Timothy J. Cope – Chairman of the Board & Chief Financial Officer Lyle Berman – Chairman of the Board & Chief Executive Officer

Justin Sebastiano - Morgan Joseph & Co., Inc. Clinton Morrison - Felti & Company Chris Krueger - Northland Securities Todd Ellers - Roth Capital Partners LLC [James Kaler] - Banc of America Securities [Rishi Pak - KBC Financial] Analyst for [Samia Quatter] - Jefferies Asset Management [Howard Briarman - Evergreen Investments]

Welcome to Lake’s Entertainment second quarter 2008 earnings conference call. On the call with me is Lyle Berman, Lake’s Chairman of the Board and Chief Executive Officer.

As we begin our prepared remarks I would like to remind everyone that this call may contain forward-looking statements within the meaning of the federal securities law, including statements concerning business strategies and their intended results and similar statements concerning anticipated future events and expectations that are not historical facts. These forward-looking statements are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995.

These statements do not guarantee future performance and therefore undue reliance should not be placed upon them. Lyle will begin our discussion today with a general overview and update on our casino projects.

I’ll then discuss the second quarter financial results, recent business events and then we’ll conduct a question and answer session.

Welcome everyone to Lake’s Second Quarter 2008 earnings call. Considering the very difficult economic environment, we were pleased with our second quarter performance.

The Four Winds Casino Resort which we manage on behalf of the Pokagon Band of Potawatomi Indians in New Buffalo Michigan followed up on a strong month of March and exceeded our expectations in the second quarter. Since Four Winds was not open in the prior year period, we cannot measures the effects of the slowdown in the economy, we can tell you that the performance has exceeded on internal projects for the second quarter which is very encouraging.

As we celebrate the first anniversary of four winds, we continue to see the performance at the property improve which bodes well for our second year of operations. Four Winds has become in our opinion, one of the top destinations in the great lakes region.

We are consistently refining our targets in terms of customers and demographics in order to provide the best possible guest experience and maximize operating results at Four Winds. Four Winds customer loyalty program is continued in its rapid expansion and our club membership is still exceeding our expectations.

We have used this data to create direct marketing programs and promotions that have significantly improved the level of play from our guests, increasing the win per guest statistics. We have used these same programs to leverage the hotel as well.

Year-to-date we are now running over 98% occupancy. In the second quarter, we shifted advertising dollars for a short time to the Chicago market and we believe the campaign produced tangible results in terms of awareness, market penetration and property visit by Chicago land gamers.

Additionally, we believe that the investment that we have made in our guest services and employee training programs is also having a positive effect on retaining guests. Our internal research shows that guests rate Four Winds customer service much higher than competitor service and Four Winds guest also indicate an extremely high likelihood to return to the Four Winds in the future.

In addition to Four Winds, our Cimarron Casino in Perkins, Oklahoma which we manage for the Iowa Tribe of Oklahoma continues to see strong results. The casino which contains 360 slot machines, saw total revenue up in the second quarter of 2008 compared to the prior year period.

We expect continued solid performance from Cimarron for the rest of the year. The Red Hawk Casino project near Sacramento California which is the casino development and management project currently under construction with the Shingle Springs Band of Miwok Indians remains within budget and on schedule for a scheduled grand opening at the end of this year.

We have commitments for $65 million in FF&E financing for this project and are in the process of finalizing this financing. The casino project is approximately 80% complete and the dedicated interchange from US Route 50 which will allow for easy access for our customers to the casino is now approximately 87% complete.

We were very pleased last month with the news of the Shingle Springs Tribe and Governor Schwarzenegger signed an amended compact that will allow for expanded Class III gaming up to 5,000 Class III slots at the casino. We now await ratification of the amended compact from the California State Legislator and approval from the Bureau of Indian Affairs which we expect to receive before the opening of the casino.

Upon its opening, the facility will feature approximately 2,000 slot machines and gaming devices, 75 gaming tables, 10 food and beverage outlets and approximately 3,200 covered parking spaces. We believe that Red Hawk Casino is well positioned to draw from a large customer base with over 4 million in a 75 mile radius of the casino, achieve a strong ROI and create shareholder value.

You can see webcam shots of current construction on our website at LakesEntertainment.com. Let’s move on to our latest project in Ohio, the My Ohio Now Casino Initiative.

