Lottery Gaming Facility Manager presentation to the Lottery Gaming Facility Review Board

September 16, 2009

Presented by:Lakes Entertainment, Inc.

FORWARD LOOKING STATEMENTS

Certain information included in this document (as well as information included in oral statements) 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 projections, and the effects of regulation (including gaming and tax regulation) and competition. Such information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any statements made by or on behalf of the company. These risks and uncertainties include, but are not limited to, need for potential future financing to meet development needs, future economic conditions that affect the population generally, possible delays in completion of projects, including various regulatory, litigation and numerous other conditions which must be satisfied before completion of projects.

In the event of a conflict or inconsistency between Exhibit C of the Chisholm Creek Management Contract and the document, Exhibit C controls.

AGENDA

• Introduction of Lakes Entertainment, Inc.

• Review of Proposal– Gaming and non-gaming revenue projections– Projected tourism and tourism spending– Sources of capital– Concept, theme and architectural features– Potential for increasing gaming capacity– Marketing strategies– Development timeline– Managerial and compliance strategy– Responsible gambling

• Why Lakes Entertainment, Inc.

LAKES OVERVIEWTim Cope

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Project Operators/Developers

• Lakes Entertainment, Inc. is a publically traded company on NASDAQ: LACO

• Lakes has developed, constructed, opened & operated casino resorts similar to the proposed project in the non-traditional gaming markets of Minnesota, Mississippi, Louisiana, Michigan, Oklahoma and California

• Lakes currently manages a total of 5,500 slot machines and 150 tables at three separate locations

• Lakes has a full complement of supporting corporate staff– Lakes hires & trains a local staff to operate the resort day to day– Local staff will report to an experienced corporate team– Corporate staff will ensure a smooth opening and on-going

oversight

PROJECTED REVENUE

Projected revenue, resident spending and tourist spending is based on an estimated opening date of September 1, 2011. Projections assume 1,300 slot machines; 30 table games and other amenities outline in this document not including a hotel. Additional amenities will be added pursuant to the terms of Management Contract with Kansas Lottery and impact thereof is not reflected in these projections.

PROJECTED TOURISM & SPENDING

SOURCES OF CAPITAL

• Phase one sources of capital– Kansas Gaming Holdings: up to $75 million (50%)– CVG Kansas Gaming LP*: up to $50 million (33%)– Lakes Entertainment: up to $25 million (17%)

*CVG Kansas Gaming LP might take the form of an LLC rather than an LP

CONCEPT, THEMING & FEATURES

• “Prairie Style” genre that is historically European Arts & Crafts with use of heavy timber & stone that is indigenous to the area

CONCEPT, THEMING & FEATURES

• No temporary facility is proposed

• Permanent facility located on I-35 at Exit 33

• Property access via US 81

• Approximately 1,500 surface park guest spaces, 400 employee spaces, 25 oversize vehicle spaces

Proposed Project

CONCEPT, THEMING & FEATURES

slot floor concept

slot sign concept

• Create a gaming floor that is full of excitement and energy yet blends with the natural environment

• Approximately 1,300 to 1,500 slot machines

• Approximately 30 table games– 12 blackjack games– 2 craps games– 2 roulette games– 4 mini baccarat – 10 other games

CONCEPT, THEMING & FEATURES

buffet concept

deli concept

• Approximately 250-seat high energy buffet with action stations, wood-fire grill, Asian specialties, made-fresh salads, home cooking & dessert bar

• Approximately 50-seat casual steakhouse

• Approximately 30-seat deli open 24/7 serving sandwiches, breakfast all day, and quick-grab snacks

CONCEPT, THEMING & FEATURES

• Lakes is currently negotiating with third parties in order to potentially secure a hotel.

• Estimated 150 rooms

• Pool

• Exercise facility

• Business center

• Meeting space

room concept

POTENTIAL TO INCREASE GAMING CAPACITY

• The gaming floor will open with approximately 1,300 slot machines but contain enough square footage to be able to accommodate up to 1,500 slot machines through floor reconfiguration with minimal disruption if demand warrants the increase.

• Phase one will be designed to facilitate development of future phases and non-gaming amenities with minimal disruption to existing operations.

MARKETING STRATEGIES

• Attract and generate trial– Use mass media such as television, radio and newspaper to promote awareness and to

establish a brand identity with residents– Attract transient guests and tourists with outdoor advertising along the I-35 corridor– Attract known gamblers in the region and tourists with targeted online advertising and direct

marketing

• Retain and grow frequency– Use in-house marketing efforts to enroll customer into the facility’s loyalty club/player tracking

system– Use the player tracking database along with data mining techniques and direct marketing to

ensure the most profitable players return– Use drawings and promotions to bolster repeat visits from residents and tourists– Continually train and enforce process improvement to ensure the best possible guest service

• Recover and reactivate– Use surveys and on-floor hosts to recognize areas of service improvement and correct

immediately– Use analysis of the player tracking database to evaluate customer trends and modify marketing

plans accordingly

• Remember our standards– Deliver a great gamble, great food and great service to encourage frequent and repeat visits

from all guests– Always be committed to quality– Market responsibly

ESTIMATED TIMELINE

• Assumed award of gaming license: January, 2010

• Solicitation of construction bids: July, 2010

• Award construction contracts: August, 2010

• Groundbreaking: September, 2010

• Begin taking employment applications: March, 2011

• Local supplier/vendor fair: March, 2011

• Employment & training facilities open: April, 2011

• Open dealer school: June, 2011

• Installation of gaming equipment: July, 2011

• Opening: September, 2011

• Timing of future phases to be driven by market conditions

RESPONSIBLE GAMBLING

• Lakes is committed to responsible gambling. Prior to opening Lakes will develop a property specific responsible gambling plan for the facility. The plan will be submitted for regulators for approval and the plan’s compliance will be overseen by the facility’s compliance officer.

• The facility’s advertising will contain a responsible gambling message when possible. The facility will not buy advertising or utilize images that appeal to children. The facility will make responsible gambling information readily accessible at the facility and allow individuals to opt out of direct marketing programs. The facility will maintain a self exclusion list.

• Lakes will mandate that all facility employees attend a two day orientation program which includes a course on responsible gambling that utilizes materials developed by the American Gaming Association and materials developed by Lakes. Annual refresher courses will be given to all employees.

• 2% of gambling revenue will be paid to the problem gambling and addictions fund.

MANAGERIAL & COMPLIANCE

• The on-site staff will report to the on-site general manager who will act as the facility’s chief executive officer. In the absence of the general manger, casino shift managers will have responsibility of the daily conduct of the gaming business.

• The facility’s general manager and department heads will report to Lakes Entertainment corporate office.

• Lakes Entertainment corporate office will be responsible for strategic operating plans and policy creation.

• The on-site facility staff will be responsible for plan execution and day-to-day compliance.

• An on-site facility compliance officer will be a single point of contact for Commission questions and concerns. The compliance officer will be responsible for obtaining all internal approvals in order to streamline responses to the Commission.

• A whistle blowers’ hotline will be available to all employees of the facility.

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THANK YOU

Thank you. Questions?