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<SEC-DOCUMENT>0000950137-08-000570.txt : 20080310
<SEC-HEADER>0000950137-08-000570.hdr.sgml : 20080310
<ACCEPTANCE-DATETIME>20080117113245
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000950137-08-000570
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20080117

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:		CORRESP

	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>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
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<HTML>
<HEAD>
<TITLE>corresp</TITLE>
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<BODY bgcolor="#FFFFFF">
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Mr.&nbsp;Joseph A. Foti &#151; Senior Assistant Chief Accountant<BR>
Securities and Exchange Commission<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Page 1

</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Confidential Treatment Under Rule&nbsp;83 is<BR>
Requested By Lakes Entertainment, Inc</B>.<BR>
<B>for Response to Comment Nos. 2 and 12</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">January&nbsp;17, 2008
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Via EDGAR &#038; Fax</U>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Mr.&nbsp;Joseph A. Foti<BR>
Senior Assistant Chief Accountant<BR>
United States Securities and Exchange<BR>
100 F. Street, N.E.<BR>
Washington, D.C. 20549

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="90%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Re:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>Lakes Entertainment, Inc.</B></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>Form&nbsp;10-K for the year ended December&nbsp;31, 2006</B></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>Filed October&nbsp;19, 2007</B></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>Fife No.&nbsp;000-24993</B></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Dear Mr.&nbsp;Foti:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This letter will respond to your comment letter dated December&nbsp;18, 2007 with respect to
Lakes&#146; Annual Report on Form 10-K as amended for the year ended December&nbsp;31, 2006 (the
&#147;Form 10-K&#148;). To facilitate your review, we have included in this letter your original
comments (in bold) followed by our responses, which have been numbered to correspond to
your letter.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Form&nbsp;10-K for the year ended December&nbsp;31, 2006 </B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Item&nbsp;6. Selected Financial Data</B></U>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>1.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Please revise to either disclose or cross-reference to a discussion
thereof, any factors that materially affect the comparability of the information
provided in your Selected Financial Data. For example, you should describe or
cross-reference to a discussion of (i)&nbsp;the $11,250 legal settlement received in
fiscal 2004, (ii)&nbsp;the $10,216 gain on sale of the PokerTek investment in fiscal
2006, (iii)&nbsp;the loss on extinguishment of debt and other interest expenses in 2006
and (iv)&nbsp;any other significant or unusual items which may he helpful to an
investor&#146;s understanding of the selected financial data. Refer to the requirements
of Item&nbsp;301 of Regulation&nbsp;S-K.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In future filings, we will add disclosure of factors that materially affect the
comparability of the information provided in our Selected Financial Data.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Mr.&nbsp;Joseph A. Foti &#151; Senior Assistant Chief Accountant<BR>
Securities and Exchange Commission<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Page 2

</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Confidential Treatment Under Rule&nbsp;83 is<BR>
Requested By Lakes Entertainment, Inc</B>.<BR>
<B>for Response to Comment Nos. 2 and 12</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Consolidated Financial Statements</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Consolidated Statements of Shareholders&#146; Equity</B></U>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>2.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>We note for the years ended January&nbsp;1, 2006 and December&nbsp;31, 2006 you
have recorded an amount of additional paid in capital for the &#147;net change in
equity related to minority interest&#148;. Please explain to us the nature of these
amounts and how the amounts were calculated or determined. Also, please explain
to us the nature of the &#147;expiration of repurchase commitment of subsidiary common
shares&#148; recorded in additional paid in capital for the year ended January&nbsp;1, 2006.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>Confidential Treatment Request by Lakes Entertainment, Inc., A.</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following is a description of the expiration of repurchase commitment of subsidiary
common shares recorded in additional paid-in capital for the year ended January&nbsp;1, 2006.
In 2004, WPTE inadvertently violated certain securities laws in connection with its
initial public offering that could have required WPTE to repurchase a
certain number of shares sold in the offering. The proceeds from the sale of these shares were reported on
the balance sheet as a liability at approximately $0.6&nbsp;million as of January&nbsp;2, 2005.
However, in 2005, WPTE&#146;s repurchase obligation with respect to such shares expired, and
these proceeds were transferred to equity, resulting in the &#147;expiration of repurchase
commitment of subsidiary common shares&#148; being recorded in additional paid-in capital for
the year ended January&nbsp;1, 2006. Please note that this was disclosed in Note 1 to the
Company&#146;s Consolidated Financial Statements for the 2004 and 2005 fiscal years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Note 2. Summary of Significant Accounting Policies</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Revenue Recognition, page 73</B></U>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>3.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>We note from your disclosure on page 34 of MD&#038;A that WPTE began to
recognize advertising/sponsorship revenue during fiscal 2006. Please tell us, and
disclose in the notes to the financial statements in future filings, your
accounting policy for recognizing revenue on this advertising/sponsorship revenue.
If revenue related to advertising/sponsorship is not material to your financial
statements, then specifically state so.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2006 WPTE recognized sponsorship revenue of approximately $1.4&nbsp;million. In our
opinion, this revenue was not material to our financial statements. WPTE&#146;s accounting
policy for recognizing sponsorship revenue is to recognize these revenues as the episodes
that feature the sponsor are aired, as disclosed in Item&nbsp;7, Management&#146;s Discussion and
Analysis of Financial Condition and Results of Operations of the Form&nbsp;10-K. No
advertising revenues were recognized in 2006. If revenue from either sponsorship or
advertising becomes material in the future, we will disclose the related revenue
recognition policy in the notes to the financial statements of future filings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Note 3. Short-term Investments, page 79</B></U>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>4.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>We note that you have included disclosure of the cost, fair value and
gross</B>
</TD>
</TR>
</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

