or the Term of the Agreements,
whichever is greater, neither it nor any of its present or future Insiders will
directly or indirectly purchase any land or operate, manage, develop or have any
direct or indirect interest in any commercial facilities or business venture
located within 20 miles of the Facility without the prior written consent of the
Band.

10.  REPRESENTATIONS, WARRANTIES, AND COVENANTS

10.1. Representations and Warranties of the Band. The Band represents and
warrants to Manager as follows:

     10.1.1. Due Authorization. The Band's execution, delivery and performance
          of this Agreement and all other instruments and agreements executed in
          connection with this Agreement have been properly authorized by the
          Band and do not require further Band approval.

     10.1.2. Valid and Binding. This Agreement and all other instruments and
          agreements executed in connection with this Agreement have been


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<PAGE>

          properly executed, and once approved in accordance with Legal
          Requirements constitutes the Band's legal, valid and binding
          obligations, enforceable against the Band in accordance with their
          terms.

     10.1.3. Pending Litigation. There are no actions, suits or proceedings,
          pending or threatened, against or affecting the Band before any court
          or governmental agency that relate to the Project, the Enterprise or
          any transaction contemplated by the Transaction Documents, except as
          disclosed on Exhibit B.

10.2. Band Covenants. The Band covenants and agrees as follows:

     10.2.1. No Impairment of Contract. During the term of this Agreement and
          the Development Agreement, the Band shall enact no law impairing the
          obligations or contracts entered into in furtherance of the
          development, construction, operation and promotion of Gaming on the
          Gaming Site. Neither the Pokagon Council nor any committee, agency,
          board of any other official body, and no officer or official of the
          Band shall, by exercise of the police power or otherwise, act to
          modify, amend, or in any manner impair the obligations of contracts
          entered into by the Pokagon Council or the GRA or other parties in
          furtherance of the financing, development, construction, operation, or
          promotion of Gaming at the Gaming Site without the written consent of
          the non-tribal parties to such contracts.

     10.2.2. Waiver of Sovereign Immunity. The Band will waive sovereign
          immunity on the limited basis described in Section 13.1 with respect
          to this Agreement.

     10.2.3. Valid and Binding. This Agreement, the Development Agreement, the
          Lakes Development Note, the Lakes Facility Note, the Lakes Working
          Capital Advance Note, the Minimum Payments Note, the Transition Note
          and the Non-Gaming Land Acquisition Line of Credit, and each other
          contract contemplated by this Agreement shall, once approved in
          accordance with Legal Requirements, be enforceable in accordance with
          their terms.

     10.2.4. Legal Compliance. In its performance of this Agreement, the Band
          shall comply with all Legal Requirements.

     10.2.5. No Termination. The Band shall not act in any way whatsoever,
          directly or indirectly, to cause this Agreement to be amended,
          modified,


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<PAGE>

          canceled, or terminated, except pursuant to its express terms or with
          the consent of Manager.

     10.2.6. Title to Assets. During the Term of this Agreement the Band shall
          retain its interest in the title to (or the leasehold interest in) all
          Enterprise assets, including the Gross Revenues, the Gaming Site and
          any fixtures, supplies and equipment, subject to the purchase money
          security interest in equipment securing the Equipment Loan, Lakes'
          security interest in the Dominion Account and (to the extent
          applicable) in the Furnishings and Equipment (until all obligations of
          the Band to Lakes secured by that account and such Furnishings and
          Equipment are paid in full, to the extent provided in Section 9.2.
          l(j) of the Development Agreement), and any other liens granted in
          accordance with the Development Agreement.

     10.2.7. Notwithstanding the foregoing, a breach of this subsection 10.2
          shall not be a basis to overturn, negate or in any manner modify any
          Governmental Action through arbitration or other proceedings, and any
          remedy for such breach shall be subject to the Specific Performance
          Restriction. The preceding sentence does not prevent an arbitrator
          from determining that the taking of any Governmental Action or the
          failure to take any Governmental Action, which is not caused by a
          breach of Great Lakes or Lakes' obligations under the Agreements or
          the Guaranty, constitutes a breach of this Agreement by the Band,
          thereby resulting in liability on the part of the Band for damages in
          favor of the Manager as provided in this Agreement.

10.3. Representations and Warranties of Manager and Lakes. Manager and Lakes
each represent and warrant to the Band as follows:

     10.3.1. Due Authorization. Manager's and Lakes' execution, delivery and
          performance of this Agreement, the Guaranty and all other instruments
          and agreements executed in connection with this Agreement have been
          properly authorized by and Lakes, respectively, to the extent they are
          parties thereto, and do not require further approval.

     10.3.2. Valid and Binding. This Agreement and all other instruments and
          agreements executed in connection with this Agreement have been
          properly executed and constitutes Manager's and Lakes' respective
          legal, valid and binding obligation, enforceable against Manager and
          Lakes in accordance with their terms to the extent they are parties
          thereto.

     10.3.3. Litigation. There are no actions, suits or proceedings pending or
          threatened against or affecting Manager or Lakes before any court or


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<PAGE>

          governmental agency that would in any material way affect Manager's or
          Lakes' ability to perform this Agreement and the Guaranty, to the
          extent they are parties thereto, other than litigation disclosed in
          filings by Lakes with the Securities and Exchange Commission. Manager
          and Lakes each warrant that no litigation so disclosed in any material
          way affects or will affect Managers' and Lakes' ability to perform
          under the Agreements or the Guaranty.

     10.3.4. Certifications. The certifications contained in the Respondent
          Certifications attached as Exhibit H to Manager's Proposal (the
          "Certificate") are true and correct as to Manager, Lakes and as to all
          Insiders of Manager and Lakes, as if each such Insider were the
          "undersigned respondent" on such Certificate.

10.4. Manager Covenants. Manager and Lakes each covenant and agree as follows:

     10.4.1. Noninterference in Band Affairs. Manager and Lakes each agrees not
          to interfere in or attempt to wrongfully influence the internal
          affairs or government decisions of the Band government by offering
          cash incentives, by making written or oral threats to the personal or
          financial status of any person, or by any other action, except for
          actions in the normal course of business of Manager that relate to the
          Enterprise.

     10.4.2. Prohibition of Payments to Members of Band Government. Manager and
          Lakes represent and warrant that no payments have been or will be made
          by Manager or Lakes, or any Affiliate or Insider of Manager or Lakes,
          to any Member of the Band Government, any Band official, any Relative
          of a Member of Band Government or Band official, any Band Government
          employee, any agent of the Band, or any entity known by Manager or
          Lakes to be associated with any such person, for the purpose of
          obtaining any special privilege, gain, advantage or consideration.

     10.4.3. Prohibition of Hiring Members of Band Government. No Member of the
          Band Government, Band official, Relative of a Member of the Band
          Government or Band official or employee of the Band Government may be
          employed at the Enterprise without a written waiver of this Section
          10.4.3 by the Band. For this purpose, the Band will identify all such
          persons to Manager in a writing and take reasonable steps to keep the
          list current; Manager shall not be held responsible if any person not
          on such written list is employed.

     10.4.4. Prohibition of Financial Interest in Enterprise. No Member of the
          Band Government or Relative of a Member of the Band Government shall


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<PAGE>

          have a direct or indirect financial interest in the Enterprise greater
          than the interest of any other member of the Band; provided, however,
          nothing in this subsection shall restrict the ability of a Band member
          who is not a Member of Band Government or Relative of a Member of the
          Band Government to purchase or hold stock in Lakes where (i) such
          stock is publicly held and (ii) the Band member acquires less than 5%
          of the outstanding stock in the corporation.

     10.4.5. No Amendment. Neither Manager nor Lakes shall act in any way
          whatsoever, directly or indirectly, to cause this Agreement to be
          amended, modified, canceled, or terminated, except pursuant to its
          express terms or with the consent of the Band.

     10.4.6. CRC. CRC shall not during the Term of the Management Agreement (a)
          be directly or indirectly affiliated with Manager, Lakes or the
          Facility, whether as joint venturer or otherwise, (b) be employed by
          Manager or Lakes or, to the knowledge of Manager and Lakes, any entity
          having any contractual relationship with Manager or Lakes, with regard
          to the Facility, or (c) directly or indirectly receive any payment or
          anything of value from Manager from or out of the Management Fee or
          any other payment made to Manager by the Band or the Facility. Manager
          agrees to indemnify the Band and its members and hold them harmless
          against all loss, liability and expense relating to claims, of
          whatever kind or nature, of CRC against any one or more of them. The
          Band consents to the execution and delivery by Lakes of a certain
          Conditional Release and Termination Agreement between Lakes and CRC
          dated May 20, 1999, as amended by Amendment dated on or about July 7,
          1999, true copies of which are attached as Exhibit M of the
          Development Agreement, provided that CRC executes and delivers to the
          Band and its members a general release in the form attached as Exhibit
          N of the Development Agreement. Manager and Lakes each warrant that it
          has no agreements or understandings with CRC in any way related to the
          Band or the Enterprise other than as set forth in Exhibit M of the
          Development Agreement. The Band further agrees that Lakes may hold
          stock of CRC as collateral for Lakes' guarantee of a loan to a third
          party, provided that on default it proceeds to liquidate such
          collateral in a reasonably prompt and orderly manner, and that Lyle
          Berman may continue to hold approximately 350,000 shares of CRC so
          long as he plays no role in the management of, and does not sit on,
          the board of directors of CRC.

10.5. No Liens. Subject to the exceptions stated in Section 10.6, the Band
specifically warrants and represents to Manager that during the term of this
Agreement the Band shall


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<PAGE>

not act in any way whatsoever, either directly or indirectly, to cause any
person or entity to become an encumbrancer or lienholder of the Gaming Site or
the Facility except as provided under the Agreements. Except as otherwise
specifically provided in the Agreements, Manager specifically warrants and
represents to the Band that during the term of this Agreement Manager shall not
act in any way, directly or indirectly, to cause any person or entity to become
an encumbrancer or lienholder of the Gaming Site or the Facility, or to obtain
any interest in this Agreement without the prior written consent of the Band,
and, where applicable, the United States. The Band and Manager shall keep the
Facility and Gaming Site free and clear of all enforceable mechanics' and other
enforceable liens resulting from the construction of the Facility and all other
enforceable liens which may attach to the Facility or the Gaming Site, which
shall at all times remain the property of the United States in trust for the
Band.

10.6. Permitted Liens. The Band shall have the right to grant the following
liens and security interests pertaining to the Enterprise and the Facility:

     10.6.1. The purchase money security interest in Furnishings and Equipment
          granted to the Equipment Lender to secure the Equipment Loan and, to
          the extent provided in Section 9.2.1(j) of the Development Agreement,
          security interests in Furnishings and Equipment granted to Great
          Lakes;

     10.6.2. Security interests in Facility or Enterprise revenues, subordinate
          to the right of Manager to receive payment of Management Fees and
          payments on the Lakes Development Loan, the Lakes Facility Loan, the
          Lakes Working Capital Advance Note, the Minimum Payments Note, and any
          other amounts due to the Manager under the Agreements and related
          documents;

     10.6.3. Security interests in Facility or Enterprise assets, as provided in
          Section 9.2.5(b) of the Development Agreement; and

     10.6.4. Other liens and security interests in assets of the Facility and
          Enterprise with the written consent of Manager and the Bank Lender,
          which consent will not be unreasonably withheld.

     10.6.5. [intentionally omitted]

10.7. Brokerage. Manager, Lakes and the Band represent and warrant to each other
that neither has sought the services of a broker, finder or agent in this
transaction, and neither has employed, nor authorized, any other person to act
in such capacity. Manager, Lakes and the Band each hereby agrees to indemnify
and hold the other harmless from and against any and all claims, loss,
liability, damage or expenses (including reasonable attorneys' fees) suffered or
incurred by the other party as a result of a claim brought by a person or entity
engaged or claiming to be engaged as a finder, broker or agent by the


                                       50

<PAGE>

indemnifying party; subject, as to Lakes' relations with CRC, to the provisions
of Section 10.4.6.

11. DEFAULT

11.1. Events of Default by the Band. Each of the following shall be an event of
default by the Band under this Agreement ("Band Event of Default"):

     11.1.1. The Band shall commit a Material Breach of any of the Band's
          obligations under this Agreement or any other Transaction Documents,
          subject to the rights to cure provided in this Agreement or in any of
          such documents.

     11.1.2. Any of the representations and warranties made by the Band in
          Section 10.1 of this Agreement or in any other Transaction Documents
          were not true in any material respect when made or would not be
          materially true if made on the date such performance would otherwise
          be due.

     11.1.3. The Band violates the provisions of Section 9.1 of this Agreement,
          subject to notice and right to cure.

     11.1.4. The Band commits any Material Breach of the Development Agreement
          which is not cured within any applicable cure period.

If any Band Event of Default occurs, Manager may, upon written notice to Band,
exercise the rights and remedies available to Manager provided in this
Agreement; provided, however, that all such rights and remedies shall be Limited
Recourse.

11.2. Events of Default by Manager. Each of the following shall be an event of
default by Manager under this Agreement ("Manager Event of Default"):

     11.2.1. Any Minimum Guaranteed Monthly Payment, Monthly Distribution
          Payment or other payment due the Band under this Agreement is not paid
          within ten (10) days after its due date.

     11.2.2. Manager or Lakes shall commit any other Material Breach of any of
          Manager's or Lakes' obligations under this Agreement, the Guaranty, or
          any other Transaction Documents, as applicable.

     11.2.3. Any representation or warranty that Manager or Lakes has made under
          this Agreement or any other Transaction Document shall prove to have
          been untrue in any material respect when made or would not be
          materially true if made on the date such performance would otherwise
          be due.


                                       51

<PAGE>

     11.2.4. Manager or Lakes violates the provisions of Article 9 of this
          Agreement applicable to Manager or Lakes, subject to rights of notice
          and cure to the extent provided in that Article.

     11.2.5. Manager or Lakes (to the extent applicable) commits or causes any
          Material Breach of the Development Agreement which is not cured within
          any applicable cure period.

     11.2.6. [intentionally omitted]

     11.2.7. Manager violates Legal Requirements in the management of the
          Enterprise, including without limitation the Band Gaming Ordinance,
          and such violation is not cured within (a) thirty (30) days after
          notice, as to the Band Gaming Ordinance or any other gaming laws or
          regulations, or (b) within a reasonable period, not to exceed 90 days,
          as to any other Legal Requirements.

If any Manager Event of Default occurs, the Band may, upon written notice to
Manager, exercise the rights and remedies available to the Band provided in this
Agreement.

11.3. Material Breach; Right to Cure.

     11.3.1. Neither Great Lakes nor the Band may terminate this Agreement,
          recover damages or foreclose on security interests on grounds of a
          potential Material Breach of this Agreement or any other Transaction
          Document unless it has provided written notice to the other party of
          its intention to terminate this Agreement, seek damages or foreclose.
          During the 30 day period after the receipt of the notice to terminate
          (as to defaults which can be cured within 30 days) or the 90 day
          period after such receipt (as to defaults which cannot be cured within
          30 days), whichever is applicable, the party receiving the notice may
          cure the alleged default and (without waiting for the expiration of
          such periods) any party may submit the matter to arbitration under the
          dispute resolution provisions of this Agreement set forth at Article
          13. The discontinuance or correction of a Material Breach shall
          constitute a cure thereof. Nothing in this subsection shall affect or
          impair the obligation of any party to promptly comply with all Legal
          Requirements, or limit any sanctions that may be imposed for any
          violation thereof; nor shall this subsection prevent a party taking
          such actions within such 30 or 90 day periods as may be permitted or
          required by this Agreement, the Gaming Ordinance or NIGC regulations.
          The provisions of this subsection and the parallel provisions of
          Section 12.3 of the Development


                                       52

<PAGE>

          Agreement shall control over any conflicting provisions in any other
          Transaction Document.

     11.3.2. Nothing in this subsection 11.3 shall apply to termination under
          Sections 12.1, 12.2, 12.6, 12.7 or 12.8 of this Agreement.

12. TERMINATION

12.1. Voluntary Termination. This Agreement may be terminated by mutual written
consent.

12.2. Termination if No NIGC Approval. The Band and Manager may each
unilaterally terminate the Agreements by written notice if NIGC Approval has not
occurred on or before August 26, 2007.

12.3. Manager Right to Terminate on Band Event of Default. Manager shall be
entitled to terminate the Agreements (a) upon a Band Event of Default or (b) as
specifically provided in the Agreements, subject to right to cure and
arbitration as provided in this Agreement.

12.4. Band Right to Terminate on Manager Event of Default. The Band shall be
entitled to terminate the Agreements (a) upon a Manager Event of Default or (b)
as specifically provided in the Agreements, subject to right to cure and
arbitration as provided in this Agreement.

12.5. Band Right to Terminate for Material Adverse Change. Prior to the
Commencement Date, the Band shall be entitled to terminate the Agreements in the
event of a Material Adverse Change; provided that the following procedures shall
apply:

     12.5.1. Manager shall notify the Band in the event of any Material Adverse
          Change.

     12.5.2. Manager shall cause Lakes to send to the Band copies of all filings
          by Lakes with the Securities and Exchange Commission under Forms 8K,
          10Q and 10K; shall furnish the Band with copies of such other SEC
          filings that the Band may request; and shall furnish the Band with
          such other information concerning a Material Adverse Change as the
          Band may reasonably request.

     12.5.3. If the Band believes that a Material Adverse Change has occurred,
          the Band shall so notify Manager and Lakes in writing and shall
          request specified further assurances of their respective continued
          ability to perform under the Agreements, the Guaranty, and all related
          agreements and instruments.


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<PAGE>

     12.5.4. Within thirty (30) days after that notification Manager shall admit
          or deny, and shall cause Lakes if applicable to admit or deny, the
          alleged Material Adverse Change, giving the specific basis for its
          response; shall state, and shall cause Lakes to state, whether it
          agrees to provide the requested further assurances; if it agrees to
          provide the requested further assurances, shall tender its performance
          in that regard; and, if it admits a Material Adverse Change but
          disputes the requested further assurances, shall tender such further
          assurances by it and Lakes as it deems sufficient to ensure its
          continued ability to perform under the Agreements, the Guaranty, and
          all related agreements and instruments.

     12.5.5. If Manager or Lakes denies the Material Adverse Change or disputes
          that the requested further assurances are reasonably required to
          assure the Band of their respective continued ability to perform under
          the Agreements, the Guaranty, and all related agreements and
          instruments, those issues shall be submitted to arbitration. The
          arbitrator shall determine whether (a) a Material Adverse Change has
          occurred; (b) the requested further assurances are reasonably required
          to assure the Band of their respective continued ability to perform
          under the Agreements, the Guaranty, and all related agreements and
          instruments; and (c) if a Material Adverse Change has occurred but the
          requested further assurances are not reasonably required to so assure
          the Band, what further assurances must be provided by Manager and
          Lakes to reasonably assure the Band of their continued ability to
          perform under the Agreements, the Guaranty, and all related agreements
          and instruments. Any further assurances required under the
          arbitrator's award must be furnished by Manager and Lakes within
          thirty (30) days after entry of the award.

     12.5.6. If Manager or Lakes admit the Material Adverse Change but does not
          furnish further assurances, or if Manager or Lakes does not timely
          provide further assurances pursuant to an arbitrator's award, the Band
          may terminate the Agreements by written notice to Manager.

     12.5.7. Manager, Lakes and the Band agree that the continuing ability of
          Manager and Lakes to make the payments and advances provided under
          this Agreement, the Guaranty, and all related agreements and
          instruments, and to ensure the Band can obtain the Loans to develop,
          construct, equip and operate the Facility provided in this Agreement,
          is an essential part of the consideration for which the Band bargained
          in entering into the Agreements.


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<PAGE>

12.6. Termination if Manager License Withdrawn or on Conviction. The Band may
also terminate this Agreement immediately where Manager or Lakes has had its
gaming license withdrawn in any jurisdiction by final administrative action (the
finality of which shall be determined without regard to pending or possible
judicial review or appeal), or if Manager, Lakes or an Insider of Manager or
Lakes, has been convicted of a criminal (a) felony or (b) misdemeanor offense
involving gaming, fraud or moral turpitude; provided, however, the Band may not
terminate this Agreement based on a director or officer's conviction where
Manager or Lakes terminates such individual within ten (10) days after receiving
notice of the conviction.

12.7. Termination on Buy-Out. This Agreement shall terminate if the Band
exercises its option to buy out the Agreement in accordance with Section 8.

12.8. Involuntary Termination Due to Changes in Legal Requirements. It is the
understanding and intention of the parties that the development, construction
and operation of the Enterprise shall conform to and comply with all Legal
Requirements. If during the term of this Agreement, the Enterprise or any
material aspect of Gaming at the Gaming Site is determined by the Congress of
the United States, Department of the Interior of the United States of America,
the NIGC, or the judgment of a court of competent jurisdiction (after expiration
of the time within which appeals must be filed or completion of appeals, if any)
to be unlawful under federal law, the obligations of the parties hereto shall
cease and the Agreements shall be of no further force and effect as of the date
of such determination; subject, however, to the following provisions as to
damages:

     12.8.1. If the date of such determination is prior to the Commencement
          Date, Manager shall be entitled to damages as provided in Section 14.4
          of the Development Agreement with regard to failure to obtain NIGC
          Approval.

     12.8.2. If the date of such determination is after the Commencement Date:

          (a)  The Band shall retain all fees and Monthly Payments previously
               paid or advanced to it pursuant to the Agreements, as well as all
               Tribal Distributions and Non-Gaming Lands, the Gaming Site and
               any other property transferred into trust;

          (b)  Any money loaned to the Band by Lakes or Great Lakes, or owed to
               Lakes or Great Lakes under the Transaction Documents as of the
               date of such determination shall be repaid to Great Lakes or
               Lakes in accordance with the Limited Recourse terms of the Lakes
               Development Note, the Lakes Facility Note, the Lakes Working
               Capital Advance Note, the Minimum Payments Note, the Transition


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<PAGE>

               Loan Note, the Non-Gaming Acquisition Line of Credit, this
               Agreement and any other applicable Transaction Documents; and

          (c)  The Band shall retain its interest in the title (and any lease)
               to all Enterprise assets, including the Gross Revenues, the
               Gaming Site and any fixtures, supplies and equipment (except, as
               to Surplus Equipment, as provided in Section 13.7(b)(iv) of the
               Development Agreement), subject to the purchase money security
               interest in Furnishings and Equipment securing the Equipment
               Loan, Manager's security interest in the Dominion Account and
               Furnishings and Equipment, if any (until all obligations of the
               Band to Manager secured by that account and Furnishings and
               Equipment are paid in full, to the extent provided in Section
               9.2.1(j) of the Development Agreement), and any other liens
               granted in accordance with the Development Agreement; and

          (d)  Any Net Revenues accruing through the date of termination shall
               be distributed in accordance with Article 5 of this Agreement.


     Upon termination of this Agreement any claim of Manager or Lakes against
the Band, or of the Band against the Manager or Lakes, shall be subject to their
respective rights of recoupment and setoff, if any.

13.  DISPUTE RESOLUTION; LIQUIDATED DAMAGES

13.1. Band's Waiver of Sovereign Immunity and Consent to Suit. The Band
expressly waives its sovereign immunity from suit for the purpose of permitting
or compelling arbitration as provided in this Article 13 and consents to be sued
in the United States District Court for the Western District of Michigan -
Southern Division, the United States Court of Appeals for the Sixth Circuit, and
the United States Supreme Court for the purpose of compelling arbitration or
enforcing any arbitration award or judgment arising out of this Agreement, the
Transition Loan Note, the Lakes Development Note, the Lakes Facility Note, the
Lakes Working Capital Advance Note, the Minimum Payments Note, the Non-Gaming
Land Acquisition Line of Credit, the Development Agreement, any mortgages
granted to Manager securing the Lakes Development Note or, the Non-Gaming Land
Acquisition Line of Credit, the Dominion Agreement, the Lakes Security
Agreement, or other obligations between the parties. If the United States
District Court lacks jurisdiction, the Band consents to be sued in the Michigan
State Court system. The Band waives any requirement of exhaustion of tribal
remedies. Without in any way limiting the generality of the foregoing, the Band
expressly authorizes any governmental authorities who have the right and duty
under applicable law to take any action


                                       56

<PAGE>

authorized or ordered by any such court, and to take such action, including
without limitation, repossessing or foreclosing on any real property not in
trust and or on equipment subject to a security interest, or on the Dominion
Account, or otherwise giving effect to any judgment entered; provided, however,
that liability of the Band under any judgment shall always be Limited Recourse,
and in no instance shall any enforcement of any kind whatsoever be allowed by
Lakes or Manager against any assets of the Band other than the limited assets of
the Band specified in Section 13.3.1 below. The Band appoints the Chairman of
the Pokagon Council and the Secretary of the Pokagon Council as its agents for
service of all process under or relating to the Agreements. The Band agrees that
service in hand or by certified mail, return receipt requested, shall be
effective for all purposes under or relating to the Agreements if served on such
agents.

13.2. Arbitration. All disputes, controversies or claims arising out of or
relating to this Agreement, any other Transaction Documents or other obligations
between Lakes or Manager and the Band shall be settled by binding arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association in effect on the date demand for arbitration is made, and the
Federal Arbitration Act. The parties agree that binding arbitration shall be the
sole remedy as to all disputes arising out of this Agreement, except for
disputes requiring injunctive or declaratory relief. Notwithstanding the
foregoing, an arbitrator shall not have the power to compel, overturn, negate or
in any manner modify any Governmental Action, and any arbitration award or
related judicial decree or judgment shall be subject to the Specific Performance
Restriction. The preceding sentence does not prevent an arbitrator from
determining that the taking of any Governmental Action or the failure to take
any Governmental Action, which is not caused by a breach of Manager or Lakes'
obligations under the Agreements or the Guaranty, constitutes a breach of this
Agreement by the Band or the impairment of rights of Manager under this
Agreement, thereby resulting in liability on the part of the Band for damages in
favor of the Manager as provided in this Agreement and enforcement of the
obligations of the Band to Manager, including any security agreements and
collateral instruments, in accordance with their terms.

     13.2.1. Choice of Law. In determining any matter the Arbitrator(s) shall
          apply the terms of this Agreement, without adding to, modifying or
          changing the terms in any respect, and in their interpretation and
          construction shall, to the extent not preempted by federal law, apply
          Michigan law. Use of Michigan law for the foregoing limited purpose of
          interpretation and construction is not intended by the parties to and
          shall not otherwise (i) incorporate substantive Michigan laws or
          regulations, including but not limited to Michigan usury laws or any
          other present or future provision of the laws of Michigan that would
          restrict the rate of interest upon any loan contemplated hereunder; or
          (ii) grant any jurisdiction to the State or any political subdivision
          thereof over the Gaming Site or the Facility.


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<PAGE>

     13.2.2. Place of Hearing. All arbitration hearings shall be held at a place
          designated by the arbitrator(s) in Kalamazoo, Michigan or at such
          other place agreed to by the parties.

     13.2.3. Confidentiality. The parties and the arbitrator(s) shall maintain
          strict confidentiality with respect to the arbitration.

13.3. Limitation of Actions. The Band's waiver of immunity from suit is
specifically limited to the following actions and judicial remedies:

     13.3.1. Damages. The enforcement of an award of money and/or damages by
          arbitration; provided that the award of any arbitrator and/or court
          must be Limited Recourse, and no arbitrator or court shall have
          authority or jurisdiction to order execution against any assets or
          revenues of the Band except (a) undistributed or future Net Revenues
          of the Enterprise or Subsequent Gaming Facility Revenues; (b) as to
          the Equipment Loan, the Furnishings and Equipment securing that Loan;
          (c) if the Commencement Date does not occur, Subsequent Gaming
          Facility Revenues to the extent provided in this Agreement; (d) as to
          the Lakes Development Note and the Non-Gaming Acquisition Line of
          Credit, mortgages on the Non-Gaming Lands prior to their transfer into
          trust; (e) after the Commencement Date occurs, funds on deposit in the
          Dominion Account to the extent provided in Section 9.2.l(j) of the
          Development Agreement and the Dominion Agreement, or in any other
          dominion agreement executed by the Band; and (f) as to the Lakes
          Development Note, the Lakes Facility Note, the Lakes Working Capital
          Advance Note, the Non-Gaming Land Acquisition Line of Credit and the
          Transition Loan, Furnishings and Fixtures to the extent provided in
          Section 9.2.l(j) of the Development Agreement. 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
          this subsection.

     13.3.2. Consents and Approvals. The enforcement of a determination by an
          arbitrator that the Band's consent or approval has been unreasonably
          withheld contrary to the terms of this Agreement or any other
          Transaction Document, provided that such enforcement shall be subject
          to the Specific Performance Restriction.

     13.3.3. Injunctive Relief and Specific Performance. The enforcement of a
          determination by an arbitrator that prohibits the Band from taking any
          action that would prevent Manager from performing its obligations
          pursuant to the terms of this Agreement or any other Transaction


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<PAGE>

          Document, or that requires the Band to specifically perform any
          obligation under this Agreement; provided, however, that any
          injunction against the Band shall be Limited Recourse; shall be
          subject to the Specific Performance Restriction; shall not mandate,
          preclude or affect payment of any funds of the Band other than
          undistributed or future Net Revenues of the Enterprise or funds in the
          Dominion Account or Subsequent Gaming Facility Revenues; and shall not
          relate to any asset of the Band other than the Enterprise.

     13.3.4. Action to Compel Arbitration. An action to compel arbitration
          pursuant to this Article 13.

13.4. Damages on Termination for Failure to Obtain NIGC Approval. In the event
of termination of this Agreement under Section 12.2 because NIGC Approval has
not been obtained on or before August 26, 2007, the Band shall be responsible
for damages as provided in Section 14.4 of the Development Agreement but shall
not be liable for additional damages under this Agreement.

13.5. Liquidated Damages and Limitations on Remedies. The following liquidated
damages and limitations on remedies apply under this Agreement, in addition to
those provided elsewhere in this Agreement as to claims and remedies against the
Band:

     13.5.1. Liquidated Damages Payable by Manager. In the event of a Manager
          Event of Default prior to the Commencement Date, after such notice and
          right to cure as may be provided in this Agreement, Manager shall pay
          liquidated damages as provided in Section 14.5(a) of the Development
          Agreement and shall not be liable for additional damages under this
          Agreement.

     13.5.2. Liquidated Damages Payable by the Band. In the event of a Band
          Event of Default prior to the Commencement Date, after such notice and
          right to cure as may be provided in this Agreement and except as
          provided in Section 13.14 as to Governmental Actions, the Band shall
          pay liquidated damages as provided in Section 14.5(b) of the
          Development Agreement and shall not be liable for additional damages
          under this Agreement.

13.6. Manager Continuing Obligations. Nothing in this Article shall affect or
impair Manager's and Lakes' continuing obligations under Sections 9.3
(non-competition) and 18.15 (confidentiality) of this Agreement, all of which
shall remain enforceable for the following terms, notwithstanding the
termination of the Agreements and payment of liquidated or other damages: (a) as
to Section 9.3, the greater of five years after execution of the Agreements or
one year after termination; and (b) as to Section 18.15, the greater of five
years after execution of the Agreements or two years after termination.


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<PAGE>

13.7. Termination of Exclusivity. Section 9.1 (Exclusivity in Michigan) of this
Agreement shall terminate upon any termination of the Agreements,
notwithstanding any breach of the Agreements by the Band.

13.8. Remedies. In consideration of the agreement to liquidated damages to the
extent provided above, the Band, Lakes and Manager each waive the right to
actual, consequential, exemplary or punitive damages to the extent that
liquidated damages are applicable to a default, but shall retain the right to
injunctive relief (a) prior to termination of the Agreements, to enforce rights
and remedies thereunder, subject to the Limited Recourse provisions of this
Agreement as to the Band and the Band's limited waiver of sovereign immunity;
and (b) after termination, to the extent that provisions of this Agreement
specifically survive such termination, subject to such Limited Recourse
provisions and limited waiver. The injured party shall, where liquidated damages
are not applicable and damages or remedies are not otherwise specified, be
entitled to such damages as it may be entitled to under applicable law, subject
to such Limited Recourse provisions and limited waiver of the Band's sovereign
immunity (which shall apply to all claims against the Band under or relating to
the Agreements, in addition to all Loans).

13.9. Band Injunctive Relief. Manager, Lakes and Band acknowledge and agree that
termination of this Agreement and payment of damages may not be a sufficient or
appropriate remedy for breach by the Manager or Lakes, and further agree that
the Band shall, upon breach of this Agreement by the Manager or Lakes, have the
right to pursue such remedies (in addition to termination) at law or equity as
it determines are best able to compensate it for such breach, including
specifically actions to require payment of the Minimum Guaranteed Monthly
payment and the Monthly Distribution Payment, and on the Guaranty. The Manager
and Lakes each specifically acknowledge and agree that there will be irreparable
harm to the Band and that damages will be difficult to determine if a Manager
Event of Default occurs, and the Manager therefore further acknowledges that an
injunction and/or other equitable relief will be an appropriate remedy for any
such breach.

13.10. No Setoff Against Payments to Band. The Band's right to payment of the
Minimum Guaranteed Monthly Payments until termination shall be absolute and not
subject to setoff or recoupment by Manager or Lakes. The Band's right to payment
of the Monthly Distribution Payments until termination shall be absolute and not
subject to setoff or recoupment by Manager or Lakes, except as specifically
provided in this Agreement, the Development Agreement, or the Dominion
Agreement.

13.11. Indemnification on Termination. In the event of termination, (a) Manager
shall indemnify and hold the Band harmless against all loss, liability, damage
and expense from or arising out of any acts or omissions of Manager prior to
termination in violation of, or beyond the scope of its authority under, this
Agreement; and (b) the Band shall indemnify and hold Manager harmless against
all loss, liability, damage and expense


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<PAGE>

from or arising out of any acts of Manager prior to termination pursuant to and
in accordance with the terms of this Agreement. This covenant shall survive any
termination.

13.12. Fees not Damages. In no event shall fees or other non-refundable payments
made by Manager or Lakes to Band, or Tribal Distributions, constitute damages to
Manager or Lakes or be repayable by the Band.

13.13. Undistributed Net Revenues. If on termination the Enterprise has accrued
Net Revenues which have not been distributed under Section 5 of this Agreement,
Manager shall receive that Management Fee equal to the Management Fee it would
have received for the period prior to termination had the distribution occurred
during the term of the Management Agreement, subject to the Band's right of
setoff and recoupment.

13.14. Damages for Governmental Action. If the Band takes a Governmental Action
or fails to take a Governmental Action, and such action or inaction is not
caused by a breach of Manager or Lakes' obligations under the Agreements or the
Guaranty and constitutes a breach of this Agreement by the Band or the
impairment of rights of Manager under this Agreement, the Band shall be liable
for any resulting actual and consequential damages incurred by Manager (subject
to the Limited Recourse provisions of this Agreement and the limited waiver of
the Band's sovereign immunity).

14.  CONSENTS AND APPROVALS

14.1. Band. Where approval or consent or other action of the Band is required,
such approval shall mean the written approval of the Pokagon Council evidenced
by a resolution thereof, certified by a Band official as having been duly
adopted, or such other person or entity designated by resolution of the Pokagon
Council. Any such approval, consent or action shall not be unreasonably withheld
or delayed; provided that the foregoing does not apply where a specific
provision of this Agreement allows the Band an absolute or unilateral right to
deny approval or consent or withhold action.

14.2. Manager. Where approval or consent or other action of Manager is required,
such approval shall mean the written approval of the Managing Officer. Any such
approval, consent or other action shall not be unreasonably withheld or delayed.

14.3. Business Board. Where approval or consent or other action of the Business
Board is required, any such approval, consent or other action shall not be
unreasonably delayed.

15.  DISCLOSURES

15.1. Shareholders and Directors. On the date of this Agreement Manager and
Lakes shall each provide a written certification to the Band providing a true
and correct certification of their respective Affiliates, directors, officers
and shareholders owning five


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<PAGE>

percent (5%) or more of the stock or equity interests of each of them, (the
"Lakes Certification").

15.2. Warranties. Manager and Lakes further warrant and represent as follows:

     15.2.1. No officer, director or individual owner of five percent (5%) or
          more of the stock or equity interests of Manager or Lakes, or any
          Affiliate of Manager or Lakes, has been arrested, indicted for,
          convicted of, or pleaded nolo contendere to any felony or any gaming
          offense, or had any association with individuals or entities known to
          be connected with organized crime, except, as to Lyle Berman, an
          arrest prior to 1980 for a gaming offense that did not result in a
          conviction; and

     15.2.2. No person or entity listed on the Lakes Certification, including
          any officers and directors of Manager and Lakes, has been arrested,
          indicted for, convicted of, or pleaded nolo contendere to any felony
          or any gaming offense, or had any association with individuals or
          entities known to be connected with organized crime, except, as to
          Lyle Berman, an arrest prior to 1980 for a gaming offense that did not
          result in a conviction.

     15.2.3. Manager agrees that all of its and Lakes' directors and officers
          and any individual owners of five percent (5%) or more of the stock or
          equity interests of Manager or Lakes (whether or not involved in the
          Enterprise), shall:

          15.2.3.1. consent to background investigations to be conducted by the
          Band, the State, the Federal Bureau of Investigation (the "FBI") or
          any law enforcement authority to the extent required by the IGRA and
          the Compact;

          15.2.3.2. be subject to licensing requirements in accordance with Band
          law and this Agreement;

          15.2.3.3. consent to a background, criminal and credit investigation
          to be conducted by or for the NIGC, if required;

          15.2.3.4. consent to a financial and credit investigation to be
          conducted by a credit reporting or investigation agency at the request
          of the Band;

          15.2.3.5. cooperate fully with such investigations; and

          15.2.3.6. disclose any information requested by the Band which would
          facilitate the background and financial investigation.


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<PAGE>

     Any materially false or deceptive disclosures or failure to cooperate fully
with such investigations by an employee of Manager or Lakes or an employee of
the Band shall result in the immediate dismissal of such employee. The results
of any such investigation may be disclosed by the Band to federal officials and
to such other regulatory authorities as required by law.

15.3. Disclosure Amendments. Manager and Lakes each agree that whenever there is
any material change in the information disclosed pursuant to this Article 15 it
shall notify the Band of such change not later than thirty (30) days following
the change or within ten days after it becomes aware of such change, whichever
is later. The Band shall, in turn, provide the Secretary of the Interior and/or
the NIGC (whichever is applicable) copies of any such notifications. All of the
warranties and agreements contained in this Article 15 shall apply to any person
or entity who would be listed in this Article 15 as a result of such changes.
Nothing in this Section or in this Agreement shall (a) limit Manager's
obligation to comply with NIGC regulations, including without limitation 25
C.F.R. Section 537.2, or (b) constitute an assumption by the Band of any
obligation to furnish information to the NIGC on Manager's behalf or otherwise
fulfill any obligation of Manager under such regulations.

15.4. Breach of Manager's Warranties and Agreements. The material breach of any
warranty or agreement of Manager or Lakes contained in this Article 15 shall be
grounds for immediate termination of this Agreement; provided that (a) if a
breach of the warranties contained in Sections 15.2.2 or 15.2.3 is discovered,
and such breach was not disclosed by any background check conducted by the FBI
as part of the BIA or other federal approval of this Agreement, or was
discovered by the FBI investigation but all officers and directors of Manager
and Lakes sign sworn affidavits that they had no knowledge of such breach, then
Manager and Lakes shall have thirty (30) days after notice from the Band to
terminate the interest of the offending person or entity and if such termination
takes place, this Agreement shall remain in full force and effect; and (b) if a
breach relates to a failure to update changes in ownership interests, financial
position or additional gaming related activities, then Manager and Lakes shall
have thirty (30) days after notice from the Band to cure such default prior to
termination.

16.  NO PRESENT LIEN, LEASE OR JOINT VENTURE

     The parties agree and expressly warrant that neither the Management
Agreement nor any exhibit thereto is a mortgage or lease and, consequently, does
not convey any present interest whatsoever in the Facility or the Gaming Site,
nor any proprietary interest in the Enterprise itself; except, with regard to
the Dominion Account, the security interest created by the Dominion Agreement
and, with regard to the Furnishings and Equipment, the security interest created
by the Lakes Security Agreement. The parties further agree and acknowledge that
it is not their intent, and that this Agreement shall not be construed,


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to create a joint venture between the Band and Manager; rather, Manager shall be
deemed to be an independent contractor for all purposes hereunder.

17.  CONCLUSION OF THE MANAGEMENT TERM

     Upon the conclusion or the termination of this Agreement, Manager shall
take reasonable steps for the orderly transition of management of the Enterprise
to the Band or its designee pursuant to a transition plan; such transition
period shall be for a reasonable period but not less than sixty days. Manager
shall cooperate fully with the Band in that regard. No later than four months
before the expiration of the Term of this Agreement, Manager shall submit to the
Business Board and the Band a transition plan which shall be sufficient to allow
the Band to operate the Enterprise and provide for the orderly transition of the
management of the Enterprise.

18.  MISCELLANEOUS

18.1. Situs of the Contracts. This Agreement, as well as all contracts entered
into between the Band and any person or any entity providing services to the
Enterprise, shall be deemed entered into in Michigan, and shall be subject to
all Legal Requirements of the Band and federal law as well as approval by the
Chairman of the NIGC where required by the IGRA.

18.2. Notice. Any notice required to be given pursuant to this Agreement shall
be delivered to the appropriate party by Certified Mail Return Receipt
Requested, or by overnight mail or courier service to the following addresses:

     If to the Band:           Pokagon Band of Potawatomi Indians
                               58620 Sink Road
                               Dowagiac, MI 49047
                               Attn: Chairman, Tribal Council

     With a copy to:           Michael Phelan, General Counsel
                               Pokagon Band of Potawatomi Indians
                               P.O. Box 180
                               Dowagiac, MI 49047

     And                       Daniel Amory, Esq.
                               Drummond Woodsum & MacMahon
                               P.O. Box 9781
                               Portland, ME 04104-5081

     If to Manager or Lakes:   Great Lakes Gaming of Michigan, LLC
                               Lakes Entertainment, Inc.


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<PAGE>

                               130 Cheshire Lane
                               Minnetonka, MN 55305
                               Attn: Timothy J. Cope

     With a copy to:           Damon Schramm
                               Lakes Entertainment, Inc.
                               130 Cheshire Lane
                               Minnetonka, MN 55305

     With a copy to:           Kevin Quigley, Esq.
                               Hamilton Quigley & Twait, PLC
                               First National Bank Building
                               Suite W1450
                               332 Minnesota Street
                               Saint Paul, MN 55101-1314

     and to:                   Daniel R. Tenenbaum
                               Gray Plant Mooty
                               500 I.D.S. Center
                               Minneapolis, MN 55402-3796

or to such other different address(es) as Manager or the Band may specify in
writing. Any such notice shall be deemed given three days following deposit in
the United States mail, one day following delivery to a courier service or upon
actual delivery, whichever first occurs.

18.3. Relationship. Manager, Lakes and the Band shall not be construed as joint
venturers or partners of each other by reason of this Agreement and neither
shall have the power to bind or obligate the other except as set forth in this
Agreement.

18.4. Further Actions. The Band, Lakes and Manager agree to execute or cause to
be executed all contracts, agreements and documents and to take all actions
reasonably necessary to comply with the provisions of this Agreement and the
intent hereof.

18.5. Waivers. No failure or delay by Manager or the Band to insist upon the
strict performance of any covenant, agreement, term or condition of this
Agreement, or to exercise any right or remedy consequent upon, the breach
thereof, shall constitute a waiver of any such breach or any subsequent breach
of such covenant, agreement, term or condition. No covenant, agreement, term, or
condition of this Agreement and no breach thereof shall be waived, altered or
modified except by written instrument. No wavier of any breach shall affect or
alter this Agreement, but each and every covenant, agreement,


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<PAGE>

term and condition of this Agreement shall continue in full force and effect
with respect to any other then existing or subsequent breach thereof.

18.6. Captions. The captions for each section and subsection are intended for
convenience only.

18.7. Severabilitv. If any provision, or any portion of any provision, of this
Agreement is found to be invalid or unenforceable, such unenforceable provision,
or unenforceable portion of such provision, shall be deemed severed from the
remainder of this Agreement and shall not cause the invalidity or
unenforceability of the remainder of this Agreement. If any provision, or any
portion of any provision, of this Agreement is deemed invalid due to its scope
or breadth, such provision shall be deemed valid to the extent of the scope or
breadth permitted by law.

18.8. Advances. Except as provided in Section 5.6.2 with regard to Minimum
Guaranteed Payment Advances or as otherwise provided in the Agreements, any
amounts advanced by Manager or the Band related to the operation of the
Enterprise shall accrue interest at the Band Interest Rate and shall be treated
according to GAAP.

18.9. Third Party Beneficiary. This Agreement is exclusively for the benefit of
the parties hereto and it may not be enforced by any party other than the
parties to this Agreement and shall not give rise to liability to any third
party other than the authorized successors and assigns of the parties hereto as
such are authorized by this Agreement.

18.10. Survival of Covenants. Any covenant, term or provision of this Agreement
which, in order to be effective, must survive the termination of this Agreement,
shall survive any such termination.

18.11. Estoppel Certificate. Manager and the Band agree to furnish to the other
party, from time to time upon request, an estoppel certificate in such
reasonable form as the requesting party may request stating whether there have
been any defaults under this Agreement known to the party furnishing the
estoppel certificate and such other information relating to the Enterprise as
may be reasonably requested.

18.12. Periods of Time; Time of Essence. Whenever any determination is to be
made or action is to be taken on a date specified in this Agreement, if such
date shall fall on a Saturday, Sunday or legal holiday under the laws of the
Band or the State of Michigan, then in such event said date shall be extended to
the next day which is not a Saturday, Sunday or legal holiday. Time is of the
essence.

18.13. Exhibits. All exhibits attached hereto are incorporated herein by
reference and made a part hereof as if fully rewritten or reproduced herein.


                                       66

<PAGE>

18.14. Successors and Assigns. The benefits and obligations of this Agreement
shall inure to and be binding upon the parties hereto and their respective
permitted successors and assigns.

18.15. Confidential and Proprietary Information. The Band, Lakes and Manager
each agree that any information received concerning the other party during the
performance of this Agreement, regarding the parties' organization, financial
matters, marketing and development plans for the Enterprise, the Gaming Site, or
other information of a proprietary nature (the "Confidential Information") will
be treated by all parties in full confidence and except as required to allow
Manager, Lakes and the Band to perform their respective covenants and
obligations hereunder, or in response to legal process, and will not be revealed
to any other persons, firms or organizations. This provision shall survive the
termination of this Agreement as provided in Section 13.6. The obligations not
to use or disclose the Confidential Information shall not apply to Confidential
Information (a) which has been made previously available to the public by the
Band, Lakes or Manager or becomes generally available to the public, unless the
Confidential Information being made available to the public results in a breach
of this Agreement; (b) which prior to disclosure to the Band, Lakes or Manager
was already rightfully in any such persons' possession; (c) which is obtained by
the Band, Lakes or Manager from a third party who is lawfully in possession of
such Information, and not in violation of any contractual, legal or fiduciary
obligation to the Band, Lakes or Manager, with respect to such Confidential
Information and who does not require the Band, Lakes or Manager to refrain from
disclosing such Confidential Information to others; or (d) by the Band, if such
Confidential Information pertains to the Gaming Site or the Enterprise, in
connection with the Band's development, construction and operation of a gaming
facility after termination of the Agreements.

18.16. Patron Dispute Resolution. Manager shall submit all patron disputes
concerning play to the Gaming Regulatory Authority pursuant to the Band Gaming
Ordinance, and the regulations promulgated thereunder.

18.17. Modification. Any change to or modification of this Agreement must be in
writing signed by both parties hereto and shall be effective only upon approval
by the Chairman of the NIGC, the date of signature of the parties
notwithstanding.

18.18. Entire Agreement.

     18.18.1. This Agreement is the entire agreement between Manager and the
          Band relating to management of the Enterprise and supersedes all prior
          management agreements and understandings, whether written or oral,
          between or among the Band, Lakes and Manager;


                                       67

<PAGE>

     18.18.2. Collateral agreements between or among the Band, Lakes and Manager
          consist of the following documents, which are not part of this
          Management Agreement:

          (a)  Third Amended and Restated Development Agreement of near or even
               date;

          (b)  Third Amended and Restated Lakes Development Note of near or even
               date;

          (c)  Third Amended and Restated Transition Loan Note of near or even
               date;

          (d)  Third Amended and Restated Non-Gaming Land Acquisition Line of
               Credit Agreement of near or even date;

          (e)  Third Amended and Restated Account Control Agreement of near or
               even date;

          (f)  Third Amended and Restated Pledge and Security Agreement of near
               or even date;

          (g)  Second Amended and Restated Assignment and Assumption Agreement
               of near or even date;

          (h)  Second Amended and Restated Unlimited Guaranty of near or even
               date;

          (i)  First Amended and Restated Lakes Facility Note of near or even
               date;

          (j)  First Amended and Restated Lakes Working Capital Advance Note of
               near or even date;

          (k)  First Amended and Restated Lakes Minimum Payments Note of near or
               even date;

          (1)  First Amended and Restated Security Agreement of near or even
               date;

          (m)  Form of Dominion Account Agreement;

          (n)  Third Amended and Restated Indemnity Agreement from the Band to
               Great Lakes (as assignee of Lakes) of near or even date; and


                                       68

<PAGE>

          (o)  Reaffirmation of Guarantees and Mortgages dated as of December
               22, 2004 and January 25, 2006, together with the Band Designee
               Guarantees and the Band Designee Mortgages referenced therein.

     All such collateral agreements supersede all other prior collateral
agreements and understandings, written or oral between the parties. Lakes, Great
Lakes and the Band each affirmatively represents that no promises have been made
to that party which are not contained in this Agreement, the Development
Agreement or any other Transaction Documents, and stipulates that no evidence of
any promises not contained in this Agreement, the Development Agreement, or any
other Transaction Documents shall be admitted into evidence on their behalf.
This Agreement shall not be supplemented, amended or modified by any course of
dealing, course of performance or uses of trade and may only be amended or
modified by a written instrument duly executed by officers of all parties.

18.19. Savings Clauses.

     18.19.1. The Band, Lakes and Manager each agree to execute, deliver and, if
          necessary, record any and all additional instruments, certifications,
          amendments, modifications and other documents as may be required by
          the United States Department of the Interior, Bureau of Indian
          Affairs, the office of the field Solicitor, the NIGC, or any
          applicable statute, rule or regulation in order to effectuate,
          complete, perfect, continue or preserve the respective rights,
          obligations, liens and interests of the parties hereto to the fullest
          extent permitted by law; provided, that any such additional
          instrument, certification, amendment, modification or other document
          shall not materially change the respective rights, remedies or
          obligations of the Band, Lakes or Manager under this Agreement, the
          Guaranty, or any other agreement or document related hereto.

     18.19.2. Any other provision of this Agreement to the contrary
          notwithstanding: (i) in no event shall the rate of interest payable in
          connection with any indebtedness incurred by the Band pursuant hereto
          or in connection herewith (including, without limitation, indebtedness
          evidenced by the Lakes Development Note, the Lakes Facility Note, the
          Lakes Working Capital Advance Note, the Minimum Payments Note, the
          Transition Loan Note or the Non-Gaming Land Acquisition Line of
          Credit) exceed the maximum rate permitted by law (the "Legal Rate");
          (ii) if at any time the rate of interest on any such indebtedness
          computed as provided above (the "Computed Rate") exceeds the Legal
          Rate, then interest shall accrue thereafter on such indebtedness at
          the Legal Rate regardless of whether the Computed Rate is greater or
          less than the Legal Rate until


                                       69

<PAGE>

          the total amount of interest payable on such indebtedness equals the
          amount that would have been payable on such indebtedness without
          regard to this sentence, or until such indebtedness is paid in full,
          whichever occurs first; and (iii) if the holder receives any interest
          in excess of the maximum rate permitted by this sentence with respect
          to any such indebtedness, the excess shall be credited against the
          principal of such indebtedness or refunded, at the holder's option.

18.20. Preparation of Agreement. This Agreement was drafted and entered into
after careful review and upon the advice of competent counsel; it shall not be
construed more strongly for or against either party.

18.21. Consents. Except where expressly indicated that an agreement or consent
is in the sole or unilateral discretion of a party, no agreement or consent
under this Agreement shall be unreasonably withheld or delayed.

18.22. Execution. This Agreement may be executed in four counterparts, two to be
retained by each party. Each of the four originals is equally valid. This
Agreement shall be binding upon both parties when properly executed and approved
by the Chairman of the NIGC (the "Effective Date").

18.23. Limited Joinder.

     18.23.1. Lakes Entertainment, Inc. and Lakes Gaming and Resorts, LLC each
          join in this Agreement for the limited purpose of agreeing to be bound
          by the provisions of this Agreement specifically applicable to them,
          as well as the provisions of Articles 13 and 18 (as they pertain to
          such provisions of continuing applicability to them). In addition,
          Lakes Entertainment, Inc. shall have the benefit of any rights and
          remedies it had prior to the execution of the Assignment and
          Assumption Agreement as of October 16, 2000 under the following
          sections of this Agreement: 9.2, 10.2, 11.3, 12.5, 13.8 (as to
          remedies for claims for breach of its retained rights under this
          subsection), 13.11 (b) (limited to claims relating to the period
          before such date of the Assignment and Assumption Agreement),
          18.2,18.3, 18.5, 18.7, 18.9, 18.10, 18.12, 18.14, 18.15, 18.17, 18.18,
          18.19, 18.20, 18.21 and 18.22.

     18.23.2. Sections 10(a) and 10(d) of the Assignment and Assumption
          Agreement are superseded by this Agreement and the Development
          Agreement and are no longer in effect.

             [The balance of this page is intentionally left blank.
                          The signature page follows.]


                                       70

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.

The Pokagon Band of Potawatomi          Great Lakes Gaming of Michigan LLC
Indians


By: /s/ John Miller                     By: /s/ Timothy Cope
    ---------------------------------       ------------------------------------
Its: Council Chairman                   Its: PRESIDENT and CFO


By: /s/ Daniel F. Rapp                  Lakes Entertainment, Inc.,
    ---------------------------------   f/k/a Lakes Its Gaming, Inc.
Its: Secretary


                                        By: /s/ Timothy Cope
                                            ------------------------------------
                                        Its: PRESIDENT/CFO


                                        Lakes Gaming and Resorts, LLC


                                        By: /s/ Timothy Cope
                                            ------------------------------------
                                        Its: PRESIDENT/CFO

Approved pursuant to 25 U.S.C. Section 2711

NATIONAL INDIAN GAMING COMMISSION


By
   ----------------------------------
Print Name:
            -------------------------
Its: Chairperson


                                       71

<PAGE>

                                    EXHIBIT A
                                   GAMING SITE

THAT PART OF SECTION 14, THE SOUTHEAST QUARTER OF SECTION 11, THE WEST HALF OF
SECTION 13 AND THE SOUTHEAST QUARTER OF SECTION 15, TOWNSHIP 8 SOUTH, RANGE 21
WEST, NEW BUFFALO TOWNSHIP, BERRIEN COUNTY, MICHIGAN, DESCRIBED AS: BEGINNING AT
THE SOUTH QUARTER CORNER OF SAID SECTION 14; THENCE WEST ON THE SOUTH LINE OF
SAID SECTION 14 A DISTANCE OF 1997.12 FEET; THENCE NORTH 00 degrees 01' 30" EAST
ON THE EAST LINE EXTENDED OF "ASSESSOR'S PLAT OF PLUTA ACRES", BEING A
SUBDIVISION IN THE SOUTHWEST QUARTER OF SAID SECTION 14 A DISTANCE OF 40.00 FEET
TO THE SOUTHEAST CORNER OF SAID SUBDIVISION; THENCE WEST (PLATTED NORTH 89
DEGREES 54' 20" WEST) ON THE SOUTH LINE OF SAID SUBDIVISION AND PARALLEL WITH
SAID SOUTH SECTION LINE 632.62 FEET (PLATTED 632.51 FEET) TO THE SOUTHWEST
CORNER OF SAID SUBDIVISION; THENCE NORTH 00 DEGREES 04' 15" WEST (PLATTED NORTH
00 degrees 01' 40" EAST) ON THE WEST LINE OF SAID SUBDIVISION AND PARALLEL WITH
THE LINE COMMON TO SAID SECTIONS 14 AND 15 A DISTANCE OF 620.00 FEET TO THE
NORTHWEST CORNER OF SAID SUBDIVISION; THENCE WEST ON THE NORTH LINE EXTENDED OF
SAID SUBDIVISION 33.00 FEET TO THE LINE COMMON TO SAID SECTIONS 14 AND 15;
THENCE SOUTH 00 DEGREES 04' 15" EAST ON SAID COMMON SECTION LINE 59.49 FEET;
THENCE NORTH 89 degrees 46' 01" WEST PARALLEL WITH THE SOUTH LINE OF THE
NORTHEAST QUARTER OF THE SOUTHEAST QUARTER OF SAID SECTION 15 A DISTANCE OF
488.78 FEET TO THE EASTERLY RIGHT OF WAY LINE OF INTERSTATE 94 RAMP "D"; THENCE
NORTHWESTERLY 65.22 FEET ON A 2789.79 FOOT RADIUS CURVE TO THE RIGHT WHOSE CHORD
BEARS NORTH 24 degrees 09' 32" WEST 65.22 FEET; THENCE NORTH 23 DEGREES 29' 22"
WEST 222.46 FEET; THENCE NORTHERLY 152.93 FEET ON A 155.00 FOOT RADIUS CURVE TO
THE RIGHT WHOSE CHORD BEARS NORTH 04 DEGREES 46' 33" EAST 146.80 FEET; THENCE
NORTH 33 DEGREES 02' 28" EAST 201.91 FEET; THENCE NORTHERLY 423.07 FEET ON A
505.00 FOOT RADIUS CURVE TO THE LEFT WHOSE CHORD BEARS NORTH 09 degrees 02' 28"
EAST 410.81 FEET; THENCE NORTH 14 DEGREES 57' 32" WEST 180.69 FEET; THENCE
NORTHEASTERLY 466.00 FEET ON A 445.00 FOOT RADIUS CURVE TO THE RIGHT WHOSE CHORD
BEARS NORTH 15 DEGREES 02' 28" EAST 445.00 FEET; THENCE NORTH 45 degrees 02' 28"
EAST 201.89 FEET ALL ON SAID EASTERLY RIGHT OF WAY LINE OF INTERSTATE 94 RAMP
"D"; THENCE NORTH 42 DEGREES 09' 28" EAST ON THE EASTERLY RIGHT OF WAY LINE OF
INTERSTATE 94 A DISTANCE OF 426.11 FEET TO THE EAST AND WEST QUARTER LINE OF
SAID SECTION 14; THENCE NORTH 89 DEGREES 47' 21" EAST ON SAID EAST AND WEST
QUARTER LINE AND ON SAID EASTERLY RIGHT OF WAY LINE 131.67 FEET; THENCE
NORTHEASTERLY 1721.44 FEET ON A


                                       72

<PAGE>

11662.20 FOOT RADIUS CURVE TO THE LEFT WHOSE CHORD BEARS NORTH 42 degrees 45'
47" EAST 1719.87 FEET; THENCE NORTH 40 degrees 12' 25" EAST 529.13 FEET; THENCE
SOUTH 84 degrees 48' 44" EAST 258.15 FEET; THENCE NORTH 34 DEGREES 34' 39" EAST
302.96 FEET; THENCE NORTH 85 DEGREES 51' 09" EAST 172.54 FEET; THENCE NORTH 32
DEGREES 07' 05" EAST 883.38 FEET ALL ON SAID EASTERLY RIGHT OF WAY LINE OF
INTERSTATE 94 TO THE LINE COMMON TO SECTIONS 11 AND 14; THENCE NORTH 89 degrees
39' 40" EAST ON SAID COMMON SECTION LINE 1200.02 FEET TO THE WEST LINE OF THE
EAST HALF OF THE SOUTHEAST QUARTER OF SAID SECTION 11; THENCE NORTH 00 degrees
16' 16" EAST ON SAID WEST LINE 870.83 FEET TO THE CENTERLINE OF MAUDLIN ROAD;
THENCE SOUTH 59 DEGREES 44' 03" EAST ON SAID CENTERLINE 250.96 FEET; THENCE
SOUTH 00 DEGREES 16' 16" WEST PARALLEL WITH SAID WEST LINE 743.06 FEET TO THE
LINE COMMON TO SAID SECTIONS 11 AND 14; THENCE NORTH 89 degrees 39' 40" EAST ON
SAID COMMON SECTION LINE 1105.81 FEET TO THE CORNER COMMON TO SECTIONS 11, 12,
13 AND 14; THENCE SOUTH 89 degrees 58' 52" EAST ON THE NORTH LINE OF SAID
SECTION 13 A DISTANCE OF 1321.09 FEET TO THE EAST LINE OF THE WEST HALF OF THE
NORTHWEST QUARTER OF SAID SECTION 13; THENCE SOUTH 00 degrees 01' 03" EAST ON
SAID EAST LINE 2640.34 FEET TO THE EAST AND WEST QUARTER LINE OF SAID SECTION
13; THENCE SOUTH 00 degrees 05' 34" EAST ON THE EAST LINE OF THE WEST HALF OF
THE SOUTHWEST QUARTER OF SAID SECTION 13 A DISTANCE OF 2649.26 FEET TO THE SOUTH
LINE OF SAID SECTION 13; THENCE SOUTH 89 degrees 33' 42" WEST ON SAID SOUTH
SECTION LINE 1309.49 FEET TO THE CORNER COMMON TO SECTIONS 13, 14, 23 AND 24;
THENCE NORTH 00 degrees 11' 33" WEST ON THE LINE COMMON TO SAID SECTIONS 13 AND
14 A DISTANCE OF 2650.01 FEET TO THE QUARTER CORNER COMMON TO SAID SECTIONS 13
AND 14; THENCE SOUTH 89 degrees 47' 52" WEST ON THE EAST AND WEST QUARTER LINE
OF SAID SECTION 14 A DISTANCE OF 664.34 FEET TO THE WEST LINE OF THE EAST HALF
OF THE EAST HALF OF THE SOUTHEAST QUARTER OF SAID SECTION 14; THENCE SOUTH 00
degrees 07' 52" EAST ON SAID WEST LINE 1637.07 FEET TO THE SOUTH LINE OF THE
NORTH 25 ACRES OF THE WEST HALF OF THE EAST HALF OF THE SOUTHEAST QUARTER OF
SAID SECTION 14; THENCE SOUTH 89 degrees 47' 52" WEST ON SAID SOUTH LINE 666.09
FEET TO THE EAST LINE OF THE WEST HALF OF THE SOUTHEAST QUARTER OF SAID SECTION
14; THENCE SOUTH 00 DEGREES 04' 12" EAST ON SAID EAST LINE 1017.75 FEET TO THE
SOUTH LINE OF SAID SECTION 14; THENCE SOUTH 89 degrees 35' 30" WEST ON SAID
SOUTH SECTION LINE 667.18 FEET TO THE WEST LINE OF THE EAST HALF OF THE WEST
HALF OF THE SOUTHEAST QUARTER OF SAID SECTION 14; THENCE NORTH 00 degrees 00'
32" WEST ON SAID WEST LINE 885.75 FEET TO THE SOUTH LINE OF THE NORTH TWO THIRDS
OF THE EAST HALF OF THE WEST HALF OF THE WEST HALF OF THE SOUTHEAST QUARTER OF
SAID SECTION 14; THENCE SOUTH 89 DEGREES 39' 35" WEST ON SAID SOUTH LINE 333.12
FEET TO THE WEST LINE OF THE EAST HALF OF THE


                                       73

<PAGE>

WEST HALF OF THE WEST HALF OF THE SOUTHEAST QUARTER OF SAID SECTION 14; THENCE
SOUTH 00 degrees 01' 18" WEST ON SAID WEST LINE 886.15 FEET TO THE SOUTH LINE OF
SAID SECTION 14; THENCE SOUTH 89 degrees 35' 30" WEST ON SAID SOUTH SECTION LINE
333.59 FEET TO THE POINT OF BEGINNING. CONTAINING 673.18 ACRES MORE OR LESS.

