In its third quarter 2008 results announced today Minneapolis-based Lakes Entertainment expressed disappointment at the failure of its ballot initiative for a casino in Ohio. Lyle Berman, Chief Executive Officer of Lakes, said, “We are very disappointed that our MyOhioNow casino resort initiative was not approved by the voters of the State of Ohio in this week’s election. However, during the referendum process we never lost sight of our core operations and development projects which continue to proceed as planned.

Further commenting, Tim Cope, President and Chief Financial Officer of Lakes, stated, “Although we are disappointed with the voter results in Ohio, regarding the proposed casino project, we are very excited about the soon-to-open Red Hawk Casino that we are developing and will manage on behalf of the Shingle Springs Band as well as the ongoing results at both the Cimarron Casino and the Four Winds Casino Resort.”

He continued, “As we recently announced, we closed on an $8 million building loan from First State Bank. This loan, in conjunction with our recently completed credit line agreement with UBS Financial Services for 75% of the market value of our auction rate securities, is expected to provide our Company the sources of working capital that are needed in the foreseeable future. In addition, we are moving forward with the upcoming November 21, 2008 stock dividend of all of our Company’s shares in WPTE.”

Lakes Entertainment reported consolidated third quarter 2008 revenues of $11.2 million, a 60.0% increase from the prior-year period. Lakes’ revenue increased $5.8 million, primarily due to a full quarter of contribution of management fees from the Four Winds Casino Resort, which is owned by the Pokagon Band of Potawatomi Indians (“Pokagon Band”) and opened to the public on August 2, 2007. Also contributing to the increase in Lakes’ third quarter 2008 revenues was an adjustment resulting from an approved compact amendment between the Pokagon Band and the State of Michigan that reduced the Four Winds Casino Resort gaming tax. This amendment caused a one-time addition to revenue of approximately $1.8 million to Lakes.

Revenue related to WPTE decreased to $2.8 million for the third quarter of 2008, from $4.4 million in the prior-year period. The decrease was caused by 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 Game Show Network agreement in effect during the 2008 period, as compared to the Travel Channel agreement which was in effect during the 2007 period.

The loss from operations for the third quarter of 2008 was $5.1 million, compared to $6.3 million in the third quarter of 2007. The operating loss for the nine months ended September 28, 2008 was $19.5 million, compared to an operating loss of $12.0 million in the prior-year period. On October 28, 2008 Lakes closed on a two-year interest only $8 million non-revolving line of credit loan agreement with First State Bank. The interest rate of the loan is 8.95%. Lakes has drawn $2 million on this loan agreement to date.

Lyle Berman commented, "We continue to be pleased with results from the Four Winds Casino Resort given the current economic environment across the United States. Further, the amendment of the gaming compact between the State of California and the Shingle Springs Band of Miwok Indians, which will allow for expanded Class III gaming at the Red Hawk Casino, has now been ratified by the State of California’s legislature and is awaiting final approval by the Bureau of Indian Affairs. Approval is expected prior to the planned opening of the Red Hawk Casino, which is still on schedule for later this year.”

He added, “We believe that our Company is well positioned for growth given the upcoming opening of the Red Hawk Casino, as well as the projects we have in various stages of development.” Lakes Entertainment currently has development and management or financing agreements with four separate Tribes for casino operations in Michigan, California, and Oklahoma, for a total of five separate casino sites. (E-11.06.08)

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