10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (“Act”)
	For the fiscal year ended December 31, 2008
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 333-88242

JACOBS ENTERTAINMENT, INC.

(Exact name of Registrant as specified in its charter)

Delaware	34-1959351
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

17301 West Colfax, Suite 250, Golden, Colorado 80401

(Address of principal executive offices) (Zip code)

(303) 215-5200

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None.

Securities registered pursuant to Section 12(g) of the Act: None.

Indicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act.

Yes   o  No   x

Indicate by check mark if the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Act.

Yes   x  No   o

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes   x  No   o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  o	Accelerated filer  o	Non-accelerated filer  x	Smaller reporting company  o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes   o  No   x

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter:  No market exists for the common stock of the registrant; as of March 18, 2009 all of its outstanding shares of common stock are held by one person and three trusts.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date:

Class	Outstanding at March 18, 2009
Class A Common Stock, $0.01 par value	1,320 shares
Class B Common Stock, $0.01 par value	180 shares

DOCUMENTS INCORPORATED BY REFERENCE:  None

See the exhibit index which appears on page E-1.

JACOBS ENTERTAINMENT, INC.

2008 ANNUAL REPORT ON FORM 10-K

Table of Contents

Item	Description
Item 1.	Business
Item 1A.	Risk Factors
Item 1B.	Unresolved Staff Comments
Item 2.	Properties
Item 3.	Legal Proceedings
Item 4.	Submission of Matters to a Vote of Security Holders
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Item 6.	Selected Financial Data
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 7A.	Quantitative and Qualitative Disclosure about Market Risk
Item 8.	Financial Statements and Supplementary Data
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A.	Controls and Procedures
Item 9A(T).	Controls and Procedures
Item 9B.	Other Information
Item 10.	Directors, Executive Officers and Corporate Governance
Item 11.	Executive Compensation
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13.	Certain Relationships and Related Transactions, and Director Independence
Item 14.	Principal Accounting Fees and Services
Item 15.	Exhibits, Financial Statement Schedules

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

We make statements in this report that relate to matters that are not historical facts that we refer to as “forward-looking statements” regarding, among other things, our business strategy, our prospects and our financial position. These statements may be identified by the use of forward-looking terminology such as “believes,” “estimates, “expects, “intends,” “may,” “should” or “anticipates” or the negative or other variation of these or similar words, or by discussion of strategy or risks and uncertainties. Forward-looking statements in this report include, among other things, statements concerning:

·projections of future results of operations or financial condition;

·expectations for our casino, truck plaza and horse racing properties; and

·expectations of the availability of capital resources.

Any forward-looking statement made by us necessarily is based upon a number of estimates and assumptions that, while considered reasonable by us, are inherently subject to significant business, economic, regulatory and competitive uncertainties and contingencies, many of which are beyond our control, and are subject to change. Actual results of our operations may vary materially from any forward-looking statement made by us or on our behalf. Forward-looking statements should not be regarded as representations by us or any other person that the forward-looking statements will be achieved. Undue reliance should not be placed on any forward-looking statements. The contingencies and uncertainties to which any forward-looking statement contained herein is subject to include, but are not limited to, the following:

·Our substantial indebtedness could adversely affect our financial health and prevent us from fulfilling our debt obligations.

·We will require a significant amount of cash to service our indebtedness. Our ability to generate cash depends on many factors beyond our control.

·Our indebtedness imposes restrictive covenants on us and our ability to refinance our debt in the foreseeable future is problematic given the recent and continuing turmoil in the credit markets.

·We may not be able to successfully integrate the operations of recent and future acquisitions into our business.

·We may experience a loss of market share due to intense competition and the possible introduction of slot machines at one or more Colorado racetracks.

·We face extensive regulation from gaming and other government authorities and the possibility that legislative changes may prohibit or limit our gaming activities.

·Changes to applicable tax laws could have a material adverse effect on our operations and financial condition.

·Our operations could continue to be adversely affected due to the adoption of anti-smoking regulations in Colorado and their possible adoption in Nevada.

·We depend upon our key employees and certain members of our management.

·The single member of our board of directors and his family trusts indirectly own or control the issued and outstanding shares of Jacobs Entertainment, Inc. and could have interests that conflict with yours.

·We rely on the maintenance of agreements with horsemen at our horse racing facility.

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·Our business relies heavily on certain markets and an economic downturn in these markets as has been experienced in 2008 could have a material adverse effect on our future results of operations.

·Seasonality and weather conditions can adversely affect our results of operations.

All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements included in this report. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this report might not occur.

NON-GAAP FINANCIAL MEASURES

Consolidated and property level EBITDA and the related ratios presented in this report are supplemental measures of our performance that are not required by, or presented in accordance with, generally accepted accounting principles. EBITDA is not a measurement of our financial performance under generally accepted accounting principles and should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with generally accepted accounting principles, or as an alternative to cash flow from operating activities as a measure of our liquidity.

EBITDA consists of net income (loss) plus depreciation and amortization, interest, net of capitalized interest, and income taxes. EBITDA is presented because it is used by our management as a supplemental performance measure to analyze the performance of our business and because it is frequently used by securities analysts, investors and others in their evaluation of companies in our industry, substantially all of which present EBITDA when reporting their results.

Our bank credit agreement and our indenture use EBITDA, subject to certain adjustments, to measure our compliance with debt covenants. We also use EBITDA to evaluate and price potential acquisition candidates. We believe EBITDA facilitates operating performance comparisons from period to period and company to company by removing potential differences caused by variations in capital structures (affecting relative interest expense), tax positions (such as the impact on periods or type of companies of changes in effective tax rates or net operating losses) and the age and book depreciation of facilities and equipment (affecting relative depreciation expense).

EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under generally accepted accounting principles. Some of these limitations are:

·EBITDA does not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;

·EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

·EBITDA does not reflect the cash requirements necessary to service interest or principal payments, on our debts;

·although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements; and

·other companies in our industry may calculate EBITDA differently than we do, limiting its usefulness as a comparative measure.

Because of these limitations, EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our results under generally accepted accounting principles and using EBITDA only supplementally. See our consolidated financial statements and the notes to those statements included elsewhere in this report.

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INDUSTRY AND MARKET DATA

This report includes market and industry data that we obtained from our own research, studies conducted by third party sources that we believe to be reliable and industry and general publications by third parties and, in some cases, management estimates based on industry and other knowledge. We have not independently verified any of the data from third party sources, and we make no representation as to the accuracy of such information. While we believe internal company estimates are reliable and market definitions are appropriate, they have not been verified by any independent sources.  Actual results could differ from those estimates.

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PART I

Item 1.               Business.

Introduction

Jacobs Entertainment, Inc. (“Jacobs Entertainment,” “JEI,” the “Company,” “us,” “our” or “we”) was formed as a Delaware corporation on April 17, 2001. We are a developer, owner and operator of gaming and pari-mutuel wagering facilities throughout the United States, with properties located in Colorado, Louisiana, Nevada and Virginia. We own and operate five land-based casinos, 18 video gaming truck plazas (five of which are leased) and a horse racing track with eight satellite wagering facilities (four of which are leased). In addition, we are party to an agreement that entitles us to a portion of the gaming revenue from an additional truck plaza video gaming facility.

All of our gaming facilities target local customers and emphasize revenues from slot machine play or video gaming, or both. For the year ended December 31, 2008, our net revenues and EBITDA were approximately $362.5 million and $43.0 million, respectively. See Note 15 to our consolidated financial statements for information concerning the operational performance of the segments of our business.

The following table sets forth certain information and property level EBITDA (excluding corporate overhead) of our properties:

			As of December 31, 2008				Year Ended December 31, 2008
			Approximate
			Gaming
			Square	Gaming	Table	Hotel	Property Level
Property	Location	Facility Type	Footage	Machines	Games	Rooms	EBITDA (1)
							(in thousands)
The Lodge Casino	Black Hawk, Colorado	Land-based casino	25,000	944	32	50	$	25,759
Gilpin Casino	Black Hawk, Colorado	Land-based casino	16,000	429	18	0	5,407
Gold Dust West-Reno	Reno, Nevada	Land-based casino	17,500	470	0	27	6,239
Gold Dust West -Carson City	Carson City, Nevada	Land-based casino	12,000	392	6	146	(1,279		)
Gold Dust West-Elko(2)	Elko, Nevada	Land-based casino	13,000	329	7	0	1,288
Louisiana Truck Plazas	Louisiana (19 various locations)	Video gaming	12,000	929	0	0	21,688
Colonial Downs Racetrack and satellite wagering facilities	Virginia (8 various locations)	Horse racing and pari-mutuel wagering	N/A	N/A	N/A		599
Total			95,500	3,493	63	223	$	59,701

(1)	Property Level EBITDA excludes corporate overhead expense of $16.7 million.
(2)	Opened March 5, 2007.

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The following is a reconciliation of our property level EBITDA to our net loss (in thousands):

	Year Ended December 31, 2008
Total Property Level EBITDA	$	59,701
Corporate overhead	(16,677		)
Total EBITDA	43,024
Depreciation and amortization	(19,935		)
Interest expense, net	(27,227		)
Net Loss	$	(4,138	)

Business Strategy and Competitive Strengths

Our business strategy is to continue to develop a broad, geographically diversified base of gaming and pari-mutuel wagering properties that seek to provide our customers with an enjoyable entertainment experience, and in turn, to generate significant customer loyalty and repeat business.  We believe that there are opportunities for growth and operational efficiencies in the markets in which we operate.

Black Hawk, Colorado was one of the fastest growing gaming markets in the country, having experienced a 26.3% compound annual growth in gaming revenue from 1998 through 2000. Revenues in 2001 through 2003 stabilized at approximately $500 million annually and rose to $524 million in 2004, $535 million in 2005, $554 million in 2006, and $581 million in 2007.  However, in 2008, revenues fell to $509 million due to a statewide smoking ban and a nationwide economic recession, combined with a pronounced slowdown in the gaming industry.

In 2006, we acquired an operating casino in Carson City, Nevada, and we entered into a land and building lease to develop a casino in Elko, Nevada that opened on March 5, 2007. We continue to consider several other potential small casino opportunities in Nevada.

In the last three years, we acquired and/or developed seven additional Louisiana truck plaza video gaming facilities and we believe that there are other Louisiana truck plaza video gaming properties that may be available for acquisition.

We may acquire or develop additional gaming properties in different jurisdictions catering to local gaming patrons in the future, further expanding our geographic diversity.

In November 2003 and 2004, referendums were passed in four localities in Virginia that allowed us to expand our off-track wagering facilities from four to nine such facilities and we now operate eight. Our strategy for our horse racing operations is to be a competitive participant in the industry by capitalizing on our unique dirt and turf track facilities for live racing, hosting marquee racing events, and expanding our off-track wagering facility network under appropriate circumstances. On January 11, 2008, we announced that we intend to sell our racetrack and offsite wagering facilities in Virginia.  At this point a sale is not probable and we are not actively seeking a buyer.

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Our competitive strategies and strengths include:

Generate Repeat Business by Catering to Local Gaming Patrons. We focus on attracting and fostering repeat business from local gaming patrons at all of our properties. Our strategy for establishing a strong presence with local residents or patrons is to provide a user-friendly gaming environment featuring convenient locations, high quality food at affordable prices and promotional incentives that reward frequent play. In order to maximize exposure to the local and surrounding communities in the most cost-effective manner, we utilize computerized slot data tracking systems that allow us to track individual play and payouts and develop mailing lists for special events, contest play and promotions. We also participate in busing programs with unaffiliated transportation companies to bring patrons from the greater Denver metropolitan area and surrounding communities to our two properties located in Black Hawk, Colorado.

Expand Louisiana Truck Plaza Business. Our strategy of expanding our presence in the Louisiana truck plaza market is driven by: (i) the consistent revenue each facility generates, (ii) the high return on investment associated with operating the truck plazas, and (iii) the relatively low capital expenditures necessary to maintain the facilities.

Enter Additional Locals-Oriented Markets. Our management team has a proven track record of successfully operating casinos that cater to local residents or day trip patrons who reside in close proximity to the properties. In an effort to leverage this operating experience and enter two additional locals-oriented markets, we acquired Piñon Plaza (subsequently renamed “Gold Dust West-Carson City”), located in Carson City, Nevada, in June 2006. This facility has 392 slot machines and six table games on its 12,000 square foot gaming floor. We opened a new casino in Elko, Nevada (“Gold Dust West-Elko”) on March 5, 2007 that features a 13,000 square-foot casino floor with 329 ticket in-ticket out (TITO) slot machines and seven table games.

Broad Geographic and Asset Diversification. We believe that because of our geographic and asset diversification, we are less dependent on results at a specific property or in a specific market to generate our cash flow. This geographic diversity helps mitigate our susceptibility to regional economic downturns or weather conditions.

Strong Emphasis on Slot and Video Gaming Revenues. All of our gaming facilities emphasize slot machine or video gaming play, or both. We believe slot machine play to be the fastest growing, most consistently profitable and lowest risk segment of the gaming entertainment business. We offer a wide variety of games to attract customers and encourage them to play for longer periods of time, thereby promoting the stability of our gaming revenue. We intend to maximize slot and video gaming revenue by continuing to invest in state-of-the art equipment and systems and replacing older models with the most current product offerings in appropriate markets. In addition, we believe that our plans to introduce table games in our Colorado casinos will enable us to maintain our competitive edge in that market.

Significant Barriers to Entry. There are significant regulatory and other barriers to entry in each of the markets in which we operate. The gaming industry in each of our markets is governed by a state gaming commission. In order to enter the gaming industry in any of our markets, a potential new entrant must work through a costly and lengthy regulatory process, which could last anywhere from 12 to 18 months depending on jurisdiction and type of gaming. Beyond the regulatory barriers, the need for significant investments of time and capital also restricts potential new entrants. The discussion that follows provides a sample of the specific barriers to entry in each of our markets.

In the Black Hawk, Colorado market, barriers to entry include: (i) the scarcity of land available for development within the approved gaming district, which is defined in the state constitution, the Gaming Commission’s regulations and the City of Black Hawk’s ordinances, and (ii) the high cost of acquiring land and constructing new gaming facilities.

There are stringent licensing requirements and substantial licensing and compliance expenses attendant to commencing and conducting gaming operations in Nevada.

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In Louisiana, the barriers to entry include restrictions that require truck plaza video gaming facilities to meet specified minimum levels of diesel and total fuel sales, have a specified minimum site acreage and conduct restaurant operations not fewer than 12 hours per day and to keep a convenience store open 24 hours per day. These restrictions also prohibit the operation of more than 50 video gaming machines at any location and require truck plaza video gaming facilities to be located only in those parishes that voted to continue video gaming during a one-time statewide referendum in 1996.

In Virginia, in all but the county in which we operate and one additional county, any potential operator of any competing horse racing track would need to secure passage of a referendum in the locale in which the track is to be operated. In addition, an unlimited racetrack owner’s and operator’s license is required in order to have off-track wagering facilities. Off-track wagering facilities can be opened only in the current jurisdictions in which we operate plus one other county without passage of additional referendums. The number of off-track wagering facilities is limited by statute to a statewide total of 10 and we currently operate eight, leaving only two potentially available. The high cost of building a new racetrack in Virginia presents an additional barrier in that state.

Strong, Experienced Management Team. Our senior management team is an experienced group of industry veterans. Jeffrey P. Jacobs, our Chairman and Chief Executive Officer, has been Black Hawk Gaming’s Chief Executive Officer since November 1996 and the Chief Executive Officer of Colonial Holdings, Inc. (“Colonial”), our wholly owned subsidiary, since March 1997. Stephen R. Roark, our President, has been Black Hawk Gaming’s President since September 1995 and was its Chief Financial Officer from 1993 to 2006. Ian M. Stewart, our President of Pari-Mutuel Wagering Operations, has been President of Colonial since November 1998 and its Chief Financial Officer since June 1997. Michael T. Shubic, our Chief Operating Officer, has over 35 years of experience in the gaming industry. Brett A. Kramer, our Chief Financial Officer, has over 14 years experience with us in various financial capacities. Stanley Politano, our Executive Vice President, has 15 years of experience in the gaming industry. The five general managers of our casinos have numerous years of casino management experience and report to Mr. Shubic. The Vice President of Louisiana Operations oversees our truck plaza video gaming operations, has over 14 years of experience in the truck plaza video gaming business and also reports directly to Mr. Shubic. We believe the expertise and experience of our management team enables us to enhance the operation of our existing properties and any properties we may acquire in the future.

Our Properties and Operations

The Lodge Casino—Black Hawk, Colorado. The Lodge Casino in Black Hawk, Colorado, which commenced operations in June 1998, is one of 18 casinos located in the gaming district of Black Hawk. The Lodge services the greater Denver metropolitan area, which is located 40 miles east of Black Hawk and has a population of approximately 2.4 million, as well as customers from nearby communities such as Boulder and Fort Collins, Colorado and Cheyenne, Wyoming. We believe that most of The Lodge’s customers are primarily day trip patrons who reside in the greater Denver metropolitan area. As of December 31, 2008, the Black Hawk market had approximately 9,750 gaming devices (slot machines, blackjack and poker tables) generating approximately $509 million in revenues for the year then ended. The Lodge is one of the largest gaming facilities in the market.

The Lodge is located on a 2.5 acre site that abuts State Highway 119, with approximately 25,000 square feet of gaming space on three floors containing 944 slot machines and 32 table games, 50 hotel rooms, three restaurants, four bars and on-site parking for 600 vehicles. Our property includes The White Buffalo Grille, an upscale dining facility, a buffet and a snack bar. Black Hawk has no significant lodging facilities other than our facility and the Isle of Capri, which has a 402-room hotel at its Black Hawk casino. Another competitor is nearing completion of a 536-room hotel directly across from The Lodge Casino, which is expected to be completed in the fourth quarter of 2009 or early 2010.

We utilize computerized slot data tracking systems that allow us to track individual play and payouts and develop mailing lists for special events, contest play and promotions. The Lodge participates in busing programs with unaffiliated transportation companies who transport patrons to Black Hawk/Central City from the market areas described above. Black Hawk Gaming has obtained an exemption as a common carrier from the Colorado Public Utilities Commission and may elect to operate its own busing program in the future.

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During 2008, we provided financial support for a proposed constitutional amendment (“Colorado Amendment 50”) that would increase the types of games, wagering limits and hours of operation at Colorado casinos.  Colorado residents approved the proposed constitutional amendment on November 4, 2008.  The amendment was subsequently voted upon and approved by the residents of each of the three gaming towns in Colorado (Black Hawk, Central City and Cripple Creek).  The new gaming regulation, which will be effective on July 2, 2009 at Colorado casinos, allows for the introduction of craps and roulette, increases the maximum wager limit to one hundred dollars, allows 24-hour gaming operations, and sets a maximum gaming tax rate of 20%.  The Colorado Division of Gaming has commenced revisions of the Internal Control Minimum Procedures which will govern the procedures encompassing the new games, limits and hours.  For the year ended December 31, 2008, we funded a total of $1.4 million in support of this amendment.  For further discussion, see Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

The Gilpin Casino—Black Hawk, Colorado. The Gilpin Casino, which commenced operations in October 1992, is located on a one-acre site in the central Black Hawk gaming district. We expanded our facility through the acquisition of an adjacent casino in early 1994 and we further expanded the casino in 2005. We were one of the first casinos opened in Colorado following the legalization of casino gaming in 1991. We offer 429 slot machines and an 18 table poker room where we provide both tournament and cash poker play. The Gilpin has a restaurant and two bars and a slot club and utilizes busing and other promotional programs, similar to those of The Lodge. We have available to our customers 200 surface parking spots in the heart of historic Black Hawk.

Gold Dust West-Reno—Reno, Nevada. Gold Dust West-Reno, which we acquired in 2001, is located on 4.6 acres in Reno’s central downtown gaming district and has been operating since 1978. Gold Dust West-Reno caters to residents of Reno and surrounding areas and has approximately 17,500 square feet of gaming space, which offers 470 slot machines. Gold Dust West-Reno also features the Wildwood Restaurant, a 6,600 square foot dining facility, and has parking for 300 vehicles. The property currently offers 27 motel rooms.

Gold Dust West-Carson City—Carson City, Nevada. On June 25, 2006, we closed an agreement with Capital City Entertainment, Inc. (“CCI”), an unaffiliated party, under which we acquired all of the assets of Piñon Plaza, a division of CCI which we have now re-branded as Gold Dust West-Carson City. The assets included all of the personal property, buildings and improvements used by Piñon Plaza in the operation of its casino, hotel, bowling alley and RV park in Carson City, Nevada. The purchase price for the assets was $14.5 million.  Additionally, during 2006 and 2007, we spent approximately $5.0 million in total for property and equipment improvements.

Contemporaneously, we entered into a triple net ground lease covering land underlying the assets which began upon closing of the asset purchase agreement discussed above. The lessor is a family trust affiliated with CCI. The lease has a ten year term with two ten year extensions at our option. Rentals under the lease are $250,000 per year for years one through five, $300,000 per year for years six through ten, and a rate based on an MAI (Member of the Appraisal Institute) appraisal of the property during the first and second extension terms. We have the right to purchase the leased land at an MAI appraised value at the end of the first ten year term. We also have a right of first refusal should the lessor seek to sell the leased land to a third party.

Gold Dust West-Carson City, which commenced operations in 1995, is a 140,000 square foot facility located on approximately 18 acres covered by the land lease described above. Gold Dust West-Carson City offers 392 slot machines and six table games, four restaurants and two bars. It has a slot club and offers various promotional packages, many associated with its 32 bowling lanes. Gold Dust West-Carson City has 146 hotel rooms. It also owns and operates a 48 space RV park as part of the resort. There are approximately 850 parking spaces for Gold Dust West-Carson City’s casino patrons and hotel guests.

Gold Dust West-Elko—Elko, Nevada. On November 14, 2005, we entered into a triple net lease with an unaffiliated party for the lease of a 37,000 square foot building and approximately six acres of land in Elko, Nevada. The lease has a five-year term with three five-year renewals at our option. Rent under the lease was $225,000 for the first year, with $50,000 of the first year rent abated as an allowance for tenant improvements. The second year’s rent is $375,000 and for years three through five the annual rent is $450,000.

We have the right to buy the land and the building any time after the first 12 months through the 60th month for $5 million and from the 61st month through the 120th month for $5.4 million.

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We renovated and upgraded the building and installed 329 slot machines, seven table games and appropriate food and beverage offerings. Pre-opening and gaming device costs totaled approximately $21 million. We commenced renovation during the third quarter of 2006 and opened the casino on March 5, 2007.

Louisiana Gaming Properties. Our truck plaza properties consist of 18 truck plaza video gaming facilities located in Louisiana (of which five are leased). We are also party to an agreement that entitles us to a portion of the gaming revenues from a 19th truck plaza (Cash’s Truck Plaza and Casino in Lobdell). Each truck plaza features a 24 hour per day convenience store, fueling operations, a restaurant operating not fewer than 12 hours per day, and up to 50 video gaming devices in the casino depending on the level of fuel sales and available space.  At December 31, 2008, our truck plaza video gaming facilities had a combined total of 929 video gaming devices.

The Louisiana truck plazas’ revenues are comprised of: (i) revenue from video poker gaming machines; (ii) sales of gasoline and diesel fuel; (iii) sales of groceries, trucker supplies and various items through their convenience stores; (iv) sales of food and beverages in their restaurants and bars; and (v) miscellaneous commissions on ATMs, pay phones and lottery sales.

The Louisiana video gaming industry consists of video gaming in 31 of Louisiana’s 64 parishes. The industry is highly regulated and video gaming machines can only be placed in qualifying bars, restaurants, hotels, satellite wagering facilities and truck plazas. In order to qualify for video gaming, a truck plaza must offer diesel fuel, gasoline, a convenience store, a restaurant and a place for truck drivers to shower and sleep. Our video gaming machines are located in a separate gaming room that is designed to provide a pleasant casino-like atmosphere. As of December 31, 2008, Louisiana had 181 licensed video gaming truck plazas.

The Louisiana truck plaza video gaming market caters primarily to local residents, whom we believe contribute to the vast majority of truck plaza gaming revenue. We believe that most of our video gaming customers live within a five-mile radius of our properties.

Colonial Downs—New Kent, Virginia. Colonial Downs, which opened in 1997, is a racetrack in New Kent, Virginia, which primarily conducts pari-mutuel wagering on thoroughbred and harness racing. The track facility was designed to provide patrons with a pleasant atmosphere to enjoy quality horse racing. The outside grandstand area, located on the first floor of the track facility, has an occupancy capacity of approximately 4,000 patrons. Also located on the first floor of the track facility are two simulcast television amphitheaters, two covered patio-seating areas, two bars, a large concession food court, gift shop, and wagering locations with approximately 72 tellers. The Jockey Club, which is in the main grandstand area located on the third floor of the track facility, includes a full-service dining area with a seating capacity of 548 patrons, two separate lounge areas, and additional wagering locations with 24 tellers. On the fourth floor is the Turf Club with seating for full service dining for 125 along with 10 luxury suites with skybox seating and a wagering location with eight tellers. In 2005, we added outdoor seating for additional patrons along the track’s homestretch in an area called “the Green.”

The dirt track at Colonial Downs is one and one-quarter miles in length and is one of the largest tracks in the United States. Based on our knowledge of the industry, we believe the 180-foot wide turf track is the widest turf track in the country, thereby establishing the track as one of the major turf racing facilities in the Mid-Atlantic region.  In addition to our racetrack, we presently operate eight satellite wagering facilities in Virginia as described below.  We previously operated nine such facilities until we closed our Chesapeake Military Highway facility in November 2008 in order to consolidate operations with our Chesapeake Indian River Road facility.

In 2005, Colonial Downs created a new stakes race, the Colonial Turf Cup, which together with the Virginia Derby forms the first two legs of the Grand Slam of Grass™. The Grand Slam of Grass™ consists of four races including the two races at Colonial Downs, the Secretariat to be held at Arlington Park, and the John Deere Breeders’ Cup Turf at Monmouth Park. Since the inception of The Grand Slam of Grass™, we have guaranteed a minimum of $5 million to any horse that sweeps the four race series. Of the $5 million guarantee, approximately $2.6 million would be paid as a result of the cumulative purse winnings from the four races. The remaining approximate $2.4 million would be paid by us as a bonus award. Annually, we purchase an insurance policy to cover a portion of the $2.4 million of this bonus payment if that payment were to be required.  Since the inception of The Grand Slam of Grass™, no single horse has won all four legs of the series.

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Satellite Wagering Facilities, Virginia. In addition to our racetrack facility, we operate eight satellite wagering facilities in Virginia (four are leased). These facilities provide simulcast pari-mutuel wagering on thoroughbred and harness racing from our racetrack and selected other racetracks throughout the United States. Our satellite wagering facilities are located in Alberta, Chesapeake, Hampton, Martinsville, Weber City, Vinton, and two in Richmond. These facilities employ state-of-the-art audio/video technology for receiving quality import simulcast thoroughbred and harness racing from nationally known racetracks.

The facilities are structured to accommodate the needs of various patrons, from the seasoned handicapper to the novice wagerer, and provide patrons with a comfortable, upscale environment including a full bar and a range of restaurant services. In addition, self-serve automated wagering equipment is available to patrons in order to make wagering more user-friendly to the novice and more efficient for the expert. This equipment, with touch-screen interactive terminals and personalized portable wagering terminals, provides patrons with current odds information and enables them to place wagers and credit winning tickets to their accounts without waiting in line.

In 2003, the legislature of the Commonwealth of Virginia passed a statute authorizing the Virginia Racing Commission to grant licenses and thereafter regulate account wagering in Virginia. On April 28, 2004, the Virginia Racing Commission granted Colonial a license to accept wagers over the telephone or through the internet via its advanced deposit wagering system. The advanced deposit wagering system became fully operational late in the third quarter of 2004. In addition, Colonial has entered into agreements with other licensed account wagering providers in Virginia. Pursuant to these agreements, Colonial receives a share of source market fees for wagers placed by Virginians through these account wagering service providers. In February 2009, the Virginia General Assembly amended the statutory provisions relating to account wagering to set the source market fee for wagers originating from Virginia at 10% of such wagers. Colonial shares the source market fee equally with the recognized majority horsemen’s groups. Virginia’s Governor has signed the legislation and it is scheduled to become effective July 1, 2009.

In 2004, the legislature of the Commonwealth of Virginia passed a statute, signed by the governor of Virginia, authorizing up to ten satellite wagering facilities in localities that approved such facilities by referenda. On November 2, 2004, referenda were passed authorizing the locating of a satellite wagering facility in the following counties in Virginia: Henry County, Scott County and Westmoreland County. Thereafter, the Virginia Racing Commission granted Colonial licenses to own and operate a satellite wagering facility in Henry County and Scott County, Virginia. The Virginia Racing Commission can grant licenses for two more satellite wagering facilities under existing legislation.

The Nautica Properties. We have acquired from affiliated parties several options to lease and options to purchase six parcels of land and certain improvements on the west bank of the Cuyahoga River in Cleveland, Ohio. We refer to these properties, covering an aggregate of approximately 624,000 square feet of land (14.4 acres) and a building comprised of 47,380 square feet of net rentable space, as the Nautica Properties. The Nautica Properties currently require aggregate option payments totaling $200,000 per year.

During March 2008, we exercised our option to acquire one of these parcels referred to as “Lot D.”  On April 1, 2008, we purchased this parcel for $800,000.  The company that owned this parcel of land and parking lot business was wholly owned by our Chairman and Chief Executive Officer.  In January 2009, we acquired another of these parcels referred to as “Sugar Warehouse” for $2,575,000.  See Item 13 “Certain Relationships and Related Transactions, and Director Independence.”

The option agreements give us the right until July 2010 to purchase one of the remaining parcels and the right to purchase or enter into long-term leases on the remaining three parcels.  Our Chairman and Chief Executive Officer owns varying interests in three of the four remaining parcels.

Although we may elect not to exercise all the options unless casino gaming opportunities arise, we nonetheless have the right to acquire all or part of the Nautica Properties for other purposes.  If casino gaming is not legalized but we decide to exercise our options, the aggregate purchase price would be approximately $3.0 million for one of the parcels and the aggregate annual lease payments on the remaining three parcels would be approximately $355,000. If all four remaining parcels are purchased and none leased, the total purchase price would be approximately $6.5 million, less any aggregate option payments previously made. The purchase price and rent

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payments would be increased based on independent appraisals of the land and improvement values if, in the future, casino gaming were to become legalized in Ohio and a casino is licensed at Nautica.

Seasonality and Weather Conditions

Seasonality and weather conditions can affect our results of operations. Winter travel conditions can adversely affect patronage and revenues at our Colorado and Nevada casinos. Although casino business is not seasonal, levels of gaming activity increase significantly during weekends and holidays, especially holiday weekends. Hurricanes Katrina and Rita temporarily affected our truck plaza video gaming operations in late 2005, while Hurricanes Gustav and Ike temporarily affected our truck plaza video gaming operations in late 2008. Similar hurricanes could have a material adverse effect on our Louisiana operations in future years. Our pari-mutuel wagering revenues are higher during scheduled live racing than at other times of the year. Adverse weather conditions can cause cancellation of or curtail attendance at outdoor races, thereby reducing wagering and our revenues. Attendance and wagering at both outdoor races and satellite wagering facilities can be harmed by holidays and other competing seasonal activities.

Competition

General. We face intense competition in each of the markets in which we operate. Our existing gaming facilities compete directly with other gaming properties and activities in and near Colorado, Nevada, Louisiana and Virginia. We expect this competition to increase as new gaming operators enter our markets, existing competitors expand their operations, gaming activities expand in existing jurisdictions and gaming is legalized in new jurisdictions. Several of our competitors have significantly better name recognition and more marketing and financial resources than we do. We cannot predict with any certainty the effects of existing and future competition on our operating results.

We compete with other forms of gaming and entertainment such as online computer gaming, bingo, pull-tab games, card parlors, sports books, pari-mutuel or telephonic betting on horse racing and dog racing, state-sponsored lotteries, video lottery terminals, and video poker terminals. We may compete with gaming from other venues including internet gaming, although its legality is presently unclear.

We also compete with gaming operators in other gaming jurisdictions such as Las Vegas, Nevada, and Atlantic City, New Jersey. Our competition includes casinos located on Native American reservations throughout the United States, which have the advantage of being exempt from certain state and federal taxes. Some Native American tribes are either establishing or are considering the establishment of gaming at additional locations. Expansion of existing gaming jurisdictions and the development of new gaming jurisdictions and casinos on Native American-owned lands would increase competition for our existing and future operations. In addition, increased competition could limit new opportunities for us or result in the saturation of certain gaming markets. See Item 1A “Risk Factors—Competition” below.

Casino Properties. We believe the primary competitive factors in the Black Hawk, Colorado, market are location, availability and convenience of parking; number and types of slot machines and gaming tables; types and pricing of amenities, including food; name recognition; overall atmosphere; and customer service. We believe our Colorado casinos generally compete favorably based on these factors.

Our Colorado casinos are on opposite sides of Main Street in Black Hawk. Because of their proximity, our Black Hawk casinos compete for some of the same customers. Further, there were 16 other casinos operating in Black Hawk on December 31, 2008. There were approximately 9,750 gaming devices (slot machines, blackjack and poker tables) in Black Hawk as of December 31, 2008.

Central City is located adjacent to Black Hawk and provides the most direct competition to the gaming establishments in Black Hawk. There were six casinos operating in Central City with approximately 2,100 gaming devices as of December 31, 2008. Black Hawk has historically enjoyed a competitive advantage over Central City in large part because access by State Highway 119 (formerly the only major access to Black Hawk from the Denver metropolitan area and Interstate 70) requires customers to drive by and, in part, through Black Hawk to reach

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Central City. In late 2004, Central City constructed a road from I-70 directly into Central City, commonly referred to as the Central City Parkway. It is now possible for certain traffic that passed through Black Hawk to proceed directly to Central City from Interstate 70. Nonetheless, motorists driving from the Denver metropolitan area still have the option of choosing to go either to Black Hawk or Central City without having to drive through the other town.

Large, well-financed companies have entered the Black Hawk and other Colorado markets and others may enter through the purchase or expansion of existing facilities, which could have a material adverse effect on our results of operations and financial position. For example, the Mountain High Casino (formerly the Black Hawk Casino by Hyatt) opened in December 2001. The Mountain High Casino is directly across the street from The Lodge Casino. On January 1, 2005, Ameristar Casinos, Inc. purchased this facility and has since commenced construction of a 536 hotel room tower (expected to be completed in the fourth quarter of 2009 or early 2010), a convention center, and other amenities. Under Ameristar’s ownership, this facility has been expanded to approximately 1,600 slot machines and 26 table games, and a parking garage accommodating 1,550 vehicles. No other casinos are currently under construction in Black Hawk. In 2003, the Isle of Capri Casinos, Inc. purchased Colorado Central Station, directly across the street from its existing facility and subsequently completed a major renovation and expansion project physically linking the two properties. The combined casinos are the largest in Black Hawk with approximately 2,000 slot machines, 34 table games, 402 hotel rooms and 2,300 parking spaces. The Isle of Capri is noted for its aggressive marketing programs. The Mardi Gras casino, next to our Lodge casino, was purchased in 2005 and the owners have developed and implemented new marketing programs.

Our Gold Dust West Casino-Reno encounters strong competition from large hotel and casino facilities and smaller casinos similar in size to our Gold Dust West-Reno in the Reno area, which includes Sparks, Nevada. There is also competition from gaming establishments in other towns and cities in Nevada and from Native American gaming facilities located near Sacramento, California. Our Gold Dust West-Carson City and Gold Dust West-Elko, Nevada casinos face competition from several casinos in those cities and many other venues in Nevada.

Truck Plaza Operations. Our Louisiana truck plaza operations face competition from land-based and riverboat casinos throughout Louisiana and on the Mississippi Gulf Coast, casinos on Native American lands and other non-casino gaming opportunities within Louisiana. The Louisiana Riverboat Economic Development and Gaming Control Act limits the number of gaming casinos in Louisiana to 15 riverboat casinos statewide and one land-based casino in New Orleans. All 15 available riverboat licenses are issued.

Our video gaming operations also face competition from other truck plaza video gaming facilities located in surrounding areas, as well as competition from Louisiana horse racing facilities, some of which have been authorized to operate video gaming machines, and restaurants and bars with video gaming machines. As of December 31, 2008, there were 181 truck plazas in Louisiana licensed to operate video gaming devices.

Horse Racing and Pari-Mutuel Wagering Operations. We compete with racetracks located outside Virginia (including several in Delaware, Maryland, New Jersey, New York, Pennsylvania, and West Virginia, some of which augment their purses with slot machine revenues) and other forms of gaming, such as land-based casinos, including those in Atlantic City, and statewide lotteries in Virginia and neighboring states. The possible legalization of other forms of gaming in Virginia, such as Native American or riverboat casinos, could have an adverse effect on our performance. Although bills for the creation of riverboat casinos have failed in the Virginia legislature, proponents of riverboat gaming in Virginia may continue to seek legislative approval. Additionally, certain Native American tribes are considering seeking federal recognition which, if successful, could result in additional gaming venues. Similarly, the expansion of other forms of gaming in neighboring states, such as table games in West Virginia and slot machines in Maryland, could have an adverse effect on our performance.

We have competed and will compete for wagering dollars and simulcast fees with live racing and races simulcast from racetracks in other states, particularly racetracks in neighboring states such as Charles Town in West Virginia, Pimlico Race Course and Laurel Park in Maryland, and Delaware Park in Delaware. We believe that our existing agreements will continue to promote coordination of thoroughbred events between Maryland and Virginia. However, if the Virginia or Maryland Racing Commissions do not approve either party’s proposed racing days, or if the Virginia-Maryland thoroughbred racing circuit is otherwise unsuccessful, our track may have to compete directly with Pimlico Race Course and Laurel Park in Maryland.

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We also compete for wagering dollars with account wagering companies operating both legally and illegally in Virginia. These companies take wagers from Virginians both over the phone and the internet. We believe our agreements with four licensed account wagering companies and legislative changes scheduled to go into effect July 1, 2009 provide us with fair compensation for their activities. During 2008, we settled our lawsuit against Youbet.com, Inc. which resulted in an agreement with our fourth licensed account wagering company. Unlicensed account wagering companies have lower costs than Colonial and thus are able to attract customers in Virginia with large wagering rebates.

Employees and Labor Relations

As of December 31, 2008, we had approximately 1,200 full-time and part-time employees at our facilities in Black Hawk, Colorado, and Reno, Carson City, and Elko, Nevada, 400 employees at our facilities in Virginia and 500 employees at our facilities in Louisiana. Employees include cashiers, dealers, food and beverage service personnel, facilities maintenance, security, valet, accounting, marketing, and personnel services. We consider relations with our employees to be good.

None of our employees are presently represented by any union or other labor organization. See “Risk Factors” under Item 1A below.

Regulation

Gaming Regulation and Licensing—Colorado

The State of Colorado created the Colorado Division of Gaming within the Department of Revenue to license, implement, regulate and supervise the conduct of limited stakes gaming. The Division, under the supervision of the Gaming Commission, has been granted broad power to ensure compliance with Colorado law and regulations adopted thereunder (collectively, the “Colorado Regulations”). The Division may inspect, without notice, premises where gaming is being conducted; may seize, impound or remove any gaming device; may examine and copy all of a licensee’s records; may investigate the background and conduct of licensees and their employees; and may bring disciplinary actions against licensees and their employees. The Division may also conduct detailed background checks of persons who lend money to or invest money in a licensee.

It is illegal to operate a gaming facility without a license issued by the Gaming Commission. The Gaming Commission is empowered to issue five types of gaming and gaming-related licenses. The licenses are revocable and nontransferable. Our failure or inability to obtain and maintain necessary gaming licenses would have a material adverse effect on its gaming operations.

The Colorado casinos were granted retail/operator licenses concurrently with their openings. The licenses are subject to continued satisfaction of suitability requirements and must be renewed annually. The current licenses for both Colorado casinos were renewed on April 17, 2008. There can be no assurance that the Colorado casinos can successfully renew their licenses in a timely manner from year to year.  Beginning in 2009, Colorado licenses must be renewed biyearly.

All persons employed by us in Colorado who are involved, directly or indirectly, in gaming operations in Colorado also are required to obtain various forms of gaming licenses. Key licenses are issued to “key employees,” which include any executive, employee or agent of a licensee having the power to exercise a significant influence over decisions concerning any part of the operations of a licensee. At least one key license holder must be on the premises of each Colorado casino at all times that a casino is open for business.

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The Gaming Commission closely regulates the suitability of persons owning or seeking to renew an interest in a gaming license, and the suitability of a licensee can be adversely affected by persons associated with the licensee. Additionally, any person or entity having any direct interest in our subsidiary Black Hawk Gaming & Development Company, Inc. (“Black Hawk Gaming”) or any casino directly or indirectly owned by Black Hawk Gaming may be subject to administrative action, including personal history and background investigations. The actions of persons associated with Jacobs Entertainment, Inc., such as its shareholders, its officers, directors, management or employees, could jeopardize any licenses held by Black Hawk Gaming. All of Black Hawk Gaming’s directors are required to be found suitable as associated persons.

As a general rule, under the Colorado Regulations, it is a criminal violation for any person to have a legal, beneficial, voting or equitable interest, or right to receive profits in more than three retail/operator gaming licenses in Colorado. Black Hawk Gaming has an interest in two such licenses. Any expansion opportunities that we may have in Colorado are limited to one more license.

The Colorado Division of Gaming may require any person having an interest in a licensee or an applicant for a license to provide background information, information on sources of funding, and a sworn statement that the interested person or applicant is not holding that interest for another party. The Gaming Commission may, at its discretion, require any person having an interest in a licensee to undergo a full background investigation and to pay for that investigation in the same manner as an applicant for a license. A background investigation includes an examination of one’s personal history, financial associations, character, record, and reputation, as well as the people with whom a person has associated.

The Gaming Commission has the right to request information from any person directly or indirectly interested in, or employed by, a licensee, and to investigate the moral character, honesty, integrity, prior activities, criminal record, reputation, habits and associations of (i) all persons licensed pursuant to the Colorado Limited Gaming Act, (ii) all officers, directors and stockholders of a licensed privately held corporation, (iii) all officers, directors and stockholders holding either a 5% or greater interest or a controlling interest in a licensed publicly traded corporation, (iv) any person who as agent, consultant, advisor or otherwise, exercises a significant influence upon the management or affairs of a publicly traded corporation, (v) all general partners and all limited partners of a licensed partnership, (vi) all persons that have a relationship similar to that of an officer, director or stockholder of a corporation (such as members and managers of a limited liability company), (vii) all persons supplying financing or lending money to any licensee connected with the establishment or operation of limited gaming, and (viii) all persons having a contract, lease or ongoing financial or business arrangement with any licensee, if such contract, lease or arrangement relates to limited gaming operations, equipment, devices or premises.

If the Gaming Commission determines that a person or entity is not suitable to own a direct or indirect voting interest in Black Hawk Gaming or Jacobs Entertainment, Black Hawk Gaming or Jacobs Entertainment may be sanctioned unless the person or entity disposes of its voting interest. Sanctions may include the loss of the casino licenses. In addition, the Colorado Regulations prohibit a licensee or any affiliate of a licensee from paying dividends, interest or other remuneration to any person found to be unsuitable, or recognizing the exercise of any voting rights by any person found to be unsuitable. The Colorado Regulations require an operating casino licensee to include in its corporate charter provisions that permit the repurchase of the voting interests of any person found to be unsuitable. Black Hawk Gaming’s Articles of Incorporation include the required provisions.

The Gaming Commission also has the power to require Black Hawk Gaming to suspend or dismiss its officers, directors and other key employees or sever relationships with other persons who refuse to file appropriate applications or who are found to be unsuitable to act in such capacities. The Commission or the Director of the Division of Gaming may review a licensee’s gaming contracts, require changes in the contract before the licensee’s application is approved or participation in the contract is allowed, and require a licensee to terminate its participation in any gaming contract.

The Gaming Commission has enacted Rule 4.5, which imposes requirements on publicly traded corporations holding gaming licenses in Colorado and on gaming licenses owned directly or indirectly by a publicly traded corporation, whether through a subsidiary or intermediary company. The term “publicly traded corporation” includes corporations, firms, limited liability companies, trusts, partnerships and other forms of business organizations. Such requirements automatically apply to any ownership interest held by a publicly traded

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corporation, holding company or intermediary company thereof, when the ownership interest directly or indirectly is, or will be upon approval of the Gaming Commission, 5% or more of the entire licensee. In any event, if the Gaming Commission determines that a publicly traded corporation, or a subsidiary, intermediary company or holding company has the actual ability to exercise influence over a licensee, regardless of the percentage of ownership possessed by that entity, the Gaming Commission may require the entity to comply with the disclosure regulations contained in Rule 4.5.

Under Rule 4.5, gaming licensees, affiliated companies and controlling persons commencing a public offering of voting securities must notify the Gaming Commission no later than ten business days after the initial filing of a registration statement with the Securities and Exchange Commission. Licensed publicly traded corporations are also required to send proxy statements to the Division of Gaming within five days after their distribution. Licensees to whom Rule 4.5 applies must include in their charter documents provisions that: restrict the rights of the licensees to issue voting interests or securities except in accordance with the Colorado Gaming Act and the Colorado Regulations; void the transfer of voting securities or other voting interests issued in violation of the Colorado Gaming Act and the Colorado Regulations until the issuer ceases to be subject to the jurisdiction of the Gaming Commission or until the Gaming Commission, by affirmative act, validates the transfer; and provide that holders of voting interests or securities of licensees found unsuitable by the Gaming Commission may, within 60 days of such finding of unsuitability, be required to sell their interests or securities back to the issuer at the lesser of the cash equivalent of the holders’ investment or the market price as of the date of the finding of unsuitability. Alternatively, the holders may, within 60 days after the finding of unsuitability, transfer the voting interests or securities to a person suitable to the Gaming Commission. Until the voting interests or securities are held by suitable persons, the issuer may not pay dividends or interest, the securities may not be voted, they may not be included in the voting or securities of the issuer, and the issuer may not pay any remuneration in any form to the holders of the securities.

Notification must be given to the Division of Gaming of the acquisition of direct or indirect beneficial ownership of:

·5% or more of any class of voting securities of a publicly traded corporation that is required to include in its articles of organization the Rule 4.5 charter language provisions; or

·5% or more of the beneficial interest in a gaming licensee directly or indirectly through any class of voting securities of any holding company or intermediary company of a licensee, referred to as qualifying persons.

Owners of any such interests, whether owned individually or in association with others, are subject to all finding of suitability. Notification must be made by persons acquiring these interests. Such persons must submit all requested information to the Division of Gaming, are subject to a finding of suitability as required by the Division of Gaming or the Gaming Commission, and must be informed of these requirements by the licensee. A person other than an institutional investor whose interest equals 10% or more of a publicly traded corporation or a 10% beneficial interest in a gaming licensee must apply to the Gaming Commission for a finding of suitability within 45 days after acquiring such securities.

