10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2009

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 001-13641

PINNACLE ENTERTAINMENT, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization) 95-3667491
(I.R.S. Employer
Identification No.)

3800 Howard Hughes Parkway
Las Vegas, Nevada 89169
(Address of principal executive offices) (Zip Code)

(702) 784-7777
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, $.10 par value per share	New York Stock Exchange

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 þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES o NO þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 þ NO o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES o NO o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) 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. þ

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

Large accelerated filer þ	Accelerated filer o	Non-accelerated filer o	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 þ

The aggregate market value of the common stock held by non-affiliates of the registrant as of June 30, 2009 was $525 million based on a closing price of $9.29 per share of common stock.

The number of outstanding shares of the registrant’s common stock as of the close of business on February 24, 2010 was 60,083,686.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive 2010 proxy statement, anticipated to be filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s fiscal year, are incorporated by reference into Part III of this Form 10-K.

PINNACLE ENTERTAINMENT, INC.

TABLE OF CONTENTS

PART I
Item 1. Business	1
Operating Properties	2
New Properties Under Construction and/or Development	4
Other Assets	4
Competition	4
Government Regulation and Gaming Issues	5
Employees	5
Executive Officers of the Registrant	6
Directors of the Registrant	6
Other	6
Available Information	6
Item 1A. Risk Factors	6
Item 1B. Unresolved Staff Comments	18
Item 2. Properties	19
Item 3. Legal Proceedings	21
Item 4. Submission of Matters to a Vote of Security Holders	23
PART II
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	24
Stock Performance Graph	24
Item 6. Selected Financial Data	25
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Executive Overview	27
Results of Operations	28
Liquidity and Capital Resources	38
Contractual Obligations and Other Commitments	43
Critical Accounting Estimates	44
Recently Issued and Adopted Accounting Standards	46
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	47
Item 8. Financial Statements and Supplementary Data	48
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	91
Item 9A. Controls and Procedures	91
Item 9B. Other Information	93
PART III
Item 10. Directors, Executive Officers and Corporate Governance	93
Item 11. Executive Compensation	93
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	93
Item 13. Certain Relationships and Related Transactions, and Director Independence	94
Item 14. Principal Accountant Fees and Services	94
PART IV
Item 15. Exhibits and Financial Statement Schedules	95
Signatures
Exhibit 4.26
Exhibit 4.30
Exhibit 4.33
Exhibit 10.9
Exhibit 10.16
Exhibit 10.17
Exhibit 10.48
Exhibit 10.54
Exhibit 10.55
Exhibit 10.56
Exhibit 11
Exhibit 12
Exhibit 21
Exhibit 23.1
Exhibit 23.2
Exhibit 31.1
Exhibit 31.2
Exhibit 32
Exhibit 99.1
Exhibit 99.4

PART I

Item 1. Business

Pinnacle Entertainment, Inc. is an owner, operator and developer of casinos and related hospitality and entertainment facilities. We operate seven domestic casinos, and have completed construction of another casino that is scheduled to open March 4, 2010. We have two other casino development projects in various stages of construction and planning. In addition, we operate one significant and several small casinos in Argentina. References to “Pinnacle,” “the Company,” “we,” “our” or “us” refer to Pinnacle Entertainment, Inc. and its subsidiaries, except where the context otherwise indicates.

Our mission is to increase shareholder value. We intend to accomplish this through our long-term strategy of building or acquiring new casinos or resorts that are expected to produce favorable returns above our cost of capital; maintaining and improving each of our existing properties; and providing our guests with their favorite games in attractive surroundings with quality guest service. Hence, we are developing new, high-quality gaming properties in attractive gaming markets; we are maintaining and improving our existing properties with disciplined capital expenditures; we continually focus on customer service; and we may make strategic acquisitions, either alone or with third parties, when and if available, on terms we believe are reasonable.

Highlights of 2009 and early 2010 include the following:

• Strong performance at Lumière Place, where revenues grew 26% and operating income grew 113% in 2009 compared to 2008;

• Accelerated the opening of our River City casino in south St. Louis County, which we expect to open on March 4, 2010, subject to approval by the Missouri Gaming Commission;

• Issued $450 million in aggregate principal amount of 8.625% senior unsecured debt in August 2009, the proceeds of which were used to repay our funded bank borrowings and repurchase existing senior subordinated notes;

• Entered into a $375 million amended and restated credit agreement in February 2010, which, among other things, provides for a stated maturity of March 2014;

• Received insurance proceeds of approximately $23 million related to the loss caused by Hurricane Katrina in a settlement with an insurer in February 2010;

• Updated our development projects, and reduced our planned capital expenditures for both our Sugarcane Bay at L’Auberge du Lac project and our project in Baton Rouge;

• Decided to monetize our non-strategic assets, including our land holdings on the Boardwalk in Atlantic City; and,

• Committed to and have begun certain cost cutting initiatives throughout the Company.

Other considerations during 2009 include the following:

• On November 7, 2009, Daniel R. Lee, resigned as Chairman of the Board, Chief Executive Officer and as a director. The Board of Directors appointed John V. Giovenco as Interim Chief Executive Officer and Richard J. Goeglein as Interim Nonexecutive Chairman of the Board. We are in the process of searching for a permanent Chief Executive Officer;

• During the fourth quarter of 2009, we determined that certain indefinite-lived intangible assets, real estate, buildings and equipment and previously capitalized costs associated with certain development projects were impaired and recorded impairment charges totaling $207 million for the year ended December 31, 2009, primarily related to our Atlantic City land holdings.

1

Operating Properties

Our largest property is L’Auberge du Lac in Lake Charles, Louisiana, which opened in May 2005 and offers the closest full-scale casino-hotel facilities to Houston (the sixth-largest metropolitan statistical area in the United States), as well as the Austin and San Antonio metropolitan areas. Our property is approximately 140 miles from Houston and approximately 300 miles and 335 miles from Austin and San Antonio, respectively.

L’Auberge du Lac offers 1,601 slot machines, 63 table games and 995 guestrooms and suites. The facility also offers several restaurants, approximately 26,000 square feet of meeting space, retail shops, a championship golf course designed by Tom Fazio, a full-service spa and other amenities. Unlike most other riverboat casinos, all of the public areas at L’Auberge du Lac (except the parking garage), and in particular the casino, are situated entirely on one level. The casino is surrounded on three sides by the hotel tower and other guest amenities. The hotel at L’Auberge du Lac is the largest in Louisiana outside of New Orleans.

L’Auberge du Lac competes with other full-service regional and destination resort casinos, including those in New Orleans, Louisiana, Biloxi, Mississippi, and Las Vegas, Nevada. It also competes with another casino-hotel in Lake Charles; a land-based Native American casino, which is approximately 43 miles east of Lake Charles; a racetrack slot operation located approximately 25 miles to the west; and numerous truck stops with slot machines in many parishes of Louisiana, some of which call themselves casinos.

Lumière Place is located in downtown St. Louis, Missouri. The Lumière Place complex includes the Lumière Place Casino with 2,041 slot machines and 69 table games, the 200-guestroom luxury Four Seasons Hotel St. Louis, the 294 all-suites HoteLumière, seven restaurants, banquet facilities, retail shops and more than 22,000 square feet of convention/meeting space, including a 7,300-square-foot ballroom. We own all of the facilities at Lumière Place and have a long-term agreement with Four Seasons Hotels Limited to manage our Four Seasons Hotel St. Louis. Lumière Place is located across from the Edward Jones Dome and America’s Center convention center and just north of the famous Gateway Arch. A pedestrian tunnel connects Lumière Place to the America’s Center convention center, the Edward Jones Dome and the city’s central business district.

The Lumière Place Casino competes with four other casinos in the St. Louis metropolitan area (two of which are in Illinois) in addition to our President Casino. Our River City casino, with an anticipated opening date of March 4, 2010, will also provide future competition.

Our Boomtown New Orleans property, which opened in 1994, is the only casino in the West Bank area, across the Mississippi River from downtown New Orleans. It features a dockside riverboat casino with 1,523 slot machines and 39 table games, three restaurants, a delicatessen, a 350-seat nightclub, 4,600 square feet of meeting space, an arcade and approximately 1,700 parking spaces. Boomtown New Orleans competes with a large land-based casino in downtown New Orleans, one other riverboat casino, a racetrack with slot machines and numerous truck stop casinos, as well as casinos in the Gulf Coast region.

Our southern Indiana property, Belterra Casino Resort, opened in October 2000 and is located along the Ohio River near Vevay, Indiana, approximately 50 minutes from downtown Cincinnati, Ohio, 70 minutes from Louisville, Kentucky and 90 minutes from Lexington, Kentucky. Belterra is also approximately two and a half hours from Indianapolis, Indiana. The total population within 300 miles of Belterra is approximately 48 million.

Belterra attracts customers by offering amenities that are generally superior to those at competing regional properties, several of which are closer to the population centers than Belterra. Belterra features a dockside riverboat casino with 1,562 slot machines and 55 table games and a 608-guestroom hotel, six restaurants, 33,000 square feet of meeting and conference space, a 1,553-seat entertainment showroom, retail shops, a swimming pool, a championship golf course designed by Tom Fazio and a full-service spa. The resort provides approximately 2,000 parking spaces, most of which are in a multi-level parking structure.

Belterra currently competes with four dockside riverboats; a casino-resort in French Lick, Indiana, approximately 100 miles west of Belterra; and two racetrack casinos in the Indianapolis metropolitan area, each with approximately 2,000 slot machines. One of our competitors recently opened a new, larger casino in Lawrenceburg, Indiana, replacing a smaller facility.

2

Our Boomtown Bossier City property in Bossier City, Louisiana, features a regional hotel adjoining a dockside riverboat casino. The property opened in October 1996 and is located on a site directly adjacent to, and easily visible from, Interstate 20. The Bossier City/Shreveport region is a three-hour drive from the Dallas/Fort Worth metropolitan area along Interstate 20. The property includes 1,062 slot machines and 32 table games, 187 guestrooms, which we recently refurbished, four restaurants and approximately 1,860 parking spaces.

Boomtown Bossier City competes with four dockside riverboat casino-hotels, a racetrack slot operation and large Native American casinos in southern Oklahoma. Such Native American facilities are approximately 60 miles north of Dallas.

Boomtown Reno is a land-based casino-hotel located approximately nine miles west of downtown Reno, Nevada, near the California border along Interstate 80. This interstate is the primary east-west interstate highway serving northern California. Boomtown Reno has been operating for more than 40 years.

The property offers 681 slot machines and 13 table games, 318 guestrooms, 172 of which we refurbished during 2008, two restaurants, a 30,000-square-foot amusement center and approximately 1,300 parking spaces. In addition to the main casino-hotel, the property has a gas station, a mini-mart and a 197-space recreational vehicle park.

Boomtown Reno has approximately 890 acres of land, approximately 60 of which are utilized by the casino, hotel and other amenities and another 490 acres, most of which is developable. The remaining 340 acres are remote and difficult to develop. In 2006, we sold approximately 28 acres of land to Cabela’s Inc. In 2007, we closed the property’s truck stop to accommodate the construction of a Cabela’s Inc. branded outdoor sporting goods store. We have permits to build a new truck stop at a different location on the property and are evaluating whether to do so.

Historically, Reno has been a drive-in gaming market that attracted visitors from northern California. Our facility also caters to travelers along Interstate 80 and local customers. Over the past 10 years, new and expanded Native American casino facilities have opened in California, which compete for business with Reno gaming properties. In addition, northern California has been adversely impacted by the recent economic downturn. Consequently, the overall performance of the casino-hotel business in Reno, as well as Boomtown Reno in particular, has been adversely affected.

Casino Magic Argentina consists of a significant casino-hotel facility in the city of Neuquén, Argentina and several smaller casinos elsewhere in the Patagonia region of Argentina. The principal Casino Magic Argentina property opened in July 2005 and replaced a leased facility that had operated for more than 20 years. The principal Casino Magic Argentina property in the city of Neuquén offers a casino with 794 slot machines and 44 table games, a 32-guestroom hotel, a restaurant, several bars and an entertainment venue on approximately 20 acres of land. In January 2010, we made the decision to explore strategic alternatives for our Argentina operations.

In the neighboring Province of Río Negro, there is a casino approximately 9 miles from our principal Neuquén operations.

The President Casino is a riverboat operation offering 644 slot machines and four table games and is moored near the Lumière Place complex. Operating results at the President have been adversely affected by our significant investment in the Lumière Place complex, which is located adjacent to the President. On January 27, 2010, the Missouri Gaming Commission (“MGC”) issued a preliminary order for disciplinary action that proposed that the MGC revoke the gaming license associated with the President Casino. The MGC alleges in its preliminary order that there has been a purposeful downgrading of the President Casino’s offerings and revenues, which it claims should subject our subsidiary that operates the President Casino to disciplinary action. On February 19, 2010, we filed a response to the preliminary order for disciplinary action and made a request for a hearing. We are examining all available legal remedies in connection with this matter.

3

New Properties Under Construction and/or Development

We have a number of projects at various stages of development. In south St. Louis County, Missouri, we have completed construction of our River City casino. In Lake Charles, Louisiana, we have begun preliminary work on our Sugarcane Bay at L’Auberge du Lac project. We are also developing a casino-hotel in Baton Rouge, Louisiana.

River City casino in south St. Louis County, Missouri, is expected to open on March 4, 2010, subject to approval of the MGC. River City is located just south of the confluence of the Mississippi River and the River des Peres in the community of Lemay, one of the most densely populated areas in the St. Louis region, and approximately 12 miles from our Lumière Place facility. The first phase of the River City project includes a casino and several restaurants and is expected to cost slightly less than earlier projections of $357 million, excluding operating cash, non-cash rent accruals and capitalized interest. Capitalized interest is expected to be approximately $26.0 million. River City is located on approximately 56 acres of land under a long-term lease from St. Louis County. We expect the property to open with approximately 2,103 slot machines and approximately 55 table games. A second phase for the River City project is expected to include a hotel with a minimum of 100 guestrooms, as well as other amenities to be determined at a later time.

We have begun preliminary work for our Sugarcane Bay at L’Auberge du Lac project to be built adjacent to and integrated with our L’Auberge du Lac facility. We recently updated our plans for Sugarcane Bay, which include a floating, single-level dockside casino similar to that of L’Auberge du Lac. Sugarcane Bay is expected to include at least 1,250 slot machines and 38 table games, a 400-guestroom hotel and a large multi-purpose venue. The project’s budget, excluding estimated capitalized interest and operating cash, has been updated to approximately $305 million, of which approximately $235 million remains to be spent as of December 31, 2009.

We are developing a casino-hotel in Baton Rouge, which is expected to have at least 1,300 slot machines and 50 table games and will be located on a portion of the 575 acres of land that we own approximately eight miles southeast of downtown Baton Rouge, Louisiana. The project is expected to cost approximately $250 million, excluding operating cash and estimated capitalized interest, with approximately $240 million remaining to be spent as of December 31, 2009. The project is subject to certain conditions and various other approvals. Baton Rouge is currently believed to rival New Orleans as the largest city in Louisiana and has experienced significant growth in recent years, both before and particularly after the effects of the 2005 Hurricane Katrina on the nearby New Orleans region. We continue to perform design and entitlement work for the Baton Rouge project.

Other Assets

We own approximately 19 contiguous acres at the heart of Atlantic City, New Jersey, with extensive frontage along The Boardwalk, Pacific Avenue and Brighton Park. We began site preparation work in 2007, including the demolition of the former casino-hotel and other structures located on the site. In late 2008, we decided to suspend substantially all other development indefinitely due to the economic conditions and the evolving competitive market conditions. In January 2010, we made the decision to sell our assets in Atlantic City as we no longer intend any development there.

In August 2006, we purchased approximately one and one-half acres of gaming-zoned land in Central City, Colorado, which is approximately 40 miles from Denver, Colorado. We have an option to purchase an additional six acres of adjoining, non-gaming zoned land. We believe our Central City land is the most conveniently located gaming-zoned site for Denver customers.

Competition

We face significant competition in each of the jurisdictions in which we operate. Such competition may intensify in some of these jurisdictions if new gaming operations open in these markets or existing competitors expand their operations. Our properties compete directly with other gaming properties in each state in which we operate, as well as in adjacent states. We also compete for customers with other casino operators in other markets, including casinos located on Native American reservations, and other forms of gaming, such as lotteries and internet gaming. Many of our competitors are larger and have substantially greater name recognition and marketing and financial resources. In some instances, particularly with Native American casinos, our competitors pay substantially lower taxes or no taxes at all. We believe that increased legalized gaming in other states, particularly in areas close to our existing gaming properties such as Texas, Ohio, Illinois, Indiana, Kentucky, Oklahoma or California and the development or expansion of Native American gaming in or near the states in which we operate, could create additional competition for us and could adversely affect our operations or proposed development projects.

4

Government Regulation and Gaming Issues

The gaming industry is highly regulated, and we must maintain our licenses and pay gaming taxes to continue our operations. Each of our casinos is subject to extensive regulation under the laws, rules and regulations of the jurisdiction where it is located. These laws, rules and regulations generally concern the responsibility, financial stability and character of the owners, managers, and persons with financial interests in the gaming operations. Violations of laws in one jurisdiction could result in disciplinary action in other jurisdictions. For a more detailed description of the regulations to which we are subject, please see Exhibit 99.1 to this Annual Report on Form 10-K, “Government Regulation and Gaming Issues” which is incorporated herein by reference.

Our businesses are subject to various foreign, federal, state and local laws and regulations in addition to gaming regulations. These laws and regulations include, but are not limited to, restrictions and conditions concerning alcoholic beverages, environmental matters, employees, currency transactions, taxation, zoning and building codes, and marketing and advertising. Such laws and regulations could change or could be interpreted differently in the future, or new laws and regulations could be enacted. Material changes, new laws or regulations, or material differences in interpretations by courts or governmental authorities could adversely affect our operating results.

Compliance with federal, state and local provisions which have been enacted or adopted regulating the discharge of materials into the environment or otherwise relating to the protection of the environment have not had a material effect upon our capital expenditures, earnings or the competitive positions of our properties. From time to time, certain of our development projects may require substantial costs for environmental remediation due to prior use of our development sites. Our River City project site, for example, was used for heavy industrial purposes, necessitating remediation of the site by us as part of the overall project. Our Central City site was once used to dump tailings from gold-mining operations and is believed to have subterranean mining tunnels. In Reno, we have remediated the site where our former truck stop was located. Our project budgets typically include amounts expected to cover the remediation work required.

Employees

The following is a summary of our work force by segment at December 31, 2009, some of which are part-time employees:

	Approximate
	Number of
Property	Employees
L’Auberge du Lac		2,327
Lumière Place		1,360
Belterra Casino Resort		1,204
Boomtown New Orleans		774
Boomtown Bossier City		720
Casino Magic Argentina		689
Boomtown Reno		417
President Casino		239
Corporate and other (a)		317
Total		8,047

(a) Corporate and other includes certain development project employees.

5

Executive Officers of the Registrant

The persons serving as our executive officers as of February 26, 2010, and their positions with us are as follows:

NAME	POSITION WITH THE COMPANY
John V. Giovenco	Interim Chief Executive Officer
Stephen H. Capp	Executive Vice President and Chief Financial Officer
John A. Godfrey	Executive Vice President, Secretary and General Counsel
Carlos A. Ruisanchez	Executive Vice President of Strategic Planning and Development
Clifford D. Kortman	Executive Vice President of Construction and Development
Alain J. Uboldi	Chief Operating Officer

Directors of the Registrant

The following table lists our directors, their principal occupations and principal employers as of February 26, 2010:

NAME	PRINCIPAL OCCUPATION & EMPLOYER
Stephen C. Comer	Retired Accounting Firm Managing Partner
John V. Giovenco	Interim Chief Executive Officer of Pinnacle Entertainment, Inc.
Richard J. Goeglein	Interim Nonexecutive Chairman of the Board of Pinnacle Entertainment, Inc., Owner, Evening Star Holdings, LLC (Business Consulting Firm) and Former Gaming Executive
Ellis Landau	Retired Gaming Executive
Bruce A. Leslie	Partner, Armstrong Teasdale LLP (law firm)
James L. Martineau	Business Advisor and Private Investor
Michael Ornest	Private Investor
Lynn P. Reitnouer	Partner, Crowell, Weedon & Co. (Stock Brokerage Firm)

Other

Pinnacle Entertainment, Inc., a Delaware corporation, is the successor to the Hollywood Park Turf Club, which was organized in 1938. It was incorporated in 1981 under the name Hollywood Park Realty Enterprises, Inc. In 1992, we changed our name to Hollywood Park, Inc. and in February 2000, we became Pinnacle Entertainment, Inc.

Financial information about segments and geographic areas is incorporated by reference from Note 12 to the audited Consolidated Financial Statements included in this Annual Report on Form 10-K.

Available Information

Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports are available free of charge as soon as reasonably practicable after they are filed with or furnished to the Securities and Exchange Commission (“SEC”) through our internet website, www.pnkinc.com. Our filings are also available through a database maintained by the SEC at www.sec.gov.

Item 1A. Risk Factors

An investment in our securities is subject to risks inherent to our business. We have described below what we currently believe to be the material risks and uncertainties in our business.

Before making an investment decision, you should carefully consider the risks and uncertainties described below, together with all of the other information included or incorporated by reference in this Annual Report on Form 10-K. We also face other risks and uncertainties beyond what is described below. This Annual Report on Form 10-K is qualified in its entirety by these risk factors. If any of the following risks actually occur, our business, financial condition and results of operations could be materially and adversely affected. If this were to happen, the value of securities, including our common stock, could decline significantly. You could lose all or part of your investment.

6

Our business is particularly sensitive to reductions in consumers’ discretionary spending as a result of downturns in the economy or other changes we cannot accurately predict.

Demand for entertainment and leisure activities is sensitive to consumers’ disposable incomes, and thus demand can be affected by changes in the economy that we cannot accurately predict. Perceived or actual unfavorable changes in general economic conditions including recession, economic slowdown, continued high unemployment levels, the current housing and credit crises, the potential for bank failures, higher fuel or other transportation costs, and changes in consumer confidence, may reduce disposable income of our customers or result in fewer patrons visiting our casinos. As a result, we cannot ensure that demand for entertainment and leisure activities will not be adversely affected. Continued adverse developments affecting economies throughout the world, including a general tightening of the availability of credit, potentially rising interest rates, increasing energy costs, acts of war or terrorism, natural disasters, declining consumer confidence or significant declines in the stock market could lead to a further reduction in discretionary spending on entertainment and leisure activities, which could adversely affect our business, financial condition and results of operations. A deterioration in operating results could affect our ability to comply with financial covenant ratios and “in-balance” requirements in our amended and restated credit facility and to fund our construction projects. Our recent results, particularly from the fourth quarter of 2009, show reduced operating results at certain of our properties. This may indicate a decline in consumer spending in the regional markets in which we operate.

Our substantial funding needs in connection with our development projects and other capital-intensive projects will require us to raise substantial amounts of funding from outside sources and/or conduct asset sales.

We are currently engaged in and have development projects and planned expansions that require substantial amounts of capital. We have completed construction of our River City casino, we have begun preliminary work on Sugarcane Bay at L’Auberge du Lac and we are in the design phase of our Baton Rouge project. The Sugarcane Bay at L’Auberge du Lac and Baton Rouge projects have an expected aggregate investment of over $565 million, of which $476 million remains to be invested as of December 31, 2009. Additional amounts are also needed to fund the initial operations of these development projects once they open. While we endeavor to stage development and construction of these projects over several years and we try not to commence major construction of a project without having a reasonable expectation that we will have access to funds to complete it, our proposed projects could strain our financial resources and there is no certainty that such projects will be completed.

We will need to access the capital markets or otherwise obtain additional funds through asset sales or other means to complete our development projects other than River City, and fund initial operations once these projects open since the funds required for those projects exceed our anticipated financial resources. Those additional funds would be needed along with existing cash resources, funds available under our amended and restated credit facility and anticipated cash flows from operations. In the event that our future cash flows from operations do not match the levels we currently anticipate, whether due to downturns in the economy or otherwise, we would need to raise additional funds beyond the amounts we currently anticipate needing to raise.

In addition, our amended and restated credit facility provides that we cannot spend more than $25 million in construction and development costs on the Baton Rouge project after January 1, 2010 unless we obtain at least $100 million of additional funding through asset sales, receipt of insurance proceeds, tax refunds, litigation settlements, certain dividends and other distributions from our unrestricted subsidiaries and/or gross proceeds received by us from the issuance and sale of non-debt capital. Moreover, additional funds would be needed for our expansion projects.

We do not know when or if the capital markets will permit us to raise additional funds in a timely manner, or on acceptable terms, or at all. Similar considerations apply to any effort to sell assets that we may undertake given current market conditions where asset prices have fallen from recent higher levels. Our current stock price, along with the stock prices of many public gaming companies, has declined sharply from historical levels which makes issuing equity to fund these projects less attractive. Inability to access the capital markets, or the necessity to access the capital markets on less-than-favorable terms, may force us to delay, reduce or cancel our development projects or obtain additional financing on unfavorable terms. Similarly, inability to sell assets, or the necessity to sell assets on less-than-favorable terms, may force us to delay, reduce or cancel our development projects or obtain additional financing on unfavorable terms. This may impair our growth and materially and adversely affect our financial condition, results of operations and cash flow and the returns of investing in our securities.

7

Our ability to obtain bank financing or to access the capital markets for future debt or equity offerings may also be limited by our financial condition, results of operations or other factors, such as our credit rating or outlook at the time of any such financing or offering and the covenants in our existing debt agreements, as well as by general economic conditions and contingencies and uncertainties that are beyond our control. As we seek additional financing for our development projects, we will be subject to the risks of rising interest rates and other factors affecting the financial markets. In particular, the availability of credit from financial institutions that typically provide capital has been adversely affected by the financial distress of several larger, highly leveraged companies in the gaming industry.

If we fail to refinance our 8.25% senior subordinated notes due 2012 on a timely basis, amounts outstanding under our amended and restated credit agreement may be treated as a current liability on our year-end 2010 balance sheet, which could have adverse consequences.

The amended and restated credit facility matures and all amounts outstanding thereunder are due and payable in full on March 31, 2014; provided that such date will be accelerated to September 30, 2011 if any portion of our 8.25% senior subordinated notes due 2012 is outstanding on September 30, 2011. We currently have $200 million in aggregate principal amount of our 8.25% senior subordinated notes due 2012 outstanding. In addition, because the maturity of our amended and restated credit facility may be accelerated to September 30, 2011, if we have not repurchased or redeemed our 8.25% senior subordinated notes due 2012 outstanding by the time we file our annual report on Form 10-K for the 2010 fiscal year, generally accepted accounting principles would require that amounts outstanding under the amended and restated credit facility, which amounts may be substantial, be treated as a current liability at the time our next Form 10-K is filed. If our outstanding borrowings under our amended and restated credit facility at the 2010 year-end were substantial, treating them as a current liability may lead to our receiving an audit report with respect to our 2010 audited financial statements that may not satisfy the requirements of our amended and restated credit facility and therefore might result in a default under our amended and restated credit facility that potentially could lead to an acceleration of our credit facility borrowings and then cross-defaults under our indentures.

The bond market, and particularly the market for bonds issued by casino companies, has been unpredictable and volatile over the past 12 months. As such, there can be no assurance that we will be able to repurchase or redeem our 8.25% senior subordinated notes due 2012 in their entirety by the time that we file our next Form 10-K on favorable terms or at all.

Our present indebtedness and projected future borrowings could adversely affect our financial health; future cash flows may not be sufficient to meet our obligations and we might have difficulty obtaining additional financing; we may experience adverse effects of interest-rate and exchange-rate fluctuations.

As of December 31, 2009, we had indebtedness of approximately $1,063 million. Our amended and restated credit facility consists of a $375 million revolving credit facility. Borrowings of approximately $100 million and letters of credit of $12.6 million were outstanding as of February 26, 2010 under our amended and restated credit facility. Our substantial development plans for capital-intensive projects will require us to borrow significant amounts under our credit facility and, depending on which projects are pursued to completion, may cause us to incur substantial additional indebtedness.

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While we believe that we have sufficient cash and cash-generating resources to meet our debt service obligations during the next 12 months, it is uncertain in the future whether we will generate sufficient cash flow from operations or through asset sales to meet our long-term debt service obligations. Our present indebtedness and projected future borrowings could have important adverse consequences to us, such as:

• limiting our ability to obtain additional financing without restructuring the covenants in our existing indebtedness to permit the incurrence of such financing;

• requiring a substantial portion of our cash flow to be used for payments on the debt and related interest, thereby reducing our ability to use cash flow to fund working capital, capital expenditures and general corporate requirements;

• limiting our ability to respond to changing business, industry and economic conditions and to withstand competitive pressures, which may affect our financial condition;

• causing us to incur higher interest expense in the event of increases in interest rates on our borrowings that have variable interest rates or in the event of refinancing existing debt at higher interest rates;

• limiting our ability to make investments, dispose of assets, pay cash dividends or repurchase stock;

• increasing our vulnerability to downturns in our business or our industry or the general economy and restricting us from making improvements or acquisitions or exploring business opportunities;

• placing us at a competitive disadvantage to competitors with less debt or greater resources; and

• subjecting us to financial and other restrictive covenants in our indebtedness, which a failure to comply with could result in an event of default.

If we fail to generate sufficient cash flow from future operations to meet our debt service obligations, we may need to refinance all or a portion of our debt on or before its maturity. In such circumstances, it is uncertain that we will be able to refinance any of our debt. Our future operating performance and our ability to service or refinance our debt will be subject to future economic conditions and to financial, business and other factors, many of which are beyond our control.

Our borrowings under our revolving amended and restated credit facility are at variable rates of interest, and to the extent not protected with interest rate hedges, could expose us to market risk from adverse changes in interest rates. We currently have no such interest rate hedges. If interest rates increase, our debt service obligations on the variable-rate indebtedness could increase significantly even though the amount borrowed would remain the same. This may only be partially offset by earning higher rates of interest on our surplus cash balances. Additionally, our Argentina operations expose us to foreign exchange rate risk from adverse changes in the exchange rate of the dollar to the Argentina peso.

Our indebtedness imposes restrictive covenants on us.

Our credit facility and the indentures governing our senior and senior subordinated notes impose various customary covenants on us and our subsidiaries. The restrictions that are imposed under these debt instruments include, among other obligations, limitations on our and our subsidiaries’ ability to:

• incur additional debt;

• make payments on subordinated obligations;

• make dividends or distributions and repurchase stock;

• make investments;

• grant liens on our property to secure debt;

• enter into certain transactions with affiliates;

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• sell assets or enter into mergers or consolidations;

• sell equity interests in our subsidiaries;

• create dividend and other payment restrictions affecting subsidiaries;

• change the nature of our lines of business;

• make capital expenditures;

• designate restricted and unrestricted subsidiaries; and

• amend or modify our subordinated indebtedness without obtaining consents from the holders of our senior indebtedness.

Our credit facility imposes various customary affirmative covenants on us and our restricted subsidiaries, including among others, reporting covenants, covenants to maintain insurance, comply with laws, maintain properties and other covenants customary in senior credit financings of this type. In addition, our credit facility requires that we comply with various restrictive maintenance financial covenants, including an interest coverage ratio, a debt to annualized Adjusted EBITDA ratio, and capital spending limits.

Furthermore, the covenants in our credit facility include a requirement that an “in-balance” test be satisfied for each $75 million development project other than River City. In general, the “in-balance” test requires that, as of the date of determination prior to commencement of construction, as such term is defined in our credit facility, the project sources exceed the project uses for such project and for all other projects for which construction has commenced for the period from such date of determination through the date six full months after the scheduled opening date of such project. We cannot assure you that we will be able to meet the “in-balance” test for each of our projects on the applicable determination date.

In addition, our amended and restated credit facility provides that we cannot spend more than $25 million in construction and development costs on the Baton Rouge project after January 1, 2010 unless we obtain at least $100 million of additional funding through asset sales, receipt of insurance proceeds, tax refunds, litigation settlements, certain dividends and other distributions from our unrestricted subsidiaries and/or gross proceeds received by us from the issuance and sale of non-debt capital.

Our ability to comply with the covenants contained in the instruments governing our indebtedness may be affected by general economic conditions, industry conditions, and other events beyond our control, including delay in the completion of new projects under construction. As a result, we cannot assure you that we will be able to comply with these covenants. Our failure to comply with the covenants contained in the instruments governing our indebtedness, including our credit facility and the indentures governing the existing senior and senior subordinated notes, including failure as a result of events beyond our control, could result in an event of default, which could materially and adversely affect our operating results and our financial condition and our ability to comply with the conditions of the Louisiana Gaming Control Board in connection with our Sugarcane Bay and Baton Rouge projects.

If there were an event of default under one of our debt instruments, the holders of the defaulted debt could cause all amounts outstanding with respect to that debt to be due and payable, subject to applicable grace periods. This could trigger cross-defaults under our other debt instruments. We cannot assure you that our assets or cash flow would be sufficient to repay borrowings under our outstanding debt instruments, if accelerated upon an event of default, or that we would be able to repay, refinance or restructure the payments on any of those debt instruments.

Servicing our indebtedness will require a significant amount of cash, and our ability to generate sufficient cash depends on many factors, some of which are beyond our control.

We cannot assure you that our business will generate sufficient cash flow from operations, that our anticipated revenue growth will be realized, or that future borrowings will be available to us under our credit facility in amounts sufficient to enable us to pay our indebtedness or to fund our other liquidity needs. In addition, as we undertake substantial new developments or facility renovations or if we consummate significant acquisitions in the future, our cash requirements and our debt service requirements may increase significantly.

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If we fail to generate sufficient cash flow from future operations to meet our debt service obligations, we may need to refinance all or a portion of our debt on or before maturity. We cannot assure you that we will be able to refinance any of our debt, including our credit facility and our existing senior and senior subordinated notes, on attractive terms, commercially reasonable terms or at all, particularly because of our anticipated high levels of debt and the debt incurrence restrictions imposed by the agreements governing our debt.

Our future operating performance and our ability to service or refinance our existing indebtedness, and to service, extend or refinance our credit facility will be subject to future economic conditions and to financial, business and other factors, many of which are beyond our control.

Insufficient or lower-than-expected results generated from our new developments and acquired properties may negatively affect the market for our securities; our new properties may compete with our existing properties.

We cannot assure you that, if and once completed, the revenues generated from our new developments and acquired properties will be sufficient to pay related expenses; or, even if revenues are sufficient to pay expenses, the new developments and acquired properties will yield an adequate or expected return on our significant investments. Our projects, if completed, may take significantly longer than we expect to generate returns, if any. Moreover, lower-than-expected results from the opening of a new facility may negatively affect us and the market for our securities and may make it more difficult to raise capital, even as the shortfall increases the need to raise capital. We are currently constructing or developing several new facilities, with our River City facility scheduled to open in March 2010.

As our new properties open, they may compete with our existing properties. For example, our River City casino is located approximately 12 miles from our Lumière Place facility and may divert business away from such location, which would have an adverse effect on our financial performance. In addition, our Sugarcane Bay at L’Auberge du Lac project is expected to be located adjacent to L’Auberge du Lac.

Many factors could prevent us from completing our construction and development projects as planned, including the escalation of construction costs beyond increments anticipated in our construction budgets.

Construction of major buildings has certain inherent risks, including the risks of fire, structural collapse, human error and electrical, mechanical and plumbing malfunction. Several of the projects we intend to build or are now building entail additional risks related to heights and cranes. Our development and expansion projects also entail significant risks, including:

• shortages of materials;

• shortages of skilled labor or work stoppages;

• unforeseen construction scheduling, engineering, excavation, environmental or geological problems;

• natural disasters, hurricanes, weather interference, floods, fires, earthquakes or other casualty losses or delays;

• unanticipated cost increases or delays in completing the projects;

• delays in obtaining or inability to obtain or maintain necessary licenses or permits;

• changes to plans or specifications;

• disputes with contractors;

• construction at our existing properties, which could disrupt our operations;

• remediation of environmental contamination at some of our proposed construction sites, which may prove more difficult or expensive than anticipated in our construction budgets;

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• failure to obtain and maintain necessary gaming regulatory approvals and licenses, or failure to obtain such approvals and licenses on a timely basis; and

• requirements or government-established “goals” concerning union labor or requiring that a portion of the project expenditures be through companies controlled by specific ethnic or gender groups, goals that may not be obtainable, or may only be obtainable at additional project cost.

Increases in the cost of raw materials for construction, driven by worldwide demand, higher labor and construction costs and other factors, may cause price increases beyond those anticipated in the budgets for our development projects. Escalating construction costs may cause us to modify the design and scope of projects from those initially contemplated or cause the budgets for those projects to be increased. We generally carry insurance to cover certain liabilities related to construction, but not all risks are covered and it is uncertain whether such insurance will provide sufficient payment in a timely fashion even for those risks that are insured.

It is uncertain whether any project will be completed on time or within established budgets. Significant delays or cost overruns related to our construction projects could significantly reduce any return on our investment in these projects and adversely affect our earnings and financial resources. There are also certain tax incentives for construction in hurricane-damaged areas that require completion of new facilities by certain dates. There is no certainty that such dates will be met. Construction of our development projects exposes us to risks of cost overruns due to typical construction uncertainties associated with any project or changes in the designs, plans or concepts of such projects. For these and other reasons, construction costs may exceed the estimated cost of completion notwithstanding the existence of any guaranteed maximum price construction contracts.

We are currently in discussions with the contractor regarding the guaranteed maximum price for the Sugarcane Bay project. In the event that we and the general contractor are unable to agree upon the guaranteed maximum price, then, we can either change the scope and scale of the work or terminate the contract that we have with the contractor. We may seek to terminate such contract and seek a new general contractor through competitive bidding. We have not yet entered into a guaranteed maximum price agreement for our Baton Rouge project that would protect us from potential increases in construction costs.

We have begun discussions with the Lake Charles Harbor and Terminal District to revise a ground lease pertaining to land on which the Sugarcane Bay project was to be built before the revisions to the project were made. The project will now be built primarily on land already leased for our L’Auberge du Lac complex. In connection with such revisions, we may owe additional amounts to the District.

The loss of management and other key personnel could significantly harm our business and we may not be able to effectively replace members of management who have left the company.