SUBJECT TO THE RIGHTS OF THE PUBLIC AND OF ANY GOVERNMENTAL UNIT IN ANY PART
THEREOF TAKEN, USED, OR DEEDED FOR STREET, ROAD, OR HIGHWAY PURPOSES.

THIS SURVEY WAS PERFORMED WITH AN ERROR OF CLOSURE NO GREATER THAN 1 IN 15000.

THIS SURVEY COMPLIES WITH THE REQUIREMENTS OF SECTION 3, P.A. 132 OF 1970, AS
AMENDED, EXCEPT FOR PAPER SIZE.

ASSUMED THE LINE BETWEEN THE SOUTH QUARTER CORNER AND THE SOUTHEAST CORNER OF
SAID SECTION 14 TO BEAR WEST.


                                       74

<PAGE>

                                    EXHIBIT B
                             PENDING BAND LITIGATION

Taxpayers of Michigan Against Casinos et al. v. State of Michigan. The Michigan
Supreme Court ruled against plaintiff TOMAC's challenges to the validity of the
Compact. 471 Mich. 306, 685 N.W.2d 221 (2004), and the U.S. Supreme Court
subsequently denied farther review.

TOMAC v. Norton et al., U.S.D.C.D.C, Case No. l:01CV00398-JR. The plaintiff in
this action, filed in the U.S. District Court for the District of Columbia,
challenged the decision of the Department of Interior to take the Gaming Site
into trust. The federal district court entered judgment on all counts against
the plaintiff in March, 2005. The plaintiff appealed to the U.S. Court of
Appeals for the D.C. Circuit, and on January 6, 2006, a three member panel of
that Court rejected the plaintiff's appeal. The plaintiff could seek rehearing
before the full U.S. Court of Appeals and/or seek review in the U.S. Supreme
Court, but it is not likely to achieve any farther review of the issues.

Pokagon Properties. LLC v Leonard A. Kolberg. Jr., Case No. 02-49-765-CK-B,
Circuit Court for the County of Van Buren. Claim for non-payment of rent from
crop lease. Amount of claim: approximately $36,000.00. Defendant has filed a
counterclaim seeking damages in the amount of $118,000.00. The parties have
entered into a settlement agreement which includes the Band receiving $9,000 and
a dismissal of all claims.

Pokagon Properties. LLC v Dean Anderson, Case No. 71C010205CC00602, Circuit
Court for the County of St. Joseph. Claim for non-payment of rent from crop
lease. Amount of claim: approximately $52,000.00. Defendant has filed a
counterclaim in the approximate amount of $63,000.00.


                                       75
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.171
<SEQUENCE>5
<FILENAME>c02716exv10w171.txt
<DESCRIPTION>THIRD AMENDED AND RESTATED DEVELOPMENT AGREEMENT
<TEXT>
<PAGE>
                                                                  Exhibit 10.171

                                                               EXECUTION VERSION

                           THIRD AMENDED AND RESTATED

                             DEVELOPMENT AGREEMENT

                                  BETWEEN THE

                       POKAGON BAND OF POTAWATOMI INDIANS

                                      AND

                      GREAT LAKES GAMING OF MICHIGAN, LLC,
                      (F/K/A GREAT LAKES OF MICHIGAN, LLC)

                          DATED AS OF JANUARY 25, 2006

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                           <C>
ARTICLE 1. DEFINITIONS AND OBJECTIVES......................................    3
   Section 1.1. Definitions................................................    3
      "Account"............................................................    3
      "Accrued Expenses"...................................................    3
      "Agreement"..........................................................    3
      "Agreements".........................................................    3
      "Approved Construction Costs"........................................    3
      "Approved Development Budget"........................................    3
      "Architect"..........................................................    3
      "Assignment and Assumption Agreement"................................    3
      "Band Designee"......................................................    4
      "Band Designee Guarantee"............................................    4
      "Band Designee Mortgage".............................................    4
      "Band Event of Default"..............................................    4
      "Band Interest Rate".................................................    4
      "Band Mortgage"......................................................    4
      "Band Security Agreement"............................................    4
      "Band Working Capital Advances"......................................    4
      "Bank Closing".......................................................    4
      "Bank Lender"........................................................    4
      "Bank Loan"..........................................................    4
      "Bank Loan Agreement"................................................    4
      "Bank Note"..........................................................    5
      "BIA"................................................................    5
      "Business Board".....................................................    5
      "Change of Control"..................................................    5
      "Class II Gaming"....................................................    5
      "Class III Gaming"...................................................    5
      "Commencement Date"..................................................    5
      "Compact"............................................................    5
      "Completion Date"....................................................    5
      "Constitution".......................................................    6
      "Construction Costs".................................................    6
      "Construction Documents".............................................    6
      "Construction Guaranty Payments".....................................    6
      "Control Agreement"..................................................    6
      "Corporate Commission"...............................................    6
      "CRC"................................................................    7
      "Design Agreement"...................................................    7
      "Design Packages"....................................................    7
      "Development Expenditures"...........................................    7
      "Development Soft Costs".............................................    7
      "Disbursement Accounts"..............................................    7
      "Dominion Account"...................................................    7
</TABLE>


                                       i

<PAGE>

<TABLE>
<S>                                                                           <C>
      "Dominion Agreement".................................................    7
      "Economically Feasible"..............................................    7
      "Enterprise".........................................................    7
      "Enterprise Accounts"................................................    8
      "Equipment Lender"...................................................    8
      "Equipment Loan Agreement"...........................................    8
      "Equipment Loan".....................................................    8
      "Equipment Note".....................................................    8
      "Facility"...........................................................    8
      "Final Scope of Work"................................................    8
      "Firstar"............................................................    9
      "Force Majeure"......................................................    9
      "Furnishings and Equipment"..........................................    9
      "Gaming".............................................................    9
      "Gaming Ordinance"...................................................    9
      "Gaming Regulatory Authority" or "GRA"...............................    9
      "Gaming Site"........................................................    9
      "Gaming Site Acquisition Advances"...................................    9
      "Governmental Action"................................................   10
      "Great Lakes"........................................................   10
      "Guaranty"...........................................................   10
      "Guaranty Reserve"...................................................   10
      "Initial Phase"......................................................   10
      "Initial Scope of Work"..............................................   10
      "IGRA"...............................................................   10
      "Insider"............................................................   10
      "Lakes"..............................................................   10
      "Lakes Development Loan".............................................   10
      "Lakes Development Note".............................................   11
      "Lakes Event of Default".............................................   11
      "Lakes Facility Loan"................................................   11
      "Lakes Facility Note"................................................   11
      "Lakes' Internal Expenses"...........................................   11
      "Lakes Refinancing Guaranty".........................................   11
      "Lakes Security Agreement"...........................................   11
      "Lakes Working Capital Advance Note".................................   11
      "Lakes Working Capital Advances".....................................   11
      "Legal Requirements".................................................   11
      "Limited Recourse"...................................................   12
      "Loans"..............................................................   12
      "Local Agreement"....................................................   12
      "Management Agreement"...............................................   12
      "Material Adverse Change"............................................   12
      "Material Breach"....................................................   12
      "Memorandum of Understanding"........................................   13
      "Minimum Payments Note"..............................................   13
</TABLE>


                                       ii

<PAGE>

<TABLE>
<S>                                                                           <C>
      "Monthly Payments"...................................................   13
      "National Indian Gaming Commission" or "NIGC"........................   13
      "Net Revenues".......................................................   13
      "NIGC Approval"......................................................   13
      "NIGC Disapproval"...................................................   13
      "Non-Gaming Land"....................................................   13
      "Non-Gaming Land Acquisition Line of Credit".........................   13
      "252 MM Shortfall"...................................................   13
      "Operating Expense"..................................................   14
      "Plans and Specifications"...........................................   14
      "Pokagon Council"....................................................   14
      "Preliminary Development Budget".....................................   14
      "Project"............................................................   14
      "Remaining Loan Availability Amount".................................   14
      "Reserve Amount".....................................................   14
      "Restoration Act"....................................................   14
      "Restricted Territory"...............................................   14
      "Road Service Agreement".............................................   14
      "Scholarship Program Fee"............................................   14
      "Signing Fee"........................................................   14
      "Specific Performance Restriction"...................................   14
      "State"..............................................................   14
      "Subsequent Gaming Facility Revenues"................................   15
      "Term"...............................................................   15
      "Transaction Documents"..............................................   15
      "Transition Loan"....................................................   15
      "Transition Loan Note"...............................................   15
      "Tribal Distributions"...............................................   15
      "Tribal UCC Code"....................................................   15
   Section 1.1.   Independent Agreement....................................   15
ARTICLE 2. ACQUISITION OF GAMING SITE AND NON-GAMING LANDS.................   15
   Section 2.1.   Selection of Gaming Site.................................   15
   Section 2.2.   Purchase of Gaming Site; Funding.........................   15
   Section 2.3.   [intentionally omitted]..................................   16
   Section 2.4.   Assignment of Other Options..............................   16
   Section 2.5.   Selection of Non-Gaming Lands............................   16
   Section 2.6.   Closing on Non-Gaming Lands; Funding.....................   16
   Section 2.7.   Mortgages Prior to Transfer into Trust...................   17
ARTICLE 3. CONSTRUCTION PHASES.............................................   17
   Section 3.1.   Initial Phase............................................   17
   Section 3.2.   Final Scope of Work......................................   17
   Section 3.3.   Modification of Final Scope of Work......................   17
   Section 3.4.   Bank Loans and Equipment Loans...........................   18
ARTICLE 4. DESIGN PHASE....................................................   18
   Section 4.1.   Employment of Architect..................................   18
   Section 4.2.   Design and Construction Budgets..........................   18
</TABLE>


                                      iii

<PAGE>

<TABLE>
<S>                                                                           <C>
   Section 4.3.   Gaming Regulatory Authority Expenses.....................   19
   Section 4.4.   [intentionally omitted]..................................   19
   Section 4.5.   Concept Design and Engineering...........................   19
   Section 4.6.   Preliminary Program Evaluation...........................   19
   Section 4.7.   Design Development.......................................   19
   Section 4.8.   Plans and Specifications.................................   20
   Section 4.9.   Compliance with Construction Standards. Environmental
                  Laws and Regulations.....................................   20
   Section 4.10.  Advance of Funds for Design Work. Long Lead Time Items
                  and Preliminary Site Work................................   20
ARTICLE 5. CONSTRUCTION PHASE..............................................   21
   Section 5.1.   Selection of Contractor or Construction Manager..........   21
   Section 5.2.   Vendor Preferences.......................................   21
   Section 5.3.   Proposal Review..........................................   21
   Section 5.4.   Contracts................................................   21
   Section 5.5.   Construction Document Provisions.........................   22
   Section 5.6.   Construction Administration..............................   22
   Section 5.7.   Construction Commencement and Completion.................   22
   Section 5.8.   Determination of Approved Construction Costs; Cost
                  Overruns.................................................   23
ARTICLE 6. FURNISHINGS AND EQUIPMENT.......................................   23
   Section 6.1.   Selection of Furnishings and Equipment...................   23
ARTICLE 7. TERM............................................................   23
   Section 7.1.   Term.....................................................   23
ARTICLE 8. PAYMENTS AND COMMITMENTS BY GREAT LAKES BEFORE APPROVAL OF
   MANAGEMENT AGREEMENT....................................................   24
   Section 8.1.   Fees Payable By Great Lakes to the Band..................   24
   Section 8.2.   Deposit into the Account.................................   25
   Section 8.3.   Transition Loan..........................................   25
   Section 8.4.   Advances on Lakes Development Loan.......................   26
   Section 8.5.   Non-Gaming Land Acquisition Line of Credit...............   26
ARTICLE 9. PAYMENTS AND COMMITMENTS BY GREAT LAKES AFTER APPROVAL OF
   MANAGEMENT AGREEMENT....................................................   27
   Section 9.1.   Scholarship Program Fee..................................   27
   Section 9.2.   Development and Equipment Loans..........................   27
ARTICLE 10. EXCLUSIVITY; NON-COMPETITION...................................   39
   Section 10.1.  Exclusivity Regarding Facility...........................   39
   Section 10.2.  Exclusivity in Michigan..................................   39
   Section 10.3.  Indiana Casino...........................................   39
   Section 10.4.  Non-Competition..........................................   39
   Section 10.5.  Assignment; Change of Control............................   39
   Section 10.6.  Restrictions on Collateral Development...................   40
 ARTICLE 11. REPRESENTATIONS, WARRANTIES, AND COVENANTS....................   41
   Section 11.1.  Representations and Warranties of the Band...............   41
   Section 11.2.  Band Covenants...........................................   41
   Section 11.3.  Representations and Warranties of Lakes and Great Lakes..   43
   Section 11.4.  Covenants of Lakes and Great Lakes.......................   43
</TABLE>


                                       iv

<PAGE>

<TABLE>
<S>                                                                           <C>
ARTICLE 12. EVENTS OF DEFAULT..............................................   44
   Section 12.1.  Events of Default by the Band............................   44
   Section 12.2.  Events of Default by Lakes or Great Lakes................   45
   Section 12.3.  Material Breach: Right to Cure...........................   46
ARTICLE 13. TERMINATION....................................................   47
   Section 13.1.  Voluntary Termination....................................   47
   Section 13.2.  Termination if No NIGC Approval..........................   47
   Section 13.3.  Great Lakes Right to Terminate on Band Event of Default..   47
   Section 13.4.  Band Right to Terminate on Lakes Event of Default........   47
   Section 13.5.  Band Right to Terminate for Material Adverse Change......   47
   Section 13.6.  Termination on Buyout....................................   48
   Section 13.7.  Involuntary Termination Due to Changes in Legal
                  Requirements.............................................   48
   Section 13.8.  Repair or Replacement....................................   50
   Section 13.9.  Recoupment and Setoff....................................   50
ARTICLE 14. DISPUTE RESOLUTION; LIQUIDATED DAMAGES.........................   50
   Section 14.1.  Band's Waiver of Sovereign Immunity and Consent to Suit..   50
   Section 14.2.  Arbitration..............................................   51
   Section 14.3.  Limitation of Actions....................................   52
   Section 14.4.  Damages on Termination for Failure to Obtain NIGC
                  Approval.................................................   53
   Section 14.5.  Liquidated Damages and Limitations on Remedies...........   53
   Section 14.6.  Lakes' and Great Lakes' Continuing Obligations...........   55
   Section 14.7.  Termination of Exclusivity...............................   55
   Section 14.8.  Remedies.................................................   55
   Section 14.9.  Fees not Damages.........................................   55
   Section 14.10. Damages for Governmental Action..........................   56
ARTICLE 15. GENERAL........................................................   56
   Section 15.1.  Nature of Agreement......................................   56
   Section 15.2.  Great Lakes's Interest...................................   56
   Section 15.3.  Situs of the Agreement...................................   56
   Section 15.4.  Notice...................................................   56
   Section 15.5.  Relationship.............................................   57
   Section 15.6.  Further Actions..........................................   57
   Section 15.7.  Waivers..................................................   57
   Section 15.8.  Captions.................................................   57
   Section 15.9.  Third Party Beneficiary..................................   58
   Section 15.10. Survival of Covenants....................................   58
   Section 15.11. Estoppel Certificate.....................................   58
   Section 15.12. Periods of Time; Time of the Essence.....................   58
   Section 15.13. Confidential and Proprietary Information.................   58
   Section 15.14. Government Savings Clause................................   58
   Section 15.15. Successors and Assigns...................................   59
   Section 15.16. Severability.............................................   59
   Section 15.17. Entire Agreement.........................................   59
   Section 15.18. Consents.................................................   61
   Section 15.19. [intentionally omitted]..................................   61
   Section 15.20. Limited Joinder..........................................   61
</TABLE>


                                        v

<PAGE>

                                  EXHIBIT LIST

EXHIBIT A   Third Amended and Restated Pledge and Security Agreement
EXHIBIT B   Third Amended and Restated Account Control Agreement
EXHIBIT C   Form of Dominion Account Agreement
EXHIBIT D   Description of Gaming Site
EXHIBIT E   Third Amended and Restated Lakes Development Note
EXHIBIT F   First Amended and Restated Lakes Facility Note
EXHIBIT G   First Amended and Restated Security Agreement
EXHIBIT H   First Amended and Restated Lakes Working Capital Advance Note
EXHIBIT I   First Amended and Restated Lakes Minimum Payments Note
EXHIBIT J   Third Amended and Restated Non-Gaming Land Acquisition Line of
            Credit Agreement
EXHIBIT K   Third Amended and Restated Transition Loan Note
EXHIBIT L   Band Litigation
EXHIBIT M   Conditional Release and Termination Agreement between Lakes and CRC
            dated May 20,1999, as amended by Amendment dated on or about
            July 7, 1999, as amended by Amendment dated on or about
            January 2, 2003
EXHIBIT N   General Release from CRC to the Band and its members


                                       vi

<PAGE>

                THIRD AMENDED AND RESTATED DEVELOPMENT AGREEMENT

     This Third Amended and Restated Development Agreement is made as of the
25th day of January, 2006, by and between the POKAGON BAND OF POTAWATOMI INDIANS
(the "Band"), and GREAT LAKES GAMING OF MICHIGAN, LLC, a Minnesota limited
liability company (f/k/a Great Lakes of Michigan, LLC, ("Great Lakes").

                                    RECITALS

     A. The Band, pursuant to 25 U.S.C. Sections 1300j et seq. (the "Restoration
Act"), is a federally recognized Indian tribe recognized as eligible by the
Secretary of the Interior for the special programs and services provided by the
United States to Indians because of their status as Indians and is recognized as
possessing powers of self-government.

     B. As authorized by the Restoration Act, the Band intends to acquire the
Gaming Site in the State of Michigan, to be held by the federal government in
trust for the Band, on which the Band intends to construct and operate a
permanent Class III gaming facility (the "Facility"); and the Band will possess
sovereign governmental powers over the Gaming Site pursuant to the Band's
recognized powers of self government, and the Band desires to use the Gaming
Site to improve the economic conditions of its members.

     C. The Band and Lakes Entertainment, Inc., f/k/a Lakes Gaming, Inc.
("Lakes") entered into a Development Agreement dated as of July 8, 1999 (the
"Development Agreement") which contains provisions relating to the development
of the Facility.

     D. The Band has ratified the Development Agreement on August 26, 1999, and
the Development Agreement is now in full force and effect.

     E. Lakes has assigned its rights and obligations under the Development
Agreement 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.

     F. Great Lakes and the Band entered into a First Amended and Restated
Development Agreement dated as of October 16, 2000 (the "First Amended
Development Agreement").

     G. Pursuant to the First Amended Development Agreement, Great Lakes agreed
to increase the Lakes Development Loan from $43,000,000 to $46,000,000 and the
Non-Gaming Land Acquisition Line of Credit from $10,000,000 to $15,000,000,
thereby agreeing to loan the Band an additional $8,000,000 for immediate use by
the Band in acquiring both gaming and non-gaming land. The Band and Great Lakes
agreed to construct the Facility in a phased approach, with the Initial Phase
having a then estimated cost of approximately $97,000,000. Great Lakes also
agreed, due to uncertainty in the capital markets over the availability of
financing for the Facility, to provide a greater proportion of the initial phase
of project financing from its own funds, and affirmed its commitment to finance
all phases of the project entirely from its own funds if financing at an
interest rate of 13% or less is not available from the capital markets. The Band
in turn agreed to extend the term of the Management Agreement from five to seven
years and to enter into a Dominion Agreement granting Great Lakes a security
interest in the


                                        1

<PAGE>

Dominion Account as defined in the Management Agreement.

     H. Great Lakes and the Band entered into a Second Amended and Restated
Development Agreement dated as of December 22, 2004 (the "Second Amended
Development Agreement"), the primary purposes of which were to extend the
termination date in Section 8.l(c) of the Development Agreement, relating to the
time period during which the Monthly Payments may be required to be made by
Great Lakes to the Band, from August 26, 2004 to August 26, 2007, and to make
corresponding changes in Sections 13.2 and 14.4 of the Development Agreement to
change the August 26, 2004 date to August 26, 2007.

     I. Pursuant to the Second Amended Development Agreement, the Band and Great
Lakes acknowledged and agreed that the cost of developing, constructing and
equipping the Initial Phase of the Project totaled, as of December 22, 2004,
approximately $197,000,000, which the parties agreed would be financed as
follows: the Lakes Development Loan in the amount of $46,000,000 and an
additional $151,000,000 to be provided by an Equipment Loan and a Bank Loan. To
the extent that the Band was unable to raise additional funding of $151,000,000
from third parties at an interest rate not to exceed 13% (the "151MM
Shortfall"), Great Lakes agreed to provide $54,000,000 (or such lesser amount as
may be necessary to make up the 151MM Shortfall) through, at its option, a
direct loan, third party loans enabled by credit enhancements provided by Great
Lakes, or third-party loans with interest subsidies provided by Great Lakes, in
each case at an interest rate not to exceed 13%, such $54,000,000 loan and the
Lakes Development Loan to be subordinated to certain other third-party
financing. Great Lakes did not have any other responsibility to fund, or provide
credit enhancements or interest subsidies for, the 151MM Shortfall (if any).

     J. The cost of developing, constructing and equipping the Initial Phase of
the Project is now understood as totaling approximately $298,000,000, which will
be financed as follows: the Lakes Development Loan in the amount of $46,000,000
and an additional $252,000,000 to be provided by an Equipment Loan and a Bank
Loan. To the extent that the Band is unable to raise additional funding of
$252,000,000 from third parties at an interest rate not to exceed 13% (the
"252MM Shortfall"), Great Lakes shall, at the request of the Band, provide
$54,000,000 (or such lesser amount as may be necessary to make up the 252MM
Shortfall) through, at its option, a direct loan, third party loans enabled by
credit enhancements provided by Great Lakes, or third-party loans with interest
subsidies provided by Great Lakes, in each case at an interest rate not to
exceed 13%, such $54,000,000 loan and the Lakes Development Loan to be
subordinated to such third-party financing and to the Bank Loan and the
Equipment Loan. Great Lakes shall not have any other responsibility to fund, or
provide credit enhancements or interest subsidies for, the 252MM Shortfall (if
any).

     K. Great Lakes and the Band have agreed that the term of this Agreement
shall begin on the date the Management Agreement, this Agreement (if required)
and the Lakes Development Note (if required) are approved by the Chairman of the
NIGC, and/or the BIA (if required), and continue until, unless earlier
terminated in accordance with its terms, seven (7) years from commencement of
Gaming at the Initial Phase of the Facility, provided that the Term of the
Management Agreement will be five (5) years from the Commencement Date if (a)
the Development Expenditures of the Initial Phase of the Facility are equal to
or more than $138,000,000, and (b) Lakes' Financial Support for such Initial
Phase has not exceeded


                                        2

<PAGE>

$46,000,000, as provided in Section 3.2 of the Management Agreement.

     L. Great Lakes has agreed to fund under the Lakes Development Loan, and has
advanced funds for architectural work, engineering services, long-lead-time
items, and to permit the Band to complete preliminary site work.

     M. This Third Amended and Restated Development Agreement incorporates
changes to reflect the expected increased cost of the Initial Phase of the
Project as now contemplated, as described in Section J above, and its impact on
the composition of the financing for such Initial Phase, as well as to reflect
the parties' desire to have flexibility to modify the scope of the Initial Phase
as the parties agree depending on the availability and suitability of financing.

     NOW, THEREFORE, in consideration of the mutual covenants, conditions and
promises herein contained, the receipt and sufficiency of which are expressly
acknowledged, the Band and Great Lakes hereby agree as follows:

                                   ARTICLE 1.
                           DEFINITIONS AND OBJECTIVES

     Section 1.1. Definitions. Capitalized terms not otherwise defined herein
shall have the meanings set forth in the Management Agreement. In addition to
other terms which are defined elsewhere in this Agreement, the following terms,
for purposes of this Agreement, shall have the meanings set forth in this
Section.

     "Account" means the account at Firstar established pursuant to Section 8.2
that is subject to the Control Agreement.

     "Accrued Expenses" shall mean the accrued unpaid development costs and
expenses relating to the Gaming Site and the Enterprise.

     "Agreement" shall mean this Development Agreement.

     "Agreements" shall mean this Agreement and the Management Agreement.

     "Approved Construction Costs" shall mean the Architect's estimate of
Construction Costs approved by the Band and Great Lakes pursuant to Section 5.8.

     "Approved Development Budget" has the meaning set out in Section 4.2.

     "Architect" shall have the meaning described in Section 4.1.

     "Assignment and Assumption Agreement" means the Assignment and Assumption
Agreement among Great Lakes, Lakes and the Band dated as of October 16, 2000, as
amended by First Amendment dated as of December 22, 2004 as further amended and
restated by a Second Amended and Restated Assignment and Assumption Agreement
dated as of January 25, 2006.


                                        3

<PAGE>

     "Band Designee" shall mean Pokagon Properties, LLC, a Delaware limited
liability company, Filbert Land Development, LLC, an Indiana limited liability
company, or such other entities as may be designated by the Band in writing.

     "Band Designee Guarantee" shall mean the guarantee by the Band Designee to
Great Lakes of amounts advanced by Great Lakes under the Lakes Development Note
and the Non-Gaming Land Acquisition Line of Credit, which shall be substantially
in the form of the guaranty executed by Pokagon Properties, LLC in favor of
Lakes dated March 9, 2000.

     "Band Designee Mortgage" means, individually and collectively, each
mortgage granted by a Band Designee to Great Lakes securing the applicable Band
Designee Guarantee, which shall be substantially in the form of the mortgage
granted by Pokagon Properties, LLC to Lakes dated March 9, 2000.

     "Band Event of Default" has the meaning described in Section 12.1.

     "Band Interest Rate" shall mean the lesser of (i) Wall Street Journal prime
rate as of the Bank Closing plus 1%, or (ii) 10%.

     "Band Mortgage" means, individually and collectively, each mortgage granted
by the Band to Great Lakes securing the Lakes Development Note and the
Non-Gaming Land Acquisition Line of Credit, which shall be substantially in the
form of the mortgage granted by Pokagon Properties, LLC to Lakes dated March 9,
2000, with appropriate changes reasonably acceptable to Great Lakes and the Band
reflecting the change to the Band as mortgagor and to Great Lakes as mortgagee.

     "Band Security Agreement" shall mean the pledge and security agreement
between Lakes and the Band granting the Band a lien and security interest in the
Account, in the form attached hereto as Exhibit A, as the same may be amended
from time to time.

     "Band Working Capital Advances" shall have the meaning defined in the
Management Agreement.

     "Bank Closing" means the closing on the Bank Loan Agreement.

     "Bank Lender" shall mean one or more financial institutions or bond
trustees described as the lender or bond trustee in the Bank Loan Agreement.

     "Bank Loan" shall mean the loan evidenced by the Bank Note.

     "Bank Loan Agreement" shall mean (a) the capital leases, loan agreements
and/or bond indentures to be entered into between the Band and the Bank Lender
for the Initial Phase in a principal amount of approximately $193,000,000,
which will, when added to the Lakes Development Loan and the Equipment Loan,
finance all Development Expenditures for the Initial Phase, provided that the
amount of the Bank Loan may be increased or decreased as


                                        4

<PAGE>

agreed upon by Great Lakes and the Band; and (b) the subsequent or amended
capital leases, loan agreements and/or bond indentures in an additional
approximate amount of $38,000,000, which along with the additional Equipment
Loan for the Final Scope of Work will finance all Development Expenditures
associated with the expansion of the Facility to the Final Scope of Work;
provided that the additional amount of the Bank Loan may be increased or
decreased as agreed upon by Great Lakes and the Band. The amount borrowed under
the Bank Loan Agreement may also be increased and the added proceeds thereof
used to refinance all or portions of the Lakes Development Loan, provided that
amounts used for such refinancing shall be in addition to (a) the sums needed to
fund Development Expenditures for the Initial Phase (as to financing for the
Initial Phase) and Final Scope of Work (as to financing for the Final Scope of
Work), in the respective maximum amounts set out above, and (b) any sums which
the Band is able to borrow without Great Lakes' guaranty, credit enhancements or
interest subsidy to expand the Initial Scope of Work to include all or a portion
of the Final Scope of Work.

     "Bank Note" shall mean the promissory notes or bonds to be executed by the
Band pursuant to the Bank Loan Agreement.

     "BIA" shall mean the Bureau of Indian Affairs under the Department of the
Interior of the United States of America.

     "Business Board" shall mean the decision making body created pursuant to
Section 3.4 of the Management Agreement.

     "Change of Control" shall have the meaning set out in Section 10.5(c).

     "Class II Gaming" shall mean Class II Gaming as defined in the IGRA.

     "Class III Gaming" shall mean Class III Gaming as defined in the IGRA.

     "Commencement Date" shall mean the first date that Gaming is conducted
pursuant to the terms of the Management Agreement in a Facility, including
Gaming conducted on completion of the Initial Phase of the Facility.

     "Compact" shall mean the Compact between the Band and the State dated
December 3, 1998 and approved in 64 Fed. Reg. No. 32, Thursday, February 18,
1999, at 8111, as the same may, from time to time, be amended; or such other
compact or consent decree that may be substituted therefor.

     "Completion Date" shall mean the date upon which Great Lakes receives, as
to the Initial Phase or the Final Scope of Work:

          (i) an architect's certificate from the Architect chosen pursuant to
          this Agreement as having responsibility for the design and supervision
          of construction, equipping and furnishing of the Facility certifying
          that the Initial Phase or the Final Scope of Work, as the case may be,
          has been fully constructed substantially in accordance with the Plans
          and


                                        5

<PAGE>

          Specifications;

          (ii) certification from the division, department or designee of Great
          Lakes having responsibility to assure compliance with any operational
          standards stating that the Initial Phase or the Final Scope of Work,
          as the case may be, as completed, is in substantial compliance with
          any such standards;

          (iii) a permanent or temporary certificate of occupancy, if required,
          from the regulatory entity within the Band Government with authority
          to grant such a certificate, permitting the use and operation of the
          Initial Phase or the Final Scope of Work, as the case may be, in
          accordance with this Agreement; and

          (iv) certificates of such professional designers, inspectors or
          consultants or opinions of counsel, as Great Lakes may reasonably
          determine to be appropriate, verifying construction and furnishing of
          the Initial Phase or the Final Scope of Work, as the case may be, in
          compliance with all Legal Requirements.

     "Constitution" shall mean the document or documents which govern the
actions of the Band and, upon enactment, the Constitution of the Pokagon Band of
Potawatomi Indians as ultimately approved by the Band and approved by the
Secretary of the Interior.

     "Construction Costs" means the costs of acquiring the Gaming Site and
designing, developing, constructing, furnishing and equipping the Facility,
including all related planning and professional fees, Furnishings and Equipment,
and a contingency not to exceed 10% of such costs (excluding Furnishings and
Equipment).

     "Construction Documents" shall have the meaning described in Section 5.4.

     "Construction Guaranty Payments" shall have the meaning described in
Section 9.2.1(a)(i)

     "Control Agreement" shall mean the Account Control Agreement among Firstar,
Lakes and the Band dated July 8, 1999, as amended by Amendment to Account
Control Agreement dated October 16, 2000 and as further amended and restated by
Second Amendment to Account Control Agreement dated December 22, 2004 and by a
Third Amended and Restated Account Control Agreement dated January 25, 2006,
perfecting the Band's lien and security interest in the Account, a true copy of
which is attached as Exhibit B, as the same may be amended from time to time.

     "Corporate Commission" shall mean a body corporate and politic established,
at the Band's discretion, by the Pokagon Council to own the Enterprise and such
other businesses and assets as the Band may deem appropriate.


                                        6

<PAGE>

     "CRC" means Casino Resource Corporation, a Minnesota corporation and its
Insiders.

     "Design Agreement" shall have the meaning described in Section 4.1.

     "Design Packages" shall have the meaning described in Section 4.1.

     "Development Expenditures" shall mean all Approved Construction Costs; all
other costs of equipping and opening the Facility, including but not limited to
all related planning and professional fees, costs of infrastructure, fixtures,
Furnishings and Equipment (including gaming equipment), and pre opening costs,
fees and expenses; all legal, lobbying, public relations and other professional
costs and expenses related to transferring Gaming Lands and Non-Gaming Lands
into trust and to the Compact between the Band and the State of Michigan; and
all legal, lobbying and other fees and expenses previously incurred by the Band
in obtaining, or litigating with regard to, the Compact with the State of
Michigan, not to exceed $20,000, as well as all other such fees and expenses
subsequently incurred by the Band that the Band reasonably chooses to include in
the Development Budget, together with all other Development Soft Costs.

     "Development Soft Costs" shall mean legal, lobbying, public relations and
other professional fees and expenses for work related to the Compact, litigation
relating to transfer of the Gaming Site into trust or otherwise affecting the
Project, development of Band ordinances required under the Local Agreement or
otherwise needed for development of the Project, and other services reasonably
related to development of the Project, subject in each case to limitations, if
any, set forth in this Agreement.

     "Disbursement Accounts" shall mean those accounts described in Section
4.19.3 of the Management Agreement.

     "Dominion Account" means the collateral account in favor of Great Lakes
established under Section 4.19.2 of the Management Agreement.

     "Dominion Agreement" means the collateral agreement granting Great Lakes a
security interest in the Dominion Account and perfecting such interest, which
shall be in the form attached as Exhibit C, as the same may be amended from time
to time.

     "Economically Feasible" means for purposes of Sections 13.7 and 14.5
hereof, that the Net Revenues from any operations of the Enterprise in question
shall on a monthly basis exceed the aggregate debt service payments due and
payable during such month on each of the Loans and any other indebtedness to
which Great Lakes has subordinated its liens.

     "Enterprise" shall mean the enterprise of the Band created by the Band to
engage in Class II and Class III Gaming at the Facility, and which shall include
all gaming at the Facility and any other lawful commercial activity allowed in
the Facility, including but not limited to the sale of alcohol, tobacco, gifts
and souvenirs; provided, however, the Enterprise shall only include any hotel
operated by the Band, ancillary non-Gaming activity within the Facility, or
other commercial enterprise conducted by the Band which is not generally related
to Class II or Class III Gaming if such hotel, non-Gaming activity or other
commercial enterprise (a) is financed by,


                                        7

<PAGE>

or through the guaranty of, Manager, (b) is specifically included within the
Initial Scope of Work or the Final Scope of Work, or is not a material expansion
of the Initial Scope of Work or the Final Scope of Work, or (c) is specified by
the Business Board and the Pokagon Council as being included in the Enterprise,
in which case depreciation and other expenses relating to such hotel, non-Gaming
activity or other commercial enterprise shall be an Operating Expense, all
related revenues shall be included in Gross Revenues, and interest on all
related financing shall be paid by the Enterprise; and provided further that the
Enterprise shall not include a tribal gift/craft business which the Band may
elect to operate, rent free, on an area of about 2,400 square feet at the
Facility. The design and operation of such gift/craft shop shall be consistent
with the theme and quality of the Facility, and the location of such gift/craft
shop shall be approved by the Business Board.

     "Enterprise Accounts" shall mean those accounts described in Section 4.19.1
of the Management Agreement.

     "Equipment Lender" shall mean the financial institution described as the
lender in the Equipment Loan Agreement.

     "Equipment Loan Agreement" shall mean (a) the bond indentures, loan
agreements and/or equipment leases in a principal amount of approximately
$59,000,000 to be entered into between the Band and the Equipment Lender to
finance acquisition of the Furnishings and Equipment for the Initial Phase,
provided that the amount of the Equipment Loan may be increased or decreased as
agreed upon by Great Lakes and the Band; and (b) the subsequent or amended bond
indenture, loan agreement and/or equipment lease in an additional approximate
amount of $6,000,000, which will finance the acquisition of the Furnishings and
Equipment for expansion of the Facility to the Final Scope of Work; provided
that the additional amount of the Equipment Loan may be increased or decreased
as agreed upon by Great Lakes and the Band.

     "Equipment Loan" means the loan or lease under the Equipment Loan
Agreement.

     "Equipment Note" shall mean the promissory note or bond to be executed by
the Band pursuant to the Equipment Loan Agreement.

     "Facility" shall mean the permanent buildings, structures and improvements
located on the Gaming Site and all fixtures, Furnishings and Equipment attached
to, forming a part of, or necessary for the operation of the Enterprise.

     "Final Scope of Work" means the final gaming facility and associated
amenities that the parties intend to complete, unless otherwise agreed by Great
Lakes and the Band, no later than the third anniversary of the Commencement
Date, which, together with the Initial Phase, shall include not less than
110,000 sq. ft. of gaming space, 110 gaming tables, 3,000 slot machines, a 3,100
car garage and additional surface parking for guests, oversized vehicles and
employees as needed, a 200 room hotel, expanded food and beverage facilities,
and a 2,500 seat bingo and events center, and which shall contain approximately
(excluding the hotel and bingo/events center) at least 350,000 to 370,000 sq.
ft. of space. The Final Scope of Work will include and be integrated with the
Initial Phase.


                                        8

<PAGE>

     "Firstar" shall mean Firstar Bank N.A., n/k/a U.S. Bank National
Association, and its successors in interest.

     "Force Majeure" shall mean acts of God, fire, flood, storm, earthquake,
war, civil disorder, governmental acts, regulations, orders or restrictions,
accidents not caused by a party's negligence, strikes or labor disturbances.

     "Furnishings and Equipment" shall mean all furniture, furnishings and
equipment required for the operation of the Enterprise in accordance with the
standards set forth in this Agreement, including, without limitation:

          (i) cashier, money sorting and money counting equipment, surveillance
          and communication equipment, and security equipment;

          (ii) slot machines, video games of chance, table games, keno equipment
          and other gaming equipment;

          (iii) office furnishings and equipment;

          (iv) specialized equipment necessary for the operation of any portion
          of the Enterprise for accessory purposes, including equipment for
          kitchens, laundries, dry cleaning, cocktail lounges, restaurants,
          public rooms, commercial and parking spaces, and recreational
          facilities; and

          (iv) hotel equipment (to the extent a hotel is included in the
          Enterprise);

          (v) all other furnishings and equipment hereafter located and
          installed in or about the Facility which are used in the operation of
          the Enterprise in accordance with the standards set forth in this
          Agreement.

     "Gaming" shall mean any and all activities defined as Class II and Class
III Gaming pursuant to IGRA.

     "Gaming Ordinance" shall have the meaning described in Section 8.4(c).

     "Gaming Regulatory Authority" or "GRA" shall mean the Band body created
pursuant to the Band Gaming Ordinance to regulate the Class II and Class III
Gaming of the Band in accordance with the Compact, the IGRA and the Gaming
Ordinance.

     "Gaming Site" shall mean the parcels of land in New Buffalo, Michigan
described on the attached Exhibit D.

     "Gaming Site Acquisition Advances" shall mean funds advanced under the
Lakes


                                       9

<PAGE>

Development Loan in such amount or amounts as are needed to option or acquire
the Gaming Site, provided that the total amount of Gaming Site Acquisition
Advances shall not exceed $11,000,000.

     "Governmental Action" means any resolution, ordinance, statute, regulation,
order or decision of the Band or any instrumentality or agency of the Band,
regardless of how constituted, that has the force of law.

     "Great Lakes" means Great Lakes Gaming of Michigan, LLC, a Minnesota
limited liability company (f/k/a Great Lakes of Michigan, LLC).

     "Guaranty" means the Unlimited Guaranty dated as of October 16, 2000 from
Lakes Gaming, Inc. and Lakes Gaming and Resorts, LLC to the Band.

     "Guaranty Reserve" shall have the meaning described in Section
9.2.1(a)((ii)(A).

     "Initial Phase" shall mean the first phase of the Facility, which shall
include the facilities described in the Initial Scope of Work. The Initial Phase
shall be designed and constructed so that it will be an integral part of the
Final Scope of Work.

     "Initial Scope of Work" means a facility including not less than 110,000
sq. ft. of gaming space, 110 gaming tables, 3,000 slot machines, a buffet,
casual dining outlet, steakhouse, casino cafe, seafood outlet, coffee/pastry
shop, employee dining, Kids Quest/Arcade, and a 2,100 space garage and 1,200
surface parking spaces for guests, parking spaces for oversized vehicles and
approximately 700 employee spaces, and which shall contain at least 300,000 sq.
ft. of space but shall not include a hotel; provided, however, that depending on
the availability and suitability of financing, upon the agreement of Great Lakes
and the Band the Initial Scope of Work may be expanded or contracted to include
greater or lesser amounts of the Final Scope of Work.

     "IGRA" shall mean the Indian Gaming Regulatory Act of 1988, P.L. 100-497,
25 U.S.C. Section 2701 et seq. as it may from time to time be amended.

     "Insider" has the meaning defined in 11 U.S.C. Section 101(31), assuming
Lakes and Great Lakes were both the debtor in that definition, and shall include
persons or entities that become Insiders after the date of this Agreement,
whether as the result of a merger, acquisition, restructuring or otherwise.

     "Lakes" shall mean both Lakes Entertainment, Inc., f/k/a Lakes Gaming,
Inc., a Minnesota corporation, and Lakes Gaming and Resorts, LLC, a Minnesota
limited liability company.

     "Lakes Development Loan" shall mean the loan to the Band to be made by
Great Lakes under the Lakes Development Note in a principal amount of up to
$46,000,000 (which amount is subject to increase in accordance with Section
9.2.1 hereof), comprised of (a) up to $ 11,000,000 for Gaming Site Acquisition
Advances and (b) the balance for Development Expenditures other than acquisition
of the Gaming Site.


                                       10

<PAGE>

     "Lakes Development Note" shall mean the promissory note dated as of January
25, 2006 and executed by the Band to evidence the Lakes Development Loan, which
is in the form attached hereto as Exhibit E, together with all amendments,
substitutions, restatements, modifications and renewals thereof.

     "Lakes Event of Default" has the meaning described in Section 12.2.

     "Lakes Facility Loan" shall mean the Loan to be made by Great Lakes to the
Band, or facilitated by Great Lakes through guarantees, credit enhancements or
interest subsidies, pursuant to Section 9.2.4 of this Agreement. The Lakes
Facility Loan shall not include any loan to the extent it is subject to a Lakes
Refinancing Guaranty.

     "Lakes Facility Note" shall mean the promissory note dated as of January
25, 2006 and executed by the Band to evidence the Lakes Facility Loan if such
Loan is made directly by Great Lakes, which is in the form attached hereto as
Exhibit F, together with all amendments, substitutions, restatements,
modifications and renewals thereof.

     "Lakes' Internal Expenses" shall mean Lakes' and Great Lakes' corporate
overhead, including without limitation salaries or benefits of any of Lakes's
and Great Lakes' officers and employees, whether or not they perform services
for the Project or the Enterprise, and any travel or other expenses of Lakes's
and Great Lakes' employees.

     "Lakes Refinancing Guaranty" means a guaranty of, or other credit
enhancement furnished by, Great Lakes or Lakes, to the extent that the proceeds
of the debt so guaranteed or benefited refinances all or a portion of the Lakes
Development Loan or any other obligation of the Band to Great Lakes.

     "Lakes Security Agreement" shall mean the security agreement dated as of
January 25, 2006 and executed by the Band in favor of Great Lakes to secure the
Lakes Facility Note, the Lakes Development Note and other obligations as
described in Section 9.2.l(j), which agreement is in the form attached hereto as
Exhibit G, as the same may be amended, substituted, restated, modified and
renewed from time to time.

     "Lakes Working Capital Advance Note" shall mean the promissory note dated
as of January 25, 2006 and executed by the Band to evidence Lakes Working
Capital Advances, which is in the form attached hereto as Exhibit H. together
with all amendments, substitutions and renewals thereof.

     "Lakes Working Capital Advances" shall have the meaning defined in the
Management Agreement.

     "Legal Requirements" shall mean any and all present and future judicial,
administrative, and tribal rulings or decisions, and any and all present and
future federal, state, local and tribal laws, ordinances, rules, regulations,
permits, licenses and certificates, in any way applicable to the Band, Lakes,
the Gaming Site, the Facility, and the Enterprise, including without limitation,


                                       11

<PAGE>

the IGRA, the Compact, and the Band Gaming Ordinance.

     "Limited Recourse" shall mean that all Loans and all liabilities of the
Band under or related to the Agreements and the other Transaction Documents, the
Enterprise or the Gaming Regulatory Authority, and any related awards, judgments
or decrees, shall be payable solely out of undistributed or future Net Revenues
of the Enterprise and shall be a limited recourse obligation of the Band, with
no recourse to tribal assets other than such Net Revenues (except (i), as to the
Equipment Loan, a security interest in the Furnishings and Equipment purchased
with Equipment Loan proceeds, (ii) as to Great Lakes, a security interest in the
Furnishings and Equipment to the extent proceeds of the Lakes Facility Loan or
the Lakes Development Loan were used to fund acquisition of Furnishings and
Equipment, and as otherwise permitted under Section 9.2.1(j) of this Agreement,
(iii) if the Commencement Date does not occur, Subsequent Gaming Facility
Revenues to the extent provided in this Agreement, (iv) mortgages on the Gaming
Site and Non-Gaming Lands prior to their transfer into trust, and (v) after the
Commencement Date occurs, funds on deposit in the Dominion Account to the extent
provided in Section 9.2.1(j) of the Development Agreement and the Dominion
Agreement, or in any other dominion agreement executed by the Band). In no event
shall Great Lakes, Lakes or any lender or other claimant have recourse to (a)
the physical property of the Facility (other than Furnishings and Equipment
subject to the security interest securing the Equipment Loan), (b) Tribal
Distributions, (c) assets of the Band purchased with Tribal Distributions, (d)
revenues or assets of any other gaming facility owned or operated by the Band,
or (e) any other asset of the Band (other than (i) as to Great Lakes, if the
Commencement Date does not occur, Subsequent Gaming Facility Revenues to the
extent provided in this Agreement, (ii) as to the Lakes Development Note and the
Non-Gaming Acquisition Line of Credit, mortgages on the Gaming Site and
Non-Gaming Lands prior to their transfer into trust, (iii) funds on deposit in
the Dominion Account to the extent provided in the Agreements, the Dominion
Agreement and any other dominion agreement executed by the Band, and (iv) such
Net Revenues of the Enterprise).

     "Loans" shall mean the Lakes Development Loan, the Lakes Facility Loan, the
Lakes Working Capital Advances, the Minimum Payment Note, the Bank Loan and the
Equipment Loan.

     "Local Agreement" means the Local Agreement dated March 13, 2000 among the
Band, the City of New Buffalo and the Township of New Buffalo, as it may be
supplemented or amended.

     "Management Agreement" shall mean the Third Amended and Restated Management
Agreement of near or even date, pursuant to which Great Lakes shall manage the
Enterprise.

     "Material Adverse Change" shall mean a material adverse change in Lakes' or
Great Lakes' financial condition which materially and substantially impairs
Lakes' or Great Lakes' respective ability to perform under the Agreements and
the Guaranty.

     "Material Breach" means a failure of either party to perform any material
duty or obligation on its part, if such party fails to (i) cure the specified
default within thirty (30) days following receipt of the notice provided under
Section 12.3, or (ii) if the default is not capable of being


                                       12

<PAGE>

cured within 30 days, commences such cure within 30 days, proceeds diligently to
complete the cure, and completes the cure no later than 90 days after receipt of
such notice.

     "Memorandum of Understanding" means the Memorandum of Understanding between
the Band and the Secretary of the Interior executed on behalf of the Secretary
on January 11, 1999.

     "Minimum Payments Note" shall mean the promissory note dated as of January
25, 2006 and executed by the Band to evidence Minimum Guaranteed Payment
Advances, which is in the form attached hereto as Exhibit I, together with all
amendments, substitutions, restatements, modifications and renewals thereof.

     "Monthly Payments" shall have the meaning described in Section 8.1(c).

     "National Indian Gaming Commission" or "NIGC" means the commission
established pursuant to 25 U.S.C. Section 2704.

     "Net Revenues" shall have the meaning set forth in the Management
Agreement, and shall include "Net Revenues (gaming)" and "Net Revenues (other)"
as defined in the Management Agreement.

     "NIGC Approval" means the written approval by the NIGC of the Management
Agreement.

     "NIGC Disapproval" means a written determination by the NIGC that the
Management Agreement should be disapproved under 25 C.F.R. Section 533.6(c), if
within 120 days after notification of the NIGC decision Lakes and Great Lakes
have not cured the reason for such disapproval.

     "Non-Gaming Land" means any parcels of land in Michigan or Indiana (other
than the Gaming Site) which are (a) identified in a writing executed by the Band
as suitable for reservation homelands for the Band in accordance with the
Memorandum of Understanding, and (b) meet the requirements of United States of
America to be accepted in trust for the Band for Gaming or non-Gaming purposes;
provided that the Gaming Site and the Non-Gaming Land shall not exceed 4,700
acres in the aggregate.

     "Non-Gaming Land Acquisition Line of Credit" shall mean an internal line of
credit in favor of the Band established by Great Lakes in the amount of
$15,000,000, pursuant to the Third Amended and Restated Non-Gaming Land
Acquisition Line of Credit Agreement in the form attached hereto as Exhibit J,
to enable the Band to option or acquire Non-Gaming Lands, together with all
amendments, substitutions, restatements, modifications and renewals thereof.

     "252 MM Shortfall" means the difference, if any, between (a) $252,000,000
and (b) the aggregate amount of bank commitments and firm underwriting
commitments the Band obtains for the Initial Phase for the Bank Loan and the
Equipment Loan, without any guaranty, credit enhancement or interest subsidy
from Great Lakes or Lakes for such Loans (other than a Lakes


                                       13

<PAGE>

Refinancing Guaranty) and on terms not less favorable to the Band than
those set out in Sections 9.2.2, 9.2.3 and 9.2.5 with regard to those Loans.

     "Operating Expense" has the meaning provided in Section 2 of the Management
Agreement.

     "Plans and Specifications" shall mean the final Plans and Specifications
approved for the Facility as described in Section 4.8.

     "Pokagon Council" shall mean the duly elected governing legislative body of
the Band described pursuant to 25 U.S.C. Section 1300j-4(b) or, at the option of
the Band, a designed committee or council created pursuant to resolution or
ordinance of the Pokagon Council.

     "Preliminary Development Budget" shall have the meaning described in
Section 4.2.

     "Project" shall have the meaning described in Section 4.1.

     "Remaining Loan Availability Amount" shall have the meaning described in
Section 9.2.1(a)((ii)(A).

     "Reserve Amount" shall have the meaning described in Section
9.2.1(a)(ii)(A).

     "Restoration Act" shall mean 25 U.S.C. Sections 1300j et seq.

     "Restricted Territory" shall mean the States of Ohio, Illinois, Indiana and
Michigan.

     "Road Service Agreement" shall mean that certain Service, Maintenance and
Reconstruction of County Roads Agreement dated October 24, 2001 by and among the
Band, Great Lakes, Lakes and the Board of County Road Commissioners of Berrien
County, Michigan.

     "Scholarship Program Fee" shall mean the $1,000,000 non-refundable fee paid
by Lakes under Section 9.1 of this Agreement.

     "Signing Fee" shall have the meaning described in Section 8.1(b).

     "Specific Performance Restriction" shall mean that no arbitrator or court
shall have the power to compel, overturn, negate or in any manner modify any
Governmental Action; but such restriction shall not prevent an arbitrator from
determining that the taking of any Governmental Action or the failure to take
any Governmental Action, which is not caused by a breach of Great Lakes or
Lakes' obligations under the Agreements or the Guaranty, constitutes a breach of
this Agreement by the Band or the impairment of rights of Great Lakes under this
Agreement; and which therefore results in liability on the part of the Band for
damages in favor of Great Lakes as provided in this Agreement and enforcement of
the obligations of the Band to Great Lakes, including any security agreements
and collateral instruments, in accordance with their terms.

     "State" shall refer to the State of Michigan.


                                       14

<PAGE>

     "Subsequent Gaming Facility Revenues" means gaming revenues from a gaming
facility (including the Facility) owned or operated by the Band in Michigan, but
only to the following extent: (i) all Class III Gaming Net Revenue and (ii)
Class II Gaming Net Revenue, to the extent that such Net Revenue exceeds
$1,000,000 per annum.

     "Term" shall mean the term of this Agreement as described in Section 7.1.

     "Transaction Documents" shall mean, individually or collectively, as the
context may require, this Agreement, the Management Agreement, the Dominion
Account Agreement, the Band Mortgages, the Security Agreement, and any other
documents, instruments and agreements between Great Lakes and the Band
referenced therein, each as heretofore and hereafter amended.

     "Transition Loan" shall have the meaning described in Section 8.3.

     "Transition Loan Note" shall mean the promissory note dated as of January
25, 2006 and executed by the Band evidencing the Transition Loan, which is in
the form attached hereto as Exhibit K. together with all amendments,
substitutions, restatements, modifications and renewals thereof.

     "Tribal Distributions" shall mean Monthly Distribution Payments, Minimum
Guaranteed Monthly Payments and any other payments received by the Band pursuant
to or in connection with the Management Agreement.

     "Tribal UCC Code" shall have the meaning assigned to such term in Section
9.2.5(m) hereof.

     Section 1.1. Independent Agreement. The objective of the Band and Great
Lakes in entering into and performing this Agreement is to provide a legally
enforceable procedure and agreement pursuant to which Great Lakes will pay
certain fees to the Band and make certain loans to the Band, and whereby the
Band and Great Lakes can proceed as far as possible with development of the
Facility prior to the approval of the Management Agreement by the NIGC so that
the Facility can be opened to the public as soon as possible after the approval
of the Management Agreement by the NIGC; and to set forth the rights and
obligations of the parties if approval of the Management Agreement by the NIGC
does not occur or on the occurrence or non-occurrence of certain other events.
This is intended to be a legally enforceable agreement, independent of the
Management Agreement, which shall enter into effect when executed and delivered
by the parties and be enforceable between the parties regardless of whether or
not this Agreement or the Management Agreement is approved by the Chairman of
the NIGC.

                                   ARTICLE 2.
                 ACQUISITION OF GAMING SITE AND NON-GAMING LANDS

     Section 2.1. Selection of Gaming Site. The parties have selected the Gaming
Site for the Facility.

     Section 2.2. Purchase of Gaming Site; Funding. The Band, through the Band
Designee, has purchased the Gaming Site using funds provided by Lakes or Great
Lakes under


                                       15

<PAGE>

the Lakes Development Loan. All amounts so advanced by Lakes or Great Lakes,
together with option or acquisition payments made by Lakes or Great Lakes prior
to such purchase, are Development Expenditures and have been advanced under the
Lakes Development Note.

          2.2.1. The Band Designee has executed and delivered the Band Designee
Guarantee to Great Lakes. The Band Designee has executed and delivered to Great
Lakes a Band Designee Mortgage securing that guarantee.