An institutional investor who, individually or in association with others, acquires, directly or indirectly, the beneficial ownership of 15% or more of any class of voting securities or 15% of the beneficial interest in a gaming licensee must apply to the Gaming Commission for a finding of suitability within 45 days after acquiring such interests.

Licensees must also notify any qualifying persons of these requirements. Whether or not so notified, qualifying persons are responsible for complying with these requirements.

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The Colorado Regulations also provide for exemption from the requirements for a finding of suitability when the Gaming Commission finds such action to be consistent with the purposes of the Colorado Gaming Control Act. The Gaming Commission may determine that anyone with a material relationship to, or material involvement with, a licensee or an affiliated company must apply for a finding of suitability or must apply for a key employee license.

Pursuant to Rule 4.5, persons found unsuitable by the Gaming Commission must be removed from any position as an officer, director, or employee of a licensee, or of a holding or intermediary company. Such unsuitable persons also are prohibited from any beneficial ownership of the voting securities of any such entities. Licensees, or affiliated entities of licensees, are subject to sanctions for paying dividends or distributions to persons found unsuitable by the Gaming Commission, or for recognizing voting rights of, or paying a salary or any remuneration for services to, unsuitable persons. Licensees or their affiliated entities also may be sanctioned for failing to pursue efforts to require unsuitable persons to relinquish their interests. The Gaming Commission must provide prior approval of any sale, lease, purchase, conveyance, or acquisition of an interest in a casino licensee, except as provided in Rule 4.5 relating to publicly traded corporations.

As of December 31, 2008, Colorado casinos may operate only between 8:00 a.m. and 2:00 a.m., and may permit only individuals 21 years or older to gamble or consume alcohol in the casino. Slot machines, black jack, poker and other approved variations of those games and video poker are the only permitted games, with a maximum single wager of $5.00. Colorado casinos may not extend credit to gaming patrons. The Colorado Constitution and Regulations restrict the percentage of space a casino may use for gaming to 50% of any floor and 35% of the overall square footage of the building in which the casino is located. Effective July 1 of each year, Colorado establishes the gross gaming revenue tax rate for the ensuing 12 months. Under the Colorado Constitution, the rate can be increased to as much as 40% of adjusted gross proceeds. Colorado has both raised and lowered gaming tax rates since they were initially set in 1991. Currently, the maximum gaming tax rate is 20%.

On November 4, 2008, Colorado Amendment 50 was approved by Colorado voters and was subsequently voted upon and approved by each of the three gaming towns in Colorado (Black Hawk, Central City and Cripple Creek).  The new gaming regulation, which will be effective on July 2, 2009 at Colorado casinos, allows for the introduction of craps and roulette, increases the maximum single wager limit to $100, allows 24-hour gaming operations, and sets a maximum tax rate of 20%.  For further discussion, see Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Gaming Regulation and Licensing—Nevada

The ownership and operation of casino gaming facilities in Nevada, including the Nevada casino operated by Jacobs Entertainment’s direct and indirect subsidiaries Gold Dust West Casino, Inc. (“Gold Dust West”), Jacobs Piñon Plaza Entertainment, Inc. (“Piñon Plaza”) and Jacobs Elko Entertainment, Inc. (“Elko”) (collectively, the “Nevada Gaming Subsidiaries”), are subject to the Nevada Gaming Control Act and the regulations promulgated thereunder (the “Nevada Act”) and to the licensing and regulatory control of the Nevada Gaming Commission (the “Nevada Commission”), the Nevada State Gaming Control Board (the “Nevada Board”), and various local ordinances and regulations, including, without limitation, those of the cities of Reno, Carson City and Elko, Nevada (collectively, the “Nevada Gaming Authorities”).

The laws, regulations and supervisory procedures of the Nevada Gaming Authorities are based upon declarations of public policy which are concerned with, among other things: (i) the prevention of unsavory or unsuitable persons from having a direct or indirect involvement with gaming at any time or in any capacity; (ii) the establishment and maintenance of responsible accounting practices and procedures; (iii) the maintenance of effective controls over the financial practices of licensees, including the establishment of minimum procedures for internal fiscal affairs and the safeguarding of assets and revenues, providing reliable record keeping and filing periodic reports with the Nevada Gaming Authorities; (iv) the prevention of cheating and fraudulent practices; and (v) providing a source of state and local revenues through taxation and licensing fees. Change in such laws, regulations and procedures could have an adverse effect on Jacobs Entertainment’s Nevada gaming operations.

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The Nevada Gaming Subsidiaries have been licensed by the Nevada Gaming Authorities as corporate licensees. Gaming licenses require the periodic payment of fees and taxes and are not transferable. Jacobs Entertainment’s parent company, Jacobs Investments, Inc. (“Jacobs Investments” or “JII”), has been registered by the Nevada Commission as a holding company and has been found suitable to own Jacobs Entertainment’s stock. Black Hawk Gaming has been registered by the Nevada Commission as an intermediary company and has been found suitable to own the stock of Gold Dust West. Jacobs Entertainment has been registered by the Nevada Commission as a publicly traded corporation (a “Registered Corporation”) and has been found suitable as the sole shareholder of Black Hawk Gaming, Piñon Plaza and Elko.  Registered Corporations, registered intermediary companies, and corporate licensees are required periodically to submit detailed financial and operating reports to the Nevada Commission and furnish any other information that the Nevada Commission may require. Substantially all material loans, leases, sales of securities and similar financing transactions by Jacobs Investments, Jacobs Entertainment, Black Hawk Gaming, and the Nevada Gaming Subsidiaries must be reported to or approved by the Nevada Commission. No person may become a stockholder of, or holder of an interest in, or receive any percentage of profits from a corporate licensee without first obtaining licenses and approvals from the Nevada Gaming Authorities. The controlling shareholders, directors and certain officers of Jacobs Investments, Jacobs Entertainment, Black Hawk Gaming, and the Nevada Gaming Subsidiaries have obtained from the Nevada Gaming Authorities the various registrations, findings of suitability, approvals, permits and licenses that are required in order to engage in gaming activities in Reno, Carson City and Elko, Nevada.

The Nevada Gaming Authorities may investigate any person who has a material relationship to, or material involvement with, Jacobs Investments, Jacobs Entertainment, Black Hawk Gaming, or the Nevada Gaming Subsidiaries in order to determine whether that individual is suitable or should be licensed as a business associate of a gaming licensee. The officers, directors and shareholders of Jacobs Investments and Jacobs Entertainment must file applications with and be licensed or found suitable by the Nevada Gaming Authorities. The officers, directors and certain key employees of the Nevada Gaming Subsidiaries must file applications with and may be required to be licensed or found suitable by the Nevada Gaming Authorities. The officers, directors and key employees of Jacobs Investments, Jacobs Entertainment and Black Hawk Gaming who are actively and directly involved in the gaming activities of the Nevada  Gaming Subsidiaries may be required to be licensed or found suitable by the Nevada Gaming Authorities. The Nevada Gaming Authorities may deny an application for licensing for any cause that they deem reasonable. A finding of suitability is comparable to licensing, and both require submission of detailed personal and financial information followed by a thorough investigation. The applicant for licensing or a finding of suitability must pay all the costs of the investigation. Changes in licensed positions must be reported to the Nevada Gaming Authorities and, in addition to their authority to deny an application for a finding of suitability or licensure, the Nevada Gaming Authorities have jurisdiction to disapprove a change in a corporate position.

If the Nevada Gaming Authorities were to find an officer, director or key employee unsuitable for licensing or unsuitable to continue having a relationship with Jacobs Investments, Jacobs Entertainment, Black Hawk Gaming or the Nevada Gaming Subsidiaries, the companies involved would have to sever all relationships with that person. In addition, the Nevada Commission may require Jacobs Investments, Jacobs Entertainment, Black Hawk Gaming or the Nevada Gaming Subsidiaries to terminate the employment of any person who refuses to file appropriate applications. Determinations of suitability or of questions pertaining to licensing are not subject to judicial review in Nevada.

Jacobs Investments, Jacobs Entertainment, Black Hawk Gaming and the Nevada Gaming Subsidiaries are required periodically to submit detailed financial and operating reports to the Nevada Commission and furnish any other information that the Nevada Commission may require. Substantially material loans, leases, sales of securities and similar financing transactions of Jacobs Investments, Jacobs Entertainment, Black Hawk Gaming and the Nevada Gaming Subsidiaries must be reported to or approved by the Nevada Commission.

If it were determined that the Nevada Act was violated by Jacobs Investments, Jacobs Entertainment, Black Hawk Gaming Jacobs Investments, Jacobs Entertainment, Black Hawk Gaming or the Nevada Gaming Subsidiaries, the registrations or gaming licenses that Jacobs Investments, Jacobs Entertainment, Black Hawk Gaming Jacobs Investments, Jacobs Entertainment, Black Hawk Gaming and the Nevada Gaming Subsidiaries hold could be limited, conditioned, suspended or revoked, subject to compliance with certain statutory and regulatory procedures. In addition, Jacobs Investments, Jacobs Entertainment, Black Hawk Gaming, or the Nevada Gaming Subsidiaries and the persons involved could be subject to substantial fines for each separate violation of the Nevada Act at the

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discretion of the Nevada Commission. Further, a supervisor could be appointed by the Nevada Commission to operate the casinos operated by the Nevada Gaming Subsidiaries and, under certain circumstances, earnings generated during the supervisor’s appointment (except for reasonable rental value of the casino) could be forfeited to the State of Nevada. Limitation, conditioning or suspension of the gaming licenses of the Nevada Gaming Subsidiaries or the appointment of a supervisor could (and revocation of any gaming license would) have a material adverse effect on the gaming operations, financial condition and results of operations of Jacobs Entertainment.

The Nevada Act requires any person who acquires beneficial ownership of more than 5% of a Registered Corporation’s voting securities to report the acquisition to the Nevada Commission. The Nevada Act requires that beneficial owners of more than 10% of a Registered Corporation’s voting securities apply to the Nevada Commission for a finding of suitability within 30 days after the Chairman of the Nevada Board mails the written notice requiring such filing. Under certain circumstances, an “institutional investor,” as defined in the Nevada Act, that acquires more than 10%, but not more than 15%, of a Registered Corporation’s voting securities may apply to the Nevada Commission for a waiver of a finding of suitability if that institutional investor holds the voting securities for investment purposes only. In certain circumstances, an institutional investor that has obtained a waiver may hold up to 19% of a Registered Corporation’s voting securities for a limited period of time and maintain the waiver. An institutional investor will not be deemed to hold voting securities for investment purposes unless the voting securities were acquired and are held in the ordinary course of business as an institutional investor and not for the purpose of causing, directly or indirectly, the election of a majority of the members of the Registered Corporation’s board of directors, any change in the Registered Corporation’s corporate charter, bylaws, management, policies or operations, or of any of its gaming affiliates, or any other action that the Nevada Commission finds to be inconsistent with holding the Registered Corporation’s voting securities for investment purposes only. Activities which are not deemed to be inconsistent with holding voting securities for investment purposes only include: (i) voting on all matters voted on by stockholders; (ii) making financial and other inquiries of management of the type normally made by securities analysts for informational purposes and not to cause a change in management, policies or operations; and (iii) such other activities as the Nevada Commission may determine to be consistent with such investment intent. If the beneficial holder of voting securities who must be found suitable is a corporation, partnership or trust, it must submit detailed business and financial information, including a list of beneficial owners. The applicant is required to pay all costs of investigation.

Any officer, director or stockholder of a licensed or registered company who fails or refuses to apply for a finding of suitability or a license within 30 days after being directed to do so by the Nevada Commission or the Chairman of the Nevada Board may be found unsuitable. The same restrictions apply to a record owner of stock if the record owner, after request, fails to identify the beneficial owner. Any stockholder found unsuitable who holds, directly or indirectly, any beneficial ownership of the stock of a licensed or registered company beyond such period of time as may be prescribed by the Nevada Commission may be guilty of a criminal offense. A Registered Corporation is subject to disciplinary action if, after it receives notice that a person is unsuitable to be a stockholder or to have any other relationship with the Registered Corporation, the Registered Corporation (i) pays that person any dividend or interest, (ii) allows that person to exercise, directly or indirectly, any voting right conferred through securities held by that person, (iii) pays remuneration in any form to that person for services rendered or otherwise, or (iv) fails to pursue all lawful efforts to require that unsuitable person to relinquish its voting securities including, if necessary, the immediate purchase of the voting securities for cash at fair market value. Additionally, the Cities of Reno, Carson City and Elko, Nevada have the authority to approve all persons owning or controlling the stock of any corporation controlling a gaming licensee operating in those cities.

The Nevada Commission may, in its discretion, require the holder of any of the debt or similar securities of a Registered Corporation to file applications, be investigated and be found suitable to own such debt securities if the Nevada Commission has reason to believe that such ownership would otherwise be inconsistent with the declared policies of the State of Nevada. If the Nevada Commission determines that a person is unsuitable to own those securities, then pursuant to the Nevada Act, a Registered Corporation can be sanctioned, including by revocation of its approvals and those of its affiliates, if without the prior approval of the Nevada Commission, the Registered Corporation (i) pays to the unsuitable person any dividend, interest, or any distribution whatsoever; (ii) recognizes any voting right by the unsuitable person in connection with the Registered Corporation’s securities; (iii) pays the unsuitable person remuneration in any form; or (iv) makes any payment to the unsuitable person by way of principal, redemption, conversion, exchange, liquidation, or similar transaction.

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Jacobs Investments, Jacobs Entertainment, Black Hawk Gaming and the Nevada Gaming Subsidiaries are required to maintain current stock ledgers in Nevada that may be examined by the Nevada Gaming Authorities at any time. If any securities are held in trust by an agent or by a nominee, the record holder may be required to disclose the identity of the beneficial owner to the Nevada Gaming Authorities. A failure to make the required disclosure may be grounds for finding the record holder unsuitable. Licensed and registered companies are also required to render maximum assistance in determining the identity of beneficial owners of their securities. The Nevada Commission has the power to require Jacobs Entertainment’s stock certificates to bear a legend indicating that the securities are subject to the Nevada Act. To date, the Nevada Commission has not imposed such a requirement.

Jacobs Investments, Jacobs Entertainment and Black Hawk Gaming may not make a public offering without the prior approval of the Nevada Commission if the proceeds from the offering are intended to be used to construct, acquire or finance gaming facilities in Nevada, or to retire or extend obligations incurred for those purposes or for similar transactions. On September 20, 2007, the Nevada Commission granted Jacobs Entertainment prior approval to make public offerings for a period of two years, subject to certain conditions (the “Shelf Approval”). The Shelf Approval also applies to any affiliated company wholly owned by Jacobs Entertainment which is a publicly traded corporation or would become a publicly traded corporation pursuant to a public offering. The Shelf Approval may be rescinded for good cause without prior notice upon the issuance of an interlocutory stop order by the Chairman of the Nevada Board. The Shelf Approval does not constitute a finding, recommendation or approval by any of the Nevada Gaming Authorities as to the accuracy or adequacy of the offering memorandum or the investment merits of the securities. Any representation to the contrary is unlawful.

Changes in control of a Registered Corporation through merger, consolidation, stock or asset acquisitions, management or consulting agreements, or any act or conduct by a person by which it obtains control of a Registered Corporation, may not occur without the prior approval of the Nevada Commission. Entities seeking to acquire control of a Registered Corporation must satisfy the Nevada Board and Nevada Commission on a variety of stringent standards prior to assuming such control. The Nevada Commission may also require controlling stockholders, officers, directors and other persons having a material relationship or involvement with the entity proposing to acquire control, to be investigated and licensed as part of the approval process relating to the transaction.

The Nevada legislature has declared that some corporate acquisitions opposed by management, repurchases of voting securities, and corporate defense tactics affecting Nevada corporate gaming licensees may be injurious to stable and productive corporate gaming. Regulations of the Nevada Gaming Commission provide that control of a Registered Corporation cannot be acquired through a tender offer, merger, consolidation, acquisition of assets, management or consulting agreements or any form of takeover whatsoever without the prior approval of the Nevada Gaming Commission. The Nevada Commission has established a regulatory scheme to ameliorate the potentially adverse effects of these business practices on Nevada’s gaming industry and to further Nevada’s policy to: (i) assure the financial stability of corporate gaming licensees and their affiliates; (ii) preserve the beneficial aspects of conducting business in the corporate form; and (iii) promote a neutral environment for the orderly governance of corporate affairs. Approvals are, in certain circumstances, required from the Nevada Commission before a Registered Corporation can make exceptional repurchases of voting securities above the current market price thereof and before a corporate acquisition opposed by management can be consummated. The Nevada Act also requires prior approval of a plan of recapitalization proposed by a Registered Corporation in response to a tender offer made directly to its stockholders for the purposes of acquiring control of the Registered Corporation.

License fees and taxes, computed in various ways depending on the type of gaming or activity involved, are payable to the State of Nevada and to the counties and cities in which the Nevada Gaming Subsidiaries’ operations are conducted. Depending on the particular fee or tax involved, these fees and taxes are payable either monthly, quarterly or annually and are based on either (i) a percentage of the gross revenues received; (ii) the number of gaming devices operated; or (iii) the number of table games operated. A live entertainment tax is also paid by gaming establishments where live entertainment is furnished in connection with an admission fee or the selling or serving of food, refreshments or merchandise.

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Any person who is licensed, required to be licensed, registered, or required to be registered, or is under common control with any such person (collectively, “Licensees”), and who is or proposes to become involved in a gaming venture outside of Nevada, is required to deposit with the Nevada Board, and thereafter maintain, a revolving fund in the amount of $10,000 to pay the expenses of investigation by the Nevada Board for its participation in that foreign gaming. The revolving fund is subject to increase or decrease in the discretion of the Nevada Commission. Thereafter, foreign Licensees are required to comply with certain reporting requirements imposed by the Nevada Act. The Licensees are also subject to disciplinary action by the Nevada Commission if they knowingly violate any laws of the foreign jurisdiction pertaining to the foreign gaming operation, fail to conduct the foreign gaming operation in accordance with the standards of honesty and integrity required of Nevada gaming operations, engage in activities or enter into associations that are harmful to the State of Nevada or its ability to collect gaming taxes and fees, or employ, contract with or associate with a person in the foreign operation who has been denied a license or finding of suitability in Nevada on the grounds of personal unsuitability.

Gaming Regulation and Licensing—Louisiana

Video gaming in Louisiana is regulated by the Louisiana Gaming Control Board, which is part of the Department of Public Safety and Corrections. The enforcement arm thereof in charge of licensing and criminal investigations is the Video Gaming Division of the Louisiana State Police, likewise a part of the Department of Public Safety and Corrections. The Gaming Section of the Attorney General’s Office provides all legal counsel and representation with respect to all matters involving licensing actions and any other litigation issue relative to gaming and involving either the Louisiana Gaming Control Board (hereinafter the “Board”) or the Video Gaming Division of the Louisiana State Police (hereinafter the “Division”).

The Video Draw Poker Devices Control Law, which governs our operations in Louisiana, is contained within the Louisiana Revised Statutes at Title 27:301 et seq. (the “act”) with accompanying regulations being promulgated by the Board pursuant to the statutory authority contained within the act. The video draw poker regulations are in Title 42 of the Louisiana Administrative Code at Sections 2401 et seq.

The act gives the Board broad authority and discretion in the licensing of persons for video draw poker operations within the State of Louisiana. Generally, a person may not be licensed for video draw poker if he has been convicted in any jurisdiction of any of the following offenses within ten years prior to the date of the application for a video draw poker license or less than ten years has elapsed between the date of application for a video draw poker license and the successful completion or service of any sentence, deferred adjudication, or period of probation or parole for any such offense: (i) any offense punishable by imprisonment for more than one year; (ii) theft or any crime involving false statements or declarations; or (iii) gambling, as defined by the laws or ordinances of any municipality, any parish, any state, or the United States. The act and its corresponding regulations further provide that an application for a video draw poker license may be denied if it contains any material omission of information. An applicant must also not be delinquent in state or federal income taxes, penalties or interest or delinquent in the payment of any sales taxes, penalties, or interest to either the state or any local governing authority of the parish or municipality in which the establishment is located.

There are several general suitability requirements for licensure. Specifically, the law requires that an applicant for a video draw poker license be: (i) a person of good character, honesty, and integrity; (ii) a person whose prior activities, arrest or criminal record if any, reputation, habits, and associations do not pose a threat to the public interest of Louisiana or to the effective regulation of video draw poker, and do not create or enhance the dangers of unsuitable, unfair, or illegal practices, methods, and operations in the activities authorized by the act and financial arrangements incidental thereto; and (iii) a person who is likely to conduct business as authorized by the act in complete compliance with the act.

The suitability standards must be met by every person who has or controls directly or indirectly more than a 5% ownership, income, or profit interest in an entity that has or applies for a license in accordance with the act, or who receives more than a 5% revenue interest in the form of a commission, finder’s fee, loan repayment, or any other business expense related to the gaming operation, or who has the ability, in the opinion of the Division, to exercise a significant influence over the activities of a licensee authorized or to be authorized by the act. For the purposes of the act, all gaming-related associations, outstanding loans, promissory notes, leases, or other financial indebtedness of an applicant or licensee must be revealed to the Division for the purposes of determining significant

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influence and suitability. While significant influence is determined on a case-by-case basis, it has generally been interpreted to include any person who is an officer or director of any juridical entity that is an applicant for a video draw poker license as well as the spouse of any person having more than a 5% ownership, income, or profit interest in an applicant as well as the spouse of any officer or director of any juridical entity applicant. As of the middle of 2007, the Louisiana State Police made a policy decision that generally removed spouses from the list of parties required to file suitability documentation related to video draw poker establishment licenses. However, the companion legislation was not approved nor sent to the governor for signature during the corresponding legislative session.

The suitability criteria law makes an exception for institutional investors. An institutional investor of any applicant otherwise required to be found suitable or qualified pursuant to the act is presumed suitable or qualified upon submitting documentation to the Board and the Division sufficient to establish qualifications as an institutional investor as described below, and upon certifying that: (i) it owns, holds, or controls publicly traded securities issued by a licensee or permittee or a holding, intermediate, or parent company of a licensee or permittee in the ordinary course of business for investment purposes only; (ii) it does not exercise influence over the affairs of the issuer of the securities or over any licensed or permitted subsidiary of the issuer of the securities; and (iii) it does not intend to exercise influence over the affairs of the issuer of the securities, or over any licensed or permitted subsidiary of the issuer of the securities, in the future, and that it agrees to notify the Board in writing within 30 days if that intent should change.

The exercise of voting privileges with regard to publicly traded securities is not deemed to constitute the exercise of influence over the affairs of a licensee. The act also provides that this exception is not to be construed to preclude the Board or the Division from investigating the suitability or qualifications of an institutional investor should the Board or Division become aware of facts or information which may result in such institutional investor being found unsuitable or disqualified.

An institutional investor is defined in the act as: (i) a plan or trust established and maintained by the United States Government, a state, or a political subdivision of a state for the benefit of their respective employees; (ii) an investment company that is registered under the Investment Company Act of 1940; (iii) a collective investment trust organized by a bank under Part Nine of the Rules of the Comptroller of the Currency; (iv) a closed end investment trust that is registered with the United States Securities and Exchange Commission; (v) a mutual fund; (vi) a life insurance company or property and casualty company; (vii) a federal or state bank; or (viii) an investment advisor registered under the Investment Advisers Act of 1940.

If any person required to be found qualified or suitable fails to provide all or part of the documents or information required by the Board or the Division, and if, as a result, any person holding a license issued pursuant to the act is not or may no longer be qualified or suitable, the Board will issue, under penalty of revocation of the license, a condition naming the person who failed to provide all or part of the documents or information required by the Board or the Division, and declaring that such person may not: (i) receive dividends or interest on securities of a corporation holding a license, if the person has or controls directly or indirectly more than a 5% ownership, income, or profit interest in such corporation; (ii) exercise directly, or through a trustee or nominee, a right conferred by securities of a corporation holding a license, if the person has or controls directly or indirectly more than a five percent ownership, income, or profit interest in such corporation; (iii) receive remuneration or other economic benefit from any person holding a license issued pursuant to the provisions of the act; (iv) exercise significant influence over the activities of a person holding a license issued pursuant to the provisions of the act; or (v) continue owning or holding a security of a corporation holding a license if the person has or controls directly or indirectly more than a 5% ownership, income, or profit interest in such corporation.

Operating video draw poker devices at truck plazas in Louisiana requires both an establishment license and a device owner license. The establishment license permits the placement by a licensed device owner of video draw poker devices on the licensed premises. A device owner license permits the licensed entity to place and operate video draw poker devices at licensed establishments. In many cases, an establishment licensed for the placement of video draw poker devices will contract with a licensed device owner for video draw poker device placement services for a percentage of the video draw poker revenues. A licensed establishment may also, however, be a licensed device owner. A licensed device owner entity must be majority-owned by a person or persons who have resided within the State of Louisiana for a period of two years.

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Licensed establishments in Louisiana may be a restaurant, bar, motel or hotel, a Louisiana State Racing Commission licensed pari-mutuel wagering facility, a Louisiana State Racing Commission licensed satellite wagering facility, or a qualified truck stop facility. Generally, a licensed establishment pays to a device owner a percentage of the net device revenues generated by video draw poker devices placed at its business premises. There is no law that governs the minimum amount that a device owner must be compensated for its services.

Restaurants and bars may contain up to three video draw poker devices and a hotel or motel may have three video draw poker devices in each of its lounges and restaurants licensed to sell alcoholic beverages, up to a total of twelve for each hotel or motel. A pari-mutuel wagering facility and a licensed satellite wagering facility may have an unlimited number of video draw poker devices. A truck stop facility may have up to fifty video draw poker devices, with the number being determined by the amount of fuel sales of the truck stop facility.

A restaurant, bar, motel or hotel, pari-mutuel wagering facility, and satellite wagering facility pays an initial non-refundable licensing and processing fee of $1,100. A truck stop facility pays an initial licensing and processing fee of $10,100. A license must be renewed every five years but a renewal fee is required each year. The non-refundable annual renewal and processing fee for a restaurant, bar, motel or hotel, pari-mutuel wagering facility, and satellite wagering facility is $200. The non-refundable annual renewal and processing fee for a truck stop facility is $1,100.

In addition to the licensing fee, the device owner collects all funds deposited in each video draw poker device and is required to remit to the State of Louisiana on a bi-weekly basis a franchise payment in an amount equal to a percentage of the net device revenue derived from the operation of each video draw poker device owned by him. The amount of the percentage is based on the type of licensed establishment authorized by the Board for the placement of video draw poker devices, as follows: (i) a restaurant, bar, tavern, cocktail lounge, club, motel, or hotel—26%; (ii) a qualified truck stop facility—32.5%; and (iii) a pari-mutuel wagering facility or satellite wagering facility—22.5%.

The number of video draw poker devices permissible in a qualified truck stop facility is based on average monthly fuel sales, as follows: (i) 100,000 gallons of fuel, of which at least 40,000 gallons are diesel—not more than 50 devices; (ii) 75,000 gallons of fuel, of which at least 30,000 gallons are diesel—not more than 40 devices; and (iii) 50,000 gallons of fuel, of which at least 10,000 are diesel—not more than 35 devices. Compliance with the foregoing thresholds is measured quarterly for the first year of operation and, thereafter, is measured annually. Once licensed, if a truck stop facility sells less than an average of 50,000 gallons per month but more than 25,000 gallons per month in any calendar year, the truck stop facility will not be permitted to operate any video draw poker devices in the following calendar year. A qualified truck stop facility that sells less than an average of 25,000 gallons per month in any calendar year will be subject to revocation of its video draw poker license. Bulk sales or transfers may not be used to calculate monthly averages. Fuel facilities may, however, offer fuel for sale at a lower price (a) when motor fuel is sold upon the final liquidation of a business; (b) when motor fuel is advertised, offered for sale, or sold by any fiduciary or other officer under the order or direction of any court; (c) when motor fuel is sold for promotional purposes limited to a grand opening, an annual anniversary, or an annual customer appreciation day sale, each of which does not exceed three consecutive days; and (d) when motor fuel is sold in a good faith effort to meet the legal price of a competitor. Louisiana law creates a presumption that a fuel facility will not violate the price requirement when it sells fuel below the required price to meet the price of a competitor if it makes a bona fide effort to determine the legality of the price of such competitor and determines in good faith that the competitor’s price is a legal price.

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In addition, under the act, a qualified truck stop facility is required to have at least five developed contiguous acres and sell fuel, lubricating oil, and other vehicular merchandise, such as batteries, tires, or vehicle parts for eighteen-wheel tractor-trailers, and also meet all of the following criteria: (i) it must be located adjacent to a major state or interstate highway, as defined by the Board (within 2,000 feet of a major state highway or U.S. interstate highway); (ii) it must have an on-site restaurant with all of the following features: (a) provides seating for at least 50 patrons; (b) provides full table service for sit-down meals; (c) is open 12 hours a day; (d) offers a varied menu; and (e) operates a fully equipped kitchen which includes, but is not limited to, a range oven and refrigerated storage appliances used for the preparation of foods for on-premises or immediate consumption; (iii) it must have parking areas with each of the following: (a) a stable parking area for at least 50 18-wheel tractor-trailer motor vehicles, either paved or concrete (or otherwise certified and approved), to support 18-wheel tractor- trailer motor vehicles and their loads, constructed according to industry specifications, subject to approval by the Board and the Division; (b) parking of sufficient size is allowed for safe ingress and egress; and (c) parking areas for other vehicles around business entrance ways and exits shall not constitute parking areas for 18-wheel tractor-trailer motor vehicles; (iv) it must have diesel and gasoline fuel; (v) it must have on-site repair service facilities for 18-wheel tractor-trailer motor vehicles which facility may be in the form of a contract services business which regularly performs this type of service; (vi) it must have at least four of the following amenities: (a) a separate truckers’ television lounge; (b) a full service laundry facility located in a convenient area for truckers’ use; (c) private showers for men and women, not located in an area open to general public restroom facilities; (d) a travel store with items commonly referred to as truckers’ supplies (items commonly used only by commercial motor vehicles); (e) truck scales; (f) separate truckers’ telephones; and (g) permanent storage facilities for fuel; (vii) it must have an area separated for adult patronage only; and (viii) it must have, if available, a Class A—General retail permit or a Class A—Restaurant permit, as defined in Part II of Chapter 1 or Part II of Chapter 2 of Title 26 of the Louisiana Revised Statutes of 1950, to serve or sell alcoholic beverages for on-premises consumption and be owned and leased by a person who meets all personal qualifications for such permit. In light of Hurricane Katrina and other recent events, the Louisiana legislature has recently put in place exceptions to the amenities requirements and fuel requirements that allow qualified truck stop facility licensees to operate casinos with a previously approved number of gaming devices, notwithstanding certain non-compliance with the amenities or fuel requirements. The exceptions may apply, depending on the circumstances and as determined by the Division, if the non-compliance is caused by force majeure, expropriation by political subdivision, road construction or other non-commercial circumstances that directly affect compliance. An owner or lessor of a qualified truck stop facility may lease or sublease any restaurant, convenience store, fuel facility, or any other business operation located on the premises of the qualified truck stop facility to another person, provided that such person executes a written lease which contains a requirement that the lessee or sublessee comply with the laws and regulations which govern the operation of video draw poker devices. If such lease or sublease is granted, the owner or lessor of such qualified truck stop facility shall maintain ultimate supervision and control of that entire truck stop premises.

Additionally, no license can be granted to any truck stop facility located, at the time application is made for a license to operate video draw poker devices, within five hundred feet of any property that is on the National Historic Registry, any public playground, or a building used exclusively as a church, synagogue, public library, or school. In addition, no license shall be issued for any truck stop facility unless previously applied for or licensed as of January 1, 2008, located, at the time application is made for a license to operate video draw poker devices, within two thousand five hundred feet of any property that is on the National Historic Registry, any public playground, or a building used exclusively as a church, synagogue, public library, or school unless the applicant for the license has applied prior to January 1, 2008, with the local governing authority of the parish where the truck stop is located for a certificate of compliance with applicable zoning ordinances and building codes and a statement of approval for the operation of video draw poker devices at a truck stop facility or has applied with the appropriate authority for a building permit prior to January 1, 2008.

All suitability information and applications required to be submitted with respect to the 18 Louisiana truck plazas currently owned by us, as well as the truck stop in which we share in the revenue, have been submitted to the Board and the Division. All applications submitted have been approved and none are currently pending.  However, because the Board and the Division conduct a new suitability investigation in connection with each acquisition of a facility at which video gaming devices are to be operated, regardless of prior approvals, there can be no guarantee that a suitability approval will ultimately result with respect to the plazas that we propose to acquire.

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Gaming Regulation and Licensing—Virginia

Colonial’s success is dependent upon continued government and public acceptance of horse racing as a form of legalized gaming. Although Colonial believes that pari-mutuel wagering on horse racing will continue to be legal in Virginia, gaming has come under increasing scrutiny nationally and locally.

Opposition to the Virginia Racing Act has been unsuccessfully introduced in the Virginia legislature in the past, but additional legislative opposition may arise in the future. Any repeal or material amendment of the Virginia Racing Act could have a material adverse effect on Colonial’s business of pari-mutuel wagering.

Under the Virginia Racing Act, the Virginia Racing Commission is vested with control over all aspects of horse racing with pari-mutuel wagering and the power to prescribe regulations and conditions under which such racing and wagering are conducted. The Virginia Racing Commission is responsible for, among other things, (i) conducting a review annually of Colonial’s track and satellite wagering facility licenses, (ii) annually approving Colonial’s proposed schedule of racing days, (iii) approving new or modified types of pari-mutuel wagering pools requested by Colonial, (iv) issuing permits to all officers, directors, racing officials, and other employees of Colonial, and (v) approving simulcast schedules at the track and at the satellite wagering facilities. The Virginia Racing Commission also has the authority to promulgate regulations pertaining to Colonial’s track facilities, equipment, safety and security measures, and controls the issuing of licenses and permits for participants in pari-mutuel racing, including Colonial employees at the track and at the satellite wagering facilities. In addition, the Virginia Racing Commission must approve any acquisition or continuing ownership of a 5% or greater interest in Colonial. Action by the Virginia Racing Commission that is inconsistent with the Colonial’s business plan could have a material adverse effect on Colonial.

During the 2000 session of the Virginia General Assembly, an amendment to the Racing Act was passed that requires Colonial to enter into contracts with each representative horsemen’s group and provides for it to contribute to the purse account of the respective breed a minimum of 5% of the first $75 million of simulcast amounts wagered (“handle”), 6% of the next $75 million and 7% of all handle over $150 million. The amendment also provides for the breakage generated by pari-mutuel wagering to be allocated 70% to capital expenditures and 30% to backstretch benevolent activities. Prior to this amendment, Colonial received all breakage. The Virginia Racing Act requires that, after July 1, 2000, we enter into contracts with each representative horsemen’s group that provide for us to contribute, by breed of horse, a minimum of 5% of the first $75 million of handle, 6% of the next $75 million of handle and 7% of all handle over $150 million to the purse account of the respective breed. Finally, the amendment empowers the Commission to summarily suspend Colonial’s licenses if it believes the Racing Act or the regulations have been violated. In addition, the Interstate Horse Racing Act also requires that we secure the consent of the Virginia Horsemen’s Benevolence and Protective Association (the “VaHBPA”) and the Virginia Harness Horse Association (“VHHA”) to the export simulcasting of races. These consents are usually contained in the agreement between each group and us.

The licenses issued by the Virginia Racing Commission to Colonial for the racetrack and its satellite wagering facilities are for a period of not less than 20 years, but are subject to annual review by the Virginia Racing Commission. It is possible that such licenses will not be renewed or that such licenses could be suspended or revoked by the Virginia Racing Commission for violations of the Virginia Racing Act or Virginia Racing Commission rules. We also hold an advance deposit account wagering license that is renewable annually. Our current advance deposit account wagering license expires December 31, 2009.

We have entered into an agreement with the VHHA that expires December 31, 2011.  Our agreement with the VaHBPA expired December 31, 2008.  We are currently negotiating a new contract with the VaHBPA.  In the event our VaHBPA agreement cannot continue to be renewed in the future, the Virginia Racing Commission could suspend our licenses to operate our racetrack and the satellite wagering facilities until an agreement is in place although it has not indicated that it will do so. Although it is difficult to predict the likelihood of such an event, closure of the satellite wagering facilities would be detrimental to the horsemen’s groups and us since each horsemen’s group’s primary source of purse funds is its percentage of wagering at the satellite facilities.

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Colonial, the track and the satellite wagering facilities are also subject to a variety of other laws and regulations, including zoning, construction, and land-use laws and the regulations of the Virginia Alcoholic Beverage Control Board. Such laws and regulations may affect the selection of racing center sites because of parking, traffic flow, and other similar considerations. Any interruption or termination of Colonial’s ability, or that of its concessionaires, to serve alcoholic beverages could have a material adverse effect on Colonial.

Gaming Regulation—Federal

Colonial’s interstate simulcast operations are subject to the Federal Interstate Horse Racing Act, which regulates interstate satellite wagering. In order to conduct wagering on import simulcasting at the track or any racing center, the Interstate Horse Racing Act requires Colonial to obtain the consent of the Virginia Racing Commission, the consent of the racing commission of the state where the horse racing meet originates, and the consent of the representative horsemen groups in the origination state. To conduct export simulcasting, Colonial must obtain the consent of the Virginia Horseman’s Benevolent and Protective Association or the Virginia Harness Horse Association, and the Virginia Racing Commission. Also, in the case of satellite wagering to be conducted at any of Colonial’s satellite wagering facilities, the Interstate Horse Racing Act requires Colonial to obtain the approval of all currently operating horse racetracks within 60 miles of the satellite wagering facilities or if there are no currently operating tracks within 60 miles, the approval of the closest operating horse racetrack, if any, in an adjoining state. Significant delay in obtaining or failure to obtain these consents or approvals could have a material adverse effect on Colonial.

The National Gaming Commission conducted a comprehensive legal and factual study of gambling in the United States and existing federal, state, and local policies and practices with respect to the legalization or prohibition of gambling activities. The commission published its findings and recommendations in 1999. Although no proposals have been put forward to implement the commission’s recommendations, the future adoption of some or all of these recommendations could have a material adverse effect on our business and operations.

Liquor Regulation

The sale of alcoholic beverages in Colorado is subject to licensing, control and regulation by certain Colorado state and local agencies (the “Liquor Agencies”). Subject to certain exceptions, all persons who directly or indirectly own 5% or more of a company or its casino must file applications with and are subject to investigation by the Liquor Agencies. The Liquor Agencies also may investigate persons who, directly or indirectly, lend money to liquor licensees. All liquor licenses are renewable, are revocable and are not transferable. The Liquor Agencies have broad powers to limit, condition, suspend or revoke any liquor license. Any disciplinary action by the Liquor Agencies or any failure to renew or other revocation of any of our liquor licenses would have a material adverse effect on our operations and Black Hawk Gaming’s Colorado casinos.

Under Colorado law, it is a criminal violation for any person or entity to own a direct or indirect interest in more than one type of alcoholic beverage license or more than three gaming tavern liquor licenses. Black Hawk Gaming’s Colorado casinos have gaming tavern liquor licenses. Accordingly, our expansion and diversification opportunities in Colorado are limited by these licensing restrictions.

The sale of alcoholic beverages in the cities of Reno, Carson City and Elko, Nevada, is subject to licensing, control and regulation by those cities. All licenses are revocable and are not transferable. The agencies involved have full power to limit, condition, suspend or revoke any such license, and any such disciplinary action could (and revocation would) have a material adverse effect on the operations of one or more of our Gold Dust West casinos in Nevada.

Alcohol regulation within the State of Louisiana is performed primarily by the Office of Alcohol and Tobacco Control (the “Board”). The Commissioner of the Board is given broad discretion in the granting and denial of state alcohol permits. While permits are issued on a state level, the local municipality is also permitted to provide for concurrent local licensing. The state alcohol regulatory scheme is contained at Title 26:1 of the Louisiana Revised Statutes (hereinafter referred to as the “act”). Generally, no permit may be issued if the applicable premises is located three hundred feet or less, as fixed and determined by the local municipal ordinance, of a public playground or of a building used exclusively as a church or synagogue, public library, school, full-time daycare

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center or corrections facility housing inmates, including but not limited to, a halfway house. Louisiana parishes may enact ordinances extending the distance between the applicable premises and the property line of such locations to 500 feet. Local municipalities are also permitted to regulate the opening and closing hours of permitted businesses as well as to prohibit the sale of alcoholic beverages altogether by referendum vote of the people within the municipality. A local municipality may also regulate via zoning designations the permissibility or prohibition of the permitting of businesses that sell alcoholic beverages within that municipality. All of our video gaming truck plaza facilities are currently licensed by the applicable state and local alcohol licensing authorities.

The sale of alcoholic beverages in Virginia is subject to licensing, control and regulation by the Virginia Department of Alcoholic Beverage Control (the “Virginia ABC Board”), a Virginia state agency. The Virginia ABC Board issues licenses based upon the type of beverage, type of establishment or place of consumption. Virginia ABC laws include the responsibility of the licensee to maintain complete and accurate records, certain restrictions on advertising and certain food sale requirements.

Before receiving a Virginia ABC license, an applicant must satisfy several requirements. The Virginia ABC Board conducts an extensive background investigation (to include a criminal history review as well as contacts with the local governing body of each license application) and contacts local officials, residents and business people in the vicinity of the establishment to ascertain if any objections exist. The background investigation is completed for all principal owners of the proposed licensee. Administrative hearings are available to afford all interested parties the opportunity to present any concerns with respect to an application.

A licensee is required to maintain financial responsibility for its business, including timely payment of all taxes, creditor obligations and other bills, and must keep accurate records of all such transactions. Mixed beverage licensees must record sales and purchases of all mixed beverages, food and non-alcoholic beverages. Mixed beverage licensees must submit annual review reports to the Virginia ABC Board showing all purchases and sales of alcoholic beverages during the year as well as an accurate inventory. Finally, the Virginia ABC Board imposes certain restrictions and limitations on advertising, the use of advertising materials and promotions.

If Virginia ABC agents discover license violations, a disciplinary hearing will typically be conducted with a Virginia ABC hearing officer. Any aggrieved localities and members of the community may attend the hearing and present any additional or relevant objections or complaints concerning the license. The Virginia ABC Board has broad power to limit, condition, suspend or revoke any license granted on discovery of any violation. Any disciplinary action by the Virginia ABC Board or any failure to renew or any revocation of a liquor license would likely have a material adverse effect on the operation of Colonial’s track and satellite wagering facilities.

Taxation

Gaming operators in Colorado are subject to state and local taxes and fees in addition to ordinary federal and state income taxes. The City of Black Hawk has imposed an annual license fee, currently $750, for each gaming device installed in a casino. In addition, Colorado has a tax on gross gaming revenue (also called “adjusted gross proceeds”) being generally defined as the total amount wagered less the total amount paid out in prizes. Beginning  July 1, 2008, gaming tax rates are as follows:

Tax as Percentage of	Annual Amount of Adjusted
Adjusted Gross Proceeds	Gross Proceeds
0.25%	$	0	—	2,000,000
2.00%	2,000,001		—	5,000,000
9.00%	5,000,001		—	8,000,000
11.00%	8,000,001		—	10,000,000
16.00%	10,000,001		—	13,000,000
20.00%	13,000,001			and above

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Both of JEI’s Colorado casinos are subject to the maximum rate. Neither the Colorado constitution nor the gaming statutes require that gaming tax rates be graduated, as they currently are. However, with the passage of Colorado Amendment 50, the gaming tax rates were set in accordance with the table above and can only be increased with an amendment to the Colorado Constitution.

In Nevada, license fees and taxes, computed in various ways depending on the type of gaming or activity involved, are payable to the State of Nevada, Washoe, Carson City, and Elko Counties and the Cities of Reno, Carson City, and Elko. Depending upon the particular fee or tax involved, these fees and taxes are payable either monthly, quarterly or annually and are based upon either: (i) a percentage of the gross revenues received; (ii) the number of gaming devices operated; or (iii) the number of table games operated. A live entertainment tax is also paid by casino operations where entertainment is furnished in connection with an admissions charge or the selling or serving of food or refreshments or the selling of merchandise. Presently the state tax in Nevada on adjusted gross revenue from gaming is 6.75%.

Video gaming operators in truck plazas in Louisiana are subject to state and local taxes and fees in addition to ordinary federal and state income taxes. The state of Louisiana has imposed a “gaming franchise fee” of 32.5% of the net device revenue from each video gaming device located at a truck plaza. The net device revenue is the amount remaining after all winnings have been paid. This franchise fee is collected twice per month by the Louisiana state police based on the data that is provided directly to them from the devices. There is also an annual state establishment license fee of $1,000. In addition, the state imposes a device operation fee of $1,000 per year per device, which is paid quarterly, and each parish imposes an annual occupational license tax of up to $50 per device.

Colonial is subject to a number of federal, state and local taxes and fees. These include fees to support the Virginia Breeders Fund, taxes payable to the Commonwealth of Virginia, taxes and admission charges payable to New Kent County, where the track is located, and taxes payable to localities in which satellite wagering facilities are located based upon attendance and the amount of monies wagered both at the track and at the satellite wagering facilities. Colonial believes that the public acceptance of pari-mutuel wagering on horse races, as well as other forms of gaming, is based, in part, on the governmental revenues it generates from taxes and fees on such activities. It is possible that gaming activities, including horse racing, may become a target for additional federal, state, or local taxes and fees. A significant increase in such taxes or fees or the creation of significant additional taxes or fees could have a material adverse effect on us.

Item 1A.Risk Factors.

To inform readers of our future plans and business strategies, this report contains statements concerning our future performance, intentions, objectives, plans and expectations that are or may be deemed to be “forward-looking statements.” Our ability to do this has been fostered by the Private Securities Litigation Reform Act of 1995, which provides a “safe harbor” for forward-looking statements to encourage companies to provide prospective information so long as those statements are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those discussed in the statements. Such factors affecting us include, but are not limited to, the following:

Risks Related to Our Indebtedness

Our substantial indebtedness could adversely affect our financial health and prevent us from fulfilling our obligations under our debt agreements.

We have a significant amount of indebtedness. As of December 31, 2008, we had total indebtedness excluding accounts payable and accrued expenses of approximately $290.7 million and total stockholder’s equity of approximately $24.9 million. Our substantial indebtedness could have considerable consequences. For example, it could:

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·increase our vulnerability to general adverse economic and industry conditions;

·require us to dedicate a substantial portion of our cash flow from operations to debt service, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, and other general corporate purposes;

·limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

·limit our ability to fund a required regulatory redemption or a change of control offer;

·place us at a competitive disadvantage to our competitors that have less debt; and

·limit, along with the financial and other restrictive covenants in our debt agreements, among other things, our ability to borrow additional funds. A failure to comply with those covenants could result in an event of default which, if not cured or waived, could have a significant adverse effect on us.