Our continued success and our ability to maintain our competitive position is largely dependent upon, among other things, the efforts and skills of our senior executives and management team. Although we have entered into employment agreements with certain of our senior executives and key personnel, we cannot guarantee that these individuals will remain with us. If we lose the services of any members of our management team or other key personnel, our business may be significantly impaired. We cannot assure you that we will be able to retain our existing senior executive and management personnel or attract additional qualified senior executive and management personnel.

On November 7, 2009, our former Chairman of the Board and Chief Executive Officer, Daniel R. Lee, resigned his positions. At that time, we appointed lead director Richard J. Goeglein to serve as Interim Nonexecutive Chairman of the Board and director John V. Giovenco to serve as Interim Chief Executive Officer. We have initiated a search for a permanent Chief Executive Officer, but we cannot assure you that we will be able to find a permanent Chief Executive Officer and/or Chairman of the Board in a timely manner or at all. A potential delay in finding a permanent Chief Executive Officer and/or a Chairman of the Board may have an adverse effect on our operations. Further, we may lose other members of our management team and/or key employees depending on who is named the permanent Chief Executive Officer or whether we are able to find a permanent Chief Executive Officer in a timely manner.

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In addition, our officers, directors and key employees also are required to file applications with the gaming authorities in each of the jurisdictions in which we operate and are required to be licensed or found suitable by these gaming authorities. If the gaming authorities were to find an officer, director or key employee unsuitable for licensing or unsuitable to continue having a relationship with us, we would have to sever all relationships with that person. Furthermore, the gaming authorities may require us to terminate the employment of any person who refuses to file appropriate applications. Either result could significantly impair our operations.

The gaming industry is very competitive and increased competition, including by Native American gaming facilities, could adversely affect our profitability.

We face significant competition in all of the markets in which we operate. With fewer new markets opening for development in recent years, this competition will intensify if new gaming operations enter our markets or existing competitors expand their operations. Increased competitive pressures may adversely affect our ability to continue to attract customers or require us to offer a larger number of, or more costly, promotions to compete more efficiently.

Further, several of our properties are located in jurisdictions that restrict gaming to certain areas and/or are adjacent to states that currently prohibit or restrict gaming operations. Economic difficulties faced by state governments could lead to intensified political pressures for the legalization of gaming in jurisdictions where it is currently prohibited. The legalization of gaming in such jurisdictions could be an expansion opportunity for us or a significant threat to us, depending on where the legalization occurs and our ability to capitalize on it. In particular, our ability to attract customers to our existing casinos would be significantly affected by the legalization or expansion of gaming in Texas, Ohio, Illinois, Kentucky, Oklahoma, and California and the development or expansion of Native American casinos in our markets. The value of our site in Atlantic City has been affected and would be affected by the legislation or expansion of casino gaming in Delaware, Maryland, Pennsylvania, West Virginia, New York, northern New Jersey or Connecticut.

In the past, legislation to legalize or expand gaming has been introduced in some of these jurisdictions and federal law favors the expansion of Native American gaming. In 2007, Indiana approved casinos with 2,000 slot machines at each of two racetracks in the Indianapolis area, both of which opened in 2008. In 2008, New York approved a significant reduction in its gaming tax rate as a specific inducement for a large casino hotel in the Catskills region. In 2008, Maryland voters approved a state constitutional amendment allowing 15,000 slot machines total in five locations. In 2009, the governor of Ohio approved slot machines in the state’s seven racetracks, allowing each to add up to 2,500 video lottery terminals, which approval is being challenged. Also, in November 2009, voters of Ohio approved a proposal that would amend the Ohio constitution to permit four casinos, which are to be located in each of Cleveland, Toledo, Columbus and Cincinnati. In 2009, legislation to approve up to 12 resort casinos, slot machines at racetracks and Native American gaming in Texas was rejected during the state’s 2009 legislative session. In January 2010, Delaware passed legislation that allows table games at three racetracks in the state, which may become operational by the summer of 2010. Also in January 2010, Pennsylvania passed legislation which would allow slots-only casinos in Pennsylvania to feature table games. The Pennsylvania Gaming Control Board has yet to determine how to implement such legislation. We expect similar proposals to legalize or expand gaming will be made in the future in various states and it is uncertain whether such proposals will be successful. Further, because the global economic recession has reduced the revenues of state governments from traditional tax sources, voters and state legislatures may be more sympathetic to proposals authorizing or expanding gaming in those jurisdictions.

Even in gaming markets where the state governments do not choose to increase the maximum number of gaming licenses available, we face the risk that existing casino licensees will expand their operations and the risk that Native American gaming will continue to grow. Furthermore, Native American gaming facilities frequently operate under regulatory requirements and tax environments that are less stringent than those imposed on state-licensed casinos, which could provide such Native American gaming facilities with a competitive advantage in our markets.

Many of our competitors are larger and have substantially greater name recognition and marketing resources than we do. Moreover, consolidation of companies in the gaming industry could increase the concentration of large gaming companies in the markets in which we operate. This may result in our competitors having even greater resources and name recognition than such competitors currently enjoy.

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From time to time, our competitors refurbish, rebrand or expand their casino offerings in the markets in which we operate, which could function to increase competition in those markets. For example, a large competitor of our Belterra property recently reopened a rebranded and refurbished riverboat casino in Lawrenceburg, Indiana replacing a smaller facility.

We face competition from racetracks that offer slot machines. We also compete with other forms of legalized gaming and entertainment such as bingo, pull-tab games, card parlors, sports books, pari-mutuel or telephonic betting on horse and dog racing, state-sponsored lotteries, video lottery terminals, video poker terminals and, in the future, may compete with gaming at other venues. Furthermore, competition from internet lotteries and other internet wagering gaming services, which allow their customers to wager on a wide variety of sporting events and play Las Vegas-style casino games from home, could divert customers from our properties and thus adversely affect our business. Such internet wagering services are often illegal under federal law but operate from overseas locations, and are nevertheless sometimes accessible to domestic gamblers. There are also proposals that would specifically legalize internet gaming under federal law.

Our industry is highly regulated, which makes us dependent on obtaining and maintaining gaming licenses and subjects us to potentially significant fines and penalties.

The ownership, management and operation of gaming facilities are subject to extensive state and local regulation. The statutes, rules and regulations of the states and local jurisdictions in which we and our subsidiaries conduct gaming operations require us to hold various licenses, registrations, permits and approvals and to obtain findings of suitability. The various regulatory authorities, including the Indiana Gaming Commission, the Louisiana Gaming Control Board, the Missouri Gaming Commission, the Nevada State Gaming Control Board, the Nevada Gaming Commission, the New Jersey Casino Control Commission, and the Government of the Province of Neuquén, Argentina may, among other things, limit, condition, suspend, revoke or fail to renew a license to conduct gaming operations or prevent us from owning the securities of any of our gaming subsidiaries for any cause deemed reasonable by such licensing authorities. Substantial fines or forfeitures of assets for violations of gaming laws or regulations may be levied against us, our subsidiaries and the persons involved.

To date, we have obtained all governmental licenses, findings of suitability, registrations, permits and approvals necessary for the operation of our gaming facilities. However, it is uncertain whether we will be able to obtain any new licenses, registrations, permits, approvals and findings of suitability that may be required in the future or that existing ones will be renewed or will not be suspended or revoked. Any expansion of our gaming operations in our existing jurisdictions or into new jurisdictions may require various additional licenses, findings of suitability, registrations, permits and approvals of the gaming authorities. The approval process can be time consuming and costly, and there can be no assurance of success.

We are also subject to a variety of other rules and regulations, including laws and regulations governing the serving of alcoholic beverages at our operating properties. If we are not in compliance with these laws, it could adversely affect our business.

Potential changes in the regulatory environment could harm our business.

Changes in regulations affecting the casino business can affect our existing or proposed operations. In 2006, we purchased the President Casino out of bankruptcy. The President Casino is a small riverboat operation with an aging facility and is located within three blocks of our Lumière Place facility in downtown St. Louis. On January 27, 2010, the Missouri Gaming Commission, or the “MGC”, issued a preliminary order for disciplinary action that proposed that the MGC revoke the gaming license associated with the President Casino. The MGC alleges in its preliminary order that there has been a purposeful downgrading of the President Casino’s offerings and revenues, which it claims should subject our subsidiary that operates the President Casino to disciplinary action.

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In addition, legislators and special-interest groups have proposed legislation from time to time that would restrict or prevent gaming operations. Moreover, various jurisdictions such as Illinois, Delaware, New Jersey and Neuquén, Argentina have restricted smoking on the casino floor. Such restrictions resulted in decreases in gaming revenues. Other restrictions or prohibitions on our current or future gaming operations could curtail our operations and could result in decreases in income.

We could lose the right to open our River City casino if we fail to meet the conditions imposed by the Missouri Gaming Commission.

One of our subsidiaries was selected by the MGC to proceed for licensing for the operation of the River City casino. The issuance of the operating license is in the discretion of the MGC. Although our subsidiary was selected by the MGC to proceed for licensing, we cannot assure you that the license will ultimately be granted. We have invested a significant amount of capital in this project, which may be lost or difficult to recoup in the event that the license is not ultimately granted to us by the MGC.

We may not meet the conditions for the maintenance of the licenses that we plan to utilize for our Sugarcane Bay and Baton Rouge projects.

In 2006, we acquired two entities that hold Louisiana gaming licenses. One of these licenses is planned to be used in connection with our planned Sugarcane Bay facility and the other license is anticipated to be used in connection with our planned Baton Rouge facility. The Louisiana Gaming Control Board, or the LGCB, has established numerous conditions for use of each of these licenses, which, if not satisfied, could result in forfeiture of such licenses. While we intend to fulfill all conditions set by the LGCB, it is uncertain whether we will be able to do so or that the LGCB would agree to make any amendments to the conditions that might be necessary. Forfeiture of one or both licenses could adversely affect our expansion plans for the Louisiana gaming market.

On December 15, 2009, the LGCB lowered the minimum required expenditure on Sugarcane Bay by $50 million and granted us a further extension for completion. The minimum amount we must spend in building Sugarcane Bay is now $300 million and Sugarcane Bay’s completion deadline is now June 30, 2011. Also, in October 2009, the LGCB granted an additional extension for entering into a construction contract for our Baton Rouge project. The deadline is now March 31, 2010. There is no certainty that any additional extensions, if required, will be granted.

We operate in a highly taxed industry and may be subject to higher taxes in the future. If the jurisdictions in which we operate increase gaming taxes and fees, our results could be adversely affected.

In gaming jurisdictions in which we operate, foreign, state and local governments raise considerable revenues from taxes based on casino revenues and operations. We also pay property taxes, admission taxes, sales and use taxes, payroll taxes, franchise taxes and income taxes.

Our profitability depends on generating enough revenues to pay gaming taxes and other largely variable expenses, such as payroll and marketing, as well as largely fixed expenses, such as property taxes and interest expense. From time to time, foreign, state and local governments have increased gaming taxes and such increases can significantly impact the profitability of gaming operations.

We cannot assure you that governments in jurisdictions in which we operate, or the federal government or foreign government, will not enact legislation that increases gaming tax rates. The global economic recession has reduced the revenues of state governments from traditional tax sources, which may cause state legislatures or the federal government or foreign government to be more inclined to increase gaming tax rates.

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The global financial crisis and recession has affected our business and financial condition, and may continue to affect us in ways that we currently cannot accurately predict.

The continued credit crisis, recession and related turmoil in the global financial system have had and may continue to have an effect on our business and financial condition. We do not know the duration or severity of the recession. If a significant percentage of our lenders under our amended and restated credit facility were to file for bankruptcy or otherwise default on their obligations to us, we may not have the liquidity to fund our current projects. There is no certainty that our lenders will continue to remain solvent or fund their respective obligations under our amended and restated credit facility. Two of our lenders under our previous credit facility filed for bankruptcy and were unable to fund their pro-rata share of amounts drawn under the revolving credit commitment.

The significant distress recently experienced by financial institutions has had and may continue to have far reaching adverse consequences across many industries, including the gaming industry. The ongoing credit and liquidity crisis has greatly restricted the availability of capital and has caused the cost of capital, if available, to be much higher than it has traditionally been. Accessing the capital markets in this environment could increase the costs of our projects, which could have an impact on our flexibility to react to changing economic and business conditions and our ability or willingness to fund our development projects. All of these effects could have a material adverse effect on our business, financial condition and results of operations.

Adverse weather conditions, road construction, gasoline shortages and other factors affecting our facilities and the areas in which we operate could make it more difficult for potential customers to travel to our properties and deter customers from visiting our properties.

Our continued success depends upon our ability to draw customers from each of the geographic markets in which we operate. Adverse weather conditions or road construction can deter our customers from traveling to our facilities or make it difficult for them to frequent our properties. For example, floodwall construction along the access road to Boomtown New Orleans resulted in the temporary loss of the property’s main entrance and continued construction along such road may hinder our customers’ ability to access that property. In addition, gasoline shortages or fuel price increases in regions that constitute a significant source of customers for our properties could make it more difficult for potential customers to travel to our properties and deter customers from visiting our properties. We believe that the vast majority of our customers drive to our properties.

Our dockside gaming facilities in Indiana, Louisiana and Missouri, as well as any additional riverboat or dockside casino properties that might be developed or acquired, are also subject to risks, in addition to those associated with land-based casinos, which could disrupt our operations. Although none of our vessels leave their moorings in normal operations, there are risks associated with the movement or mooring of vessels on waterways, including risks of casualty due to river turbulence, flooding, collisions with other vessels and severe weather conditions. We own a jet airplane, two seaplanes and numerous limousines and other vehicles that are used to transport customers to our casinos and for other corporate purposes. There are liabilities and other risks included in such transportation operations.

Our results of operations and financial condition could be materially adversely affected by the occurrence of natural disasters, such as hurricanes, or other catastrophic events, including war and terrorism.

Natural disasters such as major hurricanes, floods, fires and earthquakes could adversely affect our business and operating results. Hurricanes are common in the areas in which our Louisiana properties are located and the severity of such natural disasters is unpredictable. River City is located in an area along the Mississippi River that has historically experienced flooding. Although its foundation is built up to be above historical flooding levels, there is no certainty that this will be sufficient in future floods. In 2005, Hurricanes Katrina and Rita caused significant damage in the Gulf Coast region. Our former Biloxi facility was destroyed by Hurricane Katrina. Our Boomtown New Orleans casino was forced to close for 34 days as a result of Hurricane Katrina. Hurricane Rita caused significant damage in the Lake Charles, Louisiana area and forced our L’Auberge du Lac facility to close for 16 days in addition to causing physical damage. In the third quarter of 2008, Hurricanes Gustav and Ike, which struck during two key weekends, affected our Louisiana operations and our Texas customer base. Hurricane Ike also caused flooding in St. Louis, necessitating the temporary closure of the President Casino, and caused a power outage over the course of two days at our Belterra Casino Resort.

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Catastrophic events such as terrorist and war activities in the United States and elsewhere have had a negative effect on travel and leisure expenditures, including lodging, gaming (in some jurisdictions) and tourism. We cannot accurately predict the extent to which such events may affect us, directly or indirectly, in the future. We also cannot assure you that we will be able to obtain or choose to purchase any insurance coverage with respect to occurrences of terrorist acts and any losses that could result from these acts. If there is a prolonged disruption at our properties due to natural disasters, terrorist attacks or other catastrophic events, our results of operations and financial condition could be materially adversely affected.

Natural disasters have made it more challenging for us to obtain similar levels of Weather Catastrophe Occurrence/Named Windstorm, Flood and Earthquake insurance coverage for our properties compared to the levels before the 2005 hurricanes.

Because of significant loss experience caused by hurricanes and other natural disasters over the last several years, a number of insurance companies have stopped writing insurance in Class 1 hurricane areas, including Louisiana. Others have significantly limited the amount of coverage they will write in these markets and have dramatically increased the premiums charged for this coverage. As a result, our policy limits for Weather Catastrophe Occurrences/Named Windstorms as well as other losses are significantly less than the policy limits we had during the 2005 hurricane season. During that period, our aggregate Weather Catastrophe Occurrence coverage was $400 million per occurrence. Our coverage for a Named Windstorm today is $200 million per occurrence, with a deductible of 5% of stated values (up to a maximum $20 million deductible). In addition, as a result of the worldwide economic conditions, there has been uncertainty as to the viability of certain insurance companies. While the Company expects that its insurance providers will remain solvent, there is no certainty that this will be the case.

Work stoppages, organizing drives and other labor problems could negatively impact our future profits.

Although we are not currently a party to any domestic collective bargaining agreements, some of our employees have been approached by unions. Multiple unions have made claims that they are the exclusive bargaining agent for our St. Louis employees. A lengthy strike or other work stoppages at any of our casino properties or construction projects could have an adverse effect on our business and results of operations. Labor unions are making a concerted effort to recruit more employees in the gaming industry. In addition, organized labor may benefit from new legislation or legal interpretations by the current presidential administration. We cannot provide any assurance that we will not experience additional and more aggressive union activity in the future. We are party to a collective bargaining agreement for our Argentina operations.

We are subject to litigation which, if adversely determined, could cause us to incur substantial losses.

From time to time during the normal course of operating our businesses, we are subject to various litigation claims and legal disputes. Some of the litigation claims may not be covered under our insurance policies, or our insurance carriers may seek to deny coverage. As a result, we might also be required to incur significant legal fees, which may have a material adverse effect on our financial position. In addition, because we cannot accurately predict the outcome of any action, it is possible that, as a result of current and/or future litigation, we will be subject to adverse judgments or settlements that could significantly reduce our earnings or result in losses.

We face environmental and archaeological regulation of our real estate.

Our business is subject to a variety of federal, state and local governmental statutes and regulations relating to the use, storage, discharge, emission and disposal of hazardous materials. Failure to comply with such laws could result in the imposition of severe penalties or restrictions on our operations by government agencies or courts of law or the incurrence of significant costs of remediation of hazardous materials. A material fine or penalty, severe operational or development restriction, or imposition of material remediation costs could adversely affect our business. In addition, the locations of our current or future developments may coincide with sites containing archaeologically significant artifacts, such as Native American remains and artifacts. Federal, state and local governmental regulations relating to the protection of such sites may require us to modify, delay or cancel construction projects at significant cost to us.

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We face risks associated with growth and acquisitions.

We regularly evaluate opportunities for growth through development of gaming operations in existing or new markets, through acquiring other gaming entertainment facilities or through redeveloping our existing facilities. For example, we acquired two entities that hold riverboat gaming licenses to be used in our Sugarcane Bay and Baton Rouge projects. The expansion of our operations, whether through acquisitions, development or internal growth, could divert management’s attention and could also cause us to incur substantial costs, including legal, professional and consulting fees. It is uncertain that we will be able to identify, acquire, develop or profitably manage additional companies or operations or successfully integrate such companies or operations into our existing operations without substantial costs, delays or other problems. Additionally, it is uncertain that we will receive gaming or other necessary licenses or governmental approvals for our new projects or that gaming will be approved in jurisdictions where it is not currently approved. Further, we may not have adequate financing for such opportunities on acceptable terms.

Private Securities Litigation Reform Act

The Private Securities Litigation Reform Act of 1995 (the “Act”) provides certain “safe harbor” provisions for forward-looking statements. Except for the historical information contained herein, the matters addressed in this Annual Report on Form 10-K, as well as in other reports filed with or furnished to the SEC or statements made by us, may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. From time to time, we may provide oral or written forward-looking statements in our other periodic reports on Form 10-Q, Form 8-K, press releases and other materials released to the public. All forward-looking statements made in this Annual Report on Form 10-K and any documents we incorporate by reference are made pursuant to the Act. Words such as, but not limited to, “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “could,” “may,” “will,” “should,” and similar expressions are intended to identify forward-looking statements. Such forward-looking statements, which may include, without limitation, expected results of operations, adequacy of resources to fund development and expansion projects, liquidity, financing options, including the state of the capital markets and our ability to access the capital markets, the state of the credit markets, the state of the economy, anticipated completion and opening schedules of various projects, anticipated results for new projects, expansion plans, construction schedules, cash needs, cash reserves, operating and capital expenses, expense reductions, our ability to retain the gaming license for the President Casino in Missouri, the sufficiency of insurance coverage, anticipated marketing costs at various projects, the future outlook of Pinnacle and the gaming industry, our continuing exclusivity rights to operate casinos in Neuquén, Argentina after 2016 and pending regulatory and legal matters, are all subject to a variety of risks and uncertainties that could cause actual results to differ materially from those anticipated by us. This can occur as a result of inaccurate assumptions or as a consequence of known or unknown risks and uncertainties. Factors that may cause our actual performance to differ materially from that contemplated by such forward-looking statements include, among others, the various risk factors discussed above, in addition to general domestic and international economic and political conditions as well as market conditions in our industry. For more information on the potential factors that could affect our operating results and financial condition in addition to the risk factors described above, review our other filings (other than any portion of such filings that are furnished under applicable SEC Rules rather than filed) with the SEC.

All forward-looking statements included in this Annual Report on Form 10-K are made only as of the date of this Form 10-K. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

Item 1B. Unresolved Staff Comments

Not applicable.

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Item 2. Properties

The following table provides a brief description of our properties as of December 31, 2009:

			Approximate Number of
			Slot		Table		Guest
Locations	Type of Casino	Principal Markets	Machines		Games		rooms
Operating Properties:
L’Auberge du Lac, LA	Boat-in-moat	Houston, Beaumont, San Antonio, Austin,
		Southwest Louisiana and local patrons		1,601		63		995
Lumière Place Casino and Hotels, MO	Boat-in-moat	Local patrons, Kansas City and Chicago		2,041		69		494
Boomtown New Orleans, LA	Dockside	Local patrons		1,523		39		—
Belterra Casino Resort, IN	Dockside	Cincinnati, Louisville and local patrons		1,562		55		608
Boomtown Bossier City, LA	Dockside	Dallas/Ft. Worth and local patrons		1,062		32		187
Boomtown Reno, NV	Land-based	Northern California, I-80 travelers and
		local patrons		681		13		318
Casino Magic Argentina (a)	Land-based	Local patrons and regional tourists		1,057		54		32
President Casino, MO	Dockside	Local patrons		644		4		—
				10,171		329		2,634
New Properties Under Construction and/or Development:
River City, MO (b)	Boat-in-moat	Local patrons		2,103		55		—
Sugarcane Bay at L’Auberge du Lac, LA	Boat-in-moat	Houston, Beaumont, San Antonio, Austin,
		Southwest Louisiana and local patrons		1,250		38		400
Baton Rouge, LA	Dockside	Local patrons and regional tourists		1,300		50		100

(a)	The data in the table represent the combined operations of the several casinos we operate in Argentina. In January 2010, we made the decision to explore strategic alternatives for our Argentina operations.
(b)	We expect to open the first phase of River City on March 4, 2010, subject to various regulatory approvals.

The following describes the real estate and leases associated with our properties:

L’Auberge du Lac: We lease 227 acres from the Lake Charles Harbor and Terminal District upon which our L’Auberge du Lac casino-hotel resort is located. The lease has an initial term of 10 years, which commenced in May 2005, with six renewal options of 10 years each. The annual base rent for the lease is approximately $939,500 per year, which amount adjusts annually for changes in the Consumer Price Index. We own the facilities and associated improvements at the property, including the casino facility.

Lumière Place: We own approximately 16 acres of contiguous land in St. Louis for the Lumière Place complex. We own all of the improvements and facilities at the property, including the casino, hotels and various amenities.

Boomtown New Orleans: We own approximately 54 acres in Harvey, Louisiana that are utilized by Boomtown New Orleans. We also own the facilities and associated improvements at the property, including the dockside riverboat casino.

Belterra Casino Resort: We lease approximately 148 acres of the 315 acres that our Belterra Casino Resort occupies in southern Indiana. The current lease term is through September 2010 and has eight remaining consecutive five-year automatic renewal periods. The lease currently provides for minimum annual rental payments of approximately $1.2 million, plus 1.5% of gross gaming win (as defined in the lease agreement) in excess of $100 million. We also have the option to purchase the property on or after October 2020 for $30 million, subject to adjustments as defined in the lease agreement. In addition, we own the facilities and associated improvements at the property, including the dockside riverboat casino. We also own a 54-guestroom Best Western-branded hotel on six acres approximately 10 miles from Belterra.

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Boomtown Bossier City: We own 23 acres on the banks of the Red River in Bossier City, Louisiana. We also own the facilities and associated improvements at the property, including the dockside riverboat casino. We lease approximately one acre of water bottoms from the State of Louisiana. The current lease term expires in September 2011. We have options to extend the lease for seven additional five-year periods.

Boomtown Reno: We own approximately 890 acres in Reno, Nevada, approximately 60 acres of which are utilized by the casino, hotel and other amenities and another 490 acres most of which is developable. The remaining 340 acres is remote and difficult to develop. We own all of the improvements and facilities at the property, including the casino, hotel, recreational vehicle park and service station, along with substantial related water and development rights.

Casino Magic Argentina: We own 20-acres in the Province of Neuquén. We also own the casino, 32-guestroom hotel and other amenities on the site. In San Martín de los Andes, we lease the building in which we operate a smaller casino.

President Casino: We own approximately two acres of contiguous land in St. Louis adjacent to the mooring site of the President Casino. We own all of the improvements and facilities at the property, including the casino.

River City: We lease 56 acres in south St. Louis County located approximately 12 miles south of downtown St. Louis, where we have built our River City casino. We built an approximately one-mile-long, four-lane public road to connect River City to the nearby interstate highway.

Sugarcane Bay at L’Auberge du Lac: Adjoining L’Auberge du Lac, we lease approximately 234 acres of land from the Lake Charles Harbor and Terminal District. Previously, our Sugarcane Bay project was to occupy a portion of this land. However, our updated plans for Sugarcane Bay announced in November 2009 have moved the project and it is estimated we will now use approximately five acres of this land for our Sugarcane Bay project. The lease has an initial term of 10 years, commencing on the opening of Sugarcane Bay with six renewal options of 10 years each, similar to the L’Auberge du Lac lease. The annual rent on the 234-acre lease is $1.2 million for the first five years commencing with the opening of Sugarcane Bay and thereafter the amount adjusts annually for changes in the Consumer Price Index, not to exceed 5% in any given year. Prior to the opening of Sugarcane Bay, we are obligated to pay one-half of the annual rent on the date that certain conditions have been meet, such as obtaining all the required permits, licenses or approvals. Within the leased land, we purchased 50 acres for $5.0 million, which purchase did not change the base rent amount, the location of which we will designate prior to the opening of Sugarcane Bay. We have begun discussions with the District to revise this lease to provide for the fact that our Sugarcane Bay project will now be built primarily on land already leased for our L’Auberge du Lac complex. In connection with such revisions, we may owe additional amounts to the District. In addition, we own approximately 56 acres of land near the Sugarcane Bay and L’Auberge du Lac properties.

Baton Rouge: We own approximately 575 acres of land approximately 10 miles south of downtown Baton Rouge, Louisiana. We intend to build a casino-hotel on a portion of such land.

Lake Charles, Louisiana: In connection with the purchase of the two entities from Harrah’s in 2006, which entities included two licenses we plan to use for our Sugarcane Bay and Baton Rouge projects, we acquired two dockside riverboat casinos, neither of which are in service. In addition, we acquired approximately nine acres of land containing a non-operating hotel and parking structure. We also acquired two water bottom leases with the State of Louisiana at the former casino site, which expire in 2010.

Atlantic City, New Jersey: We own approximately 19 contiguous acres of land at the heart of Atlantic City along the Boardwalk. We have demolished the former casino-hotel as well as certain other structures on the site. In late 2008, we suspended development activities indefinitely. In January 2010, we made the decision to sell our assets in Atlantic City as we no longer intend to develop on our site.

Central City, Colorado: We own approximately one and one-half acres of gaming-zoned land in Central City, Colorado. In addition, we have an option to purchase an additional six acres of adjoining non-casino-zoned land.

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Virtually all of our real property interests collateralize our obligations under our amended and restated credit facility, except for the real estate owned in Atlantic City and Argentina. For a description of the segments that use the properties described above, please see the table above.

Item 3. Legal Proceedings

Insurance Litigation: In April 2006, we filed a $347 million insurance claim for our losses related to our former Casino Magic Biloxi property caused by Hurricane Katrina. In August 2006, we filed suit in the United States District Court for the District of Nevada against three of our insurance carriers, Allianz Global Risks US Insurance Company, Arch Specialty Insurance Company and RSUI Indemnity Company, related to such losses. On February 22, 2008, we settled with Arch Specialty Insurance Company, which provided $50 million of coverage, in exchange for its agreement to pay us approximately $36.8 million, which we received in March 2008. On May 9, 2008, we settled with Allianz Global Risks US Insurance Company, in exchange for its agreement to pay us approximately $48 million, which we received in June 2008. Allianz Global Risks US Insurance Company had previously paid Pinnacle $5 million, which brought Allianz Global Risks US Insurance Company’s total payment on the claim to $53 million. On February 3, 2010, we settled all claims with RSUI Indemnity Company, in exchange for its agreement to pay us approximately $23.4 million, which we received on February 12, 2010. RSUI Indemnity Company had previously paid us approximately $2 million, which brought RSUI Indemnity Company’s total payment on the claim to $25.4 million. The Company has received payments totaling approximately $215 million from its insurers relative to these claims. The Company has no further outstanding insurance claims related to Hurricane Katrina.

Jebaco Litigation: On August 9, 2006, Jebaco, Inc. (“Jebaco”) filed suit in the U.S. District Court for the Eastern District of Louisiana against Harrah’s Operating Co., Inc., Harrah’s Lake Charles, LLC, Harrah’s Star Partnership, Players LC, LLC, Players Riverboat Management, LLC, Players Riverboat II, LLC, and Pinnacle Entertainment, Inc. The lawsuit arises out of an agreement between Jebaco and Harrah’s (as successor in interest to the various Players defendants) whereby Harrah’s was obligated to pay Jebaco a fee based on the number of patrons entering Harrah’s two Lake Charles, Louisiana riverboat casinos. In November 2006, we acquired the Harrah’s Lake Charles subsidiaries, including the two riverboats. The lawsuit filed by Jebaco asserts that Harrah’s, in ceasing gaming operations in Lake Charles and ceasing payments to Jebaco, breached its contractual obligations to Jebaco and asserts damages of approximately $34.0 million. Jebaco also asserts that our agreement with Harrah’s violates state and federal antitrust laws. The lawsuit seeks antitrust damages jointly and severally against both us and Harrah’s and seeks a trebling of the $34.0 million in damages Jebaco alleges it has suffered. The defendants answered the complaint, denying all claims and asserting that the lawsuit is barred, among other reasons, because of the approval of our transaction with Harrah’s by the Louisiana Gaming Control Board and the lack of antitrust injury to Jebaco. In January 2007, all of the defendants moved to dismiss all of the claims of the complaint, which motions were heard on July 18, 2007. The motions to dismiss were granted with prejudice as to the federal antitrust claims and the state-law claims were dismissed without prejudice. Judgment of dismissal was entered on March 5, 2008. Jebaco appealed the dismissal of the federal antitrust claims to the U.S. Court of Appeals for the Fifth Circuit. Further, on March 13, 2008, Jebaco filed a new lawsuit against the same parties in the Louisiana district civil court for Orleans Parish. This lawsuit seeks unspecified damages arising out of the same circumstances as the federal lawsuit based on claims for breach of the duty of good faith, negligent breach of contract, breach of contract, unfair trade practices, unjust enrichment, and subrogation to Harrah’s insurance proceeds. In May 2009, the Louisiana district civil court extended the stay of the state case indefinitely pending the decision of the Fifth Circuit on Jebaco’s appeal. On October 30, 2009, the Fifth Circuit affirmed the district court’s dismissal of the federal antitrust claims. Jebaco has not yet indicated if it intends to appeal the Fifth Circuit decision. We moved for dismissal of the state-court claims. On January 29, 2010, the state court judge ruled from the bench that she will dismiss Jebaco’s complaint in its entirety. On February 11, 2010, the written order dismissing Jebaco’s complaint was entered. Jebaco has sixty days from February 11, 2010 to appeal the state court’s decision.

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Madison House Litigation: On December 23, 2008, Madison House Group, L.P. (“Madison House”) filed suit in Superior Court of New Jersey, Chancery Division, Atlantic County against the Company, ACE Gaming, LLC (“ACE”, a wholly owned subsidiary of the Company), and one other defendant. We acquired ACE as part of our acquisition of the entities owning the former Sands Hotel & Casino (the “Sands”) in Atlantic City, New Jersey in November 2006. The lawsuit arises out of a lease dated December 18, 2000 between Madison House as landlord and ACE as tenant for the Madison House hotel in Atlantic City, New Jersey. The lawsuit alleges in part that ACE breached certain obligations under the lease, including, among others, failure to operate and maintain the hotel as required by the lease, which was alleged to have resulted in substantial damages to the hotel. The lawsuit further alleges that the Company, as the ultimate parent entity of ACE, should be jointly and severally liable with ACE for the damages sought, and separately alleges independent actions against the Company as described more fully in the lawsuit. The lawsuit seeks specific performance of ACE’s obligations under the lease, including restoration of the hotel, as well as unspecified compensatory and exemplary damages, and attorneys’ fees, against the Company and ACE. ACE continues to make its payment obligations under the lease, which expires in December 2012.

On January 7, 2009, ACE petitioned the United States District Court for the District of New Jersey for an order compelling arbitration. On September 29, 2009, the federal court denied the petition and ACE has appealed to the United States Court of Appeals for the Third Circuit. On February 18, 2009, the trial judge in the state court action issued an order staying the arbitration, which we have also appealed. Oral argument in the appeal of the state court order was heard on December 16, 2009, but no ruling has yet been issued. Discovery in the state court lawsuit has commenced. On July 17, 2009, the state trial judge denied Madison House’s motion for partial summary judgment on the issue of whether ACE’s non-operation of the hotel following the closure of the Sands constituted a breach of the lease. While the Company cannot predict the outcome of this litigation, it intends to defend the matter vigorously.

Collective Bargaining Agreements: On May 17, 2006, we entered into a Memorandum of Agreement (the “MOA”) with Unite HERE Local 74 (“Union”) commensurate with our obligations under a development agreement with the city of St. Louis that, among other things, provided union access to certain employees (“bargaining unit employees”) employed at our Lumière Place facility should the Union manifest its intent to organize those employees. Additionally, the MOA provided that we would recognize the Union as the exclusive bargaining representative of the bargaining unit employees if a majority of the employees (verified by a neutral arbitrator) indicated their desire to be represented by the Union by signing an authorization card.

On November 20, 2008, an arbitrator conducted a review of the authorization cards submitted by the Union and determined that a majority of the bargaining unit employees had indicated their desire to be represented by the Union. Consistent with the MOA, we recognized the Union as the exclusive bargaining representative for the bargaining unit employees. We met with the Union three times to negotiate a collective bargaining agreement; the last meeting was on February 18, 2009.

During March and April 2009, we received competing claims from three unions, each claiming to be the exclusive collective bargaining representative of our St. Louis employees, including a claim from one union that they were the successor to the Union. In response to the competing claims for recognition, we withdrew recognition from the Union because of a lack of continuity of representation. In May 2009, we notified the Union that the collective bargaining agreement for HoteLumière was no longer in effect and that the collective bargaining agreement for the President Casino was being terminated. In May 2009, one of the unions claiming to be the successor to the Union filed unfair labor practice charges with the National Labor Relations Board (“NLRB”) alleging, among other things, that we refused to bargain in good faith by refusing to engage in collective bargaining negotiations, by refusing to negotiate over the discharge of employees, and by withdrawing recognition and abrogating the terms and conditions of employment. The NLRB dismissed the charge filed against HoteLumière.

In October 2009, the Union again changed its affiliation, and again requested recognition, which was denied. In December 2009, the Union filed charges with the NLRB alleging that Lumière Place and President Casino acted unlawfully when they refused to recognize and deal with the Union. In January 2010, the NLRB issued a Complaint and Notice of Hearing against Lumière Place and President Casino. The hearing is scheduled to commence in April 2010.

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President Casino: The President Casino operates on a vessel known as the Admiral. The hull of the Admiral was built in 1904. The current certification of the hull by the American Bureau of Shipping (“ABS”) expires on July 19, 2010, and the Admiral may not be used to carry passengers beyond that date without significant repairs and/or specific approval. On July 28, 2009, the Missouri Gaming Commission (“MGC”) held a public hearing to discuss our plans to address the expiration of the ABS certification in 2010. At such hearing, we proposed, subject to MGC review and ABS and other approvals, to replace the Admiral with a different vessel, specifically a riverboat built in 1993, which we acquired in 2006. Such boat has been out of service since Hurricane Rita in 2005. At this July 28, 2009 hearing, the Executive Director of the MGC, through counsel, made a recommendation that the MGC issue a ruling to prohibit Pinnacle from repairing, replacing or moving the Admiral. On August 26, 2009, the MGC approved a resolution that it is not practicable for us to repair the President Casino and prohibits us from relocating the President, or any other vessel, from the current location of the President Casino. The MGC’s resolution also provided that a new license would be needed to replace the President Casino with another vessel at its present site. On September 24, 2009, we filed a petition for judicial review with the Missouri Court of Appeals, Western District (“CAWD”) regarding the MGC’s resolution. The petition requests that the CAWD (1) set aside the MGC’s resolution; (2) stay the resolution, or alternatively, issue a writ of prohibition which would prevent the MGC from enforcing the resolution. On September 25, 2009, we filed a motion in the CAWD requesting that the CAWD (1) stay the enforcement of the resolution, (2) grant us the specific right, pending the appeal, to make and execute all necessary plans to repair or replace the President Casino and (3) order expedited briefing, argument, and review of the appeal. On October 7, 2009, the MGC responded to the motion to stay by arguing that the MGC is not trying to prohibit the repair of the Admiral and that whether the hull of the Admiral can be recertified is between us and the ABS. On October 15, 2009, the CAWD denied the motion to stay and set an accelerated briefing schedule for the appeal. On October 22, 2009 the MGC moved to dismiss our appeal.