     Section 2.3. [intentionally omitted]

     Section 2.4. Assignment of Other Options. Great Lakes shall at the Band's
sole and absolute discretion assign or cause to be assigned to the Band or the
Band Designee any or all options (other than the Gaming Site Option) it, or any
other nominee, Insider or agent of Lakes or Great Lakes may have on, or other
interests in, the following properties: (a) all lands acquired by Lakes, Great
Lakes or any agent or Insider of Lakes or Great Lakes relating to the
development of the Facility and related amenities, and (b) any other land
located within the 20-mile radius described in Section 10.6 below, unless the
Band consents in writing to their retention of specified options or interests
for specified purposes. Any such consent given by the Band shall be irrevocable
as to the specified property and purposes. Any such assignments shall be without
warranty or other recourse. Option payments or acquisition payments made by
Lakes or Great Lakes or Lakes' or Great Lakes' other nominees or agents prior to
such assignment shall be advances under the Non-Gaming Land Acquisition Line of
Credit and repayable in accordance with its terms.

     Section 2.5. Selection of Non-Gaming Lands. As soon as reasonably possible
after the date of this Agreement, the Pokagon Council shall select the
Non-Gaming Lands. The Band shall have sole discretion over the selection and
terms of acquisition of the Non-Gaming Lands.

     Section 2.6. Closing on Non-Gaming Lands; Funding. The Band or the Band
Designee shall thereafter proceed to purchase the Non-Gaming Lands. Such
purchase shall occur on or immediately following NIGC Approval; as may be
required to avoid expiration of options or deadlines set in purchase agreements,
as they may be extended with the consent of the owners of the proposed
Non-Gaming Lands; or as otherwise agreed by the parties. Great Lakes shall
advance funds in such amount or amounts as shall be needed to option and/or
acquire the Non-Gaming Lands, including without limitation all related fees and
transfer taxes, provided that the total amount Great Lakes shall be required to
advance shall not exceed $15,000,000. All amounts so advanced by Great Lakes
shall be advanced under the Non-Gaming Land Acquisition Line of Credit, which
shall be Limited Recourse, shall bear interest at the Band Interest Rate, and
shall be repayable in 60 equal monthly installments of principal and interest
commencing on the 15th day of the month after the month in which the
Commencement Date occurs.

          2.6.1. Funding where Non-Gaming Land Acquired by Band Designee. If the
Band opts to have the Band Designee enter into options or purchase agreements
for Non-Gaming Lands, or acquire any of the Non-Gaming Lands, the cost of
obtaining such options and agreements, and of closing under such options and
agreements, including all related fees,


                                       16

<PAGE>

commissions and expenses, shall be advanced by Great Lakes to the Band under the
Non-Gaming Land Acquisition Line of Credit, through a designee other than Great
Lakes, which designee shall be the nominee of and agent for Great Lakes. The
Band shall in turn advance or contribute such amounts to or for the benefit of
the Band Designee. The Band Designee shall execute and deliver to Great Lakes
the Band Designee Guarantee. The Band Designee shall also execute and deliver to
Great Lakes' nominee a Band Designee Mortgage securing that guarantee, or an
amendment to such mortgage, upon each closing on the Band Designee's acquisition
of any such real property. Great Lakes' Designee shall act solely as agent and
nominee for Great Lakes in advancing funds under the Non-Gaming Land Acquisition
Line of Credit and holding the Band Designee Mortgage, and shall not have any
independent capacity; shall be subject to all claims and defenses of the Band
and the Band Designee against Great Lakes and Lakes, to the same extent as if
the property in question had been acquired by the Band and mortgaged by the Band
to Great Lakes or Lakes; and shall be subject to the arbitration, limited waiver
of immunity, Limited Recourse and other provisions of Article 14 of the
Development Agreement. Great Lakes' designee shall only be entitled to enforce
the Band Designee Mortgage against the Band Designee to the extent that, and in
the same manner as, Great Lakes would be entitled to enforce a Band Mortgage
against the Band. Any Great Lakes' designee shall execute and deliver to the
Band an agency agreement reasonably acceptable to the Band and Great Lakes.

     Section 2.7. Mortgages Prior to Transfer into Trust. Prior to transfer of
the Gaming Site or Non-Gaming Lands into trust, amounts advanced under the Lakes
Development Note and under the Non-Gaming Land Acquisition Line of Credit shall
be secured by a Band Mortgage or Band Designee Mortgage on all such properties.
Lakes and Great Lakes shall release such mortgages upon transfer of the
respective lands subject to such mortgages into trust, or as otherwise provided
in this Agreement.

                                   ARTICLE 3.
                               CONSTRUCTION PHASES

     Section 3.1. Initial Phase. The Facility shall be constructed in two
phases, the Initial Phase and the Final Scope of Work. Great Lakes and the Band
agree to proceed with the Design Phase and the Construction Phase of the Initial
Phase in accordance with Articles 4 and 5, and to equip the Initial Phase of the
Facility in accordance with Article 6. The intent of the parties is to take all
steps necessary in accordance with Articles 4 and 5 to permit the Band to
commence construction of the Initial Phase immediately upon the taking into
trust of the Gaming Site and receipt of NIGC Approval, and to complete
construction of the Initial Phase, equip the Initial Phase of the Facility and
commence Gaming as soon as reasonably practicable thereafter.

     Section 3.2. Final Scope of Work. No later than six months after the
Commencement Date, Great Lakes shall submit to the Band a proposed Preliminary
Development Budget, plans and specifications for the Final Scope of Work. Upon
approval of such budget, plans and specifications, Great Lakes and the Band
shall proceed in accordance with Articles 4, 5 and 6 to design, construct and
equip the Facility in accordance with the Final Scope of Work in a timely manner
so as to permit opening of the Facility expansion no later than two years after
the Commencement Date.

     Section 3.3. Modification of Final Scope of Work. Notwithstanding any
provision of


                                       17

<PAGE>

this Article, the Final Scope of Work may be reduced as follows: The Band and
Great Lakes may at any time notify the other party that it believes that
unanticipated material adverse changes in local gaming market conditions (not
including changed economic conditions, whether locally or in the economy
generally) make construction of the Facility to the Final Scope of Work not
economically feasible. In that event both parties shall negotiate in good faith
to determine what adjustments, if any, in the Final Scope of Work are
appropriate in light of the changed local gaming market conditions; provided
that such adjustments shall not result in a Facility smaller than the Initial
Phase. The Band and Great Lakes shall mutually agree upon the final budget,
plans and specifications for the Final Scope of Work.

     Section 3.4. Bank Loans and Equipment Loans. Any references in Articles 4,
5 and 6 to the Bank Loan, the Equipment Loan or the Bank Closing shall refer to
such loans or closings as they pertain to the financing of the Initial Phase or
the expansion to the Final Scope of Work, as appropriate.

                                   ARTICLE 4.
                                  DESIGN PHASE

     Section 4.1. Employment of Architect. Great Lakes shall recommend to the
Band a minimum of three duly licensed architects, who shall be familiar with the
design of gaming facilities, for interview by the Pokagon Council, and the Band
shall select an architect from the group or, if none of the first group is found
acceptable to the Band, groups recommended by Great Lakes. The Band shall employ
such architect (the "Architect") for the purpose of performing certain services
in connection with the design and construction of the Facility, including site
development. The Band's agreement with the Architect shall be in the form of a
contract (the "Design Agreement") approved by Great Lakes and the Pokagon
Council. The scope of the project contemplated by this Agreement (the "Project")
shall be stated and established in the Design Agreement and shall be subject to
the mutual approval of the parties, but shall incorporate at a minimum the
Initial Phase and the Final Scope of Work (subject to the provisions of Section
3.3). The scope of design shall not include, but the design shall facilitate,
the possibility of the Band later designing and constructing phased expansions
of the hotel, theme retail space, golf course and other amenities. The Design
Agreement shall also provide for and establish appropriate design packages
("Design Packages"), each pertaining to a discrete portion or phase of the
Project. The Design Agreement shall allow Great Lakes the right and
responsibility to supervise, direct, control and administer the duties,
activities and functions of the Architect and to efficiently carry out its
covenants and obligations under this Agreement; but the Design Agreement shall
provide that the Architect will consult closely with the Band and the Band's
advisers, and that all design elements shall be subject to review and approval
by the Band.

     Section 4.2. Design and Construction Budgets. Great Lakes, with the
assistance and input of the Architect and subject to the approval of the Pokagon
Council, shall establish a preliminary Development Budget (the "Preliminary
Development Budget") for designing, constructing, furnishing and equipping the
Facility and related costs and Development Expenditures. The Preliminary
Development Budget, as approved by the Pokagon Council and as it may be amended
with the approval of the Pokagon Council, is referred to as the "Approved
Development Budget." The Approved Development Budget shall reflect the Initial
Phase and, as


                                       18

<PAGE>

to the expansion to include the Final Scope of Work, the Final Scope of Work
(subject to revision as provided in Section 3.3), as well as any other planned
phasing. Great Lakes may, after notice to and approval by the Pokagon Council,
revise the aggregate Approved Development Budget from time to time as necessary
or appropriate to reflect any unpredicted changes, variables or events or to
include additional and unanticipated Project costs. Great Lakes may, at is sole
discretion after notice to and approval by the Business Board, reallocate part
or all of the amount budgeted with respect to any line item to another line item
and to make such other modifications to the Approved Development Budget as Great
Lakes deems necessary or appropriate, provided that: (i) the cumulative
modifications of the Approved Development Budget for all Design Packages shall
not, without Great Lakes' prior approval and the Pokagon Council's prior
approval, exceed the aggregate Approved Development Budget, and (ii) any
modifications shall not otherwise conflict with the terms of this Agreement.
Approved Development Budget adjustments which otherwise vary from the terms of
the Agreement, shall, in addition to requiring Great Lakes' approval, require
the approval of the Pokagon Council. The Band acknowledges that the Approved
Development Budget is intended only to be a reasonable estimate of Project
costs, subject, however, to the provisions of Section 5.8 with regard to cost
overruns.

     Section 4.3. Gaming Regulatory Authority Expenses. The Approved Development
Budget shall include such amounts as the Band determines, after consultation
with Great Lakes, are reasonable and necessary to assure that the GRA is able to
fulfill its regulatory role in a manner that does not slow the opening of the
Facility; provided that the cost of final preparation and approval of the Gaming
Ordinance shall not exceed $20,000.

     Section 4.4. [intentionally omitted].

     Section 4.5. Concept Design and Engineering. Great Lakes, after
consultation with the Business Board and the Architect, shall prepare for the
review and approval of the Pokagon Council, a statement of requirements for the
Facility, if any, including, but not limited to, planned phasing, if any, a
program of preliminary objectives, schedule requirements, design criteria,
including assumptions regarding HVAC demands, space requirements and
relationships, special equipment and site requirements.

     Section 4.6. Preliminary Program Evaluation. Great Lakes shall prepare for
review by the Business Board and approval of the Pokagon Council, a preliminary
evaluation of the proposed Project including, but not limited to, planned
phasing, if any, schedule, Development Budget requirements, and alternative
approaches to Project design and construction. Based upon the agreed-upon
schedule, Development Budget requirements and design, the Architect shall
prepare schematic design documents consisting of drawings and other documents
illustrating the scale and relationship of the Facility and any other Enterprise
components, as well as a preliminary estimate of Enterprise costs based upon the
proposed area, size and scope of the Enterprise.

     Section 4.7. Design Development. After review by the Business Board and
upon final approval of the schematic design documents by the Pokagon Council and
Great Lakes, the Architect shall prepare design development documents consisting
of drawings and other


                                       19

<PAGE>

documents to fix and describe the size and character of the Project as to
architectural, structural, mechanical and electrical systems, materials and such
other elements and/or Design Packages as may be appropriate. Further, the
Architect shall advise Great Lakes with respect to, and update, any Development
Budget estimates. Great Lakes shall submit to the Pokagon Council, for its
review and approval, finalized versions of the design development documents
prepared by the Architect and agreed to by Great Lakes.

     Section 4.8. Plans and Specifications. Based upon the approved design
development documents and any further adjustments in the scope and quality of
the Project or in the Development Budget, the Architect shall prepare for
approval by Great Lakes and the Business Board constraction documents consisting
of preliminary drawings and specifications setting forth the general
requirements for construction of the Project. The Architect shall proceed with
completion of detailed plans and specifications (the "Plans and Specifications")
as they relate to construction of portions of the Facility in the order such
portions are to be completed or in the order required for sequential completion,
and shall proceed with completion of all Plans and Specifications as soon as
reasonably possible given construction scheduling and the intended progress of
Project work. The Architect shall advise the Business Board of any adjustments
to previous Development Budget estimates. The Plans and Specifications of the
Initial Phase shall be designed to accommodate the addition of further
amenities, including without limitation a hotel, expansion of the parking
garage, and a bingo/multi-purpose entertainment hall.

     As portions of the detailed Plans and Specifications are completed for
segments of the Project, the Architect shall be required to submit duplicate
copies of those portions of the Plans and Specifications to Great Lakes and to
the Business Board (for approval prior to release of such documents to
prospective bidders for bidding and prior to commencement of construction of
such portions) and to the Pokagon Council (for information).

     Section 4.9. Compliance with Construction Standards, Environmental Laws and
Regulations. The Facility shall be designed and constructed so as to adequately
protect the environment and the public health and safety and to comply with all
requirements of IGRA and the NIGC. The design, construction and maintenance of
the Facility shall, except to the extent a particular requirement or
requirements may be waived in writing by the Pokagon Council, meet or exceed all
reasonable minimum standards pertaining to the Band and national, State and
local building codes, fire codes and safety and traffic requirements (but
excluding planning, zoning and land use laws, ordinances, regulations and
requirements), which would be imposed on the Enterprise by existing State or
Federal statutes or regulations which would be applicable if the Facility were
located outside of the jurisdictional boundaries of the Band, even though those
requirements may not apply within the Band's jurisdictional boundaries. To the
extent that the Band has adopted or may in the future adopt more stringent
requirements, those requirements shall govern. Nothing in this subsection shall
grant to the State or any political subdivision thereof any jurisdiction
(including but not limited to, jurisdiction regarding zoning or Gaming Site use)
over the Facility or Enterprise or its development, management and operation.

     Section 4.10. Advance of Funds for Design Work, Long Lead Time Items and
Preliminary Site Work. Notwithstanding any lack of approval of the Management
Agreement or this Agreement by the NIGC, Great Lakes shall advance such funds
under the Lakes Development Loan as are reasonably necessary to proceed prior to
Bank Closing with site and


                                       20

<PAGE>

facility planning, architectural renderings and plans, including payments to the
Architect pursuant to the Design Agreement, engineering and environmental
services, Development Soft Costs, working drawings and construction contract
bidding documents. Great Lakes has also advanced under the Lakes Development
Loan, notwithstanding lack of such approvals, such funds (in the approximate
amount of $4,500,000) as were reasonably necessary to order long-lead-time items
and to permit the Band to begin preliminary site work. All amounts so advanced
by Great Lakes prior to NIGC Approval and Bank Closing shall be a part of the
development cost of the Enterprise and shall be advanced under the Lakes
Development Note as part of the Lakes Development Loan.

                                   ARTICLE 5.
                               CONSTRUCTION PHASE

     Section 5.1. Selection of Contractor or Construction Manager. Great Lakes
shall, in consultation with the Architect and the Business Board, initiate a
pre-bid selection process in order to pre-qualify prospective general
contractors and/or construction management in connection with the construction
of the Facility. Great Lakes shall submit the list of pre-qualified general
contractors and/or construction managers to the Pokagon Council, together with
Great Lakes' recommendations, for the Pokagon Council's review, comment and
approval. Special consideration shall be given in the selection of contractors
and/or construction managers to companies with a proven history of effective
employment of Native American and local subcontractors.

     Section 5.2. Vendor Preferences. In entering contracts for the supply of
goods and services for the Enterprise, including the selection of contractors
and/or construction managers, subcontractors and suppliers, Great Lakes shall
comply with the Band's Member Preference Program adopted on August 1, 2001, as
it may be amended, the provisions of Section 4 of the Local Agreement, and the
Labor Management Cooperation Agreement between Christman Kraus-Anderson, a joint
venture, and the Michigan State Building and Construction Trades Council and the
Southwest Michigan State Building and Construction Trades Council and Michigan
Regional Council of Carpenters dated May 14, 2002, as amended. Great Lakes shall
provide written notice to the Band in advance of all such contracting,
subcontracting and construction opportunities. The Band reserves the right to
require use of union labor on some or all contracts, subject to review with
Great Lakes of any related budgetary impact.

     Section 5.3. Proposal Review. Subsequent to the pre-qualification of
prospective contractors and/or construction managers, Great Lakes shall conduct
a review of responsive proposals for the construction of the Project, and Great
Lakes shall recommend to the Band a well-qualified construction manager,
contractor and/or contractors. The recommended contractor, contractors and/or
construction manager shall be subject to the approval of the Pokagon Council,
shall be properly licensed in the State of Michigan, and shall be capable of
furnishing a payment and performance bond satisfactory to the Business Board to
cover the construction for which the contractor, contractors and/or construction
manager may be retained.

     Section 5.4. Contracts. The Band shall enter into a construction management
agreement and/or construction contract or contracts (the "Construction
Documents") with the parties selected and approved in the form negotiated by
Great Lakes and approved by the


                                       21

<PAGE>

Business Board for each Construction Document. The Construction Documents shall
provide that work shall begin only after NIGC Approval, and the Construction
Documents may provide that they shall be canceled by either party if NIGC
Approval has not occurred by a specified fixed calendar date. The selected
contractor, construction manager and/or other contracting parties shall be
compensated solely from the proceeds of the Lakes Development Loan and the Bank
Loan and/or the Lakes Facility Loan, if applicable, subject to, and in
accordance with the terms, conditions and provisions of the Construction
Documents and the respective Loan Agreements.

     Section 5.5. Construction Document Provisions. The Construction Documents
shall (i) require the successful construction manager or general contractor and
all contractors to be responsible for providing all materials, equipment and
labor necessary to construct and equip the Project as necessary including site
development; (ii) shall include appropriate provisions assuring non-payment of
Michigan sales and use tax for goods and materials in the Project (to the extent
said exemption is available for the Project); and (iii) require said
construction manager or general contractor and all contractors to construct the
Project in accordance with the Plans and Specifications, including any changes
or modifications thereto approved by the Business Board. The Band agrees to
indemnify Great Lakes against loss or liability caused by any written direction
by the Pokagon Council not to collect or remit Michigan sales tax. The
Construction Documents will provide for insurance conforming to the applicable
insurance requirements of the Management Agreement, appropriate lien waivers,
and for construction schedules by which milestones, progress payments and late
penalties, if any, may be calculated.

     Section 5.6. Construction Administration. The Construction Documents shall
provide that Great Lakes shall be responsible for all construction
administration during the construction phase of the Project. Great Lakes shall
act as the Band's designated representative and shall have full power and
complete authority to act on behalf of the Band in connection with the
Construction Documents. To the extent allowed by the Design Agreement and the
Construction Documents, Great Lakes shall have control and charge of any persons
performing work on the Project site, and shall interpret and decide on matters
concerning the performance of any requirements of the Construction Documents.
Great Lakes shall have the authority to reject work which does not conform to
the Construction Documents. Great Lakes may conduct inspections to determine the
date or dates of substantial completion and the Completion Date. Great Lakes
shall observe and evaluate or authorize the observation and evaluation of
Project work performed, review or authorize review of applications for payment
for submission to the Band and review or authorize review and certification of
the amounts due the contractors and/or construction managers.

     Section 5.7. Construction Commencement and Completion. The Construction
Documents shall contain such provisions for the protection of the Band and Great
Lakes as the Band and Great Lakes shall deem appropriate; shall provide that the
construction of the Initial Phase of the Project shall commence on NIGC
Approval, following and subject to the granting of all approvals necessary to
commence construction; and shall also provide that any contractor shall exert
its best efforts to complete construction within such time as the Band and Great
Lakes agree following the commencement of construction. If the Band decides to
proceed with an expansion to the Final Scope of Work, Great Lakes and the Band
shall proceed in good faith with construction of a permanent Facility in
accordance with the Final Scope of Work, as modified


                                       22

<PAGE>

under Section 3.3, with such construction to be completed no later than two
years after the Commencement Date unless otherwise agreed by the Band, but
subject to any delay caused by the Band's approval process. All contractors
shall, at a minimum, warrant their respective portions of the work to be
performed to be free of defects for at least one year after the Completion Date
of the Initial Phase and Final Scope of Work, respectively.

     Section 5.8. Determination of Approved Construction Costs: Cost Overruns.
Promptly upon the Band's execution of the Construction Documents, the Architect
shall submit a final estimate of Construction Costs, which estimate shall be
subject to the reasonable approval of Great Lakes and the Pokagon Council. This
estimate of Construction Costs, as so approved, is referred to as "Approved
Construction Costs." Great Lakes shall pay, without repayment from the
Enterprise or recourse to the Band, Construction Costs of the Initial Phase to
the extent they exceed the lesser of (a) such Approved Construction Costs of the
Initial Phase (including the approved contingency reserve), as such costs may
change because of change orders approved by the Band and Great Lakes or
amendments to the Approved Development Budget approved by the Band and Great
Lakes, or (b) $298,000,000, or such other amount as the Pokagon Council and
Great Lakes may agree; in each case except insofar as such overruns are caused
by Force Majeure or by acts or omissions of the Band. Construction Costs do not
include amounts advanced under the Non-Gaming Acquisition Line of Credit or the
Transition Loan, and Great Lakes' liability for cost overruns under this
subsection shall be computed without regard to any amounts advanced by Lakes or
Great Lakes under such line of credit or loan.

                                   ARTICLE 6.
                            FURNISHINGS AND EQUIPMENT

     Section 6.1. Selection of Furnishings and Equipment. Great Lakes shall
submit to the Business Board, for its review and approval, the specifications
for Furnishings and Equipment. Thereafter, Great Lakes shall select and procure
vendors for purchase by the Band of Furnishings and Equipment required to
operate the Enterprise in conformity with such specifications. The cost of
Furnishings and Equipment shall be financed through the Equipment Loan.
Alternatively, in the sole discretion of the Band, Great Lakes may arrange for
the procurement of Furnishings and Equipment on lease terms consistent with the
terms provided below as to the Equipment Loan, with such changes as may be
approved by the Business Board. Any commitments for the procurement of
Furnishings and Equipment shall, however, become binding on the Band only upon
later of (a) NIGC Approval or (b) the receipt by Band of a commitment for the
Equipment Loan consistent with the terms of this Agreement (or on such modified
terms as shall be agreed to by the Band).

                                   ARTICLE 7.
                                      TERM

     Section 7.1. Term. This Agreement shall enter into and remain in full force
and effect from the date of execution hereof until, unless earlier terminated in
accordance with its terms, the later of:

               (a) seven (7) years from the Commencement Date, provided that if
          the Term of the Management Agreement is reduced to five (5) years
          pursuant to Section 3.2


                                       23

<PAGE>

          of the Management Agreement, the term of this Agreement shall be five
          (5) years plus the period of development and construction, or such
          earlier date as the Management Agreement shall have been terminated in
          accordance with its terms;

               (b) the date on which all obligations owed to Great Lakes by the
          Band pursuant to this Agreement and any related notes have been
          satisfied in full or otherwise discharged.

                                   ARTICLE 8.
 PAYMENTS AND COMMITMENTS BY GREAT LAKES BEFORE APPROVAL OF MANAGEMENT AGREEMENT

     Section 8.1. Fees Payable By Great Lakes to the Band. Great Lakes will pay
the following fees and advances to the Band:

               (a) Initial Fee. Lakes has paid the Band a non-refundable fee of
          $150,000 on execution of Term Sheet, the receipt of which is hereby
          acknowledged by the Band. Such payment shall be for the account of
          Great Lakes.

               (b) Signing Fee. Lakes has paid the Band a non-refundable signing
          fee of $1,000,000 (the "Signing Fee"). The Band acknowledges receipt
          of the Signing Fee, which shall be for the account of Great Lakes. Use
          and disbursement of Signing Fee monies shall be at the sole discretion
          of the Band, and Great Lakes shall have no responsibility for such
          funds after receipt thereof by the Band.

               (c) Monthly Payments. Great Lakes advanced $125,000 to the Band
          (the "Monthly Payments") on or about August 31, 1999, and shall
          thereafter advance on the 15th day of each month, beginning on
          September 15, 1999, and continuing until the date on which one of the
          following, whichever is earlier, has occurred:

                    (i) the Commencement Date; or

                    (ii) this Agreement and the Management Agreement have been
               terminated in accordance with their terms, and all related
               payments have been made; or

                    (iii) August 26, 2007.

     Use and disbursement of the Monthly Payments, once received by the Band,
shall be at the sole discretion of the Band, and Great Lakes shall have no
responsibility for such funds after receipt thereof by the Band. All Monthly
Payments shall constitute advances under the Transition Loan pursuant to Section
8.3 of this Agreement and shall be repayable as provided in that section.


                                       24

<PAGE>

     Section 8.2. Deposit into the Account. Upon execution of the Development
Agreement, Lakes deposited $20,900,000 into the Account, subject to the Security
Agreement and the Control Agreement. Such deposit shall be for the account of
Great Lakes. Great Lakes shall also deposit such further sums from time to time
as shall be necessary to maintain a minimum balance in the Account of at least
$2,000,000 at all times prior to the Commencement Date; provided that Great
Lakes shall not be required to make aggregate deposits that exceed the total
amount of fees, loans and other payments to be made by it to or for the account
of the Band under this Agreement. The Account shall:

               (a) serve as collateral for liquidated or other damages payable
          to the Band as provided in the Agreements; and

               (b) serve as a funding mechanism as provided in the Control
          Agreement, at Great Lakes' option, for Great Lakes's obligation to
          make payments to the Band (other than the Scholarship Program Fee) and
          to make advances under the Lakes Development Loan and the Lakes
          Facility Loan.

     Great Lakes agrees to execute and deliver the Security Agreement, the
Control Agreement, and such financing statements and other instruments as the
Band requests to perfect this security interest. Nothing in this section shall
limit Great Lakes's obligations to make payments as required under this
Agreement or limit the Band's remedies in the event of Great Lakes's default.
Funds in the Account shall be invested in such manner as Great Lakes reasonably
deems prudent, provided that the investment vehicles are liquid and do not
include equities, swaps, derivatives, commodities, or speculative instruments.
Great Lakes shall inform the Band of the nature and terms of the financial
instruments in which the escrowed funds are invested. Income from the Account
shall be payable to Great Lakes prior to a Lakes Event of Default. After a Lakes
Event of Default, income shall be payable to the Band to the extent needed to
fund damages payable to the Band. Firstar shall be entitled to reasonable
compensation acceptable to the Band and Great Lakes and to reimbursement of
expenses, all of which shall be payable from the Account prior to a Lakes Event
of Default and, after such an Event of Default, by Great Lakes. Payments into
the Account shall not be deemed advances to the Band for purposes of accrual of
interest, and interest shall only accrue as to funds advanced by Great Lakes
through the Account upon disbursement from the Account.

     Section 8.3. Transition Loan. Great Lakes shall make a loan to the Band for
the purposes and as set forth in clause (c) of Section 8.1, upon the terms set
forth in the form of Transition Loan Note (the "Transition Loan"). Each advance
of funds to the Band by Great Lakes as part of the Transition Loan shall be
evidenced by the Transition Loan Note, duly authorized and executed by the Band.
All amounts advanced under the Transition Loan shall be repayable to Great Lakes
as Limited Recourse obligations of the Band; shall not accrue interest for the
first two years after execution of the Management Agreement; shall, after the
expiration of that two year period, bear interest at the Band Interest Rate, as
defined below; and shall be payable monthly in arrears, beginning on the 15th
day of the month after the Commencement Date, in 60 equal monthly payments of
principal and interest. If the Bank Closing does not occur, interest shall
accrue on amounts advanced under the Transition Loan at Wall Street Journal
prime plus 1%, not to exceed 10%.


                                       25

<PAGE>

     Section 8.4. Advances on Lakes Development Loan. Great Lakes will provide
the following funds to the Band prior to NIGC Approval and the Bank Closing as
advances on the Lakes Development Loan, to be repaid with interest in accordance
with the terms provided in Section 9.2.1:

               (a) Gaming Site Acquisition Funds. Lakes or Great Lakes have
          advanced funds to permit the Band to acquire the Gaming Site, pursuant
          to Section 2.2.

               (b) Site Planning, Design Development and other Preliminary
          Expenditures. Great Lakes shall advance funds reasonably necessary for
          the work described in Articles 3, 4 and 5 of this Agreement to be
          performed prior to NIGC Approval and the Bank Closing, pursuant to
          those Articles.

               (c) Advances to the Band for Gaming Ordinance. In order to enable
          the Band to fulfill its covenant set forth in Section 11.2(a) below to
          timely adopt a Gaming Ordinance and regulations (the "Gaming
          Ordinance"), Great Lakes shall advance to the Band prior to NIGC
          Approval the reasonable cost of preparation and approval of the Gaming
          Ordinance, not to exceed $20,000.

               (d) Advances to the Band for Development Soft Costs. Great Lakes
          shall advance funds reasonably necessary for Development Soft Costs.
          Such advances shall be in accordance with a budget to be prepared by
          the Band and submitted to Great Lakes for its reasonable approval, as
          such budget may be modified from time to time. Great Lakes and the
          Band shall consult periodically with regard to Development Soft Costs.

     Section 8.5. Non-Gaming Land Acquisition Line of Credit. Great Lakes will
provide advances to the Band under the Non-Gaming Land Acquisition Line of
Credit but prior to the Commencement Date as provided in Sections 2.6 and 2.6.1,
upon the terms set forth in the form of Non-Gaming Land Acquisition Line of
Credit Agreement attached hereto as Exhibit J (the "Non-Gaming Land Acquisition
Line of Credit"). Each advance of funds to the Band by Great Lakes as part of
the Non-Gaming Land Acquisition Line of Credit shall be evidenced by such Line
of Credit, duly authorized and executed by the Band and setting forth the
applicable terms of this Agreement. All such advances shall be repaid with
interest on the same terms as provided in Article 9 with regard to the Lakes
Development Loan, except that funds advanced under the Non-Gaming Land
Acquisition Line of Credit shall at Great Lakes' request, prior to transfer of
land into trust, be guaranteed by the Band Designee and secured by mortgages in
favor of Great Lakes on any Non-Gaming Lands acquired by the Band or the Band
Designee. The Non-Gaming Land Acquisition Line of Credit shall otherwise be
Limited Recourse. All land and options acquired through the Non-Gaming Land
Acquisition Line of Credit shall be acquired in the name of the Band or the Band
Designee.


                                       26

<PAGE>

                                   ARTICLE 9.
 PAYMENTS AND COMMITMENTS BY GREAT LAKES AFTER APPROVAL OF MANAGEMENT AGREEMENT

     Section 9.1. Scholarship Program Fee. Upon NIGC Approval and transfer of
the Gaming Site into trust eligible for Gaming purposes, Great Lakes will pay
the Band a non-refundable fee of $1,000,000 (the "Scholarship Program Fee") into
an account established and controlled by the Band. The ultimate use and
disbursement of these funds shall be at the sole discretion of the Band, and
Great Lakes shall have no responsibility for such funds after payment to the
Band.

     Section 9.2. Development and Equipment Loans. Great Lakes shall make
available to the Band the Lakes Development Loan and, upon NIGC Approval and
transfer of the Gaming Site into trust for the Band, shall assist the Band in
obtaining the Bank Loan and the Equipment Loan; and, to the extent required
under Section 9.2.4, shall provide the Lakes Facility Loan. Such Loans shall be
in an aggregate amount sufficient to, and shall be used to, pay for all
Development Expenditures for both the Initial Phase and the Final Scope of Work,
provided that unless otherwise agreed to by the Band, (a) the aggregate amount
of Development Expenditures for the Initial Phase shall not exceed $298,000,000,
(b) the aggregate amount of additional Development Expenditures for the Final
Scope of Work shall not exceed an additional $44,000,000, and (c) the Bank Loan
and Equipment Loan to fund the Final Scope of Work need not be obtained at the
same time as such Loans are obtained for the Initial Phase. The Loans shall be
in the following amounts and on the following terms, unless otherwise agreed by
the Band:

          9.2.1. Lakes Development Loan.

               (a) Amount: $46,000,000 for the Initial Phase, comprised of (i)
          up to $11,000,000 for Gaming Site Acquisition Advances and (ii) the
          balance for Development Expenditures other than acquisition of the
          Gaming Site. Great Lakes shall not be required to provide additional
          funding or credit enhancements for the Initial Phase except as
          provided under Sections 5.8 and 9.2.4, and shall not be required to
          provide any funding for the Final Scope of Work.

                    (i) All amounts paid by Great Lakes or Lakes under or in
               relation to any guarantees or credit enhancements provided by
               Great Lakes or Lakes at the request of the Band with respect to
               any Construction Documents ("Construction Guaranty Payments"),
               shall be deemed advances under the Lakes Development Loan and to
               the extent required the maximum cap of the Lakes Development Loan
               shall be increased by such amounts paid; provided that Great
               Lakes and Lakes agree that they shall not make any Construction
               Guarantee Payments unless (A) the obligee or beneficiary
               thereunder has demanded such payment, (B) Great Lakes or Lakes
               has provided the Band with written notice of such demand, and (C)
               the Band has not paid the amount demanded within thirty (30)


                                       27

<PAGE>

               days after the Band's receipt of such notice.

                    (ii) Great Lakes shall prior to the Commencement Date, at
               the request of the Band, provide guarantees, credit enhancements
               or interest subsidies for any Construction Documents and/or with
               respect to any Loans and, as to Loans, post cash collateral
               therefor, subject to the following terms (in addition to any
               other applicable terms set forth in this Agreement):

                    (iii) Reserves ("Guaranty Reserves") shall, unless waived in
               writing by the Band and Great Lakes, be established under the
               Lakes Development Loan at the time that Great Lakes or Lakes
               provides such guarantees, credit enhancements or interest
               subsidies, which reserves shall be in an amount (the "Reserve
               Amount") equal to the lesser of (x) the principal amounts of the
               commitments under any Construction Documents or Loans, as
               applicable, for which Great Lakes or Lakes provided such
               guaranties, credit enhancements or interest subsidies, or (y) any
               contractual limitation or cap on Lakes or Great Lakes' liability
               under such guaranties or other credit enhancements, or the
               present value of any such interest subsidy as of the closing on
               the Bank Loan or the Equipment Loan, as applicable; PROVIDED
               HOWEVER, that (I) the amount of any Guaranty Reserve shall be
               reduced by the amount of cash collateral posted by Lakes or Great
               Lakes to secure any guaranty, credit enhancement or interest
               subsidy, the amount advanced by Lakes or Great Lakes for such
               cash collateral being an advance under the Lakes Development
               Loan, (II) the amount of any Guaranty Reserve and the amount of
               any Reserve Amount shall be reduced to the extent that the
               liability of Lakes or Great Lakes under the guaranty, credit
               enhancement or interest subsidy for which the Guaranty Reserve is
               established decreases and is not, under the terms of the
               guaranteed or benefited obligation, subject to increase, and
               shall be terminated when such guaranty, credit enhancement or
               interest subsidy is released or terminated; and (III) except with
               the prior written consent of Great Lakes or Lakes, as applicable,
               or as otherwise provided under Section 9.2.4, neither the amount
               of the guaranty, credit enhancement or interest subsidy nor the
               related Guaranty Reserve shall exceed the then Remaining Loan
               Availability Amount. The term "Remaining Loan Availability
               Amount" shall mean as of any date in question, the amount equal
               to $46,000,000, less all then outstanding advances on the Lakes
               Development Loan, and less the aggregate Reserve Amount as of
               such date for all previously granted guaranties, credit
               enhancements or interest subsidies (regardless of whether a
               Guaranty Reserve was in fact established therefor); and

                    A. Except with the prior consent of Great Lakes, at no time
                    shall Lakes or Great Lakes be obligated to make advances
                    under the Lakes Development Loan to the extent that the same
                    would cause the sum of outstanding advances under the Lakes


                                       28

<PAGE>

                    Development Loan plus the outstanding Reserve Amount as of
                    the date of such advance for all guaranties, credit
                    enhancements or interest subsidies previously granted by
                    Lakes and Great Lakes (regardless of whether a Guaranty
                    Reserve was in fact established therefor) to exceed
                    $46,000,000 unless such advance will have the effect of
                    reducing dollar for dollar the outstanding obligation of
                    Lakes or Great Lakes under any applicable guaranty, credit
                    enhancement or interest subsidy.

                    B. Great Lakes, Lakes and the Band agree that no Guaranty
                    Reserves have been established as of the date hereof and
                    that no guaranty, credit enhancement or interest subsidy of
                    Lakes or Great Lakes is currently outstanding (other than
                    under the Road Service Agreement, which the parties intend
                    to terminate and shall not require any Guaranty Reserve).

                    C. Any funds advanced by Lakes or Great Lakes under the
                    Lakes Development Loan or the Lakes Facility Loan to provide
                    cash collateral for a guarantee, credit enhancement or
                    interest subsidy of Lakes or Great Lakes shall, if released
                    on or prior to the Commencement Date, be used to pay
                    Development Expenditures and, if released after the
                    Commencement Date, shall be used at the Band's option to pay
                    Development Expenditures or to repay Loans.

               (b) Term: Seven (7) year term, plus the period of development and
          construction; provided that if the Term of the Management Agreement is
          reduced to five (5) years pursuant to Section 3.2 of the Management
          Agreement, the term of the Lakes Development Loan shall be five (5)
          years plus the period of development and construction.

               (c) Interest and amortization.

                    (i) Interest at the Band Interest Rate shall accrue from
               date of advance until the Commencement Date; thereafter the Lakes
               Development Loan shall be payable as follows: monthly in arrears,
               beginning on the 15th day of the month after the month in which
               the Commencement Date occurs, in equal monthly payments of
               principal and interest for (a), if the term of the Lakes
               Development Loan is seven (7) years, the successive 84 months of
               the term; or (b) if the term of the Lakes Development Loan is
               five (5) years, in the successive 60 months of the term.

                    (ii) If the Bank Closing does not occur, interest shall
               accrue on amounts advanced under the Lakes Development Loan at
               Wall Street Journal prime plus 1%, not to exceed 10%.

               (d) Repayment of the Lakes Development Loan shall be subordinated


                                       29

<PAGE>

          to the Bank Loan, the Equipment Loan, as well as to any other
          third-party loans or equipment leases necessary for the construction
          and equipping of the Facility as contemplated by Articles Three and
          Four of this Agreement. Great Lakes agrees to execute and deliver
          subordination agreements evidencing such subordination in form
          reasonably acceptable to the Bank Lender, the Equipment Lender, or
          such other third-party lender or equipment lessor.

               (e) The Band shall be entitled to draw on the Lakes Development
          Loan prior to NIGC Approval as provided in Sections 4.10 and 8.4, and
          thereafter the balance of the Lakes Development Loan upon NIGC
          Approval. Advances under the Lakes Development Loan may be made
          through the Account or otherwise at the written request of the Band.

               (f) Principal may be prepaid at any time without penalty.

               (g) Each advance of funds to the Band by Great Lakes under the
          Lakes Development Loan shall be made under a promissory note in the
          form of Lakes Development Note, duly authorized and executed by the
          Band.

               (h) All disbursements under the Lakes Development Loan shall be
          made (i) through the Enterprise Account and the Disbursement Account
          or (ii) pursuant to the Band's written direction to Great Lakes,
          unless otherwise agreed by Great Lakes and the Band in writing, and
          shall be on account of Development Expenditures in accordance with the
          Approved Development Budget, unless otherwise approved by the Business
          Board. Great Lakes shall provide the Band with a monthly accounting of
          all such disbursements, which accounting shall include a certification
          by Great Lakes that the disbursements shown on the accounting were for
          Development Expenditures in accordance with the Approved Development
          Budget, were for Development Soft Costs, or were otherwise approved by
          an attached vote of the Business Board.

               (i) (intentionally omitted)

               (j) The obligations of the Band to Great Lakes under the Lakes
          Development Note, the Lakes Facility Note, the Lakes Working Capital
          Advance Note, the Minimum Payments Note (subject to the limitations
          set forth in Section 5.6.2 of the Management Agreement), the
          Non-Gaming Land Acquisition Line of Credit and the Transition Loan,
          and under any other Transaction Documents and, under the Management
          Agreement, for Management Fees, shall be secured by a security
          interest in (I) the Dominion Account pursuant to the Dominion
          Agreement, (II) pursuant to the Lakes Security Agreement, Furnishings
          and Equipment to the extent that the proceeds of the Lakes Facility
          Note or the Lakes Development Note are used to acquire Furnishings and
          Equipment (the "Lakes FF&E "); and (III) pursuant to the Lakes
          Security Agreement, Furnishings and Equipment (or the Band's leasehold
          interest therein) that is not financed by Great Lakes through the
          Lakes Facility Note (the "Other FF&E"). Great Lake's security interest
          in the Dominion Account and Furnishings and Equipment shall be subject


                                       30

<PAGE>

          to the following terms and conditions:

                    (iii) Great Lakes may block payment to the Band of Monthly
               Distribution Payments and may foreclose on its security interest
               on the Dominion Account and on its security interest in any
               Furnishings and Equipment only on the occurrence of a Band Event
               of Default under the Development Agreement or the Management
               Agreement, if such default is not cured within any applicable
               cure period and, if arbitration is timely demanded, after entry
               of an arbitrator's award finding a Band Event of Default has
               occurred. Great Lakes must comply with applicable law with regard
               to taking possession of, and foreclosure on, Furnishings and
               Equipment, including without limitation any legal requirements
               relating to the possession or sale of gaming equipment.

                    (iv) Great Lake's security interest in the Dominion Account,
               the Lakes FF&E, the Other FF&E and any other collateral of Great
               Lakes at or related to the Facility shall be senior to all other
               liens thereon, except that it shall be subordinate to any
               security interests granted to the Bank Lender and the Equipment
               Lender, and, as to the Dominion Account, shall be further subject
               to payment of the claims and expenses described in Section 4.19.6
               of the Management Agreement. Great Lakes shall promptly execute
               and deliver subordination agreements pertaining to the Dominion
               Agreement, the Lakes FF&E, the Other FF&E and any other
               collateral of Great Lakes at or related to the Facility with
               regard to any Bank Lender or Equipment Lender, which agreements
               shall contain provisions reasonably acceptable to Great Lakes and
               such lenders.

                    (v) The Dominion Agreement and the Lakes Security Agreement
               shall be amended at the Band's request (i) to conform with
               requests of the Bank Lender and the Equipment Lender, to the
               extent needed to obtain the Bank Loan or the Equipment Loan, and
               (ii) to the extent reasonably necessary to provide for
               subordinate security interests for loans for the benefit of the
               Enterprise as provided in Section 9.2.5(b) below.

                    (vi) The Dominion Agreement shall terminate as to Great
               Lakes, without prejudice to the Bank Lender, the Equipment
               Lender, or any other party that may have joined in, or be
               benefited by, those agreements, and Great Lake's security
               interest in the Dominion Account shall be discharged, and Great
               Lakes shall discharge and terminate its security interest in the
               Furnishings and Equipment, on termination of this Agreement
               pursuant to Sections 13.1, 13.2 (except as otherwise provided in
               Section 14.4 hereof), 13.4 (prior to the Commencement Date),
               13.5, or 13.6 hereof, or of the Management Agreement pursuant to
               Sections 12.1, 12.2 (except as otherwise provided in Section 13.4
               thereof), 12.4 (prior to the Commencement Date), 12.5, 12.6
               (prior to the Commencement Date) or 12.7 thereof. On a
               termination under Sections 13.4 (after the Commencement Date) or
               13.7 of the Development Agreement or Sections 12.4 (after the


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<PAGE>

               Commencement Date), 12.6 or 12.8 of the Management Agreement
               after the Commencement Date, such security interest shall remain
               in effect until amounts due Great Lakes have been paid in
               accordance with the Agreements, and shall thereafter be promptly
               discharged; provided that (A) Great Lakes' right to payment and
               security interest in the Dominion Account after such termination
               under or pursuant to the Agreements shall continue to be
               subordinate to payment of claims and expenses described in
               Section 4.19.6 of the Management Agreement, and shall in addition
               be subordinate to (I) fees or other amounts due to any manager of
               the Enterprise, (II) any amounts due to lenders or lessors under
               loans for the benefit of the Enterprise, whether existing as of
               the termination or made thereafter, including without limitation
               the Bank Loan and the Equipment Loan, and (III) absent an Event
               of Default (as defined in the Transaction Documents, excluding
               the Development Agreement and the Management Agreement) under the
               obligations of the Band to Great Lakes (other than obligations
               under the Agreements which do not expressly survive their
               termination) which is not timely cured, Monthly Distribution
               Payments to the Band; (B) Great Lakes agrees to permit the prompt
               release and transfer of proceeds from the Dominion Account to or
               for the account of the Band to the extent necessary to pay such
               senior claims in accordance with their terms, and to pay such
               Monthly Distribution Payments, and Great Lakes agrees to
               cooperate with the Band and any replacement manager in that
               regard to maintain the going concern value of the Enterprise; and
               (C) the Band and any replacement manager may make deposits in,
               and withdrawals from, the Enterprise Accounts and Disbursement
               Accounts, after funds are transferred from the Dominion Account
               into such accounts, free of any interest of Great Lakes. Great
               Lakes shall promptly execute and deliver subordination agreements
               pertaining to the Dominion Agreement and the Lakes Security
               Agreement with regard to any such manager, lender or lessor,
               which agreements shall contain provisions reasonably acceptable
               to Great Lakes and the manager, lenders or lessors.

                    (vii) Nothing in the Dominion Agreement or the Lakes
               Security Agreement shall alter the damages due Great Lakes (A) on
               a Band Event of Default, which shall continue to be controlled by
               Article 14 of this Agreement and Article 13 of the Management
               Agreement, and the amount which Great Lakes is entitled to obtain
               on foreclosure on the Dominion Account or the Lakes Security
               Agreement shall be controlled by those Articles; or (B) under any
               other provision of the Agreements or any related agreement. Upon
               payment in full of all amounts due Great Lakes under the
               Agreements, the Lakes Development Note, the Lakes Working Capital
               Advance Note, the Lakes Facility Note, the Non-Gaming Acquisition
               Line of Credit and the Transition Loan, Great Lakes shall
               promptly terminate the Dominion Agreement and the Lakes Security
               Agreement and release any related security interests.

                    (viii) The Band shall execute and deliver the Lakes Security


                                       32

<PAGE>

               Agreement on the date of this Agreement and the Dominion Account
               Agreement (together with any additional resolutions of the Band
               and/or the Pokagon Council as may be legally required to
               authorize the Band to execute, deliver and perform such
               Agreement) on or before the Commencement Date.

          9.2.2. Bank Loan.

               (a) Amount:

                    (i) For the Initial Phase, an amount of approximately
               $193,000,000 which amount may be increased or decreased by
               agreement of Great Lakes and the Band and which, when added to
               the Lakes Development Loan and the Equipment Loan, will finance
               all Development Expenditures for the Initial Phase, plus, at
               Great Lakes' discretion, such amount to refinance all or portions
               of the Lakes Development Loan as may be permitted under the
               definition of "Bank Loan Agreement;"

                    (ii) For the expansion of the Facility to the Final Scope of
               Work, an additional amount of approximately $38,000,000, which
               amount may be increased or decreased by agreement of Great Lakes
               and the Band and which will, when added to the additional
               Equipment Loan for the Final Scope of Work, finance all
               Development Expenditures associated with such expansion.

               (b) Term: For the Initial Phase and Final Scope of Work: As to
          each not less than five (5) years, and amortized (including both
          principal payments and payments into a sinking fund) no more rapidly
          than in equal monthly installments of principal and interest; or, if
          the Band is unable to obtain the Bank Loan on such terms, with a term
          reasonably acceptable to the Band and Great Lakes.

               (c) Guaranty: Great Lakes shall not be required to provide its
          guarantee of the Bank Loan or any other credit enhancements, except as
          provided in Section 9.2.4 with regard to the Lakes Facility Loan.

               (d) Assignment: The loan commitment or undertaking shall not be
          assignable by either Great Lakes or the Band without the written
          consent of both parties.

               (e) (intentionally omitted)

               (f) Assistance: Great Lakes shall proceed promptly and with due
          diligence after NIGC Approval to assist the Band in obtaining a bank
          commitment or firm underwriting commitment for the Bank Loan as
          provided in Section 9.2.5(g), and in closing on the Bank Loan promptly
          after obtaining such commitment.

          9.2.3. Equipment Loan.


                                       33

<PAGE>

               (a) The Equipment Loan for the Initial Phase shall be in an
          amount of approximately $59,000,000, which amount may be increased or
          decreased by agreement of Great Lakes and the Band. The Equipment Loan
          for the expansion to the Final Scope of Work shall be an additional
          amount of approximately $6,000,000, necessary to equip the Facility to
          the Final Scope of Work, which amount may be increased or decreased by
          agreement of Great Lakes and the Band. Interest shall accrue on the
          amount advanced for the Initial Phase until the Commencement Date;
          thereafter such advance shall be repayable monthly in arrears,
          beginning on the 15th day of the month after the month in which the
          Commencement Date occurs, in equal monthly payments of principal and
          interest for the successive 48 months of the term. The amount advanced
          to equip the expansion to the Final Scope of Work shall be repaid in
          equal monthly payments of principal and interest for the successive 48
          months after Completion Date of such expansion, beginning 15 days
          after such Completion Date; or on such other terms as the Band may
          reasonably approve.

               (b) Security: Purchase money security interest in Furnishings and
          Equipment purchased with the loan proceeds.

               (c) Guaranty: Great Lakes shall not be required to provide its
          guarantee or any other credit enhancement of the Equipment Loan,
          except as provided in Section 9.2.4 with regard to the Lakes Facility
          Loan.

               (d) Assignment: The loan commitment shall not be assignable by
          either Great Lakes or the Band without the written consent of both
          parties.

               (e) (intentionally omitted)

               (f) Lease: At the Band's option the Equipment Loan may be
          structured into an equivalent equipment lease.

               (g) Assistance: Great Lakes shall proceed promptly and with due
          diligence after NIGC Approval to assist the Band in obtaining a
          commitment for the Equipment Loan as provided in Section 9.2.5(f), and
          in closing on the Equipment Loan promptly after obtaining such
          commitment.

          9.2.4. Lakes Facility Loan,

               (a) Loan Amount:

                    (i) If the Band, with Great Lakes' assistance, is unable to
               obtain, no later than the earlier of (A) 90 days after the later
               of NIGC Approval or transfer of the Gaming Site into trust, or
               (B) after receiving NIGC Approval and transfer of the Gaming Site
               into trust, the date by which additional funding is needed to
               keep development and construction of the Initial Phase on
               schedule without slowdown or abatement (unless otherwise agreed
               by the Band), a bank commitment or firm underwriting


                                       34

<PAGE>

               commitment to provide the Bank Loan and the Equipment Loan on the
               terms set forth in this Agreement at an interest rate equal to or
               less than 13% per annum in an aggregate amount of not less than
               $252,000,000 for the Initial Phase, Great Lakes agrees that it
               will, at its option but to the extent needed to fund the 252MM
               Shortfall, (I) loan the Band the difference between $252,000,000
               and the aggregate amount of such commitments which the Band is
               able to obtain on such terms, but not more than $54,000,000, at a
               13% interest rate and otherwise on the same terms and conditions
               as provided in this Agreement with regard to the Lakes
               Development Loan; (II) provide its guaranty or other credit
               enhancement to a third party providing such a loan on such terms;
               or (III) subsidize the interest payable by the Band on such a
               loan from a third party on such terms, to the extent it exceeds
               13%.

                    (ii) To the extent that Great Lakes is unable to obtain
               third party financing for the 252MM Shortfall on such terms
               through guarantees, credit enhancements or interest subsidies, it
               shall provide a direct loan to the Band on such terms.

                    (iii) In no event shall the loan which Great Lakes is
               obligated to make, obtain or subsidize under this subsection
               exceed $54,000,000.

                    (iv) If the Lakes Facility Loan is made by a third party
               lender through guarantees, credit enhancements or interest
               subsidies of Great Lakes, all references to Great Lakes in this
               Agreement relating to the Lakes Facility Loan and the Lakes
               Facility Note shall be deemed to include references to such
               third-party lender for the purposes of such loan and such note.

               (b) Term: The Lakes Facility Loan shall have the same term as the
          Lakes Development Loan.

               (c) Interest and amortization: Interest shall accrue at the rate
          of 13%. The amortization of the Lakes Facility Loan shall be the same
          as on the Lakes Development Loan.

               (d) Subordination: Repayment of the Lakes Facility Loan shall be
          subordinated to the same extent as the Lakes Development Loan. Great
          Lakes agrees to execute and deliver subordination agreements
          evidencing such subordination in form reasonably acceptable to Great
          Lakes and the Bank Lender, the Equipment Lender, or, as to other
          third-party lenders or equipment lessors, as required by this
          Agreement.

               (e) Advances: Advances under the Lakes Facility Loan may be made
          through the Account or otherwise at the written request of the Band.

               (f) Prepayment: Principal may be prepaid at any time without


                                       35

<PAGE>

          penalty.

               (g) Promissory Note: Each advance of funds to the Band by Great
          Lakes under the Lakes Facility Loan shall be made under a promissory
          note in the form of Lakes Facility Note, duly authorized and executed
          by the Band.

               (h) Disbursements: All disbursements under the Lakes Facility
          Loan shall be made (A) through the Enterprise Account and the
          Disbursement Account or (B) pursuant to the Band's written direction
          to Great Lakes, unless otherwise agreed by Great Lakes and the Band in
          writing, and shall be on account of Development Expenditures in
          accordance with the Approved Development Budget, unless otherwise
          approved by the Business Board.

               (i) Security: The obligations of the Band to Great Lakes under
          the Lakes Facility Loan shall be secured to the extent provided in
          Section 9.2.l(j).

          9.2.5. Terms Applicable to all Loans.

               (a) (intentionally omitted)

               (b) Limited Recourse: Loan repayments shall be solely out of
          revenues of the Enterprise and shall be a Limited Recourse obligation
          of the Band. The Band agrees not to encumber any of the assets of the
          Facility or the Enterprise without the written consent of Great Lakes
          and the holder of the Bank Loan, which consent will not be
          unreasonably withheld; except that the Band shall have the right
          without the consent of Great Lakes and such holder to grant
          subordinate security interests in Enterprise revenues, as well as
          first priority purchase money security interests in any Enterprise
          assets purchased with proceeds of such loan (other than Furnishings
          and Equipment purchased with the proceeds of the Equipment Loan, the
          Lakes Development Loan or the Lakes Facility Loan), but in each case
          only if such security interests are granted to secure loans made for
          the benefit of the Enterprise. The Band shall not lease the Facility
          or grant a leasehold mortgage on the Facility without Great Lakes'
          consent.

               (c) Limited Waiver. The Band shall enter into a limited,
          transactional waiver of sovereign immunity and consent to jurisdiction
          and arbitration as to the holder of the Bank Note and the Equipment
          Note as provided in Sections 14.1 and 14.2 as to Great Lakes.
          Governing law shall be Michigan law unless the Band otherwise agrees.

               (d) Other Terms. All other terms are subject to the Band's
          approval, which approval shall not be unreasonably withheld.

               (e) Selection of Lenders, etc. The selection of the lenders
          making the Bank Loan, the Equipment Loan and all other loans or leases
          relating to the Enterprise, and of all underwriters and professionals
          relating to any such


                                       36

<PAGE>

          transaction, shall be subject to the Band's reasonable approval.

               (f) Loan Commitments - Equipment Loan.

                    (i) Promptly and with due diligence after NIGC Approval and
               transfer of the Gaming Site into trust, but in no event later
               than 90 days after the later of NIGC Approval or transfer of the
               Gaming Site into trust (unless otherwise agreed by the Band),
               Great Lakes shall (A) deliver to the Band a proposed commitment
               from a lender with regard to the Equipment Loan for the Initial
               Phase, the terms of which shall be consistent with this Agreement
               and otherwise reasonably acceptable to the Band, and (B) increase
               the amount of the Escrow Account to $46,000,000 (less amounts
               previously advanced under the Lakes Development Loan).

                    (ii) After the Commencement Date and at such time as will
               permit completion of the Final Scope of Work in accordance with
               this Agreement, Great Lakes shall deliver to the Band a proposed
               commitment from an Equipment Lender with regard to the Equipment
               Loan for the expansion of the Facility to the Final Scope of
               Work, the terms of which shall be consistent with this Agreement
               and otherwise reasonably acceptable to the Band.

               (g) Loan Commitments - Bank Loan.

                    (i) Promptly and with due diligence after NIGC Approval and
               transfer of the Gaming Site into trust, but in no event later
               than 90 days after the later of NIGC Approval or transfer of the
               Gaming Site into trust (unless otherwise agreed by the Band),
               Great Lakes shall deliver to the Band a proposed commitment or
               other firm undertaking from a lender or underwriter with regard
               to the Bank Loan for the Initial Phase, the terms of which shall
               be consistent with this Agreement and otherwise reasonably
               acceptable to the Band.

                    (ii) After the Commencement Date and at such time as will
               permit completion of the Final Scope of Work in accordance with
               this Agreement, Great Lakes shall deliver to the Band a proposed
               commitment from a Lender with regard to the Bank Loan for the
               expansion of the Facility to the Final Scope of Work, the terms
               of which shall be consistent with this Agreement and otherwise
               reasonably acceptable to the Band.

               (h) (intentionally omitted)

               (i) Refinancing - Band. The Band may seek to refinance any Loan.
          Great Lakes agrees to cooperate with that refinancing, provided that
          (i) all costs and expenses of the refinancing shall, to the extent
          that interest expense is reduced by the refinancing, be an Operating
          Expense of the Facility, and shall otherwise be either borne by the
          Band or funded through the refinancing; and (ii) Great


                                       37

<PAGE>

          Lakes is not required to guarantee any new loan facilities. Interest
          on any new facility shall be an Operating Expense of the Facility.

               (j) Refinancing - Great Lakes. Great Lakes may, at or after the
          closing on the Bank Loan, seek to refinance the Lakes Development Loan
          and any other Loan that is made by a third party lender with a
          guarantee, other credit enhancement or interest subsidy provided by
          Lakes or Great Lakes; and may, after the closing on the Bank Loan,
          seek to refinance the Lakes Facility Loan. The Band agrees to
          cooperate with that refinancing, provided that (i) all costs and
          expenses of the refinancing (unless closed at the time of the Bank
          Loan) are borne by Great Lakes, (ii) the terms of the refinancing are
          in all respects no less favorable to the Band than provided in this
          Agreement or (to the extent more favorable than this Agreement) under
          the loan documentation of the obligation being refinanced (including,
          without limitation, interest rate, amortization, and recourse),
          without regard to any guaranty, other credit enhancement or interest
          subsidy provided by Great Lakes, and are otherwise reasonably
          acceptable to the Band; and (iii) the refinanced debt shall not be
          payable on termination of the Agreements with Great Lakes, provided
          that management of the Enterprise after such termination shall be
          reasonably acceptable to the lender.

               (k) Great Lakes Guarantees. The Band consents to the grant by
          Lakes and Great Lakes of other guarantees pari passu to third parties,
          provided that such other guarantees do not and shall not materially
          impair Lakes's or Great Lakes' ability to perform their respective
          obligations under the Guaranty or the Agreements, or under any
          instruments or agreements executed in connection therewith.

               (l) Increase Loan Amounts. The amount of Loans may be increased
          by agreement of Great Lakes and the Band to the extent that the
          Approved Development Budget exceeds the funds available under the
          Loans as provided above.