The occurrence of any one of these events could have a material adverse effect on our business, financial condition, results of operations, prospects and ability to satisfy our obligations under our debt agreements.

Our debt agreements impose many restrictive covenants on us.

Our debt agreements contain covenants that, among other things, restrict our ability to:

·incur more debt;

·issue stock of subsidiaries;

·make investments;

·repurchase stock;

·create liens;

·enter into transactions with affiliates;

·enter into sale-leaseback transactions;

·merge or consolidate; and

·transfer and sell assets.

In addition, our senior credit facility contains many restrictive covenants similar to the covenants of our indenture but the covenants in our senior credit facility are generally more restrictive than those contained in our indenture. Our senior credit facility also requires us to maintain specified consolidated financial ratios and satisfy certain consolidated financial tests. Our ability to meet those financial ratios and financial tests may be affected by events beyond our control, and we may not be able to continue to meet those tests. If we fail to meet those tests or breach any of the covenants, the lenders under our senior credit facility could declare all amounts outstanding thereunder, together with the accrued interest, to be immediately due and payable. Our assets may not be sufficient to repay in full such indebtedness or any other indebtedness, including $210 million of our senior unsecured notes issued under our indenture. Further, any other agreements we may enter into in the future governing our indebtedness may impose additional restrictions on us, any of which may adversely affect our ability to finance our future operations or capital needs or to pursue available business opportunities.  Our failure to pay interest, repay our indebtedness when due, or maintain

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compliance with our debt covenants would result in an event of default under both our senior credit facility and our note indenture.

Complying with these covenants could materially limit our financial and operating flexibility and could cause us to take actions that we otherwise would not take or cause us not to take actions that we otherwise would take.

Despite current indebtedness levels, we may still be able to incur substantially more debt, which could exacerbate the risks described above.

We and our subsidiaries may be able to incur substantial additional indebtedness in the future. The indenture governing our senior unsecured notes and our senior credit facility do not fully prohibit us or our subsidiaries from doing so. If new debt is added to our and our subsidiaries’ current debt levels, the related risks that we and they now face could intensify.

To service our indebtedness, we will require a significant amount of cash, the availability of which depends on many factors beyond our control.

Our ability to make payments on and to refinance our indebtedness and to fund our operations will depend on our ability to generate cash. This, to an extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. Our business may not generate sufficient cash flow from operations and future borrowings may not be available to us in amounts sufficient to enable us to pay our indebtedness, or to fund our other liquidity needs. In addition, if we consummate significant acquisitions in the future, our cash requirements may increase significantly. If we are unable to generate sufficient cash flow and are unable to refinance or extend outstanding borrowings, we may have to:

·reduce or delay planned expansion and capital expenditures;

·sell assets;

·restructure debt; or

·raise additional capital.

Furthermore, we intend to refinance all of our debt on or before maturity. We cannot assure you that we will be able to refinance any of our debt on commercially reasonable terms or at all.

Our senior notes are not secured by any of our assets and senior noteholders’ rights to enforce remedies will be limited to the rights of holders of unsecured debt.

Our senior notes are not secured by any of our assets. Our obligations under our senior credit facility are secured by liens on substantially all of our assets. If we become insolvent or are liquidated, or if payments under our senior credit facility are accelerated, the lenders under our senior credit facility will be entitled to exercise the remedies available to a secured lender under applicable law and our senior credit facility. Accordingly, such lenders will have a prior claim with respect to our assets and there may not be sufficient assets remaining to pay amounts due on our senior unsecured notes then outstanding.

We are a holding company and will depend on the business of our subsidiaries to satisfy our obligations under our indebtedness.

We are a holding company. Substantially all of the operations necessary to fund payment on our indebtedness are conducted by our subsidiaries. Our ability to make payments on our indebtedness will depend on our subsidiaries’ cash flow and their payment of funds to us. Our subsidiaries’ ability to make payments to us will depend on their earnings, the terms of their indebtedness, business and tax considerations, legal and regulatory restrictions and economic conditions.

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We may not have the ability to raise the funds necessary to finance the change of control offer required by our indebtedness.

Upon the occurrence of certain change of control events, we will be required to offer to repurchase all outstanding senior unsecured notes at a purchase price equal to 101% of their principal amount. Moreover, a change of control constitutes a default under our senior credit facility. However, it is likely that we will not have sufficient funds at the time of such a change of control to make the required repurchase of our notes or repay the indebtedness under our senior credit facility. The change of control provisions may not protect you in a transaction in which we incur a large amount of debt, including a reorganization, restructuring, merger or other similar transaction, because that kind of transaction may not involve any shift in voting power or beneficial ownership, or may not involve a shift large enough to trigger a change of control as defined in our debt agreements.

Federal and state statutes allow courts, under specific circumstances, to void guarantees, subordinate claims in respect of indebtedness and require debt holders to return payments received from guarantors.

Under the federal bankruptcy law and comparable provisions of state fraudulent transfer laws, a court could void a guarantee of one or more of our subsidiaries or claims related to our senior unsecured notes or subordinate a subsidiary’s guarantee to all of our other debts or all other debts of the guarantor if, among other things, we or the guarantor, at the time we or it incurred the indebtedness evidenced by its guarantee:

·received less than reasonably equivalent value or fair consideration for the incurrence of that indebtedness; and

·we were or the guarantor was insolvent or rendered insolvent by reason of that incurrence;

·we were or the guarantor was engaged in a business or transaction for which our or the guarantor’s remaining assets constituted unreasonably small capital; or

·we or the guarantor intended to incur, or believed that we or it would incur, debts beyond our or its ability to pay those debts as they mature.

In addition, a court could void any payment by us or the guarantor pursuant to our senior unsecured notes or a guarantee and require that payment to be returned to us or the guarantor, or to a fund for the benefit of our creditors or the creditors of the guarantor.

The measures of insolvency for purposes of these fraudulent transfer laws will vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally, however, a guarantor would be considered insolvent if:

·the sum of its debts, including contingent liabilities, were greater than the fair saleable value of all of its assets,

·the present fair saleable value of its assets were less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature, or

·it could not pay its debts as they become due.

We believe that we and the guarantors have received reasonably equivalent value and fair consideration for the incurrence of the indebtedness and obligations represented by our senior unsecured notes and the guarantees. On the basis of historical financial information, recent operating history and other factors, we believe that we and each subsidiary guarantor, after giving effect to its guarantee of our senior unsecured notes, are not insolvent, do not have unreasonably small capital for the business in which we are or it is engaged and have not incurred debts beyond our or its ability to pay such debts as they mature. However, a court might disagree with any or all of our conclusions in this regard and it could apply different legal standards.

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Holders of our senior unsecured notes may be required to comply with registration, licensing, qualification or other requirements under gaming laws or dispose of their securities.

The gaming authorities of any jurisdiction in which we currently or in the future conduct or propose to conduct gaming, either through our subsidiaries or a joint venture, may require that a holder or beneficial owner of our senior unsecured notes be registered, licensed, qualified or found suitable, or comply with any other requirement under applicable gaming laws. If you have an interest in our senior unsecured notes, by the terms of the indenture, you will be deemed to agree to comply with all of these requirements, including your agreement to register or apply for and maintain in full force and effect a license, qualification or a finding or suitability, or comply with any other requirement, within the required time period, as provided by the relevant gaming authority. If you fail to apply to be, or fail to become, registered, licensed or qualified or such registration, license or qualification is suspended or revoked or not maintained, or you are found unsuitable or fail to comply with any other requirement of a gaming authority, then we will have the right, at our option, to:

·require you to sell your senior unsecured notes or beneficial interest in the senior unsecured notes in accordance with applicable gaming requirements within 30 days after you receive notice of our election, or by any earlier date that the relevant gaming authority may request or prescribe; or

·redeem your senior unsecured notes (possibly within less than 30 days following the notice of redemption if requested or prescribed by the gaming authority) at a redemption price equal to the lesser of:

·your cost;

·100% of the principal amount of the senior unsecured notes, plus accrued and unpaid interest, if any, to the redemption date or the date of the first to occur of any (i) failure to become or continue to be registered, licensed or qualified, (ii) failure to be found or continue to be suitable, (iii) failure to comply with relevant gaming authority requirements or (iv) receipt of notice from the relevant gaming authority that you will not be registered, licensed or qualified; and

·any other amount required by applicable law or by order of any gaming authority.

If we elect, in our sole discretion, to redeem your senior unsecured notes, we will notify the indenture trustee in writing of any redemption as soon as practicable. We will not be responsible for any costs or expenses you may incur in connection with your registration, application for a license, qualification or a finding of suitability, or your renewal or continuation of the foregoing or compliance with any other requirement of a gaming authority. The indenture also provides that as soon as you are required to sell your senior unsecured notes as a result of a gaming authority action, you will, to the extent required by the applicable gaming authority, have no further right:

·to exercise, directly or indirectly, any right conferred by the senior unsecured notes; or

·to receive from us any interest or any other distributions or payments, or any remuneration in any form, relating to the senior unsecured notes, except the redemption price we refer to above.

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Risks Related to Our Business

We face significant competition.

The gaming industry is characterized by a high degree of competition among a large number of participants, many of which have financial and other resources that are greater than our resources. Competitive gaming activities include casinos, pari-mutuel wagering, video lottery terminals and other gaming devices, and other forms of legalized gaming. New or expanded operations by other persons can be expected to increase competition for our gaming operations and could have a material adverse impact on us.

Casino Operations. Our casino operations are conducted in Black Hawk, Colorado, and Reno, Carson City, and Elko, Nevada. Competition in the Black Hawk gaming market, which is the primary gaming market in Colorado, is intense. In addition, large, well-financed companies have entered the Black Hawk and other Colorado markets through the purchase or expansion of existing facilities and others may continue to do so, all of which could materially harm our business, financial condition and results of operations. For example:

·Ameristar Casinos, Inc. (“Ameristar”) purchased Mountain High Casino (formerly the Black Hawk Casino by Hyatt) in a bankruptcy sale. That casino is directly across highway 119 from The Lodge and Ameristar has expanded the casino area to accommodate approximately 1,700 total gaming devices with new slot product, expanded the parking garage and refurbished and rebranded its dining venues. Ameristar has commenced construction of a $235-240 million, 33 story, 536-room hotel, a convention center and other amenities and facilities which are expected to be completed in the second half of 2009. In all respects, Ameristar is known to be a fierce competitor in gaming markets in which it operates;

·Isle of Capri Casinos, Inc. owns Colorado Central Station, across the street from its existing facility and in 2005 completed a major renovation and expansion project physically linking the two properties. The combined casinos are the largest in Black Hawk with approximately 2,100 total gaming devices, 402 hotel rooms and 2,300 parking spaces;

·the 2005 acquisition of four Colorado racetracks (two of which are in the Denver metropolitan area) that are owned and operated by BLB Investors, L.L.C., a joint venture including Kerzner International Limited, Starwood Capital Group Global, L.L.C., and Waterford Group, L.L.C., may reinvigorate efforts to authorize video lottery terminals, slot machines or other types of gaming at the state’s racetracks. BLB has publicly discussed a statewide initiative to expand slot machine gaming to both of its Denver area facilities and potentially to one or both of its other tracks in the southern part of the state. If this authorization is granted by the Colorado Lottery Division, the Colorado state legislature, or the voters, it would have a material adverse effect on gaming revenues in Black Hawk and at The Lodge and Gilpin casinos.

·the Mardi Gras casino, next to our casino, The Lodge, was purchased in 2005 and the owners have developed and implemented new marketing programs, expanded the poker room and added new slot product;

·late in 2004, Central City, a gaming area about one mile from Black Hawk, completed the “Southern Access,” a road which directly connects Central City to Interstate 70. The new access road to Central City enables existing casinos and possible new casinos to pose a significant competitive threat to gaming activities in Black Hawk; and

·in the recent past, the Cheyenne and Arapahoe Indian tribes have claimed significant treaty rights to land in Colorado have pursued a plan to exchange those rights for land east of the Denver metropolitan area on which to build and operate a large casino gaming facility. Although this project appears to be dormant at present, if it is renewed and survives political and other challenges, it could have a material adverse effect on gaming revenues in Black Hawk and at The Lodge and Gilpin casinos.

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In addition to competing with other gaming facilities in Colorado as described above, we compete to a lesser degree, for both customers and potential future gaming sites, with gaming companies nationwide, including casinos in Nevada and several other states, and casinos on Native American lands in several states, many of which have substantially greater financial resources and experience in the gaming business. The expansion of legalized casino gaming to new jurisdictions throughout the United States may also affect competitive conditions.

The Gold Dust West casino in Reno, Nevada, encounters strong competition from large hotel and casino facilities and smaller casinos similar in size to the Gold Dust West casino in the Reno area, which includes Sparks, Nevada. There is also competition from gaming establishments in other towns and cities in Nevada and from Native American gaming facilities located near Sacramento, California. Our Carson City and Elko, Nevada Gold Dust West casinos face competition from several casinos in those cities and other venues in Nevada. Gold Dust West-Elko faces additional competitive and other risks associated with being a newly-opened casino.

In addition, we believe that the introduction of casino gaming, or the expansion of presently conducted gaming activities (particularly at Native American establishments) in areas in or close to Nevada, such as California, Oregon, Washington, Arizona and western Canada, could materially harm our operations at our Reno property.

Louisiana Truck Plaza Operations. Our Louisiana truck plaza operations compete with other truck plazas located in Louisiana and other forms of gaming, such as land-based, riverboat and Native American casinos, as well as slot machines located at horseracing tracks and video poker machines located in bars, restaurants, hotels, off-track wagering facilities and bingo parlors. There were 181 licensed video poker truck plazas in Louisiana at December 31, 2008.

Pari-Mutuel Wagering Operations. We operate a racetrack in New Kent, Virginia, and off-track wagering facilities in Alberta, Chesapeake, Hampton, Martinsville, Weber City, Vinton, and Richmond (two), Virginia. Similarly, the expansion of other forms of gaming in neighboring states, such as table games in West Virginia and slot machines in Maryland, could have an adverse effect on our performance.

We compete with racetracks located outside Virginia (including several in Delaware, Maryland, New Jersey, New York, Pennsylvania, and West Virginia, some of which augment their purses with slot machine revenues) and other forms of gaming, such as land-based casinos, including those in Atlantic City, New Jersey, and statewide lotteries in Virginia and neighboring states. We also face competition from a wide range of entertainment options, including live and televised sporting events and other recreational activities such as theme parks (Kings Dominion to the northwest and Busch Gardens to the southeast).

We compete for wagering dollars and simulcast fees with live racing and races simulcast from racetracks in other states, particularly racetracks in neighboring states such as Charles Town in West Virginia, Pimlico Race Course and Laurel Park in Maryland, and Delaware Park in Delaware. We also compete for wagering dollars with account wagering companies operating both legally and illegally in Virginia. These companies take wagers from Virginians both over the phone and the internet. We believe our agreements with four licensed account wagering companies and legislative changes scheduled to go into effect July 1, 2009 provide us with fair compensation for their activities. Unlicensed account wagering companies have lower costs than Colonial Downs and thus are able to attract customers in Virginia with large wagering rebates.

We face extensive regulation from gaming authorities.

Licensing Requirements. As owners and operators of gaming and pari-mutuel wagering facilities, we are subject to extensive state and local and some federal regulation. State and local authorities require us and our subsidiaries to demonstrate suitability to obtain and retain various licenses and require that we have registrations, permits and approvals to conduct gaming and wagering operations. Various regulatory authorities, including the Colorado Limited Gaming Control Commission, the Nevada Gaming Commission, the Nevada State Gaming Control Board, the Louisiana Gaming Control Board and the Virginia Racing Commission may, for any reason set forth in the applicable legislation, limit, condition, suspend or revoke a license or registration to conduct gaming or wagering operations or prevent us from owning the securities of any of our gaming or wagering subsidiaries. Like all gaming and wagering operators in the jurisdictions in which we operate, we will need to apply periodically to renew our licenses or registrations. We cannot assure you that we will be able to obtain such renewals. Regulatory

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authorities may also levy substantial fines against us or seize our assets or those of our subsidiaries or of the people involved in violating gaming laws or regulations. Any of these events could materially harm our business, financial condition and results of operations. Gaming authorities in the United Sates can generally require that any beneficial owner of our securities, including holders of our debt, file an application for a finding of suitability.

Potential Changes in Regulatory Environment. From time to time, legislators and special interest groups have proposed legislation that would expand, restrict or prevent gaming or wagering operations in the jurisdictions in which we operate. Any expansion of gaming or wagering or restriction on or prohibition of our gaming or wagering operations could materially harm our business, financial condition and results of operations. In particular in Colorado, there have been repeated attempts to expand gambling beyond Black Hawk, Central City and Cripple Creek to other towns, racetracks, bingo halls, and tribal gaming through legislation, ballot initiatives, and administrative action by state or local agencies and this is a continued competitive threat to us.

Taxation. We believe that the prospect of significant additional revenue is one of the primary reasons that jurisdictions permit legalized gaming and wagering. As a result, gaming and wagering companies are typically subject to significant taxes and fees in addition to normal federal, state, local and provincial income taxes, and such taxes and fees are subject to increase at any time. We pay substantial taxes and fees with respect to all of our operations. From time to time, federal, state and local legislators and officials have proposed changes in tax laws, or in the administration of such laws, affecting the gaming and wagering industry. It is not possible to predict the likelihood of changes in tax laws or in the administration of such laws. Similarly, special improvement districts, now in existence or those that may be formed in the future, may impose assessments in the form of additional taxes or fees that will finance infrastructure improvements that enhance the attractiveness or accessibility of casinos with which we compete and/or add to our costs of doing business, either of which can negatively affect the competitive position of our Lodge and Gilpin casinos. Such changes, if adopted, could materially harm our business, financial condition and results of operations.

Compliance with Other Laws. We are also subject to a variety of other rules and regulations, including zoning, environmental, construction and land-use laws and regulations governing the serving of alcoholic beverages.

We depend on our key personnel, particularly Jeffrey P. Jacobs.

We are highly dependent on the services of Jeffrey P. Jacobs (one of our indirect owners and our Chief Executive Officer) and other officers and key employees. The loss of the services of any of these individuals could materially harm our business, financial condition and results of operations. The loss of their experience and familiarity with our operations could have negative effects on management’s efficiency and could cause us to incur costs to find qualified replacements.

Our Chief Executive Officer and his family trusts  own a controlling beneficial interest in our capital stock and may significantly influence our affairs or may pursue other activities that compete with us.

All of our equity securities are presently owned by Jacobs Investments, Inc. (“JII”). Jeffrey P. Jacobs, our Chairman and Chief Executive Officer, and his family trusts own virtually all of JII’s equity securities. JII has the ability to significantly influence our affairs, including the election of our directors and transactions including mergers, consolidations or sales of assets. Although Mr. Jacobs has agreed not to pursue any U.S. casino or gaming activities except through us (excepting investments in publicly traded companies and his involvement therein), he is allowed to purchase and own additional truck plazas in Louisiana which we have the right to buy. Any such activities by him could be competitive with our operations in that state.

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We need to increase capital expenditures to compete effectively.

Capital expenditures, amenity upgrades and new gaming equipment are necessary from time to time to preserve the competitiveness of our properties. The gaming industry is very competitive and is expected to become more competitive in the future. If cash from our operations is insufficient to provide for needed levels of capital expenditures, our competitive position could deteriorate if we are unable to borrow funds for such purposes.

Economic conditions, seasonality and weather conditions could affect our operations.

Our business, financial condition and results of operations may be harmed by general and local economic conditions. If the U.S. economy or the local economy in a market in which we operate suffers a downturn, our properties could be harmed as the disposable income of consumers or their willingness to patronize our operations declines, resulting in a decrease in the number of patrons at our properties or a decrease in the amount that patrons are willing to wager.

In addition, seasonality and weather conditions can affect our results of operations. Winter travel conditions can adversely affect patronage and revenues at our Colorado and Nevada casinos. Although casino business is not seasonal, levels of gaming activity increase significantly during weekends and holidays, especially holiday weekends. Hurricanes Katrina and Rita temporarily affected our truck plaza video gaming operations in late 2005, while Hurricanes Gustav and Ike temporarily affected our truck plaza video gaming operations in late 2008.  Similar hurricanes could have a material adverse effect on our Louisiana operations in future years. Our pari-mutuel wagering revenues are higher during scheduled live racing than at other times of the year. Adverse weather conditions can cause cancellation of or curtail attendance at outdoor races, thereby reducing wagering and our revenues. Attendance and wagering at both outdoor races and satellite wagering facilities can be harmed by holidays and other competing seasonal activities.

We depend on agreements with Colonial’s horsemen to operate our racing and wagering business.

The Federal Interstate Horseracing Act and the Virginia Racing Act require Colonial to have written agreements with representative Virginia horsemen’s groups in order to simulcast races.

We have entered into an agreement with the VHHA that expires December 31, 2011.  Our agreement with the VaHBPA expired December 31, 2008.  We are currently negotiating a new contract with the VaHBPA.  In the event our VaHBPA agreement cannot continue to be renewed in the future, the Virginia Racing Commission could suspend our licenses to operate our racetrack and the satellite wagering facilities until an agreement is in place although it has not indicated that it will do so. Although it is difficult to predict the likelihood of such an event, closure of the satellite wagering facilities would be detrimental to the horsemen’s groups and us since each horsemen’s group’s primary source of purse funds is its percentage of wagering at the satellite facilities.

Energy price increases may adversely affect our costs and our revenues.

Our casino and horse racing and pari-mutuel wagering operations use significant amounts of electricity and other forms of energy. Any substantial increase in the cost of the forms of energy we use may negatively affect our results of operations. In addition, consumer energy or gasoline price increases may reduce the disposable income of our potential customers or their willingness to patronize our operations and correspondingly reduce our patronage and revenues. Furthermore, a fuel price increase may impact fuel sales in Louisiana, making it more difficult to meet minimum fuel sale requirements which in turn could limit (or eliminate entirely) the number of video gaming devices we can operate at any given truck plaza.

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Our business, financial condition, and results of operations may be harmed by union efforts to organize our employees.

Our employees are not covered by collective bargaining agreements. However, in January and February 2007, the United Food and Commercial Workers local union #7 conducted some initial organizing activities in Black Hawk by direct mail to casino employees, handouts at bus stops and personal solicitations. These efforts were directed to employees of all major casinos in Black Hawk. A small number of our employees, which we estimate to be about 22, signed up with the local as internal organizers in January and February 2007.  Since that time we have not been notified of any other employees being involved with organizing.  All union organization activity seems to have ceased in April 2007.  If this or any other union seeks to organize any of our employees, we could experience disruption in our business and incur significant costs, both of which could have a material adverse effect on our results of operation and financial condition. If a union were successful in organizing any of our employees, we could experience significant increases in our labor costs which could also have a material adverse effect on our business, financial condition, and results of operations.

We are subject to potential exposure to environmental liabilities.

Generally, we are subject to various federal, state and local governmental laws and regulations relating to the use, storage, discharge, emission and disposal of hazardous materials. Failure to comply could result in the imposition of severe penalties or restrictions on our operations by governmental agencies or courts. We are not aware of any such exposure at our properties. Black Hawk, Colorado is located within a 400-square mile area that in 1983 was designated as the Clear Creek Central/City National Priorities List Site Study Area under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended. Although our Colorado casinos are not within any of the specific areas currently identified for investigation or remediation under that statute, environmental problems may subsequently be discovered, including in connection with any future construction on our property. Furthermore, governmental authorities could broaden their investigations and identify areas of concern within the site, we could be identified as a “potentially responsible party” and any related liability could have a material adverse effect on us. We do not have insurance to cover environmental liabilities, if we incur any.

Failure to complete any future construction or development projects on budget and on time could adversely affect our financial condition.

Any future construction or expansion projects will be subject to significant risks, any of which could cause unanticipated cost increases and delays. These include, among others, the following:

·shortages of material and skilled laborers;

·labor disputes and work stoppages;

·weather interference or delays;

·engineering problems;

·environmental problems;

·regulatory problems;

·changes to plans or specifications;

·fire, earthquake, flood and other natural disasters; and

·geological, construction, excavation and equipment problems.

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Our expansion projects may not be completed within our budget, our construction activities may disrupt our operations and our new operations may not open on schedule. We have limited experience in developing properties and cannot predict all of the risks that any particular construction or remodeling project might face. In addition, we have experienced delays that adversely affected our business during similar remodeling and expansion projects. Failure to complete a construction or expansion project on time or within our budget may cause us to devote additional resources to the project, which could divert our time and attention away from the operation of our other businesses and could cause our business to suffer.

If we are unable to finance our expansion and renovation projects as well as capital expenditures through cash flow, borrowings under our senior credit facility and additional financings, our expansion and renovation efforts will be jeopardized.

We intend to finance our current and future expansion and renovation projects primarily with cash flow from operations and borrowings under our senior credit facility. If we are unable to finance our current or future expansion projects, we will have to adopt one or more alternatives, such as reducing or delaying planned expansion, development and renovation projects as well as capital expenditures, selling assets, restructuring debt, or obtaining additional equity financing or joint venture partners, or modifying our senior credit facility. These sources of funds may not be sufficient to finance our expansion, and other financing may not be available on acceptable terms in a timely manner or at all. In addition, our existing indebtedness contains certain restrictions on our ability to incur additional indebtedness. If we are unable to secure additional financing, we could be forced to limit or suspend expansion, development and renovation projects, which may adversely affect our business, financial condition and results of operations.

The concentration and evolution of the slot machine manufacturing industry could impose additional costs on us.

A majority of our revenues are attributable to slot machines operated by us at our gaming facilities. It is important, for competitive reasons, that we offer the most popular and up to date slot machine games with the latest technology to our customers.

We believe that a substantial majority of the slot machines sold in the U.S. in 2008 were manufactured by a few select companies. In addition, we believe that one company in particular provided a majority of all slot machines sold in the U.S. in 2008.

In recent years, the prices of new slot machines have escalated faster than the rate of inflation. Furthermore, in recent years, slot machine manufacturers have frequently refused to sell slot machines featuring the most popular games, instead requiring participation lease arrangements in order to acquire the machines. Participation slot machine leasing arrangements typically require the payment of a fixed daily rental. Such agreements may also include a percentage payment of coin-in or net win. Generally, a participation lease is substantially more expensive over the long term than the cost to purchase a new machine.

For competitive reasons, we may be forced to purchase new slot machines or enter into participation lease arrangements that are more expensive than our current costs associated with the continued operation of our existing slot machines. If the new slot machines do not result in sufficient incremental revenues to offset the increased investment and participation lease costs, it could hurt our profitability.

Our operations could be adversely affected due to the adoption of certain anti-smoking regulations.

In November 2006, a ballot initiative listed as Question 5 and entitled the “Nevada Clean Indoor Air Act” (the “Question 5”) was approved by a majority of Nevada voters. Question 5 restricts smoking in all indoor public places of employment with certain exceptions. Among the exceptions are the gaming areas of casinos and “stand alone” bars, taverns and saloons that do not serve meals. If future ballot initiatives or anti-smoking legislation are passed in Nevada removing or restricting these exceptions to Question 5, there could be a resulting material adverse effect on our business.

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The “Colorado Clean Indoor Act” (the “Indoor Act”) was adopted in the Colorado legislature in March 2006. It bans smoking in virtually all public places although certain portions of gaming casinos, including gaming areas, were exempt from the Indoor Act until January 1, 2008. Compliance with the Indoor Act which now bans smoking in casinos has had an adverse effect on our business.

Item 1B.Unresolved Staff Comments.

None.

Item 2.Properties.

See “Our Properties and Operations” in Item 1 above for a description of the location and general character of our principal properties. Each of our properties is subject to liens and encumbrances securing our senior credit facility. See Note 5 to our consolidated financial statements included elsewhere herein.

Item 3.Legal Proceedings.

We are involved in routine litigation arising in the ordinary course of our business pertaining to workers’ compensation claims, equal opportunity employment issues, or guest injury claims. All such claims are routinely turned over to our insurance providers. We believe these matters are covered by appropriate insurance policies, less applicable deductibles which are accrued in our financial statements.  None of the claims or payment of deductibles is expected to have a material impact on our financial position, results of operations or cash flows.

Item 4.Submission of Matters to a Vote of Security Holders.

There were no matters submitted to a vote of our security holders during the fourth quarter of the fiscal year covered by this report.

Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Effective January 31, 2007, all of our outstanding common stock became held by Jacobs Investments, Inc., a private holding company and, accordingly, there is no established trading market for our common stock. We have elected to be taxed under the provisions of Subchapter S of the Internal Revenue Code of 1986. Under those provisions, the owner of our common stock pays taxes on our taxable income. Our ability to make distributions to our stockholder is limited by the terms of the credit agreement and indenture related to our indebtedness.

We have no equity compensation, stock option or similar plans relating to our equity securities.

We made no repurchases of our equity securities during the fourth quarter of the fiscal year covered by this report.

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Item 6.Selected Financial Data.

The following selected consolidated financial data should be read in conjunction with our management’s discussion and analysis of financial condition and results of operations and our consolidated financial statements and related notes thereto appearing elsewhere in this report. The consolidated statements of operations data and the consolidated balance sheet data are derived from our consolidated financial statements. The selected financial data provided below is not necessarily indicative of our future results of operations or financial performance.

	As of and for the Year Ended December 31,
	2008			2007			2006			2005			2004
	(Dollars In Thousands, except Distributions per Common Share)
Statements of Operations Data:(1)
Net revenues	$	362,524		$	349,858		$	322,410		$	252,247		$	206,346
Total costs and expenses	339,435			316,779			290,749			233,062			182,349
Operating income	23,089			33,079			31,661			19,185			23,997
Interest expense, net	(27,227		)	(28,067		)	(32,271		)	(22,660		)	(20,008		)
Pre-payment penalties, tender and consent costs	—			—			(9,321		)	—			—
Income tax (expense) benefit	—			—			103			(423		)	—
Net income (loss)	$	(4,138	)	$	5,012		$	(9,828	)	$	(3,898	)	$	3,989
Balance Sheet Data (end of period):(1)
Current assets	$	32,552		$	35,517		$	37,040		$	32,705		$	29,454
Total assets	342,529			355,915			350,830			298,250			259,179
Current liabilities	27,374			28,755			30,526			32,260			26,589
Long-term debt, capital lease obligations and other liabilities	290,249			298,735			284,940			194,969			158,202
Stockholder’s equity	24,906			28,425			35,364			71,021			74,388
Financial Data
Ratio of earnings to fixed charges(2)	0.86		x	1.16		x	0.71		x	0.85		x	1.19		x
Distributions per Common Share	$	1,200		$	10,962		$	22,803		$	15,000		—

(1)See a discussion of our recent acquisition activities in Note 4 and our debt issuances in Note 5 to the consolidated financial statements.

(2)The ratio of earnings to fixed charges is computed by dividing earnings by fixed charges. Earnings consist of income (loss) before income taxes, plus fixed charges and amortization of capitalized interest, less interest capitalized during the period. Fixed charges consist of interest on indebtedness (whether expensed or capitalized), amortization of deferred financing costs, discounts and premiums and that portion of rental expense that we believe is representative of interest. For the years ended December 31, 2008, 2006 and 2005, we had a deficiency of $4,063, $10,014 and $3,514, respectively, in earnings to fixed charges.

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Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This section discusses the results of our operations on a historical basis for the years indicated. You should read the following discussion and analysis in conjunction with the audited consolidated financial statements that are included elsewhere in this Form 10-K. Certain statements contained in this Management’s Discussion and Analysis of Financial Condition and Results of Operations constitute “forward-looking statements,” which statements involve risks and uncertainties described elsewhere in this report.

Our historical information may not necessarily be meaningful when making year-to-year comparisons, as our cost structure, debt structure, capitalization, and the overall composition of our company following the transactions discussed herein have significantly changed. Further, the historical information should not necessarily be taken as a reliable indication of our future performance.

TABLE OF CONTENTS TO MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)

Description of item
A.	Company background	37
B.	Significant transactions occurring during the year ended December 31, 2008	37
C.	Overview and discussion of our operations	38
D.	Comparison of our operations for the year ended December 31, 2008 to the year ended December 31, 2007	42
E.	Comparison of our operations for the year ended December 31, 2007 to the year ended December 31, 2006	43
F.	Segment information for the three years ended December 31, 2008	46
G.	Liquidity and capital resources—December 31, 2008	49
H.	Critical accounting policies and estimates	51

A.Company background

We are a developer, owner and operator of gaming and pari-mutuel wagering facilities throughout the United States, with properties located in Colorado, Nevada, Louisiana and Virginia. As of December 31, 2008, we own and operate two casinos in Colorado and three casinos in Nevada, 18 video gaming truck plazas in Louisiana and a horse racing track with eight satellite wagering facilities in Virginia. In addition, we are party to an agreement that entitles us to a portion of the gaming revenues from an additional truck plaza video gaming facility.

We have elected to be taxed under the provisions of Subchapter “S” of the Internal Revenue Code of 1986. Under those provisions, the owner of our company pays income taxes on our taxable income.

Effective January 31, 2007, we became a wholly-owned subsidiary of Jacobs Investments, Inc. (“JII”), which in turn was 50% owned by Jeffrey P. Jacobs, our Chief Executive Officer, and two of his family trusts, and 50% owned by a revocable trust and an irrevocable trust established by his father, Richard E. Jacobs.  On October 1, 2008, JII redeemed the shares owned by the Richard E. Jacobs Revocable Trust.  As a result, Jeffrey P. Jacobs and his family trusts own 80% of JII’s Class A shares and 100% of its Class B shares.  The Richard E. Jacobs Irrevocable Trust owns 20% of JII’s Class A shares. Additionally, effective October 15, 2008, Richard E. Jacobs resigned his position as a member of the Board of Directors of JEI. These changes in ownership had no impact on our financial position or results of operations.

B.Significant transactions occurring during the year ended December 31, 2008

Nautica Property Acquisition

We have acquired from affiliated parties several options to lease and options to purchase six parcels of land and certain improvements on the west bank of the Cuyahoga River in Cleveland, Ohio.  We refer to these properties as the Nautica Properties.  During March 2008, we exercised our option to acquire one of the Nautica parcels referred to as “Lot D.”  On April 1, 2008, we purchased this parcel for $0.8 million.  The company that owned this

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parcel of land and parking lot business was wholly owned by our Chairman and Chief Executive Officer. The purchase of this parking lot business was accounted for as a combination of entities under common control.  Accordingly, the consolidated financial statements and the accompanying management’s discussion and analysis of financial condition and results of operations presented in this Form 10-K have been retroactively adjusted to include the operations of Lot D from January 1, 2006.  See Note 4 of the consolidated financial statements.

Additionally, on January 15, 2009, we exercised our option to acquire one of these parcels referred to as “Sugar Warehouse,” and on January 21, 2009, we purchased this parcel for $2.6 million.  The company that owned this building was 29.5% owned by our Chairman and Chief Executive Officer and 70.5% owned by third parties.

Acquisition of Land in the Gulf Coast of Mississippi

During 2008, we completed several land purchase transactions with owners of real estate lots in the Gulf Coast of Mississippi, resulting in total purchases of $3.0 million, including acquisition costs of $0.2 million.  Additionally, during September 2008, we entered into two land purchase options totaling $0.2 million.  These land purchase options each have an initial term of one-year, expiring June 2009, with two one-year extensions at the option of JEI. During November 2008, we entered into a third land purchase option totaling $0.1 million, expiring May 2009, with a one-year extension at the option of JEI. The total purchase price of all parcels under these three option agreements is $42 million.  During January 2009, we completed one additional land purchase transaction, resulting in a total purchase of $0.3 million.

We are conducting due diligence on the lots and evaluating the feasibility of developing and constructing a mixed use project which may include a licensed gaming establishment, a hotel, restaurant, condominiums, retail development and parking facilities.  Furthermore, we have filed an application with Hancock County, Mississippi, to rezone property to waterfront district, as part of our plan to build a casino resort and hotel. The project is subject to all necessary approvals from the Mississippi Gaming Commission as well as necessary financing.

Abandonment Costs

On November 10, 2008, we closed one of our two satellite wagering facilities in Chesapeake, Virginia. We recorded an impairment of leasehold improvements at this location totaling $0.8 million in the fourth quarter of 2008.  Additionally, we incurred costs for the termination of the operating lease and severance totaling less than $0.1 million in the fourth quarter of 2008.

C.Overview and discussion of our operations

We have four segments representing the geographic regions of our operations: Colorado, Nevada, Louisiana and Virginia. Each segment is managed separately because of the unique characteristics of its revenue stream, regulatory environment and customer base.

Our Chief Executive Officer (“CEO”) is the chief operating decision maker. Our casino properties in Colorado (The Lodge and Gilpin casinos) and Nevada (the Gold Dust West-Reno, Gold Dust West-Carson City and Gold Dust West-Elko casinos) are managed by our Chief Operating Officer (“COO”) who is located in our Golden, Colorado corporate offices. Further, our 19 video poker truck plaza operations are also managed by our COO. Additionally, we have two Regional Vice Presidents who report to the COO and assist in managing these operations. Our COO reports to our President, who is also located in Golden, Colorado.  Our President reports directly to our CEO. Our Virginia racetrack and satellite wagering facilities are managed by our on-site President of Pari-Mutuel Operations, and he also reports directly to our CEO. Our management team conducts monthly video conferencing and teleconferencing calls with our CEO.

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When we analyze and manage our segments, we focus on several measurements that we believe provide us with the necessary ratios and key performance indicators for us to determine how we are performing versus our competition and against our own internal goals and budgets. We confer monthly and discuss and analyze significant variances in an effort to identify trends and changes in our business. We focus on EBITDA (earnings before interest, income taxes, depreciation and amortization) as one of the primary measurements of reviewing and analyzing the operating results of each segment. While we recognize that EBITDA is not a measure defined under generally accepted accounting principles (i.e. it is a non-GAAP financial measure), we nonetheless believe it is useful because it allows holders of our debt and management to evaluate and compare operating results from continuing operations from period to period in a meaningful and consistent manner in addition to standard GAAP financial measures. Additionally, most financial analysts following the gaming industry utilize EBITDA as a financial measurement, and when our debt holders (both secured and unsecured) inquire and discuss our operational performance with us, they consistently inquire about our EBITDA performance levels versus the prior year as well as our EBITDA margins versus our competitors. Finally, EBITDA is a key component of certain financial covenants contained in our debt agreements, among other things, and as such it is a critical ingredient that we must watch in order to ensure compliance with our bank credit agreement and our note indenture covenants, measure our historical operating performance, and determine our ability to achieve future growth.

In addition to the above performance measurements, we pay particular attention to our monthly and annual cash flow. Our business is sensitive to shifts in volumes and levels of activity and we find it necessary to watch our cash closely. Every six months (June 15 and December 15) we have a cash interest payment due on our $210 million senior unsecured notes amounting to $10.2 million. Additionally, we have drawn $60 million on our senior secured credit facility with interest due at varying intervals.  As previously discussed, we have a $40 million revolving loan with a bank group on which we can draw as needed in order to facilitate the cash flow we generate from operations. This is generally a function of the timing of generating cash from operations coupled with the amount of cash we need to run the business—i.e., our cash inventory. Presently, we estimate that we require approximately $15 million of cash inventory to operate our properties. See also Section G, “Liquidity and Capital Resources.”

Colorado

Our Colorado operations consist of The Lodge Casino at Black Hawk (“The Lodge”) and the Gilpin Casino (“Gilpin”), both of which are located in Black Hawk, Colorado. The competitive aspects of the market in Black Hawk continue to be a significant factor in our operations. There were approximately 9,750 gaming devices in the city of Black Hawk at December 31, 2008. At December 31, 2008, we had 1,423 devices in this market (976 at The Lodge and 447 at the Gilpin), which represented approximately 15% of the total devices in the Black Hawk market.

For the year ended December 31, 2008, our gross gaming revenues at The Lodge and the Gilpin totaled $100.8 million, which represented 20% of the total gaming revenues in Black Hawk. The overall Black Hawk market in 2008 declined by 12.5% in gross gaming revenues, and total gaming devices decreased by 1.5%. We managed to generate 135% efficiencies (our percentage of the gross gaming revenues divided by our percentage of the gaming devices) within the market for 2008. We follow our efficiency level very closely as we believe this is a useful measure of how well we are performing within the market.

We expect some of our previous and existing market share to be lost due to increased competition. As more properties continue to compete for their fair share of the market, our personnel costs, marketing costs, and other costs will likely increase as we attempt to keep our market share.

Nevada

Our Nevada operations consist of Gold Dust West-Reno, located in Reno, Nevada, which was acquired on January 5, 2001; Gold Dust West-Carson City, located in Carson City, Nevada, which was acquired on June 25, 2006; and our newly-developed casino, Gold Dust West-Elko, located in Elko, Nevada, which opened on March 5, 2007.

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As in Colorado, our Nevada casinos operate in highly competitive markets. As a result of the added competition from Indian Gaming in California, many Northern Nevada casinos advertise themselves as “locals’ casinos.” At December 31, 2008, Reno had approximately 12,800 gaming devices, of which Gold Dust West-Reno had 470 devices, or 3.7% of the market. For the year ended December 31, 2008, our gross gaming revenues were 4% of the Reno market, with an efficiency rate of 104%.

Since its acquisition in June 2006, Gold Dust West-Carson City (formerly Piñon Plaza Resort), has undergone major renovations and changes to the operations emerging January 24, 2007 as the “new” Gold Dust West-Carson City by way of an extensive rebranding program. The Carson City area (state capital) is 30 miles south of Reno and services the areas of Dayton, Gardnerville and Minden surrounding it with a total population base of 60,000 plus. The area has approximately 4,600 gaming devices of which Gold Dust West-Carson City has 398 (9% of total devices).  For the year ended December 31, 2008, our efficiency rate was 91%. This property is expected to substantially improve its efficiency through enhanced utilization of its many unique amenities.

At December 31, 2008, Gold Dust West-Elko has 336 gaming devices, representing 8% of the total devices in the market.  For the year ended December 31, 2008, our gross gaming revenues were 10% of the Elko market, with an efficiency rate of 122%.

Louisiana

The Louisiana truck plaza video gaming facilities consist of 18 truck plazas located in Louisiana and a share in the gaming revenues of an additional truck plaza. Each truck plaza features a convenience store, fueling operations, a restaurant and up to 50 video gaming devices in the casino depending on the level of fuel sales and available space.  At December 31, 2008, our truck plaza video gaming facilities had a combined total of 929 video gaming devices.

The Louisiana truck plazas’ revenues are comprised of: (i) revenue from video poker gaming machines; (ii) sales of gasoline and diesel fuel; (iii) sales of groceries, trucker supplies and sundry items through their convenience stores; (iv) sales of food and beverages in their restaurants and bars; and (v) miscellaneous commissions on ATMs, pay phones and lottery sales.

All video poker activity is reported via a computer phone line directly to the Louisiana State Police. The Louisiana truck plazas’ revenues are dependent on meeting the minimum gallons of fuel sales requirements necessary to operate video poker gaming machines in Louisiana. The fuel sales requirements must be complied with on an annual basis (except for the first year of operations during which it must be complied with on a quarterly basis) and in the event of noncompliance, the Louisiana State Police will turn off a portion of the video poker machines until the minimum fuel sales requirements are met. Management of the Louisiana truck plazas believes that they will continue to meet the fuel sales requirements necessary to operate video poker gaming machines in Louisiana at current levels, however, we can give no assurance in this regard.

Virginia

Colonial’s revenues are comprised of: (i) pari-mutuel commissions from wagering on races broadcast from out-of-state racetracks to Colonial’s satellite wagering facilities and the track using import simulcasting; (ii) wagering at the track and Colonial’s satellite wagering facilities on its live races; (iii) commissions from advance deposit account wagering by telephone and over the internet; (iv) admission fees, program and racing form sales, and certain other ancillary deposit account activities; and (v) net income from food and beverage sales and concessions.

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Colonial’s revenues are heavily dependent on the operations of its satellite wagering facilities.  Revenues from the satellite wagering facilities help support live racing at the track. The amount of revenue Colonial earns from each wager depends on where the race is run.  Revenues from import simulcasting of out-of-state races and from wagering at the track and at the satellite wagering facilities on races run at the track consist of the total amount wagered at Colonial’s facilities, less the amount paid as winning wagers. The percentage of each dollar wagered on horse races that must be returned to the public as winning wagers (typically about 79%) is legislated by the state in which a race takes place. Revenues from export simulcasting consist of amounts payable to Colonial by the out-of-state racetracks and their simulcast facilities with respect to wagering on races run at the track.

As discussed above, on November 10, 2008, we closed one of our two satellite wagering facilities in Chesapeake, Virginia. We now operate eight satellite wagering facilities in Virginia.

Summary of Consolidated Operating Results

Our results of operations reflect the consolidated operations of all our subsidiaries. A summary of our consolidated operating results for the years ended December 31, 2008, 2007 and 2006 is as follows:

	Year Ended December 31,
	2008			2007			2006
	(Dollars in Thousands)
Revenues
Gaming:
Casino	$	139,492		$	144,656		$	121,483
Truck stop	67,590			64,322			66,418
Pari-mutuel	38,657			41,309			39,787
Food and beverage	30,736			29,260			25,069
Convenience store—fuel	97,021			81,329			77,520
Other	22,746			20,935			18,571
Less: promotional allowances	(33,718		)	(31,953		)	(26,438		)
Total net revenues	362,524			349,858			322,410
Costs and expenses
Gaming:
Casino	46,809			48,427			43,567
Truck stop	40,990			37,954			37,621
Pari-mutuel	31,172			32,977			32,559
Food and beverage	15,417			16,416			13,704
Convenience store—fuel	90,714			77,269			73,389
Other	18,260			16,290			15,017
Marketing, general and administrative	68,533			69,342			60,787
Loss on change in fair value of investment in equity securities	6,577
Goodwill impairment	199
Abandonment costs	829
Depreciation and amortization	19,935			18,104			14,105
Total costs and expenses	339,435			316,779			290,749
Operating income	23,089			33,079			31,661
Interest expense, net	(27,227		)	(28,067		)	(32,271		)
Pre-payment penalties, tender and consent costs							(9,321		)
Income tax benefit							103
Net (loss) income	$	(4,138	)	$	5,012		$	(9,828	)

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D.Comparison of our operations for the year ended December 31, 2008 to the year ended December 31, 2007

All comparisons below begin with the 2008 results followed by the 2007 results.

Casino revenues decreased $5.2 million or 4% to $139.5 million from $144.7 million.  The decrease in casino revenues is a result of decreased casino revenues at The Lodge of $2.2 million or 3%, the Gilpin of $3.4 million or 13%, Gold Dust West-Reno of $1.3 million or 6% and Gold Dust West-Carson City of $0.3 million or 3%.  These decreases were partially offset by an increase of $2.0 million at Gold Dust West-Elko, which opened on March 5, 2007.  Casino revenues at our two Colorado properties have been negatively affected due to the smoking ban which became effective on January 1, 2008.  Overall, the City of Black Hawk casino win declined 12.5% during 2008 compared to 2007.  The decreased revenues at our casinos in Black Hawk and Reno are also attributable to general economic conditions, higher gas prices during the summer months and decreased customer spend per visit.