On January 27, 2010, the MGC issued a preliminary order for disciplinary action against the President Riverboat Casino-Missouri, Inc. (“PRC-MO”), a wholly-owned subsidiary of Pinnacle Entertainment, Inc. and the operator of President Casino. The preliminary order proposes that the MGC revoke the license of the PRC-MO. The MGC alleges in its preliminary order that there has been a purposeful downgrading of the President Casino’s offerings and revenues, which it claims should subject PRC-MO to disciplinary action. On February 19, 2010, the Company filed a response to the preliminary order for disciplinary action and made a request for a hearing. The Company is examining all available legal remedies in connection with this matter.

Indiana Tax Dispute: In 2008, the Indiana Department of Revenue (“IDR”) commenced an income tax examination of the Company’s Indiana income tax filings for the 2005 to 2007 period. During June of 2009, the Company received an informal notification from the field agent for the IDR challenging whether income and gain from certain asset sales, including the sale of the Hollywood Park Racetrack in 1999, and other transactions outside of Indiana, such as the Aztar merger termination fee in 2006, which we reported on our Indiana state tax returns for the years 2000 through 2007, resulted in business income subject to apportionment, and proposed a potential assessment of approximately $11 million, excluding interest and penalties, of additional Indiana income taxes. During the fourth quarter of 2009, the Company submitted additional information to the IDR for consideration. On February 9, 2010, the Company received a revised proposed assessment in the amount of $7.3 million, excluding interest and penalties. The Company has 45 days to formally respond.

Other: We are a party to a number of other pending legal proceedings. Management does not expect that the outcome of such proceedings, either individually or in the aggregate, will have a material effect on our financial position, cash flows or results of operations.

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

None.

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PART II

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

Our common stock is quoted on the New York Stock Exchange under the symbol “PNK”. The table below sets forth the high and low sales prices of our common stock as reported on the New York Stock Exchange:

	Price Range
	High		Low
2009
Fourth Quarter	$	11.82	$	8.07
Third Quarter		11.49		8.35
Second Quarter		13.99		6.81
First Quarter		8.83		4.78
2008
Fourth Quarter	$	7.91	$	2.58
Third Quarter		13.36		6.57
Second Quarter		17.86		10.32
First Quarter		23.74		12.12

As of February 24, 2010, there were 2,316 stockholders of record of our common stock.

Dividends: We did not pay any dividends in 2009 or 2008. Our indentures governing our 8.625% senior notes due 2017, 7.50% senior subordinated notes due 2015, and 8.25% senior subordinated notes due 2012 and the amended and restated credit facility limit the amount of dividends that we are permitted to pay. The Board of Directors does not anticipate paying any cash dividends on our common stock in the foreseeable future, as our financial resources are being reinvested into the expansion of our business.

Share Repurchase: During the years ended December 31, 2009 and 2008, we did not make any purchases of the Company’s equity securities.

Sales of Unregistered Equity Securities: During the years ended December 31, 2009 and 2008, we did not issue or sell any unregistered equity securities.

Stock Performance Graph

The stock performance graph and related information presented below is not deemed to be “soliciting material” or to be “filed” with the Securities and Exchange Commission or subject to Regulation 14A or 14C under the Securities Exchange Act of 1934 or to the liabilities of Section 18 of the Securities Exchange Act of 1934, and will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent we specifically incorporate it by reference into such a filing.

Set forth below is a graph comparing the cumulative total stockholder return for Pinnacle’s common stock with the cumulative total returns for the New York Stock Exchange Composite Index (the “NYSE Composite Index”) and the Dow Jones US Gambling Index. The total cumulative return calculations are for the period commencing December 31, 2004 and ending December 31, 2009, and include the reinvestment of dividends. The stock price performance shown in this graph is neither necessarily indicative of, nor intended to suggest, future stock price performance.

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	12/31/04		12/31/05		12/31/06		12/31/07		12/31/08		12/31/09
Pinnacle Entertainment, Inc.	$	100.00	$	124.92	$	167.54	$	119.11	$	38.83	$	45.40
NYSE Composite Index	$	100.00	$	109.36	$	131.74	$	143.42	$	87.12	$	111.76
Dow Jones US Gambling Index	$	100.00	$	101.44	$	147.81	$	169.69	$	45.64	$	71.07

* Assumes $100 invested on December 31, 2004 in Pinnacle’s common stock, the NYSE Composite Index and the Dow Jones US Gambling Index. Total return assumes reinvestment of dividends. Values are as of December 31^st of each year.

Item 6. Selected Financial Data

The following selected financial information for the years 2005 through 2009 was derived from our audited Consolidated Financial Statements. The information set forth below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the audited Consolidated Financial Statements and related notes thereto.

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	For the year ended December 31,
	2009(a)			2008(b)			2007(c)			2006(d)			2005(e)
				(in millions, except per share data)
Results of Operations:
Revenues	$	1,045.6		$	1,044.7		$	921.8		$	911.5		$	668.5
Operating income (loss)		(188.3	)		(345.3	)		16.8			98.3			32.3
Income (loss) from continuing operations, net of income taxes		(257.8	)		(370.2	)		—			63.3			(0.1	)
Income (loss) from discontinued operations, net of income taxes		(0.5	)		47.6			(1.4	)		13.6			6.2
Income (loss) from continuing operations per common share:
Basic	$	(4.29	)	$	(6.17	)	$	0.00		$	1.33		$	0.00
Diluted	$	(4.29	)	$	(6.17	)	$	0.00		$	1.28		$	0.00
Other Data:
Capital expenditures	$	226.4		$	306.0		$	545.6		$	186.5		$	193.9
Ratio of Earnings to Fixed Charges (f)		—			—			—			2.57			—
Cash flows provided by (used in):
Operating activities	$	120.2		$	129.3		$	153.4		$	206.5		$	61.7
Investing activities		(202.4	)		(306.0	)		(566.2	)		(459.3	)		(138.6	)
Financing activities		96.6			101.9			414.6			294.1			23.2
Balance Sheet Data—December 31:
Cash, restricted cash and equivalents	$	138.9		$	125.0		$	197.3		$	216.7		$	156.5
Total assets		1,843.9			1,919.2			2,193.5			1,737.8			1,244.9
Long-term debt		1,063.3			943.2			841.3			774.3			657.7
Stockholders’ equity		494.4			739.3			1,052.4			694.6			427.8

(a)	The financial results for 2009 reflect impairment charges totaling $207 million related to indefinite-lived intangible assets, real estate, buildings and equipment and previously capitalized costs associated with certain development projects.
(b)	The financial results for 2008 included a full year of operations at Lumière Place and also reflect impairment charges totaling $318 million related to goodwill, indefinite-lived intangible assets, undeveloped real estate and previously capitalized costs associated with certain development projects. Income from discontinued operations reflects a gain of $54.9 million, net of income taxes, related to insurance proceeds received related to our former Casino Magic Biloxi operations.
(c)	The financial results for 2007 include the opening of the casino at Lumière Place in mid-December 2007 and a majority of L’Auberge du Lac’s new 252 guestrooms in late December 2007.
(d)	In 2006, we completed the sale of our two card club casinos and our Casino Magic Biloxi site and certain related assets. In accordance with U.S. GAAP, these assets and related liabilities were reclassified to “assets held for sale” as of December 31, 2005 and the financial results reflect the Casino Magic Biloxi and card club operations as discontinued operations for all periods presented. This had no effect on previously reported net income (loss). The financial results for 2006 reflect the May 2006 opening of The Casino at Emerald Bay, the President Casino acquisition in December 2006 and net proceeds of approximately $44.7 million related to our terminated merger agreement with Aztar Corporation.
(e)	The financial results for 2005 reflect the May 2005 opening of L’Auberge du Lac, the July 2005 opening of a replacement casino in Neuquén, Argentina, and the former Embassy Suites Hotel, refurbished and renamed HoteLumière.
(f)	In computing the ratio of earnings to fixed charges: (x) earnings were the income from continuing operations before income taxes and fixed charges and excluding capitalized interest; and (y) fixed charges were the sum of interest expense, amortization of debt issuance costs, capitalized interest and the estimated interest component included in rental expense. Due principally to our large non-cash charges deducted to compute such earnings, earnings so calculated were less than fixed charges by $269 million, $449.9 million, $48.5 million and $24.5 million for the fiscal years ended December 31, 2009, 2008, 2007 and 2005, respectively.

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

The following discussion and analysis of financial condition, results of operations, liquidity and capital resources should be read in conjunction with, and is qualified in its entirety by, our audited Consolidated Financial Statements and the notes thereto, and other filings with the Securities and Exchange Commission.

EXECUTIVE OVERVIEW

Pinnacle Entertainment, Inc. is an owner, operator and developer of casinos and related hospitality and entertainment facilities. We currently operate seven domestic casinos, including L’Auberge du Lac in Lake Charles, Louisiana; Lumière Place in St. Louis, Missouri; Boomtown New Orleans in New Orleans, Louisiana; Belterra Casino Resort in Vevay, Indiana; Boomtown Bossier City in Bossier City, Louisiana; Boomtown Reno in Reno, Nevada; and the President Casino in St. Louis, Missouri. Internationally, we operate one significant and several small casinos in Argentina. We previously operated a small casino in the Bahamas, which we closed on January 2, 2009.

We have a number of projects at various stages of development. In south St. Louis County, Missouri, we have completed construction of our River City casino, which we expect to open on March 4, 2010. In Louisiana, we have begun preliminary work on our Sugarcane Bay at L’Auberge du Lac project, and continue to proceed with design and entitlement work for our Baton Rouge project.

We operate casino properties, all of which include gaming, and some of which include hotel, dining, retail and other amenities. Our operating results are highly dependent on the volume of customers at our properties, which in turn affects the price we can charge for our hotel rooms and other amenities. While we do provide casino credit in several gaming jurisdictions, most of our revenue is cash-based, with customers wagering with cash or paying for non-gaming services with cash or credit cards. Our properties generate significant operating cash flow. Our industry is capital intensive and we rely on the ability of our resorts to generate operating cash flow to pay interest, repay debt financing costs and fund maintenance capital expenditures.

Our mission is to increase shareholder value. We intend to accomplish this through our long-term strategy of building or acquiring new casinos or resorts that are expected to produce favorable returns above our cost of capital; maintaining and improving each of our existing properties; and providing our guests with their favorite games in attractive surroundings with quality guest service. Hence, we are developing new, high-quality gaming properties in attractive gaming markets; we are maintaining and improving our existing properties with disciplined capital expenditures; we continually focus on customer service; and we may make strategic acquisitions, either alone or with third parties, when and if available, on terms we believe are reasonable.

In July 2009, we successfully amended our bank credit facility to, among other things, permit the issuance of senior unsecured debt. In August 2009, we closed a private offering of $450 million in aggregate principal amount of 8.625% senior notes due 2017 (the “8.625% Notes”). The $434 million in net proceeds was used to repay our then funded bank borrowings of $206 million, repurchase or redeem all $135 million aggregate principal amount of our 8.75% senior subordinated notes due 2013 (the “8.75% Notes”) and $75.0 million in aggregate principal amount of our existing 8.25% senior subordinated notes due 2012 (the “8.25% Notes”), and for general corporate purposes.

On February 5, 2010, we entered into a $375 million amended and restated credit facility, replacing our prior $531 million credit facility, which among other things, provides for a stated maturity date of March 31, 2014; provided that such date will be accelerated to September 30, 2011 if any portion of our 8.25% Notes are outstanding on September 30, 2011.

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RESULTS OF OPERATIONS

The following table highlights our results of operations for the three years ended December 31, 2009, 2008 and 2007. As discussed in Note 12 to our audited Consolidated Financial Statements, we report segment operating results based on revenues and Adjusted EBITDA. Such segment reporting is on a basis consistent with how we measure our business and allocate resources internally. See Note 12 to our audited Consolidated Financial Statements for more information regarding our segment information and a reconciliation of this financial information to income from continuing operations in accordance with U.S. GAAP.

	For the year ended December 31,
	2009			2008			2007
				(in millions)
Revenues:
L’Auberge du Lac	$	339.0		$	342.6		$	321.2
Lumière Place		219.0			174.2			8.0
Boomtown New Orleans		137.7			158.4			162.0
Belterra Casino Resort		161.9			168.6			177.9
Boomtown Bossier City		90.9			88.9			89.7
Boomtown Reno		38.7			46.0			67.2
Casino Magic Argentina		36.2			40.0			37.3
President Casino		20.4			25.8			58.1
Other		1.8			0.2			0.4
Total revenues	$	1,045.6		$	1,044.7		$	921.8
Operating income (loss)	$	(188.3	)	$	(345.3	)	$	16.8
Income (loss) from continuing operations	$	(257.8	)	$	(370.2	)	$	0.1
Adjusted EBITDA (a):
L’Auberge du Lac	$	79.2		$	84.3		$	75.2
Lumière Place		42.0			10.1			(1.0	)
Boomtown New Orleans		37.6			54.2			54.2
Belterra Casino Resort		26.5			29.7			39.3
Boomtown Bossier City		19.2			17.1			17.9
Boomtown Reno		(2.6	)		(4.4	)		3.5
Casino Magic Argentina		9.1			11.8			14.3
President Casino		(2.9	)		(5.0	)		7.1

(a) We define Adjusted EBITDA for each segment as earnings before interest income and expense, income taxes, depreciation, amortization, pre-opening and development costs, non-cash share-based compensation, asset impairment costs, write-downs, reserves, recoveries, gain (loss) on sale of certain assets, gain (loss) on sale of equity security investments, gain (loss) on early extinguishment of debt and discontinued operations. We use Adjusted EBITDA to compare operating results among our properties and between accounting periods.

Comparison of the year ended December 31, 2009 to December 31, 2008 and December 31, 2007

The 2009 results reflect a very strong first half of the year, offset by a softer second half of 2009, including a fourth quarter in which the regional economies in which we operate experienced a significant downturn compared to the 2008 period. Results at Lumière Place improved dramatically, consistent with the anticipated maturing of the property, growth of market share and improved operating efficiencies. Offsetting Lumière Place’s improvements were operating downturns at Boomtown New Orleans and L’Auberge du Lac, which results reflect challenging economic conditions and increased marketing efforts by regional competitors. Our marketing programs implemented to address the increased competition did not produce intended results.

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Overall, our regional diversification continues to benefit us, as such diversification allowed for full-year improvements at Lumière Place and relatively stable results at Boomtown Bossier City and Belterra Casino Resort to minimize the downturns experienced at the other locations. We expect that such regional diversification will continue with the anticipated opening of River City on March 4, 2010.

Segment comparison of the year ended December 31, 2009 to December 31, 2008 and December 31, 2007

Each segment’s contribution to the operating results was as follows:

L’Auberge du Lac

							Percentage
	For the year ended December 31,						Increase/(Decrease)
	2009		2008		2007		2009 vs. 2008			2008 vs. 2007
	(in millions)
Gaming revenues	$	298.6	$	300.7	$	288.5		(0.7	)%		4.2	%
Total revenues		339.0		342.6		321.2		(1.1	)%		6.7	%
Operating income		50.0		49.1		48.2		1.8	%		1.9	%
Adjusted EBITDA		79.2		84.3		75.2		(6.0	)%		12.1	%

L’Auberge du Lac, our largest property, achieved increased results for the first three quarters of 2009, offset by decreased results for the fourth quarter of 2009 as compared to the 2008 period. Contributing to the variance was a lower-than-normal table games hold level during the fourth quarter of 2009, as well as a comparable 2008 fourth quarter that benefited from Hurricane Ike recovery efforts and related spending in southeast Texas. We increased our marketing spend to address increased competitor marketing efforts. Based on post-event analysis, some of these marketing efforts proved to be inefficient.

Revenues and Adjusted EBITDA increased from 2007 to 2008 due to the benefits of the completion of the expansion of both guestrooms and other amenities in January 2008. The guestroom expansion increased the available hotel rooms to 995 from 743.

Lumière Place

									Percentage
	For the year ended December 31,								Increase/(Decrease)
	2009		2008			2007			2009 vs. 2008			2008 vs. 2007
	(in millions)
Gaming revenues	$	179.2	$	140.6		$	4.7			27.5	%		2,891.5	%
Total revenues		219.0		174.2			8.0			25.7	%		2,077.5	%
Operating income		5.1		(38.5	)		(29.4	)		113.2	%		31.0	%
Adjusted EBITDA		42.0		10.1			(1.0	)		315.8	%	NM

NM — Not meaningful

Lumière Place includes the Lumière Place Casino, which opened in late 2007, the Pinnacle-owned Four Seasons Hotel St. Louis and HoteLumière, each of which opened in early 2008, and other amenities, comprising the Lumière Place complex. Overall operational results at Lumière Place continued to improve during 2009 as the complex completed its second year of operations. In addition, Missouri’s so-called gambling “loss limit”, wherein players were required to have player cards and a player’s “buy-in” was limited to $500 in a two-hour period, was repealed in November 2008, commensurate with an increase in the gaming tax rate.

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Boomtown New Orleans

							Percentage
	For the year ended December 31,						Increase/(Decrease)
	2009		2008		2007		2009 vs. 2008			2008 vs. 2007
	(in millions)
Gaming revenues	$	131.8	$	151.7	$	154.8		(13.1	)%		(2.0	)%
Total revenues		137.7		158.4		162.0		(13.1	)%		(2.2	)%
Operating income		29.9		45.1		45.7		(33.7	)%		(1.3	)%
Adjusted EBITDA		37.6		54.2		54.2		(30.6	)%		—

Results during 2009 at Boomtown New Orleans reflect the heightened competition in the area, principally from the Mississippi Gulf Coast, floodwall construction along the primary access road to our property; as well as softer economic conditions. As the Hurricane Katrina relief efforts have been reduced, the related spending, construction activity and discretionary income have declined, which has dampened operating results throughout the region. To address these issues, Boomtown New Orleans is revisiting certain aspects of its marketing program, including increased marketing efforts to draw in local customers with events and promotions, which in the fourth quarter of 2009 in particular, adversely affected our operating results.

Boomtown New Orleans achieved Adjusted EBITDA in 2008 that equaled 2007 results despite the temporary closure and other hurricane disruptions in the third quarter of 2008. We estimate that Hurricanes Gustav and Ike negatively affected Boomtown New Orleans’ net revenues by approximately $2.7 million during 2008.

Belterra Casino Resort

							Percentage
	For the year ended December 31,						Increase/(Decrease)
	2009		2008		2007		2009 vs. 2008			2008 vs. 2007
	(in millions)
Gaming revenues	$	139.5	$	144.0	$	153.6		(3.1	)%		(6.3	)%
Total revenues		161.9		168.6		177.9		(4.0	)%		(5.2	)%
Operating income		12.7		15.3		23.1		(17.0	)%		(33.8	)%
Adjusted EBITDA		26.5		29.7		39.3		(10.8	)%		(24.4	)%

Results during 2009 at Belterra reflect poor general economic conditions and increased competition in Belterra’s market area. During mid-2008, two racetrack casinos opened in the Indianapolis metropolitan area, each of which operate approximately 2,000 slot machines. One of these competitors replaced its temporary casino with a significantly nicer permanent facility in March 2009 and the other competitor replaced a smaller facility with a new, larger casino in Lawrenceburg, Indiana in June 2009. In order to address this increased competition, we increased our marketing efforts and expenditures. Some of these marketing efforts proved to be inefficient.

On November 3, 2009, Ohio voters passed a constitutional amendment which allows one casino to be developed in each of Cincinnati, Columbus, Cleveland and Toledo. In the event a new casino is developed in Cincinnati or Columbus, which is likely to take several years to develop and open, it will likely provide additional competition to Belterra.

Boomtown Bossier City

							Percentage
	For the year ended December 31,						Increase/(Decrease)
	2009		2008		2007		2009 vs. 2008			2008 vs. 2007
	(in millions)
Gaming revenues	$	85.7	$	83.4	$	84.6		2.8	%		(1.4	)%
Total revenues		90.9		88.9		89.7		2.2	%		(0.9	)%
Operating income		12.6		2.1		9.9		500.0	%		(78.8	)%
Adjusted EBITDA		19.2		17.1		17.9		12.3	%		(4.5	)%

30

Boomtown Bossier City achieved increased revenues and Adjusted EBITDA for the 2009 year despite the competitive Bossier City/Shreveport gaming market, and improved Adjusted EBITDA through a refinement of the property’s marketing efforts and certain cost-cutting measures. Full year results in 2008 were relatively consistent with the results in 2007. Boomtown Bossier City competes with four dockside riverboat casino-hotels and a racetrack operation. In addition, the Bossier City/Shreveport gaming market, which is approximately 188 miles east of Dallas/Fort Worth, competes with Native American gaming in southern Oklahoma located approximately 60 miles north of Dallas/Fort Worth.

Boomtown Reno

										Percentage
	For the year ended December 31,									Increase/(Decrease)
	2009			2008			2007			2009 vs. 2008			2008 vs. 2007
	(in millions)
Gaming revenues	$	22.2		$	23.8		$	35.3			(6.7	)%		(32.6	)%
Total revenues		38.7			46.0			67.2			(15.9	)%		(31.5	)%
Operating loss		(17.6	)		(23.6	)		(3.9	)		25.4	%		(505.1	)%
Adjusted EBITDA (loss)		(2.6	)		(4.4	)		3.5			41.0	%		(225.7	)%

Boomtown Reno has been affected by significant competition from the northern California Native American gaming market, as well as poor economic conditions in both the Reno market and northern California. Reduced operating loss and Adjusted EBITDA loss for the year ended December 31, 2009 are due to cost-cutting measures. Employee headcount as of December 31, 2009 has decreased 11% from December 31, 2008.

Casino Magic Argentina

							Percentage
	For the year ended December 31,						Increase/(Decrease)
	2009		2008		2007		2009 vs. 2008			2008 vs. 2007
	(in millions)
Gaming revenues	$	32.5	$	35.9	$	34.5		(9.5	)%		4.1	%
Total revenues		36.2		40.0		37.3		(9.5	)%		7.2	%
Operating income		6.2		6.8		11.6		(8.8	)%		(41.4	)%
Adjusted EBITDA		9.1		11.8		14.3		(22.9	)%		(17.5	)%

Casino Magic Argentina includes a sizable casino-hotel facility in Neuquén, and several smaller casinos in other parts of the Province of Neuquén. Revenues have decreased due to a recent decline in the value of the Argentina peso, as well as weakness in the Argentina economy. The decrease in Adjusted EBITDA reflects the currency decline and inflation of certain costs, principally payroll costs.

In January 2010, we made the decision to explore strategic alternatives for our Argentina operations.

The President Casino

									Percentage
	For the year ended December 31,								Increase/(Decrease)
	2009			2008			2007		2009 vs. 2008			2008 vs. 2007
	(in millions)
Gaming revenues	$	19.1		$	23.6		$	53.6		(19.1	)%		(56.0	)%
Total revenues		20.4			25.8			58.1		(20.9	)%		(55.6	)%
Operating income (loss)		(9.1	)		(38.1	)		0.1		76.1	%	NM
Adjusted EBITDA (loss)		(2.9	)		(5.0	)		7.1		42.2	%		(170.4	)%

NM — Not meaningful

Revenues for 2009 have decreased from the prior year due principally to competition from an expanded competing property across the river and the neighboring Lumière Place. As a result, beginning in late 2008, we eliminated mid-week table game operations at the President and reduced operating hours for the entire casino mid-week. These cost-cutting measures have resulted in a decreased Adjusted EBITDA loss for 2009. During the year, operations at the President were also adversely affected due to temporary flood-related closures.

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The President Casino operates on a vessel known as the Admiral. The certification of the hull by ABS Consulting (“ABS”) expires in July 2010, and the Admiral may not be used to carry passengers beyond that date without significant repairs and/or specific approval. During 2009, we proposed a plan to the Missouri Gaming Commission (“MGC”) to repair the Admiral prior to the expiration of the ABS certification. On January 27, 2010, the MGC issued a preliminary order for disciplinary action against the President Casino, which proposes that the MGC revoke the gaming license of the President Casino. The MGC alleges in its preliminary order that there has been a purposeful downgrading of the President Casino’s offering and revenues, which the MGC claims should subject the President Casino to disciplinary action. On February 19, 2010, we filed a response to the preliminary order for disciplinary action and made a request for a hearing. We are pursuing all available legal remedies in connection with this matter. For further detail, see Note 10, Commitments and Contingencies, and Note 14, Subsequent Events, to the Consolidated Financial Statements.

Other factors affecting income from continuing operations

	For the year ended December 31,									Percentage Increase/(Decrease)
	2009			2008			2007			2009 vs. 2008			2008 vs. 2007
	(in millions)
Other benefits (costs):
Corporate expenses	$	(40.2	)	$	(38.2	)	$	(39.8	)		5.2	%		(4.0	)%
Depreciation and amortization expense		(105.1	)		(117.8	)		(80.3	)		(10.8	)%		46.7	%
Pre-opening and development costs		(28.7	)		(55.4	)		(60.8	)		(48.2	)%		(8.9	)%
Non-cash share-based compensation		(13.9	)		(9.2	)		(8.4	)		51.1	%		9.5	%
Impairment of goodwill		—			(28.5	)		—		NM			NM
Impairment of indefinite-lived intangible assets		(1.9	)		(41.4	)		—			(95.4	)%	NM
Impairment of land and development costs		(188.4	)		(228.0	)		—			(17.4	)%	NM
Impairment of buildings, riverboats and equipment		(16.5	)		(20.3	)		(4.9	)		(18.7	)%		314.3	%
Write-downs, reserves and recoveries, net		(1.7	)		(4.3	)		0.5			(60.5	)%		(960.0	)%
Other non-operating income		0.3			2.7			15.5			(88.9	)%		(82.6	)%
Interest expense, net of capitalized interest		(70.5	)		(53.0	)		(25.7	)		33.0	%		106.2	%
Gain on sale of equity securities		12.9			—			—		NM				—
Impairment of investment in equity securities		—			(29.1	)		—		NM			NM
Loss on early extinguishment of debt		(9.5	)		—			(6.1	)	NM			NM
Income tax benefit (expense)		(2.7	)		54.5			(0.5	)		(105.0	)%	NM

NM — Not Meaningful

Corporate expenses represent unallocated payroll, professional service fees, rent, travel expenses and other general and administrative expenses not directly incurred by our casino and hotel operations. Such expenses in 2009 included approximately $5.0 million of compensation expense related to the resignation of a corporate officer and other staff reductions at our corporate headquarters. Additionally, the prior-year period included approximately $1.5 million of compensation expense related to the resignation of a corporate officer.

Depreciation and amortization expense decreased in 2009 due to the decreased asset basis resulting from our 2008 fourth quarter impairment of certain long-lived assets. The increase in 2008 is primarily due to the opening of Lumière Place and the expansion at L’Auberge du Lac.

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Pre-opening and development costs for the fiscal years ended December 31, 2009, 2008 and 2007 consist of the following:

	For the year ended December 31,
	2009		2008		2007
	(in millions)
Atlantic City (a)	$	12.1	$	17.3	$	18.7
River City (b)		8.0		6.1		4.8
Baton Rouge		5.8		7.5		9.5
Sugarcane Bay		2.0		3.2		1.8
Missouri Proposition A Initiative		—		7.9		—
Lumière Place		—		7.8		22.9
Kansas City		—		4.6		2.2
Other		0.8		1.0		0.9
Total pre-opening and development costs	$	28.7	$	55.4	$	60.8

(a)	In late 2008, we decided to suspend substantially all development activities in Atlantic City indefinitely. The continuing pre-opening and development costs include property taxes and other costs associated with ownership of the land. In January 2010, we made the decision to sell our assets in Atlantic City as we no longer intend to develop on our site.
(b)	Pre-opening costs at the River City project, expected to open in March 2010, includes $3.8 million for non-cash straight-lined rent accruals under a lease agreement for the year ended December 31, 2009.

Non-cash share-based compensation was $13.9 million, $9.2 million, and $8.4 million for the years ended December 31, 2009, 2008 and 2007, respectively. These compensation expenses relate to the fair value of options on the date of issuance and are not related to actual stock price performance. The number of options granted under our equity incentive compensation plan was 559,800 in 2009, versus 2,070,500 and 552,500 in 2008 and 2007, respectively. The expense for 2009 has increased over the prior year period due to the accelerated vesting of certain stock options. In May 2009, all previously outstanding unvested stock option grants to members of our Board of Directors became fully vested resulting in a charge of $3.2 million to compensation expense. In addition, in November 2009, concurrent with the resignation of a corporate officer, certain stock option grants became fully vested, resulting in a charge of $2.0 million to compensation expense.

Impairment of goodwill. In accordance with authoritative guidance, the Company reviews goodwill for impairment annually during the fourth quarter, or more frequently if events or circumstances indicate that the carrying value may not be recoverable. As a result of our annual impairment testing, we recorded no impairment charges to goodwill for the year ended December 31, 2009. During 2008, the carrying amounts of goodwill associated with Boomtown Reno and the President Casino were impaired by $9.9 million and $18.6 million, respectively. There were no such impairment charges for the year ended December 31, 2007.

Impairment of indefinite-lived intangible assets. Indefinite-lived intangible assets include gaming licenses, and all of such assets are reviewed for impairment annually during the fourth quarter, or more frequently if events or circumstances indicate that the carrying value may not be recoverable. As a result of our annual review during the fourth quarter of 2009, we fully impaired the gaming license related to our President Casino, which resulted in an impairment charge of $1.9 million. During 2009, we proposed to the MGC two separate plans to relocate or replace the Admiral riverboat, on which the President Casino operates, with a newer, larger casino riverboat. We were informed by the MGC that either plan of action would require us to forfeit our license and reapply for a new gaming license in a public bid process open to all interested parties. On January 27, 2010, the MGC issued a preliminary order for disciplinary action that proposed that the MGC revoke the gaming license associated with the President Casino.

During 2008, we determined the fair value of each of our gaming licenses related to Sugarcane Bay, Baton Rouge and Boomtown Bossier City was less than its carrying value, and as a result, for the year ended December 31, 2008, we recorded impairment charges of $20.3 million, $15.4 million, and $5.7 million, respectively. There were no such impairment charges for the year ended December 31, 2007.

33

Impairment of land and development costs consists of the following:

	For the year ended December 31,
	2009		2008		2007
	(in millions)
Atlantic City	$	160.0	$	196.7	$	—
Sugarcane Bay at L’Auberge du Lac		20.9		9.2		—
President Casino		3.5		3.6		—
Boomtown Reno		2.9		0.5		—
Baton Rouge		0.7		4.9		—
Other projects		0.4		13.1		—
Impairment of land and development costs	$	188.4	$	228.0	$	—

During the fourth quarter of 2009, we determined that, in accordance with applicable guidance, a triggering event had occurred for our land held in Atlantic City, New Jersey due to the continuing economic downturn of the gaming market in Atlantic City as the result of increased competitive pressures in surrounding markets, including Pennsylvania, as well as the continued deterioration in commercial real estate values in the area. We tested the carrying value of our land holdings for recoverability, and based on the result of these tests, recorded impairment charges of $160 million during the fourth quarter of 2009. We also began marketing the Atlantic City land and related business assets for sale in February 2010.

During the fourth quarter of 2009, we re-evaluated the scope and design of our Sugarcane Bay and Baton Rouge projects. The Sugarcane Bay project was relocated from land adjacent to L’Auberge du Lac to the existing L’Auberge du Lac footprint. In addition, the size of the project, the anticipated amenities, and other items were reduced in scope. As a result of these changes, the previously capitalized development costs of $20.9 million associated with the prior Sugarcane Bay design were fully impaired.

Our Baton Rouge project will be similar to the original design. However, the orientation and structure of the hotel have changed, resulting in the impairment of certain of the capitalized design components of the project totaling $0.7 million in the fourth quarter of 2009.

Due to poor historical and prospective financial performance outlook for our President Casino, as well as communications with the MGC during the fourth quarter of 2009 as discussed above, we determined there was a triggering event requiring review of the President Casino assets during the fourth quarter of 2009. As a result of these tests, we determined that certain land holdings were impaired and recorded impairment charges of $3.5 million during the fourth quarter of 2009.

Due to the poor economic climate and prospective financial performance outlook in Reno, we determined a triggering event occurred for Boomtown Reno during the fourth quarter of 2009. As a result, we tested all long-lived assets at the property for recoverability. As a result of these tests, we recorded impairment charges of $2.9 million related to real estate and an additional $7.4 million related to buildings and equipment, discussed below, during the fourth quarter of 2009.

In addition, the scope of certain previously planned property improvement projects was reduced or eliminated. As a result, we reviewed all previously capitalized development costs and recorded impairment charges as appropriate.

During the fourth quarter of 2008, the continuing economic downturn and constrained capital markets contributed to a severe decline in value of most gaming stocks and gaming assets. As a result, we determined that a triggering event in accordance with applicable guidance occurred in the fourth quarter of 2008. Given the deterioration in commercial real estate values, and uncertainties surrounding the Company’s access to sufficient resources to adequately finance the its development pipeline at that time, all development project land holdings and related capitalized costs were reviewed for recoverability in connection with the preparation of the audited Consolidated Financial Statements for 2008. As a result of these tests, we determined that certain land holdings and related capitalized costs were impaired and we recorded charges totaling $228.0 million as of December 31, 2008. There were no such impairment charges for the year ended December 31, 2007.

34

Impairment of buildings, riverboats and equipment consists of the following:

	For the year ended December 31,
	2009		2008		2007
	(in millions)
Corporate jet	$	8.7	$	—	$	—
Boomtown Reno		7.4		7.7		—
President Casino		—		6.6		—
Other		0.4		6.0		4.9
Impairment of buildings, riverboats and equipment	$	16.5	$	20.3	$	4.9

During the fourth quarter of 2009, we listed our corporate jet for sale. We incurred an impairment charge of $8.7 million as the carrying amount exceeded the fair value.

Due to the poor economic climate and prospective financial performance outlook in Reno, we determined a triggering event occurred for Boomtown Reno during the fourth quarter of 2009. As a result, we tested all long-lived assets at Boomtown Reno for recoverability. As a result of these tests, we determined that certain buildings and equipment were impaired and as of December 31, 2009, we recorded impairment charges of $7.4 million.

In addition, during the year we incurred asset impairment charges related to the value of obsolete gaming equipment in the normal course of business.

During the fourth quarter of 2008, we determined a triggering event occurred for Boomtown Reno and the President Casino due to poor operating performance and a poor prospective financial performance outlook. As a result, we determined certain buildings, riverboats and equipment were impaired and as of December 31, 2008, we recorded impairment charges of $7.7 million and $6.6 million, for Boomtown Reno and the President Casino, respectively. In addition, during 2008 we incurred impairment charges of $4.5 million related to two idle riverboats acquired in 2006. During 2007, we recorded a loss of $1.0 million related to a cancelled condominium project in St. Louis, Missouri, a loss of $1.0 million related to a postponed guestroom addition project for Belterra Casino, and impairment charges related to gaming equipment that was adjusted to its net realizable value prior to being sold.

Write-downs, reserves and recoveries, net consist of the following:

	For the year ended December 31,
	2009		2008			2007
	(in millions)
(Gain)/loss on sale of assets (a)	$	1.7	$	3.0		$	(0.5	)
Customer loyalty program related expenses (b)		—		1.4			—
Insurance proceeds		—		(0.2	)		—
Other		—		0.1			—
Write-downs, reserves and recoveries, net	$	1.7	$	4.3		$	(0.5	)

(a)

During 2009 and 2008, we sold slot machines at our properties for a loss of $1.7 million and $3.0 million, respectively. During 2007, we recorded a $0.5 million gain on the sale of a corporate aircraft.

(b)

During the year ended December 31, 2008, we expanded our mychoice rewards program at our L’Auberge du Lac and Belterra properties. In doing so, we disclosed to our customers their reward account based on prior play. We had historically maintained such records to facilitate the provision of complimentary goods and services, but had not previously disclosed the point balances to customers at these facilities. The disclosure of point balances to our customers resulted in a non-cash charge to establish a theoretical liability for such initial amounts.

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Other non-operating income consists primarily of the following:

	For the year ended December 31,
	2009		2008		2007
	(in millions)
Interest income	$	0.3	$	2.0	$	15.2
Dividend income		—		0.7		0.3
Total other non-operating income	$	0.3	$	2.7	$	15.5

Interest income has decreased during the year ended December 31, 2009 compared to the prior-year period primarily due to lower short-term interest rates in the current period. We utilize conservative investment options, resulting in low levels of interest income relative to surplus cash. Prior-year dividend income relates to our shares held in Ameristar Casinos, Inc., which suspended dividend payments from the third quarter of 2008 to the second quarter of 2009. We sold all shares held during 2009.

Interest expense, net of capitalized interest was as follows:

	For the year ended December 31,
	2009			2008			2007
	(in millions)
Interest expense before capitalization of interest	$	84.3		$	78.1		$	68.6
Less capitalized interest		(13.7	)		(25.1	)		(42.9	)
Interest expense, net of capitalized interest	$	70.6		$	53.0		$	25.7

The increase in interest expense before capitalized interest for the year ended December 31, 2009 from the same 2008 period was principally due to the replacement of less expensive revolver borrowings with new, long-term 8.625% Notes. We believe the longer maturity, fixed interest rate and less-restrictive covenants of the 8.625% Notes warranted the higher interest rate, particularly as we prepare our capital structure for our planned growth. The decrease in capitalized interest was principally due to the suspension of development activities in Atlantic City, partially offset by an increase in such activities attributable to our River City project.

Gain on sale of equity securities During 2009, we sold all 1.2 million shares that we held in Ameristar Casinos, Inc. for cash proceeds of $23.7 million and realized a gain of $12.9 million. The shares were purchased in 2006 with the intent of proposing a combination of the two companies. However, given subsequent changes in the financial markets, we determined that such combination was no longer in the best interests of our stockholders.

Impairment of investment in equity securities At December 31, 2008, we owned 1.2 million shares of common stock in Ameristar Casinos, Inc., as discussed above. In accordance with applicable guidance, the decline in market value during 2008 was considered “other-than-temporary” and an impairment charge of $29.1 million was recorded in the Consolidated Statements of Operations for the year ended December 31, 2008.

Loss on early extinguishment of debt During 2009, we issued $450 million aggregate principal amount of 8.625% Notes, and used much of the net proceeds to retire early other outstanding indebtedness. Such early retirements resulted in a write-off of $9.5 million in call or tender premiums, unamortized debt issuance and other costs. During 2007, we issued fixed-rate, eight-year 7.50% senior subordinated notes due 2015. A majority of the proceeds were used to retire $275 million of floating-rate secured-term debt and to purchase $25.0 million in principal amount of our 8.25% senior subordinated notes due 2012. These transactions resulted in a loss on early extinguishment of $6.1 million for the year ended December 31, 2007. There were no debt issuance costs written off in 2008.

