Lakes Entertainment, Inc. Announces Modification of Arrangement with Jamul

  Lakes Entertainment, Inc. Announces Modification of Arrangement with Jamul

Business Wire

MINNEAPOLIS -- April 9, 2013

Lakes Entertainment, Inc. (NASDAQ: LACO) announced that it has modified its
arrangement with the Jamul Indian Village (“Jamul”) relating to monies it
advanced to Jamul for a potential casino development on Jamul’s trust land in
San Diego County, California.

Recently, Penn National Gaming, Inc. (“Penn”) announced that a wholly-owned
subsidiary of Penn entered into definitive agreements with Jamul to jointly
develop a Hollywood-branded casino and resort on Jamul’s trust land in San
Diego County, California (“Penn Casino”). The proposed $360 million
development will include a three-story, 203,000-gross square-foot casino with
at least 1,700 slot machines, 50 live table games including poker, multiple
restaurants, bars and lounges and a partially enclosed parking structure with
over 1,900 spaces.

Lakes previously had a Pre-Development, Development and Financing Arrangement
Agreement (“Agreement”) with the Tribe to develop a casino on the same trust
land, but terminated the Agreement in March, 2012. Lakes had loaned Jamul
approximately $57.5 million under the Agreement.

Pursuant to a Subordination and Intercreditor Agreement Lakes entered into
with Jamul and Penn related to the Penn Casino, Lakes agreed to modify the
terms of its outstanding debt with Jamul to reflect that the total debt
outstanding is currently $60 million, and that interest on such debt will
accrue at 4.25% after the Penn Casino opens. Additionally, Lakes has agreed
that it will subordinate repayment of its debt until the senior financing is
paid in full, but that current interest on the subordinated debt will be paid
to Lakes on a quarterly basis when the Penn Casino opens so long as there is
no default under the senior financing agreement. When the senior financing is
paid in full, Lakes will receive repayment of its outstanding principal and
interest. Lakes also entered into ten-year option agreement with Penn that
grants Penn the right to purchase approximately 98 acres of land which Lakes
owns adjacent to Jamul’s trust land. The purchase price for the land is $7
million and increase annually by 1%.

Tim Cope, President of Lakes, stated, “We are happy for the Jamul Tribe as it
continues to pursue its gaming opportunity. This is also good news for Lakes,
as it provides for the potential opportunity for Lakes to recover its
financial investment in the Jamul project.

About Lakes Entertainment

Lakes Entertainment, Inc. currently owns the Rocky Gap Lodge & Golf Resort
near Cumberland, Maryland. Lakes has a management agreement with the Shingle
Springs Band of Miwok Indians to manage the Red Hawk Casino. Lakes has an
investment in Rock Ohio Ventures, LLC’s casino developments in Ohio.

The Private Securities Litigation Reform Act of 1995 provides a safe harbor
for forward-looking statements. Certain information included in this press
release (as well as information included in oral statements or other written
statements made or to be made by Lakes Entertainment, Inc.) contains
statements that are forward-looking, such as statements relating to plans for
future expansion and other business development activities as well as other
capital spending, financing sources and the effects of regulation (including
gaming and tax regulation) and competition. Such forward-looking information
involves important risks and uncertainties that could significantly affect
anticipated results in the future and, accordingly, such results may differ
from those expressed in any forward-looking statements made by or on behalf of
the company. These risks and uncertainties include, but are not limited to,
need for potential future financing to meet Lakes’ development needs; those
relating to the inability to complete or possible delays in completion of
Lakes' 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 or development
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' expansion goals; risks of entry into new
businesses; reliance on Lakes' management and litigation costs. For more
information, review the company's filings with the Securities and Exchange
Commission.

Contact:

Lakes Entertainment, Inc.
Timothy Cope, 952-449-7030
 
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