Golden Entertainment Inc (GDEN) 2007 Q1 法說會逐字稿

Good afternoon. My name is Cynthia, and I will be your conference operator today. At this time, I would like to welcome everyone to the Lakes Entertainment first quarter fiscal 2007 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. (OPERATOR INSTRUCTIONS) I would now like to turn today's call over to Tim Cope, President and CFO. Please begin your conference.

Thank you and hello, everyone. Thank you for joining today's conference call as we discuss Lakes Entertainment's first quarter 2007 financial results. My name's Tim Cope and I'm Lakes' President and Chief Financial Officer. Here with me is Lyle Berman, Lakes' Chairman of the Board and Chief Executive Officer. As we begin our prepared remarks, I'd like to remind everyone that this call may contain forward-looking statements within the meaning of the federal securities law, including statements concerning business strategies and their intended results and similar statements concerning anticipated future events and expectations that are not historical facts. These forward-looking statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements do not guarantee future performance and therefore undue reliance should not be placed upon them. Lyle will begin our discussion today with an update on our casino projects. I'll then discuss our first quarter financial results and recent business events. Lyle?

Good afternoon, everyone, and thank you for joining us today. As I review each casino project, please remember that they are not in any order of significance or state of completion. Dates of construction and anticipated openings are subject to change. I'll begin with the Four Winds Casino Resort. Lakes has a National Indian Gaming Commission approved development and management contracts with the Pokagon Band of Potawatomi Indians to build and manage a 125,000 square foot casino in New Buffalo Township, Michigan, approximately 75 miles east of Chicago. Construction on this project began in June of 2006. The project continues to move along on schedule and within budget and we continue to be very pleased with the construction process. We encourage you to view the webcam on our website, lakesentertainment.com, to see the facilities' progress. We look forward to the scheduled opening of both the casino and the 165-room hotel in August of this year.

Once completed, Four Winds Casino Resort will be the only land-based casino in the northern Indiana - western Michigan market. The casino will include 3,000 slot machines and 110 table games, as well as restaurants, the hotel, retail shopping space and several other amenities. The next project I will discuss is the Foothill Oaks Casino, which is the development and management project with the Shingle Springs Band of Miwok Indians near Sacramento, California. Lakes has a seven-year management contract that has been approved by the National Indian Gaming Commission to develop and manage this casino, which is to be built on the Rancheria of the Shingle Springs Tribe in El Dorado County, California, approximately 35 miles east of Sacramento. After overcoming several years of delay taxes and unfounded litigation, I'm happy to report that the Tribe received the building permit from the California Transportation for the interchange on April 30, 2007 and construction of the interchange started earlier this week. We are working to finalize financing for the project in the near future and look forward to the start of construction on the casino during the early summer of 2007.

Once completed, the facility will host a total of 2,000 slot machines and gaming devices, 100 gaming tables, several food and beverage outlets and approximately 3200 covered parking spaces. We anticipate an opening date in the fourth quarter of 2008 for this project. Next I will discuss our project with the Jamul Indian Village. Lakes has an agreement for the development and financing of a casino resort operation with the Jamul Indian Village. The Jamul Tribe has a six acre reservation on which the casino is planned to be built. Lakes has also acquired approximately 100 acres of land contiguous to the six acres of reservation land that could be used for the casino's support facilities if the land is taken into trust. The process of getting the land into trust has been slow, and therefore, the current plans are for the casino to be built on the existing six-acre reservation. Under the current compact with the State of California and based upon requirements and other compacts approved by the state in 2004, the Tribe completed a tribal environmental impact statement report that was approved by the Tribe's general council with a record of decision issued by the Tribe on December 6, 2006.

Since that time, the Jamul Tribe has received comments from various state agencies, including the representative from the California governor's office. The Tribe in the state have met on several occasions in an attempt to address the state's comments related to compact requirements. Resolving the state's comments and other issues concerning the existing compact or negotiating a new compact, may take longer than is currently acceptable to the Jamul Tribe. Therefore, based on the most recent meeting with the state, Lakes and the Tribe, the Jamul Tribe, evaluated the Tribe's alternatives of pursuing a new compact complying with certain requirements in its existing compact or building and operating a casino based solely on class two electronic gaming devices. Lakes and the Jamul Tribe have decided to move forward with the opening of a casino based solely on class two electronic gaming devices, and therefore, the size and scope of the gaming facility will decrease.