Income tax Our 2009 effective income tax rate for continuing operations was (1.1)%, or an expense of approximately $2.7 million, as compared to 12.8%, or a benefit of $54.5 million in 2008. Our 2009 effective rate differs from the statutory rate primarily due to the effects of the recording of a valuation allowance reserve against substantially all of our domestic deferred tax assets. Authoritative guidance requires the recording of a valuation allowance when a company has recorded three or more years of consecutive net losses. During 2009, we established additional non-cash deferred tax asset valuation allowances totaling $93.3 million with respect to the realization of deferred tax assets.

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Discontinued operations consist of our former Casino Magic Biloxi operations and our operations at The Casino at Emerald Bay in The Bahamas. During 2009, we recorded legal expenses for our Casino Magic Biloxi operations related to the ongoing legal dispute involving our insurance proceeds related to the property. For further detail regarding the litigation, see Note 10, Commitments and Contingencies, to the Consolidated Financial Statements. During 2008, we recorded a gain of $54.9 million, net of income taxes, related to insurance proceeds received related to our former Casino Magic Biloxi operations.

In July 2008, we decided to sell or otherwise discontinue operations of The Casino at Emerald Bay. This small casino was distant from our other operations and its success was heavily reliant on the neighboring unaffiliated Four Seasons hotel. The owner of such hotel was then in receivership. On January 2, 2009, we closed the casino. Consequently, since the beginning of the third quarter of 2008, we have reflected the business as a discontinued operation. As of December 31, 2009, we recorded minimal costs associated with the shut-down of the casino, and for the year ended December 31, 2008 recorded $4.3 million in asset impairment charges for the gaming operation’s related assets.

Discontinued Development Opportunity In September 2007, we submitted a proposal for a new gaming entertainment complex to be located in Kansas City, Kansas. In September 2008, we withdrew such application in light of deteriorating capital markets. In connection with our application, we deposited $25 million with the Kansas Lottery Commission in June 2008, which was later returned to us in September 2008.

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LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2009, we held $129.6 million of cash and cash equivalents. We estimate that approximately $70 million of such cash is needed to fund our casino cages, slot machines and day-to-day operating and corporate accounts. This amount is expected to increase to approximately $80 million with the opening of River City in March 2010. As of December 31, 2009, we had a then existing $531 million revolving credit facility with a maturity date in December 2010 (the “Previous Credit Facility”), of which $36.9 million was outstanding and $12.6 million was committed under various letters of credit. On February 5, 2010, we entered into a $375 million amended and restated credit facility, which facility matures in March 2014 (the “Amended Credit Facility”). As of February 26, 2010, $100 million was outstanding under the Amended Credit Facility, and $12.6 million was committed under various letters of credit. We anticipate additional borrowings in the future to fund our development projects and other general corporate needs.

We generally produce significant positive cash flows from operations, though this is not always reflected in our reported net income due to large non-cash charges such as depreciation. However, our ongoing liquidity will depend on a number of factors, including available cash resources, cash flow from operations, funding of construction of our development projects and our compliance with covenants contained in the Amended Credit Facility and bond indentures.

										Percentage
	For the year ended December 31,									Increase/(Decrease)
	2009			2008			2007			2009 vs. 2008			2008 vs. 2007
	(in millions)
Net cash provided by operating activities	$	120.2		$	129.3		$	153.4			(7.0	)%		(15.7	)%
Net cash used in investing activities	$	(202.4	)	$	(306.0	)	$	(566.2	)		(33.9	)%		(46.0	)%
Net cash providing by financing activities	$	96.6		$	101.9		$	414.6			(5.2	)%		(75.4	)%

Operating Cash Flow

Our cash provided by operating activities in 2009 decreased from the prior year period primarily due to the collection of insurance proceeds in 2008, the impact of which was partially offset by improved operating results in 2009 and increases in accounts payable and accrued liabilities in 2009. No insurance proceeds were received in 2009. Our decrease in cash provided by operating activities in 2008 from 2007 is primarily due to slightly weaker operating results and cash payments for previously accrued accounts payable.

Investing Cash Flow

The following is a summary of our capital expenditures for the years ended December 31, 2009, 2008 and 2007 by property or development project:

	For the year ended December 31,
	2009		2008		2007
	(in millions)
River City	$	169.2	$	51.7	$	18.3
Sugarcane Bay at L’Auberge du Lac		14.3		11.2		3.1
Lumière Place		9.7		83.5		322.8
Belterra Casino Resort		7.0		5.7		13.9
Boomtown New Orleans		5.7		7.6		4.7
L’Auberge du Lac		5.4		23.4		69.8
Boomtown Bossier City		4.2		3.1		2.3
Baton Rouge		2.1		1.0		21.4
Boomtown Reno		2.0		7.0		2.5
Casino Magic Argentina		1.2		4.5		10.5
Atlantic City		0.9		99.4		37.2
Other		4.7		7.9		39.1
Total capital expenditures	$	226.4	$	306.0	$	545.6

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As of December 31, 2009, we had cumulatively invested approximately $318 million in the River City project, $21.2 million in the Sugarcane Bay at L’Auberge project, and $26.4 million in the Baton Rouge project. These amounts include cash expenditures, land acquisitions, capitalized interest and pre-opening costs. The amounts for Sugarcane Bay and Baton Rouge exclude costs of the prior designs that were written off as of December 31, 2009.

In 2010 and for the next few years, our material capital expenditures include the following:

• In connection with our River City project, we entered into a lease and development agreement with the St. Louis County Port Authority. Pursuant to the terms of the lease and development agreement, the project is to be developed in two phases. We are required to invest $375 million in the first phase and $75 million in the second phase, which must be completed three years from the anticipated opening on March 4, 2010. Phase One includes, among other things, the gaming facilities. We expect to open Phase One on March 4, 2010 and to have invested the required $375 million. If we do not complete the second phase, the maximum amount of liquidated damages that we would have to pay is $20 million;

• In December 2009, the Louisiana Gaming Control Board (“LGCB”) approved updated plans for our Sugarcane Bay at L’Auberge du Lac project, lowered the minimum required expenditure on such project by $50 million to $300 million and granted us an additional extension for its completion until June 30, 2011. We estimate the updated project cost for Sugarcane Bay will be approximately $305 million, excluding operating cash and estimated capitalized interest of approximately $15.0 million. As of December 31, 2009, approximately $235 million remains to be spent for the Sugarcane Bay at L’Auberge du Lac project;

• In October 2009, the LGCB granted an additional extension for entering into a construction contract for our Baton Rouge project, which has a preliminary budget of approximately $250 million, excluding operating cash and estimated capitalized interest between approximately $10 million and $15 million. As of December 31, 2009, approximately $240 million remains to be spent for the Baton Rouge project. The deadline for entering into a construction contract is now March 31, 2010. We continue to perform design and entitlement work for our project in Baton Rouge. We expect to enter into a guaranteed maximum price contract for the project and commence construction as soon as is practicable.

• In connection with our Lumière Place project, we have a redevelopment agreement with the City of St. Louis, which, among other things, commits us to oversee the investment of $50 million in residential housing, retail or mixed use developments in the City of St. Louis within five years of the opening of the casino and hotel. The total cost of such projects must be at least $50 million; however, our investment in such projects can be substantially less, as such projects may be developed in partnership with others. If we and our development partners collectively fail to invest $50 million in residential housing, retail or mixed use developments, we would be obligated to pay a fee of $1.0 million in January 2013, $2.0 million in January 2014 and $2.0 million annually thereafter, adjusted by the change in the consumer price index; and

• We intend to continue to maintain our current properties in good condition and estimate that this will require maintenance capital spending of approximately $30 million to $40 million per year.

Our intention is to use existing cash resources, cash flows from operations and funds available under our Amended Credit Facility to fund operations, maintain existing properties, make necessary debt service payments and fund the development of some of our capital projects. Although the capital markets have improved in recent months, they remain volatile and subject to change.

Our ability to borrow under our Amended Credit Facility is contingent upon, among other things, meeting customary financial and other covenants. If we are unable to borrow under our Amended Credit Facility, or if our operating results are adversely affected because of a reduction in consumer spending, or for any other reason, this may affect our ability to complete our projects unless we sell assets, enter into leasing arrangements, or take other measures to find additional resources. There is no certainty that we will be able to do so on terms that are favorable to the Company or at all.

39

Our substantial funding needs in connection with our development projects, including our Sugarcane Bay at L’Auberge du Lac and Baton Rouge projects, will require us to raise substantial additional capital from outside sources. Although the capital markets improved during 2009, as evidenced by our ability to issue $450 million in aggregate principal amount of 8.625% Notes in August 2009, as discussed below, we cannot accurately predict our ability to access the capital markets in the future. The need for additional capital during periods of difficult market conditions may force us to delay, reduce or cancel planned development and expansion projects, sell assets or obtain such capital on potentially unfavorable terms. We intend to proceed with significant construction of our various projects only when we believe that it is likely that sufficient funding is available on reasonable terms.

In addition to the effect that the global financial crisis has already had on us, we may face significant challenges if conditions in the economy and financial markets do not improve, or if they worsen. The credit crisis has adversely affected overall consumer demand, which has had a negative effect on our revenues. Furthermore, the effects of the recent disruption to the overall economy could adversely affect consumer confidence and the willingness of consumers to spend money on leisure activities. Because of the current economic environment, certain of our customers may curtail the frequency of their visits to our casinos and may reduce the amounts they wager and spend during those visits below what they would normally wager and spend in better economic times. All of these effects could have a material adverse effect on our liquidity.

Financing Cash Flow

Credit Facility

As of December 31, 2009, we had borrowings of $36.9 million and $12.6 million committed under various letters of credit under our Previous Credit Facility.

On February 5, 2010, we entered into the Amended Credit Facility, which amended and restated the $531 million Previous Credit Facility. The Amended Credit Facility consists of a $375 million revolving credit commitment, of which $110 million was drawn immediately. Of the amount drawn, $92.7 million was used to repay borrowings outstanding under the Previous Credit Facility as of the same date. The Amended Credit Facility permits us, in the future, to increase the commitments under the revolving credit facility and to obtain term loan commitments, in each case from existing or new lenders that are willing to commit to such an increase so long as we are in pro forma compliance with a consolidated senior secured debt ratio and a consolidated total leverage ratio.

The Amended Credit Facility expires and all amounts outstanding there under are due and payable in full on March 31, 2014; provided that such date will be accelerated to September 30, 2011 if any portion of our 8.25% senior subordinated notes due 2012 (“8.25% Notes”) are outstanding on September 30, 2011. As of February 26, 2010, $200 million aggregate principal amount of our 8.25% Notes is outstanding.

The proceeds of the Amended Credit Facility may be used for general corporate purposes, including the payment of certain expenditures associated with the construction and development of our River City, Sugarcane Bay and Baton Rouge projects.

The Amended Credit Facility does not have any debt repayment obligations prior to 2014 (as long as no portion of our 8.25% Notes is outstanding on September 30, 2011). We are obligated to make mandatory prepayments of indebtedness under the Amended Credit Facility from the net proceeds of certain debt offerings, certain asset sales and dispositions and certain casualty events, subject in certain cases to our right to reinvest proceeds. In addition, we will be required to prepay borrowings under the Amended Credit Facility with a percentage of our “excess cash flow” (as defined in the Amended Credit Facility, and reduced for cash flow applied to permitted capital spending). We do not believe such payments will be required in the foreseeable future. We have the option to prepay all or any portion of the indebtedness under the Amended Credit Facility at any time without premium or penalty.

The interest rate margins for revolving credit loans under the Amended Credit Facility depend on our consolidated total leverage ratio, which in general is the ratio of consolidated total debt (less excess cash, as defined in the Amended Credit Agreement) to annualized adjusted EBITDA. The Amended Credit Facility bears interest, at our option, at either a LIBOR rate plus a margin ranging from 3.00% to 4.75% or at a base rate plus a margin ranging from 1.50% to 3.25%, in either case based on our consolidated total leverage ratio. The undrawn revolver facility bears a commitment fee for un-borrowed amounts of 0.25% to 0.75% per annum based on our consolidated total leverage ratio.

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The Amended Credit Facility has, among other things, financial covenants, capital spending limits and other affirmative and negative covenants, including a required minimum consolidated interest coverage ratio, a maximum permitted consolidated total leverage ratio and a maximum permitted consolidated senior secured leverage ratio. Furthermore, the Amended Credit Facility has covenants that limit the amount of senior unsecured debt that we may incur to $900 million, unless our consolidated total leverage ratio (computed in accordance with the Amended Credit Facility) is less than 6.00 to 1.00.

The Amended Credit Facility also has certain new covenants regarding construction projects. In general, under the Amended Credit Facility a project is defined as the construction and/or renovation of improvements that could reasonably be expected to exceed $75 million. These new covenants include a requirement that an “in-balance” test be satisfied for each unfinished project other than the first phase of our River City project. In general, the in-balance test requires that, as of the date of determination prior to commencement of construction (as such term is defined in the Amended Credit Facility), the project sources exceed the project uses for such project (and for all other unfinished projects as to which commencement of construction has occurred) for the period from such date of determination through the date six full months after the scheduled opening date of such project. For purposes of the in-balance test, project sources and project uses are defined in the Amended Credit Facility. Commencement of construction means, in general, for any project, the spending from and after January 1, 2010 of amounts (excluding certain costs such as land acquisition costs, costs to obtain a gaming license and capitalized interest) in excess of certain amounts: $25 million for Sugarcane Bay, $25 million for Baton Rouge, and for all other projects, the lesser of $25 million and 10% of the construction budget for such project. In addition, there is a limitation in the Amended Credit Facility such that we cannot spend more than $25 million in construction and development costs on the Baton Rouge project after January 1, 2010 unless we have received not less than $100 million in the aggregate from permitted sales or other dispositions of assets (including receipt of insurance and condemnation proceeds), cash tax refunds, litigation settlements, and/or gross proceeds received by us from the issuance and sale of non-debt capital, and/or dividends and distributions received from unrestricted subsidiaries net of investments made after January 1, 2010 in such unrestricted subsidiaries that have not been charged to an investment basket.

The obligations under the Amended Credit Facility are secured by most of our assets and our domestic restricted subsidiaries, including a pledge of the equity interests in our domestic subsidiaries and, if and when formed or acquired, by a pledge of up to 66% of the then outstanding equity interests of our foreign restricted subsidiaries. Our obligations under the Amended Credit Facility are also guaranteed by our domestic restricted subsidiaries and are required to be guaranteed by our foreign restricted subsidiaries, if and when such foreign restricted subsidiaries are formed or acquired, unless such guarantee causes material adverse tax, foreign gaming or foreign law consequences. The subsidiaries that own our corporate airplane, the Atlantic City site and our foreign subsidiaries are currently unrestricted subsidiaries for purposes of the Amended Credit Facility.

The Amended Credit Facility provides for customary events of default with corresponding grace periods, including payment defaults, cross defaults with certain other indebtedness to third parties, breaches of covenants and bankruptcy events. In the case of a continuing event of default, the lenders may, among other remedies, accelerate the payment of all obligations due from the borrowers to the lenders, charge the borrowers the default rate of interest on all then outstanding or thereafter incurred obligations, and terminate the lenders’ commitments to make any further loans or issue any further letters of credit. In the event of certain defaults, the commitments of the lenders will be automatically terminated and all outstanding obligations of the borrowers will automatically become due. In addition, the lenders may take possession of, and enforce the borrowers’ rights with respect to, the borrowers’ collateral, including selling the collateral.

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Senior and Senior Subordinated Indebtedness

As of December 31, 2009, we had outstanding $450 million aggregate principal amount of 8.625% senior notes due 2017 (“8.625% Notes”), $385 million aggregate principal amount of 7.50% senior subordinated notes due 2015 (“7.50% Notes”) and $200 million aggregate principal amount of 8.25% Notes.

In August 2009, we closed an offering of $450 million in aggregate principal amount of new 8.625% Notes. The 8.625% Notes were issued in a private offering conducted pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended, at a price of 98.597% of par to yield 8.875% to maturity. Net of the original issue discount, initial purchasers’ fees and various costs and expenses, net proceeds from the offering were approximately $434 million. Net proceeds from the offering were used to repurchase $75.0 million in aggregate principal amount of our 8.25% Notes, repurchase or redeem all $135 million in aggregate principal amount of our then-outstanding 8.75% senior subordinated notes due 2013 (the “8.75% Notes”), and repay approximately $206 million in then-outstanding revolving credit borrowings under the Previous Credit Facility, $200 million of which was permitted refinancing basket debt. The remaining net proceeds from the offering are for general corporate purposes, including funding of our development projects.

The 8.625% Notes are senior unsecured obligations and rank equally in right of payment with all of our existing and future senior debt, including debt under our Amended Credit Facility. The 8.625% Notes are, however, effectively subordinated to our Amended Credit Facility, which is secured by a first priority lien, as well as any other secured debt which may be issued in the future. The 8.625% Notes are guaranteed on a senior basis by certain of our current and future domestic restricted subsidiaries. The 8.625% Notes rank senior to our existing 7.50% Notes and 8.25% Notes.

Under the indenture governing the 8.625% Notes, among other debt baskets, we are permitted to incur the greater of $750 million or 3.5x Consolidated EBITDA (as defined in the Indenture) in senior indebtedness and secured indebtedness, which debt basket excludes the 8.625% Notes. Under the indentures governing the 7.50% Notes and 8.25% Notes, we are permitted to incur the greater of $1.5 billion or 2.5x Adjusted EBITDA (as defined in the indenture) and $475 million in senior secured indebtedness, respectively. Under these senior secured indebtedness baskets, we are permitted in certain circumstances to incur senior unsecured indebtedness. In addition, the indentures governing the 8.625% Notes, the 7.50% Notes and the 8.25% Notes include other debt incurrence baskets, including a permitted refinancing basket and a general debt basket, the permitted size of the latter of which is the greater of $250 million or 5% of Consolidated Total Assets (as defined in the indentures) under the 8.625% Notes and 7.50% Notes, and $50 million under the 8.25% Notes. Under all three indentures, we may also incur additional indebtedness if, after giving effect to the indebtedness proposed to be incurred, our Consolidated Coverage Ratio (essentially, a ratio of adjusted EBITDA to interest) for a trailing four-quarter period on a pro forma basis (as defined in our indentures) would be at least 2.0 to 1.0. As a result of the recent Amended Credit Facility and the issuance of the 8.625% Notes, resulting in higher interest expense on a pro-forma basis, our Consolidated Coverage Ratio under all three currently existing indentures was below 2.0 to 1.0 as of December 31, 2009. Hence, under the most restrictive of our bond indentures, the indenture governing the 8.25% Notes, which are currently callable, we are currently restricted to borrowing no more than $525 million of senior indebtedness, which includes the general debt basket amount of $50 million. Such amount is in excess of the revolving credit commitment under our Amended Credit Facility, and the nominal portion of the 8.625% Notes that was not permitted refinancing basket debt.

The 8.25% Notes, 7.50% Notes and 8.625% Notes become or became callable at a premium over their face amount on March 15, 2008, June 15, 2011 and August 1, 2013, respectively. Such premiums decline periodically as the notes progress towards their respective maturities. The 7.50% Notes and 8.625% Notes are redeemable prior to such time at a price that reflects a yield to the first call that is equivalent to the applicable Treasury bond yield plus 0.5 percentage points.

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CONTRACTUAL OBLIGATIONS AND OTHER COMMITMENTS

The following table summarizes our contractual obligations and other commitments as of December 31, 2009:

			Less than						More than
Contractual Obligations	Total		1 year		1-3 years		3-5 years		5 years		Other
Long-Term Debt Obligations (a)	$	1,072.8	$	0.1	$	200.2	$	37.1	$	835.4	$	—
Fixed interest payments (b)		509.8		83.3		160.2		135.4		130.9		—
Operating Lease Obligations (c)		582.3		10.7		23.7		19.9		528.0		—
Purchase Obligations: (d)
Construction contractual obligations (e)		21.8		21.8		—		—		—		—
Other (f)		55.5		45.6		9.9		—		—		—
Other Long-Term Liabilities Reflected on the Registrant’s Balance sheet under GAAP (g)		29.0		10.8		—		—		—		18.2
Total	$	2,271.2	$	172.3	$	394.0	$	192.4	$	1,494.3	$	18.2

(a)	Our Amended Credit Facility provides for a stated maturity date of March 31, 2014; provided that such date will be accelerated to September 30, 2011 if any portion of our 8.25% Notes is outstanding on September 30, 2011. The outstanding borrowings as of December 31, 2009 under our Previous Credit Facility were approximately $36.9 million.
(b)	Includes interest obligations associated with the debt obligations outstanding as of December 31, 2009, and through the debt maturity date.
(c)	For those lease obligations in which annual rent includes both a minimum lease payment and a percentage of future revenue, the table reflects only the known minimum lease obligation. In addition, the table reflects all renewal options for those lease obligations that have multiple renewal periods.
(d)	Purchase obligations represent agreements to purchase goods or services that are enforceable and legally binding on us.
(e)	Includes contracts executed as of December 31, 2009 for completion of our River City project, which contracts are included in the project budgets.
(f)	Includes open purchase orders, employment agreements, deferred bonus obligations and the estimated withdrawal liability associated with a union-sponsored multi-employer pension benefit plan.
(g)	Includes executive deferred compensation, director’s post-retirement plan and uncertain tax position reserves. The amount included in the “Other” column includes uncertain tax position liabilities for which we are unable to make a reliable estimate of the period of cash settlement with the taxing authority.

The table above excludes certain commitments as of December 31, 2009, for which the timing of expenditures associated with such commitments is unknown, or contractual agreements have not been executed, or the guaranteed maximum price for such contractual agreements has not been agreed upon. Such commitments include: (i) the remaining $50 million commitment for residential housing, retail, or mixed-use development stipulated by our City of St. Louis redevelopment agreement, which must be completed within five years of the opening of the Lumière Place casino and hotel; (ii) the remaining project costs for phase one and $75.0 million in phase two under our lease and development agreement with the St. Louis County Port Authority, which excludes the amounts covered by our guaranteed maximum price agreement regarding River City; (iii) expenditures associated with our proposed expansion and development projects at Sugarcane Bay and Baton Rouge; (iv) the funding, in certain circumstances, of an additional $5.0 million into an indemnification trust we created in 2005; (v) the agreement, under certain circumstances, to purchase sales tax increment bonds at Boomtown Reno for approximately $5.0 million, if necessary.

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CRITICAL ACCOUNTING ESTIMATES

The audited Consolidated Financial Statements were prepared in conformity with accounting principles generally accepted in the United States. Certain of the accounting policies require management to apply significant judgment in defining the estimates and assumptions for calculating financial estimates. These judgments are subject to an inherent degree of uncertainty. Management’s judgments are based on our historical experience, terms of various past and present agreements and contracts, industry trends, and information available from other sources, as appropriate. There can be no assurance that actual results will not differ from those estimates. Changes in these estimates could adversely affect our financial position or our results of operations.

We have determined that the following accounting policies and related estimates are critical to the preparation of our audited Consolidated Financial Statements:

Land, buildings, riverboats and equipment: We have a significant investment in long-lived property and equipment, which represents approximately 84% of our total assets. Judgments are made in determining the estimated useful lives of assets, the salvage values to be assigned to assets and if or when an asset has been impaired. The accuracy of these estimates affect the amount of depreciation expense recognized in the financial results and whether to record a gain or loss on disposition of an asset. We review the carrying value of our property and equipment used in operation whenever events or circumstances indicate that the carrying value of an asset may not be recoverable from estimated future undiscounted cash flows expected to result from its use and eventual disposition. Adverse industry or economic trends, lower projections of profitability, or a sustained decline in our market capitalization, among other items, may be indications of potential impairment issues, which are triggering events requiring the testing of an asset’s carrying value for recoverability. The determination of fair value uses accounting judgments and estimates, including market conditions. Changes in estimates or application of alternative assumptions could produce significantly different results.

During the fourth quarter of 2009, we determined that, in accordance with applicable guidance, a triggering event had occurred for our land held in Atlantic City, New Jersey due to the continuing economic downturn of the gaming market in Atlantic City as the result of increased competitive pressures in surrounding markets, including Pennsylvania, as well as the continued deterioration in commercial real estate values in the area. We tested the carrying value of our land holdings for recoverability, and recorded impairment charges of $160 million during the fourth quarter of 2009.

During the fourth quarter of 2009, we re-evaluated the scope and design of our Sugarcane Bay and Baton Rouge projects. The Sugarcane Bay project was relocated from land adjacent to L’Auberge du Lac to the existing L’Auberge du Lac footprint. In addition, the size of the project, the anticipated amenities, and other items were reduced in scope. As a result of these changes, the previously capitalized development costs of $20.9 million associated with the prior Sugarcane Bay design were fully impaired. Our Baton Rouge project will be similar to the original design. However, the orientation and structure of the hotel have changed, resulting in the impairment of certain of the design components of the project totaling $0.7 million in the fourth quarter of 2009.

Due to poor historical and prospective financial performance outlook for our President Casino, as well as communications with the MGC during the fourth quarter of 2009 discussed below, we determined there was a triggering event requiring review of the President Casino assets during the fourth quarter of 2009. As a result of these tests, we determined that certain assets were impaired and recorded impairment charges of $3.5 million during the fourth quarter of 2009.

Due to the poor economic climate and prospective financial performance outlook in Reno, we determined a triggering event occurred for Boomtown Reno during the fourth quarter of 2009. As a result, we tested all long-lived assets at the property for recoverability. As a result of these tests, we recorded impairment charges of $2.9 million related to real estate and an additional $7.4 million related to buildings and equipment, during the fourth quarter of 2009.

In addition, the scope of certain previously planned property improvement projects was reduced or eliminated. As a result, we reviewed all previously capitalized development costs and recorded impairment charges as appropriate.

44

During the year ended December 31, 2008, we recorded impairment charges related to land and development costs of $228.0 million and impairment charges of $20.3 million related to buildings, riverboats and equipment.

For further detail regarding impairments of land, buildings, riverboats and equipment, see Note 2, Land, Buildings, Riverboats and Equipment, to the Consolidated Financial Statements.

Self-insurance Reserves: We are self-insured up to certain limits for costs associated with general liability, workers’ compensation and employee medical coverage. Insurance claims and reserves include accruals of estimated settlements for claims as well as estimated legal costs to be incurred to settle such claims. In estimating these accruals, we consider historical loss experience and make judgments about the expected levels of cost per claim.

Income Tax Assets and Liabilities: We utilize estimates related to cash flow projections for the realization of deferred income tax assets. The estimates are based upon recent operating results and budgets for future operating results. We consider the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in this assessment.

In accordance with applicable guidance, we record tax contingencies when the exposure item becomes probable and reasonably estimable. We assess the tax uncertainties on a quarterly basis and maintain the required tax reserves until the underlying issue is resolved or upon the expiration of the statute of limitations. Our estimate of the potential outcome of any uncertain tax issue is highly judgmental and we believe we have adequately provided for any reasonable and foreseeable outcomes related to uncertain tax matters.

Effective January 1, 2007, we adopted authoritative guidance that requires that tax positions be assessed using a two-step process. A tax position is recognized if it meets a “more likely than not” threshold, and is measured at the largest amount of benefit that is greater than 50 percent likely of being realized. As required by the standard, we review uncertain tax positions at each balance sheet date. Liabilities we record as a result of this analysis are recorded separately from any current or deferred income tax accounts, and are classified as current (“Other accrued liabilities”) or long-term (“Other long-term liabilities”) based on the time until expected payment.

Goodwill and Other Intangible Assets: We account for goodwill and indefinite-lived intangible assets in accordance with applicable guidance; accordingly, we perform an annual review for impairment in the fourth quarter of each fiscal year, or more frequently if events or circumstances indicate that the carrying value may not be recoverable. Adverse industry or economic trends, lower projections of profitability, or a sustained decline in our market capitalization, among other items, maybe indications of potential impairment issues, which are triggering events requiring the testing of an asset’s carrying value for recoverability. Evaluations of possible impairment and, if applicable, adjustments to carrying values require us to estimate, among other factors, forecasts of future operating results, revenue growth, EBITDA margin, tax rates, capital expenditures, depreciation, working capital, weighted average cost of capital, long-term growth rates, risk premiums and terminal values and fair market values of our reporting units and assets. Changes in estimates or the application of alternative assumptions could produce significantly different results. Should conditions be different from our last assessment, significant write-downs of goodwill or intangible assets may be required, which write-downs would adversely affect our operating results. As a result of our annual review during the fourth quarter of 2009, we fully impaired the gaming license related to our President Casino, which resulted in an impairment charge of $1.9 million for the year ended December 31, 2009. During 2009, we proposed to the MGC two separate plans to relocate or replace the Admiral riverboat, on which the President Casino operates, with a newer, larger casino riverboat. We were informed by the MGC that either plan of action would require us to forfeit our license and reapply for a new gaming license in a public bid process open to all interested parties. On January 27, 2010, the MGC issued a preliminary order for disciplinary action that proposed that the MGC revoke the gaming license associated with the President Casino. For further detail, see Item 3 of Part I and Note 8, Impairment of Goodwill and Indefinite-lived Intangible Assets, to the Consolidated Financial Statements.

During the year ended December 31, 2008, we recorded impairments to goodwill of $28.5 million and impairments to intangible assets of $41.4 million.

45

Insurance Receivables: We have significant receivables from an insurance company related to our former Biloxi property, which was destroyed by Hurricane Katrina. We record receivables to the extent of our net book value for physical property damage and for actual costs incurred under the business-interruption coverage. Until such claims are resolved, no gains for coverage in excess of net book value and no potential insurance recoveries for lost profits are recorded. Significant estimates are required in determining the amount of our insurance claims. On February 12, 2010, we received $23.4 million from our insurance carrier as a final payment settling all remaining outstanding claims. As a result of this final settlement, we recognized the deferred gain of $18.3 million related to our Hurricane Katrina insurance claim, as well as the $23.4 million in proceeds in February 2010.

Share-based Compensation: We account for share-based payment awards in accordance with authoritative guidance, which requires that share-based payment expense is measured at the grant date based on the fair value of the award and is recognized over the requisite service period. Determination of the fair values of share-based payment awards at the grant date requires judgment, including estimating the expected term of the relevant share-based awards and the expected volatility of our stock. Additionally, we must estimate the amount of share-based awards that are expected to be forfeited. The expected term of share-based awards represents the period of time that the share-based awards are expected to be outstanding and was determined based on historical experience of similar awards, giving consideration to the contractual terms of the awards, vesting schedules and expectation of future employee behavior. Any changes in these highly subjective assumptions may significantly impact the stock-based compensation expense for the future.

RECENTLY ISSUED AND ADOPTED ACCOUNTING STANDARDS

In May 2009, the Financial Accounting Standards Board (“FASB”) issued new authoritative guidance requiring disclosures regarding subsequent events for events or transactions that occur after the balance sheet date but before the financial statements are issued, for public companies, and requires disclosure of the date through which an entity has evaluated subsequent events. This guidance was effective for interim and annual reporting periods ending after June 15, 2009 and the adoption did not have a material effect on our audited Consolidated Financial Statements.

In June 2009, the FASB issued new authoritative guidance to establish the FASB Accounting Standards Codification as the single source of authoritative non-governmental GAAP. The guidance is effective for interim and annual reporting periods ending after September 15, 2009. We adopted the guidance effective July 1, 2009 and the adoption did not have a material effect on our audited Consolidated Financial Statements.

In June 2009, the FASB issued new authoritative guidance regarding a transfer of financial assets, the effects of a transfer on its financial statements, and any continued involvement in transferred financial assets. Additionally, the concept of a qualifying special-purpose entity was removed. The guidance is effective for annual reporting periods beginning after November 15, 2009 and the adoption did not have a material effect on our audited Consolidated Financial Statements.

In June 2009, the FASB issued new authoritative guidance for enterprises involved with variable interest entities. The guidance is effective for annual reporting periods beginning after November 15, 2009 and the adoption did not have a material effect on our audited Consolidated Financial Statements.

In August 2009, the FASB issued new authoritative guidance on measuring liabilities at fair value. The guidance addresses restrictions on the transfer of a liability and clarifies how the price of a traded debt security should be considered in estimating the fair value of the issuer’s liability. This guidance is effective for the first reporting period beginning after its issuance. We adopted the guidance effective October 1, 2009 and the adoption did not have a material effect on our audited Consolidated Financial Statements.

A variety of proposed or otherwise potential accounting standards are currently under review and study by standard-setting organizations and certain regulatory agencies. Because of the tentative and preliminary nature of such proposed standards, we have not yet determined the effect, if any, that the implementation of any such proposed or revised standards would have on our audited Consolidated Financial Statements.

46

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

At times, we are exposed to market risk from adverse changes in interest rates with respect to the short-term floating interest rate on borrowings under our Previous Credit Facility. As of December 31, 2009, there was $36.9 million outstanding under our Previous Credit Facility, and $12.6 million committed under various letters of credit. As of December 31, 2009, any borrowings outstanding under our Previous Credit Facility would have accrued interest at LIBOR plus a margin determined by our current consolidated leverage ratio, which margin was 2.25%. As of December 31, 2009, if LIBOR rates were to increase or decrease by one percentage point, our interest expense would increase or decrease by approximately $0.4 million per year, assuming constant debt levels. Under our Amended Credit Facility, any borrowings outstanding accrue interest at LIBOR plus a margin determined by our current consolidated leverage ratio, which margin was 4.25% as of February 26, 2010.

We are also exposed to market risk from adverse changes in the exchange rate of the dollar to the Argentina peso, which has fluctuated significantly in recent months. The total assets of Casino Magic Argentina at December 31, 2009 were $28.1 million, or approximately 1.5% of our consolidated assets.

The table below provides the principal cash flows and related weighted average interest rates by contractual maturity dates for our debt obligations at December 31, 2009. At December 31, 2009, we did not hold any material investments in market-risk-sensitive instruments of the type described in Item 305 of Regulation S-K.

																						Fair
Liabilities	2010			2011			2012			2013			2014			Thereafter			Total			Value
	(in thousands)
Credit Facility (a)		—			—			—			—		$	36,919			—		$	—		$	36,181
Rate		2.68	%		2.68	%		2.68	%		2.68	%		2.68	%		2.68	%		2.68	%
7.50% Notes		—			—			—			—			—		$	385,000		$	385,000		$	352,756
Fixed rate		7.50	%		7.50	%		7.50	%		7.50	%		7.50	%		7.50	%		7.50	%
8.25% Notes		—			—		$	200,000			—			—			—		$	200,000		$	199,250
Fixed rate		8.25	%		8.25	%		8.25	%		8.25	%		8.25	%		8.25	%		8.25	%
8.625% Notes		—			—			—			—			—		$	450,000		$	450,000		$	457,313
Fixed rate		8.625	%		8.625	%		8.625	%		8.625	%		8.625	%		8.625	%		8.625	%
All Other	$	88		$	95		$	102		$	110		$	118		$	325		$	838		$	838
Avg. Interest rate		7.33	%		7.33	%		7.33	%		7.25	%		7.25	%		7.25	%		7.25	%

(a) Our Amended Credit Facility provides for a stated maturity date of March 31, 2014; provided that such date will be accelerated to September 30, 2011 if any portion of our 8.25% Notes is outstanding on September 30, 2011. The outstanding borrowings as of December 31, 2009 under our Previous Credit Facility were approximately $36.9 million.

47

Item 8. Financial Statements and Supplementary Data

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of
Pinnacle Entertainment, Inc.
Las Vegas, Nevada

We have audited the accompanying consolidated balance sheet of Pinnacle Entertainment, Inc. and its subsidiaries (the “Company”) as of December 31, 2009, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the year ended December 31, 2009. Our audit also included the financial statement schedule for the period January 1, 2009 through December 31, 2009, inclusive, listed in the Index at Item 15(a)2. These financial statements and the financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audit.

We conducted our audit 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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company at December 31, 2009 and the consolidated results of its operations and its cash flows for the year ended December 31, 2009, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the financial statement schedule referred to above, when considered in relation to the consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 26, 2010 expressed an unqualified opinion thereon.

/s/ ERNST & YOUNG LLP

Las Vegas, Nevada

February 26, 2010

48

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Pinnacle Entertainment, Inc.
Las Vegas, Nevada

We have audited the accompanying consolidated balance sheets of Pinnacle Entertainment, Inc. and subsidiaries (the “Company”) as of December 31, 2008, and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2008. Our audits also included the financial statement schedule listed in the Index at Item 15(a)(2). These financial statements and the financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and financial statement schedule 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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes 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 Pinnacle Entertainment, Inc. and subsidiaries as of December 31, 2008, and the results of their operations and their cash flows for each of the two years in the period ended December 31, 2008, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ DELOITTE & TOUCHE LLP Las Vegas, Nevada

March 9, 2009

49

PINNACLE ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	For the year ended December 31,
	2009			2008			2007
	(in thousands, except per share data)
Revenues:
Gaming	$	908,692		$	903,780		$	809,380
Food and beverage		62,461			63,248			46,299
Lodging		37,376			37,101			23,431
Retail, entertainment and other		37,080			40,555			42,704
		1,045,609			1,044,684			921,814
Expenses and other costs:
Gaming		543,047			542,309			471,426
Food and beverage		62,528			65,469			46,680
Lodging		23,966			24,613			11,698
Retail, entertainment and other		21,250			26,231			28,983
General and administrative		240,786			235,658			200,730
Depreciation and amortization		105,157			117,846			80,334
Pre-opening and development costs		28,732			55,371			60,783
Impairment of goodwill		—			28,543			—
Impairment of indefinite-lived intangible assets		1,850			41,387			—
Impairment of land and development costs		188,409			227,954			—
Impairment of buildings, riverboats and equipment		16,492			20,330			4,852
Write-downs, reserves and recoveries, net		1,708			4,292			(488	)
		1,233,925			1,390,003			904,998
Operating income (loss)		(188,316	)		(345,319	)		16,816
Other non-operating income		339			2,715			15,510
Interest expense, net of capitalized interest		(70,556	)		(53,049	)		(25,715	)
Gain on sale of equity securities		12,914			—			—
Impairment of investment in equity securities		—			(29,088	)		—
Loss on early extinguishment of debt		(9,467	)		—			(6,124	)
Income (loss) from continuing operations before income taxes		(255,086	)		(424,741	)		487
Income tax benefit (expense)		(2,744	)		54,545			(443	)
Income (loss) from continuing operations		(257,830	)		(370,196	)		44
Income (loss) from discontinued operations, net of income taxes		(472	)		47,599			(1,450	)
Net loss	$	(258,302	)	$	(322,597	)	$	(1,406	)
Net loss per common share—basic
Income (loss) from continuing operations	$	(4.29	)	$	(6.17	)	$	0.00
Income (loss) from discontinued operations, net of income taxes		(0.01	)		0.79			(0.02	)
Net loss per common share—basic	$	(4.30	)	$	(5.38	)	$	(0.02	)
Net loss per common share—diluted
Income (loss) from continuing operations	$	(4.29	)	$	(6.17	)	$	0.00
Income (loss) from discontinued operations, net of income taxes		(0.01	)		0.79			(0.02	)
Net loss per common share—diluted	$	(4.30	)	$	(5.38	)	$	(0.02	)
Number of shares—basic		60,056			59,966			59,221
Number of shares—diluted		60,056			59,966			59,221

See accompanying notes to the consolidated financial statements.

