Entertainment Inc

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International Guild of Hospitality & Restaurant Managers

Entertainment Inc (NasdaqNM:LACO)

130 Cheshire Lane
Minnetonka, MN 55305

Phone: (952) 449-9092
Fax: (952) 449-9353
Employees (last reported count): 30

Lakes Entertainment, Inc. (Lakes), formerly Lakes Gaming, Inc., operates the Indian casino management business and holds various other assets previously owned by Grand Casinos. Lakes' main business is the development, construction and management of casinos and related hotel and entertainment facilities in emerging and established gaming jurisdictions. During 2001, Lakes managed the largest casino resort in Louisiana and has entered into development and management agreements with four separate tribes for four new casino operations: one in Michigan, two in California and one with the Nipmuc Nation on the east coast. The Company also has agreements for the development of a casino on Indian owned land in California through a joint venture.

Lakes' historical revenues have been derived almost exclusively from management fees. During 2001, Lakes managed a land-based, Indian-owned casino, Grand Casino Coushatta, in Kinder, Louisiana (Grand Casino Coushatta). Pursuant to the Coushatta management contract, Lakes received a fee based on the net distributable profits generated by Grand Casino Coushatta. The management contract expired January 16, 2002, and will not be renewed. This non-renewal will result in the loss of revenues to the Company derived from such contract.

The Company also managed a second land-based, Indian-owned casino in Marksville, Louisiana (Grand Casino Avoyelles). On March 31, 2000, the Company reached an agreement with the tribe for the early buyout of the management contract for Grand Casino Avoyelles, which was scheduled to expire on June 3, 2001. The early buyout of the contract was provided for in the original seven-year management agreement and, under the agreement, Lakes was compensated for the management fees the Company would have received had it managed Grand Casino Avoyelles through the original contract expiration date of June 3, 2001.

Partnership to Develop and Manage Casino Near San Diego, California

On May 12, 1999, the Company announced that it would form a partnership for the purpose of developing a gaming facility on Indian-owned land near San Diego, California. Under the agreement, Lakes has formed a limited liability company with Kean Argovitz Resorts, LLC (KAR), a limited liability company based in Houston, Texas. The partnership between Lakes and KAR holds a contract to develop and manage a casino resort facility with the Jamul Indian Village in California. The contract is subject to approval by NIGC. 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 will begin once various regulatory approvals are received.

Development and Management of Michigan Casino

On June 22, 1999, the Company announced that it has been selected by the Pokagon Band of Potawatomi Indians (the Band) to serve as the exclusive developer and manager of a proposed casino gaming resort facility to be owned by the Band in the state of Michigan. In connection with its selection, Lakes and the Band have executed a development and management agreement governing their relationship during the development, construction and management of the casino. The United States Department of the Interior issued a Finding of No Significant Impact (FONSI) in January 2001, and filed a legal notice of its intent to place into trust 675 acres near New Buffalo, Michigan on behalf of the Pokagon Band. Under Federal law, a 30-day waiting period was required for public comments to be made before the land in trust process could be finalized. During the 30-day period, a lawsuit was filed against the federal government in the District Court in the District of Columbia by a Michigan-based group called "Taxpayers of Michigan Against Casinos", to stop the U.S. Department of Interior from placing into trust the land for the casino site. The Department of Justice is defending the suit on behalf of the Secretary of Interior.

Partnership to Develop and Manage Casino Near Sacramento, California

On July 15, 1999, the Company announced that it would form a partnership for the purpose of developing a gaming facility on Indian-owned land near Sacramento, California. Pursuant to the agreement, Lakes has formed a limited liability company with KAR, a limited liability company based in Houston, Texas. The partnership between Lakes and KAR has been awarded a contract to develop and manage a casino resort facility with the Shingle Springs Band of Miwok Indians in California. The contract is subject to approval by NIGC and placement of the land where the gaming facility is to be located into trust with the Bureau of Indian Affairs (BIA). 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 will begin once various regulatory approvals are received.

Joint Venture for Further California Casinos, Including Financing of Cloverdale, California Casino

On August 10, 2000, the Company announced that it had agreed to form a joint venture for the purpose of 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. The partnership between Lakes and MRD holds the contract to finance casino facilities with the Cloverdale Rancheria of Pomo Indians. The planned site for the potential new casino development is located on Highway 101 in Cloverdale, California, approximately 60 miles north of San Francisco. Development will start as soon as various regulatory approvals are obtained. Development is also subject to completion of definitive financing arrangements. The joint venture also entered into a contract relating to the Paskenta Band of Nomlaki Indians. However, in February 2001, Lakes announced its intention to discontinue its involvement with the Paskenta project.

Agreement for Possible Casino Development with Massachusetts Tribe

On July 9, 2001, the Company announced that it had signed development and management agreements with the Nipmuc Nation of Massachusetts for a potential future casino resort in the eastern United States. The Nipmuc Nation's petition for federal recognition received a proposed positive finding from the Bureau of Indian Affairs (BIA) in January 2001. However, in September 2001, that proposed positive finding was reversed by the BIA when it issued a negative finding relating to the Nipmuc Nation's request for federal recognition. The Nipmuc Nation has 180 days from the date of the negative finding to submit additional information for reconsideration. In addition, community groups will have an opportunity to submit comments and documentation. The tribe has indicated that it will submit additional information for reconsideration. If approval is received, the Nipmuc Nation would need to put land in trust and come to a gaming agreement with the state where the land is located before proceeding with any such enterprise.

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The data included within the Financial section is solely for information and does not construe a recommendation and/or endorsement by IGHRM or its members to invest funds with any of the companies listed. You are strongly advised to obtain professional advice with qualified individuals or corporations for any investments of funds.

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