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


</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Mr.&nbsp;Joseph A. Foti &#151; Senior Assistant Chief Accountant<BR>
Securities and Exchange Commission<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Page 3

</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Confidential Treatment Under Rule&nbsp;83 is<BR>
Requested By Lakes Entertainment, Inc</B>.<BR>
<B>for Response to Comment Nos. 2 and 12</B>
</DIV>


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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>unrealized losses of your short-term investments as of December&nbsp;31, 2006 and
January&nbsp;1, 2006. Please revise future filings to include the contractual
maturities of the securities as of the date of the most recent balance sheet
presented and the amount of gains or losses reclassified out of accumulated other
comprehensive income into earnings. See paragraphs 20-21 of SFAS No.&nbsp;115.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In future filings, we will disclose the contractual maturities of the securities as of the
date of the most recent balance sheet presented and the amount of realized gains or losses
reclassified out of accumulated other comprehensive income into earnings, if any.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Note 5. Long &#151; Term Assets Related to Indian Casino Projects &#151; Notes Receivable,
page 80</B></U>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>5.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>We note your disclosure that on September&nbsp;28, 2006, the Shingle Springs
Tribe and El Dorado County entered into a settlement agreement that requires the
Shingle Springs Tribe to make voluntary mitigation payments to construct high
occupancy vehicle (&#147;HOV&#148;) lanes on Highway 50, make payments for law enforcement
services, collect and pay sales taxes on food and beverage revenues to El Dorado
County and contribute to the El Dorado County general fund. Please tell us if this
settlement will affect the recoverability of the amounts recorded as notes
receivable that are payable by Shingle Springs to Lakes, or if it will affect the
management fees that will be earned by Lakes once the casino is open.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The settlement agreement between the Shingle Springs Tribe and El Dorado County has been
contemplated in all forecasts and fair value estimates related to this project. The
settlement payments will be included as deductions from operational results of the casino
facility after it is open and will affect Lakes&#146; management fees earned, which will be
based upon these operational results. However, under the casino&#146;s projected business
model, which contemplates this settlement and includes the related payments, the
recoverability of the notes receivable from the Shingle Springs Tribe will not be
affected. This forecasted business model for the casino is corroborated by third-party
market study information obtained for the Shingle Springs project.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Note 11. Stock Options, page 90</B></U>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>6.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Please revise future filings to ensure your disclosures related to the
stock option plans include disclosure of the weighted-average grant-date fair
value of options granted during the year, for each year in which an income
statement is presented. See paragraph A</B><B>240(c)</B><B> of SFAS No.&nbsp;123R.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We will include disclosure of the weighted-average grant-date fair value of options
granted during the year, for each year in which an income statement is presented in future
filings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Note 13. Commitments and Contingencies page 93</B></U>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>7.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>We note from your disclosures in Note 13 and on page 40 of MD&#038;A
that you have an operating lease for an airplane and WPTE has an operating
lease for office space that appears to have escalating payments. Please tell
us</B>
</TD>
</TR>
</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

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


</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Mr.&nbsp;Joseph A. Foti &#151; Senior Assistant Chief Accountant<BR>
Securities and Exchange Commission<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Page 4

</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Confidential Treatment Under Rule&nbsp;83 is<BR>
Requested By Lakes Entertainment, Inc</B>.<BR>
<B>for Response to Comment Nos. 2 and 12</B>
</DIV>