The agreement between Lakes and the Jamul Tribe will also be modified to reflect the new economics of the revised casino plan, which will not require a compact and will not be subject to the approval by the state or NIGC. Along with the Tribe, we are currently evaluating plans for the casino facility to determine when construction will start and when casino operations will begin. Next, I will discuss the current status of our agreements with the Pawnee Nation of Oklahoma. In January, 2005, the Pawnee business council, which is the tribal government leadership of the Pawnee Nation, approved the tribal agreement, ratifying consulting and management contracts, between a Lakes subsidiary, the Pawnee Tribal Development Corporation and the Pawnee TDC's gaming subsidiaries, comprised of tribal entities that own and operate the tribal casino, relating to the existing Trading Post Casino and two other proposed facilities, the Travel Plaza Casino and the Chilocco Casino. Since that time, certain of our agreements have been disputed by the Pawnee Business Council.

Lakes, the Pawnee TDC and its gaming subsidiaries, which support approving the updated tribal agreement and Lakes' involvement in the projects, are evaluating how they wish to proceed with their current project agreements given this action. Including, perhaps, terminating the project agreements. For our consulting services, Lakes was receiving $5,000 per month related to the Trading Post Casino project and was to receive monthly fees of $25,000 and $250,000 from the Travel Plaza Casino and Chilocco Casino project respectively upon their completion. Lakes had also planned to manage each of these facilities under management contracts, subject to regulatory approvals. We currently believe that it's unlikely that we will receive future fees related to these projects. Lakes has advanced approximately $5 million to the Pawnee TDC related to these projects under the existing agreements. As a result of the dispute related to our agreements, we have decreased the carrying value of these notes receivable to zero on our financial statements.

We intend to work with the Pawnee TDC to resolve all of the financial terms of the contracts, including repayment of the advances. However, there can be no assurances that we will receive any future payments related to these projects or that we will be repaid in our full -- in full for our advances. We will continue to work with the Pawnee TDC and the Business Council to reach a resolution. Now I will discuss our projects with the Iowa Tribe of Oklahoma. Lakes has signed consulting and management agreements with the Iowa Tribe to assist in the development, construction and management of two gaming facilities. The first one is the existing Cimarron facility, which is located in Perkins, Oklahoma, approximately eight miles from Stillwater. This casino has been renovated to increase gaming machines from 240 to 350. It also includes six electronic table games, new back-of-the-house spaces and a new snack bar. Renovations were completed early last summer, about the same time our seven-year management contract was approved by NIGC. Additional land was purchased and a 200 new parking places were added.

The project came in substantially under budget and additional improvements, including training facilities, a new smoke shop and a new gaming commission offices are being completed with these additional funds. We are very pleased to be working with the Iowa Tribe on this project and are very proud of this locals themed casino. The second project with the Iowa Tribe of Oklahoma is the development of a full service casino and resort, which will be named the Ioway Casino on tribal land located on route 66 midway between Warwick and Chandler, Oklahoma. The Iowa Tribe has members that own a 74-acre allotment on U.S. route 66, midway between the access points to Warwick and Chandler, Oklahoma, from 144. The Iowa Tribe has acquired a majority interest in 59 acres of this parcel and is in the process of obtaining a majority interest in the remaining 15 acres. An additional 100 acres of fee land has been acquired to provide the necessary site area for the project. The long-term plan is to acquire an additional 300 acres of non-trust land for the development of a majority of non-gaming facility.

The Bureau of Indian Affairs must approve the transfer of the land to the Tribe. To date, approximately 80% of the allotees have transferred their land interest to the Tribe with the BIA approval. The BIA must also approve the leasing of the additional acres of allotee land to complete the site. This requires preparation of an environmental assessment for the proposed project and the issuance of a finding of no significant impact by the BIA. The EA was completed and submitted to the BIA in March of 2007, with the issuance of a FONSI, which will allow approval of the leases. The master plan and draft environmental assessment have been submitted to the BIA and NIGC. Once approved, the EA will pave the way for NIGC approval of the management contract. The NIGC has provided their final comments to the Tribe on the contract and, subject to these revisions and issuance of the FONSI, the NIGC can approve the management contract. The proposed development is planned to have approximately 1200 slot machines, 30 table games, four restaurants, 150 room hotel, a child care center, parking and back-of-the-house support facilities.

