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Lakes Entertainment, Inc. (“Lakes”) (NASDAQ:LACO) announced that Evitts Resort, LLC (“Evitts”), a wholly owned subsidiary of Lakes, closed on the purchase of the Rocky Gap Lodge & Golf Resort near Cumberland Maryland (“Rocky Gap”) today. Rocky Gap is a AAA four-diamond resort which includes a 215-room hotel, convention center, spa, two restaurants and the only Jack Nicklaus signature golf course in Maryland. The purchase price of approximately $6.8 million was paid at closing. Contemporaneous with the closing, Evitts entered into a lease with the Maryland Department of Natural Resources for approximately 260 acres of real property on which Rocky Gap is situated (“Lease”). The initial term of the lease is for 40 years.
Earlier this year, Evitts was awarded a video lottery operation license for Rocky Gap by the State of Maryland Video Lottery Facility Location Commission (“Commission”). The Commission recently approved Evitts’ revised development plans which include the renovation of the existing facilities to convert the approximately 20,000 square feet of existing convention and meeting space into a gaming facility that will feature a minimum of 500 video lottery terminals, a bar and a food outlet. The total cost of the Rocky Gap acquisition and development project is expected to be between $25 million and $30 million.
Lakes Entertainment’s Chairman and Chief Executive Officer, Lyle Berman stated, “We are very pleased that the Commission approved our revised gaming facility plans and that we now own Rocky Gap. We have the cash to finance the current development plans and we intend to start construction in November of this year, with an anticipated opening date for gaming in the second quarter of 2013.”
Tim Cope, President and Chief Financial Officer of Lakes, added, “We look forward to entering this market with a gaming product in this beautiful setting which already has such outstanding resort amenities. We are excited to immediately take over the operation of the existing hotel, golf course, restaurants and spa which will remain open during development.”