As you know, we are sponsoring a referendum to be voted on by Ohio resident during the November 4th Presidential Election that will allow for a single casino and entertainment and destination resort to be built near I71 and Route 23 in Clinton County. Yesterday, our team delivered petitions containing over 750,000 signatures to the Ohio Secretary of State.

We anticipate that enough signatures will be verified in the requisite number of counties that will permit the referendum to be placed on the November ballot in Ohio. We expect to hear from the state sometime in the first or second week of September ratifying our signatures.

Once the referendum has been placed on the ballot we will be gearing up for an intensive two month campaign throughout the state of Ohio to educate residents of the initiative specifically, the differences between this referendum and previous attempts at allowing gambling in Ohio and the benefits that will result from a yes vote on November 4th. If the referendum passes, we believe it will take 12 to 18 months for Ohio to form a gaming commission and for our architects and engineers to complete the architectural and engineering plans.

Construction should take 12 to 18 months which would put us on track for a grand opening in the fall of 2011. We estimate that the casino will provide up to 5,000 additional jobs in the Clinton County area and be a stimulus for other economic development in the area.

In terms of our other projects, there are no major updates to report on the Jamul Indian Village Casino project near San Diego, the Iowa Casino Resort near Chandler Oklahoma and our Vicksburg Mississippi project. Planning is still ongoing to redesign the proposed Jamul casino to provide for approximately 1,000 Class II gaming devices along with 25 Class II table games.

We are working with the tribe to determine when the casino construction can be begin and are still hoping for operations to begin in 2010. For the Iowa Casino Resort which will be our second project with the Iowa Tribe of Oklahoma, we are waiting on the Bureau of Indian Affairs for approval of the land plan on which the casino resort will be built.

After the BIA approval is received, we expect to rapidly receive NIGC approval of our management contract which is the last step needed before design, financing and construction of the project begins. Once NIGC approval is received, we expect a 12 to 18 month development and construction timeline with an expected opening of the Iowa Casino in the middle of 2010.

The casino is currently planned to have approximately 12 to 15,000 Class III slot machines, 30 to 50 table games, four restaurants and a hotel. With that, I’ll turn the call back over to Tim to provide an overview of recent business issues and financial results.

Now, I’ll discuss the second quarter results for Lake’s Entertainment. Second quarter 2008 consolidated revenues were $11 million, a 34.8% increase from the prior year period.

Lake’s revenue increased $5.5 million primarily due to a full quarter contribution of management fees from our Four Winds Casino Resort compared to no contribution from that property in the second quarter of 2007. Revenue related to WPTE decreased to $5.1 million for the second quarter of 2008 compared to $7.7 million in the prior year period.

The decrease was due to a decline in domestic television license fee income from the World Poker Tour Television program which was due to lower per episode license fees under the Gaming Show Network agreement in effect during the 2008 period as compared to the Travel Channel agreement which was in effect during the 2007 period. In accordance with the management contract with the Pokagon Band pre-opening expenses during the construction phase of the Four Winds project are shared proportionately with Lakes during the first 12 months of Four Winds operations.

Lakes’ proportionate share is approximately $4 million over the first 12 months of operations and only the first 12 months. Thus, beginning in August of this year we’re no longer impacted by pre-opening expenses.

Consolidated, selling, general and administrative expenses were up $4 million from the prior year period to $13.9 million due to development costs associated with the proposed Ohio Casino Resort project. For the second quarter of 2008, Lakes’ selling, general and administrative expenses were $7.7 million and consisted primarily of payroll and related expenses of $2.1 million including share based compensation, the development cost associated with the Ohio Casino Resort initiative of $4 million, travel expenses of $700,000 and professional fees of $500,000.

Other costs and expenses incurred in the second quarter of 2008 included amortization of intangible assets of approximately $1.7 million associated with the casino project with the Pokagon Band which commenced upon the opening of the Four Winds Casino resort in August, 2007. Net unrealized gains on note receivable related to the company’s receivables from Indian tribes which are adjusted to estimated fair value based upon the current status of the related tribal casino projects and evolving marketing conditions.