Truck stop gaming revenues increased $3.3 million or 5% to $67.6 million from $64.3 million.  Of this increase, $1.8 million is due to video gaming activity at the Silver Dollar location that began in September 2007, combined with a net increase totaling $1.5 million at all other truck stop locations.  The increase in gaming revenue is primarily attributable to the increased bet and jackpot limits that became effective in late 2007.

Pari-mutuel revenues decreased $2.7 million or 6% to $38.7 million from $41.3 million.  The decrease in revenues is primarily attributable to a $3.6 million decrease at the off track wagering facilities combined with a $0.2 million decrease at the racetrack, somewhat offset by a $1.1 million increase in account wagering revenues.

Food and beverage revenues increased $1.5 million or 5% to $30.7 million from $29.3 million.  This increase is attributable to increases of $1.0 million at The Lodge, $0.1 million at Gold Dust West-Reno, $0.4 million at Gold Dust West-Elko and $0.3 million at the truck stop facilities, primarily due to increased promotional activity, offset by decreases of $0.1 million at the Gilpin, $0.1 million at Gold Dust West-Carson City and $0.1 million at Colonial.

Convenience store-fuel revenues increased $15.7 million or 19% to $97.0 million from $81.3 million.  The average selling price of fuel increased to $3.58 per gallon in 2008 from $2.74 per gallon in 2007.  These increases in fuel revenues were somewhat offset by a decrease in volume to 27.1 million gallons from 29.7 million gallons.

Other revenues increased $1.8 million or 9% to $22.7 million from $20.9 million and were primarily attributable to an increase of $2.0 million in convenience store and other revenues at the truck stops, $0.1 million at Colonial due to an increase in Virginia Derby sponsorship revenue combined with a one-time lawsuit settlement with Youbet, and an increase of $0.1 million at The Lodge, somewhat offset by a decrease of $0.4 million in hotel and other revenues at Gold Dust West-Carson City.

Promotional allowances increased $1.8 million or 6% to $33.7 million from $32.0 million.  The increase is attributable to an increase in promotional allowances of $1.1 million at The Lodge, $0.3 million at Gold Dust West-Reno, $0.6 million at Gold Dust West-Elko and $0.2 million at the truck stops, somewhat offset by a decrease of $0.4 million at the Gilpin.

Casino expenses decreased $1.6 million or 3% to $46.8 million from $48.4 million.  This decrease is primarily due to decreases of $0.4 million at The Lodge, $1.1 million at the Gilpin, $0.2 million at Gold Dust West-Reno and $0.3 million at Gold Dust West-Carson City, offset by an increase of $0.4 million at Gold Dust West-Elko. These variances are consistent with the changes in casino revenues by property as discussed above.

Truck stop gaming expenses increased $3.0 million or 8% to $41.0 million from $38.0 million.  Of this increase, $1.2 million is due to video gaming activity at the Silver Dollar location that began in September 2007, combined with a net increase totaling $1.8 million at all other truck stop locations.

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Pari-mutuel costs and expenses decreased $1.8 million or 5% to $31.2 million from $33.0 million.  The decrease is primarily attributable to a $2.4 million decrease in pari-mutuel taxes, purses and other direct expenses associated with decreased pari-mutuel revenues at the racetrack and off track wagering facilities, partially offset by a $0.6 million increase in account wagering direct costs and expenses.

Food and beverage costs and expenses decreased $1.0 million or 6% to $15.4 million from $16.4 million due to decreases of $0.4 million at The Lodge, $0.1 million at the Gilpin, $0.5 million at Gold Dust West-Carson City and $0.2 million at Colonial, offset by an increase of $0.2 million at the truck stops.

Convenience store-fuel expenses increased $13.4 million or 17% to $90.7 million from $77.3 million.  The average cost of fuel increased to $3.35 per gallon in 2008 from $2.60 per gallon in 2007.  These increases in fuel expenses were somewhat offset by a decrease in volume.

Other costs and expenses increased $2.0 million or 12% to $18.3 million from $16.3 million, and were primarily attributable to an increase in convenience store expenses at the truck stops.

Marketing, general and administrative expenses decreased $0.8 million or 1% to $68.5 million from $69.3 million.  This decrease is primarily the result of  decreases of $0.8 million at Colonial due to decreased lobbying costs associated with Instant Racing, and decreases of $0.4 million at The Lodge, $0.6 million at the Gilpin, $0.3 million at Gold Dust West-Reno, $0.1 million at Gold Dust West-Carson City and $0.1 million at Gold Dust West-Elko. These decreases were partially offset by an increase of $1.5 million at corporate, primarily due to political contributions totaling $1.4 million made for a Colorado campaign, which is further discussed in Note 11 to the financial statements.

During 2008, we recorded an impairment totaling $6.6 million on the change in fair value of our investment in equity securities of MTR Gaming Group, Inc., which is further discussed in Note 6 to the financial statements.  No comparable transaction occurred during 2007.

A goodwill impairment totaling $0.2 million was recorded at Gold Dust West-Carson City during 2008, which is further discussed in Note 3 to the financial statements.  No comparable transaction occurred during 2007.

Abandonment costs totaling $0.8 million were recorded during 2008 due to the closure one of our two satellite wagering facilities in Chesapeake, Virginia, which is further discussed in Note 12 to the financial statements.  No comparable transaction occurred during 2007.

Depreciation and amortization expense increased $1.8 million or 10% to $19.9 million from $18.1 million.  Of this increase, $0.4 million is attributable to Gold Dust West-Elko and $0.2 million is attributable to the Silver Dollar truck stop location. Additionally, The Lodge increased by $0.5 million, the Gilpin increased by $0.1 million, Gold Dust West-Reno increased by $0.1 million, Gold Dust West-Carson City increased by $0.3 million and the remaining truck stops combined increased by $0.2 million due to capital asset purchases.

Net interest expense decreased $0.8 million or 3% to $27.2 million from $28.1 million.  The decrease is attributable to lower effective interest rates on our variable rate bank debt, partially offset by an increase in debt outstanding during the year ended December 31, 2008 compared to the year ended December 31, 2007.

E.Comparison of our operations for the year ended December 31, 2007 to the year ended December 31, 2006

All comparisons below begin with the 2007 results followed by the 2006 results.

Casino revenues increased to $144.7 million from $121.5 million, or 19%, due to increases at The Lodge of $10.4 million or 15% and the Gilpin of $1.5 million or 6%.  Additionally, Gold Dust West-Carson City, which was acquired on June 25, 2006, contributed $5.4 million and Gold Dust West-Elko, which opened March 5, 2007, also contributed $7.4 million.  These increases were somewhat offset by a decrease at Gold Dust West-Reno of $1.5 million due to a soft Reno market.  The increase in the casino revenues at our Colorado properties is a result of

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several factors.  We have expanded capital investments in our slot product over the last year, and the completion of the south entrance of The Lodge enabled us to add 60 devices and has generated increased walk-in traffic into the casino. Additionally, City of Black Hawk casino win grew 5% during 2007 compared to 2006.

Truck stop gaming revenues decreased to $64.3 million from $66.4 million, or 3%.  Hurricanes Katrina and Rita, which hit the Louisiana, Mississippi and Texas Gulf Coast in August and September 2005, respectively, disrupted riverboat and other casino competition in the region.  For the first half of 2006, our truck stops benefited from the reduction in competition as well as the population relocation from the New Orleans area. No increased business levels for similar reasons were experienced in 2007, resulting in a year-over-year decrease of $5.4 million.  This decrease is partially offset by an increase of $3.3 million due to the acquisitions of the Vinton and St. Helena locations, purchased in June and July 2006, respectively, and the installation of video gaming devices at the Silver Dollar location in September 2007.  Our truck stop gaming revenue results are consistent with the overall market decline in Louisiana.

Pari-mutuel revenues increased 4% to $41.3 million from $39.8 million.  This increase is primarily attributable to a $0.9 million increase in account wagering revenues combined with a $0.6 million increase in wagering revenues at our off track wagering facilities and racetrack.

Food and beverage revenues increased to $29.3 million from $25.1 million, or 17%.  This increase is attributable to $1.4 million generated by Gold Dust West-Carson City and $1.9 million generated by Gold Dust West-Elko, as well as increases of $0.2 million at Colonial and $0.7 million at the truck stop facilities.  Of the increase at the truck stops, $0.4 million is attributable to the addition of the Vinton and St. Helena locations in June and July 2006, respectively, $0.2 million is attributable to the St. Martin and Diamond locations and $0.1 million is attributable to all other truck stop locations combined.

Convenience store-fuel revenues increased $3.8 million or 5% to $81.3 million from $77.5 million.  The addition of the St. Helena and Silver Dollar truck stops in July 2006 and February 2007, respectively, generated $6.1 million in additional fuel revenues. This increase in fuel revenues was offset by a $2.3 million year-over-year decrease on a same store basis attributable to the following: (1) stabilized business levels during 2007 from the 2006 impact of Hurricanes Katrina and Rita, as previously mentioned and (2) new competitors having recently entered some of our markets, which negatively impacted our fuel revenues. Our average selling price of fuel increased from $2.57 per gallon in 2006 to $2.74 per gallon in 2007.

Other revenues, which are comprised of our convenience store and hotel operations, increased to $20.9 million from $18.5 million, or 13%.  The increase is attributable to Gold Dust West-Carson City which was acquired on June 25, 2006 and contributed $1.5 million, an increase of $0.7 million primarily due to the Vinton, St. Helena and Silver Dollar truck stops which were acquired in June 2006, July 2006 and February 2007, respectively, and increases of $0.1 million at The Lodge and $0.1 million at Gold Dust West-Elko.

Promotional allowances increased 21% to $32.0 million from $26.4 million.  The increase is attributable to an increase in promotional allowances at the truck stops of $0.9 million, The Lodge of $1.8 million, the Gilpin of $0.3 million, and $0.4 million at Gold Dust West-Reno, while Gold Dust West-Carson City contributed $1.1 million and Gold Dust West-Elko also contributed $1.1 million.  The increase at the truck stops is primarily due to complimentary food and beverage sales at the recently acquired locations.

Casino expenses increased $4.9 million or 11% to $48.4 million from $43.5 million. Of this increase, $2.0 million is due to the addition of Gold Dust West-Carson City and $3.1 million is due to the addition of Gold Dust West-Elko.  Additionally, casino expenses increased by $0.9 million at The Lodge offset by decreases of $0.7 million at the Gilpin and $0.4 million at Gold Dust West-Reno.

Truck stop gaming expenses increased to $38.0 million from $37.6 million.  The 2007 video gaming expenses from the Vinton and St. Helena locations purchased in June and July 2006, respectively, and the installation of video gaming devices at the Silver Dollar location in September 2007 account for an increase of $2.2 million.  This increase is partially offset by a year-over-year decrease of $1.8 million due to increased business levels during the first half of 2006 as a result of Hurricanes Katrina and Rita, which hit the Louisiana, Mississippi

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and Texas Gulf Coast in August and September 2005, respectively, disrupting riverboat and other competition in the region.  No such increased business levels were experienced in 2007.

Pari-mutuel costs and expenses increased to $33.0 million from $32.6 million.  The $0.4 million increase is primarily attributable to pari-mutuel taxes and other direct expenses associated with increased pari-mutuel revenues, somewhat offset by a decrease in track materials costs resulting from a one-time purchase in 2006.

Food and beverage costs and expenses increased to $16.4 million from $13.7 million, or 20%. The addition of Gold Dust West-Carson City provided $1.3 million, Gold Dust West-Elko provided $1.2 million, the remaining three casinos increased by a total of $0.1 million, and an increase of $0.1 million at the truck stops.

Convenience store-fuel expenses increased by $3.9 million or 5% to $77.3 million from $73.4 million.  The addition of the St. Helena and Silver Dollar truck stops in July 2006 and February 2007, respectively, generated $6.0 million in additional fuel expenses. This increase in fuel expenses was offset by a $2.1 million year-over-year decrease on a same store basis attributable to two factors: (1) stabilized business levels during 2007 from the 2006 impact of Hurricanes Katrina and Rita, as previously mentioned, and (2) new competitors having recently entered some of our markets, which negatively impacted fuel volumes. The average cost of fuel increased from $2.43 per gallon in 2006 to $2.60 per gallon in 2007.

Other costs and expenses increased to $16.3 million from $15.0 million and were primarily attributable to the addition of hotel operations at Gold Dust West-Carson City, which was acquired on June 25, 2006, and convenience store-other costs generated by the addition of the St. Helena and Silver Dollar truck stops in July 2006 and February 2007, respectively.

Marketing, general and administrative expenses increased $8.6 million or 14% to $69.4 million from $60.8 million.  This increase is the result of the addition of our Gold Dust West-Carson City casino which accounted for $3.8 million of the increase and our Gold Dust West-Elko casino which also accounted for an increase of $3.8 million, as well as increases at The Lodge of $2.1 million, Gilpin of $1.1 million, Colonial of $0.8 million, and the truck stops of $0.8 million, offset by decreases of $3.3 million in corporate overhead expenses and $0.5 million at Gold Dust West-Reno.  The increased marketing costs at our operating units drove increased revenues for all segments.  The increase at our two new Nevada casinos was substantially due to expenses incurred in launching and rebranding the casinos with the Gold Dust West name.  The increase at Colonial is primarily attributable to a $0.6 million increase in marketing costs related primarily to the national television broadcast of the 2007 Virginia Derby combined with a $0.6 million increase in non-recurring lobbying costs, partially offset by decreased security costs, the 2006 write-off of assets under renovation, and the one-time accrual for the Virginia Thoroughbred Association’s share of account wagering in 2006. The increase at the truck stops was primarily due to the addition of office space and additional staff to accommodate expansion.  The $3.3 million net decrease in our corporate overhead was primarily the result of 2006 political campaign costs incurred in Ohio to support a constitutional amendment that would have allowed slot machines at the state’s existing racetracks and two locations in downtown Cleveland.

Depreciation and amortization expense increased to $18.1 million from $14.1 million.  Of this increase, $1.1 million is attributable to the acquisition of Gold Dust West-Carson City and $2.0 million is attributable to Gold Dust West-Elko.  Additionally, The Lodge increased by $0.5 million primarily due to the new south entrance, corporate increased by $0.2 million due to capital asset purchases, and increases were experienced of $0.1 million at the Gilpin and $0.1 million at the truck stops.

Net interest expense decreased $4.2 million or 13% to $28.1 million from $32.3 million.  As a result of our debt refinancing during June 2006, we wrote off $5.7 million in financing fees and $1.9 million of note issue discount, partially offset by the write off of $1.5 million of note issue premium, on the debt refinanced. This net decrease is somewhat offset by an increase in additional debt outstanding during the year ended December 31, 2008 compared to the year ended December 31, 2006, partially offset by lower effective interest rates as a result of the refinancing transactions which occurred in June 2006.

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Pre-payment penalties, tender and consent costs in the amount of $9.3 million were incurred during June 2006.  These costs represented the premium required to purchase the senior secured notes in 2006, prior to their maturity in 2009 and consent solicitation fees and expenses as part of the tender offer for such notes.  No comparable transaction occurred during 2007.

For the year ended December 31, 2006, we received a tax refund for a portion of an income tax charge incurred during 2005, resulting in an income tax benefit of $0.1 million.  No comparable transaction occurred during 2007.

F.Segment information for the three years ended December 31, 2008

As discussed above, we have four segments representing the geographic regions of our operations: Colorado, Nevada, Louisiana and Virginia. Each segment is managed separately because of the unique characteristics of its revenue stream, regulatory environment and customer base.

The information presented is by each segment in which we have operations and also presents our EBITDA (earnings before interest, income taxes, depreciation and amortization) for each segment. We believe that the presentation of a non-GAAP financial measure such as EBITDA is useful because it allows holders of our debt and management to evaluate and compare our operating results from continuing operations from period to period in a meaningful and consistent manner in addition to standard GAAP financial measures. Management internally evaluates the performance of our segments using EBITDA measures as do most analysts following the gaming industry. EBITDA is an element of certain key financial covenants in our debt agreements and, as such, is a critical component that we closely watch in order to determine our ability to achieve future growth and to ensure we are in compliance with our debt agreements. We present EBITDA in the tables below to provide further discussion and analysis of our operating results. EBITDA can be reconciled directly to our consolidated net income (loss) by adding the amounts shown for depreciation and amortization, interest and income taxes to net income (loss). This information should not be considered as an alternative to any measure of performance as promulgated under accounting principles generally accepted in the United States of America, such as net income (loss), nor should it be considered as an indicator of our overall financial performance. Our calculation of EBITDA may be different from the calculation used by other companies and comparability may be limited.

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The following is a summary of the net revenues, costs and expenses and EBITDA, for the three years ended December 31, 2008, 2007 and 2006 (dollars in thousands):

	For the Years Ended December 31,
	2008			2007			2006
NET REVENUES
Colorado:
The Lodge	$	73,853		$	76,051		$	67,315
Gilpin	20,200			23,323			22,245
Total Colorado	94,053			99,374			89,560
Nevada:
Gold Dust West-Reno	19,457			20,986			22,893
Gold Dust West-Carson City	13,085			13,833			6,517
Gold Dust West-Elko	10,189			8,243
Total Nevada	42,731			43,062			29,410
Louisiana	182,101			161,070			158,859
Virginia	43,592			46,322			44,549
Corporate and other	47			30			32
Total Net Revenues	362,524			349,858			322,410
COSTS AND EXPENSES (excluding depreciation and amortization, net interest expense and income taxes)
Colorado:
The Lodge	48,094			49,359			46,286
Gilpin	14,793			16,594			16,158
Total Colorado	62,887			65,953			62,444
Nevada:
Gold Dust West-Reno	13,218			13,794			14,675
Gold Dust West-Carson City (1)	14,364			15,064			7,664
Gold Dust West-Elko	8,901			8,567			499
Total Nevada	36,483			37,425			22,838
Louisiana	160,413			141,771			135,747
Virginia (2)	42,993			44,921			43,686
Corporate overhead and other (3)(4)	16,724			8,605			21,250
Total Costs and Expenses	319,500			298,675			285,965
EBITDA
Colorado:
The Lodge	25,759			26,692			21,029
Gilpin	5,407			6,729			6,087
Total Colorado	31,166			33,421			27,116
Nevada:
Gold Dust West-Reno	6,239			7,192			8,218
Gold Dust West-Carson City (1)	(1,279		)	(1,231		)	(1,147		)
Gold Dust West-Elko	1,288			(324		)	(499		)
Total Nevada	6,248			5,637			6,572
Louisiana	21,688			19,299			23,112
Virginia (2)	599			1,401			863
Corporate overhead and other (3)(4)	(16,677		)	(8,575		)	(21,218		)
Total EBITDA	$	43,024		$	51,183		$	36,445

See Sections D and E above which provide explanations regarding the fluctuations in our revenues and costs and expenses by property and segment.

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The following table sets forth a reconciliation of our EBITDA, a non-GAAP financial measure, to our net income (loss), a GAAP financial measure (dollars in thousands):

Year Ended December 31, 2008	EBITDA			Depreciation and  Amortization		Interest  Expense, net		Income Tax  Benefit	Net  Income (Loss)
Colorado:
The Lodge	$	25,759		$	4,825	$	6,715		$	14,219
Gilpin	5,407			1,998		1,903			1,506
Total Colorado	31,166			6,823		8,618			15,725
Nevada:
Gold Dust West-Reno	6,239			1,589		2,617			2,033
Gold Dust West-Carson City (1)	(1,279		)	2,079		1,533			(4,891		)
Gold Dust West-Elko	1,288			2,364		1,423			(2,499		)
Total Nevada	6,248			6,032		5,573			(5,357		)
Louisiana	21,688			4,219		4,875			12,594
Virginia (2)	599			2,114		520			(2,035		)
Corporate overhead and other (3)	(16,677		)	747		7,641			(25,065		)
TOTAL	$	43,024		$	19,935	$	27,227		$	(4,138	)

Year Ended December 31, 2007	EBITDA			Depreciation and  Amortization		Interest  Expense, net		Income Tax  Benefit		Net  Income (Loss)
Colorado:
The Lodge	$	26,692		$	4,318	$	6,884			$	15,490
Gilpin	6,729			1,854		1,891				2,984
Total Colorado	33,421			6,172		8,775				18,474
Nevada:
Gold Dust West-Reno	7,192			1,520		2,605				3,067
Gold Dust West-Carson City	(1,231		)	1,819		1,521				(4,571		)
Gold Dust West-Elko	(324		)	1,974		1,790				(4,088		)
Total Nevada	5,637			5,313		5,916				(5,592		)
Louisiana	19,299			3,848		4,774				10,677
Virginia	1,401			2,065		486				(1,150		)
Corporate overhead and other	(8,575		)	706		8,116				(17,397		)
TOTAL	$	51,183		$	18,104	$	28,067			$	5,012
Year Ended December 31, 2006	EBITDA			Depreciation and  Amortization		Interest  Expense, net		Income Tax  Benefit		Net  Income (Loss)
Colorado:
The Lodge	$	21,029		$	3,810	$	10,049			$	7,170
Gilpin	6,087			1,725		3,045				1,317
Total Colorado	27,116			5,535		13,094				8,487
Nevada:
Gold Dust West-Reno	8,218			1,539		3,822				2,857
Gold Dust West-Carson City	(1,147		)	727		814				(2,688		)
Gold Dust West-Elko	(499		)			86				(585		)
Total Nevada	6,572			2,266		4,722				(416		)
Louisiana	23,112			3,712		4,363				15,037
Virginia	863			2,069		549				(1,755		)
Corporate overhead and other (4)	(21,218		)	523		9,543		$	103	(31,181		)
TOTAL	$	36,445		$	14,105	$	32,271	$	103	$	(9,828	)

(1)Included in Gold Dust West-Carson City for 2008 is a $0.2 million impairment of goodwill.

(2)Included in Virginia for 2008 is a $0.8 million charge for the closure of a satellite wagering facility.

(3)Included in corporate overhead and other for 2008 is a $6.6 million impairment of the fair value of an

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investment in equity securities and $1.4 million we expended in support of a constitutional amendment in Colorado to expand games, limits and hours.

(4)Included in corporate overhead and other for 2006 are $9.3 million in pre-payment penalties, tender and consent costs for our debt refinancing and $3.3 million we expended to pursue a constitutional amendment in Ohio to allow slot machines at the seven existing racetracks and two locations in downtown Cleveland.

G.Liquidity and capital resources—December 31, 2008

As of December 31, 2008, we had cash and cash equivalents of $21.8 million compared to $24.4 million in cash and cash equivalents as of December 31, 2007. The decrease is the result of $25.6 million cash provided by operating activities, $17.7 million cash used in investing activities, and $10.5 million used in financing activities, which is further discussed below.  Our primary sources of liquidity are cash provided by operating activities and external borrowings.  Our primary uses of cash are for debt service, capital improvements, development and acquisitions.

The cash used in investing activities during 2008 was primarily the result of property and equipment and device rights additions totaling $15.0 million for ongoing capital investments at our existing properties and $3.0 million for Mississippi land purchase transactions, offset by $0.3 million of proceeds from the sale of equipment.

The cash used in financing activities during 2008 was the result of net repayments on the revolving senior credit facility totaling $7.0 million, payments on long-term debt totaling $1.7 million and distributions to stockholders totaling $1.8 million, including $0.8 million for the purchase of Lot D.

As of December 31, 2008, we had $23.5 million available on our $40 million revolving senior credit facility for acquisitions, capital expenditure programs and working capital, although we drew $2.5 million on the credit line in January 2009 to complete the acquisition of Sugar Warehouse. See Item 1 “Business—Our Properties and Operations.”  The revolving senior credit facility carries an interest rate of 3.00% above LIBOR and expires in June 2011. As of December 31, 2008, our total debt approximates $290.7 million. Our future liquidity, which includes our ability to make semi-annual interest payments on June 15 and December 15 of each year, depends upon our future operational success.  Our failure to pay interest, repay our indebtedness when due, or maintain compliance with our debt covenants would result in an event of default under both our senior credit facility and our note indenture.

At December 31, 2008, we were in compliance with our financial covenants.  At March 31, 2009, certain debt covenants under our senior secured credit facility were to become more restrictive.  We entered into a second amendment to our credit agreement which became effective February 5, 2009.  The second amendment increased the maximum permitted senior secured leverage ratio and adjusted the test periods.

While our owners have made capital contributions to facilitate our various acquisitions from time to time, we can give no assurance that they will continue to do so in the future. Additionally, as we are a Subchapter S Corporation, we may from time to time make distributions to our owners on any taxes due as a result of taxable income generated by us. Furthermore, annual distributions may be made to our owners in an aggregate amount not to exceed the greater of $1 million and 50% of consolidated net income as defined in our credit agreement and indenture.

We believe that our cash flow from operations, cash and cash equivalents and our $40 million senior revolving credit facility discussed above will be adequate to meet our debt service obligations and operational expenditures, as well as our capital expenditure requirements for the next twelve months.  During 2009, we anticipate spending approximately $13 million for discretionary capital expenditures and also approximately $3.0 million for expansion capital expenditures, including the acquisition of a second Nautica parcel referred to above as Sugar Warehouse. While we believe these sources will provide us sufficient liquidity over the next twelve months, we can give no assurance that these sources of cash will be sufficient to enable us to do so. Further, in addition to our normal capital expenditure requirements, we anticipate that we will pursue the acquisition of other properties and continue to engage in the pursuit of new development opportunities. It is possible that we may need to enter into new financing arrangements and raise additional capital in the future if we are unable to generate sufficient cash to

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sustain expansion.  However, due to existing uncertainties in the capital and credit markets, our access to funding may be limited or available only on terms unacceptable to us.  Also, our ability to incur additional debt is further restricted by the terms and covenants of our senior secured and senior unsecured notes. We can give no assurance that we will be able to raise any capital or obtain the necessary sources of liquidity and financing on favorable terms, if at all. Additionally, any debt financing that we may incur in the future will increase the amount of our total outstanding indebtedness and our debt service requirements, and therefore heighten the related risks we currently face.

We also face the risk that there could be further declines in the demand for our products and services, which would reduce our ability to generate funds from operations. Adverse national and local economic conditions could persist or worsen. While we believe our cash flows are geographically diverse, at present we do have a significant concentration of cash flows generated in the Black Hawk, Colorado and Louisiana markets.  Should the Black Hawk or Louisiana markets decline or become saturated or should competition erode our market share, we would suffer a decline in available funds generated from operations.  If this were to occur, there exists the possibility that our credit rating could be downgraded, which would further reduce our ability to access the capital markets and obtain additional or alternative financing.  See the section “Risk Factors” in Item 1A above.

The following table provides disclosure concerning our obligations and commitments to make future payments under contracts, such as debt and lease agreements, and purchase and other long-term obligations as of December 31, 2008.

			Next		1-3		4-5		After 5
(In Thousands)	Total		12 Months		Years		Years		Years
Long-term debt (1)	$	407,079	$	24,284	$	64,087	$	98,470	$	220,238
Capital lease obligations	9,137		622		1,819		948		5,748
Operating leases (2)	36,962		2,699		4,537		3,567		26,159
Other long-term obligations (3)	23,389		1,794		3,388		2,582		15,625
Total contractual cash obligations	$	476,567	$	29,399	$	73,831	$	105,567	$	267,770

(1)Long-term debt includes principal and interest owing under the terms of our senior unsecured notes, our senior secured credit facility and the Black Hawk special assessment bonds. Interest on variable rate debt is computed based on rates outstanding at December 31, 2008.

(2)Operating leases include various land and building leases for certain properties in Nevada, Louisiana and Virginia; office space in Colorado, Louisiana, Virginia and Florida; and other equipment leases at all locations.

(3)Other long-term obligations include a 20-year, $1.25 million per year management agreement with Jacobs Investments Management Co. Inc., an affiliated company, and our obligation to pay $1 per operating video poker machine per day to the third party owner of the video poker machines in order to maintain the machines used in our truck plaza operations. In addition, Colonial has entered into an agreement with a totalisator company, which provides wagering services and designs, programs, and manufactures totalisator systems for use in wagering applications. The amendment provides for a minimum charge per calendar year of $210,000.

Finally, our outstanding senior unsecured notes aggregating $210 million cannot be redeemed until June 15, 2010. We can, however, with proceeds from an equity offering on more than one occasion redeem up to 35% of the aggregate principal amount of the notes at a redemption price of 109.75% of the principal amount thereof, plus accrued and unpaid interest.

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H.Critical accounting policies and estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We periodically evaluate our policies and the estimates and assumptions related to these policies. All of our subsidiary companies operate in a highly regulated industry. Our Colorado, Nevada, Louisiana and Virginia operations are subject to regulations that describe and regulate operating and internal control procedures. The majority of our casino revenue is in the form of cash, personal checks, credit cards or gaming chips and tokens, which by their nature do not require complex estimations. We estimate certain liabilities with payment periods that extend for longer than several months. Such estimates include our slot club liabilities, outstanding gaming chip, token and pari-mutuel ticket liability, self-insured medical and workers compensation liabilities, and litigation costs. We believe that these estimates are reasonable based on our past experience with the business and based upon our assumptions related to possible outcomes in the future. Future actual results will likely differ from these estimates.

Property and equipment

We have a significant investment in long-lived property and equipment, representing approximately 71% of our total assets, which includes the recent acquisitions of Gold Dust West-Carson City, Gold Dust West-Elko and the video gaming truck stops. We estimate that the undiscounted future cash flows expected to result from the use of these assets exceed the current carrying value of these assets. Any adverse change to the estimate of these undiscounted cash flows could necessitate an impairment charge that would adversely affect operating results. We review our property and equipment for potential impairment when events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use. Further, we assign lives to our assets based on our standard policy, which is established by management as representative of the useful life of each class of assets. Should the actual useful life of a class of assets differ from the estimated useful life, we would record an impairment charge. We review useful lives and obsolescence and assess the commercial viability of our assets periodically. During 2008, we performed an impairment analysis of property and equipment at our Gold Dust West-Carson City and Virginia reporting units, and we determined that property and equipment is not impaired at either reporting unit.

Goodwill and other intangible assets

We have $46.5 million in goodwill recorded on our consolidated balance sheet resulting from the acquisition of businesses. We do not have any other nonamortizing intangible assets on our consolidated balance sheet. We annually review our goodwill for impairment. The annual evaluation of goodwill requires the use of estimates about future operating results of each reporting unit to determine its estimated fair value. Changes in forecasted operations can materially affect these estimates. Once an impairment of goodwill has been recorded, it cannot be reversed.

Our reporting units with goodwill balances at December 31, 2008 are The Lodge ($4.2 million), Gilpin ($2.5 million), Gold Dust West-Reno ($8.8 million) and Louisiana ($31.0 million). There is no goodwill recorded in our Gold Dust West-Carson City, Gold Dust West-Elko or Virginia reporting units. We performed our most recent annual impairment test for our reporting units as of September 30, 2008. Our annual impairment test included an analysis of the gaming industry overall as well as an analysis of the specific locations in which we operate. We determined the fair values for each of these reporting units using both the market approach (recent comparable transactions from which we derived an applicable valuation multiple) and the income approach (net present value of our anticipated future cash flows). These fair values were then compared to the carrying values for the respective reporting unit. We determined that goodwill was impaired at our Gold Dust West-Carson City reporting unit, resulting in a goodwill impairment totaling $0.2 million, which is further discussed in Note 3 to the financial statements. We determined that goodwill is not impaired at any of our other reporting units.  Furthermore, if the fair value of these reporting units declined by 10%, no goodwill impairment would exist.

We have also reassessed the useful lives of our identifiable intangible assets without any change to the previously established amortization periods of such assets.

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Item 7A.Quantitative and Qualitative Disclosure about Market Risk.

Market Risk

Market risk is the risk of loss arising from adverse changes in market rates and prices, such as commodity prices and interest rates.  We purchase and sell fuel at market prices, subject to daily price changes.

We have issued $210 million of 9¾% fixed rate senior unsecured notes due in 2014 and a $100 million variable rate senior secured credit facility consisting of: (i) a $40 million revolving credit facility due in 2011, (ii) a $40 million term loan facility due in 2012, and (iii) a $20 million delayed draw term loan due in 2012.  As of December 31, 2008, $16.5 million is outstanding on the senior secured revolving credit facility and $58.6 million is outstanding on our senior secured term loan debt, bearing interest at a blended variable rate approximating 3.30% at December 31, 2008.

If market interest rates increase, our cash requirements for interest on the senior secured credit facility balance would also increase. Conversely, if market interest rates decrease, our cash requirements for interest on the senior secured credit facility balance would also decrease. There would be an approximate change in our cash requirements of $0.3 million annually for interest should market rates increase or decrease by 10% compared to interest rate levels at December 31, 2008.

We currently do not use interest rate swaps or other similar investments to alter interest rate exposure.

The recent severe economic downturn and adverse conditions in the local, regional, national and global markets has negatively affected our operations, and may continue to negatively affect our operations in the future. During periods of economic contraction such as the current period, our revenues may decrease while some of our costs remain fixed or even increase, resulting in decreased earnings. Gaming and other leisure activities we offer represent discretionary expenditures and participation in such activities may decline during economic downturns, during which consumers generally earn less disposable income. Even an uncertain economic outlook may adversely affect consumer spending in our gaming operations and related facilities, as consumers spend less in anticipation of a potential economic downturn. Furthermore, other uncertainties, including national and global economic conditions, terrorist attacks or other global events, could adversely affect consumer spending, increase gasoline prices and adversely affect our operations.

We use significant amounts of electricity, natural gas and other forms of energy. While we have generally not experienced any major shortages of energy, any substantial increases in the cost of electricity and natural gas in the United States could negatively impact our operating results. The extent of any impact is subject to the magnitude and duration of the energy price increases and could be material.

Also, if gas prices rise, this may result in a reduction of automobile travel and a decrease in the number of patrons at our properties.  Our business, assets, financial condition and results of operations could be adversely affected by a weakening of national economic conditions, high gasoline prices and/or adverse winter weather conditions.

We are a highly levered company. While we intend to finance expansion and capital expenditures with existing cash, cash flow from operations and borrowing under our existing senior secured credit facilities, we may require additional financing to support our continued growth. However, due to the existing uncertainty in the capital and credit markets, our access to capital may not be available on terms acceptable to us or at all. Further, if adverse regional and national economic conditions persist or worsen, we could experience decreased revenues from our operations attributable to decreases in consumer spending levels and could fail to satisfy the financial and other restrictive covenants to which we are subject under our existing indebtedness.

Item 8.Financial Statements and Supplementary Data.

Reference is made to the financial statements, the notes, and the report of our independent registered public accounting firm commencing on page F-1 of this report.

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Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A.Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We have carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of December 31, 2008. Based on such evaluation, we have concluded that, as of such date, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in applicable SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely discussions regarding required disclosure.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act. Those rules define internal control over financial reporting as a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

·Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

·Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

·Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use or disposition of our assets that could have a material effect on our financial statements.

Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2008. In making this assessment, our management used the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on our assessment, we believe that, as of December 31, 2008, our internal control over financial reporting is effective based on those criteria.

Changes in Internal Control Over Financial Reporting

There has been no change during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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Item 9A(T).Controls and Procedures.

 This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting.  Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.

Item 9B.Other Information.

There is no information we were required to report on Form 8-K during our fourth fiscal quarter of the year ended December 31, 2008 that was not so reported.

Item 10.Directors, Executive Officers and Corporate Governance.

The following table provides information regarding our directors and executive officers and key employees as of March 1, 2009:

Name	Age	Position
Jeffrey P. Jacobs	55	Chief Executive Officer, Secretary, Treasurer and Chairman of the Board
Stephen R. Roark	61	President
Ian M. Stewart	54	President of Pari-Mutuel Wagering Operations
Michael T. Shubic	55	Chief Operating Officer
Brett A. Kramer	40	Chief Financial Officer
Stanley Politano	59	Executive Vice President

Jeffrey P. Jacobs is our Chairman, Chief Executive Officer, Secretary and Treasurer and sole director. He is also Chairman and Chief Executive Officer of Colonial, and Chairman and Chief Executive Officer of Black Hawk Gaming, two of our subsidiaries. From 1996 to 2007, he served as Chairman and Chief Executive Officer of Diversified Opportunities Group Ltd. (“Diversified”), a company co-founded by Mr. Jacobs and his father, Richard E. Jacobs, and based in Cleveland, Ohio, that has investments in gaming companies and other ventures. Jacobs Entertainment, Inc. acquired Diversified on February 22, 2002 and it was dissolved in 2007. Mr. Jacobs serves as the Chairman and Chief Executive Officer of Jacobs Investments, Inc., a company which owns all of our equity securities and which engages in a variety of private equity transactions and other investments. From 1975 to present, Mr. Jacobs has also served as the Chairman and Chief Executive Officer of Jacobs Investments Management Co., Inc., a company engaged in the development, construction and operations of various residential and commercial real estate projects in Ohio. Mr. Jacobs became a director of MTR Gaming Group, Inc. (“MTR”) on May 6, 2008 and became its Chairman on October 31, 2008. MTR has a class of equity securities registered under the Securities Exchange Act of 1934.

Stephen R. Roark was appointed as our President on December 5, 2006. During the five years prior to that, he was our Chief Financial Officer and President of Casino Operations. He was employed as Chief Financial Officer of Black Hawk Gaming since August 1993. Mr. Roark became a director of Black Hawk Gaming in 1994. He was elected President of Black Hawk Gaming in September 1995. Prior to that time he was an independent consultant in the Denver area rendering financial and accounting assistance to companies in the public marketplace. Mr. Roark has 17 years of public accounting experience, having served as a partner with a local accounting firm based in Denver and as a partner with a national accounting firm. Mr. Roark was with Hanifen, Imhoff and Prudential Securities, Inc. for three years and is a member of the American Institute of Certified Public Accountants and the Colorado Society of Certified Public Accountants. Mr. Roark obtained his B.S.B.A. in Accounting from the University of Denver in 1973.

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Ian M. Stewart is currently our President of Pari-Mutuel Wagering Operations. He has served as President of Colonial since November 1998 and its Chief Financial Officer since June 1997. From January 1998 through November 1998, Mr. Stewart served as Chief Operating Officer of Colonial. From October 1994 to June 1997, Mr. Stewart served as a consultant and a temporary Chief Financial Officer for several Virginia-based businesses. From December 1989 to September 1994, Mr. Stewart was Vice President and CFO of Hat Brands, Inc. Mr. Stewart is a Certified Public Accountant and holds an M.B.A. degree from the University of Michigan.

Michael T. Shubic has been our Chief Operating Officer since July 1, 2006. From December 1, 2002 when he joined us until his appointment as our Chief Operating Officer, he served as our Vice President of Operations. From 2000 to 2002, Mr. Shubic was Vice President and General Manager of the Isle of Capri Black Hawk Casino in Black Hawk, Colorado. From 1997 to 2000, as a private individual, he explored and participated in various aspects of the golf industry, including education, sales and management. From 1984 to 1997, Mr. Shubic was employed by several gaming companies in Las Vegas and Reno, Nevada, Joliet, Illinois, and Nassau, Bahamas. His positions included general manager, casino administrator, customer analysis manager, casino credit manager and food and beverage manager. Mr. Shubic holds a B.S. degree in Hotel Administration from the University of Nevada.

Brett A. Kramer has been our Chief Financial Officer since December 5, 2006. He has been employed by us and certain of our predecessor subsidiaries for 14 years. He was responsible for overseeing accounting managers and controllers of our multi-state operating subsidiaries, over 30 in all. He has also been involved in developing our system of internal controls in order to comply with various gaming regulations and provisions of the Sarbanes-Oxley Act of 2002. Mr. Kramer was a staff and senior accountant for five years with Deloitte & Touche, LLP. He graduated with a degree in accounting from the University of Colorado in 1990.

Stanley Politano is our Executive Vice President and has been with the Company and its predecessor, Black Hawk Gaming & Development Company, Inc. since 1994. He is a former officer and director of Black Hawk Gaming.  He currently serves on our Company’s Nevada Compliance Committee and our Audit and Disclosure Committee.  Mr. Politano received his B.S. degree in Business, majoring in finance, from the University of Colorado in 1972.  He has 22 years of experience in the securities industry, in both retail and wholesale organizations.  He has worked for Rauscher Pierce Securities Corporation and Prudential-Bache Securities, Inc. and was a vice president with E.F. Hutton & Company, Inc. and Hanifen Imhoff Securities Corporation.

We are a company wholly owned by Jacobs Investments, Inc. (“JII”), which in turn was 50% owned by Jeffrey P. Jacobs and two of his family trusts, and 50% owned by a revocable trust and an irrevocable trust established by his father, Richard E. Jacobs.  On October 1, 2008, JII redeemed the shares owned by the Richard E. Jacobs Revocable Trust.  As a result, Jeffrey P. Jacobs and his family trusts own 80% of JII’s Class A shares and 100% of its Class B shares.  The Richard E. Jacobs Irrevocable Trust owns 20% of JII’s Class A shares, of which Jeffrey P. Jacobs is the sole trustee.  Additionally, effective October 15, 2008, Richard E. Jacobs resigned his position as a member of the Board of Directors of JEI. Our board of directors, currently consisting only of Jeffrey P. Jacobs, has no nominating, audit, compensation or other committees. Jeffrey P. Jacobs and Richard E. Jacobs had served as our directors since our formation in 2001. The board of directors is elected each year. The board has adopted a code of ethics policy which is applicable to our CEO, CFO and our employees. We rely on our employment procedures and system of internal controls and procedures, to deter wrongdoing and to promote honest and ethical conduct, full, fair and accurate disclosure in our reports, our compliance with governmental laws, rules and regulations, and internal reporting of violations of our policies.

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Item 11.Executive Compensation.

Compensation Discussion and Analysis

The following discussion of our executive compensation policies and practices include:

·an overview of our board of directors’ philosophy as to executive compensation;

·a discussion of the overall objectives of our compensation program for executive officers; and

·a discussion of all material components of compensation, particularly for the five named executive officers listed in the Summary Compensation table.

Overview and Objectives

As described in Item 12 immediately below, we are a wholly owned subsidiary of a privately-held company, hence we have no publicly traded securities, nor any option or other equity based incentive programs for our executives or employees. Our Chairman and Chief Executive Officer, Jeffrey P. Jacobs, and trusts that he and his father, Richard E. Jacobs, have established, own the equity securities of Jacobs Investments, Inc., the company that owns all of our equity securities.

During 2008, the total cash compensation to Messrs. Jeffrey P. Jacobs and Richard E. Jacobs, who resigned effective October 15, 2008, is limited to an aggregate of $1 million per year under our credit agreements. As a result, most elements of our compensation plans discussed below do not include our CEO, Jeffrey P. Jacobs. However, as also discussed below, our sole shareholder nonetheless is entitled under our credit agreements to certain tax distributions since, as a Subchapter S corporation, our taxable income flows through and is taxed to it. Finally and also as discussed in detail in Item 13 below, Messrs. Jeffrey P. Jacobs and Richard E. Jacobs have received certain direct dividends from us and constructive dividends resulting from the accounting treatment required of certain related party transactions.

Our Executive Compensation Program (Program) is designed to attract, motivate and retain high performing executives who are critical to our long-term success. The Program is structured to link executive compensation to how successfully we execute our business plans and meet a number of corporate, financial and operational goals. This design is intended to provide executives increased compensation when we do well and to provide less compensation when we do not.

The design and effectiveness of compensation policies and programs are reviewed by our CEO periodically in light of general industry and peer trends, and recommendations for changes are made to the board of directors as deemed advisable by the CEO. The CEO reviews such compensation matters with our internal personnel. The board of directors believes that the role played by the CEO in this process is reasonable and appropriate because the CEO is best suited to evaluate the performance of our executive personnel.

Our CEO reviews the philosophy, goals and objectives of the Program at least annually. In assessing their continued appropriateness, our CEO examines our success and the contributions of the individual executives in achieving our business plans. Our CEO considers the motivational impact of the Program as an incentive in attaining desired business results and in the continued ability to attract and retain high-quality executives. Key factors in judging whether the Program has met its goals are the Program’s relationship to our financial results, our future outlook and our ability to attract and retain key executive talent.

As a result of our corporate structure, the base compensation structure and amounts paid to all of our executive officers, except Jeffrey P. Jacobs, are determined after individual negotiations with each executive and approved by him. We formulate an annual cash incentive compensation plan for our named executive officers and selected middle management personnel based on our achievement of multi-year financial and growth objectives. Our discretionary annual bonus is paid in cash in an amount reviewed and approved by our CEO and traditionally has been paid in a single installment in the first quarter following the completion of a given fiscal year. Pursuant to

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current employment agreements, each named executive officer is eligible for a discretionary annual bonus up to an amount equal to 35% of such executive’s base salary. The actual amount of discretionary bonus, which varies by individual, is determined by our CEO following a review of each executive’s individual performance and contribution to our strategic and financial goals. In support of his recommendations, Mr. Jacobs considers the desirability of maintaining a cohesive, long standing management and operating group and keeps himself informed of the salaries and benefits offered by competitors although he does not adhere to specific benchmarks, median placements, percentages or ranges of compensation paid by competitors or others.

The following table sets forth information regarding the compensation paid by us to each of the following individuals for services rendered in all capacities for the years indicated:

Name and Principal Position(1)	Year	Salary	Bonus	Stock Awards	Option Awards	Non-Equity Incentive Plan Compensation	Change in Pension Value and Non- Qualified Deferred Compensation Earnings	All Other Compensation (2)(3)	Total
		($)	($)	($)	($)	($)	($)	($)	($)
Jeffrey P. Jacobs	2008	562,500	250,000					1,340,000	2,152,500
	2007	500,000	167,000					1,609,000	2,276,000
	2006	500,000	250,000					1,513,000	2,263,000
Stephen R. Roark	2008	457,816	133,000						590,816
	2007	406,134	129,188						535,322
	2006	370,529	140,000						510,529
Ian M. Stewart	2008	300,661	65,000						365,661
	2007	282,392	75,000						357,392
	2006	264,769	50,000						314,769
Michael T. Shubic	2008	339,094	98,000						437,094
	2007	314,192	93,303						407,495
	2006	272,445	105,000						377,445
Brett A. Kramer	2008	231,821	70,000						301,821
	2007	205,320	64,594						269,914
	2006	166,921	70,000						236,921
Stanley Politano	2008	171,440	49,000						220,440
	2007	159,239	47,369						206,608
	2006	150,951	54,250						205,201

(1)See Item 10 above which describes the principal positions of the named executives.

(2)See Item 13 below which describes consulting fees paid to Jacobs Investments Management Co., Inc., an affiliate of Mr. Jacobs.