Future developments may include additional gaming, hotel rooms, meeting space, special event center, golf course and other market-driven amenities. We anticipate construction to begin in late 2007, with an anticipated opening in December of 2008. The final project to discuss today is our own casino development plan in Vicksburg, Mississippi. Lakes has purchased land in Vicksburg just south of downtown and adjacent to the Mississippi River. Our current site has been approved for gaming by the Mississippi Gaming Commission and we recently received a two-year extension on this approval. Once complete, the casinos plan to house 1200 slot machines, 46 table games, 12 poker tables, four restaurants, a 250 room hotel with meeting rooms, parking and a possible child day-care center. We currently anticipate construction to begin in early 2008 with a 2010 opening. With that, I'll turn the call back over to Tim to provide an overview of recent business issues and financial results. Tim.

Thank you, Lyle. Revenue for the fist quarter of 2007 totaled $5 million, compared to $6.6 million for the first quarter ended April 2, 2006. Losses from operations were $7.3 million for the current quarter, compared to earnings from operations of $10.4 million for the prior year period. Net losses for the first quarter of 2007 were $12.1 million and basic and diluted losses were $0.53 per share. This compares with a net earnings of $11.7 million and basic and diluted earnings of $0.52 per share and $0.48 per share respectively in the first quarter 2006. Revenues for both years were derived primarily from television license fees related to the World Poker Tour television series of our majority owned subsidiary, World Poker Tour Enterprises, Inc. The decrease in revenues during the first quarter of 2007, compared to the first quarter of 2006, was primarily result of the delivery of five episodes of season five of the WPT television series in the first quarter of 2007 versus six episodes of season four of the WPT and one episode of Professional Poker Tour delivered in the first quarter 2006.

Online gaming, sponsorship and international television license revenues also decreased in the first quarter 2007 compared to the 2006 first quarter period. The decrease in online gaming revenue during the 2007 first quarter period was due to lower levels of player activity versus the prior year period. Sponsorship and event revenue decreased primarily due to the timing of not airing any episodes of the WPT television series in the first quarter 2007 versus the airing of five episodes of season four in the prior year period. International television licensing revenues decreased as a result of decreased distribution agreements for season four of the WPT and season one of the PPT. During the first quarter of 2007, casino management fees were approximately $400,000. There were no casino management fees recognized during the first quarter of 2006.

Net realized and unrealized gains on notes receivable were $200,000 and $15.5 million for the first quarter 2007 and the first quarter 2006 respectively. The net realized and unrealized gains in the first quarter of 2007 related to our notes receivable from the Pokagon Band of Potawatomi Indians, the Shingle Springs Band of Miwok Indians and the Jamul Indian Village which are adjusted to estimated fair value based upon the current status of the related tribal casino projects. Regarding the Pokagon Band, during March of 2007, Lakes contracted with a group of investors for their participation in the loans made by Lakes to the Pokagon Band and assumed by the Pokagon Gaming Authority and an agreed upon price of 98% of the face value of the loans as of the settlement date of March 2, 2007. Accordingly, as of March 2, 2007, the Pokagon notes receivable were adjusted to the negotiated participation price of 98%, which resulted in a gain of approximately $1.6 million during the first quarter 2007, which in turn was partially offset by transaction costs of approximately $1.1 million.

This participation arrangement was accounted for as a sale during 2007. However, the sale did not have any effect on Lakes' management agreement for the Pokagon casino resort project. Regarding the Shingle Springs Tribe, the repayment terms of the notes receivable were revised and the notes will now be repaid over the life of the seven-year management agreement, resident over approximately 24 months. This change resulted in unrealized losses of notes receivable of approximately $0.9 million for the first quarter of 2007. In conjunction with the change in the repayment terms of the notes receivable, the Tribe has agreed to repay Lakes for non-gaming land at the time the casino project financing is completed. Lakes had previously purchased this land on behalf of the Shingle Springs Tribe and will be repaid at its cost of approximately $8 million plus accrued interest for this non-gaming land.

During the first quarter of 2006, the net unrealized gains of $15.5 million, related primarily to the increased probability of opening for the casino development projects with the Pokagon Band and the Jamul Indian Village, due to favorable events occurring during the first quarter of 2006. Selling, general and administrative expenses were $9.7 million during the first quarter of 2007 compared to $9.2 million in the first quarter of 2006. The increased primary related to additional headcount and professional fees associated with project developments. Other expense for the first quarter of 2007 was $5.4 million compared to other income of $5.4 million for the first quarter 2006. In March, 2007, Lakes' then existing $105 million credit agreement was repaid in conjunction with the Pokagon notes receivable participation transaction discussed earlier. This repayment resulted in a loss of extinguishment of debt of approximately $3.8 million during the first quarter of 2007.