50

PINNACLE ENTERTAINMENT, INC.

CONSOLIDATED BALANCE SHEETS

	December 31,
	2009			2008
	(in thousands, except share data)
ASSETS
Current Assets:
Cash and cash equivalents	$	129,576		$	115,712
Accounts receivable, net of allowance for doubtful accounts of $10,785 and $11,848		16,331			26,348
Inventories		6,709			6,425
Prepaid expenses and other assets		18,250			18,845
Total current assets		170,866			167,330
Restricted cash		9,320			9,318
Land, buildings, riverboats and equipment (Note 1).
Land and land improvements		251,573			407,169
Buildings, riverboats and improvements		1,095,345			1,099,204
Furniture, fixtures and equipment		429,663			436,887
Construction in progress		305,319			127,407
		2,081,900			2,070,667
Less: accumulated depreciation		(524,530	)		(440,630	)
		1,557,370			1,630,037
Assets held for sale		2,660			2,687
Goodwill (Note 1)		16,742			16,742
Intangible assets, net (Note 1)		30,680			32,607
Other assets, net		51,887			60,503
Deferred income taxes (Note 4)		4,331			—
	$	1,843,856		$	1,919,224
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	74,696		$	45,755
Accrued interest		21,267			11,010
Accrued compensation		47,602			41,574
Accrued taxes		19,212			17,089
Other accrued liabilities		56,137			55,060
Deferred income taxes		1,255			4,029
Current portion of long-term debt (Note 3)		88			89
Total current liabilities		220,257			174,606
Long-term debt less current portion (Note 3)		1,063,283			943,243
Other long-term liabilities		65,907			59,831
Deferred income taxes (Note 4)		—			2,198
Commitments and contingencies (Note 10)
Stockholders’ Equity
Preferred stock—$1.00 par value, 250,000 shares authorized, none issued or outstanding		—			—
Common stock—$0.10 par value, 60,079,686 and 59,981,181 shares outstanding, net of treasury shares		6,209			6,199
Additional paid-in capital		1,014,233			999,419
Accumulated deficit		(488,379	)		(230,077	)
Accumulated other comprehensive loss		(17,564	)		(16,105	)
Treasury stock, at cost, for both periods 2,008,986 of treasury shares		(20,090	)		(20,090	)
Total stockholders’ equity		494,409			739,346
	$	1,843,856		$	1,919,224

See accompanying notes to the consolidated financial statements.

51

PINNACLE ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For the years ended December 31, 2009, 2008 and 2007

									Accumulated
			Additional						Other						Total
	Common		Paid In			Accumulated			Comprehensive			Treasury			Stockholders’
	Stock		Capital			Deficit			Loss			Stock			Equity
Balance as of January 1, 2007	$	5,019	$	625,325		$	96,089		$	(11,760	)	$	(20,090	)	$	694,583
Net loss		—		—			(1,406	)		—			—			(1,406	)
Foreign currency translation loss		—		—			—			(652	)		—			(652	)
Post-retirement benefit obligations		—		—			—			(80	)		—			(80	)
Unrealized loss on marketable securities available for sale, net of income tax		—		—			—			(3,358	)		—			(3,358	)
Total comprehensive loss																(5,496	)
Uncertain tax position adoption adjustment		—		—			(2,163	)		—			—			(2,163	)
Share-based compensation		—		8,432			—			—			—			8,432
Common stock option exercises		21		2,330			—			—			—			2,351
Equity offerings		1,150		352,188			—			—			—			353,338
Tax benefit from stock option exercises		—		1,314			—			—			—			1,314
Balance as of December 31, 2007	$	6,190	$	989,589		$	92,520		$	(15,850	)	$	(20,090	)	$	1,052,359
Net loss		—		—			(322,597	)		—			—			(322,597	)
Foreign currency translation loss		—		—			—			(2,393	)		—			(2,393	)
Post-retirement benefit obligations		—		72			—			(1,203	)		—			(1,131	)
Total comprehensive loss																(326,121	)
Share-based compensation		—		9,162			—			—			—			9,162
Common stock option exercises		9		697			—			—			—			706
Realized loss on marketable securities available for sale		—		—			—			3,341			—			3,341
Tax benefit from stock option exercises		—		(101	)		—			—			—			(101	)
Balance as of December 31, 2008	$	6,199	$	999,419			(230,077	)	$	(16,105	)	$	(20,090	)	$	739,346
Net loss		—		—			(258,302	)		—			—			(258,302	)
Foreign currency translation loss		—		—			—			(2,294	)		—			(2,294	)
Post-retirement benefit obligations		—		—			—			835			—			835
Total comprehensive loss																(259,761	)
Share-based compensation		—		14,270			—			—			—			14,270
Common stock option exercises		10		544			—			—			—			554
Balance as of December 31, 2009	$	6,209	$	1,014,233		$	(488,379	)	$	(17,564	)	$	(20,090	)	$	494,409

See accompanying notes to the consolidated financial statements.

52

PINNACLE ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the year ended December 31,
	2009			2008			2007
	(in thousands)
Cash flows from operating activities:
Net loss	$	(258,302	)	$	(322,597	)	$	(1,406	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		105,157			118,262			81,037
Impairment of goodwill		—			28,543			—
Impairment of indefinite-lived intangible assets		1,850			41,387			—
Impairment of land and development costs		188,409			227,954			—
Impairment of buildings, riverboats and equipment		16,492			24,598			—
Loss (gain) on sale of assets		1,735			3,155			(488	)
Other write-downs, reserves and recoveries, net		(58	)		1,513			4,852
Gain on sale of equity securities		(12,914	)		—			—
Impairment of investment in equity securities		—			29,088			—
Provision for bad debts		2,496			3,392			3,949
Amortization of debt issuance costs		6,533			4,888			4,289
Share-based compensation expense		13,934			9,162			8,427
Change in income taxes		5,925			(23,068	)		(1,464	)
Loss on extinguishment of debt		9,467			—			6,124
Tax benefit from stock option exercises		—			(101	)		1,314
Advances of insurance claims in excess of book value		—			2,018			5,000
Excess tax benefit from stock equity plans		—			—			(1,136	)
Changes in operating assets and liabilities:
Receivables		1,204			(3,492	)		4,740
Prepaid expenses and other		(1,076	)		(250	)		(189	)
Other long-term assets		3,693			(3,220	)		—
Accounts payable		11,167			(11,364	)		21,950
Other accrued liabilities		15,245			150			3,185
Accrued interest		10,257			(126	)		459
Other long-term liabilities		(979	)		(547	)		—
Change in long-term accounts, net		—			—			12,778
Net cash provided by operating activities		120,235			129,345			153,421
Cash flows from investing activities:
Capital expenditures and land additions		(226,445	)		(306,044	)		(545,644	)
Other investing activities		(65	)		—			—
Proceeds from sale of equity securities		23,674			—			—
Proceeds from sale of property and equipment		428			561			7,505
Change in restricted cash		(2	)		(582	)		21,914
Kansas City application deposit		—			(25,000	)		—
Kansas City application refund		—			25,000			—
Investment in available for sale securities		—			—			(39,849	)
Additional funding for 2006 asset acquisitions		—			—			(10,087	)
Net cash used in investing activities		(202,410	)		(306,065	)		(566,161	)

See accompanying notes to the consolidated financial statements.

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PINNACLE ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONT.)

	For the year ended December 31,
	2009			2008			2007
				(in thousands)
Cash flows from financing activities:
Proceeds from credit facility		117,219			241,766			50,000
Repayments under credit facility		(232,066	)		(140,000	)		(335,000	)
Proceeds from Senior 8.625% Notes due 2017		443,687			—			—
Payment of Senior Subordinated 8.75% Notes due 2013		(139,329	)		—			—
Payment on 8.25% senior subordinated notes		(76,547	)		—			(25,000	)
Debt issuance and other financing costs		(16,787	)		(510	)		(9,418	)
Proceeds from common stock options exercised		552			706			2,351
Payment on other secured and unsecured notes payable		(101	)		(87	)		(2,075	)
Proceeds from other secured and unsecured notes payable		—			20			—
Proceeds from 7.50% senior subordinated notes		—			—			379,321
Proceeds from common stock equity offerings, net of offering costs		—			—			353,338
Other financing activities, net		—			—			(17	)
Excess tax benefits from stock equity plans		—			—			1,136
Net cash provided by financing activities		96,628			101,895			414,636
Effect of exchange rate changes on cash and cash equivalents		(589	)		(587	)		652
Increase (decrease) in cash and cash equivalents		13,864			(75,412	)		2,548
Cash and cash equivalents at the beginning of the year		115,712			191,124			188,576
Cash and cash equivalents at the end of the year	$	129,576		$	115,712		$	191,124
Supplemental Cash Flow Information:
Cash paid for interest, net of amounts capitalized	$	53,471		$	47,596		$	20,552
Cash refunded for income taxes, net		127			4,281			1,158
Increase (decrease) in construction related deposits and liabilities		14,935			(15,147	)		19,102

See accompanying notes to the consolidated financial statements.

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PINNACLE ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1—Summary of Significant Accounting Policies

Basis of Presentation and Organization Pinnacle Entertainment, Inc. (“Pinnacle”) is a developer, owner and operator of casinos and related hospitality and entertainment facilities. We operate seven domestic casinos located in southeastern Indiana (“Belterra Casino Resort”); Lake Charles, New Orleans and Bossier City, Louisiana (“L’Auberge du Lac,” “Boomtown New Orleans” and “Boomtown Bossier City,” respectively); Reno, Nevada (“Boomtown Reno”) and St. Louis, Missouri (“Lumière Place Casino” and “President Casino”). Internationally, we operate one significant casino and several small casinos in Argentina (“Casino Magic Argentina”). We view each domestic property as an operating segment and aggregate our Argentina casinos into the “Casino Magic Argentina” reporting segment. References in these footnotes to “Pinnacle,” the “Company,” “we,” “our” or “us” refer to Pinnacle Entertainment, Inc. and its subsidiaries, except where stated or the context otherwise indicates.

In July 2008, we announced plans to sell or otherwise discontinue operations of The Casino at Emerald Bay in the Bahamas and officially ceased operations on January 2, 2009. We have classified the related assets as held for sale in our Consolidated Balance Sheets and have included its results in discontinued operations in our audited Consolidated Statement of Operations.

Within our construction and development pipeline, we have a number of projects at various stages of development. In south St. Louis County, we have completed construction of our River City casino, which is expected to open on March 4, 2010. In Lake Charles, Louisiana, we have begun work on a casino resort to be called Sugarcane Bay at L’Auberge du Lac. We are also developing a casino-hotel in Baton Rouge, Louisiana. Each of these projects is subject to various regulatory approvals.

Principles of Consolidation The accompanying audited Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States and the rules and regulations of the Securities and Exchange Commission (“SEC”). The results for the periods reflect all adjustments that management considers necessary for a fair presentation of operating results. The audited Consolidated Financial Statements include the accounts of Pinnacle Entertainment, Inc. and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates The preparation of audited Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and (iii) the reported amounts of revenues and expenses during the reporting period. Estimates used by us include, among other things, the estimated useful lives for depreciable and amortizable assets, the estimated allowance for doubtful accounts receivable, estimated income tax provisions, the evaluation of the future realization of deferred tax assets, determining the adequacy of reserves for self-insured liabilities and mychoice customer rewards programs, estimated cash flows in assessing the recoverability of long-lived assets, asset impairments, goodwill and intangible assets, contingencies and litigation, and estimates of the forfeiture rate and expected life of share-based awards and stock price volatility when computing share-based compensation expense. Actual results may differ from those estimates.

Fair Value Effective January 1, 2008, we adopted the authoritative guidance for fair value measurements, which guidance provides companies the option to measure certain financial assets and liabilities at fair value with changes in fair value recognized in earnings each period. We have elected not to measure any financial assets and liabilities at fair value that were not previously required to be measured at fair value.

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Fair value is defined in the authoritative guidance as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance also establishes a framework for measuring fair value and expands disclosures about fair value measurements. The fair value framework requires the categorization of assets and liabilities into three levels based upon assumptions (inputs) used to price the assets and liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:

• Level 1: Quoted market prices in active markets for identical assets or liabilities.

• Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

• Level 3: Unobservable inputs that are not corroborated by market data.

As of December 31, 2009, we had no assets or liabilities measured at fair value on a recurring basis.

For each major category of assets and liabilities measured at fair value on a nonrecurring basis during the period, the authoritative guidance requires disclosures about the fair value measurements. As of December 31, 2009, our assets that are measured at fair value on a non-recurring basis are as follows:

	Balance		Level 1		Level 2		Level 3
	(in millions)
Long-lived assets held and used	$	83.8	$	—	$	—	$	83.8
Total assets at fair value	$	83.8	$	—	$	—	$	83.8

Available-for-Sale Securities: We classify all equity securities that we hold as current available-for-sale securities and are recorded at fair value measured entirely using “Level 1” inputs. At December 31, 2008, we owned 1.2 million shares of common stock in Ameristar Casinos, Inc., a competitor, with a fair value of $10.8 million. During the second quarter of 2009, we sold all such securities for cash proceeds of $23.7 million and realized a gain of $12.9 million.

Cash and Cash Equivalents Cash and cash equivalents totaled approximately $129.6 million and $115.7 million at December 31, 2009 and 2008, respectively. Cash equivalents are highly liquid investments with an original maturity of less than three months and are stated at the lower of cost or market value.

Accounts Receivable Accounts receivable consist primarily of casino, hotel and other receivables, net of an allowance for doubtful accounts of $10.8 million and $11.8 million as of December 31, 2009 and 2008, respectively. The allowance for doubtful accounts is estimated based upon, among other things, collection experience, customer credit evaluations and the age of the receivables. We extend casino credit to approved customers in states where it is permitted following background checks and investigations of creditworthiness.

Inventories Inventories, which consist primarily of food, beverage and operating supplies, are stated at the lower of cost or market value. Costs are determined using the first-in, first-out and the weighted average methods.

Restricted Cash Current restricted cash consists of cash and highly liquid instruments with original maturities of 90 days or less, which carrying amounts approximate fair value. Long-term restricted cash at December 31, 2009 and 2008 consists primarily of an indemnification trust deposit of approximately $5.7 million for both periods.

Land, Buildings, Riverboats and Equipment Land, buildings, riverboats and equipment are stated at cost. Land includes land not currently being used in our operations, which totaled $83.3 million and $245 million at December 31, 2009 and 2008, respectively. We capitalize the costs of improvements that extend the life of the asset. Construction in progress at December 31, 2009 and 2008 relates primarily to our River City project. Depreciation expense for the years ended December 31, 2009, 2008 and 2007 was $105.0 million, $117.8 million and $80.3 million, respectively. Interest expense is capitalized on internally constructed assets at our overall weighted average cost of borrowing. Capitalized interest amounted to $13.7 million, $25.2 million and $42.9 million in 2009, 2008 and 2007, respectively.

We expense maintenance and repairs cost as incurred. Gains or losses on the dispositions of land, buildings, riverboats or equipment are included in the determination of income.

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We depreciate our land improvements, buildings, riverboats and equipment using the straight-line method over the shorter of the estimated useful life of the asset or the related lease term, as follows:

	Years
Land improvements		5 to 35
Buildings and improvements		15 to 35
Vessels		10 to 25
Furniture, fixtures and equipment		3 to 20

Pursuant to authoritative guidance, we review the carrying value of land, buildings, riverboats and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from estimated future undiscounted cash flows expected to result from its use and eventual disposition. In cases where the carrying value exceeds fair value, an impairment charge is recognized equal to an amount by which the carrying value exceeds the fair value of the asset. The factors considered by management in performing this assessment include current operating results, trends and prospects, as well as the effect of obsolescence, demand, competition and other economic factors. In estimating expected future cash flows for determining whether an asset is impaired, assets are grouped at the reporting unit level, which for most of our assets is the individual casino. If a long-lived asset is to be sold, the asset is reported at the lower of carrying value or fair value. See Note 2 for further explanation.

Goodwill and Other Intangible Assets Pursuant to authoritative guidance, goodwill and other indefinite-lived intangible assets are subject to an annual assessment for impairment during the fourth quarter, or more frequently if there are indications of possible impairment, by applying a fair-value-based test.

Goodwill: Goodwill consists of the excess of the acquisition cost over the fair value of the net assets acquired in business combinations. There were no impairments to goodwill in 2009 and 2007. Based on assessments performed, we recorded impairments to goodwill of $28.5 million for year ended December 31, 2008. For a more detailed description of the impairments to goodwill, see Note 8.

Non-amortizing Intangible Assets: Non-amortizing intangible assets consist primarily of gaming licenses. Based on assessments performed, we recorded impairments to non-amortizing intangible assets of $1.9 million and $41.4 million for the years ended December 31, 2009 and 2008, respectively. There were no impairments to non-amortizing intangible assets in 2007. For a more detailed description of the impairments to non-amortizing intangible assets, see Note 8.

Amortizing Intangible Assets: Amortizing intangible assets consist of the following:

	For the year ended December 31,
	2009		2008
	(in millions)
Concession agreement	$	1.0	$	1.0
Vendor licenses		0.2		0.2
Trade name		0.7		0.7
Total intangible assets		1.9		1.9
Less accumulated amortization:
Concession agreement		0.4		0.2
Vendor licenses		0.2		0.2
Trade name		0.7		0.7
Intangible assets, net	$	0.6	$	0.8

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Our concession agreement in Argentina provides us with certain exclusive rights to operate casinos in major cities of the Province of Neuquén. In June 2008, all of the 32 guestrooms of the hotel that adjoins the principal casino in Neuquén were opened under the terms of our concession agreement. Our exclusivity rights are to be extended from 2016 to 2021 with the completion of such luxury hotel. We are awaiting formal government approval of such extension. Based on satisfaction of the conditions in the concession agreement, we are amortizing the concession agreement through 2021. The unamortized costs as of December 31, 2009 and 2008 were $0.6 million and $0.8 million, respectively. Estimated future amortization expense for each of the next five years, applying the average peso-to-dollar exchange rate for the year ended December 31, 2009 to each such period, is approximately $0.1 million. Total amortization expense for intangible assets was $0.1 million, $0.4 million and $0.4 million for the years ended December 31, 2009, 2008 and 2007, respectively.

Unamortized Debt Issuance Cost Debt issuance costs include debt discounts or premiums and other costs incurred in connection with the issuance of debt and are capitalized and amortized to interest expense using the straight-line method, which approximates the effective interest method. Such amortization periods range from five years for our previous revolving credit facility to 10 years for the 8.75% senior subordinated notes due in 2013 (see Note 3). Unamortized debt issuance costs were $23.6 million and $15.6 million at December 31, 2009 and 2008, respectively, and are included in “Other assets, net” on our audited Consolidated Balance Sheets. Amortization of debt issuance costs included in interest expense was $5.9 million, $4.9 million and $4.3 million for the years ended December 31, 2009, 2008 and 2007, respectively.

CRDA Investments New Jersey state law provides, among other things, for an assessment of licensees equal to 1.25% of their gross gaming revenues in lieu of an investment alternative tax equal to 2.5% of gross gaming revenues. Generally, a licensee may satisfy this investment obligation by investing in qualified eligible direct investments, by making qualified contributions or by depositing funds with the New Jersey Casino Reinvestment Development Authority (“CRDA”). Funds deposited with the CRDA may be used to purchase bonds designated by the CRDA or, under certain circumstances, may be donated to the CRDA in exchange for credits against future CRDA investment obligations. CRDA bonds have terms up to 50 years and bear interest at below market rates. While we do not currently hold a New Jersey casino license, in 2006, we purchased entities that owned a former casino site, which casino was subject to these investment obligations. Our net deposits with the CRDA eligible to be used to fund qualified investments were $16.3 million and $16.3 million as of December 31, 2009 and 2008, respectively, and are included in “Other assets, net” on our audited Consolidated Balance Sheets.

Self-Insurance Accruals We are self-insured up to certain limits for costs associated with general liability, workers’ compensation and employee health coverage. Insurance claims and reserves include accruals of estimated settlements for known claims, legal costs related to settling such claims and accruals of actuarial estimates of incurred but not reported claims. At December 31, 2009 and 2008, we had total self-insurance accruals of $15.3 million and $17.0 million, respectively, which are included in “Other accrued liabilities” in our audited Consolidated Balance Sheets. In estimating those costs, we consider historical loss experience and make judgments about the expected levels of costs per claim. These claims are accounted for based on actuarial estimates of the undiscounted claims, including those claims incurred but not reported. We believe the use of actuarial methods to account for these liabilities provides a consistent and effective way to measure these highly judgmental accruals; however, changes in health care costs, accident frequency and severity and other factors can materially affect the estimate for these liabilities. We continually monitor the potential for changes in estimates, evaluate our insurance accruals and adjust our recorded provisions accordingly.

The mychoice Customer Loyalty Program The mychoice customer loyalty program offers incentives to customers who gamble at our casinos throughout the United States. Under the program, customers are able to accumulate reward points over time that they may redeem at their discretion under the terms of the program. The customer’s reward points balance will be forfeited if the customer does not earn a reward point over the prior 12-month period. As a result of the ability of the customer to accumulate reward points, we accrue the expense of reward points, after consideration of estimated breakage, as they are earned. The estimated cost to provide products and services upon redemption of reward points is expensed as the reward points are earned and is included in “Gaming” expense on our audited Consolidated Statements of Operations. To arrive at the estimated cost associated with reward points, estimates and assumptions are made regarding incremental marginal costs of the benefits, breakage rates and the mix of goods and services for which reward points will be redeemed. We use historical data to assist in the determination of estimated accruals. At December 31, 2009 and 2008, $5.8 million and $6.4 million, respectively, was accrued for the cost of anticipated mychoice reward point redemptions, which is included in “Other accrued liabilities” in our audited Consolidated Balance Sheets.

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In addition to reward points, customers at certain of our properties can earn points based on play that are redeemable in cash (“cash-back points”). In 2008, certain of our properties introduced a modification to the cash-back program whereby points are redeemable in playable credits at slot machines where, after one play-through, the credits can be cashed out. We accrue the cost of cash-back points, after consideration of estimated breakage, as they are earned. The cost is recorded as contra-revenue and included in “Gaming” revenues on our audited Consolidated Statements of Operations. At December 31, 2009 and 2008, the liability related to outstanding cash-back points, which is based on historical redemption activity, was $4.6 million and $3.7 million, respectively, which is included in “Other accrued liabilities” in our audited Consolidated Balance Sheets.

Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under authoritative guidance, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are provided against deferred tax assets when it is deemed more likely than not that some portion or all of the deferred tax asset will not be realized within a reasonable time period. Loss contingencies resulting from tax audits or certain tax positions are accrued when the potential loss can be reasonably estimated and where occurrence is probable. In July 2006, FASB issued authoritative guidance which defines accounting for uncertain tax positions, which we adopted on January 1, 2007. See Note 4, Income Taxes, for additional information.

Revenue Recognition Gaming revenues consist of the net win from gaming activities, which is the difference between amounts wagered and amounts paid to winning patrons. Food and beverage, lodging, retail, entertainment, and other operating revenues are recognized as products are delivered or services are performed.

We reward certain customers with cash based upon their level of play on certain casino games (primarily slot machines), including the cash value of mychoice “points” and coin coupon offerings. The cash values are recorded as a reduction in revenues.

Revenues in the accompanying audited Consolidated Statements of Operations are net of the retail value of hotel rooms, food and beverage and other items provided to patrons on a complimentary basis. Complimentary revenues that have been excluded from the accompanying audited Consolidated Statements of Operations are $106.3 million, $99.0 million and $91.3 million for 2009, 2008 and 2007, respectively. The estimated cost of providing these promotional allowances (which is included in gaming expenses) was $72.8 million, $70.4 million and $66.2 million for the years ended December 31, 2009, 2008 and 2007, respectively.

Gaming Taxes We are subject to taxes based on gross gaming revenues in the jurisdictions in which we operate, subject to applicable jurisdictional adjustments. These gaming taxes are an assessment of our gaming revenues and are recorded as a gaming expense in the audited Consolidated Statements of Operations. These taxes totaled approximately $265.5 million, $261.0 million and $228.0 million for the years ended December 31, 2009, 2008 and 2007, respectively.

Advertising Costs Advertising costs are expensed as incurred. Such costs (excluding expenses included in pre-opening and development costs of $1.3 million, $2.2 million and $4.8 million in 2009, 2008 and 2007, respectively) were $23.9 million, $26.6 million and $20.6 million for the years ended December 31, 2009, 2008 and 2007, respectively, and are included in “Gaming” expenses on the accompanying audited Consolidated Statements of Operations.

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Pre-opening and Development Costs Pre-opening costs consist of payroll costs to hire, employ and train the workforce prior to opening an operating facility; marketing campaigns prior to and commensurate with opening; legal and professional fees related to the project but not otherwise attributable to depreciable assets; lease payments; real-estate taxes and similar costs prior to opening. Development costs include master planning, conceptual design fees and general and administrative costs related to our projects. Pre-opening and development costs are expensed as incurred and for the fiscal years ended December 31, 2009, 2008 and 2007 consist of the following:

	For the year ended December 31,
	2009		2008		2007
	(in millions)
Atlantic City (a)	$	12.1	$	17.3	$	18.7
River City (b)		8.0		6.1		4.8
Baton Rouge		5.8		7.5		9.5
Sugarcane Bay		2.0		3.2		1.8
Missouri Proposition A Initiative		—		7.9		—
Lumière Place		—		7.8		22.9
Kansas City		—		4.6		2.2
Other		0.8		1.0		0.9
Total pre-opening and development costs	$	28.7	$	55.4	$	60.8

(a)	In late 2008, we decided to suspend substantially all development activities in Atlantic City indefinitely. The continuing pre-opening and development costs include property taxes and other costs associated with ownership of the land. In January 2010, we made the decision to sell our assets in Atlantic City, as we no longer intend to develop on our site.
(b)	Pre-opening costs at the River City project, expected to open in March 2010, includes $3.8 million for non-cash straight-lined rent accruals under a lease agreement for the year ended December 31, 2009.

Other non-operating income consists primarily of the following:

	For the year ended December 31,
	2009		2008		2007
	(in millions)
Interest income	$	0.3	$	2.0	$	15.3
Dividend income		—		0.7		0.2
Total other non-operating income	$	0.3	$	2.7	$	15.5

Interest income has decreased during the year ended December 31, 2009 compared to the prior-year period primarily due to lower short-term interest rates in the current period. We utilize conservative investment options, resulting in low levels of interest income relative to surplus cash. Prior-year dividend income relates to our shares held in Ameristar Casinos, Inc., which suspended dividend payments from the third quarter of 2008 to the second quarter of 2009. We sold all shares held during the second quarter of 2009.

Construction Period Lease Costs Construction period lease costs are expensed pursuant to authoritative guidance. Such costs primarily occur when we enter into a lease arrangement whereby rent is not scheduled to be paid until the opening of a new facility. We expense construction-period lease costs once possession and control of the leased asset has passed to us regardless of the timing of cash rent obligations and the construction-period lease cost can be reasonably estimated. Simultaneous with the recording of the lease cost, we record a deferred rent obligation until cash rent obligations commence. At such time, the liability will be amortized as a reduction in rent expense for the remainder of the lease term.

In September 2005, in connection with the commencement of site development activities at our River City project site, we began expensing lease costs associated with the 99-year lease obligation for the land underlying the planned project. We recorded charges of approximately $3.8 million, $3.9 million and $3.8 million for the years ended December 31, 2009, 2008 and 2007, respectively, based on the assumption of a minimum future cash lease obligation of $4.0 million per annum and a four-year construction period. Such charge is included in pre-opening and development costs on the audited Consolidated Statements of Operations. On February 19, 2010, the lease was amended to provide that the rent obligation began May 1, 2009, and provides that for the period from May 1, 2009 to March 31, 2010, the rent payment shall be $2.5 million. From April 1, 2010 through the expiration of the term of the Development Agreement, we are required to pay as annual rent the greater of (a) $4.0 million, or (b) 2.5% of annual adjusted gross receipts. See Note 14, Subsequent Events, for further detail.

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Currency Translation Balance sheet accounts are translated at the exchange rate in effect at each balance sheet date. Income/loss accounts are translated at the average rate of exchange prevailing during the period. Translation adjustments resulting from this process are charged or credited to other comprehensive loss.

Comprehensive Loss Comprehensive loss is the sum of the Net Loss and other comprehensive loss, which includes translation adjustments, unrealized loss on marketable securities available for sale and post-retirement plan benefit obligations.

	For the year ended December 31,
	2009			2008			2007
	(in millions)
Net loss	$	(258.3	)	$	(322.6	)	$	(1.4	)
Other comprehensive loss
Foreign currency translation loss		(2.3	)		(2.4	)		(0.6	)
Post-retirement plan benefit obligation, net of income taxes (a)		0.8			(1.1	)		(0.1	)
Unrealized loss on securities, net of income taxes (b)		—			—			(3.4	)
Comprehensive loss	$	(259.8	)	$	(326.1	)	$	(5.5	)

(a)	Included in the balance are benefit obligations related to both the executive deferred compensation plan and directors’ health and medical plan, both of which are discussed in Note 6.
(b)	Available-for-sale securities were recorded at fair value, and temporary unrealized holding gains and losses were recorded, net of tax, as a component of other comprehensive income during 2008. During the second quarter of 2009, we sold all 1.2 million shares that we held in Ameristar Casinos for cash proceeds of $23.7 million and realized a gain of $12.9 million.

Earnings per Share Diluted earnings per share assume exercise of in-the-money stock options (those options with exercise prices at or below the weighted average market price for the periods presented) outstanding at the beginning of the period or at the date of the issuance. We calculate the effect of dilutive securities using the treasury stock method. As of December 31, 2009 and 2008, our share-based awards issued under our 2005 Equity and Performance Incentive Plan consisted of grants of common stock options and phantom stock units.

For the years ended December 31, 2009 and 2008, we recorded a net loss. Accordingly, the potential dilution from the assumed exercise of stock options is zero (anti-dilutive). As a result, basic earnings per share is equal to diluted earnings per share for the years ended December 31, 2009 and 2008. Options and securities that could potentially dilute basic earnings per share in the future that were not included in the computation of diluted earnings per share were 1,126,340, 547,900 and 1,331,600 for the years ended December 31, 2009, 2008 and 2007, respectively.

Recently Issued Accounting Pronouncements

In May 2009, the Financial Accounting Standards Board (“FASB”) issued new authoritative guidance requiring disclosures regarding subsequent events for events or transactions that occur after the balance sheet date but before the financial statements are issued, for public companies, and requires disclosure of the date through which an entity has evaluated subsequent events. This guidance was effective for interim and annual reporting periods ending after June 15, 2009 and the adoption did not have a material effect on our audited Consolidated Financial Statements.

In June 2009, the FASB issued new authoritative guidance to establish the FASB Accounting Standards Codification as the single source of authoritative non-governmental GAAP. The guidance is effective for interim and annual reporting periods ending after September 15, 2009. We adopted the guidance effective July 1, 2009 and the adoption did not have a material effect on our audited Consolidated Financial Statements.

In June 2009, the FASB issued new authoritative guidance regarding a transfer of financial assets, the effects of a transfer on its financial statements, and any continued involvement in transferred financial assets. Additionally, the concept of a qualifying special-purpose entity was removed. The guidance is effective for annual reporting periods beginning after November 15, 2009 and the adoption did not have a material effect on our audited Consolidated Financial Statements.

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In June 2009, the FASB issued new authoritative guidance for enterprises involved with variable interest entities. The guidance is effective for annual reporting periods beginning after November 15, 2009 and the adoption did not have a material effect on our audited Consolidated Financial Statements.

In August 2009, the FASB issued new authoritative guidance on measuring liabilities at fair value. The guidance addresses restrictions on the transfer of a liability and clarifies how the price of a traded debt security should be considered in estimating the fair value of the issuer’s liability. This guidance is effective for the first reporting period beginning after its issuance. We adopted the guidance effective October 1, 2009 and the adoption did not have a material effect on our audited Consolidated Financial Statements.

A variety of proposed or otherwise potential accounting standards are currently under review and study by standard-setting organizations and certain regulatory agencies. Because of the tentative and preliminary nature of such proposed standards, we have not yet determined the effect, if any, that the implementation of any such proposed or revised standards would have on our audited Consolidated Financial Statements.

Note 2—Land, Buildings, Riverboats and Equipment

Impairment of land and development costs consists of the following:

	For the year ended December 31,
	2009		2008		2007
	(in millions)
Atlantic City	$	160.0	$	196.7	$	—
Sugarcane Bay at L’Auberge du Lac		20.9		9.2		—
President Casino		3.5		3.6		—
Boomtown Reno		2.9		0.5		—
Baton Rouge		0.7		4.9		—
Other projects		0.4		13.1		—
Impairment of land and development costs	$	188.4	$	228.0	$	—

During the fourth quarter of 2009, we determined that, in accordance with applicable guidance, a triggering event had occurred for our land held in Atlantic City, New Jersey due to the continuing economic downturn of the gaming market in Atlantic City as the result of increased competitive pressures in surrounding markets, including Pennsylvania, as well as the continued deterioration in commercial real estate values in the area. We tested the carrying value of our land holdings for recoverability, and based on the result of these tests, recorded impairment charges of $160 million during the fourth quarter of 2009.

In late 2008, we determined that it was in the best interests of the Company to suspend substantially all development activities of the Atlantic City project indefinitely. As a result, we ceased capitalizing interest in connection with eligible project costs in late 2008. In January 2010, we made the decision to sell our assets in Atlantic City, as we no longer intend to develop on our site.

During the fourth quarter of 2009, we re-evaluated the scope and design of our Sugarcane Bay and Baton Rouge projects. The Sugarcane Bay project was relocated from land adjacent to L’Auberge du Lac to the existing L’Auberge du Lac footprint. In addition, the size of the project, the anticipated amenities, and other items were reduced in scope. As a result of these changes, the previously capitalized development costs of $20.9 million associated with the prior Sugarcane Bay design were fully impaired.

Our Baton Rouge project will be similar to the original design. However, the orientation and structure of the hotel have changed, resulting in the impairment of certain of the capitalized design components of the project totaling $0.7 million in the fourth quarter of 2009.

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Due to poor historical and prospective financial performance outlook for our President Casino, as well as communications with the MGC during the fourth quarter of 2009 as discussed in Note 8, Impairment of Goodwill and Indefinite-lived Intangible Assets, we determined there was a triggering event requiring review of the President Casino assets during the fourth quarter of 2009. As a result of these tests, we determined that certain land holdings were impaired and recorded impairment charges of $3.5 million during the fourth quarter of 2009.

Due to the poor economic climate and prospective financial performance outlook in Reno, we determined a triggering event occurred for Boomtown Reno during the fourth quarter of 2009. As a result, we tested all long-lived assets at the property for recoverability. As a result of these tests, we recorded impairment charges of $2.9 million related to real estate and an additional $7.4 million related to buildings and equipment, discussed below, during the fourth quarter of 2009.

In addition, the scope of certain previously planned property improvement projects was reduced or eliminated. As a result, we reviewed all previously capitalized development costs and recorded impairment charges as appropriate.

During the fourth quarter of 2008, the continuing economic downturn and constrained capital markets contributed to a severe decline in value of most gaming stocks and gaming assets. As a result, we determined that a triggering event in accordance with applicable guidance occurred in the fourth quarter of 2008. Given the deterioration in commercial real estate values, and uncertainties surrounding the Company’s access to sufficient resources to adequately finance its development pipeline at that time, all development project land holdings and related capitalized costs were reviewed for recoverability in connection with the preparation of the audited Consolidated Financial Statements for 2008. As a result of these tests, we determined that certain land holdings and related capitalized costs were impaired and recorded charges totaling $228.0 million as of December 31, 2008. There were no such impairment charges for the year ended December 31, 2007.

Impairment of buildings, riverboats and equipment consists of the following:

	For the year ended December 31,
	2009		2008		2007
	(in millions)
Corporate jet	$	8.7	$	—	$	—
Boomtown Reno		7.4		7.7		—
President Casino		—		6.6		—
Other		0.4		6.0		4.9
Impairment of buildings, riverboats and equipment	$	16.5	$	20.3	$	4.9

During the fourth quarter of 2009, we listed our corporate jet for sale. We incurred an impairment charge of $8.7 million as the carrying amount exceeded the fair value.

Due to the poor economic climate and prospective financial performance outlook in Reno, we determined a triggering event occurred for Boomtown Reno during the fourth quarter of 2009. As a result, we tested all long-lived assets at Boomtown Reno for recoverability. As a result of these tests, we determined that certain buildings and equipment were impaired and as of December, 31, 2009, we recorded impairment charges of $7.4 million.

In addition, during the year we incurred asset impairment charges related to the value of obsolete gaming equipment in the normal course of business.