(3)Also see Director Compensation and Item 13 below that describe distributions to our owners during 2008, which directly and indirectly benefited our Chief Executive Officer.

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Employment Agreements

Each of our five executive officers, except our CEO, Jeffrey P. Jacobs, is a party to an Executive Employment Agreement as follows:

			Base Salary
Name	Title	Effective Date	Year One		Year Two		Year Three
Stephen R. Roark	President	December 5, 2006	$	400,000	$	450,000	$	475,000
Michael T. Shubic	Chief Operating Officer	July 1, 2006	300,000		325,000		350,000
Ian M. Stewart	President of Pari-Mutuel Wagering Operations	August 1, 2006	275,000		287,500		300,000
Brett A. Kramer	Chief Financial Officer	December 5, 2006	200,000		225,000		250,000
Stanley Politano	Executive Vice President	December 5, 2006	155,000		165,000		175,000

All employment agreements are substantially identical except with respect to the amount of the executives’ respective salaries. Among the more important provisions of the agreements are the following:

(a)the term of each agreement is three years from its effective date;

(b)the base salaries are set forth above; in addition, each executive is entitled to receive an annual bonus of up to 35% of his base salary if certain performance criteria (established each year) are met;

(c)the agreements provide that if the executive is terminated without cause or dies, he or his estate is entitled to a lump sum payment equal to six month’s salary and a pro rated portion of his bonus. If there is a change in our control and the executive is not offered employment satisfactory to him, he is entitled to a lump sum payment equal to one year’s salary except in the case of Mr. Roark who is entitled to a lump sum payment equal to three year’s salary; and

(d)each agreement contains customary provisions regarding vacations, automobile benefits, insurance and expense reimbursements.

Director Compensation

We had two directors, Jeffrey P. Jacobs, who is also our CEO, and Richard E. Jacobs, his father. In 2008, Richard E. Jacobs was paid $187,500 for his service as a director. Effective October 15, 2008, Richard E. Jacobs resigned his position as a member of the Board of Directors of JEI. Our directors received no other compensation for their services as directors.

As explained in Item 13 below, our stockholder received compensation from us in 2008 as a result of amounts accounted for as a distribution resulting from the sale of a certain Nautica Property. Additionally, annual distributions may be made to our owners in an aggregate amount not to exceed the greater of $1 million and 50% of consolidated net income as defined in our credit agreement and indenture. Distributions to our stockholder totaled $1,800,000 in 2008, including $800,000 for the purchase of Lot D.

Finally, under the terms of our bank credit agreement and note indenture, we are allowed to make a tax distribution to our stockholder to cover the tax on our income which is taxable to our stockholder because of our Subchapter S status.

The board of directors has reviewed and discussed the foregoing Compensation Discussion and Analysis with management and based thereon, the board of directors has recommended that it be included in this Annual Report on Form 10-K.

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During 2008, there were no interlocking relationships between any member of our board of directors and any of our executive officers that would be required to be disclosed under Item 407(e)(4) of Regulation S-K.

Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

As of March 1, 2009, there were 1,500 shares of our common stock outstanding divided into 1,320 Class A shares and 180 Class B shares. The shares are equal in all respects except that each Class B share entitles the holder to 50,000 votes on each matter required to be voted upon by our shareholders. We have no equity compensation, stock option or similar plans relating to our equity securities. All 1,500 shares (100%) of our issued and outstanding common stock are owned by Jacobs Investments, Inc., a Delaware corporation (“JII”).

The following table sets forth certain information regarding the beneficial ownership of JII’s common stock as of March 1, 2009, for each stockholder who is known by us to own beneficially more than 5% of JII’s common stock.

	Number of Shares		Percentage
Stockholder of JII	Class A	Class B	Class A		Class B
Jeffrey P. Jacobs(1) Golden Bear Plaza East Tower 1170 U.S. Highway One, Suite 600 North Palm Beach, Florida 33408	528	—	32	%	—
Jacobs Family Economic and Control Trusts(2) Hahn Loeser & Parks LLP 200 Public Square, Suite 2800 Cleveland, Ohio 44114	792	180	48	%	100	%
Richard E. Jacobs Irrevocable Trust(3) 25425 Center Ridge Road Cleveland, Ohio 41445	326	—	20	%	—
All executive officers and directors as a group	528	—	32	%	—

(1)Jeffrey P. Jacobs is our Chief Executive Officer, Secretary, Treasurer and Chairman of the Board.

(2)The Jacobs Family Economic Trust owns 792 Class A shares and the Jacobs Family Control Trust owns 180 Class B shares. Both trusts are dynasty trusts established by Jeffrey P. Jacobs for the benefit of his current and future heirs and place certain restrictions on the transfer of the shares by the trustee. The current trustee of both trusts is Stanley R. Gorom III, a partner in the Cleveland, Ohio law firm of Hahn Loeser & Parks LLP.

(3)Jeffrey P. Jacobs is the sole trustee of the Richard E. Jacobs Irrevocable Trust.

(4)The trusts referred to in the two preceding notes are referred to herein collectively as the “Trusts.”

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Item 13.Certain Relationships and Related Transactions, and Director Independence.

In order to assist us in our efforts to research, develop, perform due diligence on and possibly acquire new gaming opportunities, we have a consulting agreement with Jacobs Investments Management Co. Inc. (“JIMCO”), 82% of which is owned by Jeffrey P. Jacobs and the remaining 18% of which is owned in equal portions by two former directors of Colonial. On June 16, 2006, this consulting agreement was amended and restated retroactive to January 1, 2006 for a period of 20 years, and calls for $1.25 million per year payable in two equal installments of $625,000 on January 1st and July 1st each year plus two and one-half percent (2.5%) of budgeted development costs for projects undertaken by us, if certain debt covenant ratios are met. Totals incurred under this agreement with JIMCO were $1,340,000, $1,609,000 and $1,513,000 for the years ended December 31, 2008, 2007 and 2006, respectively.

We provide monthly management and accounting services for various truck stops owned by Gameco Holdings, Inc. (“Gameco”), another wholly owned subsidiary of JII. Charges to the affiliate for these management services totaled $1,157,000, $1,035,000, and $302,000 for the years ended December 31, 2008, 2007 and 2006, respectively. Additionally, we provide shared services such as a branded fuel card that can be used at the truck stops owned both by us and Gameco, and repair parts purchased by Gameco from us. These transactions result in receivables from and payables to Gameco. As of December 31, 2008 and 2007, these transactions resulted in net payables to affiliate totaling $210,000 and $435,000, respectively. We expect to continue to render management and accounting services to Gameco in the future. We believe the fees paid to us are no less favorable to us than those that would be paid to unaffiliated vendors.

We may invest up to $3 million per year in private or publicly traded securities of unaffiliated companies. These investments may be selected and managed by JII, provided that under our senior credit agreement our pro forma consolidated leverage ratio (ratio of our total pro forma debt to our pro forma EBITDA) must be 5.0 to 1.0 or less after giving effect to any such investment and provided that under our note indenture our fixed charge coverage ratio (ratio of our Consolidated EBITDA to our fixed charges, primarily interest) was at least 2.0 to 1.0 for the preceding four quarter period; and provided further that to the extent that less than $3.0 million in the aggregate of such investments are made in any fiscal year, the unused amount may be used in the succeeding fiscal year, subject to the pro forma leverage condition just discussed. Furthermore, we may invest an aggregate amount not to exceed $5.0 million at any time outstanding.  At December 31, 2008, we had invested $7,943,000 (cost) in the securities of an unaffiliated public company; the market value of such securities at December 31, 2008 was $1,367,000.

Gameco owns and has the right to acquire additional video gaming truck plazas in Louisiana. We have the right to purchase any existing or future video gaming facilities acquired by Gameco at a price equal to (i) the lesser of (a) seven times trailing 12 months EBITDA, and (b) the sum of the consideration paid by the affiliated company plus or minus an adjustment for working capital and plus an amount equal to the trailing 12 months EBITDA, or (ii) an amount supported by a fairness opinion by a nationally recognized accounting, investment banking or appraisal firm; provided that after giving effect to each such acquisition and pro forma for contemplated expenditures, (x) there must be at least $10,000,000 of undrawn availability under our revolving credit line, (y) we must be in pro forma compliance with all financial covenants under our credit agreements, and (z) we must maintain specified levels with respect to our consolidated total leverage ratio. Any such acquisitions by us could result in significant profits to Gameco.

During July 2006, we acquired from affiliated parties several options to lease and options to purchase six parcels of land and certain improvements on the west bank of the Cuyahoga River in Cleveland, Ohio. We refer to these properties, covering an aggregate of approximately 624,000 square feet of land (14.4 acres) and a building comprised of 47,380 square feet of net rentable space, as the Nautica Properties. The Nautica Properties currently require aggregate option payments totaling $200,000 per year.

During March 2008, we exercised our option to acquire one of these parcels referred to as “Lot D.”  On April 1, 2008, we purchased this parcel for $800,000, which was accounted for as a distribution to our stockholder.  The company that owned this parcel of land and parking lot business was wholly owned by our Chairman and Chief Executive Officer. The net assets acquired were $131,000, resulting in an effective net distribution of $669,000. Additionally, on January 15, 2009, we exercised our option to acquire another of these parcels referred to as “Sugar Warehouse,” and on January 21, 2009, we purchased this parcel for $2,575,000.  The company that owned this building was 29.5% owned by our Chairman and Chief Executive Officer and 70.5% owned by third parties.  An affiliate

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(“Affiliate”) of our Chairman and Chief Executive Officer is the general partner and a limited partner of the seller, a limited partnership.  Of the net proceeds from the sale, the Affiliate received approximately $80,000 (subject to increase depending on tax adjustments) attributable to its partnership interests and repayment to the Affiliate of a $504,000 loan.

The option agreements give us the right until July 2010 to purchase one of the remaining parcels and the right to purchase or enter into long-term leases on the remaining three parcels. Our Chairman and Chief Executive Officer owns varying interests in three of the four remaining parcels.  The option agreements may be extended.

Although we may elect not to exercise all the options unless casino gaming opportunities arise, we nonetheless have the right to acquire all or part of the Nautica Properties for other purposes. If casino gaming is not legalized but we decide to exercise our options, the aggregate purchase price would be approximately $3.0 million for one of the parcels and the aggregate annual lease payments on the remaining three parcels would be approximately $355,000. If all four remaining parcels are purchased and none leased, the total purchase price would be approximately $7 million, less any aggregate option payments previously made. The purchase price and rent payments would be increased based on independent appraisals of the land and improvement values if, in the future, casino gaming were to become legalized in Ohio and a casino is licensed at Nautica.

Director Independence

We are a privately held company wholly owned by Jacobs Investments, Inc. which in turn is owned beneficially by our director, Jeffrey P. Jacobs, who is also our Chief Executive Officer and several trusts created by him or his father, Richard E. Jacobs. Therefore, our board of directors is not independent, nor are any independence standards applicable to us as a result of stock exchange or any other self regulatory organization’s requirements.

The transactions reported above were approved by our two directors who were also the persons controlling JII, our sole stockholder.  One director resigned on October 15, 2008 leaving Jeffrey P. Jacobs, our Chief Executive Officer, as our sole director.  Mr. Jacobs approves all transactions required to be reported under this Item giving due regard to the covenants in our bank credit agreement and in our note indenture.

Item 14.Principal Accountant Fees and Services.

Fees paid to our registered public accounting firm for the last two years were as follows:

	Year Ended
	December 31,
	2008		2007
Audit fees	$	1,100,000	$	992,000
Audit related fees*	29,000		21,000
Tax fees**	334,000		271,000
All other fees	122,000		258,000

*Audit-related fees are comprised of our 401(k) audits and fees.

**Tax fees are principally comprised of preparation of federal and state corporate income tax returns, various state tax returns, and research and related tax consultation services.

We have no audit committee. Our board of directors considered and determined that provision of the services described above and amounts paid for those services are compatible with maintaining our principal accountant’s independence.

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Item 15.Exhibits and Financial Statement Schedules.

(a)Financial Statements and Financial Statement Schedules

(1)Financial Statements filed herewith are listed in the Index to Consolidated Financial Statements on page F-1 of this report.

(2)No Financial Statement Schedules are included herein because such schedules are not applicable, are not required, or because the required financial information is included in the Consolidated Financial Statements or notes thereto.

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(b)Exhibits

Exhibit No.	Description
2.1(1)	Agreement and Plan of Merger dated as of April 25, 2001, among Black Hawk Gaming & Development Company, Gameco, Inc. and BH Acquisition, Inc.
2.2(1)	Amendment to Agreement and Plan of Merger dated as of November 12, 2001 among Black Hawk Gaming & Development Company, Inc., Gameco, Inc. and BH Acquisition, Inc.
2.3(1)	Exchange Agreement dated February 22, 2002 among Gameco, Inc., Jeffrey P. Jacobs and The Richard E. Jacobs Revocable Trust.
2.4(1)	Agreement and Plan of Merger dated as of June 11, 2001 among Colonial Holdings, Inc., Gameco, Inc. and Gameco Acquisitions, Inc.
2.5(1)	Amendment to Agreement and Plan of Merger dated as of November 16, 2001 among Colonial Holdings, Inc., Gameco, Inc. and Gameco Acquisition, Inc.
2.6(1)	Agreement and Plan of Merger, dated February 22, 2002 between Gameco, Inc. and Jacobs Entertainment, Inc.
3.1(1)	Certificate of Incorporation of Gameco, Inc.
3.2(1)	By-Laws of Gameco, Inc.
3.3(1)	Articles of Incorporation of Black Hawk Gaming & Development Company, Inc.
3.4(1)	Bylaws of Black Hawk Gaming & Development Company, Inc.
3.5(1)	Articles of Incorporation of Gold Dust West Casino, Inc.
3.6(1)	Code of By-laws of Gold Dust West Casino, Inc.
3.7(1)	Articles of Organization of Black Hawk/Jacobs Entertainment, LLC.
3.8(1)	Operating Agreement of Black Hawk/Jacobs Entertainment, LLC.
3.9(1)	Joint Venture Agreement of Gilpin Hotel Venture.
3.10(1)	Articles of Incorporation of Gilpin Ventures, Inc.
3.11(1)	By-Laws of Gilpin Ventures, Inc.
3.12(1)	Articles of Incorporation of Jalou II Inc. (merged out of existence on December 31, 2007).
3.13(1)	By-Laws of Jalou II Inc. (merged out of existence on December 31, 2007).
3.14(1)	Articles of Incorporation of Winner’s Choice Casino, Inc., now Cash Magic Winner’s Choice, LLC
3.15(1)	By-Laws of Winner’s Choice Casino, Inc., now Cash Magic Winner’s Choice, LLC
3.16(1)	Articles of Organization of Diversified Opportunities Group Ltd. (dissolved December 31, 2007).
3.17(1)	Articles of Organization of Jalou L.L.C. (dissolved December 31, 2007).
3.18(1)	Articles of Organization of Houma Truck Plaza & Casino, L.L.C.

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3.19(1)	Articles of Organization of Jalou-Cash’s L.L.C.
3.20(1)	Articles of Incorporation of JACE, Inc. (converted to LLC, Exhibit 3.24).
3.21(1)	Articles of Organization of Lucky Magnolia Truck Stop and Casino, L.L.C.
3.22(1)	Articles of Organization of Bayou Vista Truck Plaza and Casino, L.L.C.
3.23(1)	Articles of Organization of Raceland Truck Plaza and Casino, L.L.C.
3.24(1)	Articles of Organization of JACE, LLC (duplicate of Exhibit 3.20).
3.25(2)	Certificate of Amendment of Certificate of Incorporation of Gameco, Inc.
3.26(2)	Amended and Restated Certificate of Limited Partnership of Colonial Downs, L.P.
3.27(2)	Limited Partnership Agreement of Colonial Downs, L.P.
3.28(2)	Amended and Restated Articles of Incorporation of Colonial Downs Holdings, Inc.
3.29(2)	Amendment to Articles of Incorporation of Colonial Downs Holdings, Inc.
3.30(2)	Bylaws of Colonial Downs Holdings, Inc.
3.31(2)	Articles of Incorporation of Stansley Racing Corp.
3.32(2)	Articles of Amendment to the Articles of Incorporation of Stansley Racing Corp.
3.33(2)	Bylaws of Stansley Racing Corp.
3.34(2)	Amended and Restated Operating Agreement of Diversified Opportunities Group Ltd.
3.35(2)	Amendment to the Operating Agreement of Black Hawk/Jacobs Entertainment, LLC.
3.36(2)	Amendment to the Certificate of Incorporation of Gameco, Inc.
3.37(8)	Articles of Organization of Jalou Breaux Bridge, LLC dated January 29, 2003.
3.38(8)	Articles of Organization of Jalou Eunice, LLC dated March 27, 2003.
3.39(8)	Articles of Organization of Jalou of Jefferson, LLC dated September 23, 2003.
3.40(10)	Certificate of Amendment of Certificate of Incorporation of Jacobs Entertainment, Inc. dated September 27, 2005.
3.41(10)	Articles of Incorporation of Jacobs Piñon Plaza Entertainment, Inc. dated November 2, 2005.
3.41A(12)	Bylaws of Jacobs Piñon Plaza Entertainment, Inc. dated November 8, 2005.
3.42(12)	Articles of Organization of Fuel Stop 36, LLC dated August 24, 1989.
3.43(12)	Articles of Organization of Jalou of Larose, LLC dated November 3, 2005, now Cash Magic Larose, LLC.
3.44(12)	Articles of Incorporation of Jacobs Elko Entertainment, Inc.

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3.45(12)	Bylaws of Jacobs Elko Entertainment, Inc.
3.46(12)	Articles of Organization of Jacobs Dakota Works, LLC.
3.47(12)	Operating Agreement of Jacobs Dakota Works, LLC.
3.48(12)	Articles of Organization of Jalou Diamond L.L.C.
3.49(12)	Limited Liability Company Agreement of Jalou Diamond L.L.C.
3.50(12)	Articles of Organization of Jalou Magic L.L.C. (nka Cash Magic Vinton, LLC).
3.51(12)	Limited Liability Company Agreement of Jalou Magic L.L.C. (nka Cash Magic Vinton, LLC).
3.52(12)	Articles of Organization of Jalou of Vinton-Bingo, LLC.
3.53(12)	Limited Liability Company Agreement of Jalou of Vinton-Bingo, LLC.
3.54(12)	Articles of Organization of Jalou of Vinton, LLC.
3.55(12)	Limited Liability Company Agreement of Jalou of Vinton, LLC.
3.56(12)	Articles of Organization of Jalou of St. Helena, LLC. (nka Cash Magic St. Helena, LLC).
3.57(12)	Limited Liability Company Agreement of Jalou of St. Helena, LLC. (nka Cash Magic St. Helena, LLC).
3.58(12)	Amended and Restated Articles of Incorporation of Jacobs Piñon Plaza Entertainment, Inc.
3.59(12)	Articles of Organization of Jalou of St. Martin, L.L.C.
3.60(12)	Limited Liability Company Agreement of Jalou of St. Martin, L.L.C.
3.61(12)	Limited Liability Company Agreement of Jalou L.L.C. (dissolved as of December 31, 2007).
3.62(12)	Operating Agreement of Houma Truck Plaza Stop and Casino, L.L.C.
3.63(12)	Limited Liability Company Agreement of Jalou-Cash’s L.L.C.
3.64(12)	Limited Liability Company Agreement of Lucky Magnolia Truck Stop and Casino, L.L.C.
3.65(12)	Limited Liability Company Agreement of Bayou Vista Truck Plaza and Casino, L.L.C.
3.66(12)	Limited Liability Company Agreement of Raceland Truck Plaza and Casino, L.L.C.
3.67(12)	Limited Liability Company Agreement of Jalou Breaux Bridge, LLC.
3.68(12)	Limited Liability Company Agreement of Jalou of Eunice, LLC.
3.69(12)	Limited Liability Company Agreement of Jalou of Jefferson, LLC.
3.70(12)	Limited Liability Company Agreement of Jalou of Larose, LLC, now Cash Magic Larose, LLC.
3.71(12)	Articles of Organization of Colonial Downs, LLC.
3.72(12)	Operating Agreement of Colonial Downs, LLC.

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3.73(12)	Articles of Organization of JRJ Properties, LLC.
3.74(12)	Limited Liability Company Agreement of JRJ Properties, LLC.
3.75(12)	Articles of Organization of Virginia Concessions, LLC.
3.76(12)	Amended and Restated Operating Agreement of Virginia Concessions, LLC.
3.77A(12)	Articles of Amendment to the Articles of Incorporation of Old Dominion Racing Association, Inc.
3.77B(12)	Articles of Amendment to the Articles of Incorporation of Old Dominion Racing Association, Inc.
3.77C(12)	Articles of Amendment to the Articles of Incorporation of Old Dominion Jockey Club, Inc.
3.77D(12)	Articles of Amendment to the Articles of Incorporation of Maryland-Virginia Racing Circuit, Inc.
3.78(17)	Articles of Organization of Jalou Fox, LLC dated November 14, 2005.
3.79(17)	Limited Liability Company Agreement of Jalou Fox, LLC dated September 1, 2005.
3.80(19)	Articles of Organization of Jalou Silver Dollar, LLC.
3.81(19)	Limited Liability Company Agreement of Jalou Silver Dollar, LLC.
3.82(20)	Certificate of Incorporation of Jacobs Nautica Development, Inc.
3.83(20)	Bylaws of Jacobs Nautica Development, Inc.
3.84(22)	Certificate of Formation of Diamondhead Real Estate, LLC
3.85(22)	Limited Liability Company Agreement of Diamondhead Real Estate, LLC
3.86(22)	Articles of Organization of JEI Distributing, LLC
3.87(22)	Limited Liability Company Agreement of JEI Distributing, LLC
3.88(22)	Certificate of Incorporation of Jacobs Sugar Warehouse, Inc.
3.89(22)	Bylaws of Jacobs Sugar Warehouse, Inc.
4.1(13)	Trust Indenture Agreement by and between Jacobs Entertainment, Inc. and Wells Fargo Bank, as Trustee, dated June 16, 2006.
4.2(13)	Registration Rights Agreement by and between Jacobs Entertainment, Inc. and Credit Suisse Securities (USA) LLC, CIBC World Markets Corp., Libra Securities, LLC, Wells Fargo Securities, LLC and KeyBanc Capital Markets, a Division of McDonald Investments Inc., as the initial purchasers, dated June 16, 2006.
4.3(12)	Pledge Agreement dated as of June 16, 2006 by and among Jacobs Entertainment, Inc., Black Hawk Gaming & Development Company, Inc. and Credit Suisse, Cayman Islands Branch.
4.4(12)	Guarantee Agreement dated as of June 16, 2006, by and among Jacobs Entertainment, Inc., certain of the subsidiaries of Jacobs Entertainment, Inc. and Credit Suisse, Cayman Islands Branch.

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4.5(12)	Security Agreement dated as of June 16, 2006, made by Jacobs Entertainment, Inc. and each of the guarantors listed on the signature pages or from time to time a party by execution of a joinder agreement, as pledgors, assignors and debtors in favor of Credit Suisse, Cayman Islands Branch, in its capacity as collateral agent for the Secured Parties pursuant to the Credit Agreement.
4.6(12)	Contribution Agreement dated June 16, 2006, by and among Jacobs Entertainment, Inc. and affiliates of Jacobs Entertainment, Inc.
4.7(12)	Custodian Agreement dated as of June 16, 2006, by and between Dunham Trust Company, 1 East Liberty Street, Sixth Floor, Reno, NV 89504, as custodian, Credit Suisse, Cayman Islands Branch as Collateral Agent under the Credit Agreement, Jacobs Entertainment, Inc., as the Borrower under the Credit Agreement and Blackhawk Gaming & Development Company, Inc.
4.8(12)	Form of Jacobs Entertainment, Inc. 9.75% Rule 144A Global Note due 2014.
4.9(12)	Form of Jacobs Entertainment, Inc. 9.75% Regulation S Global Note due 2014.
4.10(12)	Form of Jacobs Entertainment, Inc. 9.75% IAI Global Note due 2014.
4.11(12)	Intercompany Note dated as of June 16, 2006 by and among Jacobs Entertainment, Inc., and Credit Suisse, Cayman Islands Branch.
4.12(12)	Purchase Agreement dated June 9, 2006 by and among Jacobs Entertainment, Inc. and Credit Suisse Securities (USA) LLC, on behalf of the purchasers of the $210,000,000 9.75% Senior Notes.
4.13(12)	Pledge Agreement dated June 16, 2006 by and among Jacobs Entertainment, Inc., Black Hawk Gaming & Development Company, Inc. and Canadian Imperial Bank of Commerce, acting through its New York Agency.
10.1(3)	Deed of Lease dated May 8, 2003 between Haynes Chippenham Plaza, LLC and Colonial Downs, L.P.
10.2(10)	Asset Purchase Agreement dated November 2, 2005 among Capital City Entertainment, Inc. and Jacobs Piñon Plaza Entertainment, Inc.
10.3(12)	Piñon Plaza Ground Lease dated June 26, 2006 by and between Clark G. Russell and Jean M. Russell, Trustees of The Clark and Jean Russell Family Trust and Jacobs Entertainment, Inc.
10.4(11)	Triple Net Lease dated November 14, 2005 among Route 225 Investments, LLC and Jacobs Entertainment, Inc.
10.5(13)	Ground Lease and Option Purchase Agreement dated September 12, 2005 between Dakota/Blackhawk, LLC and Jacobs Entertainment, Inc.
10.6(13)	Thoroughbred Horseman’s Agreement dated January 1, 2005 between Colonial Downs, L.P., Stansley Racing Corp. and The Virginia Horsemen’s Benevolent and Protective Association, Inc.
10.7(13)	Shopping Center Lease dated February 28, 2005 between Jay F. Wilks, Trustee under Indenture dated December 20, 1976 by and between Herbert Cashvan and Marvin Simon, as Settlors, and Jay F. Wilks as Trustee, and Colonial Downs, L.P.
10.8(12)	Standardbred Horsemen’s Contract effective March 1, 2006 among Colonial Downs L.P., Stansley Racing Corp. and The Virginia Harness Horse Association.
10.9(12)	Membership Interests Purchase Agreement dated May 16, 2006 by and between Gameco Holdings, Inc. and Jacobs Entertainment, Inc.

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10.10A(12)	Asset Purchase Agreement dated May 17, 2006 between Feliciana Ventures, Inc., Forest Gold Truck Plaza and Casino, L.L.C., St. Helena Express & Casino, L.L.C., Seabuckle Gaming, Inc., Janice M. Penn and Minnie L. Hughes, as Sellers, Claude M. Penn, Jr., and Gameco Holdings, Inc. as Purchaser. (Assigned as to St. Helena to Jacobs Entertainment, Inc.).
10.10B(12)	First Amendment to Asset Purchase Agreement dated July 12, 2006 between Feliciana Ventures, Inc., Forest Gold Truck Plaza and Casino, L.L.C., St. Helena Express & Casino, L.L.C., Seabuckle Gaming, Inc., Janice M. Penn and Minnie L. Hughes, as Sellers, Claude M. Penn, Jr., and Gameco Holdings, Inc. as Purchaser. (Assigned as to St. Helena to Jacobs Entertainment, Inc.).
10.11(14)	Credit Agreement by and between Jacobs Entertainment, Inc., Credit Suisse Securities (USA) LLC and CIBC World Markets Corp., as Joint Lead Arrangers and Joint Bookrunners, and CIBC World Markets Corp., as Syndication Agent, and Wells Fargo Bank, National Association, as Documentation Agent and Swingline Lender, and CIT Lending Services Corporation, as Documentation Agent, and Credit Suisse, Cayman Islands Branch, as Issuing Bank, Administrative Agent and Collateral Agent, dated June 16, 2006.
10.12(12)	Consulting Agreement dated January 1, 2006 and amended June 16, 2006, by and among Jacobs Entertainment, Inc. and Jacobs Investments Management Co., Inc.
10.13(12)	Fourth Amendment to Option Purchase Agreement dated May 15, 2006 between Dakota/Blackhawk, LLC and Jacobs Entertainment, Inc.
10.14(12)	Option Agreement dated July 11, 2006 between Jacobs Entertainment, Inc. and Nautica Phase 2 Limited Partnership.
10.15(12)	Option Agreement dated July 11, 2006 between Jacobs Entertainment, Inc. and Jacobs Lot D, Inc.
10.16(12)	Option Agreement dated April 18, 2006 between Jacobs Entertainment, Inc. and Flats Development, Inc.
10.17(12)	Option Agreement dated July 11, 2006 between Jacobs Entertainment, Inc. and Sycamore & Main, Inc.
10.18(12)	Option Agreement dated July 11, 2006 between Jacobs Entertainment, Inc. and Nautica Peninsula Land Limited Partnership.
10.19(12)	Option Agreement dated July 11, 2006 between Jacobs Entertainment, Inc. and Sugar Warehouse Limited Partnership.
10.20(12)	Lease and Option to Purchase Agreement dated June 21, 2006 by and between Curray Corporation, Texas Pelican, LLC and Jalou of Vinton, LLC.
10.21(12)	Amendments to Thoroughbred Horsemen’s Agreements, dated May 11, 2006, by and between Colonial Downs, L.P. and The Virginia Horsemen’s Benevolent and Protective Association, Inc.
10.22(12)	Amendment to Standard Horsemen’s Agreements, dated May 26, 2006, by and between Colonial Downs, L.P. and The Virginia Harness Horse Association.
10.23(16)	Executive Employment Agreement dated December 5, 2006 between Jacobs Entertainment, Inc. and Stephen R. Roark.
10.24(16)	Executive Employment Agreement effective July 1, 2006 between Jacobs Entertainment, Inc. and Michael T. Shubic.
10.25(16)	Executive Employment Agreement effective August 1, 2006 between Jacobs Entertainment, Inc. and Ian M. Stewart.

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10.26(16)	Executive Employment Agreement dated December 5, 2006 between Jacobs Entertainment, Inc. and Brett Kramer.
10.27(16)	Executive Employment Agreement dated December 5, 2006 between Jacobs Entertainment, Inc. and Stanley Politano.
10.28(17)	Membership Interests Purchase Agreement dated August 20, 2007 by and between Gameco Holdings, Inc. and Jacobs Entertainment, Inc.
10.28A(18)	Amendment No. 1 dated May 4, 2007 to Credit Agreement among Jacobs Entertainment, Inc. and various lenders.
10.29(19)	Asset Purchase Agreement dated October 4, 2006 regarding the Silver Dollar Truck Plaza.
10.30(20)	Purchase Agreement dated March 14, 2008 regarding Jacobs Lot D, Inc.
10.31(21)	Amendment No. 2 dated February 5, 2009 to Credit Agreement among Jacobs Entertainment, Inc. and various lenders.
12(22)	Computation of Ratio of Earnings to Fixed Charges.
14.1(19)	Code of Ethics (as revised).
21.2(22)	Subsidiaries of Jacobs Entertainment, Inc.
25.1(12)	Statement of Eligibility of Trustee on Form T-1.
31.1(22)	Chief Executive Officer Certification under Section 302 of the Sarbanes-Oxley Act of 2002.
31.2(22)	Chief Financial Officer Certification under Section 302 of the Sarbanes-Oxley Act of 2002.
32.1(22)	Chief Executive Officer Certification under Section 906 of the Sarbanes-Oxley Act of 2002.
32.2(22)	Chief Financial Officer Certification under Section 906 of the Sarbanes-Oxley Act of 2002.

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(1)	Incorporated hereby by reference from our registration statement on Form S-4 (SEC Registration No. 333-88242) filed on May 14, 2002.
(2)	Incorporated hereby by reference from Amendment No. 1 of our registration statement on Form S-4 (SEC Registration No. 333-88242) filed on August 8, 2002.
(3)	Incorporated hereby by reference from our Form 10-K filed on March 29, 2004.
(4)	Incorporated hereby by reference from our Form 10-K filed on March 31, 2003.
(5)	Incorporated by reference from our Form 10-Q filed August 13, 2004.
(6)	Incorporated hereby by reference from our Report on Form 8-K filed October 7, 2004.
(7)	Incorporated hereby by reference to Exhibits 2.01(a) and 2.01(b) from our Report on Form 8-K dated March 4, 2005.
(8)	Incorporated hereby by reference from our Form 10-K filed March 28, 2005.
(9)	Incorporated hereby by reference from our Report on Form 8-K filed on March 4, 2005.
(10)	Incorporated by reference from our Form 10-Q filed November 14, 2005.
(11)	Incorporated hereby by reference from our Report on Form 8-K filed on November 15, 2005.
(12)	Incorporated hereby by reference from our registration statement on Form S-4 (SEC Registration No. 333-136066) filed on July 27, 2006.
(13)	Incorporated hereby by reference from our Form 8-K filed on March 23, 2006.
(14)	Incorporated hereby by reference from our Form 8-K filed on June 22, 2006.
(15)	Incorporated hereby by reference from our Form 10-K filed on March 29, 2006.
(16)	Incorporated hereby by reference from our Form 8-K filed on December 8, 2006.
(17)	Incorporated hereby by reference from our Form 8-K filed on September 6, 2007.
(18)	Incorporated hereby by reference from our Form 8-K filed on May 10, 2007.
(19)	Incorporated hereby by reference from our Form 10-K filed on March 26, 2008.
(20)	Incorporated hereby by reference from our Form 10-Q filed on May 13, 2008.
(21)	Incorporated hereby by reference from our Form 8-K filed on February 6, 2009.
(22)	Filed herewith.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

JACOBS ENTERTAINMENT, INC.
By:	/s/ JEFFREY P. JACOBS
	Jeffrey P. Jacobs
	Chief Executive Officer
By:	/s/ BRETT A. KRAMER
	Brett A. Kramer
	Chief Financial Officer

Date: March 18, 2009

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ JEFFREY P. JACOBS	Chairman of the Board of Directors and Chief	March 18, 2009
Jeffrey P. Jacobs	Executive Officer (Principal Executive Officer)
/s/ BRETT A. KRAMER	Chief Financial Officer	March 18, 2009
Brett A. Kramer	(Principal Financial and Accounting Officer)

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Jacobs Entertainment, Inc.

Consolidated Financial Statements as of December 31, 2008 and 2007, and for the Years Ended December 31, 2008, 2007 and 2006, and Report of Independent Registered Public Accounting Firm

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholder of
Jacobs Entertainment, Inc.
Golden, Colorado

We have audited the accompanying consolidated balance sheets of Jacobs Entertainment, Inc. and subsidiaries (the “Company”) as of December 31, 2008 and 2007, and the related consolidated statements of operations, stockholder’s equity, and cash flows for each of the three years in the period ended December 31, 2008. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Jacobs Entertainment, Inc. and subsidiaries as of December 31, 2008 and 2007, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2008, in conformity with accounting principles generally accepted in the United States of America.

/s/ Deloitte & Touche LLP

Denver, Colorado

March 18, 2009

F-1

JACOBS ENTERTAINMENT, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2008 AND 2007

(Dollars in thousands)

	2008			2007
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	21,790		$	24,397
Restricted cash	1,423			1,398
Accounts receivable, net of allowance for doubtful accounts of $740 and $521, respectively	2,967			3,609
Inventory	3,421			3,328
Prepaid expenses and other current assets	2,951			2,785
Total current assets	32,552			35,517
PROPERTY, PLANT AND EQUIPMENT:
Land and improvements	59,451			56,372
Buildings and improvements	181,468			177,716
Equipment, furniture and fixtures	87,332			80,999
Leasehold improvements	1,625			2,460
Construction in progress	945			837
	330,821			318,384
Less accumulated depreciation	(86,214		)	(69,683		)
Property, plant and equipment, net	244,607			248,701
OTHER NONCURRENT ASSETS:
Goodwill	46,471			46,670
Identifiable intangible assets, net	9,192			9,491
Debt issue costs, net	6,795			8,276
Investment in equity securities	1,367			5,524
Other assets	1,545			1,736
Total other noncurrent assets	65,370			71,697
TOTAL	$	342,529		$	355,915
LIABILITIES AND STOCKHOLDER’S EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	21,638		$	22,713
Gaming taxes payable	3,195			3,279
Interest payable	992			1,027
Due to affiliate	210			435
Current portion of long-term debt and capital lease obligations	1,339			1,301
Total current liabilities	27,374			28,755
Long-term debt and capital lease obligations	289,358			298,045
Other noncurrent liabilities	891			690
Total liabilities	317,623			327,490
COMMITMENTS AND CONTINGENCIES (Note 8)
STOCKHOLDER’S EQUITY:
Class A Common stock, $.01 par value; 1,800 shares authorized, 1,320 shares issued and outstanding as of December 31, 2008 and 2007	—			—
Class B Common stock, $.01 par value; 200 shares authorized, 180 shares issued and outstanding as of December 31, 2008 and 2007	—			—
Additional paid-in capital	30,251			32,051
Accumulated deficit	(5,345		)	(1,207		)
Accumulated other comprehensive loss	—			(2,419		)
Total stockholder’s equity	24,906			28,425
TOTAL	$	342,529		$	355,915

See notes to consolidated financial statements.

F-2

JACOBS ENTERTAINMENT, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2008, 2007 and 2006

(Dollars in thousands)

	2008			2007			2006
REVENUES
Gaming:
Casino	$	139,492		$	144,656		$	121,483
Truck stop	67,590			64,322			66,418
Pari-mutuel	38,657			41,309			39,787
Food and beverage	30,736			29,260			25,069
Convenience store—fuel	97,021			81,329			77,520
Convenience store—other	12,908			11,133			10,611
Hotel	4,101			4,415			3,509
Other	5,737			5,387			4,451
Total revenues	396,242			381,811			348,848
Less: Promotional allowances	(33,718		)	(31,953		)	(26,438		)
Net revenues	362,524			349,858			322,410
COSTS AND EXPENSES
Gaming:
Casino	46,809			48,427			43,567
Truck stop	40,990			37,954			37,621
Pari-mutuel	31,172			32,977			32,559
Food and beverage	15,417			16,416			13,704
Convenience store—fuel	90,714			77,269			73,389
Convenience store—other	17,222			15,175			14,283
Hotel	1,038			1,115			734
Marketing, general and administrative	68,533			69,342			60,787
Loss on change in fair value of investment in equity securities	6,577			—			—
Goodwill impairment	199			—			—
Abandonment costs	829			—			—
Depreciation and amortization	19,935			18,104			14,105
Total costs and expenses	339,435			316,779			290,749
OPERATING INCOME	23,089			33,079			31,661
Interest income	194			345			382
Interest expense, net of amounts capitalized	(27,421		)	(28,412		)	(32,653		)
Pre-payment penalties, tender and consent costs	—			—			(9,321		)
(LOSS) INCOME BEFORE INCOME TAXES	(4,138		)	5,012			(9,931		)
Income tax benefit	—			—			103
NET (LOSS) INCOME	$	(4,138	)	$	5,012		$	(9,828	)

See notes to consolidated financial statements.

F-3

JACOBS ENTERTAINMENT, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDER’S EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2008, 2007 and 2006

(Dollars in thousands)

	Common Stock				Additional			Retained Earnings			Accumulated Other
	Class A Shares	Class B Shares	Amount*		Paid-in Capital			(Accumulated Deficit)			Comprehensive Income (Loss)			Total
BALANCES, JANUARY 1, 2006	1,320	180	$	—	$	57,039		$	14,083					$	71,122
Capital contribution					6,276									6,276
Distributions					(27,704		)	(6,501		)				(34,205		)
Comprehensive income (loss):
Change in fair value of equity securities available-for-sale											$	1,999		1,999
Net loss								(9,828		)				(9,828		)
Total comprehensive loss														(7,829		)
BALANCES, DECEMBER 31, 2006	1,320	180	$	—	$	35,611		$	(2,246	)	$	1,999		$	35,364
Capital contribution					8,910									8,910
Distributions					(12,470		)	(3,973		)				(16,443		)
Comprehensive income (loss):
Change in fair value of equity securities available-for-sale											(4,418		)	(4,418		)
Net income								5,012						5,012
Total comprehensive income														594
BALANCES, DECEMBER 31, 2007	1,320	180	$	—	$	32,051		$	(1,207	)	$	(2,419	)	$	28,425
Distributions					(1,800		)							(1,800		)
Comprehensive income (loss):
Change in fair value of equity securities (Note 6)											2,419			2,419
Net loss								(4,138		)				(4,138		)
Total comprehensive loss														(1,719		)
BALANCES, DECEMBER 31, 2008	1,320	180	$	—	$	30,251		$	(5,345	)	$	—		$	24,906

*The par value amount of Jacobs Entertainment, Inc. common stock outstanding for the periods presented is less than $500 and is therefore presented as $0 above due to rounding.

See notes to consolidated financial statements.

F-4

JACOBS ENTERTAINMENT, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2008, 2007 and 2006

(Dollars in thousands)

	2008			2007			2006
OPERATING ACTIVITIES:
Net (loss) income	$	(4,138	)	$	5,012		$	(9,828	)
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization	19,935			18,104			14,105
Goodwill impairment	199			—			—
Loss on change in fair value of investment in equity securities	6,577			—			—
Loss (gain) on sale of equipment	240			(115		)	201
Deferred financing cost amortization and write-off	1,481			1,510			7,508
Note issue discount amortization and write-off	—			—			2,189
Note issue premium amortization and write-off	—			—			(1,811		)
Noncash abandonment costs	782			—			—
Other	(75		)	55			385
Changes in operating assets and liabilities, net of acquisitions:
Restricted cash	(25		)	(447		)	564
Accounts receivable, net	642			1,137			(1,737		)
Inventory	(93		)	(608		)	(250		)
Prepaid expenses and other assets	11			172			(233		)
Accounts payable and accrued expenses	524			2,584			2,886
Gaming taxes payable	(84		)	74			39
Interest payable	(35		)	(271		)	(6,817		)
Due from/to affiliate	(385		)	1,926			(2,589		)
Net cash provided by operating activities	25,556			29,133			4,612
INVESTING ACTIVITIES:
Additions to property, plant and equipment	(17,178		)	(28,296		)	(24,357		)
Proceeds from sale of equipment	370			280			72
Purchase of device rights	(900		)	(1,002		)	(868		)
Purchase of available-for-sale securities	—			—			(7,943		)
Acquisitions, net of cash acquired:
Casino	—			—			(14,702		)
Truck stops	—			(4,234		)	(6,250		)
Net cash used in investing activities	(17,708		)	(33,252		)	(54,048		)
FINANCING ACTIVITIES:
Proceeds from note issuance	—			—			210,000
Payments to obtain financing	—			(342		)	(10,415		)
Proceeds from long-term debt	—			—			60,000
Proceeds from revolving line of credit	20,038			38,500			26,461
Capital contributions from stockholders	—			—			591
Payments on long-term debt (including $19,489 paid to related parties in 2006)	(1,693		)	(1,494		)	(172,480		)
Payments on revolving line of credit	(27,000		)	(15,000		)	(31,051		)
Distributions to stockholders	(1,800		)	(17,443		)	(33,205		)
Net cash (used in) provided by financing activities	(10,455		)	4,221			49,901
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(2,607		)	102			465
CASH AND CASH EQUIVALENTS—Beginning of year	24,397			24,295			23,830
CASH AND CASH EQUIVALENTS—End of year	$	21,790		$	24,397		$	24,295
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest (including $768 paid to related parties in 2006), net of amounts capitalized	$	26,130		$	27,613		$	31,085
Non-cash investing and financing activities:
Capital contribution exchanged for retirement of note paid by affiliate	$	—		$	8,910		$	5,685
Non-cash additions to property	$	988		$	2,386		$	5,374
Acquisition of property under capital lease agreements	$	—		$	40		$	287
Distributions payable	$	—		$	—		$	1,000

See notes to consolidated financial statements.

F-5

JACOBS ENTERTAINMENT, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2008 AND 2007, AND FOR THE
YEARS ENDED DECEMBER 31, 2008, 2007 and 2006
(Dollars in thousands)

1.BUSINESS AND ORGANIZATION

Jacobs Entertainment, Inc. (“JEI,” the “Company,” “us,” “our,” or “we”) was formed on April 17, 2001, as a Subchapter S Corporation under the Internal Revenue Code of 1986, as amended, to become a geographically diversified gaming and pari-mutuel wagering company with properties in Colorado, Nevada, Louisiana, and Virginia.  We are a wholly-owned subsidiary of Jacobs Investments, Inc. (“JII”).  Effective October 1, 2008, 80% of the Class A shares of JII are owned by Jeffrey P. Jacobs, our Chief Executive Officer, and two of his family trusts, and 20% of the Class A shares are owned by an irrevocable trust established by his father, Richard E. Jacobs, of which Jeffrey P. Jacobs is the sole trustee.  Additionally, Jeffrey P. Jacobs’ family trusts own all 180 outstanding shares of JII’s Class B common stock.  These persons and their affiliates are referred to herein as “Jacobs.”  As of December 31, 2008, we own and operate five casinos through wholly-owned subsidiaries.  Our casinos include The Lodge Casino at Black Hawk (“The Lodge”) and the Gilpin Hotel Casino (“Gilpin”), both in Black Hawk, Colorado, the Gold Dust West Casino (“Gold Dust West-Reno”) in Reno, Nevada, the Gold Dust West-Carson City (“Gold Dust West-Carson City”) in Carson City, Nevada and the Gold Dust West-Elko (“Gold Dust West-Elko”) in Elko, Nevada, which opened on March 5, 2007.  JEI also owns and operates 18 truck plaza video gaming facilities in Louisiana, which are collectively referred to as “Jalou,” “truck stops” or “truck plazas.”  We also receive a percentage of gaming revenue from an additional truck plaza video gaming facility.  Finally, JEI owns and operates a horse racing track with eight satellite wagering facilities in Virginia through a wholly-owned subsidiary, Colonial Holdings, Inc. (“Colonial”).

On June 16, 2006, we acquired three truck plaza video gaming facilities, land and equipment in Louisiana; and on September 4, 2007, we acquired one additional truck plaza video gaming facility in Louisiana, all of which were previously owned by Jacobs.  The purchases of these truck plaza video gaming facilities were accounted for as combinations of entities under common control.  Our 2007 and 2006 financial statements were previously adjusted to include the operations of these truck plaza acquisitions from January 1, 2006 to their respective acquisition dates.  Additionally, on April 1, 2008, we acquired one of the Nautica parcels (see Note 7) referred to as “Lot D.”  The company that owned this parcel of land and parking lot business was wholly owned by our Chairman and Chief Executive Officer. The purchase of this parking lot business was accounted for as a combination of entities under common control.  Accordingly, the accompanying consolidated financial statements have been retroactively adjusted to include the operations of Lot D from January 1, 2006.  See Note 4 below.

2.SIGNIFICANT ACCOUNTING POLICIES

Consolidation—The accompanying consolidated financial statements include the accounts of JEI and its wholly-owned subsidiaries.  All intercompany transactions and balances have been eliminated in consolidation.

Cash and Cash Equivalents—We consider all demand deposits and time deposits with original maturities of three months or less to be cash equivalents.