Other income in the 2006 first quarter included a gain on sale of securities of $5.7 million related to a sale of 630,000 shares of common stock of PokerTek, Inc held by WPTE. As a result of the recent Pokagon notes receivable participation transaction, we repaid our $105 million credit agreement and Lakes is now in a debt-free position. Just recently, during May of 2007, Lakes and PLKS Holdings, LLC amended the exercise price of the warrant which is granted to PLKS pursuant to the terms and conditions of a 2006 financing agreement, which was fully repaid by Lakes on June 22, 2006. The amendment reduced the exercise price of the warrant from $7.50 per share to $6.50 per share for the remaining 1,147,500 shares underlying the warrant. In consideration for the reduced exercise price, PLKS delivered to Lakes the exercise notice for the purchase of the remaining 1,147,500 shares underlying the warrant on May 4, 2007 and paid the aggregate exercise price of approximately $7.5 million on May 7, 2007.

We negotiated this amendment with PLKS so that we could eliminate the uncertainty as to when the remainder of the warrant would be exercised, as the warrant was not set to expire until 2013. The receipt of this payment at this time gives us greater flexibility with respect to funding our ongoing projects and operations. During April, 2007, PLKS had exercised 102,500 shares underlying the warrant at $7.50 per share and had paid Lakes, $800,000. As a result of these two separate exercises for the entire 1,250,000 shares underlying the warrant, the warrant has now been fully exercised and no additional shares will be issued related to the warrant. In summary, we're very pleased with the progress we have made on all of our projects during first quarter of 2007. The excitement is continuing to build surrounding the opening of the Four Winds Casino in August and the start of the interchange construction at the Shingle Springs project is a major step forward in the development of the planned Foothill Oaks Casino. We appreciate our tribal partners and associates and their dedication to making all of our projects successful. With that I will turn the call over to the operator for questions.

(OPERATOR INSTRUCTIONS) Your first question comes from Chris Krueger with Northland Securities.

Good afternoon, guys. On your Four Winds Casino project, I think you noted on the call that it is about 125,000 square foot. Can you give us a preliminary square foot number for the Shingle Springs project?

Shingle Springs is approximately 90,000 square feet of casino space, which would hold the 2000 machines and 100 tables.

And that 125,000 for Four Winds was for the casino part as well, just to make sure I'm clear on that?

Correct and that's the 3000 machine project.

Okay. As far as the Shingle Springs project, besides the CalTrans beginning on the interchange work, have the local tribes begun -- are they doing anything in advance at the casino site, whether it be getting the land ready or clearing any areas out or anything like that before you begin construction?

The tribal members themselves are very excited about the project, obviously, and they have been very proactive about clear cutting the area where the road will enter, so on the reservation land, they've taken upon themselves to cut down trees and do some preliminary development work.

And you are able -- if you're able to begin construction in the next couple of months, you'll be able to get your equipment and supplies and everything into that through other roads and other means?

It takes us about four weeks of the interchange construction to get the access road to the casino site itself. So that's why we're excited about the interchange starting now. And then through the completion of the financing process, we'll be in a position to start the casino project.

Okay. Then back to Four Winds, can you just give us a little bit of an idea how the hiring process is going? I know there is going to be a couple thousand employees there. Want to get an idea of how that's going and how many have casino experience in the past, things like that?

Yes, the hiring process has gone very well. We have a very defined plan of when we need the appropriate staff on site. Training has already started for the dealers. We have approximately 8,000 applications on hand. We intend to open with a little over 2,000 employees, so we're right on target and a little bit ahead of getting the necessary applications we need for the staffing positions there.

Okay, last question. For when the typical casino -- when there's a typical opening for a casino, is it generally extremely full house type of activity that first month or does it ramp up to that or does it settle down from that? What can you tell us there? That's all I've got.

This is Lyle Berman. Typically when new large casinos open, it's the biggest problem is crowd control. You understand that we're big news in that area. We'll be on the front page of -- from a marketing standpoint it's basically free. We get -- we'll be front page news on virtually every newspaper, every news radio station in the area. So although we have a very elaborate marketing plan, I would say in the first two, three, four weeks, it's really more like you get immediate trial from all of the people in the market. Remember the northern Indiana market is about $1.2 billion and we're going to be considered the big dog in the market. And all your casino customers want to come and give trial.