In the second quarter of 2008, net unrealized gains on notes receivable were $1.1 million compared to net unrealized gains of $8.9 million in the prior year period. The difference in unrealized gains on a quarter-over-quarter basis was primarily due to the recognition of a $7.7 million unrealized gain in the second quarter of 2007 due to closing on a $450 million senior note financing to fund the Red Hawk Casino project in Shingle Springs California which increased the probability at that time of the opening of the casino.

The loss from operations for the second quarter 2008 was $6.5 million compared to earnings from operations of $1.6 million in the second quarter of 2007. While net loss applicable to common shareholders for the second quarter 2008 was $5.2 million compared to net earnings applicable to common shareholders of $6.6 million in the second quarter of 2007.

The difference resulted primarily from the items discussed above in addition to the net effect of items occurring in the prior year period including $4.9 million of interest income resulting from the repayment for land Lakes had previously purchased on the Shingle Springs Tribe’s behalf, partially offset by a loss on abandonment of online gaming assets by WPTE of $2.3 million and a stock warrant inducement discount of $1.4 million. Loss applicable to common shareholders for fully diluted shares was $0.21 in the second quarter of 2008 compared to earnings applicable to common shareholders for fully diluted shares of $0.25 for the second quarter of 2007.

Now, I would like to discuss auction rate securities. As of June 29, 2008 the company had $9.9 million in cash and cash equivalents, $6.4 million in short term investments and marketable securities and $37.5 million in long term investments in marketable securities.

Of these amounts, $4.5 million in cash and cash equivalents related to Lakes and $25 million in long term investments related to Lakes. All other amounts related to WPTE.

All of Lakes’ long term investments and marketable securities and $11.4 million of WPTE long term investments in marketable securities are comprised of auction rate securities which I will simply refer to as ARS. As a result of liquidity issues surrounding ARS’ the ARS are classified as long term investments in marketable securities as of June 29, 2008.

The types of ARS that both Lakes and WPTE own are backed by student loans, the majority of which are guaranteed under the Federal Family Education Loan Program. Neither Lakes or WPTE own any other type of ARS.

None of our ARS qualify or have ever been classified in our consolidated financial statements as cash or cash equivalents. Historically, these types of ARS’ have been highly liquid using an auction rate process that resets the applicable interest rate at predetermined intervals typically of seven to 35 days to provide liquidity at par.

However, as a result of liquidity issues experienced in the global credit and capital markets, the auctions for all the company ARS begin failing in February, 2008. The failures of these auctions do not affect the value of the collateral underlying the ARS and both Lakes and WPTE continue to earn and receive interest on the ARS at contractually set rates.

However, it will not be possible to liquidate the ARS until the issuer calls the security, a successful auction occurs, a buyer is found outside of the auction process or the security matures. During July, 2008 Lakes and WPTE received account statements for June, 2008 from the firms managing the ARS which estimated the fair value of the ARS.

Lakes and WPTE analyzed these statements and concluded that a temporary decline in estimated fair value of $2.8 million related to the auction rate securities has occurred as a result of the current lack of liquidity. This consolidated decline in estimated fair value includes $1.8 million related to Lakes and $1 million related to WPTE.

Since we consider the decline in the estimated fair value of the auction rate securities to be temporary, the related unrealized loss is included in the accumulated other comprehensive loss in the shareholders’ equity section of the company’s balance sheet as of June 29, 2008. If the company were required to liquidate the auction rate securities over the coming months as a source of financing it is likely that the proceeds would be substantially less than the carrying value of the ARS.

Lakes entered in to a client agreement with UBS Financial Service, Inc. effective April 11, 2008 for the purpose of borrowing and/or obtaining credit in the principal amount not to exceed $11 million.

During June of 2008, the margin account agreement limit was increased to $12.5 million. Lakes made an initial draw under the margin account agreement in the principal amount of $3 million for working capital purposes.

Lakes is currently seeking additional sources of financing to fund additional costs that are planned to be incurred between September and December of this year associated with the previously announced Ohio Casino Resort initiative. These additional costs which are currently expected to approximate between $10 million and $20 million will only be incurred if this initiative is successfully placed on the Ohio Ballot and are dependent on various factors including polling numbers, market studies and media efforts.

Lakes expects to be able to obtain funding as necessary. WPTE does not believe that any lack of liquidity during the next 12 months related to its ARS will have an impact on its ability to fund its operations.