Restricted Cash—Amounts due under agreements with the Virginia Horsemen’s Benevolent and Protective Association, Inc. and the Virginia Harness Horse Association are accrued based on the terms of the agreements.  Funds for purses for future live race meets are held in restricted cash accounts.

Accounts Receivable—Our accounts receivable balances primarily consist of receivables from convenience store fuel sales on account.  Generally, our receivables are collected within two months, and we have had

F-6

minimal bad debt losses.  We routinely assess the recoverability of all material receivables to determine their collectibility.

Inventory—Inventory consists of food and beverages and uniforms at the casinos and of fuel, convenience store, and restaurant items at Jalou’s truck stop operations, and is recorded at the lower of cost (first-in, first-out method) or market.

Property, Plant, and Equipment—Property, plant, and equipment are stated at historical cost.  Depreciation is computed using the straight-line method over the estimated useful lives of the related assets.  Leasehold improvements are depreciated, using the straight-line method, over the shorter of the lease term or the useful life of the asset.  Estimated useful lives used are as follows:

Land improvements	20-40 years
Buildings and improvements	5-40 years
Equipment, furniture and fixtures	2-20 years
Leasehold improvements	5-25 years

Costs of major improvements are capitalized, while costs of normal repairs and maintenance are charged to expense as incurred.  Gains or losses on disposal of assets are recognized as incurred.

Goodwill—Goodwill represents the excess purchase price over the fair value of the net identifiable assets acquired related to third party acquisitions.  See Notes 3 and 4.

Identifiable Intangible Assets—Identifiable intangible assets are comprised of revenue rights, device use rights associated with video poker machines used at each truck stop, and restriction agreements associated with certain Jalou truck stop acquisitions.  Revenue rights are amortized on a straight line basis over 50 years, representing the term of the related agreement.  Device use rights are amortized on a straight line basis over five years, representing the terms of the related agreements.  Restriction agreements are amortized on a straight line basis over five or ten years, representing the terms of the related agreements.

Capitalized Interest—Interest costs associated with major construction projects are capitalized.  When no debt is incurred specifically for a project, interest is capitalized on amounts expended for the project using our weighted average cost of borrowing.  Capitalization of interest ceases when the project or discernible portions of the project are substantially complete.  We amortize capitalized interest over the estimated useful life of the related asset.  Capitalized interest for the years ended December 31, 2008, 2007 and 2006 was $0, $159 and $154, respectively.

Debt Issue Costs—Debt issue costs that are incurred by us in connection with the issuance of debt are capitalized and amortized to interest expense, using the effective interest method, over the expected terms of the related debt agreements.

Investments in Equity Securities—Investments in equity securities are recorded at fair value and included in other noncurrent assets.  See Note 6.

Slot Club Liability—Our casinos offer customers the ability to become members in their respective slot clubs.  Once a member, the customer can insert a special card into slot and video poker machines while playing in our casinos to earn “points.”  Based on their point totals, members receive various cash rewards and gift prizes.  We accrue the cost of points as they are earned by the members of the slot clubs as a component of accounts payable and accrued expenses in the accompanying consolidated balance sheets.

Outstanding Gaming Chip and Token Liability—When customers exchange cash for gaming chips and tokens, we have a liability as long as those chips and tokens are not redeemed or won by the house.  That liability is established by determining the difference between the total chips and tokens placed in service and the actual inventory of chips and tokens in custody or under the control of the casinos.  The chip and token liability is adjusted periodically to reflect an estimate of chips and tokens that will never be redeemed, such as

F-7

chips and tokens that have been lost or taken as souvenirs and is reflected as a component of accounts payable and accrued expenses in the accompanying consolidated balance sheets.

Revenue—Casino—Casino revenues are the net winnings from gaming activities, which is the difference between gaming wins and losses.

Revenue—Truck Stop—Video poker revenue is the net winnings from gaming activities of our truck stops, which is the difference between gaming wins and losses.

Revenue—Pari-Mutuel—Pari-mutuel revenue includes our share of pari-mutuel wagering on live races after payments of amounts returned on winning wagers, and our share of wagering from import and export simulcasting at our racing centers.

Revenue—Food and Beverage—We recognize food and beverage revenue at the time that goods or services are rendered.

Revenue—Convenience Store—Fuel and Other—We recognize revenue at the time of sale for fuel and convenience-store items.

Revenue—Hotel—We recognize hotel revenue at the time rooms are provided to customers.

Revenue—Other—Other revenue consists of ATM commissions, cash advance commissions, miscellaneous vending commissions, rental income, admission charges, and program and concession sales at Colonial’s live racing events.  Other revenues are recognized at the time services are provided to patrons.

Promotional Allowances—Gross revenues include the retail amount of rooms, food and beverages, and other goods and services provided gratuitously to customers.  When computing net revenues, the retail amount of rooms, food and beverages and coupons, as well as slot club player point redemptions, is deducted from gross revenues as promotional allowances.  The estimated cost of such complimentary services in our casino operations for rooms, food, and beverages is charged to casino operations.  The estimated cost of such complimentary services in our truck stops related to video poker operations for food and beverages is charged to truck stop operations.  The estimated cost of such complimentary services in our truck stops related to fuel operations for food and beverages is charged to convenience store operations.  The estimated costs of complimentary services charged to casino operations, truck stop operations and convenience store operations, respectively, are as follows:

	Years Ended December 31
	2008		2007		2006
Casino operations	$	13,686	$	11,012	$	10,445
Truck stop operations	2,243		2,005		1,738
Convenience store operations	463		599		507

Comprehensive Income (Loss)—We account for comprehensive income (loss) in accordance with SFAS No. 130, Reporting Comprehensive Income, which established standards for the reporting and presentation of comprehensive income in our consolidated financial statements.  We present comprehensive income (loss) in our consolidated statements of stockholder’s equity.

Income Taxes—We have elected for income tax purposes to be treated as a Subchapter S Corporation under the Internal Revenue Code of 1986, as amended, and, consequently, no current or deferred income taxes have been reflected in the accompanying consolidated financial statements as these taxes are the responsibility of the stockholder.  See Note 13 for information relating to the income tax benefit for the year ended December 31, 2006.

Long-Lived Assets—We periodically evaluate the value of long-lived assets, including property, plant and equipment and identifiable intangibles, for potential impairment.  If an impairment is indicated, such impaired

F-8

assets are written down to their estimated fair value.  As of December 31, 2008 and 2007, we determined that there was no impairment of our long-lived assets other than those discussed in Notes 3 and 12.

Operating Segments—We have four reportable segments (Colorado, Nevada, Virginia, and Louisiana), as defined by SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information.  See Note 15.

Use of Estimates—The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

We periodically evaluate our policies, and the estimates and assumptions related to such accounting principles.  All of our subsidiary companies operate in a highly regulated industry.  Our operations are subject to regulations that describe and regulate operating and internal control procedures.  The majority of gaming revenue is in the form of cash which by nature does not require complex estimations.  We estimate certain liabilities with payment periods that extend for longer than several months.  Such estimates include the self-insured medical and workers compensation liabilities and litigation costs.  Furthermore, we believe that these estimates are reasonable based on past experience with the business and based upon assumptions related to possible outcomes in the future.  Actual results could differ from those estimates.

Furthermore, we have determined that the policies associated with our long-lived assets, goodwill and identifiable intangible assets, and related estimates are critical to the preparation of our consolidated financial statements.  We have a significant investment in long-lived property and equipment.  We estimate that the undiscounted future cash flows expected to result from the use of these assets exceeds the current carrying value of these assets.  Any adverse change to the estimate of these undiscounted cash flows could necessitate an impairment charge that would adversely affect operating results.  We estimate the useful lives for our assets based on historical experience, estimates of assets’ commercial lives, and the likelihood of obsolescence.  Should the actual useful life of a class of assets differ from the estimated useful life, we would record an impairment charge.

New Accounting Pronouncements—In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement No. 157, Fair Value Measurements (“SFAS 157”).  SFAS 157 establishes a single definition of fair value and a framework for measuring fair value, sets out a fair value hierarchy to be used to classify the source of information used in fair value measurements, and requires new disclosures of assets and liabilities measured at fair value based on their level in the hierarchy. SFAS 157 was effective for us on January 1, 2008. We partially adopted SFAS 157 as of January 1, 2008, pursuant to FASB Staff Position (“FSP”) No. FAS 157-2, Effective Date of FASB Statement No. 157, which delayed the effective date of SFAS 157 for all nonrecurring fair value measurements of nonfinancial assets and nonfinancial liabilities until fiscal years beginning after November 15, 2008. FSP No. FAS 157-2 states that a measurement is recurring if it happens at least annually and defines nonfinancial assets and nonfinancial liabilities as all assets and liabilities other than those meeting the definition of a financial asset or financial liability in SFAS 159.  The statement also notes that if SFAS 157 is not applied in its entirety, we must disclose: (1) that we have only partially adopted SFAS 157 and (2) the categories of assets and liabilities recorded or disclosed at fair value to which the statement was not applied.

We chose to adopt FSP No. FAS 157-2 as of January 1, 2008 and delay full application of SFAS 157.  Therefore, we did not apply SFAS 157 to nonrecurring fair value measurements of nonfinancial assets and nonfinancial liabilities, including nonfinancial long-lived assets measured at fair value for an impairment assessment under SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, and goodwill impairment assessment under SFAS No. 142, Goodwill and Other Intangible Assets. We are still required to apply SFAS 157 to recurring financial and non-financial instruments, which affects the fair value disclosure of our investment in equity securities.  See Note 6 for fair value disclosures.

F-9

In February 2007, the FASB issued Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilities — Including an amendment of FAS 115 (“SFAS 159”), which allows entities to choose at specified election dates, to measure eligible financial assets and liabilities at fair value that are not otherwise required to be measured at fair value. If a company elects the fair value option for an eligible item, changes in that item’s fair value in subsequent reporting periods must be recognized in current earnings.  SFAS 159 also establishes presentation disclosure requirements designed to draw comparison between entities that elect different measurement attributes for similar assets and liabilities.  SFAS 159 was effective for us on January 1, 2008. We adopted the fair value measurement provisions of SFAS 159 during the fourth quarter of 2008 for our investment in equity securities.  See Note 6 below.

In December 2007, the FASB issued Statement No. 141R, Business Combinations (“SFAS 141(R)”).  SFAS 141(R) establishes principles and requirements for how an acquirer in a business combination: (a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; (b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase option; and (c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination.  SFAS 141(R) is effective for all fiscal years beginning on or after December 15, 2008 and is to be applied prospectively.  Accordingly, any business combinations the Company engages in will be recorded and disclosed following existing accounting pronouncements until January 1, 2009. We expect SFAS 141(R) will have an impact on our consolidated results of operations, cash flows and financial position when effective, but the nature and magnitude of the specific effects will depend upon the nature, terms and size of the acquisitions we consummate after the effective date.

In May 2008, the FASB issued Statement No. 162, Hierarchy of Generally Accepted Accounting Principles (“SFAS 162”), which identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with GAAP in the United States (the GAAP hierarchy). The FASB does not expect that this statement will result in a change in current practice. SFAS 162 is effective for all pronouncement and applications of accounting principles issued after March 15, 1992. We have determined that the adoption of SFAS 162 did not have a material effect on our consolidated financial statements.

3.GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS

We test goodwill for impairment as of September 30 each year or when circumstances indicate it is necessary.  Testing compares the estimated fair values of our reporting units to the reporting units’ carrying value.  We consider a variety of factors when estimating the fair value of our reporting units, including estimates about the future operating results of each reporting unit, multiples of EBITDA, investment banker market analyses, and recent sales of comparable business units if such information is available to us.  A variety of estimates and judgments about the relevance and comparability of these factors to the reporting units are made.  As of September 30, 2008, we believe the carrying value of the goodwill in our Gold Dust West-Carson City reporting unit is impaired. Market conditions in 2008 resulted in Gold Dust West-Carson City not meeting the financial performance expectations originally forecast at the time of acquisition.  Consequently, Gold Dust West-Carson City recorded a goodwill impairment charge of $199 during the year ended December 31, 2008.  As a result of the impairment charge, the carrying amount of the Gold Dust West-Carson City goodwill was reduced to zero.

The changes in the carrying amount of goodwill for the years ended December 31, 2008 and 2007 are as follows:

	2008			2007
Balance as of beginning of year	$	46,670		$	44,016
Goodwill acquired during the year				2,654
Goodwill impairment during the year	(199		)
Balance as of end of year	$	46,471		$	46,670

F-10

In addition, we have assessed the useful lives of our identifiable intangible assets without any change to the previously established amortization periods of such assets.

Identifiable intangible assets as of December 31, 2008 and 2007 consist of the following:

	Weighted	2008						2007
	Average	Gross				Net		Gross				Net
	Remaining	Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
	Life	Amount		Amortization		Amount		Amount		Amortization		Amount
Amortizable intangible assets:
Revenue rights	43.00	$	6,000	$	840	$	5,160	$	6,000	$	720	$	5,280
Device use rights	2.32	8,820		5,393		3,427		7,982		4,638		3,344
Noncompete agreements	2.92	1,779		1,174		605		1,779		912		867
Total		$	16,599	$	7,407	$	9,192	$	15,761	$	6,270	$	9,491

Aggregate amortization expense of identifiable intangible assets was $1,398, $1,281, and $1,680 for the years ended December 31, 2008, 2007 and 2006, respectively.

Estimated amortization expense for the years ending December 31 (in thousands):

2009	$	1,531
2010	1,326
2011	781
2012	622
2013	314
Thereafter	4,618
Total	$	9,192

4.RECENT ACQUISITION ACTIVITY

Acquisition of St. Martin, Diamond and Magic

On June 16, 2006, with the proceeds of the refinancing occurring on the same date (see Note 5), we acquired from Jacobs, three truck plaza video gaming facilities for $14,380 and raw land and equipment for $620 to possibly develop a fourth truck plaza video gaming facility.  Two of the three truck plaza video gaming facilities acquired, Jalou Diamond and Jalou of St. Martin are located in Broussard, Louisiana, and the third facility, Jalou Magic, is located in Vinton, Louisiana.  The land and equipment on which we may develop a fourth truck plaza video gaming and/or hotel facility is also located in Vinton, Louisiana.  The acquisitions of the three truck plaza facilities, the raw land and equipment were accounted for as a combination of entities under common control, and as such are reflected for accounting and financial reporting purposes similar to a pooling of interests.  Therefore, the acquisitions have been recorded at Jacobs’ historical cost basis in the net assets transferred.

A distribution of $14,380 was recorded on the acquisition date.  The net assets of the entities acquired have been retroactively accounted for in JEI’s financial statements.  Therefore, an effective net distribution of $6,987 (the $14,380 distribution reduced by the $7,393 of net assets acquired) results from the transactions.

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The following table summarizes the net assets acquired and liabilities assumed as of June 16, 2006, for the transactions occurring on that date:

	St. Martin		Diamond		Magic		Total
Current assets	$	1,056	$	772	$	641	$	2,469
Property and equipment, net	1,622		1,113		1,688		4,423
Goodwill			628				628
Other assets	86		74		59		219
Identifiable intangible assets	195		127		83		405
Total assets acquired	2,959		2,714		2,471		8,144
Current liabilities assumed	191		384		176		751
Net assets acquired	$	2,768	$	2,330	$	2,295	$	7,393

Acquisition of Vinton

On June 21, 2006, we acquired from an unaffiliated party the Texas Pelican Truck Plaza (“Vinton”), in Vinton, Louisiana for $2,169, plus acquisition costs of $397.  Additionally, we entered into a lease covering the land, building, furniture, fixtures and equipment used by Vinton in the operation of its video gaming facility, the convenience store, and the food and beverage outlet.  The lease has a five year term with two five year extensions at the option of JEI.  Rentals under the lease are $480 per year for years one through five, $540 per year for years six through ten, and $600 per year for years eleven through fifteen.  JEI has the right to purchase the leased property for $5,000 during the first five year term reduced by a $100 option payment credit, and an $8 credit for each month in which rent has been paid with a maximum credit of $450 irrespective of the number of months paid.  After the first term and through all remaining terms, JEI has the right to purchase the leased property for $5,000, reduced by the $450 rent credit.

Under the purchase method of accounting, the total purchase price is allocated to Vinton’s tangible and intangible assets and liabilities based on their estimated fair value as of the acquisition date.  A valuation was completed to determine the fair values for property and equipment acquired.  Goodwill resulting from the Vinton transaction is attributable to anticipated future cash flows associated with the acquired entity. The following table summarizes the allocation of the purchase price to net assets acquired and liabilities assumed as of June 21, 2006, for the purchase of Vinton:

	Vinton
Property and equipment	$	255
Goodwill	2,277
Identifiable intangible assets	305
Total assets acquired	2,837
Current liabilities	61
Long-term liabilities	210
Total liabilities assumed	271
Net assets acquired	$	2,566

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Acquisition of Gold Dust West-Carson City

On June 25, 2006, we acquired the assets of the Piñon Plaza Resort (“Piñon Plaza”), a division of Capital City Entertainment, Inc. (“CCI”), an unaffiliated party.  In January 2007, we rebranded Piñon Plaza to Gold Dust West-Carson City.  Under the purchase method of accounting, the total purchase price is allocated to Gold Dust West-Carson City’s tangible and intangible assets and liabilities based on their estimated fair value as of the acquisition date.  A valuation was completed to determine the fair values for property and equipment acquired.  Goodwill resulting from the Gold Dust West-Carson City transaction is attributable to anticipated future cash flows associated with the acquired entity.

The assets purchased included all of the personal property, buildings and improvements used by Gold Dust West-Carson City in the operation of its casino, hotel, bowling alley and RV Park in Carson City, Nevada.  The purchase price for the assets was $14,500 plus $519 for cash on hand at closing and acquisition costs of $224.  Additionally, we entered into a triple net ground lease covering land underlying the assets which began at the closing date of the asset purchase.  The lessor is a family trust affiliated with CCI.  The operating lease has a ten year term with two ten year extensions at the option of JEI.  Rentals under the lease are $250 per year for years one through five, $300 per year for years six through ten, and a rate based on an appraisal performed by a Member of the Appraisal Institute (“MAI”) of the property during the first and second extension terms.  JEI has the right to purchase the leased land at an MAI appraised value at the end of the first ten year term.  It also has a right of first refusal should the lessor seek to sell the leased land to a third party.

The following table summarizes the allocation of the purchase price to net assets acquired and liabilities assumed as of June 25, 2006, for the purchase of Gold Dust West-Carson City:

	Gold Dust West- Carson City
Current assets	$	679
Property and equipment	14,500
Goodwill	199
Total assets acquired	15,378
Current liabilities assumed	135
Net assets acquired	$	15,243

Acquisition of St. Helena

On July 12, 2006, we acquired from an unaffiliated party the St. Helena Truck Plaza in Amite, Louisiana (“St. Helena”) which includes a truck plaza, convenience store, casino and food and beverage outlet operation for $3,094, plus $200 for cash on hand at closing, $90 for inventory and acquisition costs of $72.

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Under the purchase method of accounting, the total purchase price is allocated to St. Helena’s tangible and intangible assets and liabilities based on their estimated fair value as of the acquisition date.  A valuation was completed to determine the fair values for property and equipment acquired.  Goodwill resulting from the St. Helena transaction is attributable to anticipated future cash flows associated with the acquired entity. The following table summarizes the allocation of the purchase price to net assets acquired and liabilities assumed as of July 12, 2006, for the purchase of St. Helena:

	St. Helena
Current assets	$	290
Property and equipment	2,330
Goodwill	444
Identifiable intangible assets	395
Total assets acquired	3,459
Current liabilities	3
Net assets acquired	$	3,456

Acquisition of Silver Dollar

On October 4, 2006, we entered into an asset purchase agreement with an unaffiliated party to acquire the Silver Dollar truck plaza in Shreveport, Louisiana (“Silver Dollar”), which was under construction.  On January 15, 2007, we agreed with the seller to operate the business and simultaneously assume the terms of its land lease.  The land lease has an initial term of ten-years, which began July 1, 2005, with seven five-year extensions at the option of JEI.  Rentals under the lease increase throughout the initial term from $72 per year to $196 per year.  Rentals under the extension periods increase from $196 per year to $262 per year.  JEI has the right of first refusal to purchase the leased land should the lessor receive a bona-fide, arm’s length, good faith offer to purchase any or all of the real property and improvements from a third party.

On February 9, 2007, we began operating the convenience store and fuel operations and on March 29, 2007, we acquired Silver Dollar for $4,000 plus acquisition costs of $197.  The purchase agreement includes an “earn-out payment” (additional purchase price) to be determined and paid 19 calendar months after the video poker devices are legally operating at Silver Dollar.  The earn-out payment is based on 5.0 times annualized EBITDA of the truck stop, less the initial $4,000 purchase price paid, up to a maximum of $1,500 additional purchase price.

On September 18, 2007, Silver Dollar received approval from Louisiana gaming regulators to offer up to 50 video poker devices, and on September 28, 2007, we began operating 40 video poker devices. During the first quarter of 2008, we began operating 10 additional video poker devices for a total of 50 video poker devices.

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Under the purchase method of accounting, the total purchase price is allocated to Silver Dollar’s tangible and intangible assets and liabilities based on their estimated fair value as of the acquisition date.  A valuation was completed to determine the fair values for property and equipment acquired.  Goodwill resulting from the Silver Dollar transaction is attributable to anticipated future cash flows associated with the acquired entity.  The following table summarizes the allocation of the purchase price to net assets acquired as of March 29, 2007, for the purchase of Silver Dollar:

	Silver Dollar
Property and equipment	$	1,459
Goodwill	2,638
Identifiable intangible assets	100
Total assets acquired	$	4,197

Acquisition of Silver Fox

On September 4, 2007, with funds available on our revolving credit facility, we acquired from Gameco, the Silver Fox truck plaza video gaming facility for $13,794.  Silver Fox is located in Denham Springs, Louisiana.  The acquisition of the truck plaza facility was accounted for as a combination of entities under common control, and as such is reflected for accounting and financial reporting purposes similar to a pooling of interests.  Therefore, the acquisition has been recorded at Jacobs’ historical cost basis in the net assets transferred.

At January 1, 2007, Silver Fox’s debt outstanding totaled $9,021.  On September 4, 2007, with proceeds from the sale of Silver Fox, Jacobs repaid the outstanding principal and interest of $8,910.  The debt was not assumed by JEI and is reflected as a capital contribution in the statement of stockholder’s equity.

A distribution of $13,794 was recorded on the acquisition date. The net assets of the entity acquired have been retroactively accounted for in JEI’s financial statements.  Therefore, an effective net distribution of $2,339 (the $13,794 distribution reduced by the $11,455 of net assets acquired) results from the transaction.

The following table summarizes the net assets acquired and liabilities assumed as of September 4, 2007, for the Silver Fox acquisition:

	Silver Fox
Current assets	$	609
Property and equipment, net	2,743
Goodwill	7,342
Other assets	4
Identifiable intangible assets	1,004
Total assets acquired	11,702
Current liabilities assumed	247
Net assets acquired	$	11,455

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Acquisition of Nautica Lot D

As discussed further in Note 7, on April 1, 2008, we acquired Nautica Lot D (“Lot D”) for $800. The acquisition of Lot D and its parking lot business was accounted for as a combination of entities under common control.  Therefore, the acquisition has been recorded at Jacobs’ historical cost basis in the assets transferred.  Accordingly, the accompanying consolidated financial statements have been retroactively adjusted from January 1, 2006 to include the operations of the parking lot business as though the transaction had occurred at January 1, 2006.

A distribution of $800 was recorded on the acquisition date.  The net assets of the entity acquired have been retroactively accounted for in our financial statements.  Therefore, an effective net distribution of $669 (the $800 distribution reduced by the $131 of net assets acquired) results from the transaction.

The following table summarizes the net assets acquired and liabilities assumed as of April 1, 2008, for the Lot D acquisition:

	Lot D
Current assets	$	1
Property and equipment, net	143
Total assets acquired	144
Current liabilities assumed	13
Net assets acquired	$	131

Acquisition of Land in the Gulf Coast of Mississippi

During 2008, we completed several land purchase transactions with owners of real estate lots in the Gulf Coast of Mississippi, resulting in total purchases of $3,047, including acquisition costs of $246.  Additionally, during September 2008, we entered into two land purchase options totaling $160.  These land purchase options each have an initial term of one-year, expiring June 2009, with two one-year extensions at the option of JEI.  During November 2008, we entered into a third land purchase option totaling $100, expiring May 2009, with a one-year extension at the option of JEI. The total purchase price of all parcels under these three option agreements is $42,000.  During January 2009, we completed one additional land purchase transaction, resulting in a total purchase of $307, including acquisition costs of $7.

We are conducting due diligence on the lots and evaluating the feasibility of developing and constructing a mixed use project which may include a licensed gaming establishment, a hotel, restaurant, condominiums, retail development and parking facilities.  Furthermore, we have filed an application with Hancock County, Mississippi, to rezone property to waterfront district, as part of our plan to build a casino resort and hotel.  The project is subject to all necessary approvals from the Mississippi Gaming Commission as well as necessary financing.

Assuming the 2006 acquisitions of Vinton, Gold Dust West-Carson City and St. Helena had occurred as of January 1, 2006, combined unaudited proforma net revenues, costs and expenses, and net income (loss) for 2006 would have been as follows:

	2006
Net revenues	$	334,421
Costs and expenses	344,680
Net loss	$	(10,259	)

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There are no proforma effects from the Silver Dollar acquisition that occurred on March 29, 2007 since it was a newly constructed truck stop.

The proforma information for 2006 is not necessarily indicative of the results of operations that would have occurred had the acquisitions occurred at the beginning of each period presented, nor are they indicative of future operating results.

5.LONG-TERM DEBT

Long-term debt and capital lease obligations as of December 31, 2008 and 2007 consist of the following:

	2008			2007
9¾% Senior Unsecured Notes due 2014	$	210,000		$	210,000
Senior Secured Term Loan Facility due 2012	39,000			39,400
Senior Secured Delayed Draw Term Loan Facility due 2012	19,550			19,750
Senior Secured Revolving Credit Facility expiring 2011	16,537			23,500
Black Hawk Bonds Payable due 2011	1,525			2,484
Other Notes Payable — Colonial				40
Capital Leases	4,085			4,172
Total indebtedness	290,697			299,346
Less current indebtedness	(1,339		)	(1,301		)
Total long-term indebtedness	$	289,358		$	298,045

9¾% Senior Unsecured Notes due 2014 and Senior Secured Credit Facility

On June 16, 2006, we issued senior unsecured notes in the amount of $210,000 bearing interest at 9¾% due June 15, 2014 with interest only payments due each June 15 and December 15, beginning on December 15, 2006.  We also have a $100,000 senior secured credit facility consisting of: (i) a $40,000 five-year revolving credit facility; (ii) a $40,000 six-year term loan facility; and (iii) a $20,000 six-year delayed draw term loan.  Borrowings under our senior secured credit facility bear interest at a rate equal to an applicable margin plus, at our option, either (a) a base rate determined by reference to the higher of (1) the prime rate, as defined, and (2) the federal funds rate plus ½ of 1% or (b) a LIBOR rate for the interest period relevant to such borrowing adjusted for certain costs.  At December 31, 2008, the blended interest rate on our senior secured credit facility was approximately 3.30%. As of December 31, 2008, $23,463 was available on the revolving credit facility.  Proceeds from the senior unsecured notes and the term loan were used to (i) pay off $148,000 aggregate principal amount of our outstanding 117/8% senior secured notes due 2009, along with accrued and unpaid interest of $6,652 and to pay related tender and consent costs of $9,321, (ii) acquire the assets of Piñon Plaza (renamed Gold Dust West-Carson City) in Carson City, Nevada for a purchase price of $15,243 including acquisition costs (see Note 4), (iii) acquire three truck plazas and raw land in Louisiana from an affiliated party for $14,380 and $620, respectively (see Note 4), (iv) acquire two additional truck plazas for a purchase price of $2,566 and $3,456 including acquisition costs (see Note 4), (v) pay a distribution to our stockholders in connection with December 2005 truck plaza acquisitions of $8,825, (vi) pay a distribution to our stockholders of $10,000, (vii) refinance approximately $26,568 aggregate principal amount of existing indebtedness (including $19,489 of subordinated debt held by our stockholders), along with $840 accrued and unpaid interest, and (viii) pay related fees and expenses associated with the issuance of approximately $9,688.  Excess uses over the initial borrowings were paid from our cash.

Our $210,000 of 9¾% senior unsecured notes rank equally in right of payment with all of our existing and future unsecured senior indebtedness and senior to any existing and future subordinated indebtedness.  The notes are effectively subordinated to any secured indebtedness (including indebtedness under our senior credit facility) up to the value of the collateral securing such indebtedness.  The notes are guaranteed by our current

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and future restricted subsidiaries that also guarantee our senior secured credit facility.  Our $210,000 of outstanding senior unsecured notes cannot be redeemed until June 15, 2010. We can, however, with proceeds from an equity offering on more than one occasion redeem up to 35% of the aggregate principal amount of the notes at a redemption price of 109.75% of the principal amount thereof, plus accrued and unpaid interest.

There are many restrictions and covenants placed upon us under both our secured and unsecured indebtedness. We are required to maintain certain operating performance ratios, our covenants impose various restrictions on us as to the timing of redemptions of our notes, there are various change of control covenants, and there are many other restrictive and operational limitations on us that would be difficult or impossible for us to change. The occurrence of any one of these events and/or covenant violations to our debt agreements could have a material adverse effect on our business, financial condition, results of operations, prospects and ability to satisfy our obligations under our debt agreements.  Our failure to pay interest, repay our indebtedness when due, or maintain compliance with our debt covenants would result in an event of default under both our senior credit facility and our note indenture.

We entered into an amendment to our credit agreement which revised certain debt covenant ratios and became effective May 4, 2007.  The amendment increased the maximum permitted total leverage ratio, increased the maximum permitted senior secured leverage ratio, decreased the minimum interest coverage ratio and adjusted the test periods.  At December 31, 2008, we are in compliance with the revised financial covenants.

At March 31, 2009, certain debt covenants under our senior secured credit facility were to become more restrictive.   Subsequent to year-end, we entered into a second amendment to our credit agreement which became effective February 5, 2009.  The second amendment increased the maximum permitted senior secured leverage ratio and adjusted the test periods.

Black Hawk Bonds Payable due 2011

The Black Hawk bonds payable were issued in two series with interest payments varying between 6.25% and 6.50%.  Principal and interest payments totaling $368 are due semi-annually beginning in June 2000 and continuing until December 2011.  These bonds are secured by infrastructure improvements made by The Lodge.

Other Notes Payable — Colonial

A note payable to John Deere Credit, maturing October 2008, bearing interest at a rate of 2.25% payable monthly in equal installments of interest and principal beginning November 2003, is secured by the equipment purchased with the note.  This note was paid in full in 2008.

Capital Leases

Gold Dust West-Elko has a capital lease on its building with interest and principal payments of $21 per month, maturing October 2010, with the right to extend the lease three times for five year intervals, or to purchase the land and building for $5,000 any time commencing with the day after the last day of the first year of the initial term through the end of the initial term, or for $5,398 at any time during the first renewal period.  The purchase option is no longer available after the first renewal period.  The effective interest rate is 16.9%.  Each lease renewal if elected will result in an increase in monthly payments based on a base index rate established with the August 2005 Consumer Price Index as published.

Colonial has a capital lease on the land for its satellite wagering facility in Vinton, Virginia, with interest and principal payments of $10 per month, maturing September 11, 2009, with the right to extend the term of the lease five times for five year intervals, or to purchase the land for $800 at any time after the term and first renewal period of the lease (after September 11, 2014).  The effective interest rate is 11.8%.  Each lease renewal if elected will result in an increase in monthly payments by 10% over the previous lease term.

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Colonial has a capital lease on the land and building for its satellite wagering facility in Martinsville, Virginia, with interest and principal payments of $8 per month, maturing June 1, 2010, with the right to extend the term of the lease four times for five year intervals, or to purchase the land and building for $700 at any time after the initial term of the lease (after June 1, 2010), with the purchase price increasing 8% with any successive renewal term. The effective interest rate is 10.3%.  Each lease renewal if elected will result in an increase in annual payments by $8 over the lease term.

Colonial has a capital lease on the land and building for its satellite wagering facility in Chesapeake, Virginia, with interest and principal payments of $6 per month until October 2010, then interest and principal payments of $7 per month until October 2015, with three renewal periods of five years each with monthly payments starting at $8 per month increasing to $11 per month.  The effective interest rate is 10.5% per annum.

Jalou has a capital lease on equipment at its truck plaza in Vinton, Louisiana, with interest and principal payments of $5 per month until May 2011, with two renewal periods of five years each with monthly payments starting at $6 per month increasing to $7 per month.  The effective interest rate is 9.75% per annum.

Finally, the Company has two capital leases for autos with combined interest and principal payments of $1 per month until May 2011.  The effective interest rates are approximately 6% per annum on each lease.

Scheduled maturities of long-term debt and capital lease obligations as of December 31, 2008, are as follows:

2009	$	1,339
2010	2,100
2011	17,442
2012	56,808
2013	67
Thereafter	212,941
Total	$	290,697

6.FAIR VALUE OF FINANCIAL INSTRUMENTS

Effective January 1, 2008, we adopted SFAS 157 for all financial and nonfinancial assets and liabilities measured at fair value on a recurring basis.  The statement establishes a framework for measuring fair value and requires enhanced disclosures about fair value measurements.  SFAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date.  The statement establishes market or observable inputs as the preferred sources of values, followed by assumptions based on hypothetical transactions in the absence of market inputs.  The statement establishes a hierarchy for grouping these assets and liabilities, based on the significance level of the following inputs:

·Level 1 — inputs are unadjusted quoted prices for identical assets or liabilities in active markets.

·Level 2 — inputs include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

·Level 3 — inputs are unobservable and considered significant to the fair value measurement.

A financial instrument’s categorization within the hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

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Investment in Equity Securities

During 2006, we acquired approximately three percent of the outstanding shares of MTR Gaming Group, Inc. (“MTR”), a publicly-traded gaming company. Our CEO, Jeffrey P. Jacobs, his father, as well as other entities affiliated with them, also invested in MTR, increasing their combined ownership to over 18% of the outstanding common shares of MTR, making the group MTR’s largest shareholder. Effective May 6, 2008, our CEO was appointed to the Board of Directors of MTR, and effective October 31, 2008, he was appointed Chairman and three of his nominees were added as Board members.  Through October 31, 2008, our investment in MTR was accounted for as an available-for-sale investment and was recorded at fair value and included in other noncurrent assets, with unrealized gains and losses recognized as accumulated other comprehensive income (loss).

During the fourth quarter of 2008, we determined that we and our affiliates had reached a level of significant influence on the operations of MTR because of the foregoing factors, which required us to account for our investment in MTR using the equity method of accounting.  Alternatively, we have elected the fair value option permitted by SFAS 159, and beginning November 1, 2008, we have recognized changes in the fair value of our investment in MTR as unrealized gains/losses in earnings based on its quoted market price.

The fair value of our investment in MTR is based entirely upon quoted market prices, which is a Level 1 input.  As of December 31, 2007, the fair value of our investment in MTR was $5,524 and unrealized losses included in accumulated other comprehensive loss totaled $2,419.  At June 30, 2008, we determined that the decline in fair value was deemed to be “other-than-temporary” due to a significant decline in the stock price of MTR over an extended period of time. Therefore, during the second quarter of 2008, we recorded an impairment of our investment in MTR totaling $4,063.  In addition, on October 31, 2008, prior to electing the fair value option available under SFAS 159, as discussed above, we recorded an additional “other-than-temporary” impairment charge of $1,700, due to the continuing decline in the stock price of MTR.  Subsequent to electing the fair value option for our investment in MTR, we recorded an additional unrealized loss on the change in the fair value of the investment totaling $814.  As of December 31, 2008, the fair value of our investment in MTR is $1,367.

Consistent with the requirements of SFAS 159 and Rule 4-08(g) of Regulation S-X of the Securities Exchange Act of 1934, following is summary level financial information of MTR as of December 31, 2008 and 2007 and for each of the three years in the period ended December 31, 2008:

	Years Ended December 31
	2008			2007			2006
Net revenues	$	470,851		$	415,846		$	297,780
Total operating expenses	432,686			389,268			268,800
(Loss) income from continuing operations	(15,278		)	(5,868		)	7,407
Net (loss) income	(17,711		)	(11,359		)	4,446

	As of December 31,
	2008		2007
Current assets	$	71,095	$	59,940
Noncurrent assets	$	456,615	$	551,380
Current liabilities	$	70,688	$	61,591
Noncurrent liabilities	$	361,419	$	437,277

Other Financial Instruments

The following disclosure of estimated fair value of our financial instruments has been determined using available market information and generally accepted valuation methodologies.  However, considerable judgment is required to interpret market data in order to develop the estimates of fair value.  Accordingly, the estimates herein are not necessarily indicative of the amounts we could realize in a current market exchange.

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The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

The estimated fair value of our financial instruments is as follows:

	2008				2007
			Estimated				Estimated
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Liabilities—Debt and capital lease obligations	$	290,697	$	187,491	$	299,346	$	285,965

The estimation methodologies utilized are summarized as follows:

Debt—The fair value of our variable rate debt is estimated to be equal to its carrying amount.  The fair value of our senior unsecured notes issued in 2006 is based upon quoted market rates.  The fair value of other fixed rate debt is estimated based on a discounted cash flow analysis, using the prevailing market interest rates for debt of similar dollar amount, maturity and risk.

The estimated fair value of our other financial instruments, such as cash and cash equivalents, accounts receivable and accounts payable, have been determined to approximate carrying value based on the short-term nature of those financial instruments.

7.RELATED PARTY TRANSACTIONS

In order to assist us in our efforts to research, develop, perform due diligence on and possibly acquire new gaming opportunities, we have an agreement with Jacobs Investments Management Co. Inc. (“JIMCO”), 82% of which is owned by Jeffrey P. Jacobs and the remaining 18% of which is owned in equal portions by two former directors of Colonial.  This agreement calls for $1,250 per year payable in two equal installments of $625 on January 1st and July 1st each year plus two and one-half percent (2.5%) of budgeted development costs for projects undertaken by us, if certain debt covenant ratios are met.  Totals incurred under this agreement with JIMCO were $1,340, $1,609 and $1,513 for the years ended December 31, 2008, 2007 and 2006, respectively.

We provide monthly management and accounting services for various truck stops owned by Jacobs.  Charges for these management services totaled $1,157, $1,035 and $302 for the years ended December 31, 2008, 2007 and 2006, respectively.  Additionally, we provide shared services such as a branded fuel card that can be used at the truck stops owned both by us and Jacobs, and repair parts purchased by Jacobs from us.  These transactions result in receivables from and payables to our affiliate.  As of December 31, 2008 and 2007, these transactions resulted in net payables to affiliate totaling $210 and $435, respectively.

During July 2006, we acquired from affiliated parties several options to lease and options to purchase six parcels of land and certain improvements on the west bank of the Cuyahoga River in Cleveland, Ohio. We refer to these properties, covering an aggregate of approximately 624,000 square feet of land (14.4 acres) and a building comprised of 47,380 square feet of net rentable space, as the Nautica Properties. The Nautica Properties currently require aggregate option payments totaling $200 per year.

During March 2008, we exercised our option to acquire one of these parcels referred to as “Lot D.”  On April 1, 2008, we purchased this parcel for $800.  The company that owned this parcel of land and parking lot business was wholly owned by our Chairman and Chief Executive Officer.  See Note 4 above.  Additionally, on January 15, 2009, we exercised our option to acquire one of these parcels referred to as “Sugar Warehouse,” and on January 21, 2009, we purchased this parcel for $2,575.  The company that owned this building was 29.5% owned by our Chairman and Chief Executive Officer and 70.5% owned by third parties. An affiliate (“Affiliate”) of our Chairman and Chief Executive Officer is the general partner and a limited partner of the seller, a limited partnership.  Of the net proceeds from the sale, the Affiliate received approximately $80 (subject to

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increase depending on tax adjustments) attributable to its partnership interests and repayment to the Affiliate of a $504 loan.

The option agreements give us the right until July 2010 to purchase one of the remaining parcels and the right to purchase or enter into long term leases on the remaining three parcels.  Our Chairman and Chief Executive Officer owns varying interests in three of the four remaining parcels.

Although we may elect not to exercise all the options unless casino gaming opportunities arise, we nonetheless have the right to acquire all or part of the Nautica Properties for other purposes. If casino gaming is not legalized but we decide to exercise our options, the aggregate purchase price would be approximately $3,000 for one of the parcels and the aggregate annual lease payments on the remaining three parcels would be approximately $355. If all four remaining parcels are purchased and none leased, the total purchase price would be $6,550, less any aggregate option payments previously made.  The purchase price and rent payments would be increased based on independent appraisals of the land and improvement values if, in the future, casino gaming were to become legalized in Ohio and a casino is licensed at Nautica.

8.COMMITMENTS AND CONTINGENCIES

Commitments

Colonial has entered into an agreement with a totalisator company which provides wagering services and designs, programs, and manufactures totalisator systems for our pari-mutuel wagering applications.  The basic terms of the agreement state that the totalisator company shall provide totalisator services to Colonial for all wagering held at Colonial’s facilities to 2012, and to provide replacement equipment for existing equipment, at a rate of .385% of handle up to $270,000 in handle.  Handle above $270,000 will be charged a rate of .345%.  The agreement also provides for a minimum charge per calendar year of $210.  In addition, Colonial had agreements with a company which provides broadcasting and simulcasting equipment and services.  The agreements for live racing broadcasting and simulcasting services at the horse racing track, and equipment leases at two of the satellite wagering facilities expired December 31, 2007.  We purchased the leased equipment at the two satellite wagering facilities and extended the agreement for live race broadcasting and simulcasting services for one year through December 31, 2008.  We intend to seek an additional extension to this agreement or seek an alternative vendor if terms cannot be reached. Total expense incurred for totalisator and broadcasting and simulcasting equipment was $930, $1,145, and $1,146 for the years ended December 31, 2008, 2007 and 2006, respectively.

The Interstate Horse Racing Act requires that we secure the consent of the Virginia Horsemen’s Benevolence and Protective Association (the “VaHBPA”) and the Virginia Harness Horse Association (“VHHA”) to the export simulcasting of races. These consents are usually contained in the agreement between each group and Colonial.  We have entered into an agreement with the VHHA that expires December 31, 2011.  Our agreement with the VaHBPA expired December 31, 2008.  We are currently negotiating a new contract with the VaHBPA.  In the event our VaHBPA agreement cannot continue to be renewed in the future, the Virginia Racing Commission could suspend our licenses to operate our racetrack and the satellite wagering facilities until an agreement is in place although it has not indicated that it will do so. Although it is difficult to predict the likelihood of such an event, closure of the satellite wagering facilities would be detrimental to the horsemen’s groups and Colonial since each horsemen’s group’s primary source of purse funds is its percentage of wagering at the satellite facilities.

Additionally, under Louisiana law, video poker machines must be owned by Louisiana residents. The Jalou truck plaza video gaming facilities pay a fee to the third party owner of the machines in order to maintain the machines used in our truck plaza operations, plus reimbursement for the owner’s licensing costs and various other expenses.  Total expense under these obligations was $1,273, $1,268 and $1,180 for the years ended December 31, 2008, 2007 and 2006, respectively.

F-22

Operating Leases

Our operating leases include various land and building leases for certain properties in Nevada, Louisiana and Virginia, leases for office space in Colorado, Louisiana, Virginia and Florida, as well as leases for automobiles and other property and equipment at all locations, expiring at various dates.  Total expense under these non-cancelable operating leases was $2,968, $2,948 and $2,359 for the years ended December 31, 2008, 2007 and 2006, respectively.

The future minimum commitments relating to JEI’s non-cancelable operating agreements and leases are as follows:

Years Ending December 31
2009	$	2,699
2010	2,551
2011	1,986
2012	1,793
2013	1,774
Thereafter	26,159
Total	$	36,962

Capital Leases

The following is an analysis of the leased property under capital leases:

Class of Property	2008			2007
Land	$	1,523		$	1,523
Buildings	2,095			2,095
Equipment and furniture and fixtures	255			255
Other	72			72
Less: accumulated depreciation	(398		)	(235		)
Total leased property under capital leases	$	3,547		$	3,710

As of December 31, 2008, the following is a schedule by years of future minimum lease payments under capital leases together with the net present value of the minimum lease payments:

Years Ending December 31
2009	$	622
2010	1,299
2011	520
2012	474
2013	474
Thereafter	5,748
Total future minimum lease payments	9,137
Less amount representing interest ranging from 6.3% to 16.9% per annum	5,052
Net present value of minimum lease payments	$	4,085

F-23

Contingencies

We are involved in routine litigation arising in the ordinary course of our business pertaining to workers compensation claims, equal opportunity employment issues, or guest injury claims.  All such claims are routinely turned over to our insurance providers.  None of the claims is expected to have a material impact on our financial position, results of operations or cash flows.  We believe these matters are covered by appropriate insurance policies.

9.COMMON STOCK

Effective January 31, 2007, we became a wholly-owned subsidiary of JII, which in turn was 50% owned by Jeffrey P. Jacobs, our Chief Executive Officer, and two of his family trusts, and 50% owned by a revocable trust and an irrevocable trust established by Richard E. Jacobs. On October 1, 2008, JII redeemed the shares owned by the Richard E. Jacobs Revocable Trust in exchange for a $5,200 promissory note from JII.  As a result, effective October 1, 2008, 80% of the Class A shares of JII are owned by Jeffrey P. Jacobs, our Chief Executive Officer, and two of his family trusts, and 20% of the Class A shares are owned by an irrevocable trust established by his father, Richard E. Jacobs, of which Jeffrey P. Jacobs is the sole trustee. Additionally, Jeffrey P. Jacobs and his family trusts own all 180 outstanding shares of JII’s Class B common stock.

10.EMPLOYEE BENEFIT PLANS

On January 1, 1997, the Gilpin Hotel Casino Employees’ 401(k) Plan (renamed Black Hawk Gaming & Development Company Inc.’s 401(k) Plan on March 31, 1999, further re-named Jacobs Entertainment, Inc.’s 401(k) plan on December 20, 2004) (the “Plan”) was organized and began accepting contributions on September 1, 1997. The Plan is a defined contribution plan covering eligible employees of JEI, The Lodge, the Gilpin, Gold Dust West-Reno, Gold Dust West-Carson City, Gold Dust West-Elko, Jalou and Colonial.  The Plan allows eligible employees to make tax-deferred contributions that are matched by us up to a specified level.  We contributed approximately $540, $412, and $357 to the Plan for the years ended December 31, 2008, 2007 and 2006, respectively.