All right. Thank you.

Your next question comes from Clint Morrison with Feltl & Co.

The change in -- at Shingle Springs for the repayment terms in exchange for them buying the land, I thought the understanding all along was that you'd bought this land and they're going to buy it back. I'm trying to understand why we had to give them incentive to all of a sudden get them to commit to buying that land back?

It had always been agreed they would buy the land back. But as been anticipated, it would be paid over time. In this particular case, now we get actually get repaid within the next month or two in terms of when the financing closes. So we get immediate use of the cash even though we had already committed to sell the land to the Tribe over a period of time.

So we get paid for the land right away but they extend out the payment on the loan.

Correct.

As opposed to paying the loan right away and extend out the payment on the land.

There was never an opportunity to pay the loan immediately.

Okay, yes. I think I understand. So it doesn't sound like anything really has changed. I just couldn't understand why we were sort of changing the terms here at the last minute.

(Multiple speakers) I'm sorry, go ahead.

The financing for Shingle Springs, I assume nothing happens until we get that done. Do we have a timetable as when that's going to transpire?

We're looking at it completed within the next 30 to 60 days.

Okay. And the management fee, is that all from the Cimarron Casino?

Yes, it is.

Okay. That takes care of me, thanks.

Your next question comes from [Racy Perkege] with KBC Financial.

Hi, gentlemen, how are you? Could you talk about how your recruiting efforts are going at the Pokagon site?

This is Lyle again. Our recruiting is going very well. I asked -- I was just there yesterday with Tim. I believe I asked the question how many of the people we've hired so far have come from other casinos and I believe it's about 50%. And I think as we hire closer to the d-day, it'll be even be a much higher percentage than that. In numbers, Tim, do you know exactly how -- about how many people we've hired of the 2100 we're expected to hire?

Actually on staff right now, we have a little bit over 100 people, which is primarily made up of the senior management and department managers. That's about on plan. We've hired, starting to hire the dealers now and then of course as it ramps up closer, we'll be hiring the majority of the people. We expect to have approximately 1600 employees hired by the end of April timeframe and the rest coming in June, July.

So you're comfortable that you're on track?

Very comfortable.

There's probably some casino employees that you don't really want from some of your neighbors but anyway, but I'm sure you're filtering appropriately. If we were to tour that property, what would we see today inside? Carpets going down, slot bases, what stage would you say you're at?

We were there yesterday again and it's come along very, very well. You'll see not just slot bases in place, you'll see machines on the slot bases. All of the carpet's been laid or almost all of it. It's the finishes in all of the restaurants as well as the casino are essentially done, they're putting the finishing touches on it. So it's -- it looks -- I mean it's very impressive. The best word I could be given by people who we take to it now is they look at it and say unbelievable. It literally will be one of the nicest native American casinos in the United States.

I agree. Why aren't you guys moving up the opening date?

Once you put the opening date in place -- well, first off, you can't because everything kind of trickles down. Once you put that process in place, you really -- it's not really a very effective to move it up. But I don't know that we could if we wanted to. I think we're on target, we're on budget. But I don't think we're two weeks ahead of schedule or anything like that.

Could you talk a little bit about the high roller amenities that your property's going to have that the other properties in this market just can't have, even if they have a barge?

Tim, you want to talk that one?

Sure. One of the things we start with, first of all, is the very high end of the restaurant offerings that we have, unlike anybody else in the northern Indiana atmosphere for sure. In addition to that, we have very nice high-end three and -- two and three base suites in our hotel, with all the amenities that a high roller would expect to have. And then when you get to the actual gaming floor itself, you have a very large dedicated area, very upscale. You'll find it surprisingly nice. I think the only thing we can compare it to would be the Mansion in MGM in Vegas. It has its own private entrance. If a high-end patron would choose to come in and not be surrounded by the mobs in the casino, he can certainly come in his own entrance, gamble, receive the best quality food and service and then go back out the door without having the paparazzi interfere with them. So we think we have a very good mouse trap and very good amenities and very good plan in which to capture the high-end market.

Are you coming along with getting retail guys signed up because I believe you have some retail space?

Yes, we have retail space. Remember, we only -- I think we only have three 1800 foot spaces. And at this point, we do have tenants. One is a signed lease and the other two we have tentative agreements on. So it will be completely open -- should be completely filled when we open.