               (m) NIGC Approval: Tribal UCC. Great Lakes's obligation to
          advance funds under the Lakes Development Loan (except as provided in
          Sections 4.10 and 8.4) and the Lakes Facility Loan, and to procure and
          close on the Bank Loan and the Equipment Loan, are conditioned upon
          (i) NIGC Approval and (ii) the Band's adoption of a Tribal Uniform
          Commercial Code (the "Tribal UCC") that shall be substantially
          similar, as to secured transactions, to Articles 1, 2, 8 and 9 of the
          Uniform Commercial Code adopted by the State of Michigan (with the
          exclusion of any provisions that would otherwise make such Code
          inapplicable to secured transactions involving the Band or any of its
          affiliates); provided that the Tribal UCC may, at the Band's option,
          be limited in its application to the Loans, the transactions
          contemplated by the Transaction Documents and other transactions
          relating to the Enterprise. Nothing in this subsection affects or
          impairs Great Lakes's liability for damages in the event of NIGC
          Disapproval.

               (n) Subrogation. The Band recognizes that if Lakes or Great Lakes


                                       38

<PAGE>

          guarantees the Bank Loan or the Equipment Loan and pays in full either
          loan pursuant to its guarantee, Lakes or Great Lakes shall be
          subrogated to the liens, rights and remedies of the lender of the loan
          so paid.

                                   ARTICLE 10.
                          EXCLUSIVITY; NON-COMPETITION

     Section 10.1. Exclusivity Regarding Facility. During the term of this
Agreement, Great Lakes shall have an exclusive relationship with the Band
regarding the development of the Facility.

     Section 10.2. Exclusivity in Michigan. The Band shall deal exclusively with
Great Lakes for gaming development on Indian lands in Michigan from the date of
execution of this Agreement through the earlier of five years from the
Commencement Date or termination or buyout of the Agreements.

     Section 10.3. Indiana Casino. Great Lakes and Lakes recognize that the Band
intends to develop a casino in Indiana, and that the Band shall have no
obligations to Great Lakes or Lakes in that regard; except that the Band agrees
that, if it decides to engage an outside manager to develop or operate an
Indiana casino, it shall discuss contracting with Great Lakes for such
development or operation for 45 days before soliciting proposals from third
parties as to management or development of that casino. No obligation to enter
into an agreement with Great Lakes shall be implied from this undertaking, and
the Band shall retain full and absolute discretion in that regard.

     Section 10.4. Non-Competition. Lakes and Great Lakes each agree that for
five years after execution of the Agreements or the Term of the Agreements,
whichever is greater, neither it nor any of their respective present or future
Insiders will without the prior written approval of the Pokagon Council directly
or indirectly in the Restricted Territory develop, operate, consult with regard
to, or be in any way affiliated with any non-Indian gaming facility, any Class
II or III Gaming facility or any other kind of gaming, or any hotels or other
amenities related to such gaming or facility; except that Insiders shall not
include (a) Kids Quest, Grand Casinos, Inc., or Innovative Gaming Corp. by
reason of (i) the service of Lyle Berman as director or employee (without
management responsibility) of such entities, or (ii) any stock ownership of
Lakes or Great Lakes in such entities; or (b) any entity because of the
investment banking services of Ron Kramer, a director of Lakes. References in
this section shall include such entity's successor, whether by merger,
acquisition or otherwise.

     Section 10.5. Assignment; Change of Control.

               (a) Great Lakes may not assign its rights under this Agreement
          without the Band's prior written consent, except that Great Lakes may
          assign its rights under such Agreement, but not its obligations, to a
          wholly owned subsidiary of Lakes. No such assignment shall affect or
          impair the obligations of Lakes under the Guaranty.

               (b) The Band may not assign its rights under this Agreement;
          except


                                       39

<PAGE>

          that the Band may, without the consent of Great Lakes, but subject to
          approval by the Secretary of the Interior or the Chairman of the NIGC
          or his authorized representative, if required, assign this Agreement
          and the assets of the Enterprise to a Corporate Commission or other
          instrumentality of the Band organized to conduct the business of the
          Project and the Enterprise for the Band that assumes all obligations
          herein. No assignment authorized hereunder shall be effective until
          all necessary governmental approvals have been obtained. No such
          assignment shall relieve the Band of any obligation hereunder, unless
          otherwise agreed by Great Lakes or the holder of such obligation.

               (c) The Band shall be entitled to terminate the Agreements if
          Lakes or Great Lakes undergoes a Change of Control or if Great Lakes
          ceases to be a wholly-owned subsidiary of Lakes, in each case without
          the prior written consent of the Band. The Band shall not be required
          to prepay any amounts advanced by Lakes or Great Lakes or any third
          party in the event of such termination, and such obligations shall
          remain payable in accordance with their payment terms. Lakes and Great
          Lakes each agree to notify the Band in writing within 30 days after
          the occurrence of any event described in Clauses I or II in the
          definition of Change of Control, and within 30 days of Lakes's or
          Great Lakes' knowledge of any event described in Clauses III or IV of
          that definition.

          "Change of Control," for purposes of this provision, means (I) the
          merger, consolidation or other business combination of Lakes or Great
          Lakes with, or acquisition of all or substantially all of the assets
          of Lakes or Great Lakes by, any other entity, except that (A) Great
          Lakes may merge with any other entity wholly owned by Lakes if the
          surviving entity assumes the obligations of Great Lakes under the
          Agreements, and (B) Lakes Gaming and Resorts, LLC may merge with any
          other entity wholly owned by Lakes if the surviving entity assumes the
          obligations of Lakes Gaming and Resorts, LLC under the Guaranty,
          provided that in each case Lakes shall remain liable under the
          Guaranty; (II) Lyle Berman's ceasing to be either Chief Executive
          Officer or Chairman of the Board of Lakes (other than on account of
          death or disability, and except as provided at the end of this
          definition); (III) the acquisition by any person or affiliated group
          of persons not presently a shareholder of Lakes of beneficial
          ownership of 30% or more in interest of the outstanding voting stock
          of Lakes, as determined under 17 CFR Sections 240.13d-3 or 240.16a-l;
          or (IV) the acquisition by any person or affiliated group of persons
          not presently a shareholder of Lakes of beneficial ownership of 10% or
          more in interest of the outstanding voting stock of Lakes, as
          determined under 17 CFR Sections 240.13d-3 or 240.16a-l, if a majority
          of the Board of Directors of Lakes is replaced within two years after
          such acquisition by directors not nominated and approved by the Board
          of Directors.

     Section 10.6. Restrictions on Collateral Development. Lakes and Great Lakes
each agree that for five years after execution of the Agreements or the Term of
the Agreements, whichever is greater, neither Lakes, Great Lakes nor any of
their present or future Insiders will directly or indirectly purchase any land
or operate, manage, develop or have any direct or indirect interest in any
commercial facilities or business venture located within 20 miles of the


                                       40

<PAGE>

Facility without the prior written consent of the Band.

                                   ARTICLE 11.
                   REPRESENTATIONS, WARRANTIES, AND COVENANTS

     Section 11.1. Representations and Warranties of the Band. The Band
represents and warrants to Great Lakes as follows:

               (a) The Band's execution, delivery and performance of this
          Agreement, the Lakes Development Note, the Transition Loan Note, the
          Lakes Working Capital Advance Note, the Minimum Payments Note, the
          Lakes Facility Note, the Non-Gaming Acquisition Line of Credit, the
          Control Agreement, the Lakes Security Agreement and all other
          instruments and agreements executed in connection with this Agreement
          have been properly authorized by the Band and do not require further
          Band approval.

               (b) This Agreement, the Lakes Development Note, the Transition
          Loan Note, the Lakes Facility Note, the Lakes Working Capital Advance
          Note, the Minimum Payments Note, the Non-Gaming Acquisition Line of
          Credit, the Control Agreement, the Lakes Security Agreement and all
          other instruments and agreements executed in connection with this
          Agreement have been properly executed, and once approved in accordance
          with Legal Requirements constitute the Band's legal, valid and binding
          obligations, enforceable against the Band in accordance with their
          terms.

               (c) There are no actions, suits or proceedings, pending or
          threatened, against or affecting the Band before any court or
          governmental agency that relate to the Project, the Enterprise or any
          transaction contemplated by the Transaction Documents, except as
          disclosed on Exhibit L.

     Section 11.2. Band Covenants. The Band covenants and agrees as follows:

               (a) Promptly after the execution of this Agreement it will take
          the steps necessary to adopt and will adopt the Gaming Ordinance. The
          Gaming Ordinance will meet the requirements of IGRA and the applicable
          regulations under IGRA and be consistent with the provisions of this
          Agreement and the Management Agreement, and not adversely affect the
          rights of Great Lakes hereunder and thereunder. After adoption of the
          Gaming Ordinance the Band will establish a governmental authority to
          regulate gaming at the Gaming Site ("the Gaming Regulatory Authority"
          or "GRA"). The Band agrees to consult with Great Lakes concerning the
          terms of the Gaming Ordinance and any regulations adopted thereunder,
          but the final decision on those matters is in the Band's sole
          discretion.

               (b) After NIGC Approval the Band shall enter into the Bank Loan
          Agreement and the Equipment Loan Agreement and execute the Bank Note
          and the Equipment Note and related closing documentation, all subject
          to the terms


                                       41

<PAGE>

          provided in this Agreement and Great Lakes' performance of its
          obligations under this Agreement.

               (c) During the term of this Agreement and the Management
          Agreement, the Band shall enact no law impairing the obligations or
          contracts entered into in furtherance of the development,
          construction, operation and promotion of Gaming on the Gaming Site.
          Neither the Pokagon Council nor any committee, agency, board of any
          other official body, and no officer or official of the Band shall, by
          exercise of the police power or otherwise, act to modify, amend, or in
          any manner impair the obligations of contracts entered into by the
          Pokagon Council or the GRA or other parties in furtherance of the
          financing, development, construction, operation, or promotion of
          Gaming at the Gaming Site without the written consent of the
          non-tribal parties to such contracts.

               (d) The Band will waive sovereign immunity on the limited basis
          described in Article 14 with respect to the Loans, the Transition Loan
          and the Non-Gaming Land Acquisition Line of Credit.

               (e) This Agreement, the Management Agreement, the Lakes
          Development Note, the Transition Loan Note, the Lakes Facility Note,
          the Lakes Working Capital Advance Note, the Minimum Payments Note, the
          Non-Gaming Acquisition Line of Credit, the Control Agreement and the
          Security Agreement, and each other contract contemplated by this
          Agreement shall, once approved in accordance with Legal Requirements,
          be enforceable in accordance with their terms.

               (f) In its performance of this Agreement, the Band shall comply
          with all Legal Requirements.

               (g) The Band will not impose taxes on the revenues of the
          Facility or the management fee payable to Great Lakes, but reserves
          the right to otherwise impose usual and customary taxes and fees on
          transactions at or in connection with the Facility or on the
          Facility's employees, officers, directors, vendors and patrons. The
          Band shall be specifically permitted to impose (i) charges,
          assessments, fines or fees imposed by governmental entities of the
          Band which are reasonably related to the cost of Tribal governmental
          regulation of public health, safety or welfare, or the integrity of
          Tribal gaming operations, and (ii) other taxes, charges, assessments
          or fees imposed against the Enterprise or property of the Enterprise,
          or sales, use, excise, hotel occupancy and other similar taxes
          (excluding taxes, charges, assessments or fees against real or
          personal property of the Facility or on gaming revenues or earnings)
          of such types and percentage amounts not to exceed those imposed by
          any state or local government within the Restricted Territory.

               (h) The Band shall not act in any way whatsoever, directly or
          indirectly, to cause this Agreement to be amended, modified, canceled,
          or


                                       42

<PAGE>

          terminated, except pursuant to its express terms or with the consent
          of Great Lakes.

               (i) Notwithstanding the foregoing, a breach of this subsection
          11.2 shall not be a basis to overturn, negate or in any manner modify
          any Governmental Action through arbitration or other proceedings, and
          any remedy for such breach shall be subject to the Specific
          Performance Restriction. The preceding sentence does not prevent an
          arbitrator from determining that the taking of any Governmental Action
          or the failure to take any Governmental Action, which is not caused by
          a breach of Great Lakes or Lakes' obligations under the Agreements or
          the Guaranty, constitutes a breach of this Agreement by the Band,
          thereby resulting in liability on the part of the Band for damages in
          favor of the Manager as provided in this Agreement.

     Section 11.3. Representations and Warranties of Lakes and Great Lakes.
Lakes and Great Lakes each represent and warrant to the Band as follows:

               (a) Lakes' and Great Lakes' execution, delivery and performance
          of this Agreement, the Guaranty, and all other instruments and
          agreements executed in connection with this Agreement and the Guaranty
          have been properly authorized by Lakes and Great Lakes, respectively,
          to the extent they are parties thereto, and do not require further
          approval.

               (b) Each of this Agreement and all other instruments and
          agreements executed in connection with this Agreement has been
          properly executed and constitutes Lakes' and Great Lakes' respective
          legal, valid and binding obligation, enforceable against Lakes and
          Great Lakes in accordance with their terms to the extent they are
          parties thereto.

               (c) There are no actions, suits or proceedings pending or
          threatened against or affecting Lakes or Great Lakes before any court
          or governmental agency that would in any material way affect Lakes' or
          Great Lakes' ability to perform this Agreement and the Guaranty, to
          the extent they are parties thereto, other than litigation disclosed
          in filings by Lakes with the Securities and Exchange Commission. Lakes
          and Great Lakes each warrant that no litigation so disclosed in any
          material way affects or will affect Lakes' or Great Lakes' ability to
          perform under the Agreements and the Guaranty.

     Section 11.4. Covenants of Lakes and Great Lakes. Lakes and Great Lakes
each covenant and agree as follows:

               (a) Lakes and Great Lakes shall comply with all Legal
          Requirements in its performance of the Agreements and the Guaranty, to
          the extent they are parties thereto.

               (b) Great Lakes has and at all times during the Term shall have
          the financial capacity to pay to the Band all fees and payments and to
          make all


                                       43

<PAGE>

          advances and loans described in this Agreement.

               (c) Lakes and Great Lakes shall not act in any way whatsoever,
          directly or indirectly, to cause this Agreement to be amended,
          modified, canceled, or terminated, except pursuant to its express
          terms or with the consent of the Band.

               (d) Lakes' and Great Lakes' Internal Expenses shall not be paid
          by the Enterprise from revenues of the Enterprise or the proceeds of
          any Loan, but may be paid by Lakes and Great Lakes from Management
          Fees and loan repayments after they are received by Great Lakes. No
          officer or employee of Lakes or Great Lakes shall receive a salary or
          other payment from the Enterprise.

               (e) CRC shall not during the Term of the Management Agreement (i)
          be directly or indirectly affiliated with Lakes, Great Lakes or the
          Facility, whether as joint venturer or otherwise, (ii) be employed by
          Lakes or Great Lakes or, to the knowledge of Lakes or Great Lakes, any
          entity having any contractual relationship with Lakes or Great Lakes,
          with regard to the Facility, or (iii) directly or indirectly receive
          any payment or anything of value from Lakes or Great Lakes from or out
          of the Management Fee or any other payment made to Lakes or Great
          Lakes by the Band or the Facility. Lakes and Great Lakes each agree to
          indemnify the Band and its members and hold them harmless against all
          loss, liability and expense relating to claims, of whatever kind or
          nature, of CRC against any one or more of them. The Band consents to
          the execution and delivery by Lakes of a certain Conditional Release
          and Termination Agreement between Lakes and CRC dated May 20, 1999, as
          amended by Amendment dated July, 1, 1999, true copies of which are
          attached as Exhibit M, provided that CRC executes and delivers to the
          Band and its members a general release in the form attached as Exhibit
          N. Lakes and Great Lakes each warrants that it has no agreements or
          understandings with CRC in any way related to the Band or the
          Enterprise other than as set forth in Exhibit M. The Band further
          agrees that Lakes may hold stock of CRC as collateral for a Lakes'
          guarantee of a loan to a third party, provided that on default it
          proceeds to liquidate such collateral in a reasonably prompt and
          orderly manner, and that Lyle Berman may continue to hold
          approximately 350,000 shares of CRC so long as he plays no role in the
          management of, and does not sit on, the board of directors of CRC.

                                   ARTICLE 12.
                               EVENTS OF DEFAULT

     Section 12.1. Events of Default by the Band. Great Lakes shall not be
obligated to pay any fees, provide the Bank Loan, the Lakes Facility Loan or the
Equipment Loan, make any advance on the Lakes Development Loan or the Lakes
Facility Loan, or otherwise perform its obligations under or pursuant to this
Agreement if a Band Event of Default, as defined below, has occurred and is
continuing on the date such fee payment, loan advance or performance would
otherwise be made. In addition, Great Lakes shall not be obligated to make any
loan advance to the Band pursuant to this Agreement unless and until Great Lakes
receives the duly authorized


                                       44

<PAGE>

and executed Lakes Development Note and (to the extent applicable) the Lakes
Facility Note. Each of the following shall be a "Band Event of Default":

               (a) The Band shall fail to pay when due the Lakes Development
          Note, the Transition Loan Note, the Non-Gaming Acquisition Line of
          Credit, the Lakes Facility Note, the Lakes Working Capital Advance
          Note, the Minimum Payments Note or any other indebtedness to Great
          Lakes, and such payment default has continued for thirty (30) days
          after Great Lakes gives the Band notice thereof.

               (b) The Band shall commit a Material Breach of any of the Band's
          obligations under this Agreement or any other Transaction Documents,
          subject to the rights to cure provided in this Agreement or in any
          such documents.

               (c) Any of the representations and warranties made by the Band in
          Section 11.1 of this Agreement or in any other Transaction Documents
          were not true in any material respect when made or would not be
          materially true if made on the date such performance would otherwise
          be due.

               (d) The Band violates the provisions of Article 10 of this
          Agreement.

               (e) The Band commits any Material Breach of the Management
          Agreement which is not cured within any applicable cure period.

               (f) The Band, through a vote of its Council at which a quorum is
          present prior to NIGC Approval, either expressly (i) repudiates the
          Management Agreement or the Development Agreement, or (ii) authorizes
          the Band, prior to terminating the Agreements in accordance with their
          terms or expiration of the Term, to enter into management or
          development agreements with a third party with regard to a Michigan
          casino.

          If any Band Event of Default occurs, Great Lakes may, upon written
          notice to Band, declare Great Lakes' commitment to make advances under
          this Agreement terminated and Great Lakes may exercise the rights and
          remedies available to Great Lakes provided in this Agreement;
          provided, however, that all such rights and remedies shall be Limited
          Recourse.

     Section 12.2. Events of Default by Lakes or Great Lakes. The Band shall not
be obligated to perform its obligations under or pursuant to this Agreement if a
Lakes Event of Default, as defined below, has occurred or if any of the
representations and warranties made by Lakes or Great Lakes in this Agreement
were not true when made or would not be true if made on the date such
performance would otherwise be due. Each of the following shall be a "Lakes
Event of Default":

               (a) Any Monthly Payment is not paid within ten (10) days after
          its due date.

               (b) Great Lakes shall fail to make any other payments (whether of


                                       45

<PAGE>

          fees, advances or loans) required by this Agreement, and such failure
          shall continue for ten (10) days after the Band gives Lakes written
          notice thereof.

               (c) Lakes or Great Lakes shall commit any other Material Breach
          any of Lakes' or Great Lakes' obligations under this Agreement, the
          Guaranty or any other Transaction Documents, as applicable.

               (d) Any representation or warranty that Lakes or Great Lakes has
          made under this Agreement or in any other Transaction Document shall
          prove to have been untrue in any material respect when made or would
          not be materially true if made on the date such performance would
          otherwise be due.

               (e) Lakes or Great Lakes violates the provisions of Article 10 of
          this Agreement, subject to rights of notice and cure to the extent
          provided in that Article.

               (f) Lakes (to the extent applicable) or Great Lakes commits or
          causes any Material Breach of the Management Agreement which is not
          cured within any applicable cure period.

               (g) NIGC Disapproval occurs.

          If any Lakes Event of Default occurs, the Band may, upon written
          notice to Great Lakes, exercise the rights and remedies available to
          the Band provided in this Agreement.

     Section 12.3. Material Breach: Right to Cure.

               (a) Neither Great Lakes nor the Band may terminate this
          Agreement, recover damages, foreclose on security interests or
          exercise any other remedy on grounds of a potential Material Breach of
          this Agreement or any other Transaction Document unless it has
          provided written notice to the other party of the occurrence of such
          breach by such party under the Transaction Documents. During the 30
          day period after the receipt of such notice (as to defaults which can
          be cured within 30 days) or the 90 day period after such receipt (as
          to defaults which cannot be cured within 30 days), whichever is
          applicable, the party receiving the notice may cure the alleged
          default and (without waiting for the expiration of such periods) any
          party may submit the matter to arbitration under the dispute
          resolution provisions of this Agreement set forth at Article 14. The
          discontinuance or correction of a Material Breach shall constitute a
          cure thereof. Nothing in this subsection shall affect or impair the
          obligation of any party to promptly comply with all Legal
          Requirements, or limit any sanctions that may be imposed for any
          violation thereof; nor shall this subsection prevent a party taking
          any other actions within such 30 or 90 day periods as may be permitted
          or required by this Agreement, the Gaming Ordinance or NIGC
          regulations. The provisions of this subsection and the parallel
          provisions of Section 11.3 of the Management Agreement shall control
          over any conflicting provisions in any other


                                       46

<PAGE>

          Transaction Document.

               (b) Nothing in this subsection 12.3 shall apply to termination
          under Sections 13.1, 13.2, 13.6 or 13.7 of this Agreement.

                                   ARTICLE 13.
                                   TERMINATION

     Section 13.1. Voluntary Termination. This Agreement may be terminated by
mutual written consent.

     Section 13.2. Termination if No NIGC Approval. The Band and Great Lakes may
each unilaterally terminate the Agreements by written notice if NIGC Approval
has not occurred on or before August 26,2007.

     Section 13.3. Great Lakes Right to Terminate on Band Event of Default.
Great Lakes shall be entitled to terminate the Agreements (i) upon a Band Event
of Default or (ii) as specifically provided in the Agreements.

     Section 13.4. Band Right to Terminate on Lakes Event of Default. The Band
shall be entitled to terminate the Agreements (i) upon a Lakes Event of Default
or (ii) as specifically provided in the Agreements.

     Section 13.5. Band Right to Terminate for Material Adverse Change. Prior to
the Commencement Date, the Band shall be entitled to terminate the Agreements in
the event of a Material Adverse Change; provided that the following procedures
shall apply:

               (a) Great Lakes shall notify the Band promptly in the event of
          any Material Adverse Change, and in any event within 30 days after its
          occurrence.

               (b) Great Lakes shall cause Lakes to send to the Band copies of
          all filings by Lakes with the Securities and Exchange Commission under
          Forms 8K, 10Q and 1 OK; shall furnish the Band with copies of such
          other SEC filings that the Band may request; and shall furnish the
          Band with such other information concerning a Material Adverse Change
          as the Band may reasonably request.

               (c) If the Band believes that a Material Adverse Change has
          occurred, the Band shall so notify Lakes and Great Lakes in writing
          and shall request specified further assurances of their respective
          continued ability to perform under the Agreements, the Guaranty, and
          all related agreements and instruments.

               (d) Within thirty (30) days after that notification Great Lakes
          shall admit or deny, and shall cause Lakes, if applicable to admit or
          deny, the alleged Material Adverse Change, giving the specific basis
          for its response; shall state, and shall cause Lakes to state, whether
          they each agree to provide the requested further assurances; if they
          each agree to provide the requested further assurances, shall tender
          its performance in that regard; and, if it admits a Material Adverse
          Change but disputes the requested further assurances, shall tender
          such further


                                       47

<PAGE>

          assurances by it and Lakes as it deems sufficient to ensure their
          respective continued ability to perform under the Agreements, the
          Guaranty, and all related agreements and instruments.

               (e) If Lakes or Great Lakes denies the Material Adverse Change or
          disputes that the requested further assurances are reasonably required
          to assure the Band of their respective continued ability to perform
          under the Agreements, the Guaranty, and all related agreements and
          instruments, those issues shall be submitted to arbitration. The
          arbitrator shall determine whether (i) a Material Adverse Change has
          occurred; (ii) the requested further assurances are reasonably
          required to assure the Band of their respective continued ability to
          perform under the Agreements, the Guaranty, and all related agreements
          and instruments; and (iii) if a Material Adverse Change has occurred
          but the requested further assurances are not reasonably required to so
          assure the Band, what further assurances must be provided by Lakes and
          Great Lakes to reasonably assure the Band of their continued ability
          to perform under the Agreements, the Guaranty, and all related
          agreements and instruments. Any further assurances required under the
          arbitrator's award must be furnished by Lakes and Great Lakes within
          thirty (30) days after entry of the award.

               (f) If Lakes or Great Lakes admits the Material Adverse Change
          but does not furnish further assurances, or if Great Lakes or Lakes
          does not timely provide further assurances pursuant to an arbitrator's
          award, the Band may terminate the Agreements by written notice to
          Great Lakes.

               (g) Lakes, Great Lakes and the Band agree that the continuing
          ability of Great Lakes and Lakes to make the payments and advances
          provided under this Agreement, the Guaranty, and all related
          agreements and instruments, and to ensure the Band can obtain the
          Loans to develop, construct, equip and operate the Facility provided
          in this Agreement, is an essential part of the consideration for which
          the Band bargained in entering into the Agreements.

     Section 13.6. Termination on Buyout. This Agreement shall terminate if the
Band exercises its option to buy out the Management Agreement in accordance with
its terms.

     Section 13.7. Involuntary Termination Due to Changes in Legal Requirements.
It is the understanding and intention of the parties that the development,
construction and operation of the Enterprise shall conform to and comply with
all Legal Requirements. If during the term of this Agreement, the Enterprise or
any material aspect of Gaming at the Gaming Site is determined by the Congress
of the United States, Department of the Interior of the United States of
America, the NIGC, or the judgment of a court of competent jurisdiction (after
expiration of the time within which appeals must be filed or completion of
appeals, if any) to be unlawful under federal law, the obligations of the
parties hereto shall cease and the Agreements shall be of no further force and
effect as of the date of such determination; subject, however, to the following
provisions as to damages:

               (a) If the date of such determination is prior to the
          Commencement


                                       48

<PAGE>

          Date, Great Lakes shall be entitled to damages to the same extent as
          provided in Section 14.4 with regard to failure to obtain NIGC
          Approval.

               (b) If the date of such determination is after the Commencement
          Date:

                    (i) The Band shall retain all fees and Monthly Payments
               previously paid or advanced to it pursuant to this Agreement, as
               well as all Tribal Distributions and Non-Gaming Lands, the Gaming
               Site and any other property transferred into trust;

                    (ii) Any money loaned to the Band by Lakes or Great Lakes,
               or other obligations owed to Lakes or Great Lakes under the
               Transaction Documents as of the date of such determination shall
               be repaid to Great Lakes or Lakes in accordance with the Limited
               Recourse terms of the Lakes Development Note, the Lakes Facility
               Note, the Lakes Working Capital Advance Note, the Minimum
               Payments Note, the Transition Loan Note, the Non-Gaming
               Acquisition Line of Credit, this Agreement or any other
               applicable Transaction Documents; and

                    (iii) The Band shall retain its interest in the title (and
               any lease) to all Enterprise assets, including the Gaming Site
               and any fixtures, supplies and Furnishings and Equipment (except
               as provided in subsection (iv)), subject to the purchase money
               security interest in Furnishings and Equipment securing the
               Equipment Loan, Great Lakes' security interest in the Dominion
               Account and the Furnishings and Equipment, if any (until all
               obligations of the Band to Great Lakes secured by that account
               and the Furnishings and Equipment are paid in full), and any
               other liens granted in accordance with the Development Agreement;
               and

                    (iv) If (A) the Band determines that it can legally continue
               to operate portions of the Enterprise after the change in Legal
               Requirements without subjecting any related Furnishings and
               Equipment to forfeiture or seizure by any applicable governmental
               authority, and (B) it is Economically Feasible for the Band to
               continue such portions of the Enterprise and it elects to do so
               by written notice to Great Lakes within ninety (90) days after
               the occurrence of the change in Legal Requirements, then the Band
               shall have the right to continue to operate such portions of the
               Enterprise (and retain any Furnishings and Equipment used in
               connection with such portions of the Enterprise) so long as the
               same (x) remain Economically Feasible to operate, (y) any related
               Furnishings and Equipment shall remain free from any such
               forfeiture or seizure, and (z) are promptly and continually
               thereafter operated and maintained in accordance with reasonable
               industry standards. The Band and Great Lakes agree that any
               Furnishings and Equipment (together with any casualty insurance
               proceeds applicable thereto) related to (1) portions of the
               Enterprise that are not Economically Feasible for the Band to
               continue to operate, (2) would otherwise be subject to forfeiture
               or seizure as


                                       49

<PAGE>

               described above, or (3) with respect to any other portions of the
               Enterprise that the Band shall cease to continually operate
               (collectively, the "Surplus Equipment"), shall be promptly
               liquidated (subject to approvals as required under the Bank Loan
               Agreement and the Equipment Loan Agreement) in a commercially
               reasonable manner, and the Band shall pay the proceeds of such
               sale(s), to the extent permitted by any applicable subordination
               agreement, to Great Lakes on account of the Loans and other
               amounts owing to Great Lakes under the Transaction Documents.

     Section 13.8. Repair or Replacement. If the Facility is damaged, destroyed
or condemned so that continued development, construction or operation of Gaming
cannot be or can no longer be continued at the Facility, the Facility shall at
the Band's option be reconstructed if the insurance or condemnation proceeds,
together with any other funds available to the Band, are sufficient to restore
or replace the Facility to a condition at least comparable to that before the
casualty occurred or such other condition as Great Lakes and the Band may agree.
If the insurance proceeds, together with other funds available to the Band, are
not sufficient to so restore or replace the Facility or are not used to repair
the Facility, the Band shall, with the assistance of Great Lakes, adjust and
settle any and all claims for such insurance proceeds or condemnation awards,
and such proceeds or award and any undistributed Net Revenues pursuant to
Article 5 of the Management Agreement shall be applied first, as to proceeds or
awards relating to Furnishings and Equipment securing the Equipment Loan, to the
amounts due under the Equipment Loan; second, to the amounts due under the
Minimum Payments Note; third, to the Lakes Working Capital Advances, including
accrued interest; fourth, to the Band Working Capital Advances, including
accrued interest; fifth, to the amounts due under the Bank Loan; sixth, to any
remaining balance under the Equipment Loan and to any other third party
liabilities of the Enterprise to which Great Lakes has subordinated in writing;
seventh, to the Lakes Facility Loan; eighth, to the Lakes Development Loan; and
ninth, to the Band; but subject, in each case, to any applicable subordination
agreements. Any unpaid balance of the Lakes Development Loan, the Lakes Facility
Loan and the Lakes Working Capital Loan, after application of such proceeds,
shall be repaid as provided in Section 14.4 on failure to obtain NIGC Approval.

     Section 13.9. Recoupment and Setoff. Upon termination of this Agreement or
the Management Agreement any claim of Lakes or Great Lakes against the Band, or
of the Band against Lakes or Great Lakes, shall be subject to their respective
rights of recoupment and setoff, if any. The Band may recoup and set off against
Great Lakes any claims it may have against Lakes, and may recoup and set off
against Lakes any claims it may have against Great Lakes.

                                   ARTICLE 14.
                     DISPUTE RESOLUTION; LIQUIDATED DAMAGES

     Section 14.1. Band's Waiver of Sovereign Immunity and Consent to Suit. The
Band expressly waives its sovereign immunity from suit for the purpose of
permitting or compelling arbitration as provided in this Article 14 and consents
to be sued in the United States District Court for the Western District of
Michigan - Southern Division, the United States Court of Appeals for the Sixth
Circuit, and the United States Supreme Court for the purpose of compelling
arbitration or enforcing any arbitration award or judgment arising out of this
Agreement, the Management Agreement, the Lakes Development Note, the Lakes
Facility Note,


                                       50

<PAGE>

the Lakes Working Capital Advance Note, the Minimum Payments Note, the
Transition Loan Note, the Non-Gaming Acquisition Line of Credit, the Control
Agreement, the Security Agreement, any mortgages granted to Manager securing the
Lakes Development Note or the Non-Gaming Land Acquisition Line of Credit, the
Dominion Agreement, the Lakes Security Agreement, any other Transaction Document
or other obligations between the parties. If the United States District Court
lacks jurisdiction, the Band consents to be sued in the Michigan State Court
system for the same limited purpose. The Band waives any requirement of
exhaustion of tribal remedies. Without in any way limiting the generality of the
foregoing, the Band expressly authorizes any governmental authorities who have
the right and duty under applicable law to take any action authorized or ordered
by any such court, and to take such action, including without limitation,
repossessing or foreclosing on any real property not in trust and or on
equipment subject to a security interest or on the Dominion Account, or
otherwise giving effect to any judgment entered; provided, however, that
liability of the Band under any judgment shall always be Limited Recourse, and
in no instance shall any enforcement of any kind whatsoever be allowed by Lakes
or Great Lakes against any assets of the Band other than the limited assets of
the Band specified in Section 14.3(a) below. The Band appoints the Chairman of
the Pokagon Council and the Secretary of the Pokagon Council as its agents for
service of all process under or relating to the Agreements. The Band agrees that
service in hand or by certified mail, return receipt requested, shall be
effective for all purposes under or relating to the Agreements if served on such
agents.

     Section 14.2. Arbitration. All disputes, controversies or claims arising
out of or relating to this Agreement and the Lakes Development Note, the Lakes
Facility Note, the Lakes Working Capital Advance Note, the Minimum Payments
Note, the Transition Loan Note, the Non-Gaming Acquisition Line of Credit, the
Control Agreement, the Lakes Security Agreement, any other Transaction Document
or other obligations between Lakes or Great Lakes and the Band shall be settled
by binding arbitration in accordance with the Commercial Arbitration Rules of
the American Arbitration Association in effect on the date demand for
arbitration is made, and the Federal Arbitration Act. The parties agree that
binding arbitration shall be the sole remedy as to all disputes arising out of
this Agreement, except for disputes requiring injunctive or declaratory relief.
Notwithstanding the foregoing, an arbitrator shall not have the power to compel,
overturn, negate or in any manner modify any Governmental Action, and any
arbitration award or related judicial decree or judgment shall be subject to the
Specific Performance Restriction. The preceding sentence does not prevent an
arbitrator from determining that the taking of any Governmental Action or the
failure to take any Governmental Action, which is not caused by a breach of
Great Lakes or Lakes' obligations under the Agreements or the Guaranty,
constitutes a breach of this Agreement by the Band or the impairment of rights
of Great Lakes under this Agreement, thereby resulting in liability on the part
of the Band for damages in favor of the Manager as provided in this Agreement
and enforcement of the obligations of the Band to Great Lakes, including any
security agreements and collateral instruments, in accordance with their terms.

          (a) Choice of Law. In determining any matter the Arbitrator(s) shall
     apply the terms of this Agreement, without adding to, modifying or changing
     the terms in any respect, and in their interpretation and construction
     shall, to the extent not preempted by federal law, apply Michigan law. Use
     of Michigan law for the foregoing limited purpose of interpretation and
     construction is not


                                       51

<PAGE>

     intended by the parties to and shall not otherwise (i) incorporate
     substantive Michigan laws or regulations, including but not limited to
     Michigan usury laws or any other present or future provision of the laws of
     Michigan that would restrict the rate of interest upon any loan
     contemplated hereunder; or (ii) grant any jurisdiction to the State or any
     political subdivision thereof over the Gaming Site or the Facility.

          (b) Place of Hearing. All arbitration hearings shall be held at a
     place designated by the arbitrator(s) in Kalamazoo, Michigan or at such
     other place agreed to by the parties.

          (c) Confidentiality. The parties and the arbitrator(s) shall maintain
     strict confidentiality with respect to the arbitration.

     Section 14.3. Limitation of Actions. The Band's waiver of immunity from
suit is specifically limited to the following actions and judicial remedies:

          (a) Damages. The enforcement of an award of money and/or damages by
     arbitration; provided that the award of any arbitrator and/or court must be
     Limited Recourse, and no arbitrator or court shall have authority or
     jurisdiction to order execution against any assets or revenues of the Band
     except (i) undistributed or future Net Revenues of the Enterprise or
     Subsequent Gaming Facility Revenues; (ii) as to the Equipment Loan, the
     Furnishings and Equipment securing that Loan; (iii) if the Commencement
     Date does not occur, Subsequent Gaming Facility Revenues to the extent
     provided in this Agreement; (iv) as to the Lakes Development Note and the
     Non-Gaming Acquisition Line of Credit, mortgages on the Gaming Site and
     Non-Gaming Lands prior to their transfer into trust; (v) after the
     Commencement Date occurs, funds on deposit in the Dominion Account to the
     extent provided in Section 9.2.l(j) of this Agreement and the Dominion
     Agreement, or in any other dominion agreement executed by the Band; and
     (vi) as to the Lakes Development Note, the Lakes Facility Note, the Lakes
     Working Capital Advance Note, the Non-Gaming Land Acquisition Line of
     Credit and the Transition Loan, Furnishings and Fixtures to the extent
     provided in Section 9.2.l(j) of this Agreement. In no instance shall any
     enforcement of any kind whatsoever be allowed by Lakes or Great Lakes
     against any assets of the Band other than the limited assets of the Band
     specified in this subsection.

          (b) Consents and Approvals. The enforcement of a determination by an
     arbitrator that the Band's consent or approval has been unreasonably
     withheld contrary to the terms of this Agreement or any other Transaction
     Document, provided that such enforcement shall be subject to the Specific
     Performance Restriction.

          (c) Injunctive Relief and Specific Performance. The enforcement of a
     determination by an arbitrator that prohibits the Band from taking any
     action that would prevent Great Lakes from performing its obligations
     pursuant to the terms of this Agreement or any other Transaction Document,
     or that requires the Band


                                       52

<PAGE>

     to specifically perform any obligation under this Agreement; provided,
     however, that any injunction against the Band shall be Limited Recourse;
     shall be subject to the Specific Performance Restriction; shall not
     mandate, preclude or affect payment of any funds of the Band other than
     undistributed or future Net Revenues of the Enterprise, funds in the
     Dominion Account or Subsequent Gaming Facility Revenues; and shall not
     relate to any asset of the Band other than the Enterprise.

          (d) Action to Compel Arbitration. An action to compel arbitration
     pursuant to this Article 14.

     Section 14.4. Damages on Termination for Failure to Obtain NIGC Approval.
In the event of termination of this Agreement under Section 13.2 because NIGC
Approval has not been obtained on or before August 26, 2007, (a) the Band shall
be obligated to repay Great Lakes all amounts loaned to the Band by, or owed by
the Band to, Lakes or Great Lakes under or pursuant to this Agreement or any
other Transaction Document (excluding fees under the Management Agreement), but
not fees or non-refundable payments designated as such under this Agreement or
any Transaction Document; provided that such repayment shall be made only out of
distributions to the Band from Subsequent Gaming Facility Revenues, and shall be
paid in 60 equal monthly installments of principal and interest beginning one
month after opening of such a facility; and (b) the Band shall promptly sell all
Furnishings and Equipment in a commercially reasonable manner and shall pay the
proceeds of such sale to Great Lakes on account of the obligations owing to
Great Lakes described above in this Section 14.4. To secure the Band's
obligation under subsection 14.4(a), Great Lakes shall retain its mortgages, if
any, on property of the Band not transferred into trust, and may foreclose such
mortgages (subject to the arbitration provisions of this Article 14) if the Band
fails to perform as provided in that subsection; and to secure the Band's
obligation under subsection 14.4(b), Great Lakes shall retain its security
interest in Furnishings and Equipment. Great Lakes may foreclose such security
interest (subject to such arbitration provisions, and without accelerating the
Lakes Development Loan) if the Band fails to perform as provided in subsection
(b), and shall apply the proceeds of such foreclosure to the obligations owing
to Great Lakes under the Transaction Documents. Such payments and collateral
shall be Great Lakes' sole remedy and recourse in the event of termination of
this Agreement under Section 13.2. In no event shall Great Lakes have recourse
in the event of such termination to (i) assets purchased by the Band with funds
advanced by Lakes or Great Lakes, except as collateral to the extent provided in
this subsection; (ii) assets of any other gaming facility owned or operated by
the Band, other than Subsequent Gaming Facility Revenues; or (iii) any other
asset of the Band.

     Section 14.5. Liquidated Damages and Limitations on Remedies. The following
liquidated damages and limitations on remedies apply under this Agreement, in
addition to those provided elsewhere in this Agreement as to claims and remedies
against the Band:

          (a) Liquidated Damages Payable by Great Lakes. In the event of a Lakes
     Event of Default prior to the Commencement Date, after such notice and
     right to cure as may be provided in this Agreement, Great Lakes shall: (i)
     forfeit to the Band all amounts in the Account as of the default; (ii) pay
     the Band an amount equal to the sum of (x) the aggregate Monthly Payments
     payable under Section 8.1(c) over the balance of the 5-year Term, as if the
     Agreements had not been


                                       53

<PAGE>

          terminated, and (y) the Accrued Expenses; (iii) release all claims
          against the Band, including without limitation all amounts owed by the
          Band to Lakes or Great Lakes under or related to the Agreements and
          all rights under the Agreements, and discharge all mortgage and
          security interests on assets of the Band; (iv) transfer to the Band,
          at the Band's discretion and without payment of any consideration, any
          and all options and interests in real property in Michigan held by
          Lakes or Great Lakes; and (v) deliver to the Band all documents and
          work product in the possession or control of Great Lakes, Lakes or
          their agents related to the proposed Facility, the Gaming Site and the
          Non-Gaming Lands. Lakes shall join in the release, transfer and
          delivery under subsections (iii), (iv) and (v), and Lakes and Great
          Lakes each agree to execute and deliver such release, discharges and
          transfer instruments, and to deliver such work product and documents,
          at the time of payment of liquidated damages.

               (b) Liquidated Damages Payable by the Band. Except as provided in
          Section 14.10 as to Governmental Actions, in the event of a Band Event
          of Default prior to the Commencement Date, after such notice and right
          to cure as may be provided in this Agreement, the Band shall if
          requested by Great Lakes: (i) pay Great Lakes all amounts loaned to
          the Band by, or owing by the Band to, Lakes or Great Lakes under this
          Agreement or any other Transaction Documents (excluding fees under the
          Management Agreement), but not fees or non-refundable payments
          designated as such under this Agreement or any other Transaction
          Document, less the Band's right of offset, if any; such damages to be
          payable only out of Subsequent Gaming Facility Revenues on the same
          terms and with the same limitations on recourse as are provided in
          Section 14.4 with regard to damages payable by the Band under that
          subsection; (ii) release any interest in the funds in the Account,
          which shall be released to Great Lakes; (iii) transfer to Great Lakes
          all options and land (other than land held in trust) acquired by the
          Band through funds advanced by Lakes (or, failing such transfer, Great
          Lakes may foreclose on any mortgages it holds on such options or land
          not held in trust); provided that the amount of any damages payable to
          Great Lakes shall be reduced by the amount paid for any options or
          land transferred by the Band to Great Lakes; and (iv) permit Great
          Lakes to foreclose on its security interest in Furnishings and
          Equipment (subject to the terms of any intercreditor agreement between
          Great Lakes and any Bank Lender or Equipment Lender).

               (c) Limitation on Great Lakes Remedies. If the Band Event of
          Default shall occur after the Commencement Date, Great Lakes rights
          with respect to foreclosing upon any Furnishings and Equipment shall
          be subject to the following rights of the Band: If (i) the Band
          determines that it can legally continue to operate all or any portions
          of the Enterprise after the occurrence of a Band Event of Default
          without subjecting any related Furnishings and Equipment to forfeiture
          or seizure by any applicable governmental authority, and (ii) it is
          Economically Feasible for the Band to continue such portions of the
          Enterprise and it elects to do so by written notice to Great Lakes
          within ninety (90) days after the occurrence of the Band Event of
          Default, then the Band shall have the right to continue to operate
          such portions of the Enterprise (and retain any Furnishings


                                       54

<PAGE>

          and Equipment used in connection with such portions of the Enterprise)
          so long as the same (x) remain Economically Feasible to operate, (y)
          any related Furnishings and Equipment shall remain free from any such
          forfeiture or seizure, and (z) are promptly and continually thereafter
          operated and maintained in accordance with reasonable industry
          standards. The Band and Great Lakes agree that any Furnishings and
          Equipment (together with any casualty insurance proceeds applicable
          thereto) related to (1) portions of the Enterprise that are not
          Economically Feasible for the Band to continue to operate, (2) would
          otherwise be subject to forfeiture or seizure as described above, or
          (3) with respect to any other portions of the Enterprise that the Band
          shall cease to continually operate (collectively, the "Surplus
          Equipment"), shall be promptly liquidated (subject to approvals as
          required under the Bank Loan Agreement and the Equipment Loan
          Agreement) in a commercially reasonable manner, and the Band shall pay
          the proceeds of such sale(s) (to the extent permitted by any
          applicable subordination agreements) to Great Lakes on account of the
          Loans and other amounts owing to Great Lakes under the Transaction
          Documents.

     Section 14.6. Lakes' and Great Lakes' Continuing Obligations. Nothing in
this Article shall affect or impair Lakes' and Great Lakes' continuing
obligations under Sections 10.4 (noncompetition) and 15.13 (confidentiality) of
this Agreement, which shall remain enforceable for the following terms,
notwithstanding the termination of the Agreements and payment of liquidated or
other damages: (i) as to Section 10.4, the greater of five years after execution
of the Agreements or one year after termination; and (ii) as to Section 15.13,
the greater of five years after execution of the Agreements or two years after
termination.

     Section 14.7. Termination of Exclusivity. Section 10.2 (Exclusivity in
Michigan) of this Agreement shall terminate upon any termination of the
Agreements, notwithstanding any breach of the Agreements by the Band.

     Section 14.8. Remedies. In consideration of the agreement to liquidated
damages to the extent provided above, the Band, Lakes and Great Lakes each waive
the right to (i) actual and consequential damages (except as provided in Section
14.10) and (ii) exemplary or punitive damages, to the extent that liquidated
damages are applicable to a default, but shall retain the right to injunctive
relief (x) prior to termination of the Agreements, to enforce rights and
remedies thereunder, subject to the Limited Recourse provisions of this
Agreement as to the Band and the Band's limited waiver of sovereign immunity;
and (y) after termination, to the extent that provisions of this Agreement
specifically survive such termination, subject to such Limited Recourse
provisions and limited waiver. The injured party shall, where liquidated damages
are not applicable and damages or remedies are not otherwise specified, be
entitled to such damages as it may be entitled to under applicable law, subject
to such Limited Recourse provisions and limited waiver of the Band's sovereign
immunity (which shall apply to all claims against the Band under or relating to
the Agreements, in addition to all Loans).

     Section 14.9. Fees not Damages. In no event shall fees or other
non-refundable payments or Tribal Distributions made by Lakes or Great Lakes to
Band constitute damages to Lakes or Great Lakes or be repayable by the Band.


                                       55

<PAGE>

     Section 14.10. Damages for Governmental Action. If the Band takes a
Governmental Action or fails to take a Governmental Action, and such action or
inaction is not caused by a breach of Great Lakes or Lakes' obligations under
the Agreements or the Guaranty and constitutes a breach of this Agreement by the
Band or the impairment of rights of Great Lakes under this Agreement or the
other Transaction Documents, the Band shall be liable for any resulting actual
and consequential damages incurred by Great Lakes (subject to the Limited
Recourse provisions of this Agreement and the limited waiver of the Band's
sovereign immunity).

                                   ARTICLE 15.
                                     GENERAL

     Section 15.1. Nature of Agreement. This Agreement is not intended as and
shall not be construed as a "management agreement" within the meaning of the
IGRA.

     Section 15.2. Great Lakes' Interest. Nothing contained herein grants or is
intended (a) to grant Great Lakes a titled interest to the Facility, or (b) in
any way to impair the Band's sole proprietary interest in the Facility.

     Section 15.3. Situs of the Agreement. This Agreement, the Lakes Development
Note, the Lakes Facility Note, the Lakes Working Capital Advance Note, the
Minimum Payments Note, the Transition Note and the Non-Gaming Land Acquisition
Line of Credit shall be deemed entered into in Michigan.

     Section 15.4. Notice. Any notice required to be given pursuant to this
Agreement shall be delivered to the appropriate party by Certified Mail Return
Receipt Requested or by overnight mail or courier service, to the following
addresses:

          If to the Band:           Pokagon Band of Potawatomi Indians
                                    58620 Sink Road
                                    Dowagiac, MI 49047
                                    Attn: Chairman, Tribal Council

          With a copy to:           Michael Phelan, General Counsel
                                    Pokagon Band of Potawatomi Indians
                                    P.O.Box 180
                                    Dowagiac, MI 49047

          And                       Daniel Amory, Esq.
                                    Drummond Woodsum & MacMahon
                                    P.O. Box 9781
                                    Portland, ME 04104-5081

          If to Manager or Lakes:   Great Lakes Gaming of Michigan, LLC
                                    Lakes Entertainment, Inc.
                                    130 Cheshire Lane
                                    Minnetonka, MN 55305


                                       56

<PAGE>

                                    Attn: Timothy J. Cope

          With a copy to:           Damon Schramm
                                    Lakes Entertainment, Inc.
                                    130 Cheshire Lane
                                    Minnetonka, MN 55305

          With a copy to:           Kevin Quigley, Esq.
                                    Hamilton Quigley & Twait, PLC
                                    First National Bank Building
                                    Suite W1450
                                    332 Minnesota Street
                                    Saint Paul, MN 55101-1314

          and to:                   Daniel R. Tenenbaum
                                    Gray Plant Mooty
                                    500 I.D.S. Center
                                    80 So. 8th Street
                                    Minneapolis, MN 55402-3796

or to such other different address(es) as Lakes, Great Lakes or the Band may
specify in writing. Any such notice shall be deemed given three days following
deposit in the United States mail, one day following delivery to a courier
service or upon actual delivery or upon actual delivery, whichever first occurs.

     Section 15.5. Relationship. Great Lakes, Lakes and the Band shall not be
construed as joint venturers or partners of each other by reason of this
Agreement and neither shall have the power to bind or obligate the other except
as set forth in this Agreement.

     Section 15.6. Further Actions. The Band, Lakes and Great Lakes agree to
execute or cause to be executed all contracts, agreements and documents and to
take all actions reasonably necessary to comply with the provisions of this
Agreement and the intent hereof.

     Section 15.7. Waivers. No failure or delay by Great Lakes, Lakes or the
Band to insist upon the strict performance of any covenant, agreement, term or
condition of this Agreement, or to exercise any right or remedy consequent upon
the breach thereof, shall constitute a waiver of any such breach or any
subsequent breach of such covenant, agreement, term of condition. No covenant,
agreement, term or condition of this Agreement and no breach thereof shall be
waived, altered or modified except by written instrument. No waiver of any
breach shall affect or alter this Agreement, but each and every covenant,
agreement, term and condition of this Agreement shall continue in full force and
effect with respect to any other then existing or subsequent breach thereof.

     Section 15.8. Captions. The captions of each article, section and
subsection contained in this Agreement are for ease of reference only and shall
not affect the interpretational meaning of this Agreement.


                                       57

<PAGE>

     Section 15.9. Third Party Beneficiary. This Agreement is exclusively for
the benefit of the parties hereto and it may not be enforced by any party other
than the parties to this Agreement and shall not give rise to liability to any
third party other than the authorized successors and assigns of the parties
hereto.

     Section 15.10. Survival of Covenants. Any covenant, term or provision of
this Agreement which, in order to be effective, must survive the termination of
this Agreement, shall survive any such termination.

     Section 15.11. Estoppel Certificate. Great Lakes and the Band agree to
furnish to the other party, from time to time upon request, an estoppel
certificate in such reasonable form as the requesting party may request stating
whether there have been any defaults under this Agreement known to the party
furnishing the estoppel certificate.

     Section 15.12. Periods of Time: Time of the Essence. Whenever any
determination is to be made or action is to be taken on a date specified in this
Agreement, if such date shall fall on a Saturday, Sunday or legal holiday under
the laws of the Band or the State of Michigan, then in such event said date
shall be extended to the next day which is not a Saturday, Sunday or legal
holiday. Time is of the essence.

     Section 15.13. Confidential and Proprietary Information. Lakes, Great Lakes
and the Band each agree that any information received concerning the other party
during the performance of this Agreement, regarding the parties' organization,
financial matters, marketing and development plans for the Enterprise, the
Gaming Site, or other information of a proprietary nature (the "Confidential
Information") will be treated by both parties in full confidence except for such
public disclosure as may be required to allow Lakes, Great Lakes and the Band to
perform their respective covenants and obligations hereunder, or in response to
legal process, and will not be revealed to any other persons, firms or
organizations. This provision shall survive the termination of this Agreement as
provided in Section 14.6. The obligations not to use or disclose the
Confidential Information shall not apply to Confidential Information (i) which
has been made previously available to the public by the Band, Lakes or Great
Lakes, or becomes generally available to the public, unless the Confidential
Information being made available to the public results in a breach of this
Agreement; (ii) which prior to disclosure to the Band, Lakes or Great Lakes was
already rightfully in any such persons' possession; (iii) which is obtained by
the Band, Lakes or Great Lakes from a third party who is lawfully in possession
of such Information, and not in violation of any contractual, legal or fiduciary
obligation to the Band, Lakes or Great Lakes, with respect to such Confidential
Information and who does not require the Band, Lakes or Great Lakes to refrain
from disclosing such Confidential Information to others; or (iv) by the Band, if
such Information pertains to the Gaming Site or the Enterprise, in connection
with the Band's development, construction and operation of a gaming facility
after termination of the Agreements.

     Section 15.14. Savings Clauses.

          15.14.1. Lakes, Great Lakes and the Band each agree to execute,
deliver and, if necessary, record any and all additional instruments,
certifications, amendments, modifications and other documents as may be required
by the United States Department of the


                                       58

<PAGE>

Interior, Bureau of Indian Affairs, the office of the field Solicitor, the NIGC,
or any applicable statute, rule or regulation in order to effectuate, complete,
perfect, continue or preserve the respective rights, obligations, liens and
interests of the parties hereto to the fullest extent permitted by law;
provided, that any such additional instrument, certification, amendment,
modification or other document shall not materially change the respective
rights, remedies or obligations of the Band, Lakes or Great Lakes under this
Agreement, the Guaranty, or any other agreement or document related hereto.

          15.14.2. Any other provision of this Agreement to the contrary
notwithstanding: (i) in no event shall the rate of interest payable in
connection with any indebtedness incurred by the Band pursuant hereto or in
connection herewith (including, without limitation, indebtedness evidenced by
the Lakes Development Note, the Lakes Facility Note, the Lakes Working Capital
Advance Note, the Minimum Payments Note, the Transition Loan Note or the
Non-Gaming Land Acquisition Line of Credit) exceed the maximum rate permitted by
law (the "Legal Rate"); (ii) if at any time the rate of interest on any such
indebtedness computed as provided above (the "Computed Rate") exceeds the Legal
Rate, then interest shall accrue thereafter on such indebtedness at the Legal
Rate regardless of whether the Computed Rate is greater or less than the Legal
Rate until the total amount of interest payable on such indebtedness equals the
amount that would have been payable on such indebtedness without regard to this
sentence, or until such indebtedness is paid in full, whichever occurs first;
and (iii) if the holder receives any interest in excess of the maximum rate
permitted by this sentence with respect to any such indebtedness, the excess
shall be credited against the principal of such indebtedness or refunded, at the
holder's option.

     Section 15.15. Successors and Assigns. The benefits and obligations of this
Agreement shall inure to and be binding upon the parties hereto and their
respective permitted successors and assigns.

     Section 15.16. Severability. If any provision, or any portion of any
provision, of this Agreement is found to be invalid or unenforceable, such
unenforceable provision, or unenforceable portion of such provision, shall be
deemed severed from the remainder of this Agreement and shall not cause the
invalidity or unenforceability of the remainder of this Agreement. If any
provision, or any portion of any provision, of this Agreement is deemed invalid
due to its scope or breadth, such provision shall be deemed valid to the extent
of the scope or breadth permitted by law.

     Section 15.17. Entire Agreement.

          15.17.1. This Agreement and the Transaction Documents (excluding the
Management Agreement) are the entire agreement between Great Lakes, Lakes and
the Band relating to development of the Project and supersedes all prior
development agreements and understandings, whether written or oral, between or
among the Band, Lakes and Great Lakes. The Management Agreement does not
constitute a part of this Agreement

          15.17.2. Collateral agreements between or among the Band, Lakes and
Great Lakes consist of the following documents:


                                       59

<PAGE>

          (a)  Third Amended and Restated Lakes Development Note of near or even
               date;

          (b)  Third Amended and Restated Transition Loan Note of near or even
               date;

          (c)  Third Amended and Restated Non-Gaming Land Acquisition Line of
               Credit Agreement of near or even date;

          (d)  Third Amended and Restated Account Control Agreement of near or
               even date;

          (e)  Third Amended and Restated Pledge and Security Agreement of near
               or even date;

          (f)  Second Amended and Restated Assignment and Assumption Agreement
               of near or even date;

          (g)  Second Amended and Restated Unlimited Guaranty of near or even
               date;

          (h)  First Amended and Restated Lakes Facility Note of near or even
               date;

          (i)  First Amended and Restated Lakes Working Capital Advance Note of
               near or even date;

          (j)  First Amended and Restated Lakes Minimum Payments Note of near or
               even date;

          (k)  First Amended and Restated Security Agreement of near or even
               date;

          (l)  Form of Dominion Account Agreement;

          (m)  Third Amended and Restated Indemnity Agreement from the Band to
               Great Lakes (as assignee of Lakes) of near or even date; and

          (n)  Reaffirmation of Guarantees and Mortgages dated as of December
               22, 2004 and January 25, 2006, together with the Band Designee
               Guarantees and the Band Designee Mortgages referenced therein.

     All such collateral agreements supersede all other prior collateral
     agreements and understandings, written or oral between the parties. All
     prior and contemporaneous conversations, discussions, negotiations,
     possible and alleged agreements and representations, covenants and
     warranties with respect to the subject matter hereof, including without
     limitation the Term Sheet agreed to by Lakes and the Band dated June 18,
     1999, are waived, merged herein and superseded hereby. Lakes, Great Lakes
     and the Band each affirmatively represents that no promises have been made
     to that party which are not contained in this Agreement, the Management
     Agreement, or any other


                                       60

<PAGE>

Transaction Documents and documents referred to herein and therein, and
stipulates that no evidence of any promises not contained in this Agreement, the
Management Agreement, or any other Transaction Documents shall be admitted into
evidence on their behalf. This Agreement shall not be supplemented, amended or
modified by any course of dealing, course of performance or uses of trade and
may only be amended or modified by a written instrument duly executed by
officers of all parties.

Section 15.18. Consents.

          (a) Band. Where approval or consent or other action of the Band is
     required, such approval shall mean the written approval of the Pokagon
     Council evidenced by a resolution thereof, certified by a Band official as
     having been duly adopted, or such other person or entity designated by
     resolution of the Pokagon Council. Any such approval, consent or action
     shall not be unreasonably withheld or delayed; provided that the foregoing
     does not apply where a specific provision of this Agreement allows the Band
     an absolute or unilateral right to deny approval or consent or withhold
     action.

          (b) Manager. Where approval or consent or other action of Manager is
     required, such approval shall mean the written approval of the Managing
     Officer. Any such approval, consent or other action shall not be
     unreasonably withheld or delayed.

          (c) Business Board. Where approval or consent or other action of the
     Business Board is required, any such approval, consent or other action
     shall not be unreasonably delayed.

Section 15.19. [intentionally omitted]

Section 15.20. Limited Joinder.