11.CONSTITUTIONAL AMENDMENTS

During 2008, we provided financial support for a proposed constitutional amendment that would increase the types of games, wagering limits and hours of operation at Colorado casinos.  Colorado residents approved the proposed constitutional amendment on November 4, 2008.  The amendment was subsequently voted upon and approved by the residents of each of the three gaming towns in Colorado (Black Hawk, Central City and Cripple Creek).  The new gaming regulation, which will be effective on July 2, 2009 at Colorado casinos, allows for the introduction of craps and roulette, increases the maximum wager limit to one hundred dollars, allows 24-hour gaming operations, and sets a maximum gaming tax rate of 20%.  The Colorado Division of Gaming has commenced revisions of the Internal Control Minimum Procedures which will govern the procedures encompassing the new games, limits and hours.  For the year ended December 31, 2008, we funded a total of $1,371 in support of this amendment.

During 2006, we provided support for a proposed constitutional amendment in Ohio that would have allowed slot machines at the state’s seven existing racetracks and two locations in downtown Cleveland.  Ohio residents voted on the proposed constitutional amendment on November 7, 2006 and the amendment was not approved by voters.  For the year ended December 31, 2006, we funded a total of $3,255 in support of this amendment.

F-24

12.ABANDONMENT COSTS

On November 10, 2008, we closed one of our two satellite wagering facilities in Chesapeake, Virginia. We recorded an impairment of leasehold improvements at this location totaling $783 in the fourth quarter of 2008.  Additionally, we incurred costs for the termination of the operating lease and severance totaling $46 in the fourth quarter of 2008.

13.INCOME TAXES

On March 11, 2002, we received notice from the Internal Revenue Service asserting deficiencies in federal corporate income taxes for a subsidiary’s 1998 tax year.  The proposed adjustment related to the deductibility of depreciation taken against certain costs incurred by The Lodge to build and improve public assets.  During 2005, we settled this issue with the Internal Revenue Service and recorded a charge to earnings totaling $423.  During 2006, we received a tax refund of a portion of this charge totaling $103.

14.HURRICANE

During the third quarter of 2008, hurricanes Gustav and Ike struck certain of our Louisiana operations causing minimal damage.  Our damages totaled approximately $213.  We received insurance proceeds related to the damages totaling $462 during January and February 2009.

15.SEGMENT INFORMATION

Our Chief Executive Officer (“CEO”) is our chief operating decision maker. Our casino properties in Colorado (The Lodge and Gilpin casinos) and Nevada (the Gold Dust West-Reno, Gold Dust West-Carson City and Gold Dust West-Elko casinos) are managed by our Chief Operating Officer (“COO”) who is located in our Golden, Colorado corporate offices.  Further, our 19 video poker truck plaza operations are also managed by our COO.  Additionally, we have two Regional Vice Presidents who report to the COO and assist in managing these operations. Our COO reports to our President, who is also located in Golden, Colorado.  Our President reports directly to our CEO. Our Virginia racetrack and satellite wagering facilities are managed by our on-site President of Pari-Mutuel Operations, and he also reports directly to our CEO. Our management team conducts monthly video conferencing and teleconferencing calls with our CEO.

At December 31, 2008, 2007 and 2006, we have four segments representing the geographic regions of our operations. Each segment is managed separately because of the unique characteristics of its revenue stream and customer base.

We have aggregated our operations into the four segments based on similarities in the nature of the properties’ businesses, customers and regulatory environment in which each property operates. The Colorado segment consists of The Lodge and Gilpin casinos.  Our Nevada segment includes the Gold Dust West-Reno, Gold Dust West-Carson City and Gold Dust West-Elko casinos.  The Louisiana operations consist of our truck plaza/video poker facilities, and the Virginia segment consists of Colonial’s pari-mutuel operations and its satellite wagering facilities.

The accounting policies of the segments are the same as those described in Note 2.  The corporate adjustments, eliminations and other represent all other income and expenses, and are also presented. 

F-25

As of and for the Year Ended December 31, 2008

													Corporate
													Adjustments,
													Eliminations
	Colorado			Nevada			Louisiana			Virginia			and Other			Total
Revenues
Gaming
Casino	$	100,807		$	38,685											$	139,492
Truck stop							$	67,590								67,590
Pari-mutuel										$	38,657					38,657
Food and beverage	10,812			8,757			8,264			2,903						30,736
Convenience store — fuel							97,021									97,021
Convenience store — other							12,908									12,908
Hotel	1,946			2,155												4,101
Other	927			1,420			1,311			2,032			$	47		5,737
Total revenues	114,492			51,017			187,094			43,592			47			396,242
Less: Promotional allowances	(20,439		)	(8,286		)	(4,993		)							(33,718		)
Net revenues	$	94,053		$	42,731		$	182,101		$	43,592		$	47		$	362,524
Depreciation and amortization	$	6,823		$	6,032		$	4,219		$	2,114		$	747		$	19,935
Interest income	$	3		$	4		$	19		$	83		$	85		$	194
Interest expense, net of amounts capitalized	$	8,621		$	5,577		$	4,894		$	603		$	7,726		$	27,421
Net income (loss)	$	15,725		$	(5,357	)	$	12,594		$	(2,035	)	$	(25,065	)	$	(4,138	)
EBITDA(1)	$	31,166		$	6,248		$	21,688		$	599		$	(16,677	)	$	43,024
Goodwill	$	6,711		$	8,836		$	30,924								$	46,471
Identifiable intangible assets, net							$	9,192								$	9,192
Property, plant and equipment, net	$	90,574		$	44,241		$	40,517		$	64,106		$	5,169		$	244,607
Total assets	$	110,441		$	61,552		$	90,396		$	69,453		$	10,687		$	342,529
Long-term debt	$	85,655		$	61,556		$	51,174		$	5,644		$	85,329		$	289,358
Capital expenditures	$	5,348		$	5,138		$	2,561		$	781		$	3,350		$	17,178

F-26

As of and for the Year Ended December 31, 2007

													Corporate
													Adjustments,
													Eliminations
	Colorado			Nevada			Louisiana			Virginia			and Other			Total
Revenues:
Gaming
Casino	$	106,409		$	38,247											$	144,656
Truck stop							$	64,322								64,322
Pari-mutuel										$	41,309					41,309
Food and beverage	9,944			8,315			7,974			3,027						29,260
Convenience store — fuel							81,329									81,329
Convenience store — other							11,133									11,133
Hotel	1,939			2,476												4,415
Other	848			1,434			1,089			1,986			$	30		5,387
Total revenues	119,140			50,472			165,847			46,322			30			381,811
Less: Promotional allowances	(19,766		)	(7,410		)	(4,777		)							(31,953		)
Net revenues	$	99,374		$	43,062		$	161,070		$	46,322		$	30		$	349,858
Depreciation and amortization	$	6,172		$	5,313		$	3,848		$	2,065		$	706		$	18,104
Interest income	$	46		$	40		$	87		$	113		$	59		$	345
Interest expense, net of amounts capitalized	$	8,821		$	5,956		$	4,861		$	599		$	8,175		$	28,412
Net income (loss)	$	18,474		$	(5,592	)	$	10,677		$	(1,150	)	$	(17,397	)	$	5,012
EBITDA(1)	$	33,421		$	5,637		$	19,299		$	1,401		$	(8,575	)	$	51,183
Goodwill	$	6,711		$	9,035		$	30,924								$	46,670
Identifiable intangible assets, net							$	9,491								$	9,491
Property, plant and equipment, net	$	93,593		$	45,458		$	40,727		$	66,381		$	2,542		$	248,701
Total assets	$	114,615		$	64,430		$	92,650		$	71,991		$	12,229		$	355,915
Long-term debt	$	86,680		$	61,773		$	51,227		$	5,669		$	92,696		$	298,045
Capital expenditures	$	7,925		$	17,075		$	2,016		$	939		$	341		$	28,296

F-27

As of and for the Year Ended December 31, 2006

													Corporate
													Adjustments,
													Eliminations
	Colorado			Nevada			Louisiana			Virginia			and Other			Total
Revenues
Gaming
Casino	$	94,547		$	26,936											$	121,483
Truck stop							$	66,418								66,418
Pari-mutuel										$	39,787					39,787
Food and beverage	9,997			4,953			7,296			2,823						25,069
Convenience store — fuel							77,520									77,520
Convenience store — other							10,611									10,611
Hotel	1,887			1,622												3,509
Other	827			705			948			1,939			$	32		4,451
Total revenues	107,258			34,216			162,793			44,549			32			348,848
Less: Promotional allowances	(17,698		)	(4,806		)	(3,934		)							(26,438		)
Net revenues	$	89,560		$	29,410		$	158,859		$	44,549		$	32		$	322,410
Depreciation and amortization	$	5,535		$	2,266		$	3,712		$	2,069		$	523		$	14,105
Interest income	$	47		$	49		$	121		$	78		$	87		$	382
Interest expense, net of amounts capitalized	$	13,141		$	4,771		$	4,484		$	627		$	9,630		$	32,653
Income tax benefit													$	103		$	103
Net income (loss)	$	8,487		$	(416	)	$	15,037		$	(1,755	)	$	(31,181	)	$	(9,828	)
EBITDA(1)	$	27,116		$	6,572		$	23,112		$	863		$	(21,218	)	$	36,445
Goodwill	$	6,711		$	9,013		$	28,292								$	44,016
Identifiable intangible assets, net							$	9,653								$	9,653
Property, plant and equipment, net	$	91,557		$	36,973		$	39,739		$	67,717		$	2,893		$	238,879
Total assets	$	111,909		$	53,551		$	92,153		$	73,785		$	19,432		$	350,830
Long-term debt	$	87,255		$	62,191		$	47,754		$	5,727		$	81,540		$	284,467
Capital expenditures	$	7,473		$	10,151		$	2,277		$	1,919		$	2,537		$	24,357

(1)EBITDA (earnings before interest, income taxes, depreciation and amortization) is presented as supplemental information in the tables above as it is a key measure of operating performance used by our chief operating decision maker.  EBITDA can be reconciled directly to our consolidated net income (loss) by adding the amounts shown for depreciation, amortization, income taxes and interest to net income (loss).  This information should not be considered as an alternative to any measure of performance as promulgated under accounting principles generally accepted in the United States of America, such as net income (loss), nor should it be considered as an indicator of our overall financial performance.  Our calculation of EBITDA may be different from the calculation used by other companies and comparability may be limited.  Management believes that presentation of a non-GAAP financial measure such as EBITDA is useful because it allows holders of our debt and management to evaluate and compare our operating results from continuing operations from period to period in a meaningful and consistent manner in addition to standard GAAP financial measures.  Management internally evaluates the performance of our segments using EBITDA measures as do most analysts following the gaming industry.  EBITDA is also a key component of certain financial covenants in our debt agreements.

F-28

16.CONDENSED CONSOLIDATING FINANCIAL INFORMATION

On June 16, 2006, we completed a debt refinancing in the form of secured and unsecured indebtedness.  The secured portion of our indebtedness, which was with a bank syndicate group, consists of a $100,000 senior secured credit facility comprising: (1) a $40,000 six-year term loan facility; (2) a $40,000 five-year revolving credit facility; and (3) a $20,000 six-year delayed draw term loan facility.  The unsecured portion of our debt is in the form of $210,000 of 9¾% unsecured senior notes.  The senior secured credit facility and the unsecured senior notes are both guaranteed by our current and future restricted subsidiaries.  Each subsidiary guarantor is 100% owned by the parent company, all guarantees are full and unconditional and joint and several, and all subsidiaries of JEI guarantee the securities.

The following information sets forth our Condensed Consolidating Balance Sheets as of December 31, 2008 and 2007, and the Condensed Consolidating Statements of Operations and the Condensed Consolidating Statements of Cash Flows for the three years ended December 31, 2008 as required by Rule 3-10 of Regulation S-X of the Securities Exchange Act of 1934, as amended.  Investments in our subsidiaries are accounted for on the equity method.  Accordingly, entries necessary to consolidate the Parent Company Issuer and our Subsidiary Guarantors are reflected in the eliminations column.

F-29

JACOBS ENTERTAINMENT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEETS

AS OF DECEMBER 31, 2008

	Parent
	Company			Subsidiary
	Issuer			Guarantors		Eliminations			Consolidated
ASSETS
Current assets	$	1,026		$	31,526				$	32,552
Property, plant and equipment, net	1,984			242,623					244,607
Net investment in and advances to subsidiaries	106,787					$	(106,787	)	—
Other long-term assets	4,255			61,115					65,370
Total assets	$	114,052		$	335,264	$	(106,787	)	$	342,529
LIABILITIES AND STOCKHOLDER’S EQUITY
Current liabilities	$	3,797		$	23,577				$	27,374
Long-term debt	284,511			4,847					289,358
Long-term debt (receivable from) payable to affiliate	(199,182		)	199,182					—
Other long-term liabilities	20			871					891
Stockholder’s equity	24,906			106,787		$	(106,787	)	24,906
Total liabilities and stockholder’s equity	$	114,052		$	335,264	$	(106,787	)	$	342,529

AS OF DECEMBER 31, 2007

	Parent
	Company			Subsidiary
	Issuer			Guarantors		Eliminations			Consolidated
ASSETS
Current assets	$	439		$	35,078				$	35,517
Property, plant and equipment, net	2,400			246,301					248,701
Net investment in and advances to subsidiaries	112,456					$	(112,456	)	—
Other long-term assets	9,247			62,450					71,697
Total assets	$	124,542		$	343,829	$	(112,456	)	$	355,915
LIABILITIES AND STOCKHOLDER’S EQUITY
Current liabilities	$	3,410		$	25,345				$	28,755
Long-term debt	292,078			5,967					298,045
Long-term debt (receivable from) payable to affiliate	(199,382		)	199,382					—
Other long-term liabilities	11			679					690
Stockholder’s equity	28,425			112,456		$	(112,456	)	28,425
Total liabilities and stockholder’s equity	$	124,542		$	343,829	$	(112,456	)	$	355,915

F-30

JACOBS ENTERTAINMENT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2008

	Parent
	Company			Subsidiary
	Issuer			Guarantors			Eliminations			Consolidated
Net revenues				$	362,549		$	(25	)	$	362,524
Costs and expenses	$	(17,450	)	(322,010		)	25			(339,435		)
Interest expense, net	(6,048		)	(21,179		)				(27,227		)
Equity in earnings of subsidiaries	19,360						(19,360		)
Net income (loss)	$	(4,138	)	$	19,360		$	(19,360	)	$	(4,138	)

FOR THE YEAR ENDED DECEMBER 31, 2007

	Parent
	Company			Subsidiary
	Issuer			Guarantors			Eliminations			Consolidated
Net revenues				$	349,908		$	(50	)	$	349,858
Costs and expenses	$	(9,328	)	(307,501		)	50			(316,779		)
Interest expense, net	(6,527		)	(21,540		)				(28,067		)
Equity in earnings of subsidiaries	20,867						(20,867		)
Net income (loss)	$	5,012		$	20,867		$	(20,867	)	$	5,012

FOR THE YEAR ENDED DECEMBER 31, 2006

	Parent
	Company			Subsidiary
	Issuer			Guarantors			Eliminations			Consolidated
Net revenues				$	322,435		$	(25	)	$	322,410
Costs and expenses	$	(12,441	)	(278,333		)	25			(290,749		)
Interest expense, net	(7,953		)	(24,318		)				(32,271		)
Pre-payment penalties, tender and consent costs	(9,321		)							(9,321		)
Equity in earnings of subsidiaries	19,784						(19,784		)
Income (loss) before income taxes	(9,931		)	19,784			(19,784		)	(9,931		)
Income tax benefit	103									103
Net income (loss)	$	(9,828	)	$	19,784		$	(19,784	)	$	(9,828	)

F-31

JACOBS ENTERTAINMENT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2008

	Parent
	Company			Subsidiary
	Issuer			Guarantors			Eliminations	Consolidated
Net cash provided by operating activities	$	20,504		$	5,052		$	$	25,556
INVESTING ACTIVITIES:
Additions to property, plant and equipment	(301		)	(16,877		)		(17,178		)
Proceeds from sale of equipment				370				370
Purchase of device rights				(900		)		(900		)
Net cash used in investing activities	(301		)	(17,407		)		(17,708		)
FINANCING ACTIVITIES:
Proceeds from revolving line of credit	20,038							20,038
Payments on long-term debt	(405		)	(1,288		)		(1,693		)
Payments on revolving line of credit	(27,000		)					(27,000		)
Net advances to/from subsidiaries	(10,784		)	10,784
Distributions to stockholders	(1,800		)					(1,800		)
Net cash (used in) provided by financing activities	(19,951		)	9,496				(10,455		)
Net Increase (Decrease) in Cash and Cash Equivalents	252			(2,859		)		(2,607		)
Cash and Cash Equivalents — Beginning of Year	235			24,162				24,397
Cash and Cash Equivalents — End of Year	$	487		$	21,303		$	$	21,790

F-32

JACOBS ENTERTAINMENT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2007

	Parent
	Company			Subsidiary
	Issuer			Guarantors			Eliminations	Consolidated
Net cash provided by operating activities	$	19,265		$	9,868		$	$	29,133
INVESTING ACTIVITIES:
Additions to property, plant and equipment	(322		)	(27,974		)		(28,296		)
Proceeds from sale of equipment	115			165				280
Purchase of device rights				(1,002		)		(1,002		)
Acquisitions of truck stops, net of cash acquired				(4,234		)		(4,234		)
Net cash used in investing activities	(207		)	(33,045		)		(33,252		)
FINANCING ACTIVITIES:
Payments to obtain financing	(342		)					(342		)
Proceeds from revolving line of credit	38,500							38,500
Payments on long-term debt	(608		)	(886		)		(1,494		)
Payments on revolving line of credit	(15,000		)					(15,000		)
Net advances to/from subsidiaries	(25,782		)	25,782
Distributions to stockholders	(17,443		)					(17,443		)
Net cash (used in) provided by financing activities	(20,675		)	24,896				4,221
Net (Decrease) Increase in Cash and Cash Equivalents	(1,617		)	1,719				102
Cash and Cash Equivalents — Beginning of Year	1,852			22,443				24,295
Cash and Cash Equivalents — End of Year	$	235		$	24,162		$	$	24,397

F-33

JACOBS ENTERTAINMENT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2006

	Parent
	Company			Subsidiary
	Issuer			Guarantors			Eliminations	Consolidated
Net cash (used in) provided by operating activities	$	(229	)	$	4,841		$	$	4,612
INVESTING ACTIVITIES:
Additions to property, plant and equipment	(2,537		)	(21,820		)		(24,357		)
Proceeds from sale of equipment				72				72
Purchase of device rights				(868		)		(868		)
Purchase of available-for-sale securities	(7,943		)					(7,943		)
Acquisitions, net of cash acquired:
Casino				(14,702		)		(14,702		)
Truck stops				(6,250		)		(6,250		)
Net cash used in investing activities	(10,480		)	(43,568		)		(54,048		)
FINANCING ACTIVITIES:
Proceeds from note issuance	210,000							210,000
Payments to obtain financing	(4,147		)	(6,268		)		(10,415		)
Proceeds from long-term debt	60,000							60,000
Proceeds from revolving line of credit	26,461							26,461
Capital contributions from stockholders				591				591
Payments on long-term debt	(148,200		)	(24,280		)		(172,480		)
Payments on revolving line of credit	(31,051		)					(31,051		)
Net advances to/from subsidiaries	(67,985		)	67,985
Distributions to stockholders	(33,205		)					(33,205		)
Net cash provided by financing activities	11,873			38,028				49,901
Net Increase (Decrease) in Cash and Cash Equivalents	1,164			(699		)		465
Cash and Cash Equivalents — Beginning of Year	688			23,142				23,830
Cash and Cash Equivalents — End of Year	$	1,852		$	22,443		$	$	24,295

******

F-34

EXHIBIT INDEX

Exhibit No.	Description
2.1(1)	Agreement and Plan of Merger dated as of April 25, 2001, among Black Hawk Gaming & Development Company, Gameco, Inc. and BH Acquisition, Inc.
2.2(1)	Amendment to Agreement and Plan of Merger dated as of November 12, 2001 among Black Hawk Gaming & Development Company, Inc., Gameco, Inc. and BH Acquisition, Inc.
2.3(1)	Exchange Agreement dated February 22, 2002 among Gameco, Inc., Jeffrey P. Jacobs and The Richard E. Jacobs Revocable Trust
2.4(1)	Agreement and Plan of Merger dated as of June 11, 2001 among Colonial Holdings, Inc., Gameco, Inc. and Gameco Acquisitions, Inc.
2.5(1)	Amendment to Agreement and Plan of Merger dated as of November 16, 2001 among Colonial Holdings, Inc., Gameco, Inc. and Gameco Acquisition, Inc.
2.6(1)	Agreement and Plan of Merger, dated February 22, 2002 between Gameco, Inc. and Jacobs Entertainment, Inc.
3.1(1)	Certificate of Incorporation of Gameco, Inc.
3.2(1)	By-Laws of Gameco, Inc.
3.3(1)	Articles of Incorporation of Black Hawk Gaming & Development Company, Inc.
3.4(1)	Bylaws of Black Hawk Gaming & Development Company, Inc.
3.5(1)	Articles of Incorporation of Gold Dust West Casino, Inc.
3.6(1)	Code of By-laws of Gold Dust West Casino, Inc.
3.7(1)	Articles of Organization of Black Hawk/Jacobs Entertainment, LLC
3.8(1)	Operating Agreement of Black Hawk/Jacobs Entertainment, LLC
3.9(1)	Joint Venture Agreement of Gilpin Hotel Venture
3.10(1)	Articles of Incorporation of Gilpin Ventures, Inc.
3.11(1)	By-Laws of Gilpin Ventures, Inc.
3.12(1)	Articles of Incorporation of Jalou II Inc. (merged out of existence on December 31, 2007)
3.13(1)	By-Laws of Jalou II Inc. (merged out of existence on December 31, 2007)
3.14(1)	Articles of Incorporation of Winner’s Choice Casino, Inc., now Cash Magic Winner’s Choice, LLC
3.15(1)	By-Laws of Winner’s Choice Casino, Inc., now Cash Magic Winner’s Choice, LLC
3.16(1)	Articles of Organization of Diversified Opportunities Group Ltd. (dissolved December 31, 2007)
3.17(1)	Articles of Organization of Jalou L.L.C. (dissolved December 31, 2007)
3.18(1)	Articles of Organization of Houma Truck Plaza & Casino, L.L.C.

E-1

3.19(1)	Articles of Organization of Jalou-Cash’s L.L.C.
3.20(1)	Articles of Incorporation of JACE, Inc. (converted to LLC, Exhibit 3.24)
3.21(1)	Articles of Organization of Lucky Magnolia Truck Stop and Casino, L.L.C.
3.22(1)	Articles of Organization of Bayou Vista Truck Plaza and Casino, L.L.C.
3.23(1)	Articles of Organization of Raceland Truck Plaza and Casino, L.L.C.
3.24(1)	Articles of Organization of JACE, LLC (duplicate of Exhibit 3.20).
3.25(2)	Certificate of Amendment of Certificate of Incorporation of Gameco, Inc.
3.26(2)	Amended and Restated Certificate of Limited Partnership of Colonial Downs, L.P.
3.27(2)	Limited Partnership Agreement of Colonial Downs, L.P.
3.28(2)	Amended and Restated Articles of Incorporation of Colonial Downs Holdings, Inc.
3.29(2)	Amendment to Articles of Incorporation of Colonial Downs Holdings, Inc.
3.30(2)	Bylaws of Colonial Downs Holdings, Inc.
3.31(2)	Articles of Incorporation of Stansley Racing Corp.
3.32(2)	Articles of Amendment to the Articles of Incorporation of Stansley Racing Corp.
3.33(2)	Bylaws of Stansley Racing Corp.
3.34(2)	Amended and Restated Operating Agreement of Diversified Opportunities Group Ltd.
3.35(2)	Amendment to the Operating Agreement of Black Hawk/Jacobs Entertainment, LLC
3.36(2)	Amendment to the Certificate of Incorporation of Gameco, Inc.
3.37(8)	Articles of Organization of Jalou Breaux Bridge, LLC dated January 29, 2003
3.38(8)	Articles of Organization of Jalou Eunice, LLC dated March 27, 2003
3.39(8)	Articles of Organization of Jalou of Jefferson, LLC dated September 23, 2003
3.40(10)	Certificate of Amendment of Certificate of Incorporation of Jacobs Entertainment, Inc. dated September 27, 2005
3.41(10)	Articles of Incorporation of Jacobs Piñon Plaza Entertainment, Inc. dated November 2, 2005
3.41A(12)	Bylaws of Jacobs Piñon Plaza Entertainment, Inc. dated November 8, 2005
3.42(12)	Articles of Organization of Fuel Stop 36, LLC dated August 24, 1989
3.43(12)	Articles of Organization of Jalou of Larose, LLC dated November 3, 2005, now Cash Magic Larose, LLC
3.44(12)	Articles of Incorporation of Jacobs Elko Entertainment, Inc.

E-2

3.45(12)	Bylaws of Jacobs Elko Entertainment, Inc.
3.46(12)	Articles of Organization of Jacobs Dakota Works, LLC
3.47(12)	Operating Agreement of Jacobs Dakota Works, LLC
3.48(12)	Articles of Organization of Jalou Diamond L.L.C.
3.49(12)	Limited Liability Company Agreement of Jalou Diamond L.L.C.
3.50(12)	Articles of Organization of Jalou Magic L.L.C. (nka Cash Magic Vinton, LLC)
3.51(12)	Limited Liability Company Agreement of Jalou Magic L.L.C. (nka Cash Magic Vinton, LLC)
3.52(12)	Articles of Organization of Jalou of Vinton-Bingo, LLC
3.53(12)	Limited Liability Company Agreement of Jalou of Vinton-Bingo, LLC
3.54(12)	Articles of Organization of Jalou of Vinton, LLC
3.55(12)	Limited Liability Company Agreement of Jalou of Vinton, LLC
3.56(12)	Articles of Organization of Jalou of St. Helena, LLC (nka Cash Magic St. Helena, LLC)
3.57(12)	Limited Liability Company Agreement of Jalou of St. Helena, LLC (nka Cash Magic St. Helena, LLC)
3.58(12)	Amended and Restated Articles of Incorporation of Jacobs Piñon Plaza Entertainment, Inc.
3.59(12)	Articles of Organization of Jalou of St. Martin, L.L.C.
3.60(12)	Limited Liability Company Agreement of Jalou of St. Martin, L.L.C.
3.61(12)	Limited Liability Company Agreement of Jalou L.L.C. (dissolved as of December 31, 2007)
3.62(12)	Operating Agreement of Houma Truck Plaza Stop and Casino, L.L.C.
3.63(12)	Limited Liability Company Agreement of Jalou-Cash’s L.L.C.
3.64(12)	Limited Liability Company Agreement of Lucky Magnolia Truck Stop and Casino, L.L.C.
3.65(12)	Limited Liability Company Agreement of Bayou Vista Truck Plaza and Casino, L.L.C.
3.66(12)	Limited Liability Company Agreement of Raceland Truck Plaza and Casino, L.L.C.
3.67(12)	Limited Liability Company Agreement of Jalou Breaux Bridge, LLC
3.68(12)	Limited Liability Company Agreement of Jalou of Eunice, LLC
3.69(12)	Limited Liability Company Agreement of Jalou of Jefferson, LLC
3.70(12)	Limited Liability Company Agreement of Jalou of Larose, LLC, now Cash Magic Larose, LLC
3.71(12)	Articles of Organization of Colonial Downs, LLC
3.72(12)	Operating Agreement of Colonial Downs, LLC

E-3

3.73(12)	Articles of Organization of JRJ Properties, LLC
3.74(12)	Limited Liability Company Agreement of JRJ Properties, LLC
3.75(12)	Articles of Organization of Virginia Concessions, LLC
3.76(12)	Amended and Restated Operating Agreement of Virginia Concessions, LLC
3.77A(12)	Articles of Amendment to the Articles of Incorporation of Old Dominion Racing Association, Inc.
3.77B(12)	Articles of Amendment to the Articles of Incorporation of Old Dominion Racing Association, Inc.
3.77C(12)	Articles of Amendment to the Articles of Incorporation of Old Dominion Jockey Club, Inc.
3.77D(12)	Articles of Amendment to the Articles of Incorporation of Maryland-Virginia Racing Circuit, Inc.
3.78(17)	Articles of Organization of Jalou Fox, LLC dated November 14, 2005.
3.79(17)	Limited Liability Company Agreement of Jalou Fox, LLC dated September 1, 2005.
3.80(19)	Articles of Organization of Jalou Silver Dollar, LLC.
3.81(19)	Limited Liability Company Agreement of Jalou Silver Dollar, LLC.
3.82(20)	Certificate of Incorporation of Jacobs Nautica Development, Inc.
3.83(20)	Bylaws of Jacobs Nautica Development, Inc.
3.84(22)	Certificate of Formation of Diamondhead Real Estate, LLC
3.85(22)	Limited Liability Company Agreement of Diamondhead Real Estate, LLC
3.86(22)	Articles of Organization of JEI Distributing, LLC
3.87(22)	Limited Liability Company Agreement of JEI Distributing, LLC
3.88(22)	Certificate of Incorporation of Jacobs Sugar Warehouse, Inc.
3.89(22)	Bylaws of Jacobs Sugar Warehouse, Inc.
4.1(13)	Trust Indenture Agreement by and between Jacobs Entertainment, Inc. and Wells Fargo Bank, as Trustee, dated June 16, 2006
4.2(13)	Registration Rights Agreement by and between Jacobs Entertainment, Inc. and Credit Suisse Securities (USA) LLC, CIBC World Markets Corp., Libra Securities, LLC, Wells Fargo Securities, LLC and KeyBanc Capital Markets, a Division of McDonald Investments Inc., as the initial purchasers, dated June 16, 2006
4.3(12)	Pledge Agreement dated as of June 16, 2006 by and among Jacobs Entertainment, Inc., Black Hawk Gaming & Development Company, Inc. and Credit Suisse, Cayman Islands Branch
4.4(12)	Guarantee Agreement dated as of June 16, 2006, by and among Jacobs Entertainment, Inc., certain of the subsidiaries of Jacobs Entertainment, Inc. and Credit Suisse, Cayman Islands Branch

E-4

4.5(12)	Security Agreement dated as of June 16, 2006, made by Jacobs Entertainment, Inc. and each of the guarantors listed on the signature pages or from time to time a party by execution of a joinder agreement, as pledgors, assignors and debtors in favor of Credit Suisse, Cayman Islands Branch, in its capacity as collateral agent for the Secured Parties pursuant to the Credit Agreement
4.6(12)	Contribution Agreement dated June 16, 2006, by and among Jacobs Entertainment, Inc. and affiliates of Jacobs Entertainment, Inc.
4.7(12)	Custodian Agreement dated as of June 16, 2006, by and between Dunham Trust Company, 1 East Liberty Street, Sixth Floor, Reno, NV 89504, as custodian, Credit Suisse, Cayman Islands Branch as Collateral Agent under the Credit Agreement, Jacobs Entertainment, Inc., as the Borrower under the Credit Agreement and Blackhawk Gaming & Development Company, Inc.
4.8(12)	Form of Jacobs Entertainment, Inc. 9.75% Rule 144A Global Note due 2014
4.9(12)	Form of Jacobs Entertainment, Inc. 9.75% Regulation S Global Note due 2014
4.10(12)	Form of Jacobs Entertainment, Inc. 9.75% IAI Global Note due 2014
4.11(12)	Intercompany Note dated as of June 16, 2006 by and among Jacobs Entertainment, Inc., and Credit Suisse, Cayman Islands Branch
4.12(12)	Purchase Agreement dated June 9, 2006 by and among Jacobs Entertainment, Inc. and Credit Suisse Securities (USA) LLC, on behalf of the purchasers of the $210,000,000 9.75% Senior Notes
4.13(12)	Pledge Agreement dated June 16, 2006 by and among Jacobs Entertainment, Inc., Black Hawk Gaming & Development Company, Inc. and Canadian Imperial Bank of Commerce, acting through its New York Agency
10.1(3)	Deed of Lease dated May 8, 2003 between Haynes Chippenham Plaza, LLC and Colonial Downs, L.P.
10.2(10)	Asset Purchase Agreement dated November 2, 2005 among Capital City Entertainment, Inc. and Jacobs Piñon Plaza Entertainment, Inc.
10.3(12)	Piñon Plaza Ground Lease dated June 26, 2006 by and between Clark G. Russell and Jean M. Russell, Trustees of The Clark and Jean Russell Family Trust and Jacobs Entertainment, Inc.
10.4(11)	Triple Net Lease dated November 14, 2005 among Route 225 Investments, LLC and Jacobs Entertainment, Inc.
10.5(13)	Ground Lease and Option Purchase Agreement dated September 12, 2005 between Dakota/Blackhawk, LLC and Jacobs Entertainment, Inc.
10.6(13)	Thoroughbred Horseman’s Agreement dated January 1, 2005 between Colonial Downs, L.P., Stansley Racing Corp. and The Virginia Horsemen’s Benevolent and Protective Association, Inc.
10.7(13)	Shopping Center Lease dated February 28, 2005 between Jay F. Wilks, Trustee under Indenture dated December 20, 1976 by and between Herbert Cashvan and Marvin Simon, as Settlors, and Jay F. Wilks as Trustee, and Colonial Downs, L.P.
10.8(12)	Standardbred Horsemen’s Contract effective March 1, 2006 among Colonial Downs L.P., Stansley Racing Corp. and The Virginia Harness Horse Association
10.9(12)	Membership Interests Purchase Agreement dated May 16, 2006 by and between Gameco Holdings, Inc. and Jacobs Entertainment, Inc.

E-5

10.10A(12)	Asset Purchase Agreement dated May 17, 2006 between Feliciana Ventures, Inc., Forest Gold Truck Plaza and Casino, L.L.C., St. Helena Express & Casino, L.L.C., Seabuckle Gaming, Inc., Janice M. Penn and Minnie L. Hughes, as Sellers, Claude M. Penn, Jr., and Gameco Holdings, Inc. as Purchaser. (Assigned as to St. Helena to Jacobs Entertainment, Inc.)
10.10B(12)	First Amendment to Asset Purchase Agreement dated July 12, 2006 between Feliciana Ventures, Inc., Forest Gold Truck Plaza and Casino, L.L.C., St. Helena Express & Casino, L.L.C., Seabuckle Gaming, Inc., Janice M. Penn and Minnie L. Hughes, as Sellers, Claude M. Penn, Jr., and Gameco Holdings, Inc. as Purchaser. (Assigned as to St. Helena to Jacobs Entertainment, Inc.)
10.11(14)	Credit Agreement by and between Jacobs Entertainment, Inc., Credit Suisse Securities (USA) LLC and CIBC World Markets Corp., as Joint Lead Arrangers and Joint Bookrunners, and CIBC World Markets Corp., as Syndication Agent, and Wells Fargo Bank, National Association, as Documentation Agent and Swingline Lender, and CIT Lending Services Corporation, as Documentation Agent, and Credit Suisse, Cayman Islands Branch, as Issuing Bank, Administrative Agent and Collateral Agent, dated June 16, 2006
10.12(12)	Consulting Agreement dated January 1, 2006 and amended June 16, 2006, by and among Jacobs Entertainment, Inc. and Jacobs Investments Management Co., Inc.
10.13(12)	Fourth Amendment to Option Purchase Agreement dated May 15, 2006 between Dakota/Blackhawk, LLC and Jacobs Entertainment, Inc.
10.14(12)	Option Agreement dated July 11, 2006 between Jacobs Entertainment, Inc. and Nautica Phase 2 Limited Partnership
10.15(12)	Option Agreement dated July 11, 2006 between Jacobs Entertainment, Inc. and Jacobs Lot D, Inc.
10.16(12)	Option Agreement dated April 18, 2006 between Jacobs Entertainment, Inc. and Flats Development, Inc.
10.17(12)	Option Agreement dated July 11, 2006 between Jacobs Entertainment, Inc. and Sycamore & Main, Inc.
10.18(12)	Option Agreement dated July 11, 2006 between Jacobs Entertainment, Inc. and Nautica Peninsula Land Limited Partnership
10.19(12)	Option Agreement dated July 11, 2006 between Jacobs Entertainment, Inc. and Sugar Warehouse Limited Partnership
10.20(12)	Lease and Option to Purchase Agreement dated June 21, 2006 by and between Curray Corporation, Texas Pelican, LLC and Jalou of Vinton, LLC
10.21(12)	Amendments to Thoroughbred Horsemen’s Agreements, dated May 11, 2006, by and between Colonial Downs, L.P. and The Virginia Horsemen’s Benevolent and Protective Association, Inc.
10.22(12)	Amendment to Standard Horsemen’s Agreements, dated May 26, 2006, by and between Colonial Downs, L.P. and The Virginia Harness Horse Association
10.23(16)	Executive Employment Agreement dated December 5, 2006 between Jacobs Entertainment, Inc. and Stephen R. Roark
10.24(16)	Executive Employment Agreement effective July 1, 2006 between Jacobs Entertainment, Inc. and Michael T. Shubic
10.25(16)	Executive Employment Agreement effective August 1, 2006 between Jacobs Entertainment, Inc. and Ian M. Stewart

E-6

10.26(16)	Executive Employment Agreement dated December 5, 2006 between Jacobs Entertainment, Inc. and Brett Kramer
10.27(16)	Executive Employment Agreement dated December 5, 2006 between Jacobs Entertainment, Inc. and Stanley Politano
10.28(17)	Membership Interests Purchase Agreement dated August 20, 2007 by and between Gameco Holdings, Inc. and Jacobs Entertainment, Inc.
10.28A(18)	Amendment No. 1 dated May 4, 2007 to Credit Agreement among Jacobs Entertainment, Inc. and various lenders
10.29(19)	Asset Purchase Agreement dated October 4, 2006 regarding the Silver Dollar Truck Plaza.
10.30(20)	Purchase Agreement dated March 14, 2008 regarding Jacobs Lot D, Inc.
10.31(21)	Amendment No. 2 dated February 5, 2009 to Credit Agreement among Jacobs Entertainment, Inc. and various lenders
12(22)	Computation of Ratio of Earnings to Fixed Charges.
14.1(19)	Code of Ethics (as revised).
21.2(22)	Subsidiaries of Jacobs Entertainment, Inc.
25.1(12)	Statement of Eligibility of Trustee on Form T-1
31.1(22)	Chief Executive Officer Certification under Section 302 of the Sarbanes-Oxley Act of 2002
31.2(22)	Chief Financial Officer Certification under Section 302 of the Sarbanes-Oxley Act of 2002
32.1(22)	Chief Executive Officer Certification under Section 906 of the Sarbanes-Oxley Act of 2002
32.2(22)	Chief Financial Officer Certification under Section 906 of the Sarbanes-Oxley Act of 2002

E-7

(1)	Incorporated hereby by reference from our registration statement on Form S-4 (SEC Registration No. 333-88242) filed on May 14, 2002.
(2)	Incorporated hereby by reference from Amendment No. 1 of our registration statement on Form S-4 (SEC Registration No. 333-88242) filed on August 8, 2002.
(3)	Incorporated hereby by reference from our Form 10-K filed on March 29, 2004.
(4)	Incorporated hereby by reference from our Form 10-K filed on March 31, 2003.
(5)	Incorporated by reference from our Form 10-Q filed August 13, 2004.
(6)	Incorporated hereby by reference from our Report on Form 8-K filed October 7, 2004.
(7)	Incorporated hereby by reference to Exhibits 2.01(a) and 2.01(b) from our Report on Form 8-K dated March 4, 2005.
(8)	Incorporated hereby by reference from our Form 10-K filed March 28, 2005.
(9)	Incorporated hereby by reference from our Report on Form 8-K filed on March 4, 2005.
(10)	Incorporated by reference from our Form 10-Q filed November 14, 2005.
(11)	Incorporated hereby by reference from our Report on Form 8-K filed on November 15, 2005.
(12)	Incorporated hereby by reference from our registration statement on Form S-4 (SEC Registration No. 333-136066) filed on July 27, 2006.
(13)	Incorporated hereby by reference from our Form 8-K filed on March 23, 2006.
(14)	Incorporated hereby by reference from our Form 8-K filed on June 22, 2006.
(15)	Incorporated hereby by reference from our Form 10-K filed on March 29, 2006.
(16)	Incorporated hereby by reference from our Form 8-K filed on December 8, 2006.
(17)	Incorporated hereby by reference from our Form 8-K filed on September 6, 2007.
(18)	Incorporated hereby by reference from our Form 8-K filed on May 10, 2007.
(19)	Incorporated hereby by reference from our Form 10-K filed on March 26, 2008.
(20)	Incorporated hereby by reference from our Form 10-Q filed on May 13, 2008.
(21)	Incorporated hereby by reference from our Form 8-K filed on February 6, 2009.
(22)	Filed herewith.

E-8

EX-3.84

Exhibit 3.84

State of Delaware

Secretary of State

Division of Corporations

Delivered 10:47 AM 04/03/2008

FILED 10:32 AM 04/03/2008

SRV 080389496 - 4528567 FILE

STATE of DELAWARE

LIMITED LIABILITY COMPANY

CERTIFICATE of FORMATION

First: The name of the limited liability company is Diamondhead Real Estate, LLC

Second: The address of its registered office in the State of Delaware is 1209 Orange Street in the City of Wilmington. Zip code 19801. The name of its Registered agent at such address is The Corporation Trust Company

Third: (Use this paragraph only if the company is to have a specific effective date of dissolution: “The latest date on which the limited liability company is to dissolve is                                           .”)

Fourth: (Insert any other matters the members determine to include herein.)

In Witness Whereof, the undersigned have executed this Certificate of Formation this 3rd day of April, 2008.

By:	/s/ James T. Milam
	Authorized Person (s)
Name:	James T. Milam

EX-3.85

Exhibit 3.85

LIMITED LIABILITY COMPANY AGREEMENT

OF

DIAMONDHEAD REAL ESTATE, LLC

The undersigned, the sole member of Diamondhead Real Estate, LLC, a Delaware limited liability company (the “Company”), does hereby execute this Limited Liability Company Agreement of the Company effective the 3rd day of April, 2008, under the name of the Company.  The Company was organized on April 3rd, 2008, under and pursuant to the provisions of the Delaware Limited Liability Company Act (as amended from time to time, the “Act”).

I

Office; Registered Agent

The registered office of the Company in the State of Delaware shall be located at The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801.  The registered agent of the Corporation in the State of Delaware is The Corporation Trust Company and the address of the registered agent of the Company in the State of Delaware is c/o The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801.

II

Purpose and Powers

The purpose for which the Company is organized is to conduct any lawful business purpose as set forth in Section 106 of the Act.  The Company shall have the power and authority to do all things necessary to carry out its purpose, including, without limitation, the powers set forth in Section 106 of the Act.

III

Duration of the Company

The Company shall commence immediately, upon the effective date of this Limited Liability Company Agreement, and shall continue in perpetuity thereafter unless terminated sooner by operation of law or by decision of the Member.

IV

Member

Jacobs Entertainment, Inc. shall be, and is, hereby admitted to the Company as the sole member of the Company (the “Member”).  The Member hereby authorizes James T. Milam to act as the Authorized Representative solely for purposes of forming this entity in Delaware and appointing the registered agent for service of process.  All actions taken and all things done and all expenditures made by the Authorized Representative of the Company in connection with its organization and qualification are hereby ratified, approved and confirmed in all respects.

V

Capital Contributions

The Member has contributed all of the capital of the Company and may in the future contribute any additional capital deemed necessary by the Member for the operation of the Company.  The Member owns a 100% undivided Membership Interest in the Company.  The Member may loan funds to the Company on such terms and conditions as the Member may desire.  All capital contributions and loans made by the Member and any future Members shall be recorded on the books and records of the Company.

VI

Management

The Company shall be managed by a Manager, which need not be a Member of the Company.  The Manager shall be responsible for the establishment of Company procedures respecting the business affairs of the Company and the day-to-day operation of the Company’s business.  The Manager shall be authorized to carry out all day-to-day activities related to any and all business of the Company.  The Manager shall have the power and authority to take any actions not prohibited under the Act or which are otherwise conferred or permitted by law, which he believes are necessary, proper, advisable or convenient to the discharge of his duties under this Limited Liability Company Agreement or applicable law to conduct the business and affairs of the Company, including, but not limited to, the power and authority to execute agreements and other documents on behalf of the Company.

Lew Humphrey is hereby appointed as Manager of the Company.  The Manager may be removed at any time, with or without cause, by the Member.  The Manager may resign at any time by giving written notice to the Member (the “Resignation Notice”).  The resignation of the Manager shall take effect thirty (30) days after the Resignation Notice is given or at such earlier time as accepted by the Member; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.  If a Manager shall die, be adjudged incompetent, dissolve, refuse to serve, be removed or resign, or if no one is serving as Manager for any reason, then a new Manager shall be elected by the Member.

VII

Indemnification

The Company shall indemnify and hold harmless the Member, the Manager and any officer, and may indemnify and hold harmless any employee or agent of the Company, from and against any and all claims and demands whatsoever to the full extent permitted by the Act. Any indemnity will be paid from, and only to the extent of, assets of the Company.  The indemnification provided by this Article VII shall not be deemed exclusive of any other limitation on liability or rights to which those seeking indemnification may be entitled under any statute, agreement, vote of the Member or otherwise.

2

VIII

Banking

All funds of the Company shall be deposited in one or more Company checking accounts as shall be designated by the Manager, and the Manager or his designee is authorized to sign any such checks or withdrawal forms.

Company is and the Manager is authorized and directed to open one or more bank accounts in the name of and on behalf of the Company in such bank or banks or trust company or trust companies as the Manager may select and to prepare, execute and deliver in the name of and on behalf of the Company such documents or instruments as may be necessary to open such account or accounts, and if in connection with the foregoing any particular form of resolution shall be required, such resolution shall be deemed hereby adopted, provided that a copy of such resolution shall be inserted in the minute book of the Company.

IX

Books

The Company books shall be maintained at the principal office of the Member, which may or may not be located in the State of Delaware.  The books shall be kept on a calendar year basis, and shall be closed and balanced at the end of each such calendar year.

X

Authorization to Qualify to do Business as Foreign Limited Liability Company

The Manager is hereby authorized, where it is necessary or expedient for the Company to transact business, to appoint and substitute all necessary agents or attorneys for service of process, to designate and change the location of all necessary statutory offices and to execute and file all necessary certificates, reports, powers of attorney and other instruments as may be required by the laws of such state, territory, dependency or country to authorize the Company to transact business therein, and whenever it is expedient for the Company to cease doing business therein and withdraw therefrom, to revoke any appointment of agent or attorney for service of process, and to execute and file such certificates, reports, revocations of appointment or surrenders of authority as may be necessary to terminate the authority of the Company to do business in any such state, territory, dependency or country.

XI

Transfers of Interests in the Company

Interests in the Company shall be freely transferable.

IN WITNESS WHEREOF, the Member has hereunto set its hand effective the day and year first above written.

JACOBS ENTERTAINMENT, INC.

