1071255--3/8/2006--LAKES_ENTERTAINMENT

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Any significant delay in, or non-completion of, our planned Indian and non-Indian casino development projects could have a material adverse effect on our profitability. The termination of our management contracts and consulting agreements with Indian tribes may have a material adverse effect on our results of operations and financial condition. If our current casino development projects are not completed or fail to successfully compete once completed, we may lack the funds to compete for and develop future gaming or other business opportunities which may have a material adverse effect on our results of operations. We could be prevented from completing our current casino development projects or pursuing future development projects due to changes in the laws, regulations and ordinances (including tribal or local laws) that apply to gaming facilities or the inability of us or our key personnel, significant shareholders or joint venture partners to obtain or retain gaming regulatory licenses. If the NIGC elects to modify the terms of our management contracts with Indian tribes or void such contracts altogether, our revenues from management contracts may be reduced or eliminated. If Indian tribes default on their repayment obligations or wrongfully terminate their management contracts with us, we may be unable to collect the amounts due. A deterioration of our relationship with an Indian tribe could cause delays in the completion of a casino development project with that Indian tribe or even force us to abandon a casino development project altogether and prevent or significantly impede recovery of our investment therein. If funds from our operations are insufficient to support our cash requirements and we are unable to obtain additional financing in order to satisfy these requirements we may be forced to delay, scale back or eliminate some of our expansion and development goals, or cease our operations entirely. If one or more of our Indian casino projects fail to open, the recorded assets related to those projects will be impaired and there will be a material adverse impact on our financial results. During September 2005, legislation was proposed to amend the Gambling Devices Act of 1962 which could negatively affect projected management/consulting fees from the Shingle Springs and Jamul Casino projects. Our entry into new businesses may result in future losses. We cannot guarantee the financial results of the expansion of the World Poker Tour business, which may negatively impact our financial results. We are dependent on the ongoing services of our Chairman and Chief Executive Officer, Lyle Berman, and the loss of his services could have a detrimental effect on the pursuit of our business objectives, profitability and the price of our common stock. Our Articles of Incorporation and Bylaws may discourage lawsuits and other claims against our directors. Our Articles of Incorporation contain provisions that could discourage or prevent a potential takeover, even if the transaction would be beneficial to our shareholders. The price of our common stock may be adversely affected by significant price fluctuations due to a number of factors, many of which are beyond our control. We have issued numerous options and warrants to acquire our common stock that could have a dilutive effect on our common stock. The market price of our common stock may be reduced by future sales of our common stock in the public market.

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1071255--3/8/2006--LAKES_ENTERTAINMENT_INC