1235662--3/31/2006--PENINSULA_GAMING

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Our future operating performance could be adversely affected by disruptions and reduced patronage of our properties as a result of economic and other business factors. Restrictive Covenants - The indenture governing the Peninsula Gaming and DJW Notes and our senior secured credit facilities contain covenants that significantly restrict our operations. We have had net losses in recent years and may continue to experience net losses in the future. If we fail to meet the minimum live racing day requirements, our gaming license with respect to the racino will be canceled and all slot machine gaming at the racino must cease. Licensing If we fail to construct a hotel near the site of the Diamond Jo Worth casino within 18 months of the opening of the casino, our gaming license could be revoked. Risk of a New Venture The Diamond Jo Worth casino does not have any operating history or history of earnings. Reauthorization of Gaming in Iowa The Dubuque County and Worth County electorate must vote in 2010 and every eight years thereafter whether to continue to allow riverboat gaming in Dubuque County and Worth County, Iowa. If riverboat gaming is discontinued, it is unlikely that DJL or DJW will be able to conduct its gaming operations. Revocation of any of our liquor licenses, which are subject to extensive regulation, could have a material adverse effect on our gaming operations. We face intense competition in our gaming markets and increased competition may have a material adverse effect on our business, financial condition and results of operations. Extensive gaming and racing-related regulation continuously impacts our operations and changes in such laws may have a material adverse effect on our operations by, among other things, prohibiting or limiting gaming in the jurisdictions in which we operate. We are subject to environmental laws and potential exposure to environmental liabilities. This may affect our ability to develop, sell or rent our property or to borrow money where such property is required to be used as collateral. An increase in the taxes and fees that we pay could have a material adverse effect on us, and might reduce the cash flow available to service our indebtedness, including under the notes. Difficulty in Attracting and Retaining Qualified Employees If we are unable to attract and retain a sufficient number of qualified employees or are required to substantially increase our labor costs, our business, results of operations and financial condition will be materially adversely affected. All of the Company s voting equity interests are indirectly beneficially owned in the aggregate by managers and executive officers of PGP and Jefferies and Co., Inc., the initial purchaser of the Peninsula Gaming and DJW Notes ( Initial Purchaser ), and such ownership may give rise to conflicts of interest.

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1235662--3/31/2006--PENINSULA_GAMING_CORP.