   /s/ Stanley Politano

By:  Stanley Politano

Its:   Executive Vice President

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EX-3.86

Exhibit 3.86

As Secretary of State, of the State of Louisiana, I do hereby Certify that

a copy of the Articles of Organization and Initial Report of

JEI DISTRIBUTING, LLC

Domiciled at LAFAYETTE, LOUISIANA,

Was filed and recorded in this office on November 12, 2008,

And all fees having been paid as required by law, the limited liability company is authorized to transact business in this State, subject to the restrictions imposed by law, including the provisions of R.S. Title 12, Chapter 22.

In testimony whereof, I have hereunto set my hand and caused the Seal of my Office to be affixed at the City of Baton Rouge on, November 12, 2008
/s/Jay Dardenne
ATH   36891671K
Secretary of State

CERTIFICATE SS 102 PRINTED SEAL (Rev. 11/06)

Jay Dardenne
Secretary of State	ARTICLES OF ORGANIZATION
	(R.S. 12:1301)
	Domestic Limited Liability Company Enclose $75.00 filing fee Make remittance payable to Secretary of State Do not send cash	Return to:	Commercial Division P. O. Box 94125 Baton Rouge, LA 70804-9125 Phone (225) 925-4704 Web Site: www.sos.louisiana.gov

STATE OF Ohio

PARISH/COUNTY OF Cuyahoga

1.  The name of this limited liability company is :  JEI Distributing, LLC

2.  This company is formed for the purpose of:  (check one)

x	Engaging in any lawful activity for which limited liability companies may be formed.
o
	(use for limiting activity)

3.  The duration of this limited liability company is : (may be perpetual) Perpetual

4.  Other provisions:

		Signatures
JAY DARDENNE			/s/ Christopher S.W. Blake
SECRETARY OF STATE			Christopher S.W. Blake, Esq., Authorized Representative
RECEIVED & FILED
DATE	NOV 12 2008

On this 11 day of November, 2008, before me, personally appeared Christopher S.W. Blake, to me known to be the person described in and who executed the foregoing instrument, and acknowledged that he/she executed it as his/her free act and deed.

NOTARY NAME MUST BE TYPED OR PRINTED WITH NOTARY #

/s/ Carina Dotson	CARINA DOTSON
Notary Signature	NOTARY PUBLIC · STATE OF OHIO
	My commission expires Jan. 22, 2011

SS365 Rev. 03/08	(See Instructions on back)
LA037 - 08/22/2008 C T System Online

Jay Dardenne
Secretary of State
	LIMITED LIABILITY COMPANY INITIAL REPORT
	(R.S. 12:1305 (E))

1.The name of this limited liability company is :  JEI Distributing LLC

2.The location and municipal address, not a post office box only, of this limited liability company’s registered office:

718 S. Buchanan Street, Suite C, Lafayette, Louisiana 70501

3.The full name and municipal address, not a post office box only, of each of this limited liability company’s registered agent(s) is/are:

C T Corporation System, 5615 Corporate Blvd, Suite 400B, Baton Rouge, LA 70808

4.The names and municipal addresses, not a post office box only, of the first mangers, or the members:

Jacobs Entertainment, Inc., Sole Member, 17301 West Colfax Ave., Suite 250, Golden, Colarado 80401

To be signed by each person who signed the articles of organization:
	/s/ Christopher S.W. Blake
	Christopher S.W. Blake, Esq., Authorized Representative

AGENT’S AFFIDAVIT AND ACKNOWLEDGEMENT OF ACCEPTANCE

I hereby acknowledge and accept the appointment of registered agent for and on behalf of the above named limited liability company.

Registered agent(s) signature(s):

C T Corporation System

/s/ Diane Stout

Diane Stout, Asst. Secretary

Sworn to and subscribed before me, the undersigned Notary Public, on this date: 11-11-08

NOTARY NAME MUST BE TYPED OR PRINTED WITH NOTARY #

[SEAL]	/s/ Joyce A. Gilbert	JOYCE A. GILBERT NOTARY PUBLIC · STATE OF OHIO Received in Lorain County
	Notary Signature	My commission expires Sept. 9, 2013

ss 073 Rov. 03/08	(see instructions on back)
LA037 - 08/22/2008 C T System Online

EX-3.87

Exhibit 3.87

LIMITED LIABILITY COMPANY AGREEMENT

OF

JEI DISTRIBUTING, LLC

This Operating Agreement (this “Agreement”) of JEI DISTRIBUTING, LLC, a limited liability company organized pursuant to the laws of the State of Louisiana, is made effective as of November 12, 2008 by Jacobs Entertainment, Inc., a Delaware corporation, the sole Member (the “Member”), of JEI DISTRIBUTING, LLC (the “Company” as defined herein).

The Company has been formed pursuant to and in accordance with the Limited Liability Company Act of Louisiana (Louisiana Limited Liability Act 12:1301et seq.) as amended from time to time (the “Act”), and the Member does hereby state as follows:

1.Name.  The name of the limited liability company hereby is JEI Distributing, LLC (the “Company”).

2.Organization.  The Company has been formed as a Louisiana limited liability company pursuant to the provisions of the Act.

3.Purpose.  The Company is formed for the object and purpose of:

a.Supplying petroleum products in Louisiana;

b.Pursuing any lawful business whatsoever, or which shall at any time appear conducive to or expedient for the benefit of the Company or the protection of its assets;

c.Exercising all powers which may be legally exercised under the Act; and

d.Engaging in any activities reasonable necessary or convenient to the foregoing.

4.Powers.  In furtherance of its purposes, but subject to all of the provisions of this Agreement, the Company shall have the power and is hereby authorized to:

a.acquire by purchase, lease, contribution of property or otherwise, own, hold, sell, convey, transfer or dispose of any real or personal property which may be necessary, convenient or incidental to the accomplishment of the purposes of the Company;

b.act as a trustee, executor, nominee, bailee, director, officer, agent or in some other fiduciary capacity for any person or entity and to exercise all of the powers, duties, rights and responsibilities associated therewith;

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c.take any and all actions necessary, convenient or appropriate as trustee, executor, nominee, bailee, director, officer, agent or other fiduciary, including the granting or approval of waivers, consents or amendments of rights or powers relating thereto and the execution of appropriate documents to evidence such waivers, consents or amendments;

d.operate, purchase, maintain, finance, improve, own, sell, convey, assign, mortgage, pledge, guaranty, lease or demolish or otherwise dispose of any real or personal property which may be necessary, convenient or incidental to the accomplishment of the purposes of the Company;

e.borrow money, issue evidences of indebtedness and guarantee the indebtedness of others in furtherance of any or all of the purposes of the Company, and secure the same by mortgage, pledge or other lien on the assets of the Company;

f.invest any funds of the Company pending distribution or payment of the same pursuant to the provisions of this Agreement;

g.prepay in whole or in part, refinance, recast, increase, modify or extend any indebtedness of the Company and, in connection therewith, execute any extensions, renewals or modifications of any mortgage or security agreement securing such indebtedness;

h.enter into, perform and carry out contracts of any kind, including, without limitation, contracts with any person or entity affiliated with the Member, necessary to, in connection with, convenient to, or incidental to the accomplishment of the purposes of the Company;

i.employ or otherwise engage employees, managers, contractors, advisors, attorneys and consultants and pay reasonable compensation for such services;

j.enter into partnerships, limited liability companies, trusts, associations, corporations or other ventures with other persons or entities in furtherance of the purposes of the Company; and

k.do such other things and engage in such other activities related to the foregoing as may be necessary, convenient or incidental to the conduct of the business of the Company, and have and exercise all of the powers and rights conferred upon limited liability companies formed pursuant to the Act.

5.Principal Business Office.  The principal business office of the Company shall be located at 718 S. Buchanan Street, Suite C, Lafayette, Louisiana 70501.

6.Registered Agent and Office.   The registered agent and the registered office shall be as stated in the Articles of Organization filed with the Louisiana Secretary of State.  The Member

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may change the registered agent or registered office by appropriate filings with the Secretary of State.  In the event the registered agent ceases to act as such or the registered office changes, the Member shall promptly designate a new registered agent or file a notice of change of registered office, as the case may be.

7.Members.  The name and the mailing address of the Member is set forth on Schedule A attached hereto.

8.Limited Liabilities.  Except as otherwise provided by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member of the Company.

9.Capital Contributions.  The Member is deemed admitted as the Member of the Company upon its execution and delivery of this Agreement.  The Member will contribute the amount of United States Dollars to the Company as listed on Schedule A attached hereto.

10.Additional Contributions.  The Member is not required to make any additional capital contribution to the Company.  However, a Member may make additional capital contributions to the Company in such amounts and at such times as shall be determined by the Member.

11.Allocation of Profits and Losses.  The Company’s profits and losses shall be allocated to the Member.

12.Distributions.  Distributions shall be made to the Member at the times and in the aggregate amounts determined by the Member.

13.Management. The management of the Company shall be vested in Managers.    The Company will have two (2) Managers.  The Member intends that the Managers shall run the activities of the Company and shall have such other powers as are delineated herein.

a.Selection of Managers.  The Managers shall be Jeffrey P. Jacobs and Stan W. Guidroz.

b.Term of Office.  Each Manager shall hold office until his or her earlier resignation, removal from office, or death.

c.Vacancies.  If a Manager shall vacate his/her position, such vacancy shall be filled by the decision of the Member.

d.General Powers of Managers.  Except to the extent otherwise provided by law or the Agreement and without prejudice to the general powers conferred by or implied by statutory law in the State of Louisiana all of the authority of the Company shall be exercised under the authority of each Manager and all

3

decisions shall be made upon the consent of any one of the Managers, including without limitation the following powers:

i.To appoint, and at their discretion, with or without cause, to remove or suspend supporting staff, officers, assistants, supervisors, agents and employees of the Company as any one of the Managers may from time to time consider advisable, and to determine the duties and fix the compensation of all supporting staff, officers, assistants, agents, supervisors and employees.

ii.To designate a depository or depositories of the funds of the Company and the persons who shall be authorized to sign notes, checks, drafts, contracts, deeds, mortgages and other instruments on behalf of the Company.  In this regard, any one of the Managers shall be authorized to sign notes, checks, drafts, contracts, deeds, mortgages and other instruments on behalf of the Company.

iii.The business and affairs of the Company shall be managed and conducted by the Managers.  Instruments and documents providing for the acquisition, mortgage, or disposition of property of the Company shall be valid and binding upon the Company, if they are executed by any one or more Managers of the Company.

e.Removal of Managers.  Any Manager may be removed, either with or without cause, at any time, by the Member.  The vacancy caused by any such removal may be filled by the Member.

14.Officers.  The Managers may, from time to time as it deems advisable, appoint officers of the Company (the “Officers”), assign in writing titles (including, without limitation, Chairman, President, Vice President, Treasurer and Secretary) to any such persons and set forth in writing such persons’ duties and powers.  Unless the Managers decides otherwise, if the title is one commonly used for officers of a business corporation formed under the Act, the assignment of such title shall constitute the delegation to such person of the authorities and duties that are normally associated with that office.  Any delegation pursuant to this Section 14 may be revoked at any time by the Managers.  The names and titles of the initial officers of the Company are set forth on Schedule B attached hereto.

15.Other Business.  The Member may engage in or possess an interest in other business ventures (unconnected with the Company) of every kind and description, independently or with others.  The Company shall not have any rights in or to such independent ventures or the income or profits therefrom by virtue of this Agreement.

16.Exculpation and Indemnification.  No Member, Manager or Officer shall be liable to the Company, or any other person or entity who has an interest in the Company, for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Member, Manager or Officer in good faith on behalf of the Company and in a manner reasonably believed to be within

4

the scope of the authority conferred on such Member, Manager or Officer by this Agreement, except that a Member, Manager or Officer shall be liable for any such loss, damage or claim incurred by reason of such Member’s, Manager’s or Officer’s gross negligence or willful misconduct.  To the fullest extent permitted by applicable law, a Member, Manager or Officer shall be entitled to indemnification from the Company for any loss, damage or claim incurred by such Member, Manager or Officer by reason of any act or omission performed or omitted by such Member, Manager or Officer in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Member, Manager or Officer by this Agreement, except that no Member, Manager or Officer shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Member, Manager or Officer by reason of gross negligence or willful misconduct with respect to such acts or omissions; provided, however, that any indemnity under this Section 16 shall be provided out of and to the extent of Company assets only, and no Member shall have personal liability on account thereof.

17.Assignments.  A Member may assign in whole or in part its limited liability company interest by a written instrument executed by the Member.  If a Member transfers all of its interest in the Company pursuant to this Section, the transferee shall be admitted to the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement.  Such admission shall be deemed effective immediately prior to the transfer, and, immediately following such admission, the transferor Member shall cease to be a member of the Company.

18.Admission of Additional Members.  One (1) or more additional members of the Company may be admitted to the Company with the written consent of the Member.

19.Dissolution.

a.The Company shall be dissolved upon the occurrence of any of the following events: (i) the occurrence of events specified in writing in the articles of organization; (ii) by the written consent of the Member in accordance with R.S. 12:1318;  or (iii) upon entry of a decree of judicial dissolution under R.S. 12:1335, as amended.

b.As soon as possible following the occurrence of any of the events specified in this Section effecting the dissolution of the Company, the appropriate representative of the Company shall execute Articles of Dissolution to dissolve the Company in such form as shall be prescribed by the Louisiana Secretary of State and file same with the Louisiana Secretary of State’s office.

c.The bankruptcy of the Member will not cause the Member to cease to be a member of the Company and upon the occurrence of such an event, the business of the Company shall continue without dissolution.

d.In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets of the Company shall be

5

applied in the manner, and in the order of priority, set forth in Part VII. of the Act.

20.           Separability of Provisions.  Each provision of this Agreement shall be considered separable and if for any reason any provision or provisions herein are determined to be invalid, unenforceable or illegal under any existing or future law, such invalidity, unenforceability or illegality shall not impair the operation of or affect those portions of this Agreement which are valid, enforceable and legal.

21.           Entire Agreement.  This Agreement constitutes the entire agreement of the Member with respect to the subject matter hereof.

22.           Governing Law.  This Agreement shall be governed by, and construed under, the laws of the State of Louisiana (without regard to conflict of laws principles), all rights and remedies being governed by said laws.

23.           Amendments.  This Agreement may not be modified, altered, supplemented or amended except pursuant to a written agreement executed and delivered by the Member.

24.           Sole Benefit of Member.  The provisions of this Agreement (including Section 11) are intended solely to benefit the Member and, to the fullest extent permitted by applicable law, shall not be construed as conferring any benefit upon any creditor of the Company (and no such creditor shall be a third-party beneficiary of this Agreement), and the Member shall have no duty or obligation to any creditor of the Company to make any contributions or payments to the Company.

IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this Agreement as of the date first written above.

JACOBS ENTERTAINMENT, INC.
a Delaware corporation
By:	/s/ Jeffrey P. Jacobs
	Jeffrey P. Jacobs, Chief Executive Officer,
	Secretary and Treasurer

6

Schedule A

to JEI DISTRIBUTING, LLC

Limited Liability Company Agreement

MEMBER

Name	Mailing Address	Agreed Value of Capital Contribution		Percentage Interest
Jacobs Entertainment, Inc.	718 S. Buchanan, Suite C Lafayette, LA 70501	$	1,000.00	100	%

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Schedule B

to JEI DISTRIBUTING, LLC

Limited Liability Company Agreement

OFFICERS

Name	Title
Jeffrey P. Jacobs	Chairman and Manager
Stan W. Guidroz	President, Executive Vice President, Secretary, Treasurer and Manager

8

EX-3.88

Exhibit 3.88

CERTIFICATE OF INCORPORATION

OF

JACOBS SUGAR WAREHOUSE, INC.

1.The name of this corporation is Jacobs Sugar Warehouse, Inc.

2.The registered office of this corporation in the State of Delaware is located at, Corporation Trust Center 1209 Orange Street, Wilmington, DE 19801, County New Castle.  The name of its registered agent at such address is The Corporation Trust Company.

3.The purpose of this corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.

4.The total number of shares of stock that this corporation shall have authority to issue is 1,000 shares of Common Stock, $0.001 par value per share.  Each share of Common Stock shall be entitled to one vote.

5.The name and mailing address of the incorporator is: Adam J. Fogoros, Jones & Keller, P.C., 1625 Broadway, Sixteenth Floor, Denver, Colorado 80202.

6.Except as otherwise provided in the provisions establishing a class of stock, the number of authorized shares of any class or series of stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of the corporation entitled to vote irrespective of the provisions of Section 242(b)(2) of the General Corporation Law of the State of Delaware.

7.The election of directors need not be by written ballot unless the bylaws shall so require.

8.In furtherance and not in limitation of the power conferred upon the board of directors by law, the board of directors shall have power to make, adopt, alter, amend and repeal from time to time the bylaws of this corporation, subject to the right of the stockholders entitled to vote with respect thereto to alter and repeal bylaws made by the board of directors.

9.A director of this corporation shall not be liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent that exculpation from liability is not permitted under the General Corporation Law of the State of Delaware as in effect at the time such liability is determined.  No amendment or repeal of this Article 9 shall apply to or have any effect on the liability or alleged liability of any director of the

1

corporation for or with respect to any acts or omissions of such director occurring prior to such amendment or repeal.

10.This corporation shall, to the maximum extent permitted from time to time under the laws of the State of Delaware, indemnify and upon request advance expenses to any person who is or was a party or is threatened to be made a party to any threatened, pending or completed action, suit, proceeding or claim, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was or has agreed to be a director or officer of this corporation or while a director or officer is or was serving at the request of this corporation as a director, officer, partner, trustee, employee or agent of any corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, against expenses (including attorney’s fees and expenses), judgments, fines, penalties and amounts paid in settlement incurred (and not otherwise recovered) in connection with the investigation, preparation to defend or defense of such action, suit, proceeding or claim; provided, however, that the foregoing shall not require this corporation to indemnify or advance expenses to any person in connection with any action, suit, proceeding, claim or counterclaim initiated by or on behalf of such person.  Such indemnification shall not be exclusive of other indemnification rights arising under any bylaw, agreement, vote of directors or stockholders or indemnification rights arising under any bylaw, agreement, vote of directors of stockholders or otherwise and shall inure to the benefit of the heirs and legal representatives of such person. Any person seeking indemnification under this Article 10 shall be deemed to have met the standard of conduct required for such indemnification unless the contrary shall be established.  Any repeal or modification of the foregoing provisions of this Article 10 shall not adversely affect any right or protection of a director of officer of this corporation with respect to any acts or omissions of such director or officer director of officer occurring prior to such repeal or modification.

11.The books of the corporation may (subject to any statutory requirements) be kept outside the State of Delaware as may be designated by the board of directors or in the bylaws of this corporation.

12.The board of directors is authorized, subject to limitations prescribed by law and the provisions of this Article 12, to provide for the issuance of the shares of preferred stock in series, and by filing a certificate pursuant to the applicable law of the State of Delaware, to establish from time to time the number of shares to be included in each such series and the voting powers thereof, full or limited, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof.

The authority of the board with respect to each series shall include, but not be limited to, determination of the following:

2

(a) The number of shares constituting that series and the distinctive designation of that series;

(b) The dividend rate on the shares of that series, whether dividends shall be cumulative, and, if so, from which date or dates, and the relative rights of priority, if any, of payment of dividends on shares of that series;

(c) Whether that series shall have voting rights, in addition to the voting rights provided by law, and, if so, the terms of such voting rights;

(d) Whether that series shall have conversion privileges, and, if so, the terms and conditions of such conversion, including provision for adjustment of the conversion rate in such events as the board of directors shall determine;

(e) Whether or not the shares of that series shall be redeemable, and, if so, the terms and conditions of such redemption, including the date or date upon or after which they shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates;

(f) Whether that series shall have a sinking fund for the redemption or purchase of shares of that series, and, if so, the terms and amount of such sinking fund;

(g) The rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the corporation, and the relative rights of priority, if any, of payment of shares of that series; and

(h) Any other relative rights, preferences and limitations of that series.

THE UNDERSIGNED, the sole incorporator named above, hereby certifies that the facts stated above are true as of this 17th day of July, 2008.

/s/ Adam J. Fogoros

Adam J. Fogoros

3

EX-3.89

Exhibit 3.89

BYLAWS

OF

JACOBS SUGAR WAREHOUSE, INC.

a Delaware corporation

ARTICLE I

OFFICES

Section 1.         Registered Office.  The registered office shall be at the office of The Corporation Trust Company in the City of Wilmington, County of New Castle, State of Delaware.

Section 2.         Other Offices.  The corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or the business of the corporation may require.

ARTICLE II

MEETINGS OF STOCKHOLDERS

Section 1.         Annual Meeting.  An annual meeting of the stockholders for the election of directors shall be held at such place either within or without the State of Delaware as shall be designated on an annual basis by the Board of Directors and stated in the notice of the meeting.  Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of Delaware, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof.  Any other proper business may be transacted at the annual meeting.

Section 2.         Notice of Annual Meeting.  Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than sixty days before the date of the meeting.

Section 3.         Voting List.  The officer who has charge of the stock ledger of the corporation shall prepare and make, or cause a third party to prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder.  Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to be held.  The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

Section 4.         Special Meetings.  Special meetings of the stockholders of this corporation, for any purpose or purposes, unless otherwise prescribed by statute or by the Certificate of Incorporation, shall be called by the President or Secretary at the request in writing of a majority of the members of the Board of Directors or holders of a majority of the total voting power of all outstanding shares of stock of this corporation then entitled to vote, and may not be called absent such a request.  Such request shall state the purpose or purposes of the proposed meeting.

Section 5.         Notice of Special Meetings.  As soon as reasonably practicable after receipt of a request as provided in Section 4 of this Article II, written notice of a special meeting, stating the place, date (which shall be not less than ten nor more than sixty days from the date of the notice) and hour of the special meeting and the purpose or purposes for which the special meeting is called, shall be given to each stockholder entitled to vote at such special meeting.

Section 6.         Scope of Business at Special Meeting.  Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

Section 7.         Quorum.  The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business, except as otherwise provided by statute or by the Certificate of Incorporation.  If, however, such quorum shall not be present or represented at any meeting of the stockholders, the chairman of the meeting or the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented.  At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified.  If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting as provided in Section 5 of this Article II.

Section 8.         Qualifications to Vote.  The stockholders of record on the books of the corporation at the close of business on the record date as determined by the Board of Directors and only such stockholders shall be entitled to vote at any meeting of stockholders or any adjournment thereof

Section 9.         Record Date.  The Board of Directors may fix a record date for the determination of the stockholders entitled to notice of or to vote at any stockholders’ meeting and at any adjournment thereof, or to express consent to corporate action in writing without a meeting, or to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action.  The record date shall not be more than sixty or less than ten days before the date of such meeting, and not more than sixty days prior to any other action.  If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held.  A determination of

2

stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

Section 10.       Action at Meetings.  When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of applicable law or of the Certificate of Incorporation, a different vote is required, in which case such express provision shall govern and control the decision of such question.

Section 11.       Voting and Proxies.  Unless otherwise provided in the Certificate of Incorporation, each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after three years from its date, unless the proxy provides for a longer period.  Each proxy shall be revocable unless expressly provided therein to be irrevocable and unless it is coupled with an interest sufficient in law to support an irrevocable power.

Section 12.       Action by Stockholders Without a Meeting.  Unless otherwise provided in the Certificate of Incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office in Delaware (by hand or by certified or registered mail, return receipt requested), to its principal place of business, or to an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded; provided, however, that action by written consent to elect directors, if less than unanimous, shall be in lieu of holding an annual meeting only if all the directorships to which directors could be elected at an annual meeting held at the effective time of such action are vacant and are filled by such action.  Prompt notice of the taking of corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of stockholders to take the action were delivered to the corporation by delivery to its registered office in Delaware (by hand or by certified or registered mail, return receipt requested), to its principal place of business, or to an officer or agent of the corporation having custody of the book in which proceedings or meetings of stockholders are recorded.

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ARTICLE III

DIRECTORS

Section 1.         Powers.  The business of the corporation shall be managed by or under the direction of its Board of Directors, which may exercise all such powers of the corporation and do all such lawful acts and things as are not by applicable law or by the Certificate of Incorporation or by these Bylaws directed or required to be exercised or done by the stockholders.

Section 2.         Number, Election, Tenure and Qualification.  The number of directors which shall constitute the whole board shall be fixed from time to time by resolution of the Board of Directors or by the Stockholders at an annual meeting of the Stockholders (unless the directors are elected by written consent in lieu of an annual meeting as provided in Article II, Section 12).  With the exception of the first Board of Directors, which shall be elected by the incorporator, and except as provided in the corporation’s Certificate of Incorporation or in Section 3 of this Article III, the directors shall be elected at the annual meeting of the stockholders by a plurality vote of the shares represented in person or by proxy and each director elected shall hold office until his successor is elected and qualified unless he shall resign, become disqualified, disabled, or otherwise removed.  Directors need not be stockholders.

Section 3.         Vacancies and Newly Created Directorships.  Unless otherwise provided in the Certificate of Incorporation, vacancies and newly-created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director.  The directors so chosen shall serve until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced.  If there are no directors in office, then an election of directors may be held in the manner provided by statute.  If, at the time of filling any vacancy or any newly created directorship, the directors then in office shall constitute less than a majority of the whole board (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten percent of the total number of shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office.

Section 4.         Location of Meetings.  The Board of Directors of the corporation may hold meetings, both regular and special, either within or without the State of Delaware.

Section 5.         Meeting of Newly Elected Board of Directors.  The first meeting of each newly elected Board of Directors shall be held immediately following the annual meeting of stockholders and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present.  In the event such meeting is not held at such time, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors, or as shall be specified in a written waiver signed by all of the directors.

Section 6.         Regular Meetings.  Regular meetings of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by

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the Board of Directors; provided, however, that any director who is absent when such a determination is made shall be given notice of such location.

Section 7.         Special Meetings.  Special meetings of the Board of Directors may be called by the President on two days’ notice to each director by mail, overnight courier service or facsimile; special meetings shall be called by the President or Secretary in a like manner and on like notice on the written request of two directors unless the Board of Directors consists of only one director, in which case special meetings shall be called by the President or Secretary in a like manner and on like notice on the written request of the sole director.  Notice may be waived in accordance with Section 229 of the Delaware General Corporation Law.

Section 8.         Quorum and Action at Meetings.  At all meetings of the Board of Directors, a majority of the directors then in office shall constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute or by the Certificate of Incorporation.  If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 9.         Action Without a Meeting.  Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board of Directors or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee.

Section 10.       Telephonic Meeting.  Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

Section 11.       Committees.  The Board of Directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of one or more of the directors of the corporation.  The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.  In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member.

Section 12.       Committee Authority.  Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation, and may

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authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to (a) approving, adopting or recommending to the stockholders, any action or matter expressly required by the Delaware General Corporation Law to be submitted to stockholders for approval, or (b) adopting, amending or repealing any Bylaw of the corporation.  Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors.

Section 13.       Committee Minutes.  Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required to do so by the Board of Directors.

Section 14.       Directors Compensation.  Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, the Board of Directors shall have the authority to fix the compensation of directors.  The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director.  No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor.  Members of special or standing committees may be allowed like compensation for attending committee meetings.

Section 15.       Resignation.  Any director or officer of the corporation may resign at any time.  Each such resignation shall be made in writing and shall take effect at the time specified therein, or, if no time is specified, at the time of its receipt by either the Board of Directors, the President or the Secretary.  The acceptance of a resignation shall not be necessary to make it effective unless expressly so provided in the resignation.

Section 16.       Removal.  Unless otherwise restricted by the Certificate of Incorporation, these Bylaws or applicable law, any director or the entire Board of Directors may be removed, with or without cause, by the holders of a majority of shares entitled to vote at an election of directors.

ARTICLE IV

NOTICES

Section 1.         Notice to Directors and Stockholders.  Whenever, under the provisions of the statutes or of the Certificate of Incorporation or of these Bylaws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail.  An affidavit of the Secretary or an Assistant Secretary or of the transfer agent of the corporation that the notice has been given shall in the absence of fraud, be prima facie evidence of the facts stated therein.  Notice to directors may also be given by telephone, facsimile or telegram (with confirmation of receipt).

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Section 2.         Waiver.  Whenever any notice is required to be given under the provisions of the statutes or of the Certificate of Incorporation or of these Bylaws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.  The written waiver need not specify the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors, or members of a committee of directors.  Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened.  Attendance at the meeting is not a waiver of any right to object to the consideration of matters required by the Delaware General Corporation Law to be included in the notice of the meeting but not so included, if such objection is expressly made at the meeting.

ARTICLE V

OFFICERS

Section 1.         Enumeration.  The officers of the corporation shall be chosen by the Board of Directors and shall include a President, a Secretary, a Treasurer or Chief Financial Officer and such other officers with such other titles as the Board of Directors shall determine.  The Board of Directors may elect from among its members a Chairman or Chairmen of the Board and a Vice Chairman of the Board.  The Board of Directors may also choose one or more Vice Presidents, Assistant Secretaries and Assistant Treasurers.  Any number of offices may be held by the same person, unless the Certificate of Incorporation or these Bylaws otherwise provide.

Section 2.         Election.  The Board of Directors at its first meeting after each annual meeting of stockholders shall elect a President, a Secretary, a Treasurer or Chief Financial Officer and such other officers with such other titles as the Board of Directors shall determine.

Section 3.         Appointment of Other Agent.  The Board of Directors may appoint such other officers and agents as it shall deem necessary, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors.

Section 4.         Compensation.  The salaries of all officers of the corporation shall be fixed by the Board of Directors or a committee thereof.  The salaries of agents of the corporation shall, unless fixed by the Board of Directors, be fixed by the President or any Vice President of the corporation.

Section 5.         Tenure.  The officers of the corporation shall hold office until their successors are chosen and qualify.  Any officer elected or appointed by the Board of Directors may be removed at any time by the affirmative vote of a majority of the directors of the Board of Directors.  Any vacancy occurring in any office of the corporation shall be filled by the Board of Directors.

Section 6.         Chairman of the Board and Vice-Chairman of the Board.  The Chairman of the Board, if any, shall preside at all meetings of the Board of Directors and of the

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stockholders at which the Chairman shall be present.  The Chairman shall have and may exercise such powers as are, from time to time, assigned to the Chairman by the Board of Directors and -as may be provided by law.  In the absence of the Chairman of the Board, the Vice Chairman of the Board, if any, shall preside at all meetings of the Board of Directors and of the stockholders at which the Vice Chairman shall be present.  The Vice Chairman shall have and may exercise such powers as are, from time to time, assigned to such person by the Board of Directors and as may be provided by law.

Section 7.         President.  The President shall be the Chief Executive Officer of the corporation unless such title is assigned to another officer of the corporation; in the absence of a Chairman and Vice Chairman of the Board, the President shall preside as the chairman of meetings of the stockholders and the Board of Directors; and the President shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect.  The President or any Vice President shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the corporation.

Section 8.         Vice President.  In the absence of the President or in the event of the President’s inability or refusal to act, the Vice President, if any (or in the event there be more than one Vice President, the Vice Presidents in the order designated by the Board of Directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the President, and when so acting shall have all the powers of and be subject to all the restrictions upon the President.  The Vice President shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.

Section 9.         Secretary.  The Secretary shall attend all meetings of the Board of Directors and all meetings of the stockholders and record all the proceedings of the meetings of the corporation and of the Board of Directors in a book to be kept for that purpose and shall perform like duties for the standing committees when required.  The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or President, under whose supervision the Secretary shall be subject.  The Secretary shall have custody of the corporate seal of the corporation and the Secretary, or an Assistant Secretary, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by the Secretary’s signature or by the signature of such Assistant Secretary.  The Board of Directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by such officer’s signature.

Section 10.       Assistant Secretary.  The Assistant Secretary, or if there be more than one, the Assistant Secretaries in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election) shall, in the absence of the Secretary or in the event of the Secretary’s inability or refusal to act, perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.

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Section 11.       Chief Financial Officer.  The Chief Financial Officer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the Board of Directors.  The Chief Financial Officer shall disburse the funds of the corporation as may be ordered by the Board of Directors, President or Chief Executive Officer, taking proper vouchers for such disbursements, and shall render to the President, Chief Executive Officer and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all such transactions as Chief Financial Officer and of the financial condition of the corporation.  If required by the Board of Directors, the Chief Financial Officer shall give the corporation a bond (which shall be renewed every six years) in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of the Chief Financial Officer’s office and for the restoration to the corporation, in case of the Chief Financial Officer’s death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in the possession or under the control of the Chief Financial Officer that belongs to the corporation.

ARTICLE VI

CAPITAL STOCK

Section 1.         Certificates.  The shares of the corporation shall be represented by a certificate, unless and until the Board of Directors adopts a resolution permitting shares to be uncertificated.  Certificates shall be signed by, or in the name of the corporation by, (a) the Chairman of the Board, the Vice-Chairman of the Board, the President or a Vice President, and (b) the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, certifying the number of shares owned by such stockholder in the corporation.  Certificates may be issued for partly paid shares and in such case upon the face or back of the certificates issued to represent any such partly paid shares, the total amount of the consideration to be paid therefor and the amount paid thereon shall be specified.

Section 2.         Class or Series.  If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided in Section 202 of the Delaware General Corporation Law, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate that the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.  Within a reasonable time after the issuance or transfer of uncertificated stock, the corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates pursuant to Sections 151, 156, 202(a) or 218(a) of the Delaware Corporation Law or a statement that the corporation will furnish without charge, to each stockholder who so requests,

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the powers, designations, preferences and relative participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

Section 3.         Signature.  Any of or all of the signatures on a certificate may be facsimile.  In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.

Section 4.         Lost Certificates.  The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed.  When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or such owner’s legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

Section 5.         Transfer of Stock.  Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.  Upon receipt of proper transfer instructions from the registered owner of uncertificated shares such uncertificated shares shall be canceled and issuance of new equivalent uncertificated shares or certificated shares shall be made to the person entitled thereto and the transaction shall be recorded upon the books of the corporation.

Section 6.         Record Date.  In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholder or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action.  A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

Section 7.         Registered Stockholders.  The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or

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not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

ARTICLE VII

GENERAL PROVISIONS

Section 1.         Dividends.  Dividends upon the capital stock of the corporation, subject to the applicable provisions, if any, of the Certificate of Incorporation, may be declared by the Board of Directors at any regular or special meeting, pursuant to law.  Dividends may be paid in cash, in property or in shares of capital stock, subject to the provisions of the Certificate of Incorporation.  Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the Board of Directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purposes as the Board of Directors shall think conducive to the interest of the corporation, and the Board of Directors may modify or abolish any such reserve in the manner in which it was created.

Section 2.         Checks.  All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.

Section 3.         Fiscal Year.  The fiscal year of the corporation shall be fixed by resolution of the Board of Directors.

Section 4.         Seal.  The Board of Directors may adopt a corporate seal having inscribed thereon the name of the corporation, the year of its organization and the words “Corporate Seal, Delaware.” The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

Section 5.         Loans.  The Board of Directors of this corporation may, without stockholder approval, authorize loans to, or guaranty obligations of, or otherwise assist, including, without limitation, the adoption of employee benefit plans under which loans and guarantees may be made, any officer or other employee of the corporation or of its subsidiary, including any officer or employee who is a director of the corporation or its subsidiary, whenever, in the judgment of the Board of Directors, such loan, guaranty or assistance may reasonably be expected to benefit the corporation.  The loan, guaranty or other assistance may be with or without interest, and may be unsecured, or secured in such manner as the Board of Directors shall approve, including, without limitation, a pledge of shares of stock of the corporation.

ARTICLE VIII

INDEMNIFICATION

Section 1.         Scope.  The corporation shall, to the fullest extent permitted by Section 145 of the Delaware General Corporation Law, as that Section may be amended and

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supplemented from time to time, indemnify any director, officer, employee or agent of the corporation, against expenses (including attorneys’ fees), judgments, fines, amounts paid in settlement and/or other matters referred to in or covered by that Section, by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise.

Section 2.         Advancing Expenses.  Expenses (including attorneys’ fees) incurred by a present or former director or officer of the corporation in defending a civil, criminal, administrative or investigative action, suit or proceeding by reason of the fact that such person is or was a director, officer, employee or agent of the corporation (or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise) shall be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized by relevant provisions of the Delaware General Corporation Law; provided, however, the corporation shall not be required to advance such expenses to a director (i) who commences any action, suit or proceeding as a plaintiff unless such advance is specifically approved by a majority of the Board of Directors, or (ii) who is a party to an action, suit or proceeding brought by the corporation and approved by a majority of the Board of Directors which alleges willful misappropriation of corporate assets by such director, disclosure of confidential information in violation of such director’s fiduciary or contractual obligations to the corporation, or any other willful and deliberate breach in bad faith of such director’s duty to the corporation or its stockholders.

Section 3.         Liability Offset.  The corporation’s obligation to provide indemnification under this Article VIII shall be offset to the extent the indemnified party is indemnified by any other source including, but not limited to, any applicable insurance coverage under a policy maintained by the corporation, the indemnified party or any other person.

Section 4.         Continuing Obligation.  The provisions of this Article VIII shall be deemed to be a contract between the corporation and each director of the corporation who serves in such capacity at any time while this bylaw is in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any state of facts then or theretofore existing or any action, suit or proceeding theretofore or thereafter brought based in whole or in part upon any such state of facts.

Section 5.         Nonexclusive.  The indemnification and advancement of expenses provided for in this Article VIII shall (i) not be deemed exclusive of any other rights to which those indemnified may be entitled under any bylaw, agreement or vote of stockholders or disinterested directors or otherwise, both as to action in their official capacities and as to action in another capacity while holding such office, (h) continue as to a person who has ceased to be a director and (iii) inure to the benefit of the heirs, executors and administrators of such a person.

Section 6.         Other Persons.  In addition to the indemnification rights of directors, officers, employees, or agents of the corporation, the Board of Directors in its discretion shall have the power on behalf of the corporation to indemnify any other person made a party to any

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action, suit or proceeding who the corporation may indemnify under Section 145 of the Delaware General Corporation Law.

Section 7.         Definitions.  The phrases and terms set forth in this Article VIII shall be given the same meaning as the identical terms and phrases are given in Section 145 of the Delaware General Corporation Law, as that Section may be amended and supplemented from time to time.

ARTICLE IX

AMENDMENTS

Except as otherwise provided in the Certificate of Incorporation, these Bylaws may be altered, amended or repealed, or new Bylaws may be adopted, by the holders of a majority of the outstanding voting shares or by the Board of Directors, when such power is conferred upon the Board of Directors by the Certificate of Incorporation, at any regular meeting of the stockholders or of the Board of Directors or at any special meeting of the stockholders or of the Board of Directors if notice of such alteration, amendment, repeal or adoption of new Bylaws be contained in the notice of such special meeting.  If the power to adopt, amend or repeal Bylaws is conferred upon the Board of Directors by the Certificate of Incorporation, it shall not divest or limit the power of the stockholders to adopt, amend or repeal Bylaws.

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CERTIFICATE OF THE SECRETARY OF

JACOBS SUGAR WAREHOUSE, INC.

The undersigned certifies:

1.             That the undersigned is the duly elected and acting Secretary of Jacobs Sugar Warehouse, Inc., a Delaware corporation; and

2.             That the foregoing Bylaws constitute the Bylaws of the Corporation as duly adopted in a Meeting of the Board of Directors of the Corporation on July 22, 2008.

IN WITNESS WHEREOF, I have hereunto subscribed my name as of this 22nd day of July, 2008.

/s/ Stan Politano

Name: Stan Politano

Title: Corporate Secretary

EX-12

EXHIBIT 12

Computation of Ratio of Earnings to Fixed Charges

For the purpose of determining the ratio of earnings to fixed charges, “earnings” consist of income (loss) before income taxes, plus fixed charges and amortization of capitalized interest, less interest capitalized. “Fixed charges” consist of interest expense (including amortization of deferred financing costs, premiums, and discounts), amortization of capitalized expenses related to indebtedness, plus two-thirds of rental expense (this portion is considered to be representative of the interest factor), and are computed as follows:

	As of and for Year Ended December 31, (in thousands)
	2008			2007			2006			2005			2004
Earnings:
Pre-tax income (loss)	$	(4,138	)	$	5,012		$	(9,931	)	$	(3,475	)	$	3,989
Add:Fixed charges	29,410			30,546			34,387			23,863			20,890
Add:Amortization of capitalized interest	75			75			71			67			65
Less:Interest capitalized	—			(159		)	(154		)	(106		)	(110		)
Total Earnings	$	25,347		$	35,474		$	24,373		$	20,349		$	24,834
Fixed Charges
Interest expense	$	27,421		$	28,412		$	32,653		$	22,838		$	20,074
Interest capitalized	—			159			154			106			110
Estimated interest on rental expense	1,989			1,975			1,580			919			706
Total Fixed Charges	$	29,410		$	30,546		$	34,387		$	23,863		$	20,890
Ratio of Earnings to Fixed Charges(1)	0.86		x	1.16		x	0.71		x	0.85		x	1.19		x

(1)For the years ended December 31, 2008, 2006 and 2005, we had a deficiency of $4,063, $10,014 and $3,514, respectively, in earnings to fixed charges.

EX-21.2

EXHIBIT 21.2

SUBSIDIARIES

Each of the following subsidiaries of Jacobs Entertainment, Inc. and each other subsidiary that is or becomes a guarantor of the securities registered hereby is hereby made a registrant.

Exact Name of Registrant as in its Charter	State of Jurisdiction of Incorporationor Organization	Primary StandardIndustrial Classification Code Number	Percent Owned		I.R.S. EmployerIdentification Number
Black Hawk Gaming & Development Company, Inc.	Colorado	7993	100	%	84-1158484
Black Hawk/Jacobs Entertainment, LLC	Colorado	7993	100	%	84-1344735
Gold Dust West Casino, Inc.	Nevada	7993	100	%	84-1531817
Gilpin Hotel Venture	Colorado	7993	100	%	84-1195732
Gilpin Ventures, Inc.	Colorado	7993	100	%	84-1177995
Winner’s Choice Casino, Inc. (nka Cash Magic Winner’s Choice, LLC)	Louisiana	7993	100	%	72-1227314
Houma Truck Plaza & Casino, L.L.C.	Louisiana	7993	100	%	72-1447916
Jalou—Cash’s L.L.C.	Louisiana	7993	100	%	31-1750851
JACE, LLC	Louisiana	7993	100	%	72-1221055
Lucky Magnolia Truck Stop and Casino, L.L.C.	Louisiana	7993	100	%	72-1268240
Bayou Vista Truck Plaza and Casino, L.L.C.	Louisiana	7993	100	%	72-1460460
Raceland Truck Plaza and Casino, L.L.C.	Louisiana	7993	100	%	72-1478884
Colonial Holdings, Inc.	Virginia	7948	100	%	54-1826807*
Colonial Downs, L.P.	Virginia	7993	100	%	54-1739103
Stansley Racing Corp.	Virginia	7948	100	%	52-1880278
Colonial Downs, LLC	Virginia	7948	100	%	54-1826807*
JRJ Properties, LLC	Louisiana	7948	100	%	13-4236507
Jalou Breaux Bridge, LLC	Louisiana	7993	100	%	43-1996089
Jalou Eunice, LLC	Louisiana	7993	100	%	20-0180331
Jalou of Jefferson, LLC	Louisiana	7993	100	%	20-0246595
Fuel Stop 36, LLC	Louisiana	7993	100	%	72-1150382
Jalou of Larose, LLC (nka Cash Magic Larose, LLC)	Louisiana	7993	100	%	20-3747106
Jalou of St. Martin, L.L.C.	Louisiana	7993	100	%	34-1967692
Jalou Diamond, L.L.C.	Louisiana	7993	100	%	27-0014037
Jalou Magic, L.L.C. (nka Cash Magic Vinton, LLC)	Louisiana	7993	100	%	27-0014042
Jalou of Vinton, LLC	Louisiana	7993	100	%	20-4522514
Jalou of Vinton-Bingo, LLC	Louisiana	7993	100	%	20-4522638
Jalou of St. Helena, LLC (nka Jalou St. Helena, LLC)	Louisiana	7993	100	%	20-5041022
Jalou Fox, LLC	Louisiana	7993	100	%	20-3747037
Jalou Silver Dollar, LLC	Louisiana	7993	100	%	20-5884711
Jacobs Piñon Plaza Entertainment, Inc.	Nevada	7993	100	%	04-3843590
Jacobs Elko Entertainment, Inc.	Nevada	7993	100	%	20-4968456
Jacobs Dakota Works, LLC	Colorado	7993	100	%	20-5009915
Virginia Concessions, L.L.C.	Virginia	7993	100	%	54-1787887
Maryland-Virginia Racing Circuit, Inc.	Virginia	7993	100	%	52-1919780
Jacobs Nautica Development, Inc.	Delaware	7948	100	%	26-2147084
JEI Distributing, LLC	Louisiana	7993	100	%	26-3705204
Diamondhead Real Estate, LLC	Delaware	7948	100	%	26-2330243
Jacobs Sugar Warehouse, Inc.	Delaware	7948	100	%	26-3015086

* Utilize same Employer Identification Number.

EX-31.1

EXHIBIT 31.1

Certification of Chief Executive Officer Under

Section 302 of the Sarbanes-Oxley Act of 2002

I, Jeffrey P. Jacobs, certify that:

1.I have reviewed this Annual Report on Form 10-K of Jacobs Entertainment, Inc. (“registrant”);

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13(a)-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design of operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	March 18, 2009
Signature:	/s/ Jeffrey P. Jacobs
	Jeffrey P. Jacobs
Title:	Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Certification of Chief Executive Officer Under

Section 302 of the Sarbanes-Oxley Act of 2002

I, Brett A. Kramer, certify that:

1.I have reviewed this Annual Report on Form 10-K of Jacobs Entertainment, Inc. (“registrant”);

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13(a)-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design of operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	March 18, 2009
Signature:	/s/ Brett A. Kramer
	Brett A. Kramer
Title:	Chief Financial Officer

EX-32.1

EXHIBIT 32.1

Certification Pursuant to 18 U.S.C. Section 1350

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report of Jacobs Entertainment, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2008, as filed with the Securities and Exchange Commission on the date hereof (the “Annual Report”), I, Jeffrey P. Jacobs, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.the Annual Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and

2.the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Jeffrey P. Jacobs
Name:	Jeffrey P. Jacobs
Title:	Chief Executive Officer
Date:	March 18, 2009

EX-32.2

EXHIBIT 32.2

Certification Pursuant to 18 U.S.C. Section 1350

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report of Jacobs Entertainment, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2008, as filed with the Securities and Exchange Commission on the date hereof (the “Annual Report”), I, Brett A. Kramer, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.the Annual Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and

2.the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Brett A. Kramer
Name:	Brett A. Kramer
Title:	Chief Financial Officer
Date:	March 18, 2009