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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>if you record the lease expense for these obligations on a straight-line
basis in accordance with SFAS 13. If not, please tell us why you believe your
accounting for these leases is appropriate.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We do record the lease expense for our operating leases on a straight-line basis
in accordance with SFAS 13.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Note 16. Segment Information, page 97</B></U>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>8.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>We note from your disclosures throughout the filing that you
recognize revenue on international license agreements and product sales.
Please revise future filings to include disclosure of revenues from external
customers (1)&nbsp;attributed to your country of domicile and (2)&nbsp;attributed to
all foreign countries in total from which you derive revenues. See
paragraph 38 of SFAS No.&nbsp;131.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We will include disclosure of revenues from external customers (1)&nbsp;attributed to
our country of domicile and (2)&nbsp;attributed to all foreign countries in total from
which we derive revenues in future filings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Note 17. Selected Quarterly Financial Information (Unaudited) (Restated)</B></U>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>9.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Please revise future filings to discuss the nature of any unusual
or infrequent items that impacted your quarterly results of operations for
the various periods presented. Refer to the requirement outlined in Item
3</B><B>02(a)</B><B> (3)&nbsp;of Regulation&nbsp;S-K.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We will include discussion of the nature of any material unusual or infrequent
items that impacted our quarterly results of operations for the various interim
periods presented in future annual filings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Item&nbsp;9A. Controls and Procedures, page, 101</B></U>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>10.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>We note your conclusion that disclosure controls and procedures
were effective at the reasonable assurance level as of the end of the period
covered by the report notwithstanding, the error requiring the restatement.
In light of the errors that caused the restatement, and the definition of
disclosure controls, which includes controls and procedures designed to
ensure that information required to be disclosed is recorded, processed,
summarized and reported, we believe that it would be unusual for your
disclosure controls and procedures to have been effective during the period.
Please explain to us why you believe it was appropriate to conclude that
disclosure controls and procedures were effective as of the period covered
by the </B><B>Form 10-K</B><B>.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Management has considered the circumstances surrounding the restatement of our
financial statements for the three months ended April&nbsp;1, 2007, for the six months
ended July&nbsp;1, 2007, for the year ended December&nbsp;31, 2006, and quarterly financial
information for each of the quarters in the
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Mr.&nbsp;Joseph A. Foti &#151; Senior Assistant Chief Accountant<BR>
Securities and Exchange Commission<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Page 5

</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Confidential Treatment Under Rule&nbsp;83 is<BR>
Requested By Lakes Entertainment, Inc</B>.<BR>
<B>for Response to Comment Nos. 2 and 12</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">year ended December&nbsp;31, 2006, as disclosed in Note 2 to the Consolidated
Financial Statements included in the amendments to our 2006 Annual Report on Form
10-K and the first and second quarter 2007 Forms 10-Q. Based on the foregoing,
our Chief Executive Officer and our Chief Financial Officer reviewed and
re-evaluated the effectiveness of our disclosure controls and procedures, as
defined in Exchange Act Rules&nbsp;13a-15(e) and 15d-15(e), as of the end of each of
the periods covered by those reports to ensure that information required to be
disclosed by us in the reports that we file or submit under the Securities
Exchange Act of 1934 (the &#147;SEC filings&#148;) is, among other things, recorded,
processed, summarized and reported within the time periods specified in the rules
and forms of the Securities and Exchange Commission (the &#147;Commission&#148;). Our
Chief Executive Officer and our Chief Financial Officer determined that our
disclosure controls and procedures were effective at the reasonable assurance
level as of the end of the period covered by the 2006 Annual Report on Form 10-K,
notwithstanding the error requiring this restatement. This was based on their
conclusion that the error was not indicative of inadequate disclosure controls
and procedures. The basis for that conclusion is described further below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At the time of the original warrant value classification in 2006, and
subsequently, we had a process in place to timely evaluate and determine the
accounting and disclosure treatment for new transactions prior to reporting those
transactions in our SEC filings. We believe this process was and is reasonable.
This process was followed for the warrant classification transaction and was
comprised of the following steps:
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>At the time the warrants were issued, which was approximately twelve
weeks prior to the initial SEC filing deadline, the warrant issuance and
related financing facility were announced to the public via press
release. Also at the time the warrants were issued, the background
related to the warrant transaction was documented by internal accounting
and financial reporting personnel.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Over the next few weeks, appropriate accounting treatment was
researched by these personnel using various resources including our
online subscription to a comprehensive library of authoritative
financial reporting and assurance literature. After evaluation of this
research, this accounting treatment was concluded upon by our Chief
Financial Officer and Vice President &#151; Finance.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>This conclusion and supporting documentation was provided to, and
reviewed by, our audit committee, our independent registered public
accounting firm as well as that firm&#146;s external consultant (who has
Commission expertise) in advance of the SEC filing deadline.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Both our independent registered public accounting firm and the
independent consultant agreed with our accounting treatment for the
warrant transaction, and this treatment was reflected in our timely
filed SEC reports, including the 2006 Annual Report on Form 10-K.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We believe that the fact that the warrant accounting reflected in our initial SEC
filings was erroneous was a function of the inherent complexity of the applicable
accounting literature, and was not the result of a weakness in our disclosure
controls. Because our procedures require us to review, research and evaluate
accounting treatments for new transactions and provide documentation for our
conclusions to our independent registered public accounting firm for concurrence
well in advance of SEC filing deadlines, we believe that we have a process that
has adequate safeguards to reduce, though not eliminate, the risk of accounting
errors, and which are designed to provide reasonable assurance that the
objectives of disclosure controls and procedures are met. Therefore, we believe
there was a reasonable basis for concluding that we did have disclosure controls
and procedures in place at the reasonable assurance level as of the end of the
period covered by our 2006 Annual
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Mr.&nbsp;Joseph A. Foti &#151; Senior Assistant Chief Accountant<BR>
Securities and Exchange Commission<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Page 6

