Lakes Entertainment, Inc. (NASDAQ: LACO) announced that it has entered into a joint venture with Dania Entertainment Center, LLC (“DEC”) for the management and redevelopment of the existing Dania Jai Alai fronton in Dania Beach, Florida, to convert it into a destination casino (the “Casino”) which will include slot machines, Jai Alai, entertainment, a variety of bars and restaurants and other related amenities. DEC previously entered into an asset purchase agreement to purchase the Dania Jai Alai fronton from Boyd Gaming Corporation, which is scheduled to close before the end of the year (“Boyd Acquisition”). Lakes made an initial $4.0 million investment in the joint venture via a convertible promissory note that will automatically convert to equity on the closing of the Boyd Acquisition. If the Boyd Acquisition does not close, Lakes would likely lose such investment. Such investment was used to reimburse DEC for the non-refundable deposit it made under the Boyd Acquisition asset purchase agreement, and other development expenses. Under the joint venture agreement, Lakes has the right to invest an additional $6.0 million when the Boyd Acquisition closes, which Lakes currently intends to fund. If Lakes does not invest the additional $6.0 million and the Boyd Acquisition closes, Lakes will not be guaranteed to receive a management agreement but will be paid a development fee of $250,000. Lakes’ ownership percentage of the Casino will depend upon the terms of the additional financing necessary to fund the Boyd Acquisition and the redevelopment of the Casino.
“We are currently working with DEC on the details of the casino development, and we plan for it to be a first class casino facility with exciting new games, food and beverage outlets, retail shops, Jai Alai, a hotel and other market driven amenities,” stated Lyle Berman, Lakes’ Chief Executive Officer.
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