          (a) Lakes Entertainment, Inc. and Lakes Gaming and Resorts, LLC each
     join in this Agreement for the limited purpose of agreeing to be bound by
     the provisions of this Agreement specifically applicable to them, as well
     as the provisions of Articles 13, 14 and 15 (as they pertain to such
     provisions of continuing applicability to them). In addition, Lakes
     Entertainment, Inc. shall have the benefit of any rights and remedies it
     had prior to the execution of the Assignment and Assumption Agreement under
     the following sections of this Agreement: 10.3, 11.2, 12.3, 13.5 and 14.8
     (as to remedies for claims for breach of its retained rights under this
     subsection), 15.4, 15.5, 15.6, 15.9, 15.12, 15.13, 15.14, 15.15 and 15.17.

          (b) Sections 10(a) and 10(c) of the Assignment and Assumption
     Agreement are superseded by this Agreement and the Management Agreement and
     are no longer in effect.


                                       61

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.

The Pokagon Band of Potawatomi          Great Lakes Gaming of Michigan, LLC
Indians


By: /s/ John Miller                     By: /s/ Timothy Cope
    ---------------------------------       ------------------------------------
Its Council Chairman                    Its: President/CFO


By: /s/ Daniel F. Rapp                  Lakes Entertainment, Inc.
    ---------------------------------
Its Secretary


                                        By: /s/ Timothy Cope
                                            ------------------------------------
                                        Its: President/CFO


                                        Lakes Gaming and Resorts, LLC


                                        By: /s/ Timothy Cope
                                            ------------------------------------
                                        Its: President/CFO


                                       62
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.172
<SEQUENCE>6
<FILENAME>c02716exv10w172.txt
<DESCRIPTION>THIRD AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT
<TEXT>
<PAGE>
                                                               EXHIBIT 10.172

                                                               EXECUTION VERSION

            THIRD AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT

     This Third Amended and Restated Pledge and Security Agreement ("Security
Agreement") is made as of the 25th day of January, 2006, 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 the 1999 Development Agreement; and

     WHEREAS, pursuant to the 1999 Management Agreement Lakes agreed to manage
the Facility on the terms set out in the 1999 Management 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 (said Assignment and Assumption Agreement as the
same has been amended by a First Amendment dated as of December 22, 2004 and a
Second Amended and Restated Assignment and Assumption Agreement dated as of
January 25, 2006. the "Assignment Agreement"), subject to the terms and
conditions set out in that Assignment Agreement; and

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

<PAGE>

     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 Bank, N.A., each
dated as of July 8, 1999 and as each was amended by first amendments dated as of
October 16, 2000 and by second amendments dated as of December 22, 2004; and

     WHEREAS, Great Lakes, Lakes and the Band have entered into a Third Amended
and Restated Development Agreement dated as of January 25, 2006 and a Third
Amended and Restated Management Agreement dated as of January 25, 2006 (the
"Third Amended and Restated Agreements"); and

     WHEREAS, the parties wish to amend and restate the Security Agreement to
reflect the execution of the Third 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 Third 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.

     a. Capitalized terms used but not otherwise defined herein and defined in
the Third Amended and Restated Development Agreement shall have the same meaning
herein as therein.

     b. "Secured Obligations" includes (i) the obligations of Great Lakes and
Lakes to the Band under or relating to the Third Amended and Restated
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 and a Second Amended and Restated Unlimited Guaranty dated as
of January 25, 2006."

     c. "Control Agreement" means the Account 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 and by Third Amended
and Restated Account Control Agreement dated as of January 25, 2006.

     d. "Pledgor" means, collectively, each of Lakes and Great Lakes.

3. Assignment of Account. Lakes represents to the Band that it has, pursuant to
the Assignment Agreement, assigned and transferred to Great Lakes all rights of
Lakes in and to the


                                       2

<PAGE>

Account and all cash, financial assets and investment property credited to the
Account, subject to the first perfected security interest of the Band.

4. Acceptance of Assignment. Great Lakes accepts the assignment of the Account
and all related cash, financial assets and investment property, and agrees to
perform and discharge Lakes' obligations under the Security Agreement in
accordance with the terms thereof as if Great Lakes had originally been a party
thereto. The liabilities so assumed by Great Lakes include any obligations or
liabilities of Lakes which have accrued under the Security Agreement as of the
date hereof, as well as those subsequently accruing. Great Lakes recognizes and
agrees that the Account and all cash, financial assets and investment property
credited to the Account are and shall remain subject to the first perfected
security interest of the Band in accordance with the Security Agreement and the
Control Agreement.

5. Transfer of Pledged Collateral.

     a. The Pledgor hereby pledges and grants to the Secured Party a valid lien
on and security interest in Pledgor's right, title and interest in and to the
Account and all cash, securities, securities entitlements, financial assets and
other property in the Account (which, with any additional securities or
collateral pledged hereunder, any replacements, substitutions, extensions, stock
dividends, renewals or additions to such collateral and any dividends, interest
or other income thereon and the proceeds of all of the foregoing, are
hereinafter referred to collectively as the "Pledged Collateral" or the
"Collateral), as security for the Secured Obligations, all as the same may be
amended from time to time, including any payments due pursuant to any amendments
or modifications thereto, extensions and renewals thereof or substitutions
therefor; and any and all other obligations or agreements of the Pledgor to the
Secured Party outstanding from time to time, whether now existing or hereafter
arising.

     b. Pledgor warrants that the security interest granted hereunder
constitutes and shall remain a validly perfected first lien on the Pledged
Collateral.

6. Agreement not to Sell, Pledge, Encumber, Etc.

     a. The Pledgor hereby covenants and agrees that it will not sell convey,
transfer or otherwise dispose of any of the Pledged Collateral, nor create,
incur or permit to exist any pledge, mortgage, lien, charge, encumbrance or any
security interest whatsoever with respect to any of the Pledged Collateral or
the proceeds thereof, other than the liens on and security interest in the
Pledged Collateral created hereunder.

     b. In case any dividend shall be declared on any of the Pledged Collateral
from time to time, or any share of stock or fraction thereof shall be issued
pursuant to any stock split involving any of the Pledged Collateral, or any
distribution of capital shall be made on any of the Pledged Collateral, the
cash, shares or other property so distributed shall constitute Pledged
Collateral hereunder and be delivered to the Secured Party to be held as
collateral security for the Secured Obligations.


                                       3

<PAGE>

     c. The Pledgor represents and warrants that there are no restrictions on
the transferability of the Pledged Collateral to the Secured Party, that there
are no restrictions as to or with respect to the foreclosure, transfer or
disposition thereof by the Secured Party, and that any securities held in the
account shall have been duly registered under applicable securities laws.

7. Additional Warranties, Representations, Covenants. Etc.

     a. Pledgor hereby covenants that the Pledged Collateral is duly and validly
pledged to the Secured Party and warrants that it will defend the Secured
Party's right, title and security interest in and to the Pledged Collateral
against the claims and demands of all persons whomsoever. Pledgor represents and
warrants to the Secured Party that the Pledgor has good title to all the Pledged
Collateral, free and clear of all claims, mortgages, pledges, liens, security
interests and other encumbrances of every nature.

     b. Pledgor agrees that a default by Pledgor under the Control Agreement
shall be a default under all Secured Obligations, and that all collateral
securing any Secured Obligation to Secured Party shall secure all other
obligations of Pledgor to Secured Party.

     c. Pledgor hereby covenants that this Security Agreement and the Control
Agreement are valid and binding on it, are enforceable in accordance with its
terms, and create a validly perfected first lien and security interest in the
Pledged Collateral.

     d. Pledgor covenants that it will execute and deliver to Secured Party such
other instruments, certificates, stock powers and other documents as are
necessary or convenient to enable Secured Party to exercise its rights under
this Security Agreement and otherwise carry out the intent of this Security
Agreement. Pledgor grants Secured Party an irrevocable power of attorney coupled
with an interest to execute in its stead and on its behalf any such instruments,
certificates, stock powers and other documents as are needed to exercise its
rights as to the Pledged Collateral upon the occurrence of an Event of Default
hereunder.

     e. Pledgor agrees that investments in the Account shall at all times be
consistent with the provisions of Section 8.2 of the Third Amended and Restated
Development Agreement.

8. Transfer of Pledged Collateral Upon Event of Default.

     In case there shall exist an Event of Default (as hereinafter defined), the
Secured Party may cause all or any of the Pledged Collateral to be transferred
into its name or into the name of its nominee or nominees in accordance with the
Control Agreement, and Bank and any broker or other securities intermediary
having custody or control of the Pledged Collateral shall honor any such request
from Secured Party.

9. Events of Default: Remedies.

     a. If any one or more of the following events (herein called "Events of
Default") shall occur:


                                       4

<PAGE>

          i.   A Manager Event of Default or Lakes Event of Default shall occur
               under the Secured Obligations; or

          ii.  Bank terminates the Control Agreement without the appointment of
               a successor securities intermediary in accordance with Section 10
               unless the Band has refused to consent to the successor, in which
               case all property in the Account shall be deposited with the
               Clerk of the United States District Court for the Western
               District of Michigan, Southern Division, subject to the lien and
               security interest of the Band, and shall be subject to
               interpleader in that Court.

          iii. Pledgor violates any provision of the Control Agreement; or

          iv.  The Pledgor shall fail duly to perform, observe or comply with
               any provision of this Security Agreement which default is not
               cured within 30 days following written notice of default, or
               Pledgor breaches any material warranty or representation made
               hereunder;

then, upon the occurrence of any such Event of Default, the Secured Party shall
have all rights and remedies of a secured party under the Minnesota Uniform
Commercial Code or other applicable law and shall in addition to such rights and
remedies, have the right, in its absolute discretion, at any time or times
thereafter to direct Bank or any other financial intermediary in accordance with
the Control Agreement to sell or transfer any and all Pledged Collateral and
deliver the proceeds thereof to Secured Party for application to the Secured
Obligations.

     b. The Secured Party will give Pledgor at least five (5) days prior written
notice by registered or certified mail at the address of the Pledgor as set
forth above (or at such other address or addresses as the Pledgor shall specify
in writing to the Secured Party from time to time) of (i) time and place of any
public sale thereof, (ii) the time after which any private sale or any other
intended disposition of Pledged Collateral is to be made, or (iii) the time
after which Secured Party may. in accordance with the Control Agreement, deliver
entitlement orders to Bank or any other Financial intermediary with regard to
the Pledged Collateral. Any such notice shall be deemed to meet the requirements
hereunder or under any applicable law (including without limitation the
Minnesota Uniform Commercial Code) that reasonable notification be given of the
time and place of any such sale or disposition. Such notice may be given without
any demand of performance or any other demand, all such demands being expressly
waived by the Pledgor. All such sales shall be at such commercially reasonable
price or prices as Secured Party shall deem fit. and for cash or for credit or
for future delivery (without Secured Party assuming any responsibility for any
credit or risk). At any such sale or sales the Secured Party may purchase any or
all of the Pledged Collateral to be sold thereat upon such terms as the Secured
Party may deem appropriate. Upon any such sale or sales of the Pledged
Collateral, said purchase shall be held by the purchaser absolutely free from
any equity of redemption or any similar rights, all such equity of redemption or
any similar rights being hereby expressly waived and released by the Pledgor. In
the event any consent, approval or authorization of any


                                       5

<PAGE>

governmental agency will be necessary to effectuate any such sale or sales, the
Pledgor shall execute all such applications or other instruments as may be
required.

     c. The proceeds of any such sale or sales, together with any other
additional collateral security at the time received and held hereunder, shall be
received and applied: first, to the payment of all costs and expenses of such
sale, including reasonable attorneys fees; second, to the payment of the Secured
Obligations; and any surplus thereafter remaining shall be paid to the Pledgor
or to whomever may be legally entitled thereto.

     d. The Secured Party shall be entitled at its option after an Event of
Default to exercise the voting power with respect to the Pledged Collateral, if
applicable; to receive and retain, as collateral security for the Secured
Obligations, any and all dividends, distributions at any time and from time to
time declared or made upon any of the Pledged Collateral and to exercise any and
all rights of payment, conversion, exchange, subscription or any other rights,
privileges or options pertaining to the Pledged Collateral as if the Secured
Party were the absolute owner thereof, including without limitation the right to
exchange, at its discretion, any and all Pledged Collateral upon the merger,
consolidation, reorganization, recapitalization or other readjustment of any
other issuer or maker of Pledged Collateral, or, upon the exercise of any such
right, privilege or option pertaining to the Pledged Collateral, and, in
connection therewith, to deposit and deliver any and all of the Pledged
Collateral with any committee, depositary, agent, registrar or other designated
agency upon such terms and conditions as the Secured Party shall determine, or
without liability except to account for property actually received.

     e. After an Event of Default, any expenses incurred by the Secured Party in
exercising any of the foregoing rights and remedies or in the enforcement or
administration of this Security Agreement, the Control Agreement or the Third
Amended and Restated Agreements, or for the protection of the Secured Party's
security interest in the Pledged Collateral, or in connection with the priority
thereof, including without limitation all taxes, charges, liens and assessments
against the Pledged Collateral, and all reasonable attorney's fees, shall be
payable by Pledgor, shall be deemed advances necessary to protect the security,
shall be added to the Secured Obligations, and shall bear interest at the Band
Interest Rate.

10. Rights and Remedies are Cumulative.

     No course of dealing between the Pledgor and the Secured Party nor any
failure to exercise, nor any delay in exercising, on the part of the Secured
Party, any right, power or privilege hereunder or under the Secured Obligations,
shall operate as a waiver thereof, nor shall any single or partial exercise of
any rights, power or privilege constitute or be deemed to constitute any such
waiver. The rights and remedies herein provided and provided under the Secured
Obligations and under the Control Agreement are cumulative and are in addition
to, and not exclusive of any rights or remedies provided by law, including,
without limitation, the rights and remedies of a secured party under the
Minnesota Uniform Commercial Code.


                                       6

<PAGE>

11. Notices.

     Except as otherwise provided herein, notice to or demand upon the Pledgor
or the Secured Party shall be deemed to have been sufficiently given or served
for all purposes thereof if mailed by certified or registered mail, postage
prepaid, to the following addresses:

     if to Secured Party: Pokagon Band of Potawatomi Indians
                          58620 Sink Road
                          Dowagiac, MI 49047
                          Attn: Chairman, Tribal Council

     With a copy to:      Michael Phelan, General Counsel
                          Pokagon Band of Potawatomi Indians
                          P.O. Box 180
                          Dowagiac, MI 49047

     and                  Daniel Amory, Esq.
                          Drummond Woodsum & MacMahon
                          P.O. Box 9781
                          Portland, ME 04104-5081

     If to Pledgor:       Great Lakes Gaming of Michigan, LLC
                          Lakes Entertainment, Inc.
                          130 Cheshire Lane
                          Minnetonka, MN 55305
                          Attn: Timothy J. Cope

     With a copy to:      Damon Schramm
                          Lakes Entertainment, Inc.
                          130 Cheshire Lane
                          Minnetonka, MN 55305

     With a copy to:      Kevin Quigley, Esq.
                          Hamilton Quigley & Twait, PLC
                          First National Bank Building
                          Suite W 1450
                          332 Minnesota Street
                          Saint Paul, MN 55101-1314

     and to:              Daniel R. Tenenbaum
                          Gray Plant Mooty
                          500 I.D.S. Center
                          80 So. 8th Street
                          Minneapolis, MN 55402-3796


                                       7

<PAGE>

or to such other address as the party to whom such notice is directed may have
designated in writing to the other parties hereto.

12. Waiver of Presentment, Demand, Notice, Etc.

     The Pledgor hereby waives notice of acceptance of this Security Agreement
as well as presentment, demand, payment, notice of dishonor or protest and all
other notices of any kind in connection with the Secured Obligations except as
expressly provided in this Security Agreement, the Control Agreement or the
Third Amended and Restated Agreements.

13. Reinstatement.

     This Security Agreement shall continue to be effective or be reinstated, as
the case may be, if at any time any amount received by the Secured Party in
payment of the Secured Obligations is rescinded or may otherwise be restored or
returned upon the insolvency, receivership or bankruptcy of the Pledgor. It is
the intention of the parties hereto that this Security Agreement shall remain in
full force and effect until all of the Secured Obligations are fully and
indefeasibly paid and satisfied.

14. Resignation of Bank under Control Agreement.

     If Bank gives notice that it will terminate the Control Agreement, Pledgor
may designate a successor financial intermediary under the Control Agreement,
which designation shall be subject to Secured Party's reasonable consent.
Pledgor and Secured Party shall execute a replacement Control Agreement on
substantially the same terms with the successor financial intermediary.

15. Termination

     Secured Party agrees to terminate the Control Agreement and this Security
Agreement upon the earlier of (a) the Commencement Date, provided that a Manager
Event of Default has not occurred and is not continuing under the Third Amended
and Restated Agreements as of such date; (b) termination of the Third Amended
and Restated Agreements in accordance with their terms, and payment to the Band
of all amounts that may be due to it on such termination; or (c) entry of a
Final Order directing such termination.

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


                                       8

<PAGE>

     b. Neither the execution or delivery of this Security 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.

17. 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.

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

19. Amendments, Assignments, Etc. Any provision of this Security 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.

20. 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 Security
Agreement may be executed in separate counterparts and said counterparts shall
be deemed to constitute one binding document.

21. 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
Section 12 of the Control Agreement.

22. Arbitration; Limited Waiver of Sovereign Immunity. Any disputes under this
Security Agreement shall be subject to arbitration as provided in Section 14.2
of the Third Amended and Restated 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 Security Agreement. The Band's limited
waiver of sovereign immunity in Sections 14.1 and 14.3 of the Third Amended and
Restated Development Agreement shall apply to this Security Agreement; provided
that the liability of the Band under any judgment shall always be Limited
Recourse, and in no instance shall any enforcement of any kind whatsoever be
allowed against any assets of the


                                       9

<PAGE>

Band other than the limited assets of the Band specified in the definition of
Limited Recourse and Section 14.3(a) of the Third Amended and Restated
Development Agreement.

23. Remedies Cumulative. The rights and remedies conferred upon the parties
hereto shall be cumulative, and the exercise or waiver of any such right or
remedy shall not preclude or inhibit the exercise of any additional rights or
remedies. The waiver of any right or remedy hereunder shall not preclude the
subsequent exercise of such right or remedy.

24. Headings. The headings contained in this Security Agreement are for
convenience of reference only and shall have no effect on the interpretation or
operation hereof.

25. Severability. To the extent a provision of this Security Agreement is
unenforceable, this Security Agreement will be construed as if the unenforceable
provision were omitted.

26. Amendment and Restatement. This Third Amended and Restated Pledge and
Security Agreement amends and restates in its entirety the Pledge and Security
Agreement between Lakes and the Band dated as of July 8, 1999, as amended by a
first amendment dated as of October 16, 2000 and by a second amendment dated as
of December 22, 2004 (collectively, the "Prior Security Agreement")- Nothing
herein shall be construed to impair or discharge the Prior Security Agreement.
To the extent that the terms and provisions of the Prior Security Agreement may
conflict with or be inconsistent with the terms and provisions of this Third
Amended and Restated Pledge and Security Agreement, the latter shall control.

     IN WITNESS WHEREOF, the parties hereto have caused this Third Amended and
Restated Pledge and Security Agreement to be executed as of the 25th day of
January, 2006.

                                        GREAT LAKES GAMING OF MICHIGAN, LLC


                                        By /s/ Timothy J. Cope
                                           -------------------------------------
                                           Timothy J. Cope
                                        Its President


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


                                        By /s/ Timothy J. Cope
                                           -------------------------------------
                                           Timothy J. Cope
                                        Its President


                                       10

<PAGE>

                                        THE POKAGON BAND OF POTAWATOMI INDIANS


                                        By /s/ John Miller
                                           -------------------------------------
                                           John Miller
                                        Its Council Chairman


                                        By /s/ DANIEL F. RAPP
                                           -------------------------------------
                                           DANIEL F. RAPP
                                           SECRETARY

Seen and consented to:

                                        LAKES GAMING AND RESORTS, LLC


                                        By /s/ Timothy J. Cope
                                           -------------------------------------
                                           Timothy J. Cope
                                        Its President


                                       11
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.173
<SEQUENCE>7
<FILENAME>c02716exv10w173.txt
<DESCRIPTION>THIRD AMENDED AND RESTATED ACCOUNT CONTROL AGREEMENT
<TEXT>
<PAGE>
                                                               EXHIBIT 10.173

                                                               EXECUTION VERSION

              THIRD AMENDED AND RESTATED ACCOUNT CONTROL AGREEMENT

     This Third Amended and Restated Account Control Agreement ("Control
Agreement") is made as of the 25th day of January, 2006, 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"), the Pokagon Band of Potawatomi Indians (the "Band") and
U.S. Bank National Association, f/k/a Firstar Bank, N.A. ("Firstar" or "Bank").

                                   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 the 1999 Development Agreement; and

     WHEREAS, pursuant to the 1999 Management Agreement Lakes agreed to manage
the Facility on the terms set out in the 1999 Management 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 (the Assignment and Assumption Agreement, as the same has been by
a First Amendment dated as of December 22, 2004 and a Second Amended and
Restated Assignment and Assumption Agreement dated as of January 25, 2006 and
may be modified, restated, amended and substituted, is hereinafter called the
"Assignment Agreement"); and

     WHEREAS, the 1999 Agreements were amended and restated by a First Amended
and Restated Development Agreement dated as of October 16, 2000 and by a First
Amended and Restated Management Agreement dated as of October 16, 2000
(collectively, the "First Amended and Restated Agreements") and by a Second
Amended and Restated Development Agreement dated as of December 22, 2004 and a
Second Amended and Restated Management Agreement

<PAGE>

dated as of December 22, 2004 (collectively, the "Second Amended and Restated
Agreements"); and

     WHEREAS, Lakes and Great Lakes have granted Band a security interest
pursuant to a Pledge and Security Agreement dated July 8, 1999, as amended by
First Amendment dated as of October 16, 2000, a Second Amendment dated as of
December 22, 2004 and a Third Amended and Restated Pledge and Security Agreement
dated as of January 25, 2006 (collectively, the "Security Agreement"), in a
securities account maintained by Bank for Great Lakes, and in all related
property. Lakes entered into an Account Control Agreement among the Band and
Firstar dated as of July 8,1999, and Great Lakes joined therein to perfect the
Band's security interest in that account and those assets (the "Control
Agreement").

     WHEREAS, the Control Agreement was amended by first amendments dated as of
October 16, 2000 and second amendments dated as of December 22, 2004; and

     WHEREAS, Great Lakes, Lakes and the Band have entered into a Third Amended
and Restated Development Agreement dated as of January 25, 2006 and a Third
Amended and Restated Management Agreement dated as of January 25, 2006
(collectively, the "Third Amended and Restated Agreements"); and

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

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

1.   Assignment of Account. Lakes represents to Firstar that it has, pursuant to
     the Assignment Agreement, assigned and transferred to Great Lakes all
     rights of Lakes in and to the Account the date hereof, as well as those
     subsequently accruing. Great Lakes recognizes and agrees that the Account
     and all cash, financial assets and investment property credited to the
     Account are and shall remain subject to the first perfected security
     interest of the Band in accordance with the Security Agreement and this
     Account Control Agreement.

2.   The Account.

     Bank represents and warrants to the Band that:

     a.   Bank maintains account number 5522000 (the "Account") for Great Lakes
          under the name "Pokagon Collateral Account."

     b.   Lakes has deposited $20,900,000 in the Account, subject to this
          Account Control Agreement. Bank represents that the value and
          composition of the assets in the Account as of January 25, 2006 are
          shown on the attached Schedule 1.


                                        2

<PAGE>

     c.   Great Lakes shall make such further deposits into the Account as may
          be required under the Agreements, including without limitation such
          amounts as are needed to maintain a $2,000,000 balance in the Account
          in accordance with Section 8.2 of the Third Amended and Restated
          Development Agreement.

     d.   Bank does not know of any claim to or interest in the Account, except
          for claims and interests of the parties referred to in this Control
          Agreement

3.   Definitions.

     a.   The following terms shall have the indicated meanings:

     "AGREEMENTS" means the Third Amended and Restated Development Agreement and
the Third Amended and Restated Management Agreement between Great Lakes and the
Band dated as of January 25, 2006, as the same may be further amended, restated,
substituted or modified.

     "AWARD" means the award of an arbitrator relating to the Account in an
arbitration conducted in accordance with Article 14 of the Third Amended and
Restated Development Agreement.

     "BAND ACCOUNT" means a bank account in the name of the Band on which Great
Lakes does not have signatory authority, which account is designated by the Band
pursuant to Section 13 (a) of this Control Agreement to receive transfers from
the Account on account of the Transition Loan and the Non-Gaming Acquisition
Line of Credit and $900,000 of the Signing Fee.

     "BAND NOTIFICATION OF EXCLUSIVE CONTROL" means a Band Notification of a
Lakes Default or a Band Notification of Termination.

     "BAND NOTIFICATION OF LAKES DEFAULT" means notification by the Band to Bank
that either of the following conditions has been satisfied:

     (A)  A Manager Event of Default or a Lakes Event of Default has occurred
          under the Third Amended and Restated Agreements and is continuing; (b)
          either (i) the time for Lakes to demand arbitration under the Third
          Amended and Restated Agreements has expired, or (ii) Lakes timely
          demanded arbitration, and the arbitrator's award has found that a
          Manager Event of Default or a Lakes Event of Default has occurred; and
          (c) the Band is entitled to payment of the property in the Account to
          the extent specified therein; or

     (B)  A Guaranty Event of Default, as defined in a Guaranty from Lakes and
          LG&R to the Band dated October 16, 2000, as amended by First Amendment
          dated as of December 22, 2004, and a Second Amended and Restated
          Unlimited Guaranty dated as of January 25, 2006 has occurred.


                                        3

<PAGE>

          The Band Notification of Lakes Default shall be in the form attached
          hereto as Exhibit A.

     "BAND NOTIFICATION OF TERMINATION" means notification by the Band to Bank
that (a) the Third Amended and Restated Agreements have been terminated; (b)
either (i) the time for Great Lakes to demand arbitration under the Third
Amended and Restated Agreements has expired, or (ii) Great Lakes timely demanded
arbitration, and the arbitrator's award has confirmed that termination; and (c)
the Band is entitled to payment from the property in the Account to the extent
specified therein. The Band Notification of Termination shall be in the form
attached hereto as Exhibit B.

     "BAND REPRESENTATIVES" means one or more persons designated by the Band in
writing to give consents and receive notices on behalf of the Band under this
Control Agreement.

     "COURT" means the United States District Court for the District in which
the Gaming Site is located (or, if the Gaming Site has not been designated, for
the Western District of Michigan-Southern Division), the United States Appeals
for the Sixth Circuit, and the United States Supreme Court; or if Great Lakes or
the Band delivers to the Bank the written opinion of their respective counsel
that such federal courts lack jurisdiction, the courts of the State of Michigan.

     "THIRD AMENDED AND RESTATED DEVELOPMENT AGREEMENT" means the Development
Agreement dated as of July 8, 1999 between Lakes and the Band, as assumed by
Great Lakes under the Assignment and Assumption Agreement dated as of October
16, 2000, and as amended and restated by a First Amended and Restated
Development Agreement dated as of October 16, 2000, by a Second Amended and
Restated Development Agreement dated as of December 22, 2004 and by a Third
Amended and Restated Development Agreement dated as of January 25, 2006, and as
the same may be further amended, restated, substituted or modified.

     "ENTERPRISE ACCOUNT" means a bank account in the name of the Band on which
Great Lakes has signatory authority as agent for the Band pursuant to the Third
Amended and Restated Development Agreement, which account is designated by the
Band and Great Lakes pursuant to Section 13 (b) of this Control Agreement to
receive transfers from the Account on account of Development Expenditures with
regard to the Facility or the Enterprise.

     "ENTITLEMENT ORDER" means a notification to Bank from Great Lakes or the
Band directing the Bank to transfer or redeem any securities, property, cash or
other property in the Account.

     "FINAL ORDER" means an order, judgment or decree of a Court entered after
notice and hearing (a) enjoining transfer of property in the Account, or (b)
mandating compliance with, or otherwise enforcing, an Award, provided that the
time for appeal from any such Order has expired or, if the Band has taken an
appeal from such order, that the appeal has been denied and the Order is now
final.


                                        4

<PAGE>

     "FIRSTAR" shall mean Firstar Bank N.A, n/k/a U.S. Bank National
Association, and its successors in interest.

     "JOINT NOTICE" means notification by the Band and Great Lakes to Bank (a)
that the Account shall be terminated and directing the Bank to liquidate the
property in the Account and deliver the proceeds thereof as directed in the
Joint Notice, or (b) that specified funds should be wired from the Account as
indicated in the Joint Notice. The Joint Notice shall, as to termination of the
Account, be in the form attached hereto as Exhibit C. Any other Joint Notice
shall be sufficient if it is signed by both the Band and Great Lakes.

     "LAKES DRAW REQUEST" means notification by Great Lakes to the Bank, prior
to receipt by Bank of a Band Notification to transfer funds from the Account,
which notification shall be in the form of Exhibit D-l (as to transfers to the
Band Account) or D-2 (as to transfers to the Enterprise Account).

     "ORDER" means an order, judgment or decree of a Court entered after notice
and hearing (a) enjoining transfer of property in the Account, or (b) mandating
compliance with, or otherwise enforcing, an Award.

     b.   Capitalized terms used herein without definition shall have the
          meanings assigned to them in the Third Amended and Restated
          Development Agreement

4.   Control by the Band.

     Bank will comply with Entitlements Orders as follows:

     a.   Prior to receipt by Bank of a Band Notification of Exclusive Control.
          Prior to receipt by Bank of a Band Notification of Exclusive Control,
          Bank shall transfer funds from the Account in accordance with a Lakes
          Draw Request if the Band gives its prior written consent to such
          request. Such consent shall be in the form attached as Exhibit E.

     b.   Joint Notice. After receipt by Bank of a Joint Notice, Bank shall
          liquidate the property in the Account and transfer the proceeds
          thereof, and all interest, dividends and other income thereon, in
          accordance with the directions in such Joint Notice.

     c.   Band Notification of Exclusive Control. After receipt by Bank of a
          Band Notification of Exclusive Control, Bank shall:

          i.   immediately cease complying with Entitlement Orders or other
               directions concerning the Account originated by Great Lakes,
               whether pursuant to a Lakes Draw Request or otherwise;

          ii.  immediately cease purchasing or selling securities in the Account
               or making any distributions from the Account, except with the
               prior written consent of


                                        5

<PAGE>

               Band;

          iii. immediately cease distributing to Great Lakes interest and
               dividends on property in the Account; and

          iv.  not less than thirty (30) nor more than forty-five (45) days
               after receipt by Bank of a Band Notification of Exclusive
               Control, and unless otherwise enjoined by an Order, liquidate all
               property in the Account and transfer the proceeds thereof and all
               interest, dividends and other income thereon to the Band Account,
               or such other account as the Band may direct in writing.

     d.   Award. Bank shall comply with any Award not less than thirty (30) nor
          more than forty-five (45) days after receipt by Bank of a copy of the
          Award, unless enjoined by an Order of Court.

     e.   Order: Final Order. Bank shall comply with any Order or Final Order;
          provided that Bank shall not distribute property out of the Account
          without the Band's written consent except pursuant to a Final Order.

5.   Lakes' Rights in Account.

     a.   Until Bank receives a Band Notice of Exclusive Control, Bank may
          distribute to Great Lakes all interest and regular cash dividends on
          property in the Account. Bank shall not distribute any other property
          in the Account, including without limitation securities or the
          proceeds of the sale of any securities, to or at the direction of
          Great Lakes except to the extent provided in Section 4.

     b.   Until Bank receives a Band Notice of Exclusive Control, Great Lakes
          may direct the investment of all property in the Account in accordance
          with Section 8.2 of the Third Amended and Restated Development
          Agreement, provided that (a) property the Account shall not include
          equities, swaps, derivatives or commodities; (b) no instruments,
          certificated securities or financial assets, as defined in the
          Minnesota Uniform Commercial Code, shall be held in the name of Great
          Lakes, and all such assets shall be held in the name of the Account;
          and (c) any cash balances shall be invested in money market or other
          financial assets, unless needed to make distributions in accordance
          with this Control Agreement. Subject to that limitation, Bank may rely
          conclusively on Great Lakes' direction as to investment of property in
          the Account unless and until Bank receives a Band Notice of Exclusive
          Control.

     c.   Bank will not comply with any Entitlement Order originated by Lakes
          that would require Bank to violate this Control Agreement.

6.   Priority of Bank's Security Interest: Bank's Fees and Expenses: No Third
     Party Entitlement Orders.


                                        6

<PAGE>

     a.   Bank subordinates in favor of Band any security interest, lien, or
          right of setoff it may have, now or in the future, against the Account
          or property in the Account, except that Bank will retain its prior
          lien on property in the Account to secure payment for property
          purchased for the Account, normal commissions and fees for the
          Account, and its reasonable fees (including attorneys fees) and
          expenses relating to the Account. Bank is authorized to deduct such
          commissions, fees and expenses from the Account. To the extent that
          the property in the Account is not sufficient to pay such commissions,
          fees and expenses, the Band and Great Lakes jointly and severally
          agree to pay such to Bank promptly on demand.

     b.   Bank will not agree with any third party that Bank will comply with
          Entitlement Orders originated by the third party with regard to the
          Account or property in the Account.

7.   Statements. Confirmations and Notices of Adverse Claims.

     a.   Bank will send copies of all statements and confirmations for the
          Account simultaneously to Great Lakes and Band. Bank will use
          reasonable efforts promptly to notify Band and Great Lakes if any
          other person claims that it has a property interest in property in the
          Account and that it is a violation of that person's rights for anyone
          else to hold, transfer or deal with the property. Bank will also send
          the Band copies of all other communications sent by Bank to Great
          Lakes relating to the Account, and shall furnish the Band with such
          other information concerning the Escrow Account as Band may reasonably
          request.

     b.   Great Lakes shall send Band a copy of all communications sent by Great
          Lakes to Bank, including without limitation all Lakes Draw Requests;
          shall inform the Band of the nature and terms of the financial
          instruments in which the escrowed funds are invested; and shall
          furnish the Band with such other information concerning the Account as
          Band may request.

     c.   The Band shall send Great Lakes a copy of all communications sent by
          the Band to Bank relating to the Account.

8.   Bank's Responsibility.

     a.   Except for permitting a withdrawal, delivery or payment in violation
          of Sections 4 or 5, Bank will not be liable to Band for complying with
          Entitlement Orders from Great Lakes that are received by Bank before
          Bank receives a Band Notice of Exclusive Control.

     b.   Bank will not be liable to Great Lakes for complying with a Band
          Notice of Exclusive Control or with Entitlement Orders originated by
          Band after receipt by the Bank of a Band Notice of Exclusive Control,
          even if Great Lakes notifies Bank that Band is not legally entitled to
          issue the Entitlement Order or the Band Notice of Exclusive


                                        7

<PAGE>

          Control, unless Bank takes the action after it is served with an Award
          or Order enjoining or prohibiting compliance with an Entitlement Order
          of the Band, and had a reasonable opportunity to act on the Award or
          Order.

     c.   Bank shall incur no liability hereunder except for its willful
          misconduct or gross negligence so long as it shall have acted in good
          faith.

     d.   In the event that a dispute arises as to the Account, Bank may
          liquidate the property in the Account and deposit the property thereof
          with the Clerk of the United States District Court for the Western
          District of Michigan, Southern Division, and may interplead the
          parties hereto. Upon so depositing such documents and money and filing
          its complaint and interpleader, Bank shall be released from all
          liability under the terms hereof as to the money so deposited.

     e.   Bank shall have no responsibility for the genuineness or validity of
          any notices, certificates, securities, documents or other things
          deposited with it and shall be fully protected in acting in accordance
          with any written instructions given to it hereunder and reasonably
          believed by it to have been signed by the proper person, party or
          parties. Bank can rely conclusively on the opinion of counsel to the
          Band, or the opinion of its own counsel, as to the expiration of the
          time for appeal, denial of appeal or finality of an Order, provided
          that nothing in this Agreement shall waive or impair any claim, if
          any, of Great Lakes against counsel issuing such opinion.

     f.   Bank is expressly authorized to comply with and obey any and all
          Orders and Final Orders relating to the Account, provided that Bank
          does not distribute property from the Account without the Band's
          written consent except pursuant to a Final Order; and in case the Bank
          so obeys or complies with any such Order or Final Order it shall not
          be liable to any of the parties hereto or to any other person, firm or
          corporation by reason of such compliance.

     g.   Without limiting the provisions of Section 8 (c) above, the Bank shall
          not incur any liability for not performing any act or fulfilling any
          duty, obligation or responsibility hereunder by reason of any
          occurrence beyond the control of the Bank (including but not limited
          to any act or provision of any present or future law or regulation or
          governmental authority, any act of God or war, or the unavailability
          of the Federal Reserve Bank wire or telex or other wire or
          communication facility).

     h.   This Control Agreement does not create any obligation of Bank except
          for those expressly set forth in this Control Agreement. In
          particular, Bank need not investigate whether Band is entitled under
          Band's agreements with Great Lakes to give an Entitlement Order or a
          Band Notice of Exclusive Control.

     i.   The Account shall be maintained in the name of "Pokagon Collateral
          Account" on the books of the Bank unless the Band otherwise consents
          in writing.


                                        8

<PAGE>

9.   Termination: Survival.

     a.   Band may terminate this Control Agreement by notice to Bank and Great
          Lakes. Bank may terminate this Control Agreement on 60 days' notice to
          Band and Great Lakes.

     b.   If Band notifies Bank that Band's security interest in the Account has
          terminated, this Control Agreement will immediately terminate.

     c.   Section 8, "Bank's Responsibility," will survive termination of this
          Control Agreement.

10.  Financial Assets.

     All property credited to the Account will be treated as financial assets
and investment property under Articles 8 and 9 of the Minnesota Uniform
Commercial Code.

11.  Successors and Assigns.

     A successor to or assignee of Band's rights and obligations under the Third
Amended and Restated Development Agreement will succeed to Band's rights and
obligations under this Control Agreement.

12.  Notice.

     a.   Except as provided in Section 12 (b), any notice required to be given
          pursuant to this Control Agreement shall be delivered to the
          appropriate party by Certified Mail Return Receipt Requested or by
          overnight mail or courier service, to the following addresses:

          If to the Band:   Pokagon Band of Potawatomi Indians
                            58620 Sink Road
                            Dowagiac, MI 49047
                            Attn: Chairman, Tribal Council
                            Facsimile No.: (616) 782-9625

          With a copy to:   Michael Phelan, General Counsel
                            Pokagon Band of Potawatomi Indians
                            P.O. Box 180
                            Dowagiac, MI 49047
                            Facsimile No.: (269) 782-7988

          and               Daniel Amory, Esq.
                            Drummond Woodsum & MacMahon


                                       9

<PAGE>

                            P.O. Box 9781
                            Portland, ME 04104-5081
                            Facsimile No.: (207) 772-3627

          If to Manager     Great Lakes Gaming of Michigan, LLC
          or Lakes:         Lakes Entertainment, Inc.
                            130 Cheshire Lane
                            Minnetonka, MN 55305
                            Attn: Timothy J. Cope
                            Facsimile No.: (952) 449-7064

          With a copy to:   Damon Schramm
                            Lakes Entertainment, Inc.
                            130 Cheshire Lane
                            Minnetonka, MN 55305
                            Facsimile No.: (612) 632-4328

          With a copy to:   Kevin Quigley, Esq.
                            Hamilton Quigley & Twait, PLC
                            First National Bank Building
                            Suite W1450
                            332 Minnesota Street
                            Saint Paul, MN 55101-1314
                            Facsimile No.: (651) 602-9976

          and to:           Daniel R. Tenenbaum
                            Gray Plant Mooty
                            500 I.D.S. Center
                            80 So. 8th Street
                            Minneapolis, MN 55402-3796
                            Facsimile No.: (612) 632-4444

     b.   Any consent by the Band to a Lakes Draw Request may be sent either as
          provided in Section 12 (a) or by facsimile transmission addressed to
          the Bank and Lakes at the facsimile numbers set forth above. Copies of
          such consents need not be sent to counsel.

     c.   Any party may change any address or telecopy number by written notice
          to all parties.

     d.   Any notice shall be deemed given three days following deposit in the
          United States mail, one day following delivery to an overnight
          delivery service, on oral confirmation of receipt of a facsimile
          transmission, or upon actual delivery, whichever first occurs.


                                       10

<PAGE>

13.  Designation of Accounts.

     a.   Band Account. The Band shall designate the Band Account by written
          notice to Bank.

     b.   Enterprise Account. The Band and Great Lakes shall designate the
          Enterprise Account by written notice to Bank.

     c.   Change in Account Designations. The Band may change the designation of
          the Band Account by written notice to Bank and Great Lakes. The Band
          and Great Lakes may change the designation of the Enterprise Account
          by written notice to Bank.

     d.   Funds Wire Transferred. All transfers from the Account to the Band
          Account shall be by wire transfer to the accounts designated in this
          Control Agreement in accordance with written wire transfer
          instructions from the Band, subject to change in accordance with
          Section 13 (c).

14.  Action or Consents by Band.

     a.   Any action to be taken by the Band may be taken by the Pokagon Council
          on behalf of the Band.

     b.   Any consent or other notification to be given by the Band may be given
          by any Band Representative. Great Lakes and Bank shall be entitled to
          rely conclusively upon any written communication signed by a Band
          Representative.

15.  Reservation of Rights. By entering into this Control Agreement, the Band
     does not waive or affect any rights against Great Lakes under the Security
     Agreement or the Prior Control Agreement (as hereinafter defined).

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

     a.   This 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;

     b.   Neither the execution or delivery of this Control 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


                                       11

<PAGE>

     c.   The Band has, and at all times until the termination of this Control
          Agreement in accordance with Section 9 thereof shall have, a first
          perfected security interest in the Account and all cash, financial
          assets and investment property credited to the Account.

17.  Warranties and Representations - Bank. Bank represents to the Band that
     Bank's representations in Sections 2 (a) and 2 (d) of this Control
     Agreement are true and correct as of the date of this Control Agreement.

18.  Further Assurances. From time to time hereafter, Lakes, Great Lakes, the
     Band and Firstar 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 Control Agreement.

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

20.  Amendments, Assignments. Etc. Any provision of this Control 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 this Control Agreement without the written consent of
     the Band.

21.  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 Control
     Agreement may be executed in separate counterparts and said counterparts
     shall be deemed to constitute one binding document.

22.  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 Great Lakes and with
     copies set forth in Section 12 of this Control Agreement.

23.  Arbitration; Limited Waiver of Sovereign Immunity. Any disputes under this
     Control Agreement shall be subject to arbitration as provided in Section
     14.2 of the Third Amended and Restated 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 Control Agreement. The
     Band's limited waiver of sovereign immunity in Sections 14.1 and 14.3 of
     the Third Amended and Restated Development Agreement shall apply to this
     Control Agreement; provided that the liability of the Band under any
     judgment shall always be 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


                                       12

<PAGE>

     assets of the Band specified in the definition of Limited Recourse and
     Section 14.3 of the Third Amended and Restated Development Agreement.

24.  Amendment and Restatement. This Third Amended and Restated Account Control
     Agreement amends and restates in its entirety a certain Account Control
     Agreement among Lakes, the Bank and Firstar dated as of July 8, 1999, as
     amended by a First Amendment to Account Control Agreement dated as of
     October 16, 2000 and a Second Amendment to Account Control Agreement dated
     as of December 22, 2004 (collectively, the "Prior Control Agreement").
     Nothing herein shall be construed to impair or discharge the Prior Control
     Agreement. To the extent that the terms and provisions of the Prior Control
     Agreement may conflict with or be inconsistent with the terms and
     provisions of this Third Amended and Restated Account Control Agreement,
     the latter shall control.

25.  Miscellaneous.

     a.   This Control Agreement and the Account will be governed by the
          internal laws of the State of Minnesota. Bank and Great Lakes may not
          change the law governing the Account without Band's express written
          agreement

     b.   This Control Agreement may be modified only by a written amendment
          signed by all the parties hereto, and no waiver of any provision
          hereof shall be effective unless expressed in a writing signed by the
          party to be charged.

     c.   The rights and remedies conferred upon the parties hereto shall be
          cumulative, and the exercise or waiver of any such right or remedy
          shall not preclude or inhibit the exercise of any additional rights or
          remedies. The waiver of any right or remedy hereunder shall not
          preclude the subsequent exercise of such right or remedy.

     d.   The headings contained in this Control Agreement are for convenience
          of reference only and shall have no effect on the interpretation or
          operation hereof.

     e.   This Control Agreement may be executed in any number of counterparts,
          each of which when so executed and delivered shall be deemed to be an
          original and all of which taken together shall constitute one and the
          same instrument.

     f.   Great Lakes agrees to indemnify and hold the Band harmless against all
          costs, expenses and fees (i) charged by the Bank against the Account
          on or after a Manager Event of Default, or (ii) which the Band pays
          Bank under Section 6 (a) of this Control Agreement.

     g.   All income on property in the Account shall be for the account of
          Great Lakes. Great Lakes certifies that its IRS identification number
          is 41-1973426, and agrees that income on the property in the Account
          shall be reported in its name.

     h.   To the extent a provision of this Control Agreement is unenforceable,
          this Control


                                       13

<PAGE>

          Agreement will be construed as if the unenforceable provision were
          omitted.

     i.   The parties agree that Bank is a "securities intermediary" for
          purposes of Articles 8 and 9 of the Uniform Commercial Code, as
          adopted in Minnesota, and that Minnesota is the "securities
          intermediary's jurisdiction" for all purposes under those Articles
          with regard to this Control Agreement.

     IN WITNESS WHEREOF, the parties hereto have caused this Third Amended and
Restated Account Control Agreement to be executed as of the 25th day of January,
2006.

                                        GREAT LAKES GAMING OF MICHIGAN, LLC


                                        By: /s/ Timothy J. Cope
                                            ------------------------------------
                                            Timothy J. Cope
                                        Its President


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


                                        By: /s/ Timothy J. Cope
                                            ------------------------------------
                                            Timothy J. Cope
                                        Its President


                                        THE POKAGON BAND OF POTAWATOMI INDIANS


                                        By: /s/ John Miller
                                            ------------------------------------
                                            John Miller
                                        Its Council Chairman


                                        By: /s/ Daniel Rapp
                                            ------------------------------------
                                            Daniel Rapp
                                        Its Secretary


                                       14

<PAGE>

                                        U.S. BANK NATIONAL ASSOCIATION,
                                        f/k/a FIRSTAR BANK, N.A.


                                        By: /s/ James J. Kellogg
                                            ------------------------------------
                                        Name: James J. Kellogg
                                        Its: Vice President


                                        LAKES GAMING AND RESORTS, LLC


                                        By: /s/ Timothy J. Cope
                                            ------------------------------------
                                            Timothy J. Cope
                                        Its President


                                       15

<PAGE>

                                    EXHIBIT A
                       BAND NOTIFICATION OF LAKES DEFAULT

TO: U.S. Bank National Association
    101 East Fifth Street
    St. Paul, MN 55101
    attn: Frank P. Leslie

     RE:  DEFAULT UNDER CERTAIN AGREEMENTS BY AND BETWEEN THE POKAGON BAND OF
          POTAWATOMI INDIANS (THE "BAND") AND GREAT LAKES GAMING OF MICHIGAN,
          LLC ("GREAT LAKES")

Dear Sir:

     (Note: Capitalized terms used herein without definition shall have the
meanings assigned to them in a certain Account Control Agreement (the "Control
Agreement") dated as of July 8, 1999 by and among the Band, Lakes and U.S. Bank
National Association, f/k/a Firstar Bank ("Bank"), as amended and restated by
the First Amendment dated as of October 16, 2000 and by the Second Amendment
dated as of December 22, 2004 and by the Third Amended and Restated Account
Control Agreement dated as of January 25, 2006).

     Notice is hereby given to you under the Control Agreement that either of
the following conditions has been satisfied:

     (A)  A Manager Event of Default or a Lakes Event of Default has occurred
          under the Third Amended and Restated Agreements and is continuing; (b)
          either (i) the time for Great Lakes to demand arbitration under the
          Third Amended and Restated Agreements has expired, or (ii) Great Lakes
          timely demanded arbitration, and the arbitrator's award has found that
          a Manager Event of Default or a Lakes Event of Default has occurred;
          and (c) the Band is entitled to payment of the property in the Account
          to the extent specified therein; or

     (B)  A Guaranty Event of Default, as defined in a Guaranty from Lakes and
          LG&R to the Band dated October 16, 2000, as amended by First Amendment
          dated as of December 22, 2004 and Second Amended and Restated
          Unlimited Guaranty dated as of January 25, 2006, has occurred.

     You are hereby directed to:

          i.   immediately cease complying with Entitlement Orders or other
               directions concerning the Account originated by Great Lakes,
               whether pursuant to a Lakes Draw Request or otherwise;


                                       i

<PAGE>

          ii.  immediately cease purchasing or selling securities in the Account
               or making any distributions from the Account, except with the
               prior written consent of Band;

          iii. immediately cease distributing to Great Lakes interest and
               dividends on property in the Account; and

          iv.  not less than thirty (30) nor more than forty-five (45) days
               after your receipt hereof, and unless otherwise enjoined by an
               Order, liquidate all property in the Account and transfer the
               proceeds thereof and all interest, dividends and other income
               thereon to the following account by wire transfer:

    Amount:       The entire proceeds of the Account
(indicate which
 is applicable)

                                  or

                  $______________________________

Wire to:          _______________________________

Account Number:   _______________________________
Bank:             _______________________________
ABA Number:       _______________________________
Reference:        _______________________________

Dates: ____________, _____

                                        THE POKAGON BAND OF POTAWATOMI INDIANS


                                        By
                                           -------------------------------------
                                        It Council Chairman


                                        By
                                           -------------------------------------
                                        Its Secretary


                                       ii

<PAGE>

                                    EXHIBIT B
                        BAND NOTIFICATION OF TERMINATION

TO:  Firstar Bank of Minnesota, NA
     101 East Fifth Street
     St Paul, MN 55101
     Attn: Frank P. Leslie

Re:  TERMINATION OF CERTAIN AGREEMENTS BY AND BETWEEN THE POKAGON BAND OF
     POTAWATOMI INDIANS (THE "BAND") AND GREAT LAKES GAMING OF MICHIGAN, LLC
     ("GREAT LAKES")

Dear Sir:

     (Note: Capitalized terms used herein without definition shall have the
meanings assigned to them in a certain Account Control Agreement (the "Control
Agreement") dated as of July 8,1999 by and among the Band, Lakes and Firstar
Bank of Minnesota, N.A. ("Bank") as amended and restated by the First Amendment
dated as of October 16, 2000 and by the Second Amendment dated as of December
22, 2004 and by the Third Amended and Restated Account Control Agreement dated
as of January 25, 2006).

     Notice is hereby given to you under the Control Agreement that:

     (a)  the Third Amended and Restated Agreements have been terminated;

     (b)  either

          i.   the time for Great Lakes to demand arbitration under the
               Agreements has expired, or

          ii.  Great Lakes timely demanded arbitration, and the arbitrator's
               award has confirmed that termination; and

     (c)  the Band is entitled to payment of the property in the Account as
          provided herein.

     You are hereby directed to:

          i.   immediately cease complying with Entitlement Orders or other
               directions concerning the Account originated by Great Lakes,
               whether pursuant to a Lakes Draw Request or otherwise;

          ii.  immediately cease purchasing or selling securities in the Account
               or making any distributions from the Account, except with the
               prior written consent of Band;


                                       iii

<PAGE>


          iii. immediately cease purchasing or selling securities in the Account
               or making any distributions from the Account, except with the
               prior written consent of Band;

          iv.  immediately cease distributing to Great Lakes interest and
               dividends on property in the Account; and

          v.   not less than thirty (30) nor more than forty-five (45) days
               after your receipt hereof and unless otherwise enjoined by an
               Order, liquidate all property in the Account and transfer the
               proceeds thereof and all interest, dividends and other income
               thereon to the following account by wire transfer:

     Amount:      The entire proceeds of the Account
(indicate which
 is applicable)

                                       or

                  $_________________________________

Wire to:

Account Number:   __________________________________
Bank:             __________________________________
ABA Number:       __________________________________
Reference:        __________________________________

Dated: _____________, ____

                                        THE POKAGON BAND OF POTAWATOMI INDIANS


                                        By
                                           -------------------------------------
                                        Its Council Chairman


                                        By
                                           -------------------------------------
                                        Its Secretary


                                       iv

<PAGE>

                                    EXHIBIT C
                                  JOINT NOTICE

TO: Firstar Bank of Minnesota, NA
    101 East Fifth Street
    St Paul, MN 55101
    Attn: Frank P. Leslie

Re: JOINT NOTICE OF TERMINATION OF CERTAIN AGREEMENTS BY AND BETWEEN THE
    POKAGON BAND OF POTAWATOMI INDIANS (THE "BAND") AND GREAT LAKES GAMING OF
    MICHIGAN, LLC ("GREAT LAKES")

Dear Sir:

     (Note: Capitalized terms used herein without definition shall have the
meanings assigned to them in a certain Account Control Agreement (the "Control
Agreement") dated as of July 8, 1999 by and among the Band, Lakes and Firstar
Bank of Minnesota, N. A. ("Bank") as amended and restated by the First Amendment
dated as of October 16, 2000 and by the Second Amendment dated as of December
22, 2004 and by the Third Amended and Restated Account Control Agreement dated
as of January 25, 2006).

     Notice is hereby given to you that the Third Amended and Restated
Agreements have been terminated.

     You are hereby directed to liquidate all property in the Account and
transfer the proceeds as follows:

               1.   $______________________ of said proceeds shall be
                    transferred to the following account by wire transfer:

                    Account Number:   __________________________________________
                    Bank:             __________________________________________
                    ABA Number:       __________________________________________
                    Reference:        __________________________________________

               2.   $______________________ of said proceeds shall be
                    transferred to the following account by wire transfer:

                    Account Number:   __________________________________________
                    Bank:             __________________________________________
                    ABA Number:       __________________________________________
                    Reference:        __________________________________________


                                        v

<PAGE>

Dated: _____________, ____

THE POKAGON BAND OF POTAWATOMI          GREAT LAKES GAINING OF MICHIGAN, LLC
INDIANS


By                                      By
   ----------------------------------      -------------------------------------
Its Council Chairman                    Its
                                            ------------------------------------


By
   ----------------------------------
Its Secretary


                                       vi

<PAGE>

                                   EXHIBIT D-I
                 LAKES DRAW REQUEST (TRANSFERS TO BAND ACCOUNT)

TO: Firstar Bank of Minnesota, NA
    101 East Fifth Street
    St Paul, MN 55101
    Attn: Frank P. Leslie

Re: DRAW BY GREAT LAKES GAMING OF MICHIGAN, LLC UNDER THE CONTROL AGREEMENT

Dear Sir:

     (Note: Capitalized terms used herein without definition shall have the
meanings assigned to them in a certain Account Control Agreement (the "Control
Agreement") dated as of July 8, 1999 by and among the Band, Lakes and Firstar
Bank of Minnesota, N.A. ("Bank") as amended and restated by the First Amendment
dated as of October 16, 2000 and by the Second Amendment dated as of December
22, 2004 and by the Third Amended and Restated Account Control Agreement dated
as of January 25, 2006).

     Pursuant to Section 4 (a) of the Control Agreement, you are hereby directed
to wire transfer, as soon as is practicable after receipt of the Consent of the
Band, but within not more than two business days after your receipt thereof, the
following sum:

     $______________

from the Account to the Band Account as designated by the Band pursuant to
Section 13 (a) of the Control Agreement.

Dated: _____________, ____

                                        GREAT LAKES GAMING OF MICHIGAN, LLC


                                        By
                                           -------------------------------------
                                        Its
                                            ------------------------------------


                                       vii

<PAGE>

                                   EXHIBIT D-2
              LAKES DRAW REQUEST (TRANSFERS TO ENTERPRISE ACCOUNT)

TO: Firstar Bank of Minnesota, NA
    101 East Fifth Street
    St Paul, MN 55101
    Attn: Frank P. Leslie

Re: DRAW BY GREAT LAKES GAMING OF MICHIGAN, LLC UNDER THE CONTROL AGREEMENT

Dear Sir:

     (Note: Capitalized terms used herein without definition shall have the
meanings assigned to them in a certain Account Control Agreement (the "Control
Agreement") dated as of July 8, 1999 by and among the Band, Lakes and Firstar
Bank of Minnesota, N.A. ("Bank") as amended and restated by the First Amendment
dated as of October 16, 2000 and by the Second Amendment dated as of December
22, 2004 and by the Third Amended and Restated Account Control Agreement dated
as of January 25, 2006).

     Pursuant to Section 4 (a) of the Control Agreement, you are hereby directed
to wire transfer, as soon as is practicable after receipt of the Consent of the
Band, but within not more than two business days after your receipt thereof, the
following sum:

      $_____________

from the Account to the Enterprise Account as designated by the Band and Great
Lakes pursuant to Section 13 (b) of the Control Agreement.

Dated: _____________, ____

                                        GREAT LAKES GAINING OF MICHIGAN, LLC


                                        By
                                           -------------------------------------
                                        Its
                                            ------------------------------------


                                      viii

<PAGE>

                                    EXHIBIT E
                       BAND CONSENT TO LAKES DRAW REQUEST

TO: Firstar Bank of Minnesota, NA
    101 East Fifth Street
    St PauL, MN 55101
    Attn: Frank P. Leslie

Re: BAND CONSENT TO DRAW BY GREAT LAKES GAINING OF MICHIGAN, LLC
    UNDER THE CONTROL AGREEMENT

Dear Sir:

     (Note: Capitalized terms used herein without definition shall have the
meanings assigned to them in a certain Account Control Agreement (the "Control
Agreement") dated as of July 8, 1999 by and among the Band, Lakes and Firstar
Bank of Minnesota, N.A. ("Bank") as amended and restated by the First Amendment
dated as of October 16, 2000 and by the Second Amendment dated as of December
22, 2004 and by the Third Amended and Restated Account Control Agreement dated
as of January 25, 2006).

     Pursuant to Section 4 (a) of the Control Agreement, you are hereby notified
that the Band consents to the Draw by Great Lakes dated _____________, a copy of
which is attached.

Dated: _____________, ____


                                        ----------------------------------------

                                        ----------------------------------------
                                        Print Name: Band Representative,
                                                    duly authorized


                                       ix
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.174
<SEQUENCE>8
<FILENAME>c02716exv10w174.txt
<DESCRIPTION>THIRD AMENDED AND RESTATED LAKES DEVELOPMENT NOTE
<TEXT>
<PAGE>
                                                               EXHIBIT 10.174

                                                               EXECUTION VERSION

                THIRD AMENDED AND RESTATED LAKES DEVELOPMENT NOTE

$46,000,000                                                   January 25, 2006
                                                              Dowagiac, Michigan

     FOR VALUE RECEIVED, the Pokagon Band of Potawatomi Indians (the "Band")
promises to pay to Great Lakes Gaming of Michigan, LLC, a Minnesota limited
liability company ("Lakes"), such sums as may be advanced by Lakes to the Band
in accordance with Sections 8.4 and 9.2.1 of a Development Agreement between the
Band and Lakes Entertainment, Inc., f/k/a Lakes Gaming, Inc. dated as of July 8,
1999, (as assigned by Lakes Entertainment, Inc. to and assumed by Lakes pursuant
to that certain Assignment and Assumption Agreement dated as of October 16, 2000
by and among the Band, Lakes Entertainment, Inc. and Lakes, and amended by a
Second Amended and Restated Assignment and Assumption Agreement of even date
hereof (the "Assignment Agreement")); and as amended and restated by a First
Amended and Restated Development Agreement dated as of October 16, 2000, a
Second Amended and Restated Development Agreement dated as of December 22, 2004,
and a Third Amended and Restated Development Agreement of even date hereof
(collectively, and as heretofore and hereafter further amended, substituted,
restated and modified, the "Development Agreement"); provided that the principal
amount due hereunder shall not exceed Forty-Six Million Dollars ($46,000,000.00)
except as otherwise provided in Section 9.2.1(a) of the Development Agreement.