</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Confidential Treatment Under Rule&nbsp;83 is<BR>
Requested By Lakes Entertainment, Inc</B>.<BR>
<B>for Response to Comment Nos. 2 and 12</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Report on Form 10-K that were designed to ensure that information required to be
disclosed in our SEC filings were, among other things, accumulated and
communicated to management, including our principal executive and financial
officers, as appropriate to allow timely decisions regarding required disclosure
therein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U> <B>Form&nbsp;10-Q for the period ended September&nbsp;30, 2006 Note </B>1.</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Note &#151; we believe that the following comments relate to our 10-Q for the period ended
September&nbsp;30, 2007 rather than 2006 as noted above.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Basis of Presentation</B></U>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>11.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>We note your disclosure that WPTE has reclassified $7&nbsp;million of
investments in marketable securities that were previously reported
erroneously as current assets to non-current assets as of December&nbsp;31, 2006.
Although these changes in the consolidated balance sheet may be
understandable to a reader of your consolidated financial statements, please
note that it is not appropriate to categorize the change as a
reclassification if previous items classified in current assets did not meet
its definition in accordance with Chapter&nbsp;3A of ARB No.&nbsp;43, as the assets
were not reasonably expected to be realized in cash or sold or consumed
during the normal operating cycle of the business. As such, the revisions
from an unacceptable (not an alternative acceptable) GAAP presentation
represents a correction of an accounting error that would require
restatement, and not solely a reclassification, of amounts in the
consolidated financial statements in accordance with the guidance in
paragraph 26 of SFAS No.&nbsp;154 and the Statement of Auditing Standards
(Section&nbsp;420). Please confirm your understanding and compliance with such
guidance in future accounting matters of a similar nature.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We believed that our treatment of the reclassification of WPTE&#146;s investments in
marketable securities from current to non-current assets as of December&nbsp;31, 2006,
was consistent with the guidance in SFAS 154 and AU Section&nbsp;420. However, we
understand the Staff&#146;s interpretation of such guidance and we confirm that we
will comply with such interpretation in future accounting matters of a similar
nature.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Note 3. Intangible Assets Related to Indian Casino Projects and Related
Obligations</B></U>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>12.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>We note your disclosure that the opening of the Four Winds Casino
Resort triggered obligations for Lakes to pay two unrelated third parties
amounts related to the acquisition of the management contract with the
Pokagon Band. Please explain to us why you believe it was appropriate to
record the fair value of this obligation as an intangible asset. As part of
your response, please discuss the nature of this obligation and how the
amount was initially determined or calculated.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Confidential Treatment Request by Lakes Entertainment, Inc., B. </U>
</DIV>
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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


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



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Mr.&nbsp;Joseph A. Foti &#151; Senior Assistant Chief Accountant<BR>
Securities and Exchange Commission<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Page 7

</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Confidential Treatment Under Rule&nbsp;83 is<BR>
Requested By Lakes Entertainment, Inc</B>.<BR>
<B>for Response to Comment Nos. 2 and 12</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Note 5. Stock Warrant</B></U>
</DIV>

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

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>13.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>We note your disclosure that as a result of the reduction in
exercise price of the warrant, you recognized a stock warrant inducement
discount calculated using the Black-Scholes pricing model. In future
filings, please disclose the actual assumptions used in the valuation in the
notes to the financial statements.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We will disclose the principal assumptions used in the valuation of the stock
warrant inducement discount, in future filings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We acknowledge that we are responsible for the adequacy and accuracy of the disclosure in the
filing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We acknowledge that the staff comments or changes to disclosure in response to staff comments do
not foreclose the Commission from taking any action with respect to the filing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We acknowledge that the company may not assert staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities laws of the United States.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Upon review of this response letter, if you have any additional questions or comments concerning
Lakes or the Form 10-K, or if you wish to discuss any of the responses, please do not hesitate to
contact me at (952)449-7030.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Very Truly Yours,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 24pt">/s/&nbsp;Timothy
J. Cope<BR>&nbsp;<BR>
Timothy J. Cope
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">cc:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Lisa Bushland</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Jean Davis</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Tom Donahue</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">L.Ralph Piercy</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Damon Schramm</TD>
</TR>
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</TABLE>
</DIV>



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