Lakes also had notes receivable from Indian tribes which are recorded at their estimated fair value of $79.6 million as of June 29, 2008. The corresponding face value of these notes included accrued interest was $122.7 million.

As of June 29, 2008 the company’s obligations related to its margin account agreement was $2.8 million and long term contract acquisition costs payable were $6.1 million. In addition to our financial results, we are maintaining our core 2008 SG&A guidance of remaining relatively flat with the previous year.

Our SG&A guidance does not include development costs associated with the proposed Ohio Casino project. In summary, following improved performance in March of this year, the Four Winds Casino Resort continues to perform well and exceed our expectations in the second quarter.

In Oklahoma the Cimarron Casino reported strong results with an improvement in year-over-year performance and in California the construction of the Red Hawk Casino for the Shingle Springs Tribe in California remains on schedule within budget for its expected grand opening. Now I’ll return the call over to Lyle.

For the remainder of 2008 Lakes remains focused on successfully managing our current operations, opening the Red Hawk Casino, and getting the Ohio referendum passed on November 4. With that I will turn the call over to the operator for questions.

You talk about Four Winds exceeding your expectations in the second quarter. Since you can’t give us the actual number for what they did, what were your expectations for the quarter?

We can’t give that either, but what we can say is that what we’re referring to is the budget. The property in conjunction with ourselves developed a budget for 2008.

Certainly that budget was based on the results of the first four or five months of 2007. And based on that budget we are exceeding that budget.

And you said that you did very well or you marketed to Chicago. Is it fair to say that a lot of the performance came from the Chicago people?

No, not really. I think it came across the board.

When you look at our market, we deal primarily in three markets: Western Michigan and Northern Indiana; those two markets were actually as close to any of the other casino; and then you have the Chicago market and in the Chicago we’re the furthest away. And we get our smallest revenue from that Greater Chicago market.

Right, but with this marketing push you don’t think that helped kind of ramp up?

It certainly helped, but it wasn’t the difference between success or failure. It helped beat the budget certainly.

And when did you stop that marketing push to Chicago? I assume you curtailed that since the Horseshoe opened?

We continued that through about the end of May, middle of June timeframe.

And then certainly we didn’t want to go up against the Horseshoe when they opened.

So in July did you see the people from Chicago continue to come and then kind of fall off since Horseshoe opened?

We’ve been looking at the overall numbers. I don’t think we’ve yet looked at that.

Each month we review the detail but we haven’t reviewed July yet so I can’t tell you exactly where it fell off or not. What’s interesting is a tremendous amount of our revenue comes from what we call rated play.

So we know exactly where people are coming or not coming from, but we haven’t reviewed that yet.

And as far as the spend in Ohio, you guys had $4 million in Q2. How much do you think you’re going to spend from July 1 through until you know that the signatures get validated or not?

Have you pretty much stopped the spigot right now until you know if the signatures get validated or are you still kind of spending a little bit?

We’ve absolutely primarily stopped because we’re not doing any media marketing and we’re not spending any more money on signatures. So we have currently stopped and don’t intend to resume until we know for sure that we’re on the ballot.

We expect that to happen in the first or second week of September.

So up to this point in total, have you spent around $8 million?

That’s real close to the number.

As far as the ARS your margin account, you drew $3 million immediately. Where are you now in that, because you’re limit was up to $12.5 million right, so where are you now?

We have remained and I think I mentioned our margin count is $2.8 million. Of the $3 million we’ve drawn, we’ve actually paid back a couple hundred thousand just on interest income.

So we haven’t drawn any more than the $3 million and the outstanding balance is about $2.8 million.

So you say the outstanding balance, that’s how much -

That’s how much we’ve drawn.

Okay, so you still have quite a bit under there.

We still have roughly $10 million left on the line.

Tim, just following up on that last question. You’ve got the $10 million and you’ve got some cash.

How much are you looking to finance? You said you were looking to finance to pay for Ohio.

What do you need to raise by the end of the year?

In addition to the $12.5 million we probably will finance another $15 million to $18 million, in that range.

For operating?

Operating all of Ohio until we start cash flowing with Shingle Springs.

You’ve got $1.1 million unrealized gain. Where did that come from?

A lot of it had to do with Shingle Springs getting closer to opening.

So you changed the percentage on Shingle Springs?

Just a function of getting closer.