During the fourth quarter of 2008, we determined a triggering event occurred for Boomtown Reno and the President Casino due to poor operating performance and a poor prospective financial performance outlook. As a result, we determined certain buildings, riverboats and equipment were impaired and as of December 31, 2008, we recorded impairment charges of $7.7 million and $6.6 million, for Boomtown Reno and the President Casino, respectively. In addition, during 2008 we incurred impairment charges of $4.5 million related to two idle riverboats acquired in 2006. During 2007, we recorded a loss of $1.0 million related to a cancelled condominium project in St. Louis, Missouri, a loss of $1.0 million related to a postponed guestroom addition project for Belterra Casino, and impairment charges related to gaming equipment that was adjusted to its net realizable value prior to being sold.

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Cabela’s Sales Tax Increment Bonds In July 2006, we closed on the sale of approximately 28 acres of land at our Boomtown Reno property to Cabela’s Retail, Inc. for approximately $5.1 million, which land had a book value of $2.6 million. In November 2007, Cabela’s opened a branded sporting goods store. We also entered into an agreement under which we will sell or lease to Cabela’s, upon its election to purchase or lease, an additional parcel of approximately two acres. Although Cabela’s opened its retail store in November 2007, it has not yet elected whether to purchase or lease the two additional acres. Pursuant to current accounting guidelines, our continuing involvement in the two-acre parcel (contiguous to the larger parcel and an integral part of the transaction with Cabela’s) precludes us from recognizing a gain of approximately $3 million on the sale of the larger parcel at this time. In the event we execute a long-term lease for the smaller parcel, the gain on the larger parcel will be deferred and amortized over the lease term, with such gain offset by the costs, if any, of our continued involvement with the smaller parcel. In the event Cabela’s completes a purchase of the smaller parcel, the gain on the larger parcel will be recognized at such time. It was expected at the time of the purchase transaction that a portion of the construction cost of the Cabela’s retail store and certain road access improvements would be financed through the issuance of sales tax increment bonds through local or state governmental authorities. The bonds were expected to be serviced by a portion of the sales taxes generated by the new retail facilities. We agreed to purchase, if necessary and under certain conditions, some of these bonds. We estimate that we may be required to purchase bonds at a cost of approximately $5.0 million, which amounts are not recorded as of December 31, 2009.

Note 3—Long-Term Debt

Long-term debt at December 31, 2009 and 2008 consisted of the following:

	December 31,
	2009			2008
	(in millions)
Senior Secured Credit Facility	$	36.9		$	151.8
8.625% Senior Notes due 2017		443.9			—
7.50% Senior Subordinated Notes due 2015		380.8			380.2
8.25% Senior Subordinated Notes due 2012		200.9			276.7
8.75% Senior Subordinated Notes due 2013		—			133.7
Other secured and unsecured notes payable		0.9			0.9
		1,063.4			943.3
Less current maturities		(0.1	)		(0.1	)
	$	1,063.3		$	943.2

Senior Secured Credit Facility: As of December 31, 2009, our then existing senior secured credit facility (“Previous Credit Facility”) consisted of a $531 million revolver that matured in December 2010, of which $36.9 million was outstanding and $12.6 million was utilized under various letters of credit. The letters of credit include $3.0 million associated with our River City project and $9.6 million for various self-insurance programs. The Previous Credit Facility was executed in December 2005 and had been amended on four occasions prior to December 31, 2009.

On February 5, 2010, we entered into an amended and restated credit agreement (“Amended Credit Facility”). The Amended Credit Facility consists of a $375 million revolving credit facility, a portion of which refinances amounts drawn under our Previous Credit Facility, which amounts were $92.7 million as of February 5, 2010. The Amended Credit Facility matures on March 31, 2014; provided that such date will be accelerated to September 30, 2011 if any portion of our 8.25% senior subordinated notes due 2012 is outstanding on September 30, 2011. As this amendment was finalized prior to the issuance date of these Consolidated Financial Statements, the $36.9 million outstanding as of December 31, 2009 has been classified as long-term debt on the Consolidated Balance Sheet.

The Amended Credit Facility has, among other things, financial covenants, capital spending limits and other affirmative and negative covenants, including a required minimum consolidated interest coverage ratio, a maximum permitted consolidated total leverage ratio and a maximum permitted consolidated senior secured leverage ratio. Furthermore, the Amended Credit Facility has covenants that limit the amount of senior unsecured debt that we may incur to $900 million, unless our consolidated total leverage ratio (computed in accordance with the Amended Credit Facility) is less than 6.00 to 1.00.

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The Amended Credit Facility also has certain new covenants regarding construction projects. In general, under the Amended Credit Facility a project is defined as the construction and/or renovation of improvements that could reasonably be expected to exceed $75 million. These new covenants include a requirement that an “in-balance” test be satisfied for each unfinished project other than the first phase of our River City project. In general, the in-balance test requires that, as of the date of determination prior to commencement of construction (as such term is defined in the Amended Credit Facility), the project sources exceed the project uses for such project (and for all other unfinished projects as to which commencement of construction has occurred) for the period from such date of determination through the date six full months after the scheduled opening date of such project. For purposes of the in-balance test, project sources and project uses are defined in the Amended Credit Facility. Commencement of construction means, in general, for any project, the spending from and after January 1, 2010 of amounts (excluding certain costs such as land acquisition costs, costs to obtain a gaming license and capitalized interest) in excess of certain amounts: $25 million for Sugarcane Bay, $25 million for Baton Rouge, and for all other projects, the lesser of $25 million and 10% of the construction budget for such project. In addition, there is a limitation in the Amended Credit Facility such that we cannot spend more than $25 million in construction and development costs on the Baton Rouge project after January 1, 2010 unless we have received not less than $100 million in the aggregate from permitted sales or other dispositions of assets (including receipt of insurance and condemnation proceeds), cash tax refunds, litigation settlements, and/or gross proceeds received by us from the issuance and sale of non-debt capital, and/or dividends and distributions received from unrestricted subsidiaries net of investments made after January 1, 2010 in such unrestricted subsidiaries that have not been charged to an investment basket.

8.625% Senior Notes due 2017: In August 2009, we closed an offering of $450 million in aggregate principal amount of new 8.625% senior unsecured notes due 2017 (“8.625% Notes”). The 8.625% Notes were issued in a private offering conducted pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended, at a price of 98.597% of par to yield 8.875% to maturity, with interest payable on August 1 and February 1, beginning February 2010. Net of the original issue discount, initial purchasers’ fees and various costs and expenses, net proceeds from the offering were approximately $434 million. Net proceeds from the offering were used to repurchase $75.0 million in aggregate principal amount of our 8.25% senior subordinated notes due 2012 (“8.25% Notes”); repurchase or redeem $135 million in aggregate principal amount of our 8.75% senior subordinated notes due 2013 (“8.75% Notes”), and repay approximately $206 million in revolving credit borrowings under the Previous Credit Facility. We have used the remaining net proceeds from the offering for general corporate purposes.

The 8.625% Notes are senior unsecured obligations and rank equally in right of payment with all of our existing and future senior debt, including debt under our Amended Credit Facility. The 8.625% Notes are, however, effectively subordinated to our Amended Credit Facility, which is secured by a first priority lien, as well as any other secured debt which may be issued in the future. The 8.625% Notes are guaranteed on a senior basis by certain of our current and future domestic restricted subsidiaries. The 8.625% Notes rank senior to our existing 7.50% senior subordinated notes due 2015 (“7.50% Notes”) and to our 8.25% Notes.

7.50% Senior Subordinated Notes due 2015: In June 2007 we issued $385 million in aggregate principal amount of 7.50% Notes, which notes were issued at 98.525% of par. As of December 31, 2009, the aggregate principal amount of 7.50% Notes outstanding is $385 million.

8.25% Senior Subordinated Notes due 2012: In March 2004, we issued $200 million in aggregate principal amount of 8.25% Notes, which were issued at a price of 99.282% of par. In December 2004, we issued an additional $100 million in aggregate principal amount of 8.25% Notes, which additional notes were issued at a price of 105.00% of par. In June 2007, we purchased $25.0 million in aggregate principal amount of our 8.25% Notes.

In August 2009, we purchased $75.0 million in aggregate principal amount of our 8.25% Notes pursuant to a cash tender offer. Tendering holders were paid an aggregate of approximately $79.1 million, representing 102.063% of par, plus accrued and unpaid interest. We used a portion of the net proceeds from our issuance of the 8.625% Notes to fund the tender offer. As of December 31, 2009, the aggregate principal amount of 8.25% Notes outstanding is $200 million.

8.75% Senior Subordinated Notes due 2013: In September 2003, we issued $135 million in aggregate principal amount of 8.75% Notes, which notes were issued at 98.369% of par. In July 2009, we commenced a cash tender offer for all $135 million aggregate principal amount of our outstanding 8.75% Notes. In August 2009, we purchased $125.5 million aggregate principal amount of such notes pursuant to such cash tender offer. Tendering holders were paid an aggregate of approximately $133.4 million, representing 103.167% of par, plus accrued and unpaid interest.

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In October 2009, the remaining $9.5 million in aggregate principal amount of 8.75% Notes were redeemed for approximately $10.2 million, representing 102.917% of the aggregate principal amount, plus accrued and unpaid interest. We used a portion of the net proceeds from our issuance of the 8.625% Notes to fund both the tender offer and redemption.

The 8.25% Notes, 7.50% Notes and 8.625% Notes are redeemable, at our option, in whole or in part, on the following dates, at the following redemption prices (expressed as percentages of par value):

8.25% Notes Redeemable				7.50% Notes Redeemable				8.625% Notes Redeemable
	At a				At a				At a
	percentage				percentage				percentage
On or after	of par			On or after	of par			On or after	of par
March 15,	equal to			June 15,	equal to			August 1,	equal to
2008		104.125	%	2011		103.750	%	2013		104.313	%
2009		102.063	%	2012		101.875	%	2014		102.156	%
2010 and thereafter		100.000	%	2013 and thereafter		100.000	%	2015 and thereafter		100.000	%

In addition, the 8.625% Notes and 7.50% Notes are redeemable prior to August 1, 2013 and June 15, 2011, respectively, at a price that reflects a yield to first call equivalent to the applicable Treasury bond yield plus 0.5 percentage points.

Our indentures governing our 8.625% Notes, 7.50% Notes, and 8.25% Notes and our existing Amended Credit Facility limit the amount of dividends that we are permitted to pay.

Loss on early extinguishment of debt: During 2009, we issued $450 million aggregate principal amount of 8.625% Notes, and used much of the net proceeds to retire early other outstanding indebtedness. Such early retirements resulted in a write-off of $9.5 million in call or tender premiums, unamortized debt issuance and other costs.

Fair Value of Financial Instruments: The estimated fair value of our long-term debt at December 31, 2009 was approximately $1.0 billion, versus its book value of $1.1 billion. At December 31, 2008, the estimated fair value of our long-term debt was approximately $651 million, versus its book value of $943 million. The estimated fair value of our senior notes and senior subordinated notes was based on quoted market prices on or about December 31, 2009 and December 31, 2008 and the fair value of our senior secured credit facility was based on estimated fair values of comparable debt instruments.

Annual Maturities: As of December 31, 2009, annual maturities of secured and unsecured notes payable are as follows (in millions):

Year ending December 31:
2010	$	0.1
2011		0.1
2012		200.1
2013		0.1
2014 (a)		37.0
Thereafter		835.4
		1,072.8
Plus the difference between principal at maturity and unamortized net debt issuance discount		(9.4	)
Long-term debt, including current portion	$	1,063.4

(a) Includes the $36.9 million of borrowings under our Previous Credit Facility. On February 5, 2010, we entered into an Amended Credit Facility, which facility matures in March 2014; provided that such date will be accelerated to September 30, 2011 if any portion of our 8.25% senior subordinated notes due 2012 is outstanding on September 30, 2011.

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Note 4—Income Taxes

Consolidated income (loss) before taxes for domestic and foreign continuing operations is as follows:

	For the year ended December 31,
	2009			2008			2007
	(in millions)
Domestic	$	(261.1	)	$	(430.4	)	$	(8.9	)
Foreign		6.0			5.7			9.4
Total	$	(255.1	)	$	(424.7	)	$	0.5

The composition of our income tax expense (benefit) from continuing operations for the years ended December 31, 2009, 2008 and 2007 was as follows:

	Current			Deferred			Total
	(in millions)
Year ended December 31, 2009:
U.S. Federal	$	0.5		$	(3.9	)	$	(3.4	)
State		5.6			(2.8	)		2.8
Foreign		3.7			(0.4	)		3.3
	$	9.8		$	(7.1	)	$	2.7
Year ended December 31, 2008:
U.S. Federal	$	(6.6	)	$	(34.3	)	$	(40.9	)
State		(0.6	)		(15.2	)		(15.8	)
Foreign		2.6			(0.4	)		2.2
	$	(4.6	)	$	(49.9	)	$	(54.5	)
Year ended December 31, 2007:
U.S. Federal	$	(0.1	)	$	(9.0	)	$	(9.1	)
State		0.9			3.3			4.2
Foreign		4.5			0.8			5.3
	$	5.3		$	(4.9	)	$	0.4

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The following table reconciles our effective income tax rate from continuing operations to the federal statutory tax rate of 35%:

	2009						2008						2007
	Percent			Amount			Percent			Amount			Percent			Amount
	(dollars in millions)
Federal income tax (benefit) expense at the statutory rate		(35.0	)%	$	(89.3	)		(35.0	)%	$	(148.6	)		35.0	%	$	0.2
State income taxes, net of federal tax benefits		(1.5	)%		(3.9	)		(3.6	)%		(15.4	)		812.8	%		3.9
Non-deductible expenses and other		1.3	%		3.4			3.0	%		12.8			694.9	%		3.4
Reversal of reserves for unrecognized tax benefits		0.5	%		1.2			(0.0	)%		(0.1	)		(1,377.9	)%		(6.7	)
Credits		(0.8	)%		(2.0	)		(0.4	)%		(1.5	)		(469.4	)%		(2.3	)
Change in valuation allowance/reserve of deferred tax assets		36.6	%		93.3			23.2	%		98.3			396.0	%		1.9
Income tax (benefit) expense from continuing operations		1.1	%	$	2.7			(12.8	)%	$	(54.5	)		91.4	%	$	0.4

Our 2009 tax rate differs from the statutory rate due to the effects of permanent items and the recording of a valuation allowance against a significant portion of our deferred tax assets as of the end of the year.

The following table shows the allocation of income tax (expense) benefit between continuing operations, discontinued operations and equity:

	For the year ended December 31,
	2009			2008			2007
	(in millions)
Income (loss) from continuing operations before income taxes	$	(255.1	)	$	(424.7	)	$	0.5
Income tax benefit (expense) allocated to continuing operations		(2.7	)		54.5			(0.4	)
Income (loss) from continuing operations		(257.8	)		(370.2	)		0.1
Income (loss) from discontinued operations before income taxes		(0.5	)		79.7			(4.5	)
Income tax benefit (expense) allocated to discontinued operations		—			(32.1	)		3.0
Income (loss) from discontinued operations		(0.5	)		47.6			(1.5	)
Net loss	$	(258.3	)	$	(322.6	)	$	(1.4	)
Income tax benefit allocated to additional paid in capital	$	—		$	—		$	1.3
Income tax benefit (expense) allocated to other comprehensive income	$	—		$	(1.4	)	$	2.2

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At December 31, 2009 and 2008, the tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities were:

	December 31
	2009			2008
	(in millions)
Deferred tax assets—current:
Workers’ compensation insurance reserve	$	3.5		$	3.3
Bad debt allowance		2.9			3.2
Legal and merger costs		4.2			2.0
Other		8.0			7.9
Less valuation allowance		(15.4	)		(15.7	)
Total deferred tax assets—current		3.2			0.7
Deferred tax liabilities—current:
Prepaid expenses		(2.4	)		(2.2	)
Other		(0.2	)		(2.5	)
Total deferred tax liabilities—current		(2.6	)		(4.7	)
Net current deferred tax assets (liabilities)	$	0.6		$	(4.0	)
Deferred tax assets—non-current:
Federal tax credit carry-forwards	$	8.1		$	6.8
Federal net operating loss carry-forwards		21.9			—
State net operating loss carry-forwards		3.7			2.5
Capital loss carry-forward		6.5			—
Los Angeles Revitalization Zone tax credits		4.3			6.5
Deferred compensation		4.5			5.4
Pre-opening expenses capitalized for tax purposes		12.8			31.1
Stock options expense—book cost		14.4			8.9
Unrealized loss on equity securities		—			11.6
Fixed assets		102.0			13.7
Other		11.1			5.1
Less valuation allowance		(182.7	)		(89.1	)
Total deferred tax assets—non-current		6.6			2.5
Deferred tax liabilities—non-current:
Intangible assets		(4.1	)		(4.0	)
Other		—			(0.7	)
Total deferred tax liabilities—non-current:		(4.1	)		(4.7	)
Net non-current deferred tax assets (liabilities)	$	2.5		$	(2.2	)

The following table summarizes the total deferred tax assets and total deferred tax liabilities provided in the previous table:

	For the years ended December 31
	2009			2008
	(in millions)
Total deferred tax assets	$	208.0		$	108.0
Less valuation allowances		(198.1	)		(104.8	)
Less total deferred tax liabilities		(6.8	)		(9.4	)
Net deferred tax asset (liabilities)	$	3.1		$	(6.2	)

During the year ended December 31, 2009, we established additional non-cash deferred tax asset valuation allowances totaling $93.3 million with respect to the realization of deferred tax assets.

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Authoritative guidance requires the recording of a valuation allowance in a tax jurisdiction when it is “more likely than not” that some portion or all of the deferred tax assets will not be realized. The authoritative guidance further states “forming a conclusion that a valuation allowance is not needed is difficult when there is negative evidence such as cumulative losses in recent years,” and places considerably more weight on historical results and less weight on future projections. Authoritative guidance requires the consideration of all sources of taxable income available to realize the deferred tax asset, including the future reversal of existing temporary differences, future taxable income exclusive of reversing temporary differences and carry-forwards, taxable income in carry-back years and tax planning strategies.

We have reported a cumulative U.S. pretax accounting loss for the years 2006 through 2009, with the 2009 loss resulting primarily from the fourth quarter impairment charges. Considering the likelihood of realization of deferred tax assets, we reached the determination that a valuation allowance was appropriate. However, we did not record a valuation allowance against federal and state deferred tax assets which are of the same character and will reverse in the same period as deferred tax liabilities in the future. Management assesses the realizability of the deferred tax assets based on the criteria of authoritative guidance each reporting period. If future events differ from management’s estimates, the valuation allowance may be changed in future years. No valuation allowance was placed on our foreign and certain state deferred tax assets as all are believed to be more likely than not to be fully realized.

As of December 31, 2009, our tax filings reflected available Alternative Minimum Tax (“AMT”) credit carry-forwards of $3.2 million, General Business Credit (“GBC”) carry-forwards of $3.3 million and Foreign Tax Credit (“FTC”) carry-forwards of $1.6 million. The FTC and GBC carry-forwards will expire in 2011 through 2030, while the AMT credits can be carried forward indefinitely to reduce future regular tax liabilities. As of December 31, 2009, we have $63.2 million of federal net operating losses which can be carried back five years, upon our election, or forward 20 years and will expire in 2030. We also have $86.1 million of state net operating loss carry-forwards, predominantly in Louisiana and New Jersey, which expire on various dates beginning in 2012.

As of December 31, 2009, we had approximately $4.3 million of Los Angeles Revitalization Zone (“LARZ”) tax credits. A valuation allowance had been recorded for the entire amount in previous years because the use of LARZ credits is limited to business income apportioned to the LARZ. A portion of the LARZ credits will expire annually through 2012.

Pursuant to authoritative guidance, companies may elect to permanently reinvest earnings of foreign subsidiaries offshore which delays the recognition of U.S. tax on these earnings. In 2009, we have not provided for federal income taxes or tax benefits on the undistributed earnings (approximately $9.6 million at December 31, 2009) associated with Casino Magic Argentina. In the event some or all of the earnings are distributed to us, some portion of the distribution would be subject to both U.S. income taxes and foreign withholding taxes. However, foreign tax credits may become available to reduce or eliminate the U.S. income tax liability. A tax liability associated with the undistributed earnings has not been disclosed since the determination of such liability is not practicable. In 2008, we elected to treat all but approximately $3.4 million as permanently reinvested.

We file income tax returns in federal, state and foreign jurisdictions and are no longer subject to federal income tax examinations for tax years prior to 2003, state income tax examinations for tax years prior to 2000, and Argentina income tax examinations for tax years prior to 2004. In 2008, we finalized the Argentina income tax examination for the periods 2001- 2003, with no material effect to the financial statements. In December 2009, we were notified by the Internal Revenue Service that our tax returns for the years 2006 through 2008 would be examined. In 2008, the Indiana Department of Revenue commenced an income tax examination of our Indiana income tax filings for the 2005 to 2007 period. During June of 2009, we received an informal notification from the field agent for the Indiana Department of Revenue challenging whether income and gain from certain asset sales, including the sale of the Hollywood Park Racetrack in 1999, and other transactions outside of Indiana, such as the Aztar merger termination fee in 2006, which we reported on our Indiana state tax returns for the years 2000 through 2007, resulted in business income subject to apportionment, and proposed a potential assessment of approximately $11 million, excluding interest and penalties, of additional Indiana income taxes. During the fourth quarter of 2009, we submitted additional information to the department for consideration. On February 9, 2010, we received a revised proposed assessment in the amount of $7.3 million excluding interest and penalties. We will have 45 days to file a protest. In each case of examination, both federal and Indiana state, we believe that we have adequately provided for the potential outcome.

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As of December 31, 2009, we had $6.2 million of uncertain tax benefits that, if recognized, would impact the effective tax rate. Authoritative guidance requires companies to accrue interest and related penalties, if applicable, on all tax positions for which reserves have been established consistent with jurisdictional tax laws. We recognize accrued interest and penalties related to uncertain tax benefits as a component of income tax expense. During 2008, we accrued approximately $1.2 million of interest related to unrecognized tax benefits and had $4.0 million of cumulative interest accrued as of the end of the year. No penalties were accrued for in any years. It is reasonably possible that the total amounts of unrecognized tax benefits may decrease by approximately $1.0 million to $3.0 million during the next twelve months.

The following table summarizes the activity related to uncertain tax benefits for 2009 and 2008, excluding any interest or penalties:

	2009			2008
	(in millions)
Balance at January 1	$	22.3		$	21.5
Gross increases—tax positions in prior periods		2.2			7.3
Gross decreases—tax positions in prior periods		(5.0	)		(6.5	)
Balance as of December 31	$	19.5		$	22.3

Note 5—Lease Obligations

We have certain long-term operating lease obligations, including corporate office space, land at various locations, water bottom leases in Louisiana, a hotel in Atlantic City, office equipment and gaming equipment. Minimum lease payments required under operating leases that have initial terms in excess of one year as of December 31, 2009 are as follows:

	Total
	(in millions)
Period:
2010	$	10.7
2011		11.4
2012		12.3
2013		10.2
2014		9.7
Thereafter		528.0
	$	582.3

Total rent expense for these long-term lease obligations for the years ended December 31, 2009, 2008 and 2007 was $15.2 million, $16.2 million and $15.4 million, respectively.

We lease approximately 148 of the 315 acres that our Belterra Casino Resort occupies in southern Indiana. The lease period is 50 years total, including an initial five-year lease term with nine consecutive five-year automatic renewal periods. The current lease term is through September 2010 and has eight remaining consecutive five-year automatic renewal periods. The lease currently provides for minimum annual rental payments of approximately $1.2 million, plus 1.5% of gross gaming win (as defined in the lease agreement) in excess of $100 million. The lease obligation included in rent expense was $2.1 million for 2009 and $ 2.2 million and $2.3 million for 2008 and 2007, respectively. We also have the option to purchase the property on or after October 2020 for $30 million, subject to adjustments as defined in the lease agreement.

We lease the 242 acres underlying our L’Auberge du Lac and its related golf course. The lease has an initial term of 10 years, which commenced in May 2005, with six renewal options of 10 years each. The annual base rent for the lease is approximately $939,500 per year, which amount adjusts annually for changes in the Consumer Price Index.

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We lease approximately 234 acres of land from the Lake Charles Harbor and Terminal District. Previously, our Sugarcane Bay project was to occupy a portion of this land. However, our updated plans for Sugarcane Bay announced in November 2009 have moved the project and it is estimated we will now use approximately 5 acres of this land for parking facilities for our Sugarcane Bay project. The lease has an initial term of 10 years, commencing on the opening of Sugarcane Bay with six renewal options of 10 years each, similar to the L’Auberge du Lac lease. The annual rent on the 234-acre lease is $1.2 million for the first five years commencing with the opening of Sugarcane Bay and thereafter the amount adjusts annually for changes in the Consumer Price Index, not to exceed 5% in any given year. Prior to the opening of Sugarcane Bay, we are obligated to pay one-half of the annual rent on the date that certain conditions have been meet, including obtaining all the required permits, licenses or approvals. We have begun discussions with the District to revise this lease to provide for the fact that our Sugarcane Bay project will now be built primarily on land already leased for our L’Auberge du Lac complex. In connection with such revisions, we may owe additional amounts to the District. Within the leased land, we purchased 50 acres for $5.0 million, the location of which we will designate in connection with the opening of Sugarcane Bay, which purchase did not change the base rent amount. In addition, we purchased approximately 56 acres of land near the Sugarcane Bay and L’Auberge du Lac properties for future development opportunities.

We lease 56 acres constituting a site in south St. Louis County located approximately 10 miles south of downtown St. Louis, Missouri, where we have built our River City casino. The lease has a term of 99 years.

In connection with the purchase of the Atlantic City site in November 2006, we assumed the remaining six years of a 12-year lease for a hotel, which lease provides for two extension periods at our option through December 2030. Annual rent is $2.0 million with escalating payments of 11% every five years.

We lease approximately 41,000 square feet of corporate office space for certain corporate services in Las Vegas, Nevada at a base rent of approximately $1.1 million per year. The lease is for 10 years beginning October 2006, subject to one renewal term of 60 additional months. The annual rent increases 3% a year based on increases in the Consumer Price Index, not to exceed 5% a year.

We also lease approximately 9,900 square feet of corporate office space for certain corporate services in Las Vegas, Nevada at a base rent of approximately $0.5 million a year. The lease expires June 30, 2014. The annual rent increases 3% a year.

Additionally, we also lease approximately 8,500 square feet of corporate office space for certain corporate services in Las Vegas, Nevada at a base rent of approximately $0.2 million a year. The lease is for five years beginning April 2009, subject to one renewal term of 60 additional months. The annual rent increases 3% a year based on increases in the Consumer Price Index, not to exceed 6% a year.

We are a party to a number of cancellable slot participation and some table game participation arrangements at our various casinos that are customary for casino operations. The slot arrangements generally consist of either a fixed-rent agreement on a per-day basis or a percentage of each slot machine’s gaming revenue, generally payable at month-end. Slot and table game participation expense was $20.9 million, $22.1 million and $15.9 million for the years ended December 31, 2009, 2008 and 2007, respectively, and is included in Gaming Expense on the audited Consolidated Statements of Operation.

Note 6—Employee Benefit Plans

Share-based Compensation: Our 2005 Equity and Performance Incentive Plan (the “2005 Plan”) provides for the granting of stock options, stock appreciation rights, restricted stock and other performance awards to officers, key employees and consultants. The objectives of the 2005 Plan include, among other things, attracting and retaining the most capable personnel and providing for appropriate performance incentives. The 2005 Plan permits the issuance of up to an aggregate of 4.75 million shares of the Company’s common stock, plus any shares subject to awards granted under the Prior Plans and Individual Arrangements (both defined below) which are forfeited, expire or otherwise do not result in the issuance of shares of common stock, or are settled for cash or otherwise do not result in the issuance of shares on or after the effective date of the 2005 Plan (collectively, the 2005 Plan, the Prior Plans and the Individual Arrangements are referred to as the “Stock Option Plans”). Shares that are subject to awards of options or stock appreciation rights are counted against the 4.75 million share limit as one share for every one share granted. Shares that are subject to awards other than options or stock appreciation rights are counted against such limit as 1.4 shares for every one share granted.

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In addition to the 2005 Plan, we have four stock option plans (the “Prior Plans”) which provided for the issuance of up to approximately 4.4 million shares of the Company’s common stock. In addition, in 2002, 2003 and 2008, in order to recruit our executive officers, we granted options outside of the 2005 Plan or the Prior Plans for the purchase of 1,052,540 common shares, all of which remained outstanding as of December 31, 2009 (the “Individual Arrangements”).

As of December 31, 2009, we have approximately 6.3 million share-based awards outstanding, 8,000 of which are restricted stock and other awards and the rest of which are common stock options. There were approximately 1.6 million share-based awards available for grant under the various plans as of December 31, 2009.

In October 2006, we granted 45,000 shares of restricted stock pursuant to the 2005 Plan, which vest in five equal annual installments on the anniversary of the date of grant. Of the 45,000 shares of restricted stock granted, 25,000 shares of restricted stock were granted to former executive officers and pursuant to separation agreements between the Company and the former executive officers, 21,000 shares of restricted stock vested and 4,000 shares of restricted stock were cancelled. As the restricted stock grants are service-based awards, the compensation charge was based on the grant date closing price of our common stock multiplied by the number of awards, or approximately $368,000, $321,000 and $323,000 for the years ended December 31, 2009, 2008 and 2007, respectively.

Compensation costs related to our share-based payment transactions are measured at fair value on the grant date and recognized in the financial statements over the vesting period during which the employee provides service in exchange for the award.

	For the year ended December 31,
	2009			2008			2007
	(in millions)
Pre-tax share-based compensation expense	$	13.9		$	9.2		$	8.4
Tax benefit		(0.3	)		(1.3	)		(3.4	)
Reduction in net income		13.6			7.9		$	5.0
Reduction of diluted earnings per share	$	0.23		$	0.13		$	0.09

Unamortized compensation costs not yet expensed related to stock options granted totaled approximately $13.3 million, $23.4 million and $20.0 million at December 31, 2009, 2008 and 2007, respectively, and the weighted average period over which the costs are expected to be recognized is approximately three years. The economic benefit to the employee may vary from the expense calculated, dependent on movement of the stock price.

The aggregate amount of cash we received from the exercise of stock options was $0.6 million, $0.7 million and $2.4 million for the years ended December 31, 2009, 2008 and 2007, respectively, which shares, consistent with prior periods, were newly issued common stock. We present a portion of such tax benefits as financing cash flows and outflows. There was no such tax benefit for the year ended December 31, 2009 or 2008. Excess tax benefits were $1.1 million for the year ended December 31, 2007.

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The following table summarizes information related to our common stock options under the Stock Option Plans:

	Number of			Weighted Average
	Stock Options			Exercise Price
Options outstanding at January 1, 2007		5,782,665		$	13.48
Granted		552,500		$	30.36
Exercised		(207,600	)	$	11.39
Cancelled		(398,700	)	$	14.68
Options outstanding at December 31, 2007		5,728,865		$	15.10
Granted		2,070,500		$	14.34
Exercised		(74,000	)	$	9.21
Cancelled		(346,825	)	$	19.62
Options outstanding at December 31, 2008		7,378,540		$	14.73
Granted		554,000		$	10.99
Exercised		(91,505	)	$	6.05
Cancelled		(1,499,028	)	$	14.60
Options outstanding at December 31, 2009		6,342,007		$	14.56
Vested or expected to vest at December 31, 2009		6,196,496
Options exercisable at December 31, 2009		4,630,107		$	13.79
Options exercisable at December 31, 2008		4,003,940		$	12.08
Options exercisable at December 31, 2007		3,347,517		$	10.81

Weighted-average value per granted option calculated using the Black-Scholes option-pricing model for options granted during the years ended:

December 31, 2009	$	6.77
December 31, 2008	$	14.34
December 31, 2007	$	14.92

Stock options outstanding as of December 31, 2009, were as follows:

							Number of
	Number of		Weighted Average		Weighted Average		Exercisable		Weighted Average
Exercise Price Ranges	Stock Options		Remaining Life		Exercise Price		Stock Options		Exercise Price
$5.00—$8.00		919,239		3.57	$	6.53		826,739	$	6.43
$8.01—$9.00		883,501		0.91	$	8.44		883,501	$	8.44
$9.01—$13.00		922,400		6.71	$	10.67		471,775	$	10.43
$13.01—$15.00		1,546,167		5.65	$	14.47		1,053,292	$	14.45
$15.01—$20.00		1,106,800		5.54	$	17.18		781,900	$	17.19
$20.01—$30.00		689,400		6.41	$	27.53		463,800	$	27.56
$30.01—$38.00		274,500		6.69	$	31.64		149,100	$	31.47
		6,342,007		4.95	$	14.56		4,630,107	$	13.79

The “intrinsic value” is the number of exercisable options multiplied by the excess of the current share price over the weighted average exercise price of such options. The total intrinsic value of options as of December 31, 2009 and 2008 is as follows:

	For the year ended December 31,
	2009		2008		2007
	(in millions)
Intrinsic value of:
Options outstanding and exercisable	$	2.6	$	1.2	$	42.7
Options vested or expected to vest		10.8		4.3		45.0
Options exercised		0.1		0.7		3.6

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We use a Black-Scholes option-pricing model in order to calculate the compensation costs of employee share-based compensation. Such model requires the use of subjective assumptions, including the expected life of the option, the expected volatility of the underlying stock, and the expected dividend on the stock.

In computing the share-based compensation, the following is a weighted average of the assumptions used:

	Risk-Free			Expected Life	Expected			Expected
	Interest Rate			at Issuance	Volatility			Dividends
Options granted in the following periods:
2009		3.0	%	6.7 years		60.3	%	None
2008		3.6	%	6.6 years		40.4	%	None
2007		4.7	%	6.3 years		41.9	%	None

The expected volatility was derived from an analysis of both the historic actual volatility of our common stock and the implied volatilities of traded options in our common stock. Future volatility may be substantially less or greater than the expected volatility. We do not currently pay dividends and we do not anticipate that dividends will be paid within the average expected life of existing options. U.S. Treasury rates with similar maturities are used as the proxy for the risk-free rate. Market disruptions over the past year have caused U.S. Treasuries to trade at historically low rates, augmenting the values calculated using the Black-Scholes model. The expected life at issuance is based on our experience as to the average historical term of option grants that were exercised, cancelled or forfeited.

401(k) Plan: We maintain the Pinnacle Entertainment, Inc. 401(k) Investment Plan (the “401(k) Plan”). The 401(k) Plan is an employee benefit plan subject to the provisions of the Employee Retirement Income Security Act of 1974, and is intended to be a qualified plan under Section 401(a) of the Internal Revenue Code of 1986. Participants of the 401(k) Plan may contribute up to 100% of pretax income, subject to the legal limitation of $16,500 for 2009. In addition, effective January 1, 2003, participants who are age 50 or older may make an additional contribution to the 401(k) Plan, commonly referred to as a “catch-up” contribution, equal to $5,500 for 2009. We offer discretionary matching contributions under the 401(k) Plan, which vest ratably over five years. Historically, a 50% discretionary match was made, up to 5% of eligible compensation, of which half was paid during the year as part of the payroll cycle; and half was paid at the end of the Plan year, if an employee had completed 1,000 hours and was an active employee at the end of the year. For the years ended December 31, 2009, 2008 and 2007, matching contributions to the 401(k) Plan totaled $1.4 million, $1.4 million and $2.3 million, respectively.

Director Phantom Stock Units: As part of his annual retainer, each director receives $10,000 worth of phantom stock units on the date of the annual meeting of stockholders. Each phantom stock unit is the economic equivalent of one share of our common stock. Units of phantom stock are payable in common stock following the director’s cessation of service as a director for any reason. In addition, any director can elect to receive phantom stock units in lieu of payment of annual retainer and board fees. Phantom stock units are fully expensed when granted.

Other Benefit Plans: We maintain an Executive Deferred Compensation Plan (the “Executive Plan”), which allows certain highly compensated employees to defer, on a pre-tax basis, among other things, a portion of their annual base salary and bonus. Participation in the plan is limited. A participant is at all times fully vested in his or her contributions, as well as any attributable appreciation or depreciation. We do not make matching contributions to the Executive Plan for the benefit of participating employees and the payment of benefits under the plan is an unsecured obligation. In addition, certain executives are given the opportunity to defer income in return for a life annuity type investment. The total obligation under the Executive Plan is $11.2 million and $13.7 million as of December 31, 2009 and 2008, respectively, and is recorded in “Other Long-Term Liabilities” in the audited Consolidated Balance Sheets. This obligation is offset by the cash surrender value of insurance policies totaling $2.0 million and $2.2 million as of December 31, 2009 and 2008, respectively, which is recorded in “Other assets, net” in the audited Consolidated Balance Sheets.

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In February 2007, the Board of Directors approved a directors’ health and medical plan designed to provide health and medical insurance benefits comparable to those provided to corporate executives (the “Directors’ Medical Plan”). To the extent that a covered individual has other insurance or Medicare coverage, the benefits under the Company’s coverage would be supplemental to those otherwise provided. The Directors’ Medical Plan covers directors and their dependents while the director is in office and provides benefits for those directors who leave the board after age 70 and their dependents and for directors in office at the time of a change in control and their dependents for a period of five years. At present, three members of the Board of Directors are over age 70. The benefit obligation is $0.3 million and $0.2 million as of December 31, 2009 and 2008, respectively, and is recorded in “Other Long-Term Liabilities” in the audited Consolidated Balance Sheets.

Severance Agreements: On November 7, 2009, Daniel R. Lee resigned as Chief Executive Officer, Chairman of the Board and director. In connection with his resignation, the Company entered into a Separation Agreement with Mr. Lee. Under the Separation Agreement, Mr. Lee is entitled to cash severance payments equal to approximately $2.8 million, payable in various installments over a three-year period. In addition, Mr. Lee will be entitled to receive a bonus of approximately $0.7 million for 2009. Mr. Lee will be entitled to receive health benefits coverage and disability insurance coverage for a maximum period of eighteen months. At the time of his separation, certain of Mr. Lee’s outstanding stock options became fully vested and exercisable and his remaining unvested stock options immediately terminated. In connection with the final determination of his 2009 bonus, Mr. Lee surrendered 483,333 options exercisable at $14.70 per share. Mr. Lee has one year from November 7, 2009 to exercise his remaining stock options.