     1. Advances; Funding. Advances under this Note shall be made (a) upon
written request by the Band to Lakes in the form of Draw Request attached as
Exhibit A, (b) through a Draw Request approved by the Band pursuant to the
Control Agreement, (c) through other written requests by the Band to Lakes
permitted by the Development Agreement or any applicable Transaction Document,
or (d) through advances by Lakes to the Enterprise Bank Accounts to pay
Development Expenditures in accordance with either (I) the Approved Development
Budget or, prior to the adoption of the Approved Development Budget, the
approval of the Business Board or the Band; and (II) the Development Agreement.
Draw Requests submitted by the Band shall be sent in accordance with Section
15.4 of the Development Agreement. Advances under this Note may, at Lakes'
option, be funded through transfer of funds from the Escrow Account; provided
that interest shall only accrue under this Note on funds advanced through the
Escrow Account after transfer from the Escrow Account to the Band Enterprise
Account, and shall not begin to accrue on deposit by Lakes into the Escrow
Account. All Draw Requests submitted by the Band shall be funded within ten (10)
days of the date of the draw request. By making any advance to the Enterprise
Bank Accounts or otherwise under the Development Agreement, Lakes shall certify
that the amounts so advanced are necessary for, and shall be used to pay,
Development Expenditures in accordance with either (a) the Approved Development
Budget or, prior to the adoption of the Approved Development Budget, the
approval of the Business Board or the Band; and (b) the Development Agreement.

<PAGE>

     2. Interest. Interest shall accrue on the outstanding balance under this
Note as follows:

     (a) if the Bank Closing occurs, at a fixed rate equal to the lesser of (i)
     Base Rate as of the Bank Closing plus 1% or (ii) 10% (the "Band Interest
     Rate"); or

     (b) If the Bank Closing does not occur, at a variable rate equal to the
     lesser of (i) Base Rate plus 1% or (ii) 10% (the lesser of (i) and (ii)
     being referred to as the "Variable Interest Rate"). Lakes shall adjust the
     Variable Interest Rate on the then unpaid principal balance, by way of
     increase or decrease, in accordance with changes in the Base Rate. Such
     changes shall be effective as of the change in the Base Rate (the
     "Effective Date").

     Upon the Bank Closing, interest accruing under this Note prior to the Bank
Closing shall be adjusted retroactively to reflect the Band Interest Rate. "Base
Rate" means the lowest Prime Rate as is published daily in The Wall Street
Journal. In the event that the Wall Street Journal ceases to publish the Prime
Rate, then the holder hereof may in its reasonable discretion select some other
generally recognized comparable indicator of the national Prime Rate.

     3. Repayment.

          I.   If the Commencement Date occurs, the Band shall repay the amount
               of principal and accrued interest outstanding hereunder as of the
               Commencement Date monthly in arrears, beginning on the 15th day
               of the month after the month in which the Commencement Date
               occurs, in equal monthly payments of principal and interest in an
               amount sufficient to amortize such principal and accrued interest
               over (a), if pursuant to the Development Agreement the term of
               the Lakes Development Loan is seven (7) years, the successive
               eighty-four months of that term; or (b), if pursuant to the
               Development Agreement the term of the Lakes Development Loan is
               five (5) years, the successive 60 months of that term; and, if
               not sooner paid, in full at the end of the Term (except as
               provided in Section 13.7 of the Development Agreement).

          II.  If the Commencement Date does not occur, principal and interest
               shall be repayable to the extent and in the manner provided in
               the Development Agreement; provided that payments shall in any
               event be due and made only from the sources specified in Sections
               14.3 and 14.4 of the Development Agreement. If Gaming commences
               at a Subsequent Gaming Facility and payment is due under this
               Note in accordance with the Development Agreement, the Band
               shall, beginning on the 15th day of the month following such
               commencement date, make equal monthly payments to Lakes of
               principal and interest in an amount sufficient to amortize the
               principal amount outstanding as of such commencement date over a
               sixty


                                       2

<PAGE>

               (60) month period at the Variable Interest Rate, and shall
               thereafter continue to make such payments on the 15th day of each
               succeeding month to and including the fifteenth day of the
               sixtieth month following such commencement date, when all
               remaining principal and interest shall be due and payable. As of
               the Effective Date of a change in the Base Rate, Lakes shall
               adjust the monthly installments of principal and interest as of
               the installment next following the Effective Date so that the
               then unpaid principal balance would be amortized in full at the
               revised Variable Interest Rate five years after such commencement
               of gaming. Lakes shall promptly notify the Band in writing of any
               changes in the Base Rate and in the installment payment due.

     4. Prepayment. This Note may be prepaid at any time without penalty. This
Note shall also be subject to prepayment as and when required under the terms of
any Transaction Documents.

     5. Subordination. Payment of amounts due hereunder shall be subordinated to
the Bank Development Loan, the Equipment Loan and any other third-party loans or
equipment leases to the Band relating to the Facility to the extent provided in
the Development Agreement or, if the Commencement Date does not occur, or to any
loans relating to any other Gaming facility in Michigan owned by the Band to the
extent provided in the Development Agreement. The holder of this Note agrees to
execute and deliver subordination agreements evidencing such subordination in
form reasonably acceptable to the holder and the Bank Lender, the Equipment
Lender, or any other third-party lender or equipment lessor.

     6. Limited Recourse. The obligations of the Band under this Note and any
related awards, judgments or decrees shall be payable solely out of
undistributed or future Net Revenues of the Enterprise and shall be a Limited
Recourse obligation of the Band, with no recourse to tribal assets other than
the limited assets of the Band specified in the definition of Limited Recourse
and Section 14.3(a) of the Development Agreement.

     7. Default; Acceleration. All outstanding principal together with accrued
interest shall become immediately due and payable in full, subject to the
limitations on recourse provided above, upon default in the payment of principal
or interest due under this Note if such default is not remedied within thirty
(30) days after receipt by the Band of written notice thereof as provided in the
Development Agreement.

     8. Band's Waiver of Sovereign Immunity and Consent to Suit. The Band
expressly waives its sovereign immunity from suit for the purpose of permitting
or compelling arbitration to enforce this Note as provided in Article 14 of the
Development Agreement and consents to be sued in the United States District
Court for the Western District of Michigan - Southern Division, the United
States Court of Appeals for the Sixth Circuit, and the United States Supreme
Court for the purpose of compelling arbitration or enforcing any arbitration
award or judgment arising


                                       3

<PAGE>

out of this Note. If the United States District Court lacks jurisdiction, the
Band consents to be sued in the Michigan State Court system for the same limited
purpose. The Band waives any requirement of exhaustion of tribal remedies.
Without in any way limiting the generality of the foregoing, the Band expressly
authorizes any governmental authorities who have the right and duty under
applicable law to take any action authorized or ordered by any such court, and
to take such action, including without limitation, repossessing or foreclosing
on any real property not in trust, or otherwise giving effect to any judgment
entered; provided, however, that liability of the Band under any judgment shall
always be 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. The Band appoints the Chairman of the
Pokagon Council and the Secretary of the Pokagon Council as its agents for
service of all process under or relating to the Agreements. The Band agrees that
service in hand or by certified mail, return receipt requested, shall be
effective for all purposes under or relating to the Agreements if served on such
agents.

     9. Arbitration. All disputes, controversies or claims arising out of or
relating to this Note shall be settled by binding arbitration as provided in
Article 14 of the Development Agreement.

     10. Business Purposes; Applicable Law. This Note evidences a loan for
business and commercial purposes and not for personal, household, family or
agricultural purposes. This Note shall be interpreted and construed in
accordance with Michigan law, to the extent not preempted by federal law. Use of
Michigan law for the foregoing limited purpose of interpretation and
construction is not intended by the parties to and shall not otherwise (i)
incorporate substantive Michigan laws or regulations, including but not limited
to Michigan usury laws or any other present or future provision of the laws of
Michigan that would restrict the rate of interest upon any loan contemplated
hereunder; or (ii) grant any jurisdiction to the State or any political
subdivision thereof over the Gaming Site or the Facility.

     11. Notices. All notices under this Note shall be given in accordance with
Section 15.4 of the Development Agreement; except that copies of draw requests
need not be sent to attorneys.

     12. Defined Terms. Capitalized terms used herein shall have the same
meanings assigned to them in the Development Agreement, and, if not defined in
the Development Agreement, in the Management Agreement between the Band and
Lakes, as amended.

     13. Miscellaneous.

          a. Time is of the essence.

          b. The benefits and obligations of this Note shall inure to and be
          binding upon the parties hereto and their respective successors and
          assigns, provided that any succession or assignment is permitted under
          the Development Agreement.


                                       4

<PAGE>

          c. Waiver of any one default shall not cause or imply a waiver any
          subsequent default.

          d. This Note, together with the documents listed in Section 15.17 of
          the Development Agreement, as each has been amended to date, sets
          forth the entire agreement between the parties hereto with respect to
          the subject matter hereof. All agreements, covenants, representations,
          and warranties, express or implied, oral or written, of the parties
          with respect to the subject matter hereof are contained herein and
          therein. This Note shall not be supplemented, amended or modified by
          any course of dealing, course of performance or uses of trade and may
          only be amended or modified by a written instrument duly executed by
          officers of both parties.

          e. This Note has been executed and delivered as a complete amendment
          and restatement in its entirety of that certain Lakes Note dated as of
          July 8, 1999 made payable by the Band to Lakes Entertainment, Inc.,
          f/k/a Lakes Gaming, Inc., in the original principal amount of
          $43,000,000, as assigned by Lakes Entertainment, Inc., f/k/a Lakes
          Gaming, Inc to Lakes pursuant to the Assignment Agreement and as
          amended and restated by a First Amended and Restated Lakes Development
          Note dated as of October 16, 2000 and a Second Amended and Restated
          Lakes Development Note dated as of December 22, 2004, but does not
          extinguish, satisfy, discharge or constitute a novation thereof, and
          the Band hereby reaffirms, subject to the provisions of this Note, the
          indebtedness evidenced thereby. Lakes agrees to return to the Band the
          original Lakes Note dated as of July 8, 1999, the original First
          Amended and Restated Development Note dated as of October 16, 2000 and
          the original Second Amended and Restated Development Note dated as of
          December 22, 2004.

          f. Any other provision of this Note to the contrary notwithstanding:
          (i) in no event shall the rate of interest payable under this Note
          exceed the maximum rate permitted by law (the "Legal Rate"); (ii) if
          at any time the rate of interest computed as provided above (the
          "Computed Rate") exceeds the Legal Rate, then interest shall accrue
          thereafter at the Legal Rate regardless of whether the Computed Rate
          is greater or less than the Legal Rate until the total amount of
          interest payable hereunder equals the amount that would have been
          payable without regard to this sentence, or until this Note is paid in
          full, whichever occurs first; and (iii) if the holder receives any
          interest in excess of the maximum rate permitted by this sentence, the
          excess shall be credited against the principal hereof or refunded, at
          the holder's option.


                                       5

<PAGE>

                                        THE POKAGON BAND OF POTAWATOMI INDIANS


                                        By: /s/ John Miller
                                            ------------------------------------
                                        Its Council Chairman


                                        By: /s/ Daniel Rapp
                                            ------------------------------------
                                        Its Secretary


                                       6

<PAGE>

                                   EXHIBIT A
                                  DRAW REQUEST

     The Pokagon Band of Potawatomi Indians (the "Band") requests that Great
Lakes Gaming of Michigan, LLC ("Lakes") advance $_______________ under the Lakes
Development Note. The Band certifies that the amounts drawn under this Request
will be used for purposes set out in Section 8.4 of the Development Agreement or
for Development Expenditures, as per the attached itemization.

     Advances should be made [pursuant to wire transfer instructions previously
given to Lakes] [as follows: _________________________________________].

Dated:                                  THE POKAGON BAND OF POTAWATOMI INDIANS
       ------------------------------


                                        BY:
                                            ------------------------------------
                                        Its Council Chairman


                                        By:
                                            ------------------------------------
                                        Its Secretary

      [or other persons designated by the Band pursuant to the Development
                                   Agreement]


                                       7
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.175
<SEQUENCE>9
<FILENAME>c02716exv10w175.txt
<DESCRIPTION>FIRST AMENDED AND RESTATED LAKES FACILITY NOTE
<TEXT>
<PAGE>
                                                               EXHIBIT 10.175

                                                               EXECUTION VERSION

                 FIRST AMENDED AND RESTATED LAKES FACILITY NOTE

$54,000,000                                                   January 25, 2006
                                                              Dowagiac, Michigan

     FOR VALUE RECEIVED, the Pokagon Band of Potawatomi Indians (the "Band")
promises to pay to Great Lakes Gaming of Michigan, LLC, a Minnesota limited
liability company ("Lakes"), such sums as may be advanced by Lakes to the Band
in accordance with Section 9.2.4 of a Development Agreement between the Band and
Lakes Entertainment, Inc., f/k/a Lakes Gaming, Inc. dated as of July 8, 1999,
(as assigned by Lakes Entertainment, Inc. to and assumed by Lakes pursuant to
that certain Assignment and Assumption Agreement dated as of October 16, 2000 by
and among the Band, Lakes Entertainment, Inc. and Lakes, and amended by a Second
Amended and Restated Assignment and Assumption Agreement of even date hereof
(the "Assignment Agreement")); and as amended and restated by a First Amended
and Restated Development Agreement dated as of October 16, 2000, a Second
Amended and Restated Development Agreement dated as of December 22, 2004, and a
Third Amended and Restated Development Agreement of even date hereof
(collectively, and as heretofore and hereafter amended, substituted, restated
and modified, the "Development Agreement"); provided that the principal amount
due hereunder shall not exceed Fifty-Four Million Dollars ($54,000,000.00).

     1. Advances; Funding. Advances under this Note shall be made (a) upon
written request by the Band to Lakes in the form of Draw Request attached as
Exhibit A, (b) through a Draw Request approved by the Band pursuant to the
Control Agreement, (c) through other written requests by the Band to Lakes
permitted by the Development Agreement or any applicable Transaction Document,
or (d) through advances by Lakes to the Enterprise Bank Accounts to pay
Development Expenditures in accordance with either (I) the Approved Development
Budget or, prior to the adoption of the Approved Development Budget, the
approval of the Business Board or the Band; and (II) the Development Agreement.
Draw Requests submitted by the Band shall be sent in accordance with Section
15.4 of the Development Agreement. All Draw Requests submitted by the Band shall
be funded within ten (10) days of the date of the draw request. By making any
advance to the Enterprise Bank Accounts or otherwise under the Development
Agreement, Lakes shall certify that the amounts so advanced are necessary for,
and shall be used to pay, Development Expenditures in accordance with either (a)
the Approved Development Budget or, prior to the adoption of the Approved
Development Budget, the approval of the Business Board or the Band; and (b) the
Development Agreement.

     2. Interest. Interest shall accrue on the outstanding balance under this
Note at thirteen percent (13%) per annum.

<PAGE>

     3. Repayment.

          I.   If the Commencement Date occurs, the Band shall repay the amount
               of principal and accrued interest outstanding hereunder as of the
               Commencement Date monthly in arrears, beginning on the 15th day
               of the month after the month in which the Commencement Date
               occurs, in equal monthly payments of principal and interest for
               (a), if pursuant to the Development Agreement the term of the
               Lakes Development Loan is seven (7) years, the successive
               eighty-four months of that term; or (b), if pursuant to the
               Development Agreement the term of the Lakes Development Loan is
               five (5) years, the successive 60 months of that term; and, if
               not sooner paid, in full at the end of the Term (except as
               provided in Section 13.7 of the Development Agreement).

          II.  If the Commencement Date does not occur, principal and interest
               shall be repayable to the extent and in the manner provided in
               the Development Agreement; provided that payments shall in any
               event be due and made only from the sources specified in Sections
               14.3 and 14.4 of the Development Agreement. If Gaming commences
               at a Subsequent Gaming Facility and payment is due under this
               Note in accordance with the Development Agreement, the Band
               shall, beginning on the 15th day of the month following such
               commencement date, make equal monthly payments to Lakes of
               principal and interest in an amount sufficient to amortize the
               principal amount outstanding as of such commencement date over a
               sixty (60) month period at the Variable Interest Rate, and shall
               thereafter continue to make such payments on the 15th day of each
               succeeding month to and including the fifteenth day of the
               sixtieth month following such commencement date, when all
               remaining principal and interest shall be due and payable. As of
               the Effective Date of a change in the Base Rate, Lakes shall
               adjust the monthly installments of principal and interest as of
               the installment next following the Effective Date so that the
               then unpaid principal balance would be amortized in full at the
               revised Variable Interest Rate five years after such commencement
               of gaming. Lakes shall promptly notify the Band in writing of any
               changes in the Base Rate and in the installment payment due.

     4. Prepayment. This Note may be prepaid at any time without penalty. This
Note shall also be subject to prepayment as and when required under the terms of
any Transaction Documents.

     5. Subordination. Payment of amounts due hereunder shall be subordinated to
the Bank Development Loan, the Equipment Loan and any other third-party loans or
equipment leases to the Band relating to the Facility to the extent provided in
the Development Agreement or, if the


                                       2

<PAGE>

Commencement Date does not occur, or to any loans relating to any other Gaming
facility in Michigan owned by the Band to the extent provided in the Development
Agreement. The holder of this Note agrees to execute and deliver subordination
agreements evidencing such subordination in form reasonably acceptable to the
holder and the Bank Lender, the Equipment Lender, or any other third-party
lender or equipment lessor.

     6. Limited Recourse. The obligations of the Band under this Note and any
related awards, judgments or decrees shall be payable solely out of
undistributed or future Net Revenues of the Enterprise and shall be a Limited
Recourse obligation of the Band, with no recourse to tribal assets other than
the limited assets of the Band specified in the definition of Limited Recourse
and Section 14.3(a) of the Development Agreement.

     7. Default; Acceleration. All outstanding principal together with accrued
interest shall become immediately due and payable in full, subject to the
limitations on recourse provided above, upon default in the payment of principal
or interest due under this Note if such default is not remedied within thirty
(30) days after receipt by the Band of written notice thereof as provided in the
Development Agreement.

     8. Band's Waiver of Sovereign Immunity and Consent to Suit. The Band
expressly waives its sovereign immunity from suit for the purpose of permitting
or compelling arbitration to enforce this Note as provided in Article 14 of the
Development Agreement and consents to be sued in the United States District
Court for the Western District of Michigan - Southern Division, the United
States Court of Appeals for the Sixth Circuit, and the United States Supreme
Court for the purpose of compelling arbitration or enforcing any arbitration
award or judgment arising out of this Note. If the United States District Court
lacks jurisdiction, the Band consents to be sued in the Michigan State Court
system for the same limited purpose. The Band waives any requirement of
exhaustion of tribal remedies. Without in any way limiting the generality of the
foregoing, the Band expressly authorizes any governmental authorities who have
the right and duty under applicable law to take any action authorized or ordered
by any such court, and to take such action, including without limitation,
repossessing or foreclosing on any real property not in trust, or otherwise
giving effect to any judgment entered; provided, however, that liability of the
Band under any judgment shall always be 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. The Band
appoints the Chairman of the Pokagon Council and the Secretary of the Pokagon
Council as its agents for service of all process under or relating to the
Agreements. The Band agrees that service in hand or by certified mail, return
receipt requested, shall be effective for all purposes under or relating to the
Agreements if served on such agents.

     9. Arbitration. All disputes, controversies or claims arising out of or
relating to this Note shall be settled by binding arbitration as provided in
Article 14 of the Development Agreement.


                                       3

<PAGE>

     10. Business Purposes; Applicable Law. This Note evidences a loan for
business and commercial purposes and not for personal, household, family or
agricultural purposes. This Note shall be interpreted and construed in
accordance with Michigan law, to the extent not preempted by federal law. Use of
Michigan law for the foregoing limited purpose of interpretation and
construction is not intended by the parties to and shall not otherwise (i)
incorporate substantive Michigan laws or regulations, including but not limited
to Michigan usury laws or any other present or future provision of the laws of
Michigan that would restrict the rate of interest upon any loan contemplated
hereunder; or (ii) grant any jurisdiction to the State or any political
subdivision thereof over the Gaming Site or the Facility.

     11. Notices. All notices under this Note shall be given in accordance with
Section 15.4 of the Development Agreement; except that copies of draw requests
need not be sent to attorneys.

     12. Defined Terms. Capitalized terms used herein shall have the same
meanings assigned to them in the Development Agreement, and, if not defined in
the Development Agreement, in the Management Agreement between the Band and
Lakes, as amended.

     13. Miscellaneous.

          a. Time is of the essence.

          b. The benefits and obligations of this Note shall inure to and be
          binding upon the parties hereto and their respective successors and
          assigns, provided that any succession or assignment is permitted under
          the Development Agreement.

          c. Waiver of any one default shall not cause or imply a waiver any
          subsequent default.

          d. This Note, together with the documents listed in Section 15.17 of
          the Development Agreement, as each has been amended to date, sets
          forth the entire agreement between the parties hereto with respect to
          the subject matter hereof. All agreements, covenants, representations,
          and warranties, express or implied, oral or written, of the parties
          with respect to the subject matter hereof are contained herein and
          therein. This Note shall not be supplemented, amended or modified by
          any course of dealing, course of performance or uses of trade and may
          only be amended or modified by a written instrument duly executed by
          officers of both parties.

          e. This Note has been executed and delivered as a complete amendment
          and restatement in its entirety of that certain Lakes Facility Note
          dated as of December 22, 2004 made payable by the Band to Lakes in the
          original principal amount of $54,000,000, but does not extinguish,
          satisfy, discharge or constitute a novation thereof, and the Band
          hereby reaffirms, subject to the provisions of this Note, the


                                       4

<PAGE>

          indebtedness evidenced thereby. Lakes agrees to return to the Band the
          original Lakes Facility Note dated as of December 22, 2004.

          f. Any other provision of this Note to the contrary notwithstanding:
          (i) in no event shall the rate of interest payable under this Note
          exceed the maximum rate permitted by law (the "Legal Rate"); (ii) if
          at anytime the rate of interest computed as provided above (the
          "Computed Rate") exceeds the Legal Rate, then interest shall accrue
          thereafter at the Legal Rate regardless of whether the Computed Rate
          is greater or less than the Legal Rate until the total amount of
          interest payable hereunder equals the amount that would have been
          payable without regard to this sentence, or until this Note is paid in
          full, whichever occurs first; and (iii) if the holder receives any
          interest in excess of the maximum rate permitted by this sentence, the
          excess shall be credited against the principal hereof or refunded, at
          the holder's option.

                                        THE POKAGON BAND OF POTAWATOMI INDIANS


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


                                        By: /s/ Daniel Rapp
                                            ------------------------------------
                                        Its Secretary


                                       5

<PAGE>

                                    EXHIBIT A
                                  DRAW REQUEST

     The Pokagon Band of Potawatomi Indians (the "Band") requests that Great
Lakes Gaming of Michigan, LLC ("Lakes") advance $_______________under the Lakes
Facility Note. The Band certifies that the amounts drawn under this Request will
be used for purposes set out in Section 9.2.4 of the Development Agreement or
for Development Expenditures, as per the attached itemization.

     Advances should be made [pursuant to wire transfer instructions previously
given to Lakes] [as follows:_________________________________________].

Dated:                                  THE POKAGON BAND OF POTAWATOMI INDIANS
       --------------


                                        By:
                                            ------------------------------------
                                        Its: Council Chairman


                                        By:
                                            ------------------------------------
                                        Its: Secretary

[or other persons designated by the Band pursuant to the Development Agreement]


                                       6
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.176
<SEQUENCE>10
<FILENAME>c02716exv10w176.txt
<DESCRIPTION>FIRST AMENDED AND RESTATED SECURITY AGREEMENT
<TEXT>
<PAGE>
                                                               EXHIBIT 10.176

                                                               EXECUTION VERSION

                  FIRST AMENDED AND RESTATED SECURITY AGREEMENT

          This First Amended and Restated Security Agreement is made and entered
into as of the 25th day of January, 2006, between the POKAGON BAND OF POTAWATOMI
INDIANS, a federally recognized Indian Tribe, with tribal offices located at
58620 Sink Road, Dowagiac, Michigan 49047 ("DEBTOR") and Great Lakes Gaming of
Michigan, LLC, a Minnesota limited liability company whose business office is
located 130 Cheshire Lane, Minnetonka, Minnesota 55305 ("SECURED PARTY").

                                    RECITALS

     WHEREAS, the Debtor has the inherent power to conduct and regulate gaming
on its lands, subject only to the restrictions imposed by the Indian Gaming
Regulatory Act of 1988, Public Law 100-497 ("IGRA"); and

     WHEREAS, in accordance with IGRA, the Debtor has entered into a
Tribal-State Compact for the Conduct of Class III Gaming within the State of
Michigan; and

     WHEREAS, the Debtor intends to operate a gaming facility in New Buffalo,
Michigan (the "Casino") on lands the U.S. Department of the Interior has taken
or will take into trust; and

     WHEREAS, the Debtor and Lakes Entertainment, Inc., f/k/a Lakes Gaming, Inc.
("Lakes") previously entered into a Development Agreement dated as of July 8,
1999, (as assigned by Lakes to Great Lakes pursuant to that certain Assignment
and Assumption Agreement dated October 16, 2000, by and among the Debtor, Great
Lakes and Lakes,_and amended by a Second Amended and Restated Assignment and
Assumption Agreement of even date hereof ("Assignment Agreement)); and as
amended and restated by that certain First Amended and Restated Development
Agreement dated October 16, 2000 by and between the Debtor and Great Lakes, and
as amended and restated by that certain Second Amended and Restated Development
Agreement dated as of December 22, 2004 by and between the Debtor and Great
Lakes, and as further simultaneously amended and restated by that certain Third
Amended and Restated Development Agreement of even or near date hereof by and
between the Debtor and Great Lakes (collectively, and as heretofore amended and
together with all further modifications, renewals, consolidations, restatements,
amendments and extensions thereof, the "Development Agreement"), pursuant to
which Great Lakes has agreed to, among other things, make certain loans to the
Debtor in connection with the development, construction and equipping of the
Casino and certain related amenities; and

     WHEREAS, the Debtor and Lakes previously entered into a Management
Agreement dated as of July 8, 1999, as assigned by Lakes to Great Lakes pursuant
to the Assignment Agreement, and as amended and restated by that certain First
Amended and Restated Management Agreement dated October 16, 2000 by and between
the Debtor and Great Lakes,

<PAGE>

and as amended and restated by that certain Second Amended and Restated
Management Agreement dated as of December 22, 2004, by and between the Debtor
and Great Lakes, and as further simultaneously amended and restated by that
certain Third Amended and Restated Management Agreement of even or near date
hereof by and between the Debtor and Great Lakes (collectively, and as
heretofore amended and together with all further modifications, renewals,
consolidations, restatements, amendments and extensions thereof, the "Management
Agreement"), pursuant to which the Debtor and Great Lakes have agreed that Great
Lakes shall manage the Casino and certain related amenities as more specifically
set forth therein; and

     WHEREAS, pursuant to the Development Agreement and the Management
Agreement, Secured Party will, among other things, advance funds to Debtor.

     WHEREAS, as a material inducement to Secured Party to enter into the
Development Agreement and the Management Agreement, the Debtor has agreed to
execute this Security Agreement in favor of Secured Party and to grant a
security interest to Secured Party in all of its right, title and interest in
the property described herein.

                                    AGREEMENT

          Now therefore, in consideration of the above recitals and the mutual
covenants hereinafter set forth, the parties hereto agree as follows:

          1. Defined Terms. Unless the context otherwise requires, capitalized
terms not defined herein have the meaning ascribed to them in the Development
Agreement or the Management Agreement, as applicable.

          2. Creation of Security Interest. The Debtor hereby assigns, pledges
and grants to Secured Party a security interest in the Debtor's right, title and
interest in and to the collateral described in Section 3 below (the
"COLLATERAL") in each case whether now owned or hereafter acquired by Debtor in
order to secure the payment and performance of the obligations of Debtor to
Secured Party described in Section 4 herein below. On the date of execution of
this Agreement, Debtor shall cause to be authorized and delivered to Secured
Party: (a) such financing statements and similar documents necessary to perfect
the security interest granted to Secured Party pursuant to this Agreement (the
"Financing Statements"), and (b) a legal opinion in form and substances
reasonably acceptable to Secured Party, opining as to the due authorization,
execution and delivery of this Agreement and the Financing Statements by Debtor,
together with opinions as to Debtor's sovereign immunity waiver and
non-contravention with laws and agreements.

          Secured Party agrees to subordinate its security interest in the
Collateral and its rights hereunder as required under the terms of the
Development Agreement.

          3. Collateral. The Collateral under this Security Agreement includes
all of the following assets (collectively all of the following property and
similar or after-acquired property under this Section 3 being hereinafter
referred to as "COLLATERAL"):


                                        2

<PAGE>

     all goods, furniture, furnishings and equipment required for or related to
     the operation of the Enterprise, including, without limitation:

          (i) cashier, money sorting and money counting equipment, surveillance
     and communication equipment, and security equipment;

          (ii) slot machines, video games of chance, table games, keno equipment
     and other gaming equipment;

          (iii) office furnishings and equipment;

          (iv) specialized equipment necessary for the operation of any portion
     of the Enterprise for accessory purposes, including equipment for kitchens,
     laundries, dry cleaning, cocktail lounges, restaurants, public rooms,
     commercial and parking spaces, and recreational facilities; and

          (v) hotel equipment (to the extent a hotel is included in the
     Enterprise);

          (vi) all other furnishings and equipment hereafter located and
     installed in or about the Facility or the Gaming Site which are used in the
     operation of the Enterprise;

     each of the foregoing whether now owned or hereafter at any time acquired
     by Debtor and wherever located, and including all replacements, additions,
     parts, appurtenances, accessions, substitutions, repairs, and proceeds
     relating thereto or therefrom, and all documents, records, ledger sheets
     and files of Debtor relating thereto (provided that Debtor shall retain all
     originals, and Secured Party's rights as to this Collateral extend only to
     making copies); together further with all proceeds of any such Collateral,
     including, without limitation (i) whatever is now or hereafter receivable
     or received by Debtor upon the sale, exchange, collection or other
     disposition of any item of Collateral, whether voluntary or involuntary,
     whether such proceeds constitute equipment, intangibles, or other assets;
     (ii) any such items which are now or hereafter acquired by Debtor with any
     proceeds of Collateral hereunder; and (iii) any insurance proceeds or any
     payments under any indemnity, warranty or guaranty now or hereafter payable
     by reason of loss or damage or otherwise with respect to any item of
     Collateral or any proceeds thereof.

          4. Secured Obligations of Debtor. The Collateral secures and shall
hereafter secure: (i) all amounts owing by the Debtor to the Secured Party with
respect to the Lakes Development Note, the Lakes Facility Note, the Non-Gaming
Land Acquisition Line of Credit, the Transition Loan Note, the Minimum Payments
Note, the Lakes Working Capital Advance Note and any other Transaction Documents
(as each of such terms are defined in the Development Agreement) and the
Management Fee (as such term is defined in the Management Agreement), together
with any costs, expenses or other amounts hereafter owing by the Debtor to the
Secured Party pursuant to the terms of this Agreement, the Development
Agreement, the Management Agreement or any other Transaction Documents, each of
the foregoing, whether now existing or hereafter incurred or arising, and,
without limiting the generality of the


                                        3

<PAGE>

foregoing; (ii) any and all sums advanced by Secured Party in order to preserve
the Collateral or preserve Secured Party's security interest in the Collateral
(or the priority thereof) and (iii) after and during the continuance of an Event
of Default, the expenses of retaking, holding, preparing for sale or lease,
selling or otherwise disposing of or realizing on the Collateral, of any
proceeding for the collection or enforcement of any indebtedness, obligations or
liabilities of Debtor referred to above, or of any exercise by Secured Party of
its rights hereunder, together with reasonable attorneys' fees and disbursements
and court costs (collectively, the "SECURED OBLIGATIONS"); PROVIDED HOWEVER,
Secured Party agrees to terminate this Security Agreement upon request if Debtor
has satisfied the following conditions: (a) all Secured Obligations have been
repaid in full to Secured Party and (b) the Transaction Documents have been
terminated in accordance with their terms.

          5. Debtor's Representations and Warranties. The Debtor represents and
warrants that:

               (a) the Debtor is (or, to the extent that the Collateral is
acquired after the date hereof, will be) the sole legal and beneficial owner of
its respective Collateral and has exclusive possession and control thereof;
there are no security interests in, liens, charges or encumbrances on, or
adverse claims of title to, or any other interest whatsoever in, such Collateral
or any portion thereof except such liens that are created by this Security
Agreement or as permitted by Section 9.2 of the Development Agreement and
Section 10.6 of the Management Agreement (collectively, "PERMITTED LIENS"); and
that no financing statement, notice of lien, mortgage, deed of trust or
instrument similar in effect covering the Collateral or any portion thereof or
any proceeds thereof ("LIEN NOTICE") exists or is on file in any public office,
except as relates to Permitted Liens and except as may have been filed in favor
of Secured Party relating to this Security Agreement or related agreements, or
for which duly executed termination statements have been delivered to Secured
Party for filing;

               (b) the Debtor has full right, power and authority to execute,
deliver and perform this Security Agreement and the same constitutes a legally
valid and binding obligation of the Debtor, enforceable against the Debtor in
accordance with its terms subject to any limitations set forth in the Resolution
of Limited Waiver attached to the Management Agreement. Subject to the
completion of the items identified in Section 4(c) below, the provisions of this
Security Agreement are effective to create in favor of Secured Party a valid and
enforceable perfected security interest in the Collateral;

               (c) except for the filing or recording of the financing
statements and (prior to transfer of the Gaming Site into trust) fixture filings
that are to be filed in connection with this Security Agreement and compliance
with applicable Minnesota law as to creation and perfection of security
interests, and after adoption by Borrower of a commercial code governing secured
transactions, compliance with the applicable filing and other provisions of such
code, no authorization, approval or other action by, no notice to or
registration or filing with, any person or entity, including without limitation,
any creditor of Debtor or any governmental authority or regulatory body is
required, except as may be agreed to by Debtor and Secured Party: (i) for the
grant by the Debtor of the security interest in the Collateral pursuant to this
Security Agreement or for the execution, delivery or performance of this
Security Agreement by the Debtor, (ii) for the perfection or maintenance of such
security interest created hereby, or the exercise by Secured


                                        4

<PAGE>

Party of the rights and remedies provided for in this Security Agreement (other
than any required governmental consent or filing with respect to any patents,
trademarks, copyrights, governmental claims, tax refunds, licenses or permits,
compliance with the Johnson Act, 15U.S.C. Sections 1171 et seq. and other laws
applicable to the possession, transportation, use and sale of gaming equipment,
and the exercise of remedies requiring prior court approval), or (iii) for the
enforceability of such security interest against third parties, including,
without limitation, judgment lien creditors;

               (d) Debtor does not do business, and for the previous five years
has not done business, under any fictitious business names or trade names;

               (e) the Collateral has not been and will not be used or bought by
Debtor for personal, family or household purposes;

               (f) the Debtor's chief executive office is located at the address
referenced as the first page of this Agreement, Debtor has no places of business
other than such address and the Collateral is now and will at all times
hereafter be located at Debtor's places of business or as Debtor may otherwise
notify Secured Party in writing;

               (g) Intentionally omitted;

               (h) Debtor has not purchased any Collateral, other than for cash,
within twenty-one (21) days prior to the date hereof;

               (i) Intentionally omitted; and

               (j) none of the execution, delivery and performance of this
Security Agreement by Debtor, the consummation of the transactions herein
contemplated, the fulfillment of the terms hereof or the exercise by Secured
Party of any rights or remedies hereunder will constitute or result in a breach
of any of the terms or provisions of, or constitute a default under, or
constitute an event which with notice or lapse of time or both will result in a
breach of or constitute a default under, any agreement, indenture, mortgage,
deed of trust, equipment lease, instrument or other document to which Debtor is
a party, conflict with or require approval, authorization, notice or consent
under any law, order, rule, regulation, license or permit applicable to Debtor
of any court or any federal or state government, regulatory body or
administrative agency, other than compliance with the Johnson Act, 15 U.S.C.
Sections 1171 et seq. and other laws applicable to the possession,
transportation, use and sale of gaming equipment, or any other governmental body
having jurisdiction over Debtor or its properties, or require notice, consent,
approval or authorization by or registration or filing with any person or entity
(including, without limitation, any stockholder or creditor of Debtor) other
than any notices to Debtor from Secured Party required hereunder except as may
be agreed to by Debtor and Secured Party. Except for the Permitted Liens, none
of the Collateral is subject to any agreement, indenture, mortgage, deed of
trust, equipment lease, instrument or other document to which Debtor is a party
which may restrict or inhibit Secured Party's rights or ability to sell or
dispose of the Collateral or any part thereof after the occurrence of an Event
of Default (as defined herein).


                                        5

<PAGE>

          6. Covenants of Debtor. The Debtor covenants and agrees as follows
(provided that, so long as the Management Agreement remains in effect, no
violation of any covenant caused by the failure of Secured Party to perform its
express or implied obligations under the Management Agreement shall be an Event
of Default hereunder):

               (a) Debtor will not move or permit to be moved the Collateral or
any portion thereof to any location other than that set forth in Section 5(f)
hereof, the Gaming Site or locations established in compliance with Section 6(b)
hereof without the prior written consent of the Secured Party and the prior
filing of a financing statement with the proper office and in the proper form to
perfect or continue the perfection (without loss of priority) of the security
interests created herein, which filing shall be satisfactory in form, substance
and location to Secured Party prior to such filing;

               (b) Debtor will not voluntarily or involuntarily change its name,
identity, corporate structure, or location of its chief executive office or any
of its other places of business, unless in any such case: (i) Debtor shall have
first received the prior written consent of Secured Party, (ii) Debtor shall
have executed and caused to be filed financing statements with the proper
offices and in the proper form to perfect or continue the perfection (without
loss of priority) of the security interests created herein, which filing shall
be satisfactory in form, substance and location to Secured Party prior to such
filing, and (iii) Debtor shall have delivered to Secured Party any other
documents required by Secured Party in a form and substance satisfactory to
Secured Party;

               (c) Intentionally Omitted;

               (d) Debtor will promptly, and in no event later than 21 days
after a request by Secured Party, procure or execute and deliver all further
instruments and documents (including, without limitation, notices, financing
statements, mortgagee waivers, landlord disclaimers and subordination
agreements), that are consistent with the terms of the Management Agreement and
the Development Agreement and any applicable subordination agreements and that
are reasonably necessary or appropriate to and take any other actions which are
reasonably necessary to perfect or to continue the perfection, priority and
enforceability of Secured Party's security interests in the Collateral, to
enable Secured Party to exercise and enforce its rights and remedies hereunder
with respect to any Collateral, to protect the Collateral against the rights,
claims or interests of third persons, or to effect or to assure further the
purposes' and provisions of this Security Agreement, and will after and during
the continuance of an Event of Default pay all reasonable costs incurred in
connection therewith. Without limiting the generality of the foregoing, Debtor
will: (i) mark conspicuously each item of chattel paper and each other contract
included in the Collateral with a legend, in form and substance satisfactory to
Secured Party, indicating that such chattel paper and other contracts are
subject to the security interests granted hereby; (ii) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices as may be necessary or desirable, which Secured Party may
reasonably request in order to perfect and preserve the perfection and priority
of the security interests granted or purported to be granted hereby; (iii) if
any Collateral shall be evidenced by a promissory note or other instrument or
chattel paper (other than checks received by any Debtor in the ordinary course
of business), deliver and pledge to Secured Party such note or instrument or
chattel paper duly endorsed and accompanied by duly executed instruments of
transfer or


                                        6

<PAGE>

assignment, all in form and substance reasonably satisfactory to Secured Party;
(iv) if any Collateral is at any time in the possession or control of any
warehouseman, bailee, consignee or any of Debtor's agents or processors, Debtor
shall notify such warehouseman, bailee, consignee, agent or processor of the
security interests created or purported to be created hereby, shall cause such
warehouseman, bailee, consignee, agent or processor to execute any financing
statements or other documents which Secured Party may reasonably request to
perfect Secured Party's security interest in such collateral, and, upon the
request of Secured Party after the occurrence and during the continuation of an
Event of Default, shall instruct such person to hold all such Collateral for
Secured Party's account subject to Secured Party's instructions; (v) deliver and
pledge to Secured Party all securities and instruments (other than checks
received by Debtor in the ordinary course of business) constituting Collateral
duly endorsed and accompanied by duly executed instruments of transfer or
assignments, all in form and substance satisfactory to Secured Party; and (vi)
at the request of Secured Party, deliver to Secured Party any and all
certificates of title, applications for title or similar evidence of ownership
of all Collateral and shall cause Secured Party to be named as lienholder on any
such certificate of title or other evidence of ownership;

               (e) without the prior written consent of Secured Party, Debtor
will not in any way encumber, or hypothecate, or create or permit to exist, any
lien, security interest, charge or encumbrance or adverse claim upon or other
interest in the Collateral, except for Permitted Liens, and the Debtor will
defend the Collateral against all claims and demands of all persons at any time
claiming the same or any interest therein, except as expressly provided herein.
Debtor will not permit any Lien Notices to exist or be on file in any public
office with respect to all or any portion of the Collateral except, in each
case, for Lien Notices of holders of Permitted Liens or encumbrances permitted
by the Development Agreement and Management Agreement or except as may have been
filed by or for the benefit of Secured Party relating to this Security Agreement
or related agreements. Debtor shall promptly notify Secured Party of any
attachment or other legal process levied against any of the Collateral;

               (f) without the prior written consent of Secured Party or as
otherwise permitted by the Development Agreement or the Management Agreement,
Debtor will not sell, transfer, assign (by operation of law or otherwise),
exchange or otherwise dispose of all or any portion of the Collateral or any
interest therein, except that the Debtor may sell worn-out or obsolete equipment
provided that the proceeds thereof are applied to the Secured Obligations or
used to purchase new collateral of equal or greater value and the Secured Party
shall be granted a security interest therein of equal priority to the Collateral
which it replaced. If the proceeds of any such prohibited sale are notes,
instruments, documents of title, letters of credit or chattel paper, such
proceeds shall be promptly delivered to Secured Party to be held as Collateral
hereunder (with all necessary or appropriate endorsements). If the Collateral,
or any part thereof or interest therein, is sold, transferred, assigned,
exchanged, or otherwise disposed of in violation of these provisions, the
security interest of Secured Party shall continue in such Collateral or part
thereof notwithstanding such sale, transfer, assignment, exchange or other
disposition, and Debtor will hold the proceeds thereof in a separate account for
Secured Party's benefit. Debtor will, at Secured Party's request, transfer such
proceeds to Secured Party in kind;

               (g) Secured Party is hereby authorized to file one or more
financing statements or fixture filings, and continuations thereof and
amendments thereto, relative to all or any part of the Collateral, without the
signature of Debtor where permitted by law;


                                        7

<PAGE>

               (h) Except as expressly permitted by the Development Agreement
and Management Agreement, Debtor will not enter into any indenture, mortgage,
deed of trust, contract, undertaking, document, instrument or other agreement,
except for the Development Agreement and Management Agreement and any documents,
instruments or agreements related thereto or issue any securities which may
materially restrict or inhibit Secured Party's rights or ability to sell or
otherwise dispose of the Collateral or any part thereof after the occurrence of
an Event of Default;

               (i) The Debtor shall cause to be maintained, insurance with
respect to the Enterprise and Collateral as required by the Development
Agreement and Management Agreement and naming Secured Party as an additional
insured, loss payee and mortgagee, if applicable. Upon request, the Debtor shall
provide to the Secured Party certificates of insurance or copies of insurance
policies evidencing that such insurance satisfying the requirements of such
Development Agreement and Management Agreement is in effect at all times;

               (j) Except as expressly permitted by the Development Agreement
and Management Agreement, the Debtor will pay and discharge all taxes,
assessments and governmental charges or levies against the Collateral prior to
delinquency thereof and will keep the Collateral free of all unpaid claims and
charges (including claims for labor, materials and supplies) whatsoever;

               (k) Debtor will keep and maintain the Collateral in good
condition, working order and repair and from time to time will make or cause to
be made all repairs, replacements and other improvements in connection therewith
that are necessary or desirable toward such end. Debtor will not misuse or abuse
the Collateral, or waste or allow it to deteriorate except for the ordinary wear
and tear of its normal and expected use in Debtor's business in accordance with
Debtor's policies as then in effect (provided that no changes are made to
Debtor's policies as in effect on the date hereof that would be materially
adverse to the interests of the Secured Party), and will comply with all laws,
statutes and regulations pertaining to the use or ownership of the Collateral.
Debtor will promptly notify Secured Party regarding any material loss or damage
to any material Collateral or portion thereof;

               (l) The Debtor will take all actions consistent with reasonable
business judgment or, upon the occurrence of an Event of Default, directed by
Secured Party in Secured Party's reasonable discretion, to create, preserve and
enforce any liens or guaranties available to secure or guaranty payments due
Debtor under any contracts or other agreements with third parties, will not
voluntarily permit any such payments to become more than thirty (30) days
delinquent and will in a timely manner record and assign to Secured Party, to
the extent and at the earliest time permitted by law, any such liens and rights
to under such guaranties;

               (m) Intentionally omitted;

               (n) Intentionally omitted;

               (o) Secured Party shall have during normal business hours, with
reasonable notice, the right to enter into and upon any premises where any of
the Collateral or records with respect thereto are located for the purpose of
inspecting the same, performing any


                                        8

<PAGE>

audit, making copies of records, observing the use of any part of the
Collateral, or otherwise protecting its security interest in the Collateral;

               (p) Secured Party shall have the right at any time, but shall not
be obligated, to make any payments and do any other acts Secured Party may
reasonably deem necessary or desirable to protect its security interest in the
Collateral, including, without limitation, that after and during the continuance
of an Event of Default, the right to pay, purchase, contest or compromise any
encumbrance, charge or lien (excluding any Permitted Liens) applicable or
purported to be applicable to any Collateral hereunder, and whether prior to or
after the occurrence of any Event of Default, appear in and defend any action or
proceeding purporting to affect its security interest in and/or the value of any
Collateral, and in exercising any such powers or authority, the right to pay all
expenses incurred in connection therewith, including attorneys' fees. Debtor
hereby agrees that it shall be bound by any such payment made or incurred or act
taken by Secured Party hereunder after and during the continuance of an Event of
Default, and shall reimburse Secured Party for all reasonable payments made and
expenses incurred under this Security Agreement after and during the continuance
of an Event of Default, which amounts shall be secured under this Security
Agreement. Secured Party shall have no obligation to make any of the foregoing
payments or perform any of the foregoing acts;

               (q) if any Debtor shall become entitled to receive or shall
receive any certificate, instrument, option or rights, whether as an addition
to, in substitution of, or in exchange for any or all of the Collateral or any
part thereof, or otherwise, Debtor shall accept any such instruments as Secured
Party's agent, shall hold them in trust for Secured Party, and shall deliver
them forthwith to Secured Party in the exact form received, with Debtor's
endorsement when necessary or appropriate, or accompanied by duly executed
instruments of transfer or assignment in blank or, if requested by Secured
Party, an additional pledge agreement or security agreement executed and
delivered by Debtor, all in form and substance reasonably satisfactory to
Secured Party, to be held by Secured Party, subject to the terms hereof, as
additional Collateral to secure the obligations hereunder;

               (r) Secured Party is hereby authorized to pay all reasonable
costs and expenses incurred in the exercise or enforcement of its rights
hereunder, including attorneys' fees, and after an Event of Default to apply any
Collateral or proceeds thereof against such amounts, and then to credit or use
any further proceeds of the Collateral in accordance herewith; provided however
that if the Debtor is the prevailing party in any action or proceeding seeking
enforcement of this Agreement, then the Debtor shall not be and Secured Party
shall be responsible for such related costs and expenses, and Debtor shall not
be responsible for costs, fees and expenses of Secured Party prior to or after a
cure of an Event of Default; and

               (s) Secured Party may take any actions permitted hereunder or in
connection with the Collateral by or through agents or employees and shall be
entitled to retain counsel and to act in reliance upon the advice of counsel
concerning all such matters.

          7. Defaults and Remedies

          7.1 Events of Default. Each of the following occurrences shall
constitute an Event of Default:


                                        9

<PAGE>

          (a) Except as provided in Section 6, any material representation or
warranty made by or on behalf of the Debtor herein or in any report, certificate
or other document furnished by or on behalf of the Debtor pursuant to this
Agreement shall prove to be false or misleading in any material respect when
made.

          (b) Except as provided in Section 6, the Debtor shall default in the
due observance or performance of any of its material obligations hereunder and
such default shall continue for thirty (30) days (unless a shorter or longer
cure period is provided under the terms of this Agreement) after written notice
thereof has been sent to the Debtor by Secured Party; provided, however, that if
the nature of such default (but specifically excluding defaults curable by the
payment of money) is such that it is not possible to cure such breach within
thirty (30) days, such 30-day period shall be extended for so long as the Debtor
shall be using diligent efforts to effect a cure thereof.

          (c) A Material Breach shall occur.

          7.2 Remedies. Upon the occurrence and continuation of an Event of
Default hereunder, the Debtor expressly covenants and agrees that Secured Party
may, at its option, in addition to other rights and remedies provided herein or
otherwise available to it, without notice to or demand upon Debtor (except as
otherwise required herein), but subject in all cases to the provisions of, and
except as otherwise provided in, the Development Agreement and the Management
Agreement, exercise any one or more of the rights as set forth as follows:

               (a) declare all advances made by Secured Party to Debtor
hereunder, all other indebtedness owed by Debtor to Secured Party and all
Secured Obligations to be immediately due and payable, whereupon all unpaid
principal and interest on said advances and other indebtedness and Secured
Obligations shall become and be immediately due and payable;

               (b) subject to any limitations set forth in the Development
Agreement, Secured Party may immediately take possession of any of the
Collateral wherever it may be found or require the Debtor to assemble the
Collateral or any part thereof and make it available at one or more places as
Secured Party may designate, and to deliver possession of the Collateral or any
part thereof to Secured Party, who shall have full right to enter upon any or
all of Debtor's places of business, premises and property to exercise Secured
Party's rights hereunder; and without notice (except as specified below), sell
the Collateral or any part thereof in one or more parcels at one or more public
or private sales, at any of Secured Party's offices or elsewhere, at such time
or times, for cash, on credit or for future delivery, and at such price or
prices and upon such other terms as shall be commercially reasonable and in
accordance with applicable law. The Debtor acknowledges and agrees that, to the
extent notice of sale shall be required by law, at least ten (10) days' written
notice to Debtor of the time and place of any public sale or of the date on or
after which any private sale is to be made shall constitute reasonable
notification. Any public sale shall be held at such time or times during
ordinary business hours and at such place or places as Secured Party may fix in
the notice of such sale. Notwithstanding the foregoing, Secured Party shall not
be obligated to make any sale of Collateral regardless of notice of sale having
been given. Secured Party may, without notice or publication, adjourn any public
or private sale, or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale or, with respect to a private
sale, after which such sale may take place,


                                       10

<PAGE>

and any such sale may, without further notice, be made at the time and place to
which it was so adjourned or, with respect to a private sale, after which such
sale may take place. Each purchaser at any such sale shall hold the property
sold free from any claim or right on the part of Debtor, and the Debtor hereby
waives, to the full extent permitted by law, all rights of stay and/or appraisal
which Debtor now has or may at any time in the future have under any rule of law
or statute now existing or hereafter enacted. The Debtor also hereby waives any
claims against Secured Party arising by reason of the fact that the price at
which any Collateral may have been sold at a private sale was less than the
price which might have been obtained at a public sale, even if Secured Party
accepts the first offer received and does not offer such Collateral to more than
one offeree. The parties hereto agree that the notice provisions, method, manner
and terms of any sale, transfer or disposition of any Collateral in compliance
with the terms set forth herein or any other provision of this Security
Agreement are commercially reasonable;

               (c) subject to any limitations provided in the Development
Agreement, exercise any or all of the rights and remedies provided for by the
Minnesota Uniform Commercial Code, the Tribal Commercial Code (after its
adoption) or other applicable law, specifically including, without limitation,
the right to recover attorneys' fees and other expenses incurred by Secured
Party after and during the continuance of an Event of Default in the enforcement
of this Security Agreement or in connection with the Debtor's redemption of the
Collateral. Secured Party may exercise its rights under this Security Agreement
independently of any other collateral or guaranty that Debtor may have granted
or provided to Secured Party in order to secure payment and performance of the
Secured Obligations, and Secured Party shall be under no obligation or duty to
foreclose or levy upon any other collateral given by Debtor to secure any
Secured Obligation or to proceed against any guarantor before enforcing its
rights under this Security Agreement. The Debtor shall reimburse Secured Party
upon demand for, or Secured Party may apply any proceeds of Collateral to, the
reasonable costs and expenses (including attorneys' fees, transfer taxes and any
other charges) incurred by Secured Party after and during the continuance of an
Event of Default in connection with any sale, disposition, repair, replacement,
alteration, addition, improvement or retention of any Collateral hereunder or
the enforcement of this Agreement.

          8. Miscellaneous Provisions.

               (a) Notices. All notices, requests, approvals, consents and other
communications required or permitted to be made hereunder shall, except as
otherwise provided, be in writing and may be delivered personally or sent by
telegram, telecopy, facsimile, telex, first class mail or overnight courier,
postage prepaid, to the parties addressed as follows:

     To Debtor:             Pokagon Band of Potawatomi Indians
                            58620 Sink Road
                            Dowagiac, Michigan 49047
                            Attention: Chairman, Tribal Council

     With a Copy To:        Michael Phelan, General Counsel
                            Pokagon Band of Potawatomi Indians
                            P.O. Box 180
                            Dowagiac, MI 49047


                                    11

<PAGE>

                            and

                            Daniel Amory, Esq.
                            Drummond Woodsum & MacMahon
                            P.O. Box 9781
                            245 Commercial Street
                            Portland, Maine 04104-5081

     If to Secured Party:   Great Lakes Gaming of Michigan, LLC
                            130 Cheshire Lane
                            Minnetonka, MN 55305
                            Attention: Timothy J. Cope

     With a copy to:        Daniel R. Tenenbaum
                            Gray Plant Mooty
                            500 I.D.S. Center
                            80 So. 8th Street
                            Minneapolis, MN 55402-3796

Such notices, requests and other communications sent as provided hereinabove
shall be effective when received by the addressee thereof, unless sent by
registered or certified mail, postage prepaid, in which case they shall be
effective exactly three (3) business days after being deposited in the United
States mail. The parties hereto may change their addresses by giving notice
thereof to the other parties hereto in conformity with this section.

               (b) Headings. The various headings in this Security Agreement are
inserted for convenience only and shall not affect the meaning or interpretation
of this Security Agreement or any provision hereof.

               (c) Amendments. This Security Agreement or any provision hereof
may be changed, waived, or terminated only by a statement in writing signed by
the party against which such change, waiver or termination is sought to be
enforced, and then any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.

               (d) No Waiver. No failure on the part of Secured Party to
exercise, and no delay in exercising, and no course of dealing with respect to,
any power, privilege or right under this Security Agreement or any related
agreement shall operate as a waiver thereof nor shall any single or partial
exercise by Secured Party of any power, privilege or right under this Security
Agreement or any related agreement preclude any other or further exercise
thereof or the exercise of any other power, privilege or right. The powers,
privileges and rights in this Security Agreement are cumulative and are not
exclusive of any other remedies provided by law. No waiver by Secured Party of
any default hereunder shall be effective unless in writing, nor shall any waiver
operate as a waiver of any other default or of the same default on a future
occasion.

               (e) Binding Agreement. All rights of Secured Party hereunder
shall


                                       12

<PAGE>

inure to the benefit of its successors and assigns. Subject to the terms of the
Development Agreement and Management Agreement, Debtor shall not assign any of
its interest under this Security Agreement without the prior written consent of
Secured Party. Any purported assignment inconsistent with this provision shall,
at the option of Secured Party, be null and void.

               (f) Entire Agreement. This Security Agreement, together with any
other agreement executed in connection herewith and the documents listed in
Section 15.17 of the Development Agreement, as each has been amended to date, is
intended by the parties as a final expression of their agreement and is intended
as a complete and exclusive statement of the terms and conditions thereof.
Acceptance of or acquiescence in a course of performance rendered under this
Security Agreement shall not be relevant to determine the meaning of this
Security Agreement even though the accepting or acquiescing party had knowledge
of the nature of the performance and opportunity for objection.

               (g) Severability. If any provision or obligation of this Security
Agreement should be found to be invalid, illegal, or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions and obligations or any other agreement executed in connection
herewith, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby and shall nonetheless remain in
full force and effect to the maximum extent permitted by law.

               (h) Survival of Provisions. All representations, warranties and
covenants of Debtor contained herein shall survive the execution and delivery of
this Security Agreement, and shall terminate only upon the termination of this
Security Agreement pursuant to Subsection 8(k) hereof.

               (i) Power of Attorney. The Debtor hereby irrevocably appoints
Secured Party its attorney-in-fact, which appointment is coupled with an
interest, with full authority in the place and stead of Debtor and in the name
of Debtor, Secured Party or otherwise, from time to time in Secured Party's
discretion (a) to execute and file financing and continuation statements (and
amendments thereto and modifications thereof) on behalf and in the name of the
Debtor with respect to the security interests granted or purported to be granted
hereby, (b) to take any action and to execute any instrument which Secured Party
may deem necessary or advisable to exercise its rights under Section 6(r)
hereunder, and (c) upon the occurrence and during the continuance of an Event of
Default, to take any action and to execute any instrument which Secured Party
may deem necessary or advisable to accomplish the purposes of this Security
Agreement, including, without limitation:

                    (i) to obtain and adjust insurance required to be paid to
Secured Party pursuant hereto;

                    (ii) to ask, demand, collect, sue for, recover, compound,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;

                    (iii) to receive, endorse and collect any drafts or other


                                       13

<PAGE>

instruments, documents and chattel paper, in connection with clauses (i) and
(ii) above;

                    (iv) to sell, convey or otherwise transfer any item of
Collateral to any purchaser thereof in accordance with Sections 7.2(b) and (c);
and

                    (v) to file any claims or take any action or institute any
proceedings which Secured Party may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
Secured Party with respect to any of the Collateral.

               (j) Counterparts. This Security Agreement and any amendments,
waivers, consents or supplements may be executed in any number of counterparts
and by facsimile, each of which when so executed and delivered shall be deemed
an original, but all of which shall together constitute one and the same
agreement.

               (k) Termination of Agreement. Upon termination of this Security
Agreement in accordance with Section 4 hereof, Secured Party shall reassign and
redeliver to Debtor all of the Collateral hereunder which has not been sold,
disposed of, retained or applied by Secured Party in accordance with the terms
hereof, and execute and deliver to Debtor such documents as Debtor may
reasonably request to evidence such termination. Such reassignment and
redelivery shall be without warranty by or recourse to Secured Party, and shall
(if an Event of Default has occurred and is continuing) be at the expense of
Debtor; provided, however, that this Security Agreement (including all
representations, warranties and covenants contained herein) shall continue to be
effective or be reinstated, as the case may be, if at any time any amount
received by Secured Party in respect of the indebtedness and obligations secured
hereunder is rescinded or must otherwise be restored or returned by Secured
Party upon or in connection with the insolvency, bankruptcy, dissolution,
liquidation or reorganization of Debtor or any other person or upon or in
connection with the appointment of any intervenor or conservator of, or trustee
or similar official for, Debtor or any other person or any substantial part of
its assets, or otherwise, all as though such payments had not been made.