The operating expense, out of Four Winds that $1 million a quarter. That’s an offset to the management fee?

Correct.

It has been in the past.

So that’s where it sort of shows up.

It never shows up in our books. It’s netted before we get our fee.

What I’m saying is the management fee you report would have been $1 million higher if we were a year from now.

That’s right.

And it ended as of August 1.

I know you won’t give us the split between Cimarron and Four Winds, but is there anything else in that management consulting fee other than the fees from those two operations?

No, those are the two things.

Back on the Ohio stuff, I think you said on the first question that you have already spent about $8 million. Was that right up through today or through July?

That’s pretty much up through today.

You guys state that you expect to spend between $10 million and $20 million. That’s above and beyond the $8 million, is that correct?

Yes.

The bulk of that spending it sounds like, assuming it gets on the ballot, would we assume to see 70% or more of that in October?

Yes. It would primarily be on TV and radio, cable TV and radio, and I would expect at least 70% would be spent in October and the first days of November of course.

Seasonality at the Four Winds Casino. I know it hasn’t been opened a year but third quarter versus second quarter in general are they pretty similar as far as typical casino traffic?

All we have to go on is if you look at the Northern Indiana historical results. Those two quarters seem to be pretty close, pretty even in terms of results.

The earnings I think in your core business have looked pretty solid. The World Poker’s obviously been a big drag and I think it clouds the progress you’re making with the core business.

Is there any update as to potential options of that business? It looks like the outlook has declined again today.

Are you saying options relative to our ownership or to the business?

To your ownership basically.

We continue to evaluate our ownership because we know that it clouds our statements quite a bit and I think we’ll come to some resolution by the end of this year.

Back on the Ohio, do you quantify at all the State of Ohio’s budget deficit problems maybe this year versus the last time there was a referendum a couple years ago?

I can’t quantify that but it’s definitely worse. And of course in the Clinton County where we are building or will plan to build our casino, DHL announced recently (that’s where their corporate headquarters are) that they’re moving, they’re consolidating with UPS and they’ll be laying off 8,000 people.

So with our bringing in approximately up to 5,000 jobs that’s another compelling reason why we think the casino will be voted positively this year.

On the financing, the $15 million to $18 million that you indicated you needed to raise, can you give us some range of possibilities? Are you looking at debt, equity, what are the options there?

We’re planning to just look at debt. We have a balance sheet of about $150 million of net asset value and no debt of any kind, so we’re highly confident it’ll be placed strictly with debt.

You guys do have a lot of notes, specifically to Shingle Springs. What’s the current environment like at this point in time?

Is there any possibility of maybe unloading that and generating some cash from that?

We don’t believe that selling that note would be appropriate until after the casino opens because it would take too big of a haircut. But certainly it’s a wonderful asset; the casino as you know is under construction, fully financed, going to open at the end of this year; so it’s certainly a very good asset to borrow against.

That leads me into another question on Shingle Springs. Do you have an exact opening date determined yet?

There’s two dates. It’ll be no earlier than December 17 and no later than January 1.

To give you the reasons for those two particular dates is we’ll physically be ready, be staff trained, construction done well in advance, slot machines up and going by December 17, but it’s predicated on where we end up with the amended compact in the State of California. If the compact which the Governor now signed and is ratified by the state legislature with more than a two-thirds vote, then once we get the BIA approval we can implement that compact at any time which will get us to the December 17 date.

If it’s ratified by the state legislature on the simple majority, then the soonest you can put that in effect is the first of the following year. That gets us to the January 1 date.

On the compact ratification in California, can you just give us a timeframe for when you would expect, like when the legislature’s going to be back in session and when you expect them to hear that?

The legislature came back in session this week so it’s on their docket to hear. We’re optimistic we’ll get through that in a short period of time and then once that happens it’s submitted to the BIA.

BIA has a 45-day time limit so it can’t go to a dark hole. They have to act on it.

If they don’t act on it in 45 days, it’s deemed approved. So with all that said we expect to have a Class III compact fully approved in advance of opening the casino.

I know in the past, I think they were different situations, but is there any or are all the indications that the legislature will ratify the compact? There are no disputes or anything?

I know in the past there’ve been some instances where the Governor signed the compact.

In the past the legislature has ratified the vast majority of new compacts and I think all compacts that had to do with expansion of current operations; therefore we can think of no reason why it will not be ratified very quickly.