Note 7—Dispositions, Discontinued Operations and Discontinued Development Opportunities

Discontinued operations for December 31, 2009, 2008 and 2007 consist of our former Casino Magic Biloxi operations and our operations at The Casino at Emerald Bay in The Bahamas.

Casino Magic Biloxi closed in 2005 after Hurricane Katrina. In November 2006, we completed the sale of our Casino Magic Biloxi site and certain related assets for $45 million. In 2008, we received insurance proceeds of $86 million in litigation settlements in connection with our insurance claim for our former Casino Magic Biloxi property, which income has been recorded in discontinued operations on the audited Consolidated Statement of Operations for the year ended December 31, 2008. We received no such insurance proceeds in 2009, but recorded legal expenses related to the ongoing legal dispute involving our insurance proceeds related to the property. To the extent insurance advances exceed the book value of destroyed assets and certain insured expenses, the difference, $18.3 million as of December 31, 2009, is recorded as a deferred gain on the audited Consolidated Balance Sheets. Subsequent to year end, we settled our pending litigation involving our former Casino Magic Biloxi site. See further detail at Note 14, Subsequent Events.

Under Sections 1031 and 1033 of the Internal Revenue Code of 1986, as amended, we completed exchanges with our purchase of land in Atlantic City and the acquisition of certain licenses and real estate interests from Harrah’s, deferring much of the tax gain on the sale of land and the anticipated insurance proceeds related to the Biloxi assets.

On July 30, 2008, we decided to sell or otherwise discontinue operations of The Casino at Emerald Bay in The Bahamas. The casino was closed on January 2, 2009. We are actively marketing the assets associated with our Bahamas operation; however, events and circumstances beyond our control have extended the period to complete the sale of the assets beyond a year. Since the beginning of the third quarter of 2008, we have reflected the business as a discontinued operation.

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Revenue, expense and net income for Casino Magic Biloxi and The Casino at Emerald Bay included in discontinued operations are summarized as follows:

	For the year ended December 31,
	2009			2008			2007
	(in millions)
Revenues	$	0.1		$	0.9		$	1.9
Operating income (loss)	$	(0.5	)	$	76.6		$	(4.5	)
Interest income		—			3.0			—
Income (loss) before income taxes		(0.5	)		79.6			(4.5	)
Income tax benefit (expense)		—			(32.1	)		3.1
Income (loss) from discontinued operations	$	(0.5	)	$	47.6		$	(1.4	)

Net assets for Casino Magic Biloxi and The Casino at Emerald Bay are summarized as follows:

	December 31,
	2009			2008
	(in millions)
Assets:
Other assets, net	$	1.1		$	1.3
	$	1.1		$	1.3
Liabilities:
Total liabilities	$	20.1		$	20.8
Net Assets	$	(19.0	)	$	(19.5	)

In January 2010, we made the decision to explore strategic alternatives for our Argentina operations. Also, in January 2010, we made the decision to sell our assets in Atlantic City, New Jersey, as we no longer intend to develop on our site. The carrying amount as of December 31, 2009 of the assets and liabilities of our Argentina operations and Atlantic City included in the disposal group are as follows:

	December 31, 2009
	Argentina		Atlantic City
	Operations		Assets
	(in millions)
Assets:
Property and equipment, net	$	18.4	$	38.2
Other assets, net		9.7		25.5
	$	28.1	$	63.7
Liabilities:
Total liabilities	$	4.3	$	9.0
Net Assets	$	23.8	$	54.7

Kansas City, Kansas: In September 2007, we submitted a proposal for a new gaming entertainment complex to be located in Kansas City, Kansas. In September 2008, we withdrew such application. In June 2008, we deposited $25 million with the Kansas Lottery Commission, pursuant to such application, which was later returned to us in September 2008.

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Note 8—Impairment of Goodwill and Indefinite-lived Intangible Assets

Impairment of Goodwill. In accordance with authoritative guidance, the Company reviews goodwill for impairment annually during the fourth quarter, or more frequently if events or circumstances indicate that the carrying value may not be recoverable. As a result of our annual impairment testing, we recorded no impairment charges to goodwill for the year ended December 31, 2009, which goodwill relates to our Boomtown New Orleans property. During 2008, the carrying amounts of goodwill associated with Boomtown Reno and the President Casino were impaired by $9.9 million and $18.6 million, respectively. There were no such impairment charges for the year ended December 31, 2007, or any prior periods.

Impairment of Indefinite-Lived Intangible Assets. Indefinite-lived intangible assets include gaming licenses, and all of such assets are reviewed for impairment annually during the fourth quarter, or more frequently if events or circumstances indicate that the carrying value may not be recoverable. As a result of our annual review during the fourth quarter of 2009, we fully impaired the gaming license related to our President Casino, which resulted in an impairment charge of $1.9 million for the year ended December 31, 2009. During 2009, we proposed to the Missouri Gaming Commission (“MGC”) two separate plans to relocate or replace the Admiral riverboat, on which the President Casino operates, with a newer, larger casino riverboat. We were informed by the MGC that either plan of action would require us to forfeit our license and reapply for a new gaming license in a public bid process open to all interested parties. On January 27, 2010, the MGC issued a preliminary order for disciplinary action that proposed that the MGC revoke the gaming license associated with the President Casino. For further information, see Note 10, Commitments and Contingencies.

During 2008, we determined the fair value of each of our gaming licenses related to Sugarcane Bay, Baton Rouge and Boomtown Bossier City was less than its respective carrying values, and as a result, for the year ended December 31, 2008, we recorded impairment charges of $20.3 million, $15.4 million, and $5.7 million, respectively. There were no such impairment charges for the year ended December 31, 2007.

Note 9—Write-downs, reserves and recoveries, net consist of the following:

	For the year ended December 31,
	2009		2008			2007
	(in millions)
(Gain)/Loss on sale of assets (a)	$	1.7	$	3.0		$	(0.5	)
Customer loyalty program related expenses (b)		—		1.4			—
Insurance proceeds		—		(0.2	)		—
Other		—		0.1			—
Write-downs, reserves and recoveries, net	$	1.7	$	4.3		$	(0.5	)

(a)

During 2009 and 2008, we sold slot machines at our properties for a loss of $1.7 million and $3.0 million, respectively. During 2007, we recorded a $0.5 million gain on the sale of a corporate aircraft.

(b)

During the year ended December 31, 2008, we expanded our mychoice rewards program at our L’Auberge du Lac and Belterra properties. In doing so, we disclosed to our customers their reward account based on prior play. We had historically maintained such records to facilitate the provision of complimentary goods and services, but had not previously disclosed the point balances to customers at these facilities. The disclosure of point balances to our customers resulted in a non-cash charge to establish a liability for such initial amounts.

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Note 10—Commitments and Contingencies

Redevelopment Agreement: In connection with our Lumière Place project, we have a redevelopment agreement which, among other things, commits us to oversee the investment of $50.0 million in residential housing, retail or mixed-use developments in the City of St. Louis within five years of the opening of the casino and hotel. Such investment can be made with partners and partner contributions and project debt financing, all of which count toward the $50.0 million investment commitment. We are also obligated to pay an annual fee of $1.0 million to the City of St. Louis beginning after our River City project opens. The redevelopment agreement also contains certain contingent payments in the event of certain defaults. If we and our development partners collectively fail to invest $50.0 million in residential housing, retail, or mixed-use developments within five years of the opening of the casino and hotel, we would be obligated to pay an additional annual service fee of $1.0 million in Year Six, $2.0 million in Years Seven and Eight, and $2.0 million annually thereafter, adjusted by the change in the consumer price index.

Guaranteed Maximum Price Agreement for River City: On August 8, 2008, we entered into a Guaranteed Maximum Price Agreement (the “Agreement”) with a general contractor for the construction of our River City project. Among other things, the Agreement establishes that the contractor will complete the construction of the casino for a maximum price of approximately $149 million and that the project will be substantially complete by January 31, 2010. The guaranteed maximum price set by the Agreement is a portion of the total budget of $357 million for the River City project. The budget includes items separate from those covered in the Agreement, such as construction work prior to entering into the Agreement; pre-opening and development costs; furniture, fixtures and other equipment; gaming equipment; consulting fees and information technology. The $357 million budget excludes capitalized interest currently estimated to be approximately $26.0 million, operating cash estimated to be approximately $10 million and the non-cash accrual for rent during the construction period.

Lease and Development Agreement: In connection with our River City project, we have a lease and development agreement with the St. Louis County Port Authority which, among other things, commits us to lease 56 acres for 99 years (not including certain termination provisions). We are required to invest a minimum of $375 million to: (a) construct a gaming and multi-use facility; (b) perform environmental remediation on the site of the project, which remediation has been completed; (c) contribute $5.1 million for the construction of community and recreational facilities, which amount has been paid; (d) develop and construct a hatch shell on the adjoining property within eighteen months of March 4, 2010; and (e) construct a roadway into the project, which construction is complete. We are also required to pay certain fees, potentially aggregating $20 million, unless we invest at least an additional $75 million into a second phase that would include a hotel with a minimum of 100 guestrooms and other amenities, such amenities to be mutually agreed upon by us and St. Louis County. We are required to pay rent in the amount of $2.5 million from May 1, 2009 to March 31, 2010, which amount has been paid. From April 1, 2010 through the expiration of the term of the lease and development agreement we are required to pay to St. Louis County as annual rent the greater of (a) $4.0 million, or (b) 2.5% of annual adjusted gross receipts. The second phase must be opened within three years from March 4, 2010. In each of the five subsequent years that the second phase is not opened, the amount of fees begins at $2.0 million for the first year and increases by $1.0 million each subsequent year: hence, $3.0 million in Year Two, $4.0 million in Year Three, $5.0 million in Year Four and $6.0 million in Year Five. As a result, the maximum amount of such fees that we would have to pay if the second phase is not completed is $20.0 million.

Employment and Severance Agreements: We have entered into employment agreements with certain employees, including our executive officers. The employment agreements require severance payments in the case of certain triggering events, including a change in control. As of December 31, 2009, the maximum aggregate amount that would be paid to this group of 33 employees if a triggering event occurs in every case following a change in control, where applicable, is approximately $31.0 million, which includes applicable amounts of salary, bonuses and any executive deferred compensation plan balances outstanding.

Self-Insurance: We self-insure various levels of general liability, workers’ compensation and medical coverage. Insurance reserves include accruals for estimated settlements for known claims, as well as accruals for estimates of claims not yet made, which are included in “Accrued compensation” and “Other accrued liabilities” on the audited Consolidated Balance Sheets.

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Legal

Insurance Litigation: In April 2006, we filed a $347 million insurance claim for our losses related to our former Casino Magic Biloxi property caused by Hurricane Katrina. In August 2006, we filed suit in the United States District Court for the District of Nevada against three of our insurance carriers, Allianz Global Risks US Insurance Company, Arch Specialty Insurance Company and RSUI Indemnity Company, related to such losses. On February 22, 2008, we settled with Arch Specialty Insurance Company, which provided $50 million of coverage, in exchange for its agreement to pay us approximately $36.8 million, which we received in March 2008. On May 9, 2008, we settled with Allianz Global Risks US Insurance Company, in exchange for its agreement to pay us approximately $48 million, which we received in June 2008. Allianz Global Risks US Insurance Company had previously paid Pinnacle $5 million, which brought Allianz Global Risks US Insurance Company’s total payment on the claim to $53 million. On February 3, 2010, we settled all claims with RSUI Indemnity Company, in exchange for its agreement to pay us approximately $23.4 million, which we received on February 12, 2010. RSUI Indemnity Company had previously paid us approximately $2 million, which brought RSUI Indemnity Company’s total payment on the claim to $25.4 million. The Company has received payments totaling approximately $215 million from its insurers relative to these claims. The Company has no further outstanding insurance claims related to Hurricane Katrina.

Jebaco Litigation: On August 9, 2006, Jebaco, Inc. (“Jebaco”) filed suit in the U.S. District Court for the Eastern District of Louisiana against Harrah’s Operating Co., Inc., Harrah’s Lake Charles, LLC, Harrah’s Star Partnership, Players LC, LLC, Players Riverboat Management, LLC, Players Riverboat II, LLC, and Pinnacle Entertainment, Inc. The lawsuit arises out of an agreement between Jebaco and Harrah’s (as successor in interest to the various Players defendants) whereby Harrah’s was obligated to pay Jebaco a fee based on the number of patrons entering Harrah’s two Lake Charles, Louisiana riverboat casinos. In November 2006, we acquired the Harrah’s Lake Charles subsidiaries, including the two riverboats. The lawsuit filed by Jebaco asserts that Harrah’s, in ceasing gaming operations in Lake Charles and ceasing payments to Jebaco, breached its contractual obligations to Jebaco and asserts damages of approximately $34.0 million. Jebaco also asserts that our agreement with Harrah’s violates state and federal antitrust laws. The lawsuit seeks antitrust damages jointly and severally against both us and Harrah’s and seeks a trebling of the $34.0 million in damages Jebaco alleges it has suffered. The defendants answered the complaint, denying all claims and asserting that the lawsuit is barred, among other reasons, because of the approval of our transaction with Harrah’s by the Louisiana Gaming Control Board and the lack of antitrust injury to Jebaco. In January 2007, all of the defendants moved to dismiss all of the claims of the complaint, which motions were heard on July 18, 2007. The motions to dismiss were granted with prejudice as to the federal antitrust claims and the state-law claims were dismissed without prejudice. Judgment of dismissal was entered on March 5, 2008. Jebaco appealed the dismissal of the federal antitrust claims to the U.S. Court of Appeals for the Fifth Circuit. Further, on March 13, 2008, Jebaco filed a new lawsuit against the same parties in the Louisiana district civil court for Orleans Parish. This lawsuit seeks unspecified damages arising out of the same circumstances as the federal lawsuit based on claims for breach of the duty of good faith, negligent breach of contract, breach of contract, unfair trade practices, unjust enrichment, and subrogation to Harrah’s insurance proceeds. In May 2009, the Louisiana district civil court extended the stay of the state case indefinitely pending the decision of the Fifth Circuit on Jebaco’s appeal. On October 30, 2009, the Fifth Circuit affirmed the district court’s dismissal of the federal antitrust claims. Jebaco has not yet indicated if it intends to appeal the Fifth Circuit decision. We moved for dismissal of the state-court claims. On January 29, 2010, the state court judge ruled from the bench that she will dismiss Jebaco’s complaint in its entirety. On February 11, 2010, the written order dismissing Jebaco’s complaint was entered. Jebaco has sixty days from February 11, 2010 to appeal the state court’s decision.

Madison House Litigation: On December 23, 2008, Madison House Group, L.P. (“Madison House”) filed suit in Superior Court of New Jersey, Chancery Division, Atlantic County against the Company, ACE Gaming, LLC (“ACE”, a wholly owned subsidiary of the Company), and one other defendant. We acquired ACE as part of our acquisition of the entities owning the former Sands Hotel & Casino (the “Sands”) in Atlantic City, New Jersey in November 2006. The lawsuit arises out of a lease dated December 18, 2000 between Madison House as landlord and ACE as tenant for the Madison House hotel in Atlantic City, New Jersey. The lawsuit alleges in part that ACE breached certain obligations under the lease, including, among others, failure to operate and maintain the hotel as required by the lease, which was alleged to have resulted in substantial damages to the hotel. The lawsuit further alleges that the Company, as the ultimate parent entity of ACE, should be jointly and severally liable with ACE for the damages sought, and separately alleges independent actions against the Company as described more fully in the lawsuit. The lawsuit seeks specific performance of ACE’s obligations under the lease, including restoration of the hotel, as well as unspecified compensatory and exemplary damages, and attorneys’ fees, against the Company and ACE. ACE continues to make its payment obligations under the lease, which expires in December 2012.

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On January 7, 2009, ACE petitioned the United States District Court for the District of New Jersey for an order compelling arbitration. On September 29, 2009, the federal court denied the petition and ACE has appealed to the United States Court of Appeals for the Third Circuit. On February 18, 2009, the trial judge in the state court action issued an order staying the arbitration, which we have also appealed. Oral argument in the appeal of the state court order was heard on December 16, 2009, but no ruling has yet been issued. Discovery in the state court lawsuit has commenced. On July 17, 2009, the state trial judge denied Madison House’s motion for partial summary judgment on the issue of whether ACE’s non-operation of the hotel following the closure of the Sands constituted a breach of the lease. While the Company cannot predict the outcome of this litigation, it intends to defend the matter vigorously.

Collective Bargaining Agreements: On May 17, 2006, we entered into a Memorandum of Agreement (the “MOA”) with Unite HERE Local 74 (“Union”) commensurate with our obligations under a development agreement with the city of St. Louis that, among other things, provided union access to certain employees (“bargaining unit employees”) employed at our Lumière Place facility should the Union manifest its intent to organize those employees. Additionally, the MOA provided that we would recognize the Union as the exclusive bargaining representative of the bargaining unit employees if a majority of the employees (verified by a neutral arbitrator) indicated their desire to be represented by the Union by signing an authorization card.

On November 20, 2008, an arbitrator conducted a review of the authorization cards submitted by the Union and determined that a majority of the bargaining unit employees had indicated their desire to be represented by the Union. Consistent with the MOA, we recognized the Union as the exclusive bargaining representative for the bargaining unit employees. We met with the Union three times to negotiate a collective bargaining agreement; the last meeting was on February 18, 2009.

During March and April 2009, we received competing claims from three unions, each claiming to be the exclusive collective bargaining representative of our St. Louis employees, including a claim from one union that they were the successor to the Union. In response to the competing claims for recognition, we withdrew recognition from the Union because of a lack of continuity of representation. In May 2009, we notified the Union that the collective bargaining agreement for HoteLumière was no longer in effect and that the collective bargaining agreement for the President Casino was being terminated. In May 2009, one of the unions claiming to be the successor to the Union filed unfair labor practice charges with the National Labor Relations Board (“NLRB”) alleging, among other things, that we refused to bargain in good faith by refusing to engage in collective bargaining negotiations, by refusing to negotiate over the discharge of employees, and by withdrawing recognition and abrogating the terms and conditions of employment. The NLRB dismissed the charge filed against HoteLumière.

In October 2009, the Union again changed its affiliation, and again requested recognition, which was denied. In December 2009, the Union filed charges with the NLRB alleging that Lumière Place and President Casino acted unlawfully when they refused to recognize and deal with the Union. In January 2010, the NLRB issued a Complaint and Notice of Hearing against Lumière Place and President Casino. The hearing is scheduled to commence in April 2010.

President Casino: The President Casino operates on a vessel known as the Admiral. The hull of the Admiral was built in 1904. The current certification of the hull by the American Bureau of Shipping (“ABS”) expires on July 19, 2010, and the Admiral may not be used to carry passengers beyond that date without significant repairs and/or specific approval. On July 28, 2009, the Missouri Gaming Commission (“MGC”) held a public hearing to discuss our plans to address the expiration of the ABS certification in 2010. At such hearing, we proposed, subject to MGC review and ABS and other approvals, to replace the Admiral with a different vessel, specifically a riverboat built in 1993, which we acquired in 2006. Such boat has been out of service since Hurricane Rita in 2005. At this July 28, 2009 hearing, the Executive Director of the MGC, through counsel, made a recommendation that the MGC issue a ruling to prohibit Pinnacle from repairing, replacing or moving the Admiral. On August 26, 2009, the MGC approved a resolution that it is not practicable for us to repair the President Casino and prohibits us from relocating the President, or any other vessel, from the current location of the President Casino. The MGC’s resolution also provided that a new license would be needed to replace the President Casino with another vessel at its present site. On September 24, 2009, we filed a petition for judicial review with the Missouri Court of Appeals, Western District (“CAWD”) regarding the MGC’s resolution. The petition requests that the CAWD (1) set aside the MGC’s resolution; (2) stay the resolution, or alternatively, issue a writ of prohibition which would prevent the MGC from enforcing the resolution. On September 25, 2009, we filed a motion in the CAWD requesting that the CAWD (1) stay the enforcement of the resolution, (2) grant us the specific right, pending the appeal, to make and execute all necessary plans to repair or replace the President Casino and (3) order expedited briefing, argument, and review of the appeal. On October 7, 2009, the MGC responded to the motion to stay by arguing that the MGC is not trying to prohibit the repair of the Admiral and that whether the hull of the Admiral can be recertified is between us and the ABS. On October 15, 2009, the CAWD denied the motion to stay and set an accelerated briefing schedule for the appeal. On October 22, 2009 the MGC moved to dismiss our appeal.

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On January 27, 2010, the MGC issued a preliminary order for disciplinary action against the President Riverboat Casino-Missouri, Inc. (“PRC-MO”), a wholly-owned subsidiary of Pinnacle Entertainment, Inc. and the operator of President Casino. The preliminary order proposes that the MGC revoke the license of the PRC-MO. The MGC alleges in its preliminary order that there has been a purposeful downgrading of the President Casino’s offerings and revenues, which it claims should subject PRC-MO to disciplinary action. On February 19, 2010, the Company filed a response to the preliminary order for disciplinary action and made a request for a hearing. The Company is examining all available legal remedies in connection with this matter.

Indiana Tax Dispute: In 2008, the Indiana Department of Revenue (“IDR”) commenced an income tax examination of the Company’s Indiana income tax filings for the 2005 to 2007 period. During June of 2009, the Company received an informal notification from the field agent for the IDR challenging whether income and gain from certain asset sales, including the sale of the Hollywood Park Racetrack in 1999, and other transactions outside of Indiana, such as the Aztar merger termination fee in 2006, which we reported on our Indiana state tax returns for the years 2000 through 2007, resulted in business income subject to apportionment, and proposed a potential assessment of approximately $11 million, excluding interest and penalties, of additional Indiana income taxes. During the fourth quarter of 2009, the Company submitted additional information to the IDR for consideration. On February 9, 2010, the Company received a revised proposed assessment in the amount of $7.3 million, excluding interest and penalties. The Company has 45 days to formally respond.

Other: We are a party to a number of other pending legal proceedings. Management does not expect that the outcome of such proceedings, either individually or in the aggregate, will have a material effect on our financial position, cash flows or results of operations.

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Note 11—Consolidating Condensed Financial Information

Our subsidiaries (excluding our Argentina subsidiary; a subsidiary that owns an aircraft; a subsidiary with approximately $66.1 million in cash and cash equivalents as of December 31, 2009; and certain non-material subsidiaries) have fully and unconditionally and jointly and severally guaranteed the payment of all obligations under the 7.50% Notes, 8.25% Notes, and 8.625% Notes, as well as our Previous Credit Facility and Amended Credit Facility. Our Atlantic City entities do not guarantee our Amended Credit Facility and did not guarantee our Previous Credit Facility. Separate financial statements and other disclosures regarding the subsidiary guarantors are not included herein because management has determined that such information is not material to investors. In lieu thereof, we include the following:

							100% Owned			Consolidating		Pinnacle
	Pinnacle			100% Owned			Non-			and		Entertainment,
	Entertainment,			Guarantor			Guarantor			Eliminating		Inc.
	Inc.			Subsidiaries(a)			Subsidiaries(b)			Entries		Consolidated
	(in millions)
Statements of Operations
For the year ended December 31, 2009
Revenues:
Gaming	$	—		$	876.2		$	32.5		$	—	$	908.7
Food and beverage		—			59.3			3.2			—		62.5
Other		0.1			73.8			0.5			—		74.4
		0.1			1,009.3			36.2			—		1,045.6
Expenses:
Gaming		—			530.4			12.6			—		543.0
Food and beverage		—			58.2			4.3			—		62.5
General and administrative and other		56.5			250.2			8.0			—		314.7
Depreciation and amortization		5.4			95.8			4.0			—		105.2
Write downs, reserves, recoveries, and impairments		—			199.6			8.9			—		208.5
		61.9			1,134.2			37.8			—		1,233.9
Operating loss		(61.8	)		(124.9	)		(1.6	)		—		(188.3	)
Equity earnings of subsidiaries		(127.1	)		2.6			—			124.5		—
Gain on sale of equity securities		6.0			—			6.9			—		12.9
Loss on early extinguishment of debt		(9.5	)		—			—			—		(9.5	)
Interest (expense) and non-operating income, net		(83.9	)		13.7			—			—		(70.2	)
Income (loss) from continuing operations before inter-company activity and income taxes		(276.3	)		(108.6	)		5.3			124.5		(255.1	)
Management fee & inter-company interest		17.4			(17.3	)		(0.1	)		—		—
Income tax (expense) benefit		0.6			—			(3.3	)		—		(2.7	)
Income (loss) from continuing operations		(258.3	)		(125.9	)		1.9			124.5		(257.8	)
Loss from discontinued operations, net of taxes		—			(0.5	)		—			—		(0.5	)
Net income (loss)	$	(258.3	)	$	(126.4	)	$	1.9		$	124.5	$	(258.3	)

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							100% Owned			Consolidating			Pinnacle
	Pinnacle			100% Owned			Non-			and			Entertainment,
	Entertainment,			Guarantor			Guarantor			Eliminating			Inc.
	Inc.			Subsidiaries(a)			Subsidiaries(b)			Entries			Consolidated
	(in millions)
For the year ended December 31, 2008
Revenues:
Gaming	$	—		$	844.2		$	59.6		$	—		$	903.8
Food and beverage		—			58.3			4.9			—			63.2
Other		0.2			76.2			1.3			—			77.7
		0.2			978.7			65.8			—			1,044.7
Expenses:
Gaming		—			508.2			34.1			—			542.3
Food and beverage		0.1			58.9			6.5			—			65.5
General and administrative and other		59.0			264.4			18.5			—			341.9
Depreciation and amortization		5.2			100.4			12.2			—			117.8
Write downs, reserves, recoveries and impairments		9.8			285.4			27.3			—			322.5
		74.1			1,217.3			98.6			—			1,390.0
Operating loss		(73.9	)		(238.6	)		(32.8	)		—			(345.3	)
Equity earnings of subsidiaries		(246.7	)		4.1			—			242.6			—
Interest (expense) and non-operating income, net		(76.2	)		24.8			1.0			—			(50.4	)
Impairment of investment in equity securities		(10.8	)		—			(18.2	)		—			(29.0	)
Income (loss) from continuing operations before inter-company activity and income taxes		(407.6	)		(209.7	)		(50.0	)		242.6			(424.7	)
Management fee & inter-company interest		28.3			(28.0	)		(0.3	)		—			—
Income tax (expense) benefit		56.7			—			(2.2	)		—			54.5
Income (loss) from continuing operations		(322.6	)		(237.7	)		(52.5	)		242.6			(370.2	)
Income (loss) from discontinued operations, net of taxes		—			54.9			(7.3	)		—			47.6
Net income (loss)	$	(322.6	)	$	(182.8	)	$	(59.8	)	$	242.6		$	(322.6	)
For the year ended December 31, 2007
Revenues:
Gaming	$	—		$	721.3		$	88.1		$	—		$	809.4
Food and beverage		—			40.7			5.6			—			46.3
Other		0.2			64.0			1.9			—			66.1
		0.2			826.0			95.6			—			921.8
Expenses:
Gaming		—			426.0			45.4			—			471.4
Food and beverage		—			39.9			6.8			—			46.7
General and administrative and other		50.0			230.3			22.0			—			302.3
Depreciation and amortization		1.6			68.2			10.5			—			80.3
Write downs, reserves, recoveries and impairments		—			3.8			0.5			—			4.3
		51.6			768.2			85.2			—			905.0
Operating income (loss)		(51.4	)		57.8			10.4			—			16.8
Equity earnings of subsidiaries		53.0			6.2			—			(59.2	)		—
Loss on early extinguishment of debt		(6.1	)		—			—			—			(6.1	)
Interest (expense) and non-operating income, net		(56.6	)		43.9			2.5			—			(10.2	)
Income (loss) from continuing operations before inter-company activity and income taxes		(61.1	)		107.9			12.9			(59.2	)		0.5
Management fee & inter-company interest		55.0			(54.6	)		(0.4	)		—			—
Income tax (expense) benefit		4.7			—			(5.2	)		—			(0.5	)
Income (loss) from continuing operations		(1.4	)		53.3			7.3			(59.2	)		—
Loss from discontinued operations, net of taxes		—			—			(1.4	)		—			(1.4	)
Net income (loss)	$	(1.4	)	$	53.3		$	5.9		$	(59.2	)	$	(1.4	)

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					100% Owned			Consolidating			Pinnacle
	Pinnacle		100% Owned		Non-			and			Entertainment,
	Entertainment,		Guarantor		Guarantor			Eliminating			Inc.
	Inc.		Subsidiaries(a)		Subsidiaries(b)			Entries			Consolidated
	(in millions)
Balance Sheets
As of December 31, 2009
Current assets	$	5.3	$	91.2	$	74.4		$	—		$	170.9
Property and equipment, net		16.9		1,511.6		28.9			—			1,557.4
Other non-current assets		50.3		62.7		2.6			—			115.6
Investment in subsidiaries		1,576.5		23.3		—			(1,599.8	)		—
Inter-company		1.2		—		—			(1.2	)		—
	$	1,650.2	$	1,688.8	$	105.9		$	(1,601.0	)	$	1,843.9
Current liabilities		63.4		151.7		5.2			—			220.3
Notes payable, long term		1,062.5		0.8		—			—			1,063.3
Other non-current liabilities		29.9		36.8		(0.8	)		—			65.9
Inter-company		—		—		1.2			(1.2	)		—
Equity		494.4		1,499.5		100.3			(1,599.8	)		494.4
	$	1,650.2	$	1,688.8	$	105.9		$	(1,601.0	)	$	1,843.9
As of December 31, 2008
Current assets	$	17.9	$	85.3	$	64.1		$	—		$	167.3
Property and equipment, net		18.3		1,565.0		46.7			—			1,630.0
Other non-current assets		47.4		68.4		10.3			(4.2	)		121.9
Investment in subsidiaries		1,661.4		23.0		—			(1,684.4	)		—
Inter-company		1.2		0.2		—			(1.4	)		—
	$	1,746.2	$	1,741.9	$	121.1		$	(1,690.0	)	$	1,919.2
Current liabilities		38.6		129.4		6.5			0.1			174.6
Notes payable, long term		942.4		0.8		4.3			(4.3	)		943.2
Other non-current liabilities		25.9		36.0		0.2			—			62.1
Inter-company		—		—		1.4			(1.4	)		—
Equity		739.3		1,575.7		108.7			(1,684.4	)		739.3
	$	1,746.2	$	1,741.9	$	121.1		$	(1,690.0	)	$	1,919.2

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							100% Owned			Consolidating		Pinnacle
	Pinnacle			100% Owned			Non-			and		Entertainment,
	Entertainment,			Guarantor			Guarantor			Eliminating		Inc.
	Inc.			Subsidiaries(a)			Subsidiaries(b)			Entries		Consolidated
Statements of Cash Flows
For the year ended December 31, 2009
Cash provided by (used in) operating activities	$	(108.1	)	$	226.8		$	1.5		$	—	$	120.2
Cash (used in) provided by investing activities Capital expenditure and land additions		(3.8	)		(221.4	)		(1.2	)		—		(226.4	)
Proceeds from sale of equity securities and other		10.1			0.3			13.6			—		24.0
Cash provided by (used in) investing activities		6.3			(221.1	)		12.4			—		(202.4	)
Cash provided by financing activities
Net change in credit facility		(114.8	)		—			—			—		(114.8	)
Net change in notes payable		227.8			—			—			—		227.8
Other		(16.4	)		—			—			—		(16.4	)
Cash provided by financing activities		96.6			—			—			—		96.6
Effect of exchange rate changes on cash		—			—			(0.6	)		—		(0.6	)
Increase (decrease) in cash and cash equivalents		(5.2	)		5.7			13.3			—		13.8
Cash and cash equivalents, beginning of period		6.7			51.0			58.0			—		115.7
Cash and cash equivalents, end of period	$	1.5		$	56.7		$	71.3		$	—	$	129.5
For the year ended December 31, 2008
Cash provided by (used in) operating activities	$	(102.3	)	$	236.6		$	(5.0	)	$	—	$	129.3
Cash used in investing activities
Capital expenditures and land additions		(9.1	)		(277.0	)		(4.8	)		—		(290.9	)
Investment in available for sale securities		0.7			(30.1	)		—			—		(29.4	)
Change in restricted cash and others		0.2			14.1			—			—		14.3
Cash used in investing activities		(8.2	)		(293.0	)		(4.8	)		—		(306.0	)
Cash provided by (used in) financing activities
Common stock transactions		101.9			—			—			—		101.9
Cash provided by (used in) financing activities		101.9			—			—			—		101.9
Effect of exchange rate changes on cash		—			—			(0.6	)		—		(0.6	)
Increase (decrease) in cash and cash equivalents		(8.6	)		(56.4	)		(10.4	)		—		(75.4	)
Cash and cash equivalents, beginning of period		15.3			106.0			69.8			—		191.1
Cash and cash equivalents, end of period	$	6.7		$	49.6		$	59.4		$	—	$	115.7
For the year ended December 31, 2007
Cash provided by (used in) operating activities	$	(441.8	)	$	506.5		$	88.7		$	—	$	153.4
Cash used in investing activities
Capital expenditures and land additions		(16.7	)		(492.9	)		(36.0	)		—		(545.6	)
Receipts from sale of assets		(39.8	)		—			—			—		(39.8	)
Insurance proceeds and other		21.9			(7.6	)		5.0			—		19.3
Cash used in investing activities		(34.6	)		(500.5	)		(31.0	)		—		(566.1	)
Cash provided by (used in) financing activities Common stock transactions		423.5			(8.8	)		—			—		414.7
Cash provided by (used in) financing activities		423.5			(8.8	)		—			—		414.7
Effect of exchange rate changes on cash		0.5			—			0.1			—		0.6
Increase (decrease) in cash and cash equivalents		(52.4	)		(2.8	)		57.8			—		2.6
Cash and cash equivalents, beginning of period		67.7			108.8			12.0			—		188.5
Cash and cash equivalents, end of period	$	15.3		$	106.0		$	69.8		$	—	$	191.1

(a)

The following material subsidiaries are identified as guarantors of the 7.50% Notes, 8.25% Notes, and 8.625% Notes: Belterra Resort Indiana, LLC; Boomtown, LLC; PNK (RENO), LLC; Louisiana—I Gaming; PNK (LAKE CHARLES), L.L.C.; Casino Magic Corp.; Biloxi Casino Corp.; PNK (BOSSIER CITY), Inc.; Casino One Corporation; PNK (ES), LLC; PNK (River City), LLC, PNK (ST. LOUIS RE), LLC; AREP Boardwalk Properties LLC; PNK (Baton Rouge) Partnership; PNK (SCB), L.L.C.; PNK Development 7, LLC; PNK Development 8, LLC; PNK Development 9, LLC; PNK Development 13, LLC; President Riverboat Casino-Missouri, Inc.; and ACE Gaming, LLC. In addition, certain other immaterial subsidiaries are also guarantors of the 7.50% Notes, 8.25% Notes and 8.625% Notes.

(b)

Casino Magic Neuquén SA and PNK Development 11, LLC, which as of December 31, 2009 held approximately $66.0 million in cash and cash equivalents, are our only material non-guarantors of the 7.50% Notes, 8.25% Notes and 8.625% Notes. Other non-guarantor subsidiaries include, but are not limited to, a subsidiary that owns our corporate airplane.

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Note 12—Segment Information

We use Adjusted EBITDA (as defined below) to compare operating results among our segments and allocate resources. The following table highlights our Adjusted EBITDA and reconciles Adjusted EBITDA to income (loss) from continuing operations for the years ended December 31, 2009, 2008 and 2007.

