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Note 4. Investment in Evitts Resort, LLC and Acquisition of Rocky Gap Lodge & Golf Resort
 3 Months Ended
Jul. 01, 2012
Business Combination Disclosure [Text Block]
4.  Investment in Evitts Resort, LLC and Acquisition of Rocky Gap Lodge & Golf Resort

In September 2011, Lakes entered into a joint venture with Addy Entertainment, LLC (“Addy”) to form Evitts Resort, LLC (“Evitts”). In April 2012, a video lottery operation license (“License”) for the Rocky Gap Lodge & Golf Resort in Allegany County, Maryland (the “Resort”) was awarded to Evitts by the State of Maryland Video Lottery Facility Location Commission (the “Commission”).  In May 2012, Lakes paid Addy $0.6 million for its ownership interest in Evitts, giving Lakes full ownership of Evitts.  Total assets related to Evitts were approximately $2.1 million and $2.3 million as of July 1, 2012 and January 1, 2012, respectively, which consisted primarily of a $2.1 million license fee deposit paid by Evitts to the Commission during the third quarter of 2011.  Included in impairments and other losses during the three months ended July 1, 2012 were $0.6 million related to costs associated with development plans for the Resort which were subsequently revised.

On August 3, 2012, Evitts acquired the assets of the Resort pursuant to an asset purchase agreement (the “Purchase Agreement”) for $6.8 million. As provided in the Purchase Agreement, Lakes acquired substantially all of the assets used in the Resort’s business, which is primarily the operation of a AAA Four Diamond Award® winning resort and includes a 215-room hotel, convention center, spa, two restaurants and the only Jack Nicklaus signature golf course in Maryland. This acquisition is consistent with Lakes’ strategy of developing, operating, and owning or managing casino resort properties. In connection with the closing of the acquisition of the Resort, Evitts entered into a 40 year operating ground lease with the Maryland Department of Natural Resources for approximately 268 acres in the Rocky Gap State Park on which the Resort is situated.

The Company plans to renovate the existing facilities to convert the approximately 24,000 square feet of convention and meeting space into a gaming facility that will feature a minimum of 500 video lottery terminals, a bar and a food outlet.  The total cost of the project is currently expected to be between $25 million and $30 million.  Lakes currently plans to fund the entire cost of the project with Company cash, but may obtain third-party financing for a portion of the project costs.

The acquisition will be accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. Under the acquisition method of accounting, the total purchase price is allocated to the net tangible and intangible assets of the Resort acquired in connection with the acquisition, based on their estimated fair values. The Company has not included all of the required disclosures related to the third quarter 2012 acquisition of the assets of the Resort as it was not practical to do so given the timing of the transaction and the filing date of this Quarterly Report on Form 10-Q. As a result, the required disclosures will be included in the footnotes filed with the Company’s Form 10-Q for the period ending September 30, 2012.