In terms of just logistically, have you already ordered the machines and how are you balancing the Class 2 versus -

We’ve ordered the machines but the boxes that the machines come in by and large are convertible from Class 2 to Class 3. So the machines have been ordered but certainly they haven’t started.

We’re just in the queue line but certainly we can actually take shipments on machines and we can change them from Class 2 to Class 3 or vice versa very easily.

There was an article recently I think the GM at Four Winds was quoted talking about expansion plans. Can you guys give any color on that or maybe just on timing when you would think?

There’s always obviously from even before the day we open we’re talking about expansion. At this point the Tribe is looking at it.

I would say that all of our plans and approvals probably will take about a year at the earliest and probably a year of construction, so I would expect that probably two years from right now we probably will be having the grand opening of the expansion. But that certainly isn’t for sure and that’s certainly subject to the Tribal decision; not ours.

Have you guys done any polling in Ohio or has there been any polling done?

We do on a regular basis polling; however, we don’t’ make that public. The newspapers once we’re for sure on the ballot we’ll on a regular basis do polling, but here’s just one I received today.

This is from the Columbus Dispatch. It says “The Hot Issue: Would you support a casino in Ohio if some profits were shared with all counties?”

which you know is an integral part of our referendum and it was 78% yes, 22% no. Now you understand that certainly we’ve been getting a lot of good press; the people who will fund an anti-campaign have not really geared up yet.

Was there anything worth noting about World Poker Tour this quarter or anything at all that you guys wanted to point out?

Not really. They’re looking to reposition the company I think.

Did you listen to their conference call this morning?

No, I haven’t had a chance yet.

Well they had one and basically they’ve cut expenses; the results of the online international gaming has been disappointing; I think they probably said “We’re not going to really chase that with a lot of money; we’re looking at more of a sponsorship model for our show.” I think at the end of the day it’s still going to be six months to a year to see if the company can reposition itself properly but I think the overriding message is they’re not planning to just burn up a lot of money chasing the online gaming.

With respect to this Harrah’s expansion that’s coming up in Hammond, Indiana, it might be all the more important that you have more rooms at the Pokagon facility to keep people there. Does this in any way accelerate your expansion plans?

It certainly motivates us. When you say they’re planning, they’ve done it.

Their barge opened up about a week ago. I hear it’s very, very nice.

Remember our smallest market is actually the market that they’re after. They’ve been open a week.

We have not seen any diminution of our results or what we expected to, but they’re going to be a tough competitor. But quite frankly, the toughest competitors they’re going to hurt are the three riverboats closest to them.

That’s the Majestic and the [Amstar].

What time horizon wise, nothing really to report about when you may be putting - ?

I don’t think that’s going to move us quicker than what I just said, which would be expect opening with additional rooms and additional gaming and entertainment in the two-year timeframe.

Turning to Shingle Springs, anything you can tell us about development in the local economy there? What’s happening with the traffic on Highway 50?

Anybody sort of monitoring that?

I can’t say that we monitor on a regular basis. We all read the papers.

The housing market there is certainly down similar to the rest of the economy. I think if you monitor results as best as you can tell, the competitors at Thunder Valley and Cash Creek, they seem to be progressing.

Thunder Valley’s obviously building their expansion. We were able to finalize our financing and I think Thunder Valley just completed a new financing for themselves.

So I think there’s still support in the market for the casino projects.

I get a lot of questions about how Shingle Springs is going to compete versus Thunder Valley and whether you’re going to be direct head-to-head for the same customers or if you’re drawing from a slightly different customer base. Anything you could elaborate on that.

First off, there are just a lot a lot of people with very underserved markets. We talk about a 4 million population base with only two casinos in the greater Sacramento market.

So you’ve got plenty of customers for both. Although we’re both in Sacramento, we’re really almost 15 miles apart.

It’s a 45 to 50 minute drive from our front door to theirs. They’re on the highway towards Reno which out of Sacramento is going northeast.

We’re going due east on Highway 50 out of Sacramento. There’s no four-lane highway or anything between our casino and theirs.

The four-lane would actually have to go back to Sacramento and then back up northeast. So we really probably serve primarily different markets although there’s a slice of people in the middle that clearly we compete for, but then again when you think about as addition to the population 40,000 cars a day and 70,000 cars on the weekend literally go by our front door and that’s a captive group of people that they don’t compete with in any way.

