Hotel Online  Special Report


 Pokagon Band of Potawatomi Indians Receives Financing for $400 million
Four Winds Casino Resort Outside New Buffalo, Michigan
MINNEAPOLIS -- June 23, 2006 -- Lakes Entertainment, Inc. (Nasdaq:LACO) announced today that on June 22, 2006 an affiliate of the Pokagon Band of Potawatomi Indians (Pokagon Band) closed on a $305 million senior note financing in addition to a $75 million commitment for furniture, fixtures and equipment to fund the Four Winds Casino project in New Buffalo Township, Michigan. In addition, Lakes simultaneously closed on a previously announced $105 million credit agreement through a wholly-owned subsidiary with Bank of America, N.A., as Administrative Agent and the Banc of America Securities, LLC (BAS) serving as sole lead arranger and sole book manager (BofA credit agreement). 

Lakes, through a wholly-owned subsidiary, has management and development agreements with an affiliate of the Pokagon Band to develop and manage the Four Winds Casino. The Four Winds Casino will be an approximately 275,000 square foot full-service facility and is expected to include a 130,000 square foot gaming floor featuring 3,000 class III slot machines, 90 table games and a 20-table poker room; a 164-room hotel; six high-quality restaurants; three casino bars; a childcare facility and arcade; retail space; enclosed parking and other casino amenities. The Four Winds Casino will be the only land-based casino in the northern Indiana/western Michigan market. 

Lyle Berman, Lakes' Chairman of the Board and Chief Executive Officer, stated, "We are very pleased for the Pokagon Band and congratulate them on securing the funds to develop the Four Winds Casino. We look forward to working with them to open the Four Winds Casino in the third quarter of 2007 and to help make it a tremendous success." 

Approximately $25 million of the proceeds from the BofA credit agreement were used to repay in full Lakes' February 16, 2006 financing facility with an affiliate of Prentice Capital Management, LP (Prentice), and an additional approximately $22.5 million were used to fund Lakes' remaining obligation to the Pokagon Band. The remaining proceeds will be used for, among other things, funding the interest reserve under the BofA credit agreement, for Lakes' other casino development projects and for working capital purposes. All funds drawn under the BofA credit agreement bear interest at the rate of LIBOR plus 6.25% per annum (subject to change pursuant to the terms of the BofA credit agreement), are due and payable on the fourth anniversary of the closing and are secured by substantially all of the material assets of Lakes. 

Four Winds Casino Resort in New Buffalo
The construction process has begun...

In January of this year, the Pokagon Band of Potawatomi Indians received final approval to develop Four Winds Casino Resort when the federal government took official action to take its tribal land into trust. This action followed the U.S. Court of Appeals decision upholding the tribe's right to open the casino in New Buffalo Township.

The Four Winds Casino Resort will be built just north of state highway 239 and east of I-94's Exit 1 in New Buffalo Township.

The estimated cost of the project is $160 million and is being developed on 52 acres of a 675-acre tract owned by the tribe. More than four million visitors are expected each year, and future phases of the project are slated to include a hotel and a special events center.

Four Winds Casino Resort will feature:

    * More than 124,000-square feet of gaming (over 100 gaming tables and 3,000 slots)
    * Covered parking garage with 2,200-spaces
    * Six restaurants
    * Hotel with 160 Rooms and Suites 

Economic studies predict the casino will support 3,500 new jobs in the community, including 2,000 at the casino. In addition, it should provide the state of Michigan with an estimated $20 million in annual revenues and provide more than $4 million a year to local governments and agencies. There is more than a bit of irony in all this. Consider these facts:

  • From 1695 to the 1760s, the Potawatomi territory was once much of the land from Milwaukee to Detroit around the southern end of Lake Michigan. During the 1760s they expanded into northern Indiana and central Illinois.
  • Land cessions to the Americans began in 1807 and during the next 25 years drastically reduced their territory.
  • The Potawatomi sold one million acres of hunting ground known as “She-gong-ong” (Chicago) for 3 cents an acre. The government reneged on the deal, not paying them a dime. Chief Pokagon tried to persuade the United States government to pay the claims of his people for the sale of their land. He ended up making several trips to Washington. Most of his pleas went unheard until Lincoln was president, his case was reviewed and part of the money paid.
  • Through a series of treaties, the Potawatomi of the Woods (Michigan and Indiana bands) were relocated to eastern Kansas. Some Potawatomi groups avoided removal and remained in the Great Lakes. The Pokagon Band was one of these groups. In order to reamin on their ancestral land, they traded their tribal identity and slipped from greatness into poverty.
  • The Potawatomi claims remained unpaid until President Cleveland took the matter up, and in 1896 the Potawatami finally Indians received the money for the sale of their land.
  • Tribal Recognition was not restored until September of 1994 under President Clinton. 
It is estimated that there are nearly 3,000 tribal members of the Pokagon Band, approximately 1,500 of whom live in Michigan and Indiana.

The Four Winds Casino will be managed by Minneapolis-based Lakes Entertainment, Inc., which currently boasts a total of nine casino development and management deals with six different tribes located in Michigan, Oklahoma, Texas and California.

Lakes Entertainment also has plans to build a company-owned casino resort in Vicksburg, Miss., and it is the majority owner of WPT Enterprises, a media and entertainment company that produces the "World Poker Tour" television series. 

Tim Cope, President and CFO of Lakes, stated, "We have started construction of the Four Winds Casino and with the funds provided by the Lakes' credit agreement we will continue to move forward with our various other casino development projects. We will explore additional financing alternatives to fund future operations and development costs as needed. While we are allowed to sell up to three million shares of WPT Enterprises, Inc. (Nasdaq "WPTE") under the BofA credit agreement, we are no longer actively pursuing a sale of such shares." 

As a result of repaying the Prentice financing facility in full without any additional draws, 1.25 million warrants issued to Prentice will remain outstanding and exercisable while approximately 3.21 million warrants issued to Prentice will lapse and not become exercisable. 

About Lakes Entertainment 

Lakes Entertainment, Inc. currently has development and management agreements with five separate Tribes for new casino operations in Michigan, California, and Oklahoma, a total of eight separate casino sites. In addition, Lakes has announced plans to develop a company owned casino resort project in Vicksburg, Mississippi. The Company also owns approximately 62% of WPT Enterprises, Inc. (Nasdaq "WPTE"), a separate publicly held media and entertainment company principally engaged in the development, production and marketing of gaming themed televised programming including the World Poker Tour television series, the licensing and sale of branded products and the sale of corporate sponsorships. 

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. 


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

Pokagon Band of Potawatomi Indians
Donna Halinski, +1-517-372-4400

Also See: California, Connecticut, Arizona Are One, Two, Three in Indian Casino Revenue / June 2006
Pennsylvania Starts Adding 61,000 Slot Machines from Philadelphia to Pittsburgh and Casinos in Atlantic City Reinventing Itself As a Getaway for Vacationers and Conventioneers / June 2006


To search Hotel Online data base of News and Trends Go to Hotel.Online Search

Home | Welcome! | Hospitality News | Classifieds | Catalogs & Pricing | Viewpoint Forum | Ideas/Trends
Please contact Hotel.Online with your comments and suggestions.