               (l) Sovereign Immunity Waiver; Arbitration; Submission to
Jurisdiction; Limitation on Damages. This Agreement constitutes the Security
Agreement as defined and referred to in the Development Agreement and the
Management Agreement. As such and without limiting the scope of such agreements,
the provisions of Article XIV of the Development Agreement and Article XIII of
the Management Agreement apply to this Agreement and are hereby incorporated by
reference, including, without limitation, the limited sovereign immunity waiver,
limitations on recourse and arbitration provisions contained therein; except
that the definition of "Limited Recourse" in the Development Agreement (and not
in the Management Agreement) shall apply to this Agreement. This Agreement will
be governed by the internal laws of the State of Minnesota (including the
Minnesota Uniform Commercial Code as in effect from time to time, which Code
shall apply without regard to any provision therein that would otherwise provide
that such Code is inapplicable to the Band, whether based upon the fact that the
Band is deemed to be a governmental body or otherwise) without giving effect to
its conflict of laws principles except that, to the extent that Minnesota law
shall not recognize the creation, perfection or fist priority of any security
interest of the Secured Party on Collateral that is recognized under a
commercial code adopted by Debtor as tribal law in accordance with Section


                                       14

<PAGE>

9.2.5(m) of the Development Agreement (the "Tribal UCC"), then such Tribal UCC
shall apply. The parties hereto may not change the law governing this Agreement
without express written consent of the Debtor and Secured Party.

               (m) Agreements Control. In the event of inconsistency between the
Development Agreement or the Management Agreement and this Agreement, the
Development Agreement or the Management Agreement shall control.

               (n) Amendment and Restatement. This First Amended and Restated
Security Agreement amends and restates in its entirety a certain Security
Agreement from Debtor to Secured Party dated December 22, 2004 (the "Prior
Security Agreement"). The lien, assignment and security interest of the Prior
Security Agreement is hereby reaffirmed, extended and carried forward by this
Amended and Restated Security Agreement in full force and effect, to secure
payment of the Secured Obligations. Nothing herein shall be construed to impair
or discharge the Prior Security Agreement. To the extent of any conflict or
inconsistency between the terms and provisions of (A) the Prior Security
Agreement, on the one hand, and (B) this Amended and Restated Security
Agreement, on the other hand, the latter shall control.

          IN WITNESS WHEREOF, the parties hereto have caused this First Amended
and Restated Security Agreement to be duly executed and delivered under seal by
their respective undersigned duly authorized officers as of the date first above
written.

                                        DEBTOR:

                                        POKAGON BAND OF POTAWATOMI INDIANS


                                        By: /s/ John Miller
                                            ------------------------------------
                                        Name: John Miller
                                        Title: Tribal Chairman


                                        ATTEST:


                                        By: /s/ Daniel F. Rapp
                                            ------------------------------------
                                        Name: DANIEL F. RAPP
                                        Its: Secretary


                                        SECURED PARTY:

                                        GREAT LAKES GAMING OF MICHIGAN, LLC


                                        By: /s/ Timothy Cope
                                            ------------------------------------
                                        Name: Timothy Cope
                                        Title: President


                                       15
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.177
<SEQUENCE>11
<FILENAME>c02716exv10w177.txt
<DESCRIPTION>FIRST AMENDED AND RESTATED LAKES WORKING CAPITAL ADVANCE NOTE
<TEXT>
<PAGE>
                                                               EXHIBIT 10.177


                                                               EXECUTION VERSION

          FIRST AMENDED AND RESTATED LAKES WORKING CAPITAL ADVANCE NOTE

$2,000,000                                                    January 25, 2006
                                                              Dowagiac, Michigan

     FOR VALUE RECEIVED, the Pokagon Band of Potawatomi Indians (the "Band")
promises to pay to Great Lakes Gaming of Michigan, LLC, a Minnesota limited
liability company ("Lakes"), such sums as may be advanced by Lakes to the Band
as Lakes Working Capital Advances in accordance with Section 5.3 of a Management
Agreement between the Band and Lakes Entertainment, Inc. dated as of July 8,
1999, (as assigned by Lakes Entertainment, Inc. to and assumed by Lakes pursuant
to that certain Assignment and Assumption Agreement dated as of October 16, 2000
by and among the Band, Lakes Entertainment, Inc. and Lakes, and amended by a
Second Amended and Restated Assignment and Assumption Agreement of even date
hereof (the "Assignment Agreement")); and as amended and restated by a First
Amended and Restated Management Agreement dated as of October 16, 2000, a Second
Amended and Restated Management Agreement dated as of December 22, 2004, and a
Third Amended and Restated Management Agreement of even date hereof
(collectively, and as heretofore and hereafter further amended, substituted,
restated and modified, the "Management Agreement"); provided that the principal
amount due hereunder shall not exceed Two Million Dollars ($2,000,000.00).

     1. Advances: Funding. Lakes shall notify the Band in writing by overnight
courier service of the amounts of any operating cash shortfalls in the first six
months after the Commencement Date, and shall furnish a written accounting
showing the derivation of such amount (the "Lakes Cash Shortfall Notice").
Advances under this Note shall be made by Lakes (a) upon written request by the
Band to Lakes in the form of Draw Request attached as Exhibit A or (b), in the
event of an emergency cash shortfall which threatens the immediate cessation or
curtailment of operations of the Enterprise, by advances in the amount needed to
avoid such immediate cessation or curtailment. Notices given by Lakes and Draw
Requests submitted by the Band under this Note shall be sent via overnight
courier service to the addresses set out in Section 17.2 of the Management
Agreement. Advances under this Note shall be funded by Lakes through wire
transfer of funds to one or more Enterprise Accounts in an aggregate amount
equal to the greater of the Draw Request or the amount needed to avoid immediate
cessation or curtailment of operations at the Enterprise, but not to exceed
$2,000,000 in principal advances outstanding at any one time. All Draw Requests
submitted by the Band shall be funded within two (2) business days of the date
that the draw request is received by Lakes. By submitting a Draw Request, the
Band does not waive the right to assert that an additional amount, beyond the
amount shown in the Lakes Cash Shortfall Notice or the Draw Request, should be
advanced by Lakes to cover operating cash shortfalls in accordance with Section
5.3 of the Management Agreement.

<PAGE>

     2. Interest. Interest shall accrue on the outstanding balance under this
Note at the Band Interest Rate.

     3. Repayment. Amounts advanced hereunder shall be repaid from Net Revenues
with the priority provided in Section 5.5 of the Management Agreement, subject
to the terms of any applicable subordination agreements.

     4. Prepayment. This Note may be prepaid at any time without penalty. This
Note shall also be subject to prepayment as and when required under the terms of
any Transaction Documents.

     5. Limited Recourse. The obligations of the Band under this Note and any
related awards, judgments or decrees shall be payable solely out of
undistributed or future Net Revenues of the Enterprise and shall be a Limited
Recourse obligation of the Band, with no recourse to tribal assets other than
the limited assets of the Band specified in the definition of Limited Recourse
and Section 14.3(a) of the Development Agreement

     6. Band's Waiver of Sovereign Immunity and Consent to Suit. The Band
expressly waives its sovereign immunity from suit for the purpose of permitting
or compelling arbitration to enforce this Note as provided in Article 14 of the
Development Agreement and consents to be sued in the United States District
Court for the Western District of Michigan - Southern Division, the United
States Court of Appeals for the Sixth Circuit, and the United States Supreme
Court for the purpose of compelling arbitration or enforcing any arbitration
award or judgment arising out of this Note. If the United States District Court
lacks jurisdiction, the Band consents to be sued in the Michigan State Court
system for the same limited purpose. The Band waives any requirement of
exhaustion of tribal remedies. Without in any way limiting the generality of the
foregoing, the Band expressly authorizes any governmental authorities who have
the right and duty under applicable law to take any action authorized or ordered
by any such court, and to take such action, including without limitation,
repossessing or foreclosing on any real property not in trust, or otherwise
giving effect to any judgment entered; provided, however, that liability of the
Band under any judgment shall always be 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. The Band
appoints the Chairman of the Pokagon Council and the Secretary of the Pokagon
Council as its agents for service of all process under or relating to the
Agreements. The Band agrees that service in hand or by certified mail, return
receipt requested, shall be effective for all purposes under or relating to the
Agreements if served on such agents.

     7. Default; Acceleration. All outstanding principal together with accrued
interest shall become immediately due and payable in full, subject to the
limitations on recourse provided above, upon default in the payment of principal
or interest due under this Note if such default is


                                        2

<PAGE>

not remedied within thirty (30) days after receipt by the Band of written notice
thereof as provided in the Management Agreement.

     8. Arbitration. All disputes, controversies or claims arising out of or
relating to this Note shall be settled by binding arbitration as provided in
Article 13 of the Management Agreement.

     9. Business Purposes; Applicable Law. This Note evidences a loan for
business and commercial purposes and not for personal, household, family or
agricultural purposes. This Note shall be interpreted and construed in
accordance with Michigan law, to the extent not preempted by federal law. Use of
Michigan law for the foregoing limited purpose of interpretation and
construction is not intended by the parties to and shall not otherwise (i)
incorporate substantive Michigan laws or regulations, including but not limited
to Michigan usury laws or any other present or future provision of the laws of
Michigan that would restrict the rate of interest upon any loan contemplated
hereunder; or (ii) grant any jurisdiction to the State or any political
subdivision thereof over the Gaming Site or the Facility.

     10. Notices. All notices under this Note shall be given in accordance with
Section 15.4 of the Development Agreement; except that copies of draw requests
need not be sent to attorneys.

     11. Defined Terms. Capitalized terms used herein shall have the same
meanings assigned to them in the Management Agreement, and, if not defined in
the Management Agreement, in the Development Agreement between the Band and
Lakes, as amended.

     12. Miscellaneous.

          a. Time is of the essence.

          b. The benefits and obligations of this Note shall inure to and be
          binding upon the parties hereto and their respective successors and
          assigns, provided that any succession or assignment is permitted under
          the Management Agreement.

          c. Waiver of any one default shall not cause or imply a waiver any
          subsequent default.

          d. This Note, together with the documents listed in Section 15.17 of
          the Development Agreement, as each has been amended to date, sets
          forth the entire agreement between the parties hereto with respect to
          the subject matter hereof. All agreements, covenants, representations,
          and warranties, express or implied, oral or written, of the parties
          with respect to the subject matter hereof are contained herein and
          therein. This Note shall not be supplemented, amended or modified by
          any course of dealing, course of performance or uses of trade and may
          only be amended or modified by a written instrument duly executed by
          officers of both parties.


                                       3

<PAGE>

          e. This Note has been executed and delivered as a complete amendment
          and restatement in its entirety of that certain Lakes Working Capital
          Advance Note dated as of December 22, 2004 made payable by the Band to
          Lakes, but does not extinguish, satisfy, discharge or constitute a
          novation thereof, and the Band hereby reaffirms, subject to the
          provisions of this Note, the indebtedness evidenced thereby. Lakes
          agrees to return to the Band the original Lakes Working Capital
          Advance Note dated as of December 22,2004.

          f. Any other provision of this Note to the contrary notwithstanding:
          (i) in no event shall the rate of interest payable under this Note
          exceed the maximum rate permitted by law (the "Legal Rate"); (ii) if
          at any time the rate of interest computed as provided above (the
          "Computed Rate") exceeds the Legal Rate, then interest shall accrue
          thereafter at the Legal Rate regardless of whether the Computed Rate
          is greater or less than the Legal Rate until the total amount of
          interest payable hereunder equals the amount that would have been
          payable without regard to this sentence, or until this Note is paid in
          full, whichever occurs first; and (iii) if the holder receives any
          interest in excess of the maximum rate permitted by this sentence, the
          excess shall be credited against the principal hereof or refunded, at
          the holder's option.

                                        THE POKAGON BAND OF POTAWATOMI INDIANS


                                        By: /s/ John Miller
                                            ------------------------------------
                                        Its Council Chairman


                                        By: /s/ Daniel Rapp
                                            ------------------------------------
                                        Its Secretary


                                       4

<PAGE>

                                    EXHIBIT A

                                   DRAW REQUEST

     The Pokagon Band of Potawatomi Indians (the "Band") requests that Great
Lakes Gaming of Michigan, LLC ("Lakes") advance $______________ under the Lakes
Working Capital Advance Note. The Band certifies that the amounts drawn under
this Request will be used to fund operating cash shortfalls in accordance with
Section 5.3 of the Management Agreement.

     Advances should be made by wire transfer of such funds to one or more
Enterprise Bank Accounts.

Dated:                                  THE POKAGON BAND OF POTAWATOMI INDIANS
       --------------------


                                        By:
                                            ------------------------------------
                                        Its: Council Chairman


                                        By:
                                            ------------------------------------
                                        Its: Secretary

 [or other persons designated by the Band pursuant to the Management Agreement]


                                       5
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.178
<SEQUENCE>12
<FILENAME>c02716exv10w178.txt
<DESCRIPTION>FIRST AMENDED AND RESTATED LAKES MINIMUM PAYMENTS NOTE
<TEXT>
<PAGE>
                                                               EXHIBIT 10.178

                                                               EXECUTION VERSION

             FIRST AMENDED AND RESTATED LAKES MINIMUM PAYMENTS NOTE

                                                                January 25, 2006
                                                              Dowagiac, Michigan

     FOR VALUE RECEIVED, the Pokagon Band of Potawatomi Indians (the "Band")
promises to pay to Great Lakes Gaming of Michigan, LLC, a Minnesota limited
liability company ("Lakes"), such sums as may be advanced by Lakes to the Band
as Minimum Guaranteed Payment Advances in accordance with Section 5.6.1 of a
Management Agreement between the Band and Lakes Entertainment, Inc., f/k/a Lakes
Gaming, Inc. dated as of July 8, 1999, (as assigned by Lakes Entertainment, Inc.
to and assumed by Lakes pursuant to that certain Assignment and Assumption
Agreement dated as of October 16, 2000 by and among the Band, Lakes
Entertainment, Inc. and Lakes (the "Assignment Agreement")), and as amended and
restated by a First Amended and Restated Management Agreement dated as of
October 16, 2000, a Second Amended and Restated Management Agreement dated as of
December 22, 2004, and a Third Amended and Restated Management Agreement of even
date (collectively, and as heretofore and hereafter further amended,
substituted, restated and modified, the "Management Agreement").

     1. Advances; Funding. Advances under this Note shall be funded through
deposits by Lakes into the Enterprise Disbursement Account for the benefit of
the Band, which funds shall be used solely to make Minimum Guaranteed Payment
Advances to the Band. Lakes shall notify the Band in writing of any advances
hereunder when made.

     2. Interest. Interest shall not accrue on amounts outstanding under this
Note.

     3. Repayment. As provided in Section 5.6.2 of the Management Agreement,
after making one or more Minimum Guaranteed Payment Advances in a Calculation
Year Lakes may recoup such advance from the Band's Monthly Distribution Payments
in succeeding months of the same Calculation Year; provided that in no event
shall such recoupment result in the Band=s receiving less than its Minimum
Guaranteed Monthly Payment in any month. Manager shall not otherwise be entitled
to reimbursement from the Enterprise or the Band for amounts outstanding under
this Note.

     4. Prepayment. This Note may be prepaid at any time without penalty.

     5. [intentionally deleted]

     6. Limited Recourse. The obligations of the Band under this Note and any
related awards, judgments or decrees shall be payable solely through recoupment
from certain Net Revenues that would otherwise be distributed to the Band as
Monthly Distribution Payments, as provided in and subject to the limitations of
Section 3. Lakes shall have no recourse to any tribal assets other than such
undistributed Net Revenues for payment under this Note.

<PAGE>

     7. Band's Waiver of Sovereign Immunity and Consent to Suit. The Band
expressly waives its sovereign immunity from suit for the purpose of permitting
or compelling arbitration to enforce this Note as provided in Article 14 of the
Development Agreement and consents to be sued in the United States District
Court for the Western District of Michigan - Southern Division, the United
States Court of Appeals for the Sixth Circuit, and the United States Supreme
Court for the purpose of compelling arbitration or enforcing any arbitration
award or judgment arising out of this Note. If the United States District Court
lacks jurisdiction, the Band consents to be sued in the Michigan State Court
system for the same limited purpose. The Band waives any requirement of
exhaustion of tribal remedies. Without in any way limiting the generality of the
foregoing, the Band expressly authorizes any governmental authorities who have
the right and duty under applicable law to take any action authorized or ordered
by any such court, and to take such action, including without limitation,
repossessing or foreclosing on any real property not in trust, or otherwise
giving effect to any judgment entered; provided, however, that liability of the
Band under any judgment shall always be limited as provided in Sections 3 and 6.
The Band appoints the Chairman of the Pokagon Council and the Secretary of the
Pokagon Council as its agents for service of all process under or relating to
the Agreements. The Band agrees that service in hand or by certified mail,
return receipt requested, shall be effective for all purposes under or relating
to the Agreements if served on such agents.

     8. Arbitration. All disputes, controversies or claims arising out of or
relating to this Note shall be settled by binding arbitration as provided in
Article 13 of the Management Agreement.

     9. Business Purposes; Applicable Law. This Note evidences a loan for
business and commercial purposes and not for personal, household, family or
agricultural purposes. This Note shall be interpreted and construed in
accordance with Michigan law, to the extent not preempted by federal law. Use of
Michigan law for the foregoing limited purpose of interpretation and
construction is not intended by the parties to and shall not otherwise (i)
incorporate substantive Michigan laws or regulations, including but not limited
to Michigan usury laws or any other present or future provision of the laws of
Michigan that would restrict the rate of interest upon any loan contemplated
hereunder; or (ii) grant any jurisdiction to the State or any political
subdivision thereof over the Gaming Site or the Facility.

     10. Notices. All notices under this Note shall be given in accordance with
15.4 of the Development Agreement; except that copies of draw requests need not
be sent to attorneys.

     11. Defined Terms. Capitalized terms used herein shall have the same
meanings assigned to them in the Management Agreement, and, if not defined in
the Management Agreement, in the Development Agreement between the Band and
Lakes, as amended.

     12. Miscellaneous.

          a. Time is of the essence.


                                       2

<PAGE>

          b. The benefits and obligations of this Note shall inure to and be
          binding upon the parties hereto and their respective successors and
          assigns, provided that any succession or assignment is permitted under
          the Management Agreement.

          c. Waiver of any one default shall not cause or imply a waiver any
          subsequent default.

          d. This Note, together with the documents listed in Section 15.17 of
          the Development Agreement, as each has been amended to date, sets
          forth the entire agreement between the parties hereto with respect to
          the subject matter hereof. All agreements, covenants, representations,
          and warranties, express or implied, oral or written, of the parties
          with respect to the subject matter hereof are contained herein and
          therein. This Note shall not be supplemented, amended or modified by
          any course of dealing, course of performance or uses of trade and may
          only be amended or modified by a written instrument duly executed by
          officers of both parties.

          e. This Note has been executed and delivered as a complete amendment
          and restatement in its entirety of that certain Lakes Minimum Payments
          Note dated as of December 22, 2004 made payable by the Band to Lakes,
          but does not extinguish, satisfy, discharge or constitute a novation
          thereof, and the Band hereby reaffirms, subject to the provisions of
          this Note, the indebtedness evidenced thereby. Lakes agrees to return
          to the Band the original Lakes Minimum Payments Note dated as of
          December 22, 2004.

          f. Any other provision of this Note to the contrary notwithstanding:
          (i) in no event shall the rate of interest payable under this Note
          exceed the maximum rate permitted by law (the "Legal Rate"); (ii) if
          at any time the rate of interest computed as provided above (the
          "Computed Rate") exceeds the Legal Rate, then interest shall accrue
          thereafter at the Legal Rate regardless of whether the Computed Rate
          is greater or less than the Legal Rate until the total amount of
          interest payable hereunder equals the amount that would have been
          payable without regard to this sentence, or until this Note is paid in
          full, whichever occurs first; and (iii) if the holder receives any
          interest in excess of the maximum rate permitted by this sentence, the
          excess shall be credited against the principal hereof or refunded, at
          the holder's option.

                                        THE POKAGON BAND OF POTAWATOMI INDIANS


                                        By: /s/ John Miller
                                            ------------------------------------
                                        Its Council Chairman


                                        By: /s/ Daniel Rapp
                                            ------------------------------------
                                        Its Secretary


                                       3
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.179
<SEQUENCE>13
<FILENAME>c02716exv10w179.txt
<DESCRIPTION>THIRD AMENDED AND RESTATED NON-GAMING LAND ACQUISITION LINE OF CREDIT AGREEMENT
<TEXT>
<PAGE>
                                                               EXHIBIT 10.179

                                                               EXECUTION VERSION

                           THIRD AMENDED AND RESTATED
              NON-GAMING LAND ACQUISITION LINE OF CREDIT AGREEMENT

     THIS THIRD AMENDED AND RESTATED NON-GAMING LAND ACQUISITION LINE OF CREDIT
AGREEMENT is dated as of the 25th day of January, 2006, by and between THE
POKAGON BAND OF THE POTAWATOMI INDIANS (the "Band") and GREAT LAKES GAMING OF
MICHIGAN, LLC, a Minnesota limited liability company ("Lakes"):

In consideration of the mutual covenants and promises hereinafter set forth, and
in accordance with the terms of a certain Development Agreement by and between
the Band and Lakes Entertainment, Inc., f/k/a Lakes Gaming, Inc. dated as of
July 8, 1999, (as assigned by Lakes Entertainment, Inc. to and assumed by Lakes
pursuant to that certain Assignment and Assumption Agreement dated as of October
16, 2000 by and among the Band, Lakes Entertainment, Inc. and Lakes, and amended
by a Second Amended and Restated Assignment and Assumption Agreement of even
date hereof (the "Assignment Agreement")); and as amended and restated by a
First Amended and Restated Development Agreement dated as of October 16, 2000, a
Second Amended and Restated Development Agreement dated as of December 22, 2004
and a Third Amended and Restated Development Agreement of even date hereof,
(collectively, and as heretofore and hereafter further amended, substituted,
restated and modified, the "Development Agreement"), the Band and Lakes agree as
follows:

     1. Establishment of Credit. Subject to the terms of this Agreement and the
Development Agreement, Lakes agrees to make advances to the Band in an amount
not to exceed Fifteen Million Dollars ($15,000,000).

     2. Draw Requests; Funding. All draws under this Line of Credit shall be
made upon written request by the Band to Lakes in the form of Draw Request
attached as Exhibit A. All Draw Requests shall be sent in accordance with
Section 15.4 of the Development Agreement and may, at Lakes' option, be funded
through transfer of funds in the Escrow Account; provided that interest shall
only accrue under this Line of Credit on funds advanced through the Escrow
Account after disbursement from the Escrow Account, and shall not begin to
accrue on deposit by Lakes into the Escrow Account. All Draw Requests shall be
funded within ten (10) days of the date of the draw request through wire
transfer to an account directed by the Band, or as otherwise specified by the
Band.

     3. Use of Advances. Advances hereunder shall be used by the Band to option
or acquire Non-Gaming Lands, and to pay all related option fees, purchase
prices, fees, real estate commissions, transfer taxes, costs and expenses.

     4. Expiration. The commitment of Lakes to make advances hereunder shall
expire on the Commencement Date.

     5. Interest Rate. Interest shall accrue on the outstanding balance under
this Line of Credit as follows:

<PAGE>

     (a) if the Bank Closing occurs, at a fixed rate equal to the lesser of (i)
     Base Rate as of the Bank Closing plus 1% or (ii) 10% (the "Band Interest
     Rate"); or

     (b) If the Bank Closing does not occur, at a variable rate equal to the
     lesser of (i) Base Rate plus 1% or (ii) 10% (the lesser of (i) and (ii)
     being referred to as the "Variable Interest Rate"). Lakes shall adjust the
     Variable Interest Rate on the then unpaid principal balance, by way of
     increase or decrease, in accordance with changes in the Base Rate. Such
     changes shall be effective as of the change in the Base Rate (the
     "Effective Date").

     Upon the Bank Closing, interest accruing under this Line of Credit prior to
the Bank Closing shall be adjusted retroactively to reflect the Band Interest
Rate. "Base Rate" means the lowest Prime Rate as is published daily in The Wall
Street Journal. In the event that the Wall Street Journal ceases to publish the
Prime Rate, then the holder hereof may in its reasonable discretion select some
other generally recognized comparable indicator of the national Prime Rate.

     6. Repayment.

          (I)  If the Commencement Date occurs, the Band shall, beginning on the
               15th day of the month following such Commencement Date, repay the
               amount of principal and accrued interest outstanding hereunder as
               of such Commencement Date in equal monthly payments of principal
               and interest in an amount sufficient to amortize such principal
               and accrued interest over a sixty (60) month period at the Band
               Interest Rate, and shall thereafter continue to make payments in
               such amount on the 15th day of each succeeding month to and
               including the fifteenth day of the sixtieth month following such
               Commencement Date; provided that all remaining principal and
               interest shall in any event be due and payable on the fifteenth
               day of the sixtieth month following such Commencement Date.

          (II) If the Commencement Date does not occur, principal and interest
               shall be repayable to the extent and in the manner provided in
               the Development Agreement; provided that payments shall in any
               event be due and made only from the sources specified in Sections
               14.3 and 14.4 of the Development Agreement. If Gaming commences
               at a Subsequent Gaming Facility and payment is due under this
               Agreement in accordance with the Development Agreement, the Band
               shall, beginning on the 15th day of the month following such
               commencement date, make equal monthly payments to Lakes of
               principal and interest in an amount sufficient to amortize the
               principal amount outstanding as of such commencement date over a
               sixty (60) month period at the Variable Interest Rate, and shall
               thereafter continue to make such payments on the 15th day of each
               succeeding month to and including the fifteenth day of the
               sixtieth month following such commencement date, when all
               remaining principal and interest shall be due and payable. As of
               the Effective Date of a change in the Base Rate, Lakes shall
               adjust the monthly installments of principal and interest as of


                                        2

<PAGE>

               the installment next following the Effective Date so that the
               then unpaid principal balance would be amortized in full at the
               revised Variable Interest Rate five years after such commencement
               of gaming. Lakes shall promptly notify the Band in writing of any
               changes in the Base Rate and in the installment payment due.

     7. Prepayment. This Line of Credit may be prepaid at any time without
penalty. This Note shall also be subject to prepayment as and when required
under the terms of any Transaction Documents.

     8. [intentionally omitted]

     9. Limited Recourse. The obligations of the Band under this Line of Credit
and any related awards, judgments or decrees shall be payable solely out of
undistributed or future Net Revenues of the Enterprise and shall be a Limited
Recourse obligation of the Band, with no recourse to tribal assets other than
the limited assets of the Band specified in the definition of Limited Recourse
and Section 14.3(a) of the Development Agreement

     10. Default; Acceleration. All outstanding principal together with accrued
interest shall become immediately due and payable in full, subject to the
limitations on recourse provided above, upon default in the payment of principal
or interest due under this Line of Credit if such default is not remedied within
thirty (30) days after receipt by the Band of written notice thereof as provided
in the Development Agreement.

     11. Band's Waiver of Sovereign Immunity and Consent to Suit. The Band
expressly waives its sovereign immunity from suit for the purpose of permitting
or compelling arbitration to enforce this Line of Credit as provided in Article
14 of the Development Agreement and consents to be sued in the United States
District Court for the Western District of Michigan - Southern Division, the
United States Court of Appeals for the Sixth Circuit and the United States
Supreme Court for the purpose of compelling arbitration or enforcing any
arbitration award or judgment arising out of this Line of Credit. If the United
States District Court lacks jurisdiction, the Band consents to be sued in the
Michigan State Court system for the same limited purpose. The Band waives any
requirement of exhaustion of tribal remedies. Without in any way limiting the
generality of the foregoing, the Band expressly authorizes any governmental
authorities who have the right and duty under applicable law to take any action
authorized or ordered by any such court, and to take such action, including
without limitation, repossessing or foreclosing on any real property not in
trust, or otherwise giving effect to any judgment entered; provided, however,
that liability of the Band under any judgment shall always be 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. The Band appoints the Chairman of the Pokagon Council and
the Secretary of the Pokagon Council as its agents for service of all process
under or relating to the Agreements. The Band agrees that service in hand or by
certified mail, return receipt requested, shall be effective for all purposes
under or relating to the Agreements if served on such agents.


                                        3

<PAGE>

     12. Arbitration. All disputes, controversies or claims arising out of or
relating to this Line of Credit shall be settled by binding arbitration as
provided in Article 14 of the Development Agreement.

     13. Business Purposes; Applicable Law. This Line of Credit evidences a loan
for business and commercial purposes and not for personal, household, family or
agricultural purposes. This Line of Credit shall be interpreted and construed in
accordance with Michigan law, to the extent not preempted by federal law. Use of
Michigan law for the foregoing limited purpose of interpretation and
construction is not intended by the parties to and shall not otherwise (i)
incorporate substantive Michigan laws or regulations, including but not limited
to Michigan usury laws or any other present or future provision of the laws of
Michigan that would restrict the rate of interest upon any loan contemplated
hereunder; or (ii) grant any jurisdiction to the State or any political
subdivision thereof over the Gaming Site or the Facility.

     14. Notices. All notices under this Line of Credit shall be given in
accordance with Section 15.4 of the Development Agreement; except that copies of
draw requests need not be sent to attorneys.

     15. Defined Terms. Capitalized terms used herein shall have the same
meanings assigned to them in the Development Agreement, and, if not defined in
the Development Agreement, in the Management Agreement between the Band and
Lakes, as amended.

     16. Miscellaneous.

          a. Time is of the essence.

          b. The benefits and obligations of this Note shall inure to and be
          binding upon the parties hereto and their respective successors and
          assigns, provided that any succession or assignment is permitted under
          the Development Agreement.

          c. Waiver of any one default shall not cause or imply a waiver any
          subsequent default.

          d. This Agreement, together with documents listed in Section 15.17 of
          the Development Agreement, as each has been amended to date, sets
          forth the entire agreement between the parties hereto with respect to
          the subject matter hereof. All agreements, covenants, representations,
          and warranties, express or implied, oral or written, of the parties
          with respect to the subject matter hereof are contained herein and
          therein. This Agreement shall not be supplemented, amended or modified
          by any course of dealing, course of performance or uses of trade and
          may only be amended or modified by a written instrument duly executed
          by officers of both parties.

          e. This Agreement has been executed and delivered as a complete
          amendment and restatement in its entirety of that certain Non-Gaming
          Land Acquisition Line of Credit dated as of July 8, 1999 by and
          between the Band and Lakes Gaming,


                                        4

<PAGE>

          Inc., as assigned by Lakes Gaming, Inc. to and assumed by Lakes
          pursuant to the Assignment Agreement, as amended and restated by a
          First Amended and Restated Non-Gaming Land Acquisition Line of Credit
          Agreement dated as of October 16, 2000 and a Second Amended and
          Restated Non-Gaming Land Acquisition Line of Credit Agreement dated as
          of December 22, 2004, but does not extinguish, satisfy, discharge or
          constitute a novation thereof, and the Band hereby reaffirms, subject
          to the provisions of this Line of Credit Agreement, the indebtedness
          evidenced thereby. Lakes agrees to return to the Band the original
          Non-Gaming Land Acquisition Line of Credit Agreement dated as of July
          8, 1999, the original First Amended and Restated Line of Credit
          Agreement dated as of October 16, 2000 and the original Second Amended
          and Restated Line of Credit Agreement dated as of December 22, 2004.

          f. Any other provision of this Line of Credit to the contrary
          notwithstanding: (i) in no event shall the rate of interest payable
          under this Line of Credit exceed the maximum rate permitted by law
          (the "Legal Rate"); (ii) if at any time the rate of interest computed
          as provided above (the "Computed Rate") exceeds the Legal Rate, then
          interest shall accrue thereafter at the Legal Rate regardless of
          whether the Computed Rate is greater or less than the Legal Rate until
          the total amount of interest payable hereunder equals the amount that
          would have been payable without regard to this sentence, or until this
          Line of Credit is paid in full, whichever occurs first; and (iii) if
          the holder receives any interest in excess of the maximum rate
          permitted by this sentence, the excess shall be credited against the
          principal hereof or refunded, at the holder's option.

                                        THE POKAGON BAND OF POTAWATOMI INDIANS


                                        By: /s/ John Miller
                                            ------------------------------------
                                        Its Council Chairman


                                        By: /s/ Daniel Rapp
                                            ------------------------------------
                                        Its Secretary


                                        GREAT LAKES GAMING OF MICHIGAN, LLC


                                        By: /s/ Timothy J. Cope
                                            ------------------------------------
                                            Timothy J. Cope
                                        Its President


                                        5

<PAGE>

                                    EXHIBIT A
                                  DRAW REQUEST

     The Pokagon Band of Potawatomi Indians (the "Band") requests that Great
Lakes Gaming of Michigan, LLC. ("Lakes") advance $______________ under the Non-
Gaming Acquisition Line of Credit Agreement (the "Line of Credit"). The Band
certifies that the amounts drawn under this Request will be used in accordance
with Section 3 of the Line of Credit Agreement and Section 8.5 of the
Development Agreement, as per the attached itemization.

     Advances should be made [pursuant to wire transfer instructions previously
given to Lakes] [as follows: ________________________________________].

Dated:                                  THE POKAGON BAND OF POTAWATOMI INDIANS
       ------------------------------


                                        By:
                                            ------------------------------------
                                        Its: Council Chairman


                                        By:
                                            ------------------------------------
                                        Its: Secretary


                                        6
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.180
<SEQUENCE>14
<FILENAME>c02716exv10w180.txt
<DESCRIPTION>THIRD AMENDED AND RESTATED TRANSITION LOAN NOTE
<TEXT>
<PAGE>
                                                                  EXHIBIT 10.180

                                                               EXECUTION VERSION

                THIRD AMENDED AND RESTATED TRANSITION LOAN NOTE

$12,000,000                                                     January 25, 2006
                                                              Dowagiac, Michigan

     FOR VALUE RECEIVED, The Pokagon Band of Potawatomi Indians (the "Band")
promises to pay to Great Lakes Gaming of Michigan, LLC, a Minnesota limited
liability company ("Lakes"), such sums as may be advanced by Lakes to the Band
under Section 8.3 of a Development Agreement between the Band and Lakes
Entertainment, Inc., f/k/a Lakes Gaming, Inc. dated as of July 8, 1999 (the
"Development Agreement"), (as assigned by Lakes Entertainment, Inc. to and
assumed by Lakes pursuant to that certain Assignment and Assumption Agreement
dated as of October 16, 2000 by and among the Band, Lakes Entertainment, Inc.
and Lakes, and amended by a Second Amended and Restated Assignment and
Assumption Agreement of even date hereof (the "Assignment Agreement")), and as
amended and restated by a First Amended and Restated Development dated as of
October 16, 2000, a Second Amended and Restated Development dated as of December
22, 2004, and a Third Amended and Restated Development Agreement of even date
hereof, as the same may be further amended, substituted and modified
(collectively, and as heretofore and hereafter further amended, substituted,
restated and modified, the "Development Agreement"); provided that the principal
amount due hereunder shall not exceed Twelve Million Dollars ($12,000,000.00).

     1. Advances. Advances under this Note may, at Lakes'option, be funded
through transfer of funds from the Escrow Account; provided that interest shall
only accrue under this Note on funds advanced through the Escrow Account after
disbursement from the Escrow Account, and shall not begin to accrue on deposit
by Lakes into the Escrow Account.

     2. Interest. No interest shall accrue on amounts outstanding hereunder
until two years after the date hereof. Beginning on the second annual
anniversary of the date hereof, interest shall begin accruing on the outstanding
balance as follows:

     (a) if the Bank Closing occurs, at a fixed rate equal to the lesser of (i)
     Base Rate as of the Bank Closing plus 1% or (ii) 10% (the "Band Interest
     Rate"); or

     (b) if the Bank Closing does not occur, at a variable rate equal to the
     lesser of (i) Base Rate plus 1% or (ii) 10% (the lesser of (i) and (ii)
     being referred to as the "Variable Interest Rate"). Lakes shall adjust the
     Variable Interest Rate on the then unpaid principal balance, by way of
     increase or decrease, in accordance with changes in the Base Rate. Such
     changes shall be effective as of the change in the Base Rate (the
     "Effective Date").

     If the Bank Closing occurs after the second annual anniversary of the date
hereof, interest accruing under this Note prior to the Bank Closing shall be
adjusted retroactively to reflect the

<PAGE>

Band Interest Rate. "Base Rate" means the lowest Prime Rate as is published
daily in The Wall Street Journal. n the event that the Wall Street Journal
ceases to publish the Prime Rate, then the holder hereof may in its reasonable
discretion select some other generally recognized comparable indicator of the
national Prime Rate.

     3. Repayment.

     If the Commencement Date occurs, the Band shall, beginning on the 15th day
of the month following the Commencement Date, make equal monthly payments to
Lakes of principal and interest in an amount sufficient to amortize the
principal amount outstanding as of the Commencement Date over a sixty (60) month
period at the Band Interest Rate, and shall thereafter continue to make payments
in such amount on the 15th day of each succeeding month to and including the
fifteenth day of the sixtieth month following the Commencement Date, when all
remaining principal and interest shall be due and payable.

     If the Commencement Date does not occur, principal and interest shall be
repayable to the extent and in the manner provided in the Development Agreement;
provided that payments shall in any event be due and made only from Subsequent
Gaming Facility Revenues, in accordance with the Development Agreement. If
Gaming commences at such a facility and payment is due under this Note in
accordance with the Development Agreement, the Band shall, beginning on the 15th
day of the month following such commencement date, make equal monthly payments
to Lakes of principal and interest in an amount sufficient to amortize the
principal amount outstanding as of such commencement date over a sixty (60)
month period at the Variable Interest Rate, and shall thereafter continue to
make such payments on the 15th day of each succeeding month to and including the
fifteenth day of the sixtieth month following such commencement date, when all
remaining principal and interest shall be due and payable. As of the Effective
Date of a change in the Base Rate, Lakes shall adjust the monthly installments
of principal and interest as of the installment next following the Effective
Date so mat the then unpaid principal balance would be amortized in full at the
revised Variable Interest Rate five years after such commencement of gaming.
Lakes shall promptly notify the Band in writing of any changes in the Base Rate
and in the installment payment due.

     4. Prepayment. This Note may be prepaid at any time without penalty. This
Note shall also be subject to prepayment as and when required under the terms of
any Transaction Documents.

     5. Limited Recourse. The obligations of the Band under this Note and any
related awards, judgments or decrees shall be payable solely out of
undistributed or future Net Revenues of the Enterprise and shall be a Limited
Recourse obligation of the Band, with no recourse to tribal assets other than
the limited assets of the Band specified in the definition of Limited Recourse
and Section 14.3(a) of the Development Agreement.


                                       2

<PAGE>

     6. Subordination. Payment of amounts due hereunder shall be subordinated to
the Bank Development Loan, the Equipment Loan and any other third-party loans or
equipment leases to the Band relating to the Facility to the extent provided in
the Development Agreement or, if the Commencement Date does not occur, or to any
loans relating to any other Gaming facility in Michigan owned by the Band. The
holder of this Note agrees to execute and deliver subordination agreements
evidencing such subordination in form reasonably acceptable to holder and the
Bank Lender, the Equipment Lender, or any other third-party lender or equipment
lessor.

     7. Default; Acceleration. All outstanding principal together with accrued
interest shall become immediately due and payable in full, subject to the
limitations on recourse provided above, upon default in the payment of principal
or interest due under this Note if such default is not remedied within thirty
(30) days after receipt by the Band of written notice thereof as provided in the
Development Agreement.

     8. Sovereign Immunity. The Band expressly waives its sovereign immunity
from suit for the purpose of permitting or compelling arbitration to enforce
this Note as provided in Article 14 of the Development Agreement and consents to
be sued in the United States District Court for the Western District of Michigan
- - Southern Division, the United States Court of Appeals for the Sixth Circuit,
and the United States Supreme Court for the purpose of compelling arbitration or
enforcing any arbitration award or judgment arising out of this Note. If the
United States District Court lacks jurisdiction, the Band consents to be sued in
the Michigan State Court system for the same limited purpose. The Band waives
any requirement of exhaustion of tribal remedies. Without in any way limiting
the generality of the foregoing, the Band expressly authorizes any governmental
authorities who have the right and duty under applicable law to take any action
authorized or ordered by any such court, and to take such action, including
without limitation, repossessing or foreclosing on any real property not in
trust, or otherwise giving effect to any judgment entered; provided, however,
that liability of the Band under any judgment shall always be 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. The Band appoints the Chairman of the Pokagon Council and
the Secretary of the Pokagon Council as its agents for service of all process
under or relating to the Agreements, and (v) Furnishings and Fixtures to the
extent provided in Section 9.2.10 of the Development Agreement. The Band agrees
that service in hand or by certified mail, return receipt requested, shall be
effective for all purposes under or relating to the Agreements if served on such
agents.

     9. Arbitration. All disputes, controversies or claims arising out of or
relating to this Note shall be settled by binding arbitration as provided in
Article 14 of the Development Agreement.

     10. Business Purposes; Applicable Law. This Note evidences a loan for
business and commercial purposes and not for personal, household, family or
agricultural purposes. This Note shall be interpreted and construed in
accordance with Michigan law, to the extent not preempted by federal law. Use of
Michigan law for the foregoing limited purpose of interpretation and


                                       3

<PAGE>

construction is not intended by the parties to and shall not otherwise (i)
incorporate substantive Michigan laws or regulations, including but not limited
to Michigan usury laws or any other present or future provision of the laws of
Michigan that would restrict the rate of interest upon any loan contemplated
hereunder; or (ii) grant any jurisdiction to the State or any political
subdivision thereof over the Gaming Site or the Facility.

     11. Defined Terms. Capitalized terms used herein shall have the same
meanings assigned to them in the Development Agreement, and, if not defined in
the Development Agreement, in the Management Agreement between the Band and
Lakes of even date.

     12. Miscellaneous.

          a. Time is of the essence.

          b. The benefits and obligations of this Note shall inure to and be
          binding upon the parties hereto and their respective successors and
          assigns, provided that any succession or assignment is permitted under
          the Development Agreement.

          c. Waiver of any one default shall not cause or imply a waiver any
          subsequent default.

          d. This Note, together with the documents listed in Section 15.17 of
          the Development Agreement, sets forth the entire agreement between the
          parties hereto with respect to the subject matter hereof. All
          agreements, covenants, representations, and warranties, express or
          implied, oral or written, of the parties with respect to the subject
          matter hereof are contained herein and therein. This Note shall not be
          supplemented, amended or modified by any course of dealing, course of
          performance or uses of trade and may only be amended or modified by a
          written instrument duly executed by officers of both parties.

          e. This Note has been executed and delivered as a complete amendment
          and restatement in its entirety of that certain Transition Loan Note
          dated as of July 8, 1999 made payable by the Band to Lakes
          Entertainment, Inc. in the original principal amount of $7,500,000, as
          assigned by Lakes Entertainment, Inc. to Lakes pursuant to the
          Assignment Agreement and as amended and restated by a First Amended
          and Restated Transition Loan Note dated as of October 16, 2000 and a
          Second Amended and Restated Transition Loan Note dated as of December
          22, 2004, but does not extinguish, satisfy, discharge or constitute a
          novation thereof, and the Band hereby reaffirms, subject to the
          provisions of this Note, the indebtedness evidenced thereby. Lakes
          agrees to deliver to the Band the original of such Note dated as of
          July 8, 1999, the First Amended and Restated Note dated as of October
          16, 2000 and the original Second Amended and Restated Note dated as of
          December 22, 2004.


                                       4

<PAGE>

          f. Any other provision of this Note to the contrary notwithstanding:
          (i) in no event shall the rate of interest payable under this Note
          exceed the maximum rate permitted by law (the "Legal Rate"); (ii) if
          at any time the rate of interest computed as provided above (the
          "Computed Rate") exceeds the Legal Rate, then interest shall accrue
          thereafter at the Legal Rate regardless of whether the Computed Rate
          is greater or less than the Legal Rate until the total amount of
          interest payable hereunder equals the amount that would have been
          payable without regard to this sentence, or until this Note is paid in
          full, whichever occurs first; and (iii) if the holder receives any
          interest in excess of the maximum rate permitted by this sentence, the
          excess shall be credited against the principal hereof or refunded, at
          the holder's option.

                                        THE POKAGON BAND OF POTAWATOMI INDIANS


                                        By: /s/ John Miller
                                            ------------------------------------
                                        Its Council Chairman


                                        By: /s/ Daniel Rapp
                                            ------------------------------------
                                        Its Secretary


                                       5
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.181
<SEQUENCE>15
<FILENAME>c02716exv10w181.txt
<DESCRIPTION>THIRD AMENDED AND RESTATED INDEMNITY AGREEMENT
<TEXT>
<PAGE>
                                                                  EXHIBIT 10.181

                                                             EXECUTION AGREEMENT

                 THIRD AMENDED AND RESTATED INDEMNITY AGREEMENT

     This Indemnity Agreement ("Indemnity Agreement") is dated as of the 25th
day of January, 2006, by and between the Pokagon Band of the Potawatomi Indians
(the "Band") and Great Lakes Gaming of Michigan, LLC, a Minnesota limited
liability company ("Lakes"):

                                   WITNESSETH:

     WHEREAS, the Band and Lakes Entertainment, Inc., f/k/a Lakes Gaming, Inc.
("Lakes Entertainment") previously entered into Development Agreement dated as
of July 8, 1999, (as assigned by Lakes Entertainment to Lakes pursuant to that
certain Assignment and Assumption Agreement dated October 16, 2000, by and among
the Band, Lakes Entertainment and Lakes, and amended by a First Amendment dated
as of December 22, 2004 and a Second Amended and Restated Assignment and
Assumption Agreement dated as of January 25, 2006 ("Assignment Agreement")), and
as amended and restated by that certain First Amended and Restated Development
Agreement dated October 16, 2000 by and between the Band and Lakes, and as
amended and restated by that certain Second Amended and Restated Development
Agreement dated as of December 22, 2004, by and between the Band and Lakes and
as amended and restated by that certain Third Amended and Restated Development
Agreement dated of even or recent date (collectively, and as heretofore and
hereafter further amended, substituted, restated or modified, the "Third Amended
and Restated Development Agreement"), pursuant to which the Band has engaged
Lakes to, among other things, assist the Band in the design, development,
construction and management of the Facility; and

     WHEREAS, Article 2 of the Third Amended and Restated Development Agreement
provides, among other things, that Lakes shall finance the acquisition of all
parcels of land comprising the Gaming Site and the Non-Gaming Lands through the
making of advances (a) under the Lakes Note for the acquisition of each parcel
of land constituting the Gaming Site (all such advances, whether heretofore or
hereafter made, shall be collectively referred to as the "Gaming Site
Advances"), and (b) under the Non-Gaming Land Acquisition Line of Credit for
each parcel of land constituting the Non-Gaming Lands (all such advances,
whether heretofore or hereafter made, shall be collectively referred to as the
"Non-Gaming Land Advances" and together with all Gaming Site Advances shall be
collectively referred to as the "Advances"); and

     WHEREAS, as further provided in Article 2 of the Third Amended and Restated
Development Agreement, all of the Gaming Site Advances and the Non-Gaming Land
Advances are to be secured by mortgages in favor of Lakes on the related parcels
of land constituting the Gaming Site and the Non-Gaming Lands; and

     WHEREAS, the Band, with the consent of Lakes, has formed and may hereafter
form certain related entities known as "Band Designees", including but not
limited to Pokagon Properties, LLC, a Delaware limited liability company
("PPLLC") and Filbert Land Development, LLC, an Indiana limited liability
company ("Filbert"), for the purpose of, at Band's option, acquiring title to
all or a portion of the Gaming Site and all or a portion of the Non-Gaming
Lands; and

<PAGE>

     WHEREAS, each of the Advances (to the extent made in connection with any
Band Designee's acquisition of Gaming Site or Non-Gaming Land parcels) will be
made available by the Band to the Band Designee for the purpose of paying all
costs associated with the acquisition of the parcels of land constituting the
Gaming Site and the Non-Gaming Lands; and

     WHEREAS, Lakes has required and will be requiring each Band Designee to
execute and deliver certain Band Designee Guaranties and Band Designee Mortgages
(as each of such terms are defined in the Third Amended and Restated Development
Agreement) and amendments thereto from time to time in connection with each
acquisition of parcels of land related to the Gaming Site and the Non-Gaming
Lands and has required the Band to execute and deliver that certain Indemnity
Agreement dated October 16, 2000 by and between the Band and Lakes, as amended
and restated by that certain First Amended and Restated Indemnity Agreement
dated February 28, 2001 and by that certain Second Amended and Restated
Indemnity dated December 22, 2004 (collectively, the "Original Indemnity
Agreement") to Lakes, all as a condition precedent to the making of such
Advances; and

     WHEREAS, in connection with the execution of the Third Amended and Restated
Development Agreement, the Band and Lakes desire to amend and restate the
Original Indemnity Agreement as set forth herein.

     NOW, THEREFORE, for valuable consideration, the receipt of which is hereby
acknowledged, and as an inducement to the Lakes to make the Advances to the
Band, the Band agrees as follows:

     1. Recitals True. The above recitals are true and this Third Amended and
Restated Indemnity Agreement shall amend and restate the Original Indemnity
Agreement in its entirety.

     2 Definitions. Capitalized terms used but not otherwise defined herein and
defined in the Third Amended and Restated Development Agreement shall have the
same meaning herein as therein.

     3. Indemnity - General. The Band agrees to indemnify and to hold Lakes (the
"Indemnitee") harmless from any and all claims, causes of action, damages,
penalties, fees and costs (to the extent such fees and costs are payable under
the respective Band Designee Mortgages) which may be asserted against, or
incurred by, Indemnitee resulting from or due to any Band Designee's failure to
pay and perform each of its obligations under any Band Designee Guaranty and the
respective Band Designee Mortgages (excluding obligations under Section 25 of
any Band Designee Mortgage) as and when required thereunder (collectively, the
"Indemnified Obligation"); provided that such indemnity shall only be due and
owing after an Event of Default has occurred under the applicable Band Designee
Guaranty or respective Band Designee Mortgage and all applicable notices have
been given and all rights of cure have expired, and either (a) the time within
which arbitration may be demanded has expired, or (b) if arbitration has been
timely demanded, as and to the extent allowed in an arbitration award. The
Band's duty to indemnify and hold harmless includes, but is not limited to,
proceedings or actions commenced by any person (including, but not limited to,
any federal, state, or local governmental agency or entity) before any court or
administrative agency asserting a claim for which Band must indemnify Indemnitee
under this section. The Band further agrees that


                                        2

<PAGE>

pursuant to its duty to indemnify under this section, the Band shall indemnify
the Indemnitee against all Indemnified Obligations incurred by it as they become
due and not waiting for the ultimate outcome of such litigation or
administrative proceeding.

     4. Indemnity - Hazardous Waste. The Band agrees to indemnify and to hold
Lakes and each of its officers, directors, shareholders, employees, agents,
attorneys and other representatives (individually and collectively, the
"Hazardous Waste Indemnitees") harmless from any and all claims, causes of
action, damages, penalties, fees and costs (to the extent such fees and costs
are payable under the respective Band Designee Mortgages) which may be asserted
against, or incurred by, any of the Hazardous Waste Indemnitees resulting from
or due to any Band Designee's failure to pay and perform its obligations under
Section 25 of any Band Designee Mortgage as and when required thereunder
(collectively, the "Hazardous Waste Indemnity Obligation"); provided that such
indemnity shall only be due and owing after an Event of Default has occurred
under the applicable Band Designee Guaranty or respective Band Designee Mortgage
and all applicable notices have been given and all rights of cure have expired,
and either (a) the time within which arbitration may be demanded has expired, or
(b) if arbitration has been timely demanded, as and to the extent allowed in an
arbitration award. The Band's duty to indemnify and hold harmless includes, but
is not limited to, loss or liability asserted in proceedings or actions
commenced by any person (including, but not limited to, any federal, state, or
local governmental agency or entity) before any court or administrative agency
asserting a claim for which Band must indemnify Hazardous Waste Indemnitees
under this section. The Band further agrees that pursuant to its duty to
indemnify under this section, the Band shall indemnify the Hazardous Waste
Indemnitees against all Hazardous Waste Indemnity Obligations incurred by them
as they become due and not waiting for the ultimate outcome of such litigation
or administrative proceeding. The Band's obligations to indemnify and hold the
Hazardous Waste Indemnitees harmless hereunder shall survive repayment,
satisfaction and/or foreclosure of the applicable Band Designee Guaranty, the
respective Band Designee Mortgages and all other obligations now or hereafter
owed by the Band to Lakes or its permitted assigns under the Third Amended and
Restated Development Agreement, the Third Amended and Restated Management
Agreement (as defined in the Third Amended and Restated Development Agreement)
and any other instruments, documents or agreements related thereto, but shall
remain subject to the provisions of Sections 6, 7, 8, 9 and 10 of this Indemnity
Agreement, which shall also survive such repayment, satisfaction or foreclosure.

     5. Advances under Loan Agreements. Notwithstanding the foregoing and
without limiting the rights of Lakes under each Band Designee Guaranty and the
respective Band Designee Mortgages, prior to the occurrence of the Commencement
Date for the Facility, all Indemnified Obligations and Hazardous Waste Indemnity
Obligations (collectively, the "Indemnity Obligations") accruing prior thereto
and not paid by the Band on demand by any of the Indemnitees, shall be deemed to
be an Advance made by Lakes to the Band under the terms of the Lakes Development
Note or the Non-Gaming Lands Acquisition Line of Credit, as applicable, and
shall accrue interest from the date incurred and be repayable in accordance with
the terms set forth therein; subject to timely demand for arbitration under
Section 6 and, if so demanded, the arbitration award. Thereafter, to the extent
any Indemnity Obligations are not paid on demand, the same shall constitute
"Operating Expenses" (as defined in the Third Amended and Restated Management
Agreement) paid by Lakes and Lakes shall be entitled to reimbursement of the
same under the Third Amended and Restated Management Agreement


                                        3

<PAGE>

without any further consent or approval of the Band; subject to timely demand
for arbitration under Section 6 and, if so demanded, the arbitration award.

     6. Arbitration; Limited Waiver of Sovereign Immunity. Any disputes under
this Indemnity Agreement shall be subject to arbitration as provided in Section
14.2 of the Third Amended and Restated Development Agreement and be resolved in
the venues provided in Section 14.1 of the Development Agreement. The Band's
limited waiver of sovereign immunity in Section 14.1 of the Third Amended and
Restated Development Agreement shall apply to this Indemnity Agreement.

     7. Limited Recourse. The liability of the Band under or relating to this
Indemnity Agreement shall always be 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 Third Amended and Restated Development
Agreement.

     8. Governing Law. This Indemnity Agreement shall be interpreted in
accordance with the law of Michigan.

     9. Amendments. Assignments, Etc. Any provision of this Indemnity 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. Lakes may not assign its rights and obligations hereunder except to an
assignee permitted under Section 10.5(a) of the Third Amended and Restated
Development Agreement. This Indemnity Agreement may be executed in separate
counterparts and such counterparts shall be deemed to constitute one binding
document.

     10. Notices. The Band 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 the Band
at the address of the Band and with copies set forth in Section 15.4 of the
Third Amended and Restated Development Agreement. Any notice or demand so mailed
shall be deemed received on the date of actual receipt, on the third business
day following mailing as herein set forth or one day following delivery to a
courier service, whichever first occurs.

     11. Termination. This Indemnity Agreement shall terminate (except as
provided in Section 4) upon the discharge of all Band Designee Mortgages.

     12. Amendment and Restatement. This Third Amended and Restated Indemnity
Agreement amends and restates in its entirety the Original Indemnity Agreement.
Nothing herein shall be construed to impair or discharge the Original Indemnity.
To the extent that the terms and provisions of the Original Indemnity may
conflict with or be inconsistent with the terms and provisions of this Third
Amended and Restated Indemnity Agreement, the latter shall control.


                                        4

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Third Amended and
Restated Indemnity Agreement to be executed as of the 25th day of January, 2006.

                                        THE POKAGON BAND OF POTAWATOMI INDIANS


                                        /s/ John Miller
                                        ----------------------------------------
                                        By: John Miller
                                        Its: Council Chairman


                                        /s/ Daniel Rapp
                                        ----------------------------------------
                                        By: Daniel Rapp
                                        Its: Secetary


                                        GREAT LAKES GAMING OF MICHIGAN, LLC


                                        /s/ Timothy J. Cope
                                        ----------------------------------------
                                        By: Timothy J. Cope
                                        Its: President


                                       5
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.182
<SEQUENCE>16
<FILENAME>c02716exv10w182.txt
<DESCRIPTION>SECOND AMENDED AND RESTATED UNLIMITED GUARANTY
<TEXT>
<PAGE>
                                                                  EXHIBIT 10.182

                                                               EXECUTION VERSION

                 SECOND AMENDED AND RESTATED UNLIMITED GUARANTY

     This Second Amended and Restated Unlimited Guaranty ("Guaranty Agreement")
is made as of the 25th day of January, 2006, by and among Lakes Entertainment,
Inc., f/k/a Lakes Gaming, Inc., a Minnesota corporation ("Lakes") and Lakes
Gaming and Resorts, LLC, a Minnesota limited liability company ("LG & R";
collectively with Lakes, and each of Lakes and LG&R individually, the
"Guarantor"), 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 Gaming of Michigan, LLC ("Great Lakes"), pursuant to
an Assignment and Assumption Agreement dated as of October 16, 2000, as the same
has been amended by a First Amendment dated as of December 22, 2004 (the
"Assignment Agreement"), subject to the terms and conditions set out in the
Assignment Agreement; and

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

     WHEREAS, Guarantor unconditionally guaranteed the obligations of Great
Lakes to the Band under the First Amended and Restated Agreements pursuant to an
Unlimited Guaranty dated as of October 16, 2000 (the " 2000 Guaranty"); and

     WHEREAS, the First Amended and Restated Agreements were amended and
restated by a Second Amended and Restated Development Agreement dated as of
December 22, 2004 and

<PAGE>

by a Second Amended and Restated Management Agreement dated as of December 22,
2004 (collectively, the "Second Amended and Restated Agreements"); and

     WHEREAS, the 2000 Guaranty was amended by a First Amendment to Unlimited
Guaranty dated as of December 22, 2004 (as so amended and as may be further
amended, the "Guaranty") in order to reflect the execution of the Second Amended
and Restated Agreements; and

     WHEREAS, Great Lakes, Lakes and the Band have entered into a Third Amended
and Restated Development Agreement dated as of January 25, 2006 and a Third
Amended and Restated Management Agreement dated as of January 25, 2006
(collectively, the "Third Amended and Restated Agreements");

     WHEREAS, Great Lakes, Lakes and the Band have entered into a Second Amended
and Restated Assignment and Assumption Agreement of even date hereof amending
the Assignment Agreement; and

     WHEREAS, the parties wish to further amend and restate the Guaranty to
reflect the execution of the Third Amended and Restated Agreements, and to
provide that pursuant to the Guaranty each Guarantor shall unconditionally
guarantee the obligations of Great Lakes to the Band under the Third Amended and
Restated Agreements and all related documents and instruments;

     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.

     a.   Capitalized terms used but not otherwise defined herein and defined in
          the Third Amended and Restated Agreements shall have the same meaning
          herein as therein.

     b.   All references to the term "Development Agreement" herein shall mean
          the Development Agreement dated as of July 8, 1999 between Lakes and
          the Band, as assumed by Great Lakes under the Assignment and
          Assumption Agreement dated as of October 16, 2000, and the Second
          Amended and Restated Assignment and Assumption Agreement of even date
          hereof, as the same has been and may be amended, and as amended and
          restated by a First Amended and Restated Development Agreement dated
          as of October 16, 2000, a Second Amended and Restated Development
          Agreement dated as of December 22, 2004, and a Third Amended and
          Restated Development Agreement dated as of January 25, 2006, and as
          the same may be further amended, substituted, restated or modified.

     c.   All references to the term "Management Agreement" herein shall mean
          the Management Agreement dated as of July 8, 1999 between Lakes and
          the Band, as assumed by Great Lakes under the Assignment and
          Assumption Agreement dated as of October 16, 2000, and the Second
          Amended and Restated Assignment and Assumption Agreement of even


                                       2

<PAGE>

          date hereof, as the same has been and may be amended, and as amended
          and restated by a First Amended and Restated Management Agreement
          dated as of October 16, 2000, a Second Amended and Restated Management
          Agreement dated as of December 22, 2004, and a Third Amended and
          Restated Management Agreement dated as of January 25, 2006, and as the
          same may be further amended, substituted, restated or modified.

     d.   All references to the term "Lakes Loans" shall mean the Transition
          Loan, the Lakes Development Loan, the Non-Gaming Land Acquisition Line
          of Credit and the Lakes Facility Loan.

     e.   All references to the term "Obligations" shall mean any and all
          obligations of Great Lakes to the Band under or relating to the
          following documents and instruments:

          i.   Development Agreement;

          ii.  Management Agreement;

          iii. Third Amended and Restated Non-Gaming Land Acquisition Line of
               Credit Agreement dated as of January 25, 2006, and any subsequent
               amendments, restatements, substitutions and modifications
               thereto;

          iv.  Third Amended and Restated Control Agreement dated as of January
               25, 2006, and any subsequent amendments, restatements,
               substitutions and modifications thereto;

          v.   Third Amended and Restated Pledge and Security Agreement dated as
               of January 25, 2006, and any subsequent amendments, restatements,
               substitutions and modifications thereto;

          vi.  Second Amended and Restated Assignment and Assumption Agreement
               dated as of January 25, 2006, and any subsequent amendments,
               restatements, substitutions and modifications thereto.