So I think that when we open, I don’t think they’re even going to feel it much.

With respect to Shingle Springs, the compact allows you for 5,000 slots but you’re going to start at 2,000. Could you just talk about your thoughts in terms of expanding that and what your feeling is on growing that from 2,000?

When we plan a casino relative to the NIGC’s rules, you have to start with a plan and once you put that plan in place it has to do with environmental work and we really can’t change that till the casino opens. We planned this casino many years ago because it took nine year, eight years to get through all of the lawsuits.

It was planned for 2,000 machines and at this point we’re not allowed to expand until it opens. We already do have plans for expansion but we still have to go through some permits but already our plan was that the parking ramps, 70,000 feet of the top level of the parking ramp, is on the exact same level of the casino floor and our first expansion will be 70,000 feet of gaming expansion within the neighborhood of 1,400 to 1,500 machines.

How much does that cost to convert it?

We haven’t got into that yet. But obviously the foundation’s already in so the cost to convert would certainly be I think very acceptable relative to the results we expect from it.

With respect to ratification of the gaming compact, somebody alluded to this earlier that there have been some issues in the past. I’m just wondering, with respect to gaming compacts where the state actually gets tax proceeds, has there been a problem with any of those compacts getting ratified?

The only problems of getting those ratified were compacts that let the Tribes go off Reservation to new sites. One in particular I know of was I think they signed a compact with some Tribes that wanted to go to Barstow, California.

Those didn’t get approved but to my knowledge all compacts relating to existing casino operations or casinos under construction 100% of those have been ratified.

They’ll make money off of it so they’ve kind of got an incentive to approve it.

They make a great deal of it.

I don’t believe you mentioned it earlier. If you have, I apologize.

Did you mention what the cost would be to Shingle for the change in the compact? In other words, what would you be giving up in terms of tax dollars to change Class 2 to Class 3?

Their amended compact calls for a blended rate of 20% to 25% of slot revenue plus there’s a contribution the Tribe’s making to the state Non-Gaming Fund of approximately $4 million in exchange for which the Tribe gets a credit for the $5 million they pay to the county as part of the memorandum of understanding to support new road construction.

In the process of doing your due diligence out there, were you able to figure out or do you know what Thunder Valley is doing in terms of win-per-unit?

When Thunder Valley first opened, they opened with exactly the same product that we’ll be offering, I mean the same size and scope, which is a real good casino with 2,000 slot machines and of course restaurants that went with that. They had no hotel rooms and no entertainment facilities.

In their first full year of operation, they’re managed by Stations Casinos, Stations Casinos has a 24% management contract, if you extrapolate what Stations reported, they made $310 million I guess I’ll call it pre-tax; not EBITDA but pre-tax. That’s their first year.

We do not have verifiable data since then because after that Stations kind of commingled their management fees with other fees.

Would you expect to replicate that sort of success? I mean, obviously you hope to.

When they opened they had the right to open without any taxes so that number reflects no taxes paid by the Tribe. Also, if you look at what we spent versus what they spent, I think you’ll see that we’ll have higher depreciation and higher debt service.

But other than that we think it might be comparable.

On the heels of David’s comment, given it’s a much different gaming environment, much different economy right now.

Again, if I could have a casino of my choice any location relative to the economy, I think Sacramento would be one of the top locations you’d pick because of so many people with very little capacity. That being said, certainly as the economy gets better we’ll do better and when the economy’s the way it is we won’t do as good as we would have otherwise.

I think most of my other questions have been answered but may I recommend that you guys buy the Shingle bonds at $0.81 on the dollar.

And we would recommend that, too. Wait.

We would support your recommendation.

Actually, my question was answered. Thanks.

Did you say that with respect to Shingle Springs that you would get a credit for that $5.2 million state taxes? So you wouldn’t pay that based on the 20% to 25%?

We pay it. It just pays to the county.

But it goes to offset that.

That’s correct.

I don’t want to double count that when I look at Shingle Springs.

We thank you all for listening. We expect to have a very good third quarter and on our conference call after the third quarter, hopefully we’ll be able to report very positively on our Ohio referendum.

Thank you all for listening.