I see. Sounds to me like you guys are very cognizant of the fact that you've only got five years on the contract to make as much as you can.

Well, that is true, at least until we renew it.

I think the webcam you've set up is great but I'd encourage you guys to consider circulating some internal photographs as well.

Okay.

When you get around to it. Thank you very much, guys.

(OPERATOR INSTRUCTIONS) Your next question comes from [Justin Geraux] with T. Rowe Price.

Hi, guys. How are you?

Good, thanks.

Just two quick questions. One, as you get a little bit further down the line with Shingle Springs and it gets a little bit closer to opening, is there any chance to kind of engage in a similar transaction with the notes receivables that you did with the Pokagon Band?

Certainly -- it's Lyle, again, certainly that's one of the things we're certainly going to be considering.

Okay. Then Lyle, I love just to get your thoughts. Obviously, there's still a lot of heavy lifting to do with opening a couple casinos and then developing your own, but longer term certainly the Native American contracts do potentially have a finite life cycle. What is your thoughts in terms of potentially opening up more of your own Company owned casinos? Is it a build versus buy decision?

Well, certainly when you -- we're going to open these three casinos, maybe four, towards the end of 2008, we're going to be really becoming a cash cow, so to speak as they say, in 2009. We are certainly going to be looking to redeploy that money into businesses with recurring revenue. We are going to be in the Indian gaming business for a long time. But, we certainly don't see taking that cash flow and redeploying it in Indian gaming. We're certainly going to be looking both within the gaming industry and perhaps outside the gaming industry for businesses that we think we can manage and run well. People would say why can't we be more specific than that because what's going to be for sale or even for build three year, two years from now isn't what's available today.

Exactly. Okay, thanks for those thoughts.

Okay.

Your next question is a follow-up question from Clint Morrison with Feltl & Co.

At the Four Winds Casino, out of curiosity, we've been at this for several years now. How have our expectations changed at all as to how well it's going to do? We obviously were guessing several years ago as to sort of the revenue and the feedback? What have we learned? Are we sort of more excited about the revenue it might generate or less, how's the environment changed over the last couple of years.

This is, again, Lyle Berman. I think our expectations continue to grow and it grow for a couple of good reasons. Number one, of course the market has continued to grow. Today the market is in excess, I believe, of $1.2 billion. So it has continued to grow. Another thing that was brought a lot of encouragement to us was Blue Chip about a year ago, that's the casino just -- the closest casino to us and yet the furthest from the Chicago market, they substantially upgraded their facilities a year ago and their business went up almost immediately about 20% to 25%. We found it very encouraging that when you open a better facility, you get -- your revenues go up. They don't even compare to what we're doing. So certainly, the project itself has come out just extraordinarily well. It's just a big, very beautiful casino. The market has grown. We're the big dog in the market and we continue to just think that we will very much dominate the market.

Okay. Then maybe just the same question at Shingle Springs, the next one coming up. Anything changed in the environment there to make us more optimistic (Multiple speakers)?

Well, again, I'll just use comparisons, although they are not putting them out in the public form, but we know that Thunder Valley, which is the only other casino in the major Sacramento area. I think there's 5, 6 million people there and we're the -- there's just going to be two Indian casinos. They've continued to grow, they continue to do better. We're 50 mile apart but in -- we each have our own segmented areas. We don't think -- we think we'll do equally as well as they've done and certainly won't hurt them at all. So we're very excited about that as well.

Okay, good, that's encouraging. Thank you.

(OPERATOR INSTRUCTIONS) Your next question comes from Roy Berry.

Hello. I got an accounting question for Tim. Tim, when Four Winds opens in a couple or three months, would you start receiving the income, will you be receiving cash and booking it on a monthly, quarterly or annual basis?

We'll receive cash and income on a monthly basis.

That answers my question.

All right, good.

At this time, there are no further questions. Mr. Cope, are there any closing remarks?

Lyle, do you want to close?

No, just want to say thank you, all, for tuning in and watching our progress. It's been dramatic lately. I think in the next six months, we become more dramatic because we'll not only be opening the biggest casino in the northern Indiana market, but we'll also should be under construction with several more. So, we're going to be very busy people and it's a very exciting times for Lakes Entertainment.

Ladies and gentlemen, this concludes today's Lakes Entertainment first quarter fiscal 2007 financial results conference call. You may now disconnect.