3. Consent. Each Guarantor consents to the Third Amended and Restated Agreements
and to all documents executed in connection therewith or related thereto.

4. Guarantied Obligations. The undersigned Guarantor(s), jointly and severally,
hereby irrevocably and unconditionally guarantee the full and punctual payment
and performance by Great Lakes of all covenants, obligations and representations
of Great Lakes under or relating to the Obligations, including without
limitation the due and punctual payment by Great Lakes of all advances due under
the Lakes Loans and the Scholarship Program Fee, as such Obligations may be
amended, modified, restated or renewed, as well as all substitutions therefor
and renewals, extensions and rearrangements thereof, together with any and all
costs incurred by Band (including, without limitation, reasonable attorneys'
fees and disbursements) in enforcing this Guaranty or any security therefore
(individually, a "Guarantied Obligation" and collectively, the "Guarantied
Obligations").


                                       3

<PAGE>

5. Demand by the Band: Performance by Guarantor. In the event of a Guaranty
Event of Default, the Band may make demand upon the Guarantor(s), or any one of
them, for the payment or performance of the Guarantied Obligation, and each
Guarantor binds and obliges it to make such payment or performance and to pay
any related damages forthwith upon such demand. Each Guarantor further covenants
and agrees that Band may upon a Guaranty Event of Default proceed first and
directly against the Guarantor, without any action, proceeding or suit, whether
against Great Lakes or against any security for the Guarantied Obligations
(hereby intending, among other matters, to waive any defense to this Guaranty
based on impairment of collateral), or any other party liable for the Guarantied
Obligations. This Guaranty Agreement is not conditioned upon the genuineness,
validity, or enforceability of the Third Amended and Restated Agreements, the
Lakes Notes and all documents related thereto, arising thereunder or executed in
connection therewith (collectively, the "Transaction Documents") or any other
instruments relating to the creation or performance of the Guarantied
Obligations, or the pursuit by the Band of any remedies which the Band has now
or may hereafter have with respect thereto under the Transaction Documents.

"Guaranty Event of Default" means (a) either (i) a Lakes Event of Default under
the Development Agreement, (ii) a Manager Event of Default under the Management
Agreement, or (iii) any other default or breach by Great Lakes under the
Guaranteed Obligations; in each case after all cure periods have expired and
either the time within which arbitration may be demanded has expired or, if
arbitration has been timely demanded, the arbitrator has issued his award and
the award determines that Great Lakes is in default or breach under a Guaranteed
Obligation; or (b) the receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjustment
of, or any similar proceeding affecting Great Lakes or any Guarantor or any of
its or their assets.

6. Waiver of Demands. Notices, Diligence, etc. Each Guarantor hereby assents to
all the terms and conditions of the Guarantied Obligations and the related
Transaction Documents and waives (a) demand for the payment or performance of
any Guarantied Obligation (other than a demand under Section 5 hereof); (b)
notice of the occurrence of a default or an Event of Default under the
Transaction Documents; (c) notice of acceptance of any guaranty herein provided
for or of the terms and provisions thereof or hereof by the Band; (d) notice of
any indulgences or extensions granted to Great Lakes or any successor to Great
Lakes or any person or party which shall have assumed the obligations of Great
Lakes or any other obligor in respect of any Guarantied Obligation; (e) any
requirement of diligence or promptness on the part of the Band in the
enforcement of any of its rights under the provisions of any Guarantied
Obligation or the Transaction Documents; (f) any enforcement of any Guarantied
Obligation against any other party liable therefor; (g) any right which the
Guarantor might have to require the Band to proceed against any other guarantor
of the Guarantied Obligations or to realize on any collateral security therefor;
(h) any and all notices of every kind and description which may be required to
be given by any statute or rule of law in any jurisdiction (other than notices
required hereunder), to the maximum extent permitted by applicable law; (i) any
and all claims, defenses or objections based upon the failure of the Band to
make demand upon the Guarantor for the payment or performance of any of the
Guarantied Obligations (other than the demand provided for in Section 5 hereof)
under applicable law; and (j) any right to exoneration or marshaling, and, to
the maximum extent permitted by applicable law, any defense based upon or
arising from the Statute of Limitations, and other laws relating to stays of
action or moratorium. Each Guarantor further


                                       4

<PAGE>

hereby waives (solely as against Band) any right to contribution from co
guarantors as well as any right to exoneration, subrogation or reimbursement
until all Guarantied Obligations are fully and indefeasibly paid or performed
and until the expiration of any applicable preference periods. The Band and
Great Lakes (or any other party to a Guaranteed Obligation) may modify, renew,
waive or extend any Guaranteed Obligation or any provision thereof and may
modify, waive or release any collateral therefor without the consent of any
Guarantor and without altering or releasing the obligations of Guarantor
hereunder.

7. Obligations of Guarantor Unconditional, etc.

     a.   This Guaranty Agreement is a guaranty of payment not collection. This
          is a continuing Guaranty, which shall apply to the Guarantied
          Obligations which now exist or as the same may change over time, and
          to any successive transactions continuing, compromising, extending,
          increasing, modifying, releasing or renewing any Guaranteed
          Obligation, whether or not notice of any after arising Guarantied
          Obligation or change to the Guarantied Obligation is given to
          Guarantor, and whether or not any and all prior Guarantied Obligations
          have been fully paid, performed or observed before a new Guarantied
          Obligation arose, and shall apply notwithstanding the dissolution of
          Great Lakes or dissolution of any other guarantor of any Guarantied
          Obligation. The obligations of the Guarantor upon a Guaranty Event of
          Default are and shall be unconditional, irrespective of the validity,
          regularity or enforceability of any Guarantied Obligation or any of
          the Transaction Documents or of any claim or defense of any party
          relating thereto. This Guaranty Agreement shall not be affected by any
          action taken under or in respect of any Guarantied Obligation, in the
          exercise of any right or remedy therein or thereby conferred, or by
          any failure or omission on the part of the Band to enforce any right
          given thereunder or hereunder, or any remedy conferred thereby or
          hereby; or by any lack of diligence on the part of Band to enforce,
          assert or exercise any right, power or remedy granted hereunder, under
          the Third Amended and Restated Agreements or any other Guarantied
          Obligation, or any documents relating thereto (including without
          limitation any failure to perfect a security interest in or lien on
          any security for any Guarantied Obligation); or by any release or
          surrender of any security or any other guaranty at any time existing
          for the benefit of Band or in respect of any Guarantied Obligation or
          any modification to any of the foregoing; or by any sale, lease or
          transfer by Great Lakes to any person of any and all of its
          properties; or by any action of the Band granting indulgence or
          extension or accommodations to, or waiving or acquiescing in any
          default by, Great Lakes or any successor to Great Lakes, or any person
          or party which shall have assumed its or their obligations or any
          other party liable for any Guarantied Obligation; or any compromise,
          settlement or other arrangement with Great Lakes or any other party
          liable for any Guarantied Obligation; or by the release or discharge
          by operation of law of Great Lakes from the performance or observance
          of any obligation, covenant or agreement contained in the Third
          Amended and Restated Agreements or the Transaction Documents or any
          document relating to any Guaranteed Obligation or by reason of the
          dissolution of Guarantor or Great Lakes or any other defense of Great
          Lakes or any successor to Great Lakes; or by any modification or
          alteration of any Guarantied Obligation or by any circumstance
          whatsoever (with or without notice to or knowledge of the Guarantor)
          which could vary the risk of the Guarantor hereunder; it being the
          purpose, intent and agreement of the Guarantor that the


                                       5

<PAGE>

          obligations of the Guarantor hereunder are and shall upon a Guaranty
          Event of Default be absolute and unconditional under any and all
          circumstances and shall not be discharged except by payment or
          performance as herein provided, and then only to the extent of such
          payment or performance, subject, however, to renewal, extension or
          reinstatement pursuant to the provisions of Section 10 hereof.

     b.   Any claim against Great Lakes to which the Guarantor may be or become
          entitled (including, without limitation, claims by subrogation,
          reimbursement, contribution, indemnity, or otherwise) by reason of any
          payment or performance by the Guarantor in satisfaction and discharge,
          in whole or in part, of its obligations under this Guaranty Agreement
          and any other rights against Great Lakes shall be and hereby are made
          subject and subordinate to the prior payment or performance in full of
          the Guaranteed Obligations and until such time Guarantor shall not be
          entitled to and shall not claim any subrogation to any claim of Band,
          nor any right of set off or counterclaim against Great Lakes.

     c.   The Band shall have the right to seek recourse against Guarantor to
          the fullest extent provided for herein and no election by the Band to
          proceed against any party, or on any obligation, shall constitute a
          waiver of the Band's right to proceed against any Guarantor on
          obligations other than those set out herein, or against other parties,
          unless the Band has expressly waived such right in writing.
          Specifically, but without limiting the generality of the foregoing, no
          action or proceeding by the Band under any document or instrument
          evidencing the Guarantied Obligations shall serve to diminish the
          liability of Guarantor under this Guaranty Agreement except to the
          extent that the Band finally and unconditionally shall have realized
          indefeasible payment by such action or proceeding. All rights and
          remedies of the Band shall be cumulative.

     d.   Guarantor represents and warrants that any and all information
          delivered to Band by Guarantor and Great Lakes is true, accurate and
          complete as of the date hereof and covenants and agrees to provide
          Band with such further information as is required under Section
          13.5(b) of the Development Agreement and, after a default hereunder,
          such further information as to Guarantor's financial condition and
          affairs as the Band may require.

8. Direct Obligation. This Guaranty Agreement is a primary and original
obligation of Guarantor, is not merely the creation of a surety relationship,
and is an absolute, unconditional, and continuing guaranty of payment and
performance which shall remain in full force and effect without respect to
future changes in conditions. Each Guarantor agrees that it is directly, jointly
and severally with any other guarantor of the Guarantied Obligations, liable to
the Band, that the obligations of Guarantor hereunder are independent of the
obligations of Great Lakes or any other Guarantor, and that a separate action or
proceeding may be brought against Guarantor, whether such action is brought
against Great Lakes or any other guarantor or whether Great Lakes or any other
guarantor is joined in such action or proceeding. Guarantor agrees that upon the
occurrence of a Guaranty Event of Default its liability hereunder shall be
immediate and shall not be contingent upon the exercise or enforcement by the
Band of whatever remedies it may have against Great Lakes or any other
guarantor, or the enforcement of any lien or realization upon any security the
Band may at any time possess. Guarantor agrees that any release which


                                       6

<PAGE>

may be given by the Band to Great Lakes or any other obligor or any other
guarantor shall not release Guarantor. Guarantor consents and agrees that the
Band shall be under no obligation to marshal any property or assets of Great
Lakes or any other guarantor in favor of Guarantor, or against or in payment of
any or all of the Guarantied Obligations. The Band shall upon a Guaranty Event
of Default have the right to proceed first and directly against each Guarantor
under this Guaranty. Guarantor acknowledges that there are no conditions
precedent to the effectiveness of this Guaranty Agreement and that this Guaranty
Agreement is in full force and effect and is binding on Guarantor upon execution
and delivery to the Band.

9. Subordination. Guarantor hereby agrees that any and all present and future
indebtedness of Great Lakes owing to Guarantor is subordinated to payment, in
full, in cash, of the Guarantied Obligations. In this regard, no payment of any
kind whatsoever shall be made with respect to such indebtedness after the
occurrence and during the continuance of a Guaranty Event of Default until the
Guarantied Obligations have been indefeasibly paid and performed in full.

10. Reinstatement.

     a.   It is the intention of the parties hereto that this Guaranty Agreement
          shall remain in full force and effect until all of the Guarantied
          Obligations have been fully and indefeasibly paid, performed and
          satisfied; until Great Lakes is no longer obligated to the Band under
          or in respect of the Guarantied Obligations or any documents relating
          thereto; and until the expiration of any applicable preference
          periods. This Guaranty Agreement shall continue to be effective or be
          reinstated, as the case may be, if at any time any amount received by
          the Band in payment of the Guarantied Obligations is rescinded or must
          otherwise be restored or returned upon the insolvency, bankruptcy,
          dissolution, liquidation or reorganization of any Guarantor or Great
          Lakes or upon the appointment of any intervenor or conservator of, or
          trustee or similar official for any Guarantor or Great Lakes or any
          substantial part of either of their respective properties, or if any
          payment made in respect of any Guarantied Obligation is subsequently
          invalidated, declared to be fraudulent or preferential, or otherwise
          returned for any reason, all as though such payments had not been
          made.

     b.   The Guaranteed Obligations shall not be considered indefeasibly paid
          for purposes of this Guaranty Agreement unless and until all payments
          to the Band are no longer subject to any right on the part of any
          person, including Great Lakes, Great Lakes as debtor in possession, or
          any trustee (whether appointed under the Bankruptcy Code or otherwise)
          of Great Lakes' assets to invalidate or set aside such payments or to
          seek to recoup the amount of such payments or any portion thereof, or
          the declare the same to be fraudulent or preferential. Until such full
          and final performance and indefeasible payment of the Guaranteed
          Obligations whether by Guarantor or Great Lakes, the Band shall have
          no obligation whatsoever to transfer or assign its interest in the
          Transaction Documents to Guarantor. In the event that, for any reason,
          any portion of such payments to Band is set aside or restored, whether
          voluntarily or involuntarily, after the making thereof, then the
          obligation intended to be satisfied thereby shall be revived and
          continued in full force and effect as if said payment or payments had
          not been made, and Guarantor shall be liable for the full amount the
          Band is required to repay plus any and all costs and expenses
          (including attorneys' fees) paid by the Band in connection therewith.


                                       7

<PAGE>

11. Notices, etc. All notices, requests and other communications to any
Guarantor hereunder shall be in writing and shall be sent to the address of
Lakes and with the copies set forth in Section 15.4 of the Development
Agreement. Any notice or demand so mailed shall be deemed received on the date
of actual receipt, on the third business day following mailing as herein set
forth or one day following delivery to a courier service, whichever first
occurs.

12. Multiple Debtors or Guarantors. If more than one Guarantor signs this
Guaranty Agreement, or if there are multiple guarantors, as to any such
circumstances, this Guaranty shall take effect as a separate guarantee on the
same terms from each Guarantor to Band with respect to the Guarantied
Obligations of each debtor, except as otherwise expressly provided in this
section; and each such Guarantor identified on the signature page hereto is
jointly and severally liable for the Guarantied Obligations. Each Guarantor's
obligation under this Guaranty may be modified or released only by written
agreement signed by the Band and such Guarantor, without the consent or
agreement of any other Guarantor. No Guarantor's obligations under this
Guarantee shall be impaired, reduced or otherwise affected by any such
modification or release nor by the invalidity or unenforceability of the
obligations of any other Guarantor. This Guaranty shall bind all signatories to
this Guaranty, notwithstanding a failure by any party or entity named in this
Guaranty Agreement as Guarantor to sign this or any Guaranty Agreement. All
Guarantors of the Guarantied Obligations shall be and are jointly and severally
liable under this Guaranty Agreement or their guaranties, as applicable, and
default by any one guarantor shall constitute a default for all guarantors. A
default by any one debtor of the Band or any Guarantor shall constitute default
by all Guarantors with respect to all the Guarantied Obligations of all debtors
of the Band. Suit may be brought against the Guarantors, jointly and severally,
and against any one or more of them, or less than all of them, without impairing
the rights of Band, its successors or assigns, against the other of the
Guarantors; and Band may agree with any one or more of the Guarantors that such
Guarantor or Guarantors shall be liable for such sum or sums as Band may see fit
and may release any of such Guarantors from all further liability to Band for
the Guaranteed Obligations guaranteed hereunder without impairing the right of
Band to demand and collect the balance of the Guaranteed Obligations from the
other Guarantors not so released.

13. Survival of Guaranty, etc. This Guaranty Agreement shall inure to the
benefit of and be binding upon each Guarantor and the Band and their respective
successors and assigns, including any subsequent assignees of any of the
Guarantied Obligations permitted under Section 10.5(b) of the Development
Agreement. This Guaranty Agreement is intended to take effect as a sealed
instrument. This Guaranty Agreement is for the benefit of Band and in the event
this Guaranty Agreement or any Guarantied Obligation are transferred or assigned
in accordance with the Development Agreement, said transferee or assignee shall
be entitled to the benefits hereof and to enforce the performance and observance
of the terms and provisions hereof to the same extent as if said transferee or
assignee was a party or signatory hereto and any such transferee shall be
recognized as the Band hereunder.

14. Reservation of Rights. By entering into this Guaranty Agreement, the Band
does not waive or affect any rights against any Guarantor.


                                       8

<PAGE>

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

     a.   This Guaranty Agreement constitutes the legal, valid and binding
          obligation of each of the Guarantors, and is fully enforceable in
          accordance with its terms; and

     b.   Neither the execution or delivery of this Guaranty 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 any
          Guarantor under any agreement or instrument to which they or either of
          them is now a party or by which they may be bound.

16. Further Assurances. From time to time hereafter, each Guarantor 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 Guaranty
Agreement.

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

18. Amendments, Assignments, Etc. Any provision of this Guaranty 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.

19. 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 Guaranty
Agreement may be executed in separate counterparts and said counterparts shall
be deemed to constitute one binding document.

20. Severability. If any obligation or portion of this Guaranty Agreement is
determined to be invalid or unenforceable under law, it shall not affect the
validity or enforceability of any remaining obligations or portions hereof.

21. Additional Payment. All payments, advances, charges, costs and expenses,
including reasonable attorneys' fees, made or incurred by Band in connection
with the enforcement of this Guaranty Agreement shall be paid by Guarantor
immediately without demand, together with interest at a rate per annum equal to
the interest rate in effect for advances under the Lakes Loans, if (a) the Band
makes demand on Guarantor under Section 5 above and Guarantor fails to timely
demand arbitration under this Guaranty Agreement, or (b) Guarantor makes a
timely demand for arbitration or the Band or Great Lakes demand arbitration, and
the arbitration award in either case finds in the Band's favor on any issue
being arbitrated.

22. Arbitration; Limited Waiver of Sovereign Immunity. Any disputes under this
Guaranty Agreement shall be subject to arbitration as provided in Section 14.2
of the Development Agreement and be resolved in the venues provided in Section
14.1 of the Development


                                       9

<PAGE>

Agreement. The Band's limited waiver of sovereign immunity in Section 14.1 of
the Development Agreement shall apply to this Guaranty Agreement.

23. Amendment and Restatement. This Second Amended and Restated Unlimited
Guaranty amends and restates in its entirety a certain Unlimited Guaranty from
Guarantor to the Band, as amended by a First Amendment to Unlimited Guaranty
dated as of December 22, 2004 (collectively, the "Prior Guaranty"). Nothing
herein shall be construed to impair or discharge the Prior Guaranty. To the
extent that the terms and provisions of the Prior Guaranty may conflict with or
be inconsistent with the terms and provisions of this Second Amended and
Restated Unlimited Guaranty, the latter shall control.

     IN WITNESS WHEREOF, the parties hereto have caused this Guaranty Agreement
to be executed as of the 25th day of January, 2006.

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


                                        By: /s/ Timothy J. Cope
                                            ------------------------------------
                                            Timothy J. Cope
                                        Its President


                                        LAKES GAMING AND RESORTS, LLC


                                        By: /s/ Timothy J. Cope
                                            ------------------------------------
                                            Timothy J. Cope
                                        Its President


                                        THE POKAGON BAND OF POTAWATOMI INDIANS


                                        By: /s/ John Miller
                                            ------------------------------------
                                            John Miller
                                        Its Council Chairman


                                        By: /s/ Daniel Rapp
                                            ------------------------------------
                                            Daniel Rapp
                                        Its Secretary


                                       10
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.183
<SEQUENCE>17
<FILENAME>c02716exv10w183.txt
<DESCRIPTION>SECOND AMENDED AND RESTATED ASSIGNMENT AND ASSUMPTION AGREEMENT
<TEXT>
<PAGE>
                                                                  EXHIBIT 10.183

                                                               EXECUTION VERSION

                           SECOND AMENDED AND RESTATED
                      ASSIGNMENT AND ASSUMPTION AGREEMENT

This Agreement ("Assignment Agreement") is made the 25th day of January, 2006,
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 the 1999 Development Agreement; and

     WHEREAS, pursuant to the 1999 Management Agreement, Lakes agreed to manage
the Facility on the terms set out in the 1999 Management 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 (the "Assignment and Assumption Agreement"),
subject to the terms and conditions set out in the Assignment and Assumption
Agreement; and

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

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

<PAGE>

and Restated Development Agreement") and a Second Amended and Restated
Management Agreement dated as of December 22, 2004 (the "Second Amended and
Restated Management Agreement"; collectively, the "Second Amended and Restated
Agreements"); and

     WHEREAS, in connection and simultaneously with the execution of the Second
Amended and Restated Agreements, the parties amended the Assignment and
Assumption Agreement by virtue of a First Amendment to Assignment and Assumption
Agreement dated as of December 22, 2004; and

     WHEREAS, Great Lakes, Lakes and the Band have entered into a Third Amended
and Restated Development Agreement dated as of January 25, 2006 (the "Third
Amended and Restated Development Agreement") and a Third Amended and Restated
Management Agreement dated as of January 25, 2006 (the "Third Amended and
Restated Management Agreement", collectively with the Third Amended and Restated
Management Agreement and as such may be further amended, restated, substituted
or modified, the "Third Amended and Restated Agreements"); and

     WHEREAS, the parties wish to amend and restate the Assignment and
Assumption Agreement to reflect the execution of the Third Amended and Restated
Agreements as provided below;

     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 Third Amended and Restated Development Agreement or the
     Third Amended and Restated Management Agreement shall have the same meaning
     herein as therein.

3.   Assignment of Lakes' Rights Under the Obligations. Lakes grants, bargains,
     sells, conveys, assigns and transfers to Great Lakes, without recourse, all
     of Lakes' right, title and interest, legal and equitable, in, to and under
     the Third Amended and Restated Agreements, the Lakes Loans and all related
     documentation, including, without limitation, the documents listed on the
     attached Schedule A (the "Related Documents," collectively, with the Third
     Amended and Restated Agreements and the Lakes Loans, the "Obligations").

4.   Transfer of Lakes Notes. Lakes agrees to endorse the Lakes Notes in favor
     of Great Lakes. Great Lakes agrees that it is the assignee of the Lakes
     Notes, but not


                                       2

<PAGE>

     a holder in due course.

5.   Assignment of Account. Lakes hereby assigns and transfers to Great Lakes
     all rights of Lakes in and to the Account and all cash, financial assets
     and investment property in the Account, subject to the Band's first
     perfected security interest, and agrees that the Account shall secure all
     obligations of Great Lakes and Lakes to the Band in accordance with the
     terms of the Pledge and Security Agreement and the Control Agreement.

6.   Assumption of Obligations. Great Lakes accepts the assignment of Lakes'
     rights and obligations under the Obligations. Great Lakes assumes and
     agrees to perform and discharge all of the obligations and liabilities of
     Lakes arising under or relating to the Obligations in accordance with the
     terms thereof, as if Great Lakes had originally been a party thereto. The
     liabilities so assumed by Great Lakes include any obligations or
     liabilities of Lakes which have accrued under the Obligations as of the
     date hereof, as well as those subsequently accruing. All references to
     Lakes in the Obligations shall, except as set out in a certain Amendment of
     Account Control Agreement dated as of October 16, 2002 and as further
     amended by Second Amendment dated as of December 22, 2004, and a Third
     Amended and Restated Account Control Agreement dated as of January 25,
     2006, or in an Amendment to Pledge and Security Agreement dated as of
     October 16, 2000 and as further amended by Second Amendment dated as of
     December 22, 2004 and a Third Amended and Restated Pledge and Security
     Agreement dated as of January 25, 2006, be deemed to refer to Great Lakes;
     except that references in the Third Amended and Restated Agreements or in
     any related documents dated on or about January 25, 2006, to Great Lakes
     and Lakes, respectively, shall refer to the respective entity so named.

7.   Band Consent. The Band consents to the assignments and assumptions made
     under this Assignment Agreement, recognizes Great Lakes as a substituted
     party under the Obligations (except to the extent provided in Section 15.20
     of the Third Amended and Restated Development Agreement and Section 18.23
     of the Third Amended and Restated Management Agreement), and agrees that
     Great Lakes shall be a party to such Obligations to the same extent as if
     Great Lakes had originally been a party thereto; without prejudice,
     however, to Lakes' continued obligations to the Band under the Obligations
     as provided in the Third Amended and Restated Agreements, its Guaranty, the
     Control Agreement, as the same has been and may be amended, the Pledge and
     Security Agreement, as the same has been and may be amended, and this
     Assignment Agreement.

8.   Release of Lakes. The Band releases and forever discharges Lakes of any and
     all liabilities or obligations under the Obligations except as specifically
     set out in


                                       3

<PAGE>

     Section 15.20 of the Third Amended and Restated Development Agreement and
     Section 18.23 of the Third Amended and Restated Management Agreement, and,
     except as provided in such sections, agrees to look solely to Great Lakes
     for performance of all obligations of Lakes under the Obligations;
     conditioned on, however, the execution by Lakes and LG&R of the unlimited
     guarantee attached hereto as Exhibit B (the "Guarantee"), as amended, and
     without prejudice to the Band's rights under such Guarantee, under the
     Third Amended and Restated Agreements, under the Control Agreement, as the
     same has been and may be amended, the Pledge and Security Agreement, as the
     same has been and may be amended, or under this Assignment Agreement.

9.   Release of the Band. Lakes agrees that, given the assignment of its rights
     under the Obligations to Great Lakes, Lakes has and shall have no claims
     against the Band under or relating to such Obligations; reserving, however,
     any rights or remedies, if any, which (a) Lakes may now have or may in the
     future acquire under the Indemnity Agreement, (b) Lakes may in the future
     acquire under the specific provisions of the Obligations, or (c) Lakes or
     LG&R may have under this Assignment Agreement or the Guarantee.

10.  Lakes Continuing Obligations. Notwithstanding any other provision of this
     Agreement, Lakes shall continue to be a Hazardous Waste Indemnitee under
     Section 4 of the Third Amended and Restated Indemnity Agreement between
     the Band and Lakes dated as of January 25, 2006 and shall have the benefit
     of, and be bound by, Sections 4, 6, 7, 8, 9 and 10 of that Indemnity
     Agreement.

11.  Sovereign Immunity. Lakes agrees that all claims and causes of action it
     may in the future have against the Band, whether at law, in tort or
     otherwise, shall be subject to the Band's sovereign immunity, unless
     specifically waived by the Band in writing after the date of this
     Assignment Agreement or, as to disputes under this Assignment Agreement or
     under the Third Amended and Restated Agreements, as provided in such
     agreements. Lakes shall, upon the execution of this Assignment Agreement,
     no longer have the benefit of any limited waiver of sovereign immunity
     provided in the Obligations except, as to the Third Amended and Restated
     Agreements, the Control Agreement, as amended, and the Pledge and Security
     Agreement, as amended, as provided in such agreements. Nothing in this
     Assignment Agreement waives or prejudices any rights Lakes or LG&R may have
     under the terms of their Guaranty, or affects any limited waiver of
     sovereign immunity in such Guaranty.

12.  Covenants and Representations of Lakes and Great Lakes

     a.   This Assignment Agreement constitutes the legal, valid and binding


                                       4

<PAGE>

          obligation of Great Lakes and Lakes, and is fully enforceable in
          accordance with its terms.

     b.   The Obligations constitute the legal, valid and binding obligation of
          Great Lakes, and are fully enforceable in accordance with their terms.

     c.   The Guaranty constitutes the legal, valid and binding obligation of
          Lakes and LG&R, and is fully enforceable in accordance with their
          terms

     d.   Neither the execution or delivery of this Assignment 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 either of
          them is now a party or by which either of them is or may in the future
          be bound.

     e.   The fulfillment of and compliance with the terms and provisions of the
          Obligations will not conflict with, 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 Great Lakes under any agreement or instrument to which it is
          now a party or by which it is or may in the future be bound.

     f.   The Band has, and shall have until the termination of the Pledge and
          Security Agreement in accordance with Section 15 thereof, a first
          perfected security interest in the Account.

13.  Covenants and Representations of the Band

     a.   This Assignment Agreement constitutes the legal, valid and binding
          obligation of the Band, and is fully enforceable in accordance with
          its terms.

     b.   Neither the execution or delivery of this Assignment 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 the
          Band under any agreement or instrument to which it is now a party or
          may in the future be bound.

14.  Further Assurances. From time to time hereafter, Lakes, Great Lakes and/or
     the


                                       5

<PAGE>

     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
     Assignment Agreement.

15.  Governing Law; Severability. This Assignment Agreement shall be interpreted
     in accordance with the law of Michigan. Wherever possible each provision of
     this Assignment Agreement shall be interpreted in such manner as to be
     effective and valid under applicable law, but if any provisions of this
     Assignment Agreement shall be prohibited by, unenforceable or invalid under
     applicable law, such provision shall be ineffective to the extent of such
     prohibition, unenforceability or invalidity, without invalidating the
     remainder of such provision or the remaining provisions of this Assignment
     Agreement.

16.  Amendments, Assignments, Etc. Any provision of this Assignment 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 and obligations
     hereunder and under the Obligations without the written consent of the
     Band.

17.  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
     Assignment Agreement may be executed in separate counterparts and said
     counterparts shall be deemed to constitute one binding document.

18.  Notices. 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 as set
     forth in Section 15.4 of the Third Amended and Restated Development
     Agreement. Notice to the Band shall be given as provided in Section 15.4 of
     the Third Amended and Restated Development Agreement. Any notice or demand
     so mailed shall be deemed received on the date of actual receipt, on the
     third business day following mailing as herein set forth or one day
     following delivery to a courier service, whichever first occurs.

19.  Arbitration; Limited Waiver of Sovereign Immunity. Any disputes under this
     Agreement shall be subject to arbitration as provided in Section 14.2 of
     the Third Amended and Restated 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


                                        6

<PAGE>

     immunity in Sections 14.1 and 14.3 of the Third Amended and Restated
     Development Agreement shall apply to this Agreement; provided that the
     liability of the Band under any judgment shall always be 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 Section 14.3(h) of the Third Amended and Restated Development
     Agreement.

20.  Ratification. Great Lakes, the Band, and Lakes each ratify and confirm the
     Obligations.

21.  Amendment and Restatement. This Second Amended and Restated Assignment and
     Assumption Agreement amends and restates in its entirety the Assignment and
     Assumption Agreement between Great Lakes, Lakes and the Band dated as of
     October 16, 2000 and by a first amendment dated as of December 22, 2004
     (collectively, the "Prior Assignment Agreement"). Nothing herein shall be
     construed to impair or discharge the Prior Assignment Agreement. To the
     extent that the terms and provisions of the Prior Assignment Agreement may
     conflict with or be inconsistent with the terms and provisions of this
     Second Amended and Restated Assignment and Assumption Agreement, the latter
     shall control.

     IN WITNESS WHEREOF, the parties hereto have caused this Second Amended and
Restated Assignment and Assumption Agreement to be executed as of the day first
above written.

                                        GREAT LAKES GAMING OF MICHIGAN, LLC


                                        By: /s/ Timothy J. Cope
                                            ------------------------------------
                                            Timothy J. Cope
                                            Its President


                                        LAKES ENTERTAINMENT, INC., f/k/a Lakes
                                        Gaming, Inc.


                                        By: /s/ Timothy J. Cope
                                            ------------------------------------
                                            Timothy J. Cope
                                            Its President


                                       7

<PAGE>

                                        THE POKAGON BAND OF POTAWATOMI INDIANS


                                        By: /s/ John Miller
                                            ------------------------------------
                                            Its Council Chairman


                                        By: /s/ Daniel Rapp
                                            ------------------------------------
                                            Its Secretary


Seen and agreed:

                                        LAKES GAMING AND RESORTS, LLC


                                        By: /s/ Timothy J. Cope
                                            ------------------------------------
                                            Timothy J. Cope
                                            Its President


                                       8

<PAGE>

                                   SCHEDULE A
                     TO ASSIGNMENT AND ASSUMPTION AGREEMENT

1.   Third Amended and Restated Development Agreement

2.   Third Amended and Restated Management Agreement

3.   Third Amended and Restated Lakes Development Note dated as of January 25,
     2006

4.   Third Amended and Restated Transition Loan Note dated as of January 25,
     2006

5.   Third Amended and Restated Non-Gaming Land Acquisition Line of Credit
     Agreement dated as of January 25, 2006

6.   Third Amended and Restated Account Control Agreement dated as of January
     25, 2006

7.   Third Amended and Restated Pledge and Security Agreement dated as of
     January 25, 2006

8.   Guaranty by Pokagon Properties, LLC ("Pokagon Properties") in favor of
     Lakes dated March 9, 2000

9.   Mortgage covering properties in Berrien County, Michigan dated March 9,
     2000 executed by Pokagon Properties in favor of Lakes, as amended

10.  Mortgage covering properties in VanBuren County, Michigan dated March 9,
     2000 executed by Pokagon Properties in favor of Lakes, as amended

11.  Mortgage covering properties in Cass County, Michigan dated September 25,
     2000 executed by Pokagon Properties in favor of Lakes, as amended


                                       9
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.184
<SEQUENCE>18
<FILENAME>c02716exv10w184.txt
<DESCRIPTION>REAFFIRMATION OF GUARANTIES AND MORTGAGES
<TEXT>
<PAGE>
                                                                  EXHIBIT 10.184

                                                               EXECUTION VERSION

                    REAFFIRMATION OF GUARANTIES AND MORTGAGES

     This Reaffirmation is dated as of the 25th day of January 2006, by and
among the Pokagon Properties, LLC, a Delaware limited liability company
("PPLLC") and Filbert Land Development, LLC, an Indiana limited liability
company ("Filbert" and together with PPLLC, collectively the "Band Designees")
and Great Lakes Gaming of Michigan, LLC, a Minnesota limited liability company
("Lakes"):

                                   WITNESSETH:

     WHEREAS, the Band and Lakes Entertainment, Inc., f/k/a Lakes Gaming, Inc.
("Lakes Entertainment") previously entered into a Development Agreement dated as
of July 8, 1999, (as assigned by Lakes Entertainment to Lakes pursuant to that
certain Assignment and Assumption Agreement dated October 16, 2000, as the same
has been or may be amended, by and among the Band, Lakes Entertainment and
Lakes, and amended by a Second Amended and Restated Assignment and Assumption
Agreement of even date hereof ("Assignment Agreement")); and as amended and
restated by that certain First Amended and Restated Development Agreement dated
October 16, 2000 by and between the Band and Lakes, by that certain Second
Amended and Restated Development Agreement dated as of December 22,2004 by and
between the Band and Lakes, and by that certain Third Amended and Restated
Development Agreement dated of even or near date hereof by and between the Band
and Lakes (collectively and as heretofore and hereafter further amended,
substituted, restated or modified, the "Development Agreement"), pursuant to
which the Band has engaged Lakes to, among other things, assist the Band in the
design, development, construction and management of the Facility; and

     WHEREAS, Article 2 of the Development Agreement provides, among other
things, that Lakes shall finance the acquisition of all parcels of land
comprising the Gaming Site and the Non-Gaming Lands through the making of
advances (a) under the Lakes Note for the acquisition of each parcel of land
constituting the Gaming Site (all such advances, whether heretofore or hereafter
made, shall be collectively referred to as the "Gaming Site Advances"), and (b)
under the Non-Gaming Land Acquisition Line of Credit for each parcel of land
constituting the Non-Gaming Lands (all such advances, whether heretofore or
hereafter made, shall be collectively referred to as the "Non-Gaming Land
Advances" and together with all Gaming Site Advances shall be collectively
referred to as the "Advances"); and

     WHEREAS, as further provided in Article 2 of the Development Agreement, all
of the Gaming Site Advances and the Non-Gaming Land Advances are to be secured
by mortgages in favor of Lakes on the related parcels of land constituting the
Gaming Site and the Non-Gaming Lands; and

     WHEREAS, the Band, with the consent of Lakes, has formed and may hereafter
form certain related entities known as "Band Designees", including but not
limited to PPLLC and Filbert, for the purpose of, at Band's option, acquiring
title to all or a portion

<PAGE>

of the Gaming Site and all or a portion of the Non-Gaming Lands; and

     WHEREAS, each of the Advances (to the extent made in connection with any
Band Designee's acquisition of Gaming Site or Non-Gaming Land parcels) will be
made available by the Band to the Band Designee for the purpose of paying all
costs associated with the acquisition of the parcels of land constituting the
Gaming Site and the Non-Gaming Lands; and

     WHEREAS, Lakes has required and will be requiring each Band Designee to
execute and deliver to Lakes certain Band Designee Guaranties and Band Designee
Mortgages (as each of such terms are defined in the Development Agreement) and
amendments thereto from time to time, including without limitation the Band
Designee Guaranties and Band Designee Mortgages described on Exhibit A attached
hereto, in connection with each acquisition of parcels of land related to the
Gaming Site and the Non-Gaming Lands, all as a condition precedent to the making
of such Advances; and

     WHEREAS, in connection with the execution of the Third Amended and Restated
Development Agreement, Lakes requires each of the Band Designees to reaffirm the
Band Designee Guaranties and Band Designee Mortgages and the Band Designees
desire to reaffirm each of the Band Designee Guaranties and Band Designee
Mortgages pursuant to the terms hereof.

     NOW, THEREFORE, for valuable consideration, the receipt of which is hereby
acknowledged, and as an inducement to the Lakes to make the Advances to the Band
and to execute the Third Amended and Restated Development Agreement, each of the
Band Designees agrees as follows:

     1. Recitals True. The above recitals are true.

     2. Definitions. Capitalized terms used but not otherwise defined herein and
defined in the Development Agreement, the Band Designee Guaranties or the Band
Designee Mortgages, as applicable, shall have the same meaning herein as
therein.

     3. Consent and Reaffirmation. Each Band Designee hereby (i) acknowledges
receipt of a copy, and consents to the execution and delivery by the Band, of
the Third Amended and Restated Development Agreement and each of the other
Transaction Documents (as defined in the such Third Amended and Restated
Development Agreement and including, without limitation, each of the documents
and agreements referenced in Section 15.17 thereof), and further consents to
each of the terms and provisions set forth therein, and (ii) represents,
warrants and confirms that each of the Band Designee Guaranties and Band
Designee Mortgages executed by it remains in full force and effect in accordance
with its original terms.

         [The remainder of this page has been intentionally left blank.]


                                        2

<PAGE>

Dated as of January 25, 2006

                                        POKAGON PROPERTIES, LLC, A DELAWARE
                                        LIMITED LIABILITY COMPANY

                                        By: Pokagon Band of Potawatomi Indians

                                        Its: Member


                                        By: /s/ John Miller
                                            ------------------------------------
                                            John Miller
                                        Its: Chairman


                                        And


                                        By: /s/ Daniel Rapp
                                            ------------------------------------
                                            Daniel Rapp
                                        Its: Secretary


                                        FILBERT LAND DEVELOPMENT, LLC,
                                        AN INDIANA LIMITED LIABILITY COMPANY

                                        By: Pokagon Band of Potawatomi Indians

                                        Its: Member


                                        By: /s/ John Miller
                                            ------------------------------------
                                            John Miller
                                        Its: Chairman


                                        And


                                        By: /s/ Daniel Rapp
                                            ------------------------------------
                                            Daniel Rapp
                                        Its: Secretary


                                        3

<PAGE>

                                    EXHIBIT A

               SCHEDULE OF BAND DESIGNEE MORTGAGES AND GUARANTIES

I.   SCHEDULE OF MORTGAGES

     A.   BERRIEN COUNTY, MICHIGAN MORTGAGES:

          1.   Pokagon Properties, LLC executed and delivered to Lakes Gaming,
               Inc. that certain Mortgage dated March 9, 2000 which Mortgage was
               recorded on March 24, 2000 in Liber 2040, Page 1032, Berrien
               County Register of Deeds ("Berrien Mortgage").

          2.   The Berrien Mortgage was amended by that certain Amendment to
               Mortgage dated April 20, 2000 which Amendment was recorded on
               April 28, 2000 in Liber 2047, Page 1205, Berrien County Register
               of Deeds.

          3.   The Berrien Mortgage was further amended by that certain Second
               Amendment to Mortgage dated May 9, 2000 which Second Amendment
               was recorded on May 18, 2000 in Liber 2052, Page 959, Berrien
               County Register of Deeds.

          4.   The Berrien Mortgage was further amended by that certain Third
               Amendment to Mortgage dated June 8, 2000 which Third Amendment
               was recorded on July 11, 2000 in Liber 2063, Page 1512 and Page
               1520, Berrien County Register of Deeds.

     B.   VAN BUREN COUNTY, MICHIGAN MORTGAGES:

          1.   Pokagon Properties, LLC executed and delivered to Lakes Gaming,
               Inc. that certain Mortgage dated March 9, 2000 which Mortgage was
               recorded on March 28, 2000 in Liber 1287, Page 0547, Van Buren
               County Register of Deeds ("Van Buren Mortgage").

          2.   The Van Buren Mortgage was amended by that certain Amendment to
               Mortgage dated July 17, 2000 which Amendment was recorded on
               September 14,2000 in Liber 1314, Page 0854, Van Buren County
               Register of Deeds.

          3.   The Van Buren Mortgage was further amended by that certain Second
               Amendment to Mortgage dated November 14, 2000 by Pokagon
               Properties, LLC and Great Lakes Gaming of Michigan, LLC which
               Amendment was recorded on May 1, 2001 in Book 1330 at Page 960,
               Van Buren County Register of Deeds.

<PAGE>

     C.   CASS COUNTY, MICHIGAN MORTGAGES:

          1.   Pokagon Properties, LLC executed and delivered to Lakes Gaming,
               Inc. that certain Mortgage dated September 25, 2000 which
               Mortgage was recorded on October 18, 2000 in Liber 00747, Page
               0159, Cass County Register of Deeds ("Cass Mortgage").

          2.   The Cass Mortgage was amended by that certain Amendment to
               Mortgage by Pokagon Properties, LLC and Great Lakes Gaming of
               Michigan, LLC dated November 14, 2000 which Amendment was
               recorded on January 8, 2001 in Liber 00754, Page 0511, Cass
               County Register of Deeds.

          3.   The Cass Mortgage was further amended by that certain Second
               Amendment to Mortgage by Pokagon Properties, LLC and Great Lakes
               Gaming of Michigan, LLC dated December 14, 2000 which Amendment
               was recorded on April 30, 2001 in Liber 00766, Page 1137, Cass
               County Register of Deeds.

          4.   The Cass Mortgage was further amended by that certain Third
               Amendment to Mortgage by Pokagon Properties, LLC and Great Lakes
               Gaming of Michigan, LLC dated February 7, 2001 which Amendment
               was recorded on April 30, 2001 in Liber 00766, Page 1172, Cass
               County Register of Deeds.

          5.   The Cass Mortgage was further amended by that certain Fourth
               Amendment to Mortgage by Pokagon Properties, LLC and Great Lakes
               Gaming of Michigan, LLC dated April 30, 2001 which Amendment was
               recorded on June 8, 2001 in Liber 00772, Page 1074, Cass County
               Register of Deeds.

          6.   A Partial Discharge of the Cass Mortgage, dated October 7, 2003,
               was executed by Great Lakes Gaming of Michigan, LLC, which
               Partial Discharge of Mortgage was recorded on December 29, 2003,
               in Liber 00974, pp. 0907 and 0908, Cass County Register of Deeds.

II.  BAND DESIGNEE GUARANTIES

     A.   FILBERT LAND DEVELOPMENT, LLC ("FILBERT")

          1.   Filbert executed and delivered to Great Lakes Gaming of Michigan,
               LLC that certain Guaranty dated February 28, 2001.

<PAGE>

     B.   POKAGON PROPERTIES, LLC ("POKAGON")

          1.   Pokagon executed and delivered to Lakes Gaming, Inc. that certain
               Guaranty dated March 9, 2000 ("Pokagon Guaranty").

          2.   Lakes Gaming, Inc.'s rights and obligations under the Pokagon
               Guaranty were assigned to Great Lakes of Michigan, LLC pursuant
               to that certain Assignment and Assumption Agreement dated October
               16, 2000 by and among Great Lakes of Michigan, LLC, Lakes Gaming,
               Inc. and the Pokagon Band of Potawatomi Indians, as amended by a
               First Amendment to Assignment and Assumption Agreement dated as
               of December 22, 2004 and a Second Amended and Restated Assignment
               and Assumption Agreement dated as of January 25, 2006.

**   Lakes Gaming, Inc. assigned its right, title and interest in these
     Mortgages to Great Lakes of Michigan, LLC by Assignment of Mortgage
     ("Assignment") dated October 16, 2000 which Assignment was recorded January
     17, 2001 in Book 1324, Page 529, Van Buren County Register of Deeds and
     recorded February 1, 2001 in Liber 2106, Page 21, Berrien County Register
     of Deeds and recorded January 5, 2001 in Liber 00754, Page 0186, Cass
     County Register of Deeds. On November 27, 2000, Great Lakes of Michigan,
     LLC changed its name to Great Lakes Gaming of Michigan, LLC.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>19
<FILENAME>c02716exv21.txt
<DESCRIPTION>SUBSIDIARIES
<TEXT>
<PAGE>
                                                                      EXHIBIT 21


                            LAKES ENTERTAINMENT, INC.
                              LIST OF SUBSIDIARIES



      1. Grand Casinos Nevada I, Inc.
      2. Mille Lacs Gaming, LLC
      3. Grand Casinos of Louisiana, LLC -- Tunica-Biloxi
      4. Grand Casinos of Louisiana, LLC -- Coushatta
      5. Grand Casinos Pechanga, Inc.
      6. Grand Casinos Washington, Inc.
      7. Grand Media & Electronics Distributing, Inc.
      8. Grand Casinos & Resorts of Canada, Inc.
      9. Great Lakes Gaming of Michigan, LLC
     10. Mille Lacs Gaming, LLP
     11. Lakes Jamul, Inc.
     12. Lakes Kean Argovitz Resorts -- California, LLC
     13. Lakes Shingle Springs, Inc.
     14. Lakes KAR -- Shingle Springs, LLC
     15. Lakes Gaming & Resorts, LLC
     16. RFC Acquisition Co.
     17. Lakes Game Development, LLC
     18. Lakes Nipmuc, LLC
     19. Metroplex -- Lakes, LLC
     20. Lakes California Land Development, Inc.
     21. 2022 Ranch, LLC
     22. Lakes Cloverdale, LLC
     23. Pacific Coast Gaming -- Santa Rosa, LLC
     24. Borders Land Company, LLC
     25. Lakes Poker Tour, LLC
     26. WPT Enterprises, Inc.
     27. Lakes Kickapoo Consulting, LLC
     28. Lakes Kickapoo Management, LLC
     29. Lakes Iowa Consulting, LLC
     30. Lakes Iowa Management, LLC
     31. Lakes Pawnee Consulting, LLC
     32. Lakes Pawnee Management, LLC
     33. Lakes Gaming Mississippi, LLC




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>20
<FILENAME>c02716exv23w1.txt
<DESCRIPTION>CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
<TEXT>
<PAGE>

                                                                    EXHIBIT 23.1




            CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




Board of Directors
Lakes Entertainment, Inc.
Minnetonka, Minnesota

We consent to the incorporation by reference in the registration statements of
Lakes Entertainment, Inc. on Forms S-8 (File Nos. 333-77247, 333-77249,
333-77591 and 333-116674) of our reports dated February 17, 2006, included in
this Annual Report on Form 10-K, on the consolidated financial statements of
Lakes Entertainment, Inc. and Subsidiaries as of and for the year ended, and on
management's assessment of and on the effectiveness of internal control over
financial reporting as of, January 1, 2006.


/s/ Piercy Bowler Taylor & Kern


Piercy, Bowler, Taylor & Kern, Certified Public Accountants
and Business Advisors a Professional Corporation
Las Vegas, Nevada


March 3, 2006



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.2
<SEQUENCE>21
<FILENAME>c02716exv23w2.txt
<DESCRIPTION>CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
<TEXT>
<PAGE>


                                                                    EXHIBIT 23.2


CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement File Nos.
333-77247, 333-77249, 333-77591 on Form S-8 of our report dated November 30,
2005 relating to the consolidated financial statements of Lakes Entertainment,
Inc. as of January 2, 2005 and for each of the two years in the period then
ended, appearing in this Annual Report on Form 10-K of Lakes Entertainment, Inc.
for the year ended January 1, 2006.


Minneapolis, Minnesota
March 3, 2006







</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>22
<FILENAME>c02716exv31w1.htm
<DESCRIPTION>CERTIFICATION OF CEO UNDER SECTION 302
<TEXT>
<HTML>
<HEAD>
<TITLE>exv31w1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>CERTIFICATIONS</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
I, Lyle Berman, certify that:
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.&nbsp;I have reviewed this annual report on
Form&nbsp;<FONT style="white-space: nowrap">10-K</FONT> of Lakes
Entertainment, Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2.&nbsp;Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3.&nbsp;Based on my knowledge, the financial statements, and
other financial information included in this report, fairly
present in all material respects the financial condition,
results of operations and cash flows of the registrant as of,
and for, the periods presented in this report;
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
4.&nbsp;The registrant&#146;s other certifying officer and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act
Rules&nbsp;<FONT style="white-space: nowrap">13a-15(e)</FONT>
and <FONT style="white-space: nowrap">15d-15(e))</FONT> and
internal control over financial reporting (as defined in
Exchange Act
Rules&nbsp;<FONT style="white-space: nowrap">13a-15(f)</FONT>
and <FONT style="white-space: nowrap">15d-15(f))</FONT> for the
registrant and have:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    a)&nbsp;designed such disclosure controls and procedures or
    caused such disclosure controls and procedures to be designed
    under our supervision to ensure that material information
    relating to the registrant, including its consolidated
    subsidiaries, is made known to us by others within those
    entities, particularly during the period in which this report is
    being prepared;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    b)&nbsp;designed such internal control over financial reporting,
    or caused such internal control over financial reporting to be
    designed under our supervision, to provide reasonable assurance
    regarding the reliability of financial reporting and the
    preparation of financial statements for external purposes in
    accordance with generally accepted accounting principles;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    c)&nbsp;evaluated the effectiveness of the registrant&#146;s
    disclosure controls and procedures and presented in this report
    our conclusions about the effectiveness of the disclosure
    controls and procedures, as of the end of the period covered by
    this report based on such evaluation;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    d)&nbsp;disclosed in this report any change in the
    registrant&#146;s internal control of financial reporting that
    occurred during the registrant&#146;s fourth quarter that has
    materially affected, or is reasonably likely to materially
    affect, the registrant&#146;s internal control over financial
    reporting;&nbsp;and</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
5.&nbsp;The registrant&#146;s other certifying officers and I
have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant&#146;s
auditors and the audit committee of registrant&#146;s board of
directors (or persons performing the equivalent functions):
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    a)&nbsp;all significant deficiencies and material weaknesses in
    the design or operation of internal control over financial
    reporting which are reasonably likely to adversely affect the
    registrant&#146;s ability to record, process, summarize and
    report financial information;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    b)&nbsp;any fraud, whether or not material, that involves
    management or other employees who have a significant role in the
    registrant&#146;s internal control over financial reporting.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 72pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="40%"></TD>
    <TD width="2%"></TD>
    <TD width="58%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>By:&nbsp;</TD>
    <TD align="left">
    /s/ Lyle Berman</TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 3pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <DIV style="width: 47%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">

</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Lyle Berman</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Chief Executive Officer</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
March&nbsp;8, 2006
</DIV>

<P align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>23
<FILENAME>c02716exv31w2.htm
<DESCRIPTION>CERTIFICATION OF CFO UNDER SECTION 302
<TEXT>
<HTML>
<HEAD>
<TITLE>exv31w2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>CERTIFICATIONS</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
I, Timothy J. Cope, certify that:
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.&nbsp;I have reviewed this annual report on
Form&nbsp;<FONT style="white-space: nowrap">10-K</FONT> of Lakes
Entertainment, Inc.;
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2.&nbsp;Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a material
fact necessary to make the statement made, in light of the
circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3.&nbsp;Based on my knowledge, the financial statements, and
other financial information included in this annual report,
fairly present in all material respects the financial condition,
results of operations and cash flows of the registrant as of,
and for, the periods presented in this report;
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
4.&nbsp;The registrant&#146;s other certifying officer and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act
Rules&nbsp;<FONT style="white-space: nowrap">13a-15(e)</FONT>
and <FONT style="white-space: nowrap">15d-15(e))</FONT> and
internal control over financial reporting (as defined in
Exchange Act
Rules&nbsp;<FONT style="white-space: nowrap">13a-15(f)</FONT>
and <FONT style="white-space: nowrap">15d-15(f))</FONT> for the
registrant and have:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    a)&nbsp;designed such disclosure controls and procedures, or
    caused such disclosure controls and procedures to be designed
    under our supervision, to ensure that material information
    relating to the registrant, including its consolidated
    subsidiaries, is made known to us by others within those
    entities, particularly during the period in which this report is
    being prepared;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    b)&nbsp;designed such internal control over financial reporting,
    or caused such internal control over financial reporting to be
    designed under our supervision, to provide reasonable assurance
    regarding the reliability of financial reporting and the
    preparation of financial statements for external purposes in
    accordance with generally accepted accounting principles;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    c)&nbsp;evaluated the effectiveness of the registrant&#146;s
    disclosure controls and procedures and presented in this report
    our conclusions about the effectiveness of the disclosure
    controls and procedures as of the end of the period covered by
    this report based on such evaluation;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    d)&nbsp;disclosed in this report any change in the
    registrant&#146;s internal control of financial reporting that
    occurred during the registrant&#146;s fourth quarter that has
    materially affected, or is reasonably likely to materially
    affect, the registrant&#146;s internal control over financial
    reporting;&nbsp;and</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
5.&nbsp;The registrant&#146;s other certifying officers and I
have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant&#146;s
auditors and the audit committee of registrant&#146;s board of
directors (or persons performing the equivalent functions):
</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    a)&nbsp;all significant deficiencies and material weaknesses in
    the design or operation of internal control over financial
    reporting which are reasonably likely to adversely affect the
    registrant&#146;s ability to record, process, summarize and
    report financial information;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    b)&nbsp;any fraud, whether or not material, that involves
    management or other employees who have a significant role in the
    registrant&#146;s internal control over financial reporting.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 72pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="40%"></TD>
    <TD width="2%"></TD>
    <TD width="58%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>By:&nbsp;</TD>
    <TD align="left">
    /s/ Timothy J. Cope</TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 3pt;color: #000000; background: #ffffff;">

<TR>
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</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <DIV style="width: 47%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">

</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Timothy J. Cope</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Chief Financial Officer</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
March&nbsp;8, 2006
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<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>24
<FILENAME>c02716exv32w1.htm
<DESCRIPTION>CERTIFICATION OF CEO & CFO UNDER SECTION 906
<TEXT>
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<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>CERTIFICATION PURSUANT TO</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>18&nbsp;U.S.C. &#167;1350,</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>AS ADOPTED PURSUANT TO</B>
</DIV>

<DIV align="center" style="font-size: 10pt;color: #000000; background: #ffffff;">
<B>SECTION&nbsp;906 OF THE SARBANES-OXLEY ACT OF 2002</B>
</DIV>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In connection with the Annual Report of Lakes Entertainment,
Inc. (the &#147;Company&#148;) on
Form&nbsp;<FONT style="white-space: nowrap">10-K</FONT> for the
period ended January&nbsp;1, 2006 as filed with the Securities
and Exchange Commission on the date hereof (the
&#147;Report&#148;),&nbsp;I, Lyle Berman, Chief Executive
Officer of the Company, and Timothy J. Cope, Chief Financial
Officer of the Company, certify, pursuant to 18&nbsp;U.S.C.
&#167;1350, as adopted pursuant to Section&nbsp;906 of the
Sarbanes-Oxley Act of 2002, that:
</DIV>

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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    1.&nbsp;The Report fully complies with the requirements of
    Section&nbsp;13(a) or 15(d) of the Securities Exchange Act of
    1934;&nbsp;and</TD>
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<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
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<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    2.&nbsp;The information contained in the Report fairly presents,
    in all material respects, the financial condition and results of
    operations of the Company.</TD>
</TR>

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<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD>&nbsp;</TD>
    <TD align="left">
    /s/ Lyle Berman</TD>
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<TR valign="top"  style="font-size: 3pt;color: #000000; background: #ffffff;">
    <TD>&nbsp;</TD>
    <TD align="left">
    <DIV style="border-top: 1pt solid black; font-size: 1pt; margin-top: 2pt" align="left">&nbsp;</DIV></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">

</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Lyle Berman</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Chief Executive Officer</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
March&nbsp;8, 2006
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    /s/ Timothy J. Cope</TD>
</TR>

<TR valign="top"  style="font-size: 3pt;color: #000000; background: #ffffff;">
    <TD>&nbsp;</TD>
    <TD align="left">
    <DIV style="border-top: 1pt solid black; font-size: 1pt; margin-top: 2pt" align="left">&nbsp;</DIV></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff;">

</DIV>

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<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Timothy J. Cope</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    Chief Financial Officer</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
March&nbsp;8, 2006
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