	For the year ended
	December 31,
	2009			2008			2007
	(in millions)
Revenues:
L’Auberge du Lac	$	339.0		$	342.6		$	321.2
Lumière Place		219.0			174.2			8.0
Boomtown New Orleans		137.7			158.4			162.0
Belterra Casino Resort		161.9			168.6			177.9
Boomtown Bossier City		90.9			88.9			89.7
Boomtown Reno		38.7			46.0			67.2
Casino Magic Argentina		36.2			40.0			37.3
President Casino		20.4			25.8			58.1
Other		1.8			0.2			0.4
Total Revenue	$	1,045.6		$	1,044.7		$	921.8
Adjusted EBITDA: (a)
L’Auberge du Lac	$	79.2		$	84.3		$	75.2
Lumière Place		42.0			10.1			(1.0	)
Boomtown New Orleans		37.6			54.2			54.2
Belterra Casino Resort		26.5			29.7			39.3
Boomtown Bossier City		19.2			17.1			17.9
Boomtown Reno		(2.6	)		(4.4	)		3.5
Casino Magic Argentina		9.1			11.8			14.3
President Casino		(2.9	)		(5.0	)		7.1
		208.1			197.8			210.5
Corporate expenses (b)		(40.2	)		(38.2	)		(39.8	)
		167.9			159.6			170.7
Other income (expense):
Depreciation and amortization		(105.1	)		(117.8	)		(80.3	)
Pre-opening and development costs		(28.7	)		(55.4	)		(60.8	)
Non-cash share-based compensation		(13.9	)		(9.2	)		(8.4	)
Impairment of goodwill		—			(28.5	)		—
Impairment of indefinite-lived intangible assets		(1.9	)		(41.4	)		—
Impairment of land and development costs		(188.4	)		(228.0	)		—
Impairment of buildings, riverboats and equipment		(16.5	)		(20.3	)		(4.9	)
Write-downs, reserves and recoveries, net		(1.7	)		(4.3	)		0.5
Other non-operating income		0.3			2.7			15.5
Interest expense, net of capitalized interest		(70.5	)		(53.0	)		(25.7	)
Gain on sale of equity securities		12.9			—			—
Impairment of investment in equity securities		—			(29.1	)		—
Loss on early extinguishment of debt		(9.5	)		—			(6.1	)
Income tax benefit (expense)		(2.7	)		54.5			(0.5	)
Income (loss) from continuing operations	$	(257.8	)	$	(370.2	)	$	—
Capital expenditures
L’Auberge du Lac	$	5.4		$	23.4		$	69.8
Lumière Place		9.7			83.5			321.6
Boomtown New Orleans		5.7			7.6			4.7
Belterra Casino Resort		7.0			5.7			13.9
Boomtown Bossier City		4.2			3.1			2.3
Boomtown Reno		2.0			7.0			2.5
Casino Magic Argentina		1.2			4.5			10.5
President Casino		0.9			0.3			1.2
Corporate and Other, including new properties (c)		190.3			170.9			119.1
	$	226.4		$	306.0		$	545.6

87

	December 31,
	2009		2008		2007
	(in millions)
Assets:
L’Auberge du Lac	$	331.0	$	356.2	$	398.5
Lumière Place		507.9		542.8		525.3
Boomtown New Orleans		74.3		75.3		87.6
Belterra Casino Resort		193.6		200.7		215.1
Boomtown Bossier City		92.1		91.8		109.5
Boomtown Reno		41.9		54.6		71.9
Casino Magic Argentina		28.1		31.3		39.9
President Casino		2.6		8.2		45.9
Corporate and other including new properties		572.4		558.3		699.8
	$	1,843.9	$	1,919.2	$	2,193.5

(a)	We define Adjusted EBITDA for each segment as earnings before interest income and expense, income taxes, depreciation, amortization, pre-opening and development costs, non-cash share-based compensation, merger termination proceeds, asset impairment costs, write-downs, reserves, recoveries, corporate level litigation settlement costs, gain (loss) on sale of certain assets, gain (loss) on sale of equity security investments, minority interest, gain (loss) on early extinguishment of debt and discontinued operations. We use Adjusted EBITDA to compare operating results among our properties and between accounting periods.
(b)	Corporate expenses represent unallocated payroll, professional fees, travel expenses and other general and administrative expenses not directly related to our casino and hotel operations.
(c)	Includes capital expenditures for our various development projects not yet reflected as operating segments, including the following:

	For the year ended December 31,
	2009		2008		2007
	(in millions)
River City	$	169.2	$	51.6	$	18.3
Sugarcane Bay		14.3		11.2		3.1
Baton Rouge		2.1		1.0		21.4
Atlantic City		—		99.4		37.2

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Note 13—Quarterly Financial Information (Unaudited)

The following is a summary of unaudited quarterly financial data for the years ended December 31, 2009 and 2008:

	2009
	Dec. 31,			Sept. 30,			Jun. 30,			Mar. 31,
	(in millions, except per share data)
Revenues	$	245.0		$	265.4		$	266.3		$	269.0
Operating income (loss)		(223.7	)		6.4			10.4			18.6
Income (loss) from continuing operations		(242.3	)		(21.7	)		5.0			1.2
Income (loss) from discontinued operations, net of taxes		0.3			(0.2	)		(0.3	)		(0.3	)
Net income (loss)		(242.0	)		(21.9	)		4.7			0.9
Per Share Data—Basic (a)
Income (loss) from continuing operations	$	(4.03	)	$	(0.36	)	$	0.08		$	0.02
Income (loss) from discontinued operations, net of taxes		0.00			(0.01	)		—			—
Net income (loss)—basic	$	(4.03	)	$	(0.37	)	$	0.08		$	0.02
Per Share Data—Diluted (a)
Income (loss) from continuing operations	$	(4.03	)	$	(0.36	)	$	0.08		$	0.02
Income (loss) from discontinued operations, net of taxes		0.00			(0.01	)		—			—
Net income (loss)—diluted	$	(4.03	)	$	(0.37	)	$	0.08		$	0.02

	2008
	Dec. 31,			Sept. 30,			Jun. 30,			Mar. 31,
	(in millions, except per share data)
Revenues	$	258.9		$	262.8		$	266.3		$	256.6
Operating loss		(309.2	)		(7.4	)		(16.9	)		(11.8	)
Loss from continuing operations		(297.8	)		(8.2	)		(48.4	)		(15.7	)
Income (loss) from discontinued operations, net of taxes		0.1			(3.6	)		30.3			20.8
Net income (loss)		(297.7	)		(11.8	)		(18.1	)		5.1
Per Share Data—Basic (a)
Loss from continuing operations	$	(4.97	)	$	(0.14	)	$	(0.81	)	$	(0.26	)
Income (loss) from discontinued operations, net of taxes		(0.00	)		(0.06	)		0.51			0.34
Net income (loss)—basic	$	(4.97	)	$	(0.20	)	$	(0.30	)	$	0.08
Per Share Data—Diluted (a)
Loss from continuing operations	$	(4.97	)	$	(0.14	)	$	(0.81	)	$	(0.26	)
Income (loss) from discontinued operations, net of taxes		(0.00	)		(0.06	)		0.51			0.34
Net income (loss)—diluted	$	(4.97	)	$	(0.20	)	$	(0.30	)	$	0.08

(a) Net income (loss) per share calculations for each quarter are based on the weighted average number of shares outstanding during the respective periods; accordingly, the sum of the quarters may not equal the full-year income (loss) per share.

89

Note 14—Subsequent Events

In January 2010, we made the decision to explore strategic alternatives for our Argentina operations. Also in January 2010, we made the decision to sell our assets in Atlantic City, New Jersey, as we no longer intend to develop on our site. For further discussion, see Note 7, Dispositions, Discontinued Operations and Discontinued Development Opportunities.

On January 27, 2010, the Missouri Gaming Commission (“MGC”) issued a preliminary order for disciplinary action that proposed that the MGC revoke the gaming license associated with the President Casino. The MGC alleges in its preliminary order that there has been a purposeful downgrading of the President Casino’s offerings and revenues, which it claims should subject our subsidiary that operates the President Casino to disciplinary action. On February 19, 2010, we filed a response to the preliminary order for disciplinary action and made a request for a hearing. We are examining all available legal remedies in connection with this matter. For further discussion, see Note 10, Commitments and Contingencies.

We entered into a Settlement Agreement and Mutual Release, effective as of February 3, 2010, with RSUI Indemnity Company (“RSUI”), to settle our lawsuit against RSUI in connection with the Hurricane Katrina-related damage to our former hotel, casino and related properties in Biloxi, Mississippi and our Boomtown Casino in Harvey, Louisiana. RSUI agreed to pay us $23.4 million, which amount was paid in full on February 12, 2010, which is in addition to RSUI’s prior payment of approximately $2.0 million. In total, including RSUI’s settlement payment, our insurance recovery from all of our carriers on our Hurricane Katrina-related damage claim was approximately $215 million. For further discussion, see Note 10, Commitments and Contingencies.

On February 5, 2010, we entered into the Amended Credit Facility. The Amended Credit Facility consists of a $375 million revolving credit facility, of which $110 million was drawn immediately, of which $92.7 million was used to repay borrowings outstanding under our Previous Credit Facility as of the same date. The Amended Credit Facility matures on March 31, 2014, provided that such date would accelerate to September 30, 2011 if any portion of our 8.25% Notes is outstanding on September 30, 2011. For further discussion, see Note 3, Long Term Debt.

On February 19, 2010, we entered into a Seventh Amendment (the “Seventh Amendment”) of our lease and development agreement with the St. Louis County Port Authority related to our River City project. The Seventh Amendment amends the lease and development agreement to (a) provide that our obligation to pay rent began on May 1, 2009 and the project opening date shall be March 4, 2010; (b) reduce the minimum number of slot machines from 2,300 to 2,000; (c) provide that we shall construct the hatch shell on the Park Property (as defined in the Development Agreement) within eighteen months following March 4, 2010; and (d) provide that we shall complete the second phase of the project within three years following March 4, 2010. In addition, the Seventh Amendment provides that for the period from May 1, 2009 to March 31, 2010, we shall pay to the St. Louis County rent of $2.5 million. From April 1, 2010 through the expiration of the term of the Development Agreement, we shall pay to the St. Louis County as annual rent the greater of (A) $4 million or (B) 2.5% of annual adjusted gross receipts.

On February 24, 2010, the Company entered into an amendment to Separation Agreement with Mr. Lee, effective February 11, 2010, whereby Mr. Lee would be entitled to receive a bonus of $749,325 for the 2009 year. In connection with the final determination of his 2009 bonus, Mr. Lee surrendered 483,333 options exercisable at $14.70 per share. For further discussion, see Item 9B of Part II.

90

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

None.

Item 9A. Controls and Procedures

(a) Management’s Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

The Company’s management, with the participation of the Chief Executive Officer (the “CEO”) and Chief Financial Officer (the “CFO”), evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2009. Based on this evaluation, the Company’s management, including the CEO and the CFO, concluded that, as of December 31, 2009, the Company’s disclosure controls and procedures were effective, in that they provide a reasonable level of assurance that information required to be disclosed by the Company in the reports filed or submitted by it under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. The Company’s disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the CEO and the CFO, as appropriate, to allow timely decisions regarding required disclosure.

Notwithstanding the foregoing, there can be no assurance that the Company’s disclosure controls and procedures will detect or uncover all failures of persons within the Company and its consolidated subsidiaries to disclose material information otherwise required to be set forth in the Company’s periodic reports. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable, not absolute, assurance of achieving their control objectives.

No change in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended December 31, 2009 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

(b) Management’s Annual Report on Internal Control over Financial Reporting

Internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) refers to the process designed by, or under the supervision of, the Company’s CEO and CFO, and effected by the Company’s board of directors, management and other personnel, 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. Management is responsible for establishing and maintaining adequate internal control over the Company’s financial reporting.

The Company’s management, with the participation of the Company’s CEO and CFO, evaluated the effectiveness of the Company’s internal control over financial reporting as of December 31, 2009. This evaluation was performed using the internal control evaluation framework developed by the Committee of Sponsoring Organizations of the Treadway Commission. Based on such evaluation, management has concluded that, as of such date, the Company’s internal control over financial reporting was effective.

Ernst & Young LLP has issued an attestation report on the effectiveness of our internal control over financial reporting. This report follows in Item 9A(c).

91

(c) Attestation report of the independent registered public accounting firm.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of
Pinnacle Entertainment, Inc.
Las Vegas, Nevada

We have audited Pinnacle Entertainment, Inc. and its subsidiaries’ (the “Company”) internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO Criteria”). The Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit 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 effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, 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.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2009, based on the COSO Criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of the Company as of December 31, 2009, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the year ended December 31, 2009, and our report dated February 26, 2010 expressed an unqualified opinion thereon.

/s/ ERNST & YOUNG LLP Las Vegas, Nevada

February 26, 2010

92

Item 9B.   Other Information

Pinnacle has elected to include the following information in this Item 9B of Form 10-K in lieu of reporting it on a separately filed Form 8-K.

Item 5.02(e)—Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Amendment to Separation Agreement

On November 12, 2009, the Company filed a Form 8-K reporting that Daniel R. Lee advised the Company of his resignation from his positions as the Company’s Chief Executive Officer and Chairman of the Board, effective November 7, 2009. In connection with his resignation, the Company entered into a Separation Agreement with Mr. Lee, dated as of November 7, 2009 (the “Separation Agreement”). On February 24, 2010, the Company entered into an amendment to Separation Agreement with Mr. Lee (the “Amendment to Separation Agreement”), effective February 11, 2010, whereby Mr. Lee would be entitled to receive a bonus of $749,325 for the 2009 year. In connection with the final determination of his 2009 bonus, Mr. Lee surrendered 483,333 options exercisable at $14.70 per share. The Amendment to Separation Agreement is attached hereto as Exhibit 10.56 and is incorporated herein by reference. The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the Amendment to Separation Agreement.

PART III

Item 10.   Directors, Executive Officers and Corporate Governance

The information required under this item will be contained in our definitive Proxy Statement for our 2010 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days after December 31, 2009 under the captions “Election of Directors—General,” “Election of Directors—Information Regarding the Director Nominees,” “Election of Directors—Executive Officers,” “Election of Directors—Section 16(a) Beneficial Ownership Reporting Compliance,” “Election of Directors—Code of Ethical Business Conduct,” and the information regarding our audit committee and our audit committee financial expert in “Election of Directors—Board Meetings and Board Committees” and is incorporated herein by reference.

Item 11.   Executive Compensation

The information required under this item will be contained in our definitive Proxy Statement for our 2010 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days after December 31, 2009 under the captions “Election of Directors—Director Compensation”, “Election of Directors—Compensation Committee Interlocks and Insider Participation,” “Executive Compensation—Compensation Committee Report” and “Executive Compensation” and is incorporated herein by reference.

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

The information required under this item will be contained in our definitive Proxy Statement for our 2010 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days after December 31, 2009 under the captions “Election of Directors—Security Ownership of Certain Beneficial Owners and Management” and “Executive Compensation—Equity Compensation Plan Information” and is incorporated herein by reference.

93

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

The information required under this item will be contained in our definitive Proxy Statement for our 2010 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days after December 31, 2009 under the captions “Election of Directors—Transactions with Related Persons, Promoters and Certain Control Persons” and “Election of Directors—Director Independence” and is incorporated herein by reference.

Item 14.   Principal Accountant Fees and Services

The information required under this item will be contained in our definitive Proxy Statement for our 2010 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days after December 31, 2009 under the caption “Ratification of Appointment of Independent Auditors—Audit and Related Fees” and is incorporated herein by reference.

94

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) Documents filed as a part of this report.

1. Consolidated Financial Statements and Supplementary Data: The following financial statements are included herein under Item 8 of Part II of this report, “Financial Statements and Supplementary Data”:

	Page Number
Reports of Independent Registered Public Accounting Firm		48
Consolidated Statements of Operations for the years ended December 31, 2009, 2008 and 2007		50
Consolidated Balance Sheets at December 31, 2009 and 2008		51
Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2009, 2008 and 2007		52
Consolidated Statements of Cash Flows for the years ended December 31, 2009, 2008 and 2007		53
Notes to Consolidated Financial Statements		55
Quarterly Data		89
2. Financial Statement Schedules:
Schedule II — Valuation and Qualifying Accounts		106

All other schedules have been omitted for the reason that the required information is presented in the financial statements or notes thereto, the amounts involved are not significant or the schedules are not applicable.

95

3. Exhibits.

Exhibit
Number		Description of Exhibit
	3.1	Restated Certificate of Incorporation of Pinnacle Entertainment, Inc., as amended, is hereby incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K filed on May 9, 2005. (SEC File No. 001-13641).
	3.2	Restated Bylaws of Pinnacle Entertainment, Inc. as of January 13, 2010, are hereby incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on January 19, 2010. (SEC File No. 001-13641).
	4.1†	Pinnacle Entertainment, Inc. 2001 Stock Option Plan is hereby incorporated by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-8 filed on June 6, 2001. (SEC File No. 333-62378).
	4.2†	Form of First Amendment to Pinnacle Entertainment, Inc. 2001 Stock Option Plan is hereby incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K filed on January 30, 2004. (SEC File No. 001-13641).
	4.3†	Form of Stock Option Agreement for Pinnacle Entertainment, Inc. 2001 Stock Option Plan is hereby incorporated by reference to Exhibit 4.5 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004. (SEC File No. 001-13641).
	4.4†	Pinnacle Entertainment, Inc. 2002 Stock Option Plan is hereby incorporated by reference to Exhibit 4.4 to the Company’s Registration Statement on Form S-8 filed on July 16, 2003. (SEC File No. 333-107081).
	4.5†	First Amendment to Pinnacle Entertainment, Inc. 2002 Stock Option Plan is hereby incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S-8 filed on July 16, 2003. (SEC File No. 333-107081).
	4.6†	Second Amendment to Pinnacle Entertainment, Inc. 2002 Stock Option Plan is hereby incorporated by reference to Exhibit 4.6 to the Company’s Registration Statement on Form S-8 filed on July 16, 2003. (SEC File No. 333-107081).
	4.7†	Form of Stock Option Agreement for Pinnacle Entertainment, Inc. 2002 Stock Option Plan is hereby incorporated by reference to Exhibit 4.10 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004. (SEC File No. 001-13641).
	4.8†	Pinnacle Entertainment, Inc. 2005 Equity and Performance Incentive Plan, As Amended is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 27, 2008. (SEC File No. 001-13641).
	4.9†	Amendment to Pinnacle Entertainment, Inc. 2005 Equity And Performance Incentive Plan, As Amended is hereby incorporated by reference to Exhibit 4.12 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008. (SEC File No. 001-13641).
	4.10†	Form of Restricted Stock Agreement and Form of Restricted Stock Grant Notice for 2005 Equity and Performance Incentive Plan of Pinnacle Entertainment, Inc. is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 6, 2006. (SEC File No. 001-13641).
	4.11†	Form of Stock Option Grant Notice and Form of Stock Option Agreement for the Pinnacle Entertainment, Inc. 2005 Equity and Performance Incentive Plan, As Amended is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 15, 2008. (SEC File No. 001-13641).
	4.12†	Form of Grant of Other Stock Unit Awards for the Pinnacle Entertainment, Inc. 2005 Equity and Performance Incentive Plan, As Amended is hereby incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on December 15, 2008. (SEC File No. 001-13641).

96

Exhibit
Number			Description of Exhibit
	4.13	†	Form of Director Stock Option Grant Notice and Form of Director Stock Option Agreement for the Pinnacle Entertainment, Inc. 2005 Equity and Performance Incentive Plan, As Amended is hereby incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on February 10, 2010. (SEC File No. 001-13641).
	4.14	†	Nonqualified Stock Option Agreement dated as of January 11, 2003 by and between Pinnacle Entertainment, Inc. and Stephen H. Capp is hereby incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S-8 filed on July 16, 2003. (SEC File No. 333-107081).
	4.15	†	Nonqualified Stock Option Agreement dated as of April 10, 2002 by and between Pinnacle Entertainment, Inc. and Daniel R. Lee is hereby incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2002. (SEC File No. 001-13641).
	4.16	†	Nonqualified Stock Option Agreement dated as of April 10, 2002 by and between Pinnacle Entertainment, Inc. and Daniel R. Lee is hereby incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2002. (SEC File No. 001-13641).
	4.17	†	Nonqualified Stock Option Agreement dated as of August 1, 2008 by and between Pinnacle Entertainment, Inc. and Carlos Ruisanchez is hereby incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2008. (SEC File No. 001-13641).
	4.18		Indenture dated as of March 15, 2004, governing the 8.25% Senior Subordinated Notes due 2012, by and among Pinnacle Entertainment, Inc., the guarantors identified therein and The Bank of New York is hereby incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 30, 2004. (SEC File No. 001-13641).
	4.19		First Supplemental Indenture, dated as of December 3, 2004, governing the 8.25% Senior Subordinated Notes due 2012, by and among Pinnacle Entertainment, Inc., the guarantors identified therein and The Bank of New York is hereby incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on December 7, 2004. (SEC File No. 001-13641).
	4.20		Second Supplemental Indenture, dated as of October 19, 2005, governing the 8.25% Senior Subordinated Notes due 2012, by and among Pinnacle Entertainment, Inc., the guarantors identified therein and The Bank of New York Trust Company, N.A., is hereby incorporated by reference to Exhibit 4.23 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006. (SEC File No. 001-13641).
	4.21		Third Supplemental Indenture, dated as of November 17, 2006, governing the 8.25% Senior Subordinated Notes due 2012, by and among Pinnacle Entertainment, Inc., the guarantors identified therein and The Bank of New York Trust Company, N.A., is hereby incorporated by reference to Exhibit 4.24 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006. (SEC File No. 001-13641).
	4.22		Fourth Supplemental Indenture, dated as of January 30, 2007, governing the 8.25% Senior Subordinated Notes due 2012, by and among Pinnacle Entertainment, Inc., the guarantors identified therein and The Bank of New York Trust Company, N.A., is hereby incorporated by reference to Exhibit 4.25 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006. (SEC File No. 001-13641).
	4.23		Fifth Supplemental Indenture, dated as of May 29, 2007, governing the 8.25% Senior Subordinated Notes due 2012, by and among Pinnacle Entertainment, Inc., the guarantors identified therein and The Bank of New York Trust Company, N.A., is hereby incorporated by reference to Exhibit 4.25 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007. (SEC File No. 001-13641).

97

Exhibit
Number			Description of Exhibit
	4.24		Sixth Supplemental Indenture, dated as of June 7, 2007, governing the 8.25% Senior Subordinated Notes due 2012, by and among Pinnacle Entertainment, Inc., the guarantors identified therein and The Bank of New York Trust Company, N.A., is hereby incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2007. (SEC File No. 001-13641).
	4.25		Seventh Supplemental Indenture, dated as of July 16, 2009, governing the 8.25% Senior Subordinated Notes due 2012, by and among Pinnacle Entertainment, Inc., the guarantors identified therein and The Bank of New York Mellon Trust Company, N.A., is hereby incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q filed on August 4, 2009. (SEC File No. 001-13641).
	4.26	*	Eighth Supplemental Indenture, dated as of February 5, 2010, governing the 8.25% Senior Subordinated Notes due 2012, by and among Pinnacle Entertainment, Inc., the guarantors identified therein and The Bank of New York Mellon Trust Company, N.A.
	4.27		Form of 8.25% Senior Subordinated Note due 2012 is hereby incorporated by reference to Exhibit A contained in Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 30, 2004. (SEC File No. 001-13641).
	4.28		Indenture dated as of June 8, 2007, governing the 7.50% Senior Subordinated Notes due 2015, by and among Pinnacle Entertainment, Inc., the guarantors identified therein and The Bank of New York Trust Company is hereby incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on June 11, 2007. (SEC File No. 001-13641).
	4.29		First Supplemental Indenture, dated as of July 16, 2009, governing the 7.50% Senior Subordinated Notes due 2015, by and among Pinnacle Entertainment, Inc., the guarantors identified therein and The Bank of New York Mellon Trust Company, N.A., is hereby incorporated by reference to Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q filed on August 4, 2009. (SEC File No. 001-13641).
	4.30	*	Second Supplemental Indenture, dated as of February 5, 2010, governing the 7.50% Senior Subordinated Notes due 2015, by and among Pinnacle Entertainment, Inc., the guarantors identified therein and The Bank of New York Mellon Trust Company, N.A.
	4.31		Form of 7.50% Senior Subordinated Note due 2015 is hereby incorporated by reference to Exhibit A contained in Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on June 11, 2007. (SEC File No. 001-13641).
	4.32		Indenture dated as of August 10, 2009, governing the 8.625% Senior Notes due 2017, by and among the Company, the guarantors identified therein and The Bank of New York Mellon Trust Company, N.A. is hereby incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on August 13, 2009. (SEC File No. 001-13641).
	4.33	*	First Supplemental Indenture, dated as of February 5, 2010, governing the 8.625% Senior Notes due 2017, by and among Pinnacle Entertainment, Inc., the guarantors identified therein and The Bank of New York Mellon Trust Company, N.A.
	4.34		Form of 8.625% Senior Note due 2017 is hereby incorporated by reference to Exhibit A contained in Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on August 13, 2009. (SEC File No. 001-13641).
	4.35		Registration Rights Agreement, dated as of August 10, 2009, among the Company, the guarantors identified therein and J.P. Morgan Securities Inc., Banc of America Securities LLC, Barclays Capital Inc., Deutsche Bank Securities Inc. as representatives of the several initial purchasers is hereby incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on August 13, 2009. (SEC File No. 001-13641).
	10.1		Second Amended and Restated Credit Agreement, dated as of December 14, 2005, among Pinnacle Entertainment, Inc., the Lenders referred to therein, Lehman Brothers Inc., and Bear, Stearns & Co. Inc., as Joint Advisors, Joint Lead Arrangers and Joint Book Runners, Wells Fargo, N.A., as Lead Arranger, Société Générale, Deutsche Bank Securities Inc., and Wells Fargo Bank, N.A., as Joint Documentation Agents, Bear Stearns Corporate Lending Inc., as Syndication Agent, and Lehman Commercial Paper Inc., as Administrative Agent, is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 20, 2005. (SEC File No. 001-13641).

98

Exhibit
Number		Description of Exhibit
	10.2	First Amendment dated as of December 22, 2005, to the Second Amended and Restated Credit Agreement, dated as of December 14, 2005, among Pinnacle Entertainment, Inc., the Lenders referred to therein, Lehman Brothers Inc., and Bear, Stearns & Co. Inc., as Joint Advisors, Joint Lead Arrangers and Joint Book Runners, Wells Fargo, N.A., as Lead Arranger, Société Générale, Deutsche Bank Securities Inc., and Wells Fargo Bank, N.A., as Joint Documentation Agents, Bear Stearns Corporate Lending Inc., as Syndication Agent, and Lehman Commercial Paper Inc., as Administrative Agent, is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 23, 2005. (SEC File No. 001-13641).
	10.3	Second Amendment, dated as of October 11, 2006, to the Second Amended and Restated Credit Agreement dated as of December 14, 2005 (as amended by that First Amendment to the Second Amended and Restated Credit Agreement, dated December 22, 2005), among Pinnacle Entertainment, Inc., the Lenders referred to therein, Lehman Brothers Inc., and Bear, Stearns & Co. Inc., as Joint Advisors, Joint Lead Arrangers and Joint Book Runners, Wells Fargo Bank, N.A., as Lead Arranger, Société Générale, Deutsche Bank Securities Inc., and Wells Fargo Bank, N.A., as Joint Documentation Agents, Bear Stearns Corporate Lending Inc., as Syndication Agent, and Lehman Commercial Paper Inc., as Administrative Agent, is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 17, 2006. (SEC File No. 001-13641).
	10.4	Third Amendment, dated as of November 17, 2006, to the Second Amended and Restated Credit Agreement dated as of December 14, 2005 (as amended by that First Amendment to the Second Amended and Restated Credit Agreement, dated December 22, 2005 and that Second Amendment to the Second Amended and Restated Credit Agreement, dated as of October 11, 2006), among Pinnacle Entertainment, Inc., the Lenders referred to therein, Lehman Brothers Inc., and Bear, Stearns, & Co. Inc., as Joint Advisors, Joint Lead Arrangers and joint Book Runners, Wells Fargo Bank, N.A., as Lead Arranger, Société Générale, Deutsche Bank Securities Inc., and Wells Fargo Bank, N.A., as Joint Documentation Agents, Bear Stearns Corporate Lending Inc., as Syndication Agent, and Lehman Commercial Paper Inc., as Administrative Agent, is hereby incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on November 22, 2006. (SEC File No. 001-13641).
	10.5	Fourth Amendment to Second Amended and Restated Credit Agreement, dated as of July 21, 2009, by and between Pinnacle Entertainment, Inc., Lehman Commercial Paper Inc., as the administrative agent, and the Required Lenders is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 24, 2009. (SEC File No. 001-13641).
	10.6	Amendment, Resignation, Waiver, Consent and Appointment Agreement, dated as of July 24, 2009, by and between Pinnacle Entertainment, Inc., Lehman Commercial Paper Inc. and Barclays Bank PLC is hereby incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on August 4, 2009. (SEC File No. 001-13641).
	10.7	Third Amended and Restated Credit Agreement, dated as of February 5, 2010, among Pinnacle Entertainment, Inc., the Lenders referred to therein, Banc of America Securities LLC and JPMorgan Securities Inc., as Joint Lead Arrangers and Joint Book Runners, Bank of America, N.A., JPMorgan Chase Bank, N.A., Calyon New York Branch, Deutsche Bank Trust Company Americas and UBS Securities LLC, as Syndication Agents, Capital One National Association, as the Documentation Agent, and Barclays Bank PLC as the Administrative Agent is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 8, 2010. (SEC File No. 001-13641).

99

Exhibit
Number			Description of Exhibit
	10.8	†	Second Amendment and Restatement of the Pinnacle Entertainment, Inc. Executive Deferred Compensation Plan, effective December 30, 2007 is hereby incorporated by reference to Exhibit 10.6 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007. (SEC File No. 001-13641).
	10.9	*†	Summary of Director Compensation
	10.10	†	Third Amended and Restated Employment Agreement, dated December 22, 2008, between Pinnacle Entertainment, Inc. and Daniel R. Lee is hereby incorporated by reference to Exhibit 10.9 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008. (SEC File No. 001-13641).
	10.11	†	Separation Agreement dated as of November 7, 2009 between Pinnacle Entertainment, Inc. and Daniel R. Lee is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 12, 2009. (SEC File No. 001-13641).
	10.12	†	Amended and Restated Employment Agreement dated December 22, 2008 between Pinnacle Entertainment, Inc. and Stephen H. Capp is hereby incorporated by reference to Exhibit 10.10 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008. (SEC File No. 001-13641).
	10.13	†	Amended and Restated Employment Agreement dated December 22, 2008 between Pinnacle Entertainment, Inc. and John A. Godfrey is hereby incorporated by reference to Exhibit 10.11 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008. (SEC File No. 001-13641).
	10.14	†	Amended and Restated Employment Agreement dated December 22, 2008 between Pinnacle Entertainment, Inc. and Carlos Ruisanchez is hereby incorporated by reference to Exhibit 10.12 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008. (SEC File No. 001-13641).
	10.15	†	Amended and Restated Employment Agreement dated December 22, 2008 between Pinnacle Entertainment, Inc. and Alain Uboldi is hereby incorporated by reference to Exhibit 10.13 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008. (SEC File No. 001-13641).
	10.16	*†	Amended and Restated Employment Agreement dated December 22, 2008 between Pinnacle Entertainment, Inc. and Clifford D. Kortman
	10.17	*†	First Amendment to Amended and Restated Employment Agreement dated December 18, 2009 between Pinnacle Entertainment, Inc. and Clifford D. Kortman
	10.18	†	Employment Agreement dated October 6, 2006 between Pinnacle Entertainment, Inc. and Wade W. Hundley is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 12, 2006. (SEC File No. 001-13641).
	10.19	†	Separation Agreement and General Release dated as of June 5, 2008 by and among Pinnacle Entertainment, Inc. and Wade W. Hundley is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 6, 2008. (SEC File No. 001-13641).
	10.20		Form of Lease by and between the Webster Family Limited Partnership and the Diuguid Family Limited Partnership and Pinnacle Gaming Development Corp. (executed by the parties on December 11, 1998 and subsequently assigned by Pinnacle Gaming Development Corp. to Belterra Resort Indiana, LLC), is hereby incorporated by reference to Exhibit B contained in Exhibit 10.47 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1998. (SEC File No. 001-13641).

100

Exhibit
Number		Description of Exhibit
	10.21	Form of Lease by and between Daniel Webster, Marsha S. Webster, William G. Diuguid, Sara T. Diuguid, J.R. Showers, III and Carol A. Showers, and Pinnacle Gaming Development Corp. (executed by the parties on December 11, 1998 and subsequently assigned by Pinnacle Gaming Corp. to Belterra Resort Indiana, LLC), is hereby incorporated by reference to Exhibit B contained in Exhibit 10.51 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 1998. (SEC File No. 001-13641).
	10.22	Commercial Lease dated September 9, 1996 by and between State of Louisiana, State Land Office and PNK (Bossier City), Inc. (f/k/a Casino Magic of Louisiana, Corp.), is hereby incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2003. (SEC File No. 001-13641).
	10.23	Ground Lease Agreement dated as of August 21, 2003 by and between PNK (LAKE CHARLES), L.L.C., and Lake Charles Harbor & Terminal District, is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 19, 2003. (SEC File No. 001-13641).
	10.24	Addendum Number One dated as of July 5, 2005 to Memorandum of Lease dated August 21, 2003, by and between PNK (LAKE CHARLES) L.L.C. and Lake Charles Harbor & Terminal District is hereby incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2005. (SEC File No. 001-013641).
	10.25	Ground Lease Agreement, effective as of August 1, 2007, by and between PNK (LAKE CHARLES), L.L.C. and Lake Charles Harbor & Terminal District is hereby incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on November 30, 2007. (SEC File No. 001-13641).
	10.26	Guaranty Agreement, effective as of August 1, 2007, by and between Pinnacle Entertainment, Inc. and Lake Charles Harbor & Terminal District is hereby incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on November 30, 2007. (SEC File No. 001-13641).
	10.27	Redevelopment Agreement dated as of April 22, 2004 by and between the Land Clearance for Redevelopment Authority of the City of St. Louis and Pinnacle Entertainment, Inc. is hereby incorporated by reference to Exhibit 10.43 to the Company’s Amendment No. 1 to Registration Statement on Form S-4 filed on June 7, 2004. (SEC File No. 333-115557).
	10.28	First Amendment to Redevelopment Agreement and First Amendment to Option For Ground Lease dated as of December 23, 2004 by and between the Land Clearance for Redevelopment Authority of the City of St. Louis and Pinnacle Entertainment, Inc. is hereby incorporated by reference to Exhibit 10.51 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005. (SEC File No. 001-13641).
	10.29	Second Amendment to Redevelopment Agreement dated as of July 21, 2005 by and between the Land Clearance for Redevelopment Authority of the City of St. Louis and Pinnacle Entertainment, Inc. is hereby incorporated by reference to Exhibit 10.52 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005. (SEC File No. 001-13641).
	10.30	Third Amendment to the Redevelopment Agreement dated August 21, 2006 by and between Land Clearance for Redevelopment Authority of the City of St. Louis and Pinnacle Entertainment, Inc. is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 24, 2006. (SEC File No. 001-13641).
	10.31	Lease and Development Agreement dated as of August 12, 2004 by and between the St. Louis County Port Authority and Pinnacle Entertainment, Inc. is hereby incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2004. (SEC File No. 001-13641).
	10.32	Letter Agreement dated as of August 12, 2004 by and between the St. Louis County Port Authority and Pinnacle Entertainment, Inc. is hereby incorporated by reference to Exhibit 10.54 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005. (SEC File No. 001-13641).

101

Exhibit
Number		Description of Exhibit
	10.33	Second Amendment to Lease and Development Agreement dated as of October 7, 2005 by and between St. Louis County Port Authority and Pinnacle Entertainment, Inc. is hereby incorporated by reference to Exhibit 10.55 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005. (SEC File No. 001-13641).
	10.34	Third Amendment to Lease and Development Agreement dated as of August 11, 2006 by and between the St. Louis County Port Authority and Pinnacle Entertainment, Inc. is hereby incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2006. (SEC File No. 001-13641).
	10.35	Fourth Amendment to Lease and Development Agreement dated as of January 18, 2007 by and between the St. Louis County Port Authority and Pinnacle Entertainment, Inc. is hereby incorporated by reference to Exhibit 10.38 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006. (SEC File No. 001-13641).
	10.36	Fifth Amendment to Lease and Development Agreement dated as of March 30, 2007 by and between St. Louis County Port Authority and Pinnacle Entertainment, Inc. is hereby incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2007. (SEC File No. 001-13641).
	10.37	Sixth Amendment to Lease and Development Agreement dated November 26, 2007 by and between the St. Louis County Port Authority and Pinnacle Entertainment, Inc. is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 30, 2007. (SEC File No. 001-13641).
	10.38	Seventh Amendment to Lease and Development Agreement dated February 19, 2010 by and between the St. Louis County Port Authority and Pinnacle Entertainment, Inc. is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 22, 2010. (SEC File No. 001-13641).
	10.39	Indemnification Trust Agreement dated as of August 16, 2005 by and between Pinnacle Entertainment, Inc. and Wilmington Trust Company and, as an additional party, Bruce Leslie, as Beneficiaries’ Representative, is hereby incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2005. (SEC File No. 001-13641).
	10.40	Exercising of Option to Lease Additional Property situated in Calcasieu Parish, Louisiana and Exercise of Option to Lease Additional Property is hereby incorporated by reference to Exhibit 10.64 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006. (SEC File No. 001-13641).
	10.42	Standard Form of Agreement, dated November 27, 2007, between PNK (SCB), L.L.C. and Manhattan Construction Company is hereby incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on November 30, 2007. (SEC File No. 001-13641).
	10.43	Purchase Agreement, dated as of July 27, 2009, by and among Pinnacle Entertainment, Inc. and J.P. Morgan Securities Inc., Banc of America Securities LLC, Barclays Capital Inc., Deutsche Bank Securities Inc., as representatives of the several Initial Purchasers named in Schedule 1 of the Purchase Agreement is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 31, 2009. (SEC File No. 001-13641).
	10.44	Settlement Agreement, dated May 9, 2008, between Pinnacle Entertainment, Inc. and Allianz Global Risks US Insurance Company is hereby incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2008. (SEC File No. 001-13641).
	10.45	Settlement Agreement, dated February 22, 2008, between Pinnacle Entertainment, Inc. and Arch Specialty Insurance Company is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 26, 2008. (SEC File No. 001-13641).

102

Exhibit
Number			Description of Exhibit
	10.46		Settlement Agreement and Mutual Release, effective February 3, 2010, between Pinnacle Entertainment, Inc. and RSUI Indemnity Company is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 10, 2010. (SEC File No. 001-13641).
	10.47		Memorandum of Understanding, effective February 3, 2010, between Pinnacle Entertainment, Inc. and RSUI Indemnity Company is hereby incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on February 8, 2010. (SEC File No. 001-13641).
	10.48	*†	Summary of Compensatory Arrangement between Pinnacle Entertainment, Inc. and John V. Giovenco.
	10.49		Agreement for Guaranteed Maximum Price Construction Services, dated August 8, 2008, between Casino One Corporation and Yates/Paric, a Joint Venture is hereby incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2008. (SEC File No. 001-13641).
	10.50	†	Pinnacle Entertainment, Inc. Executive Health Expense Plan is hereby incorporated by reference to Exhibit 10.45 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008. (SEC File No. 001-13641).
	10.51	†	Pinnacle Entertainment, Inc. Director Health and Medical Insurance Plan is hereby incorporated by reference to Exhibit 10.47 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008. (SEC File No. 001-13641).
	10.52	†	2008 Amended and Restated Pinnacle Entertainment, Inc. Directors Deferred Compensation Plan is hereby incorporated by reference to Exhibit 10.48 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008. (SEC File No. 001-13641).
	10.53	†	First Amendment to the Second Amendment and Restatement of the Pinnacle Entertainment, Inc. Executive Deferred Compensation Plan, effective December 24, 2008 is hereby incorporated by reference to Exhibit 10.49 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008. (SEC File No. 001-13641).
	10.54	*†	Form of Amendment to Stock Option Agreements for Directors
	10.55	*†	Form of Amendment to Stock Option Agreements and Employment Agreements for Executive Officers
	10.56	*†	Amendment to Separation Agreement, effective February 11, 2010, between Pinnacle Entertainment, Inc. and Daniel R. Lee
	16.1		Letter of Deloitte & Touche LLP regarding change in principal independent public accounting firm is hereby incorporated by reference to Exhibit 16.1 to the Company’s Current Report on Form 8-K/A filed on May 13, 2009. (SEC File No. 001-13641).
	16.2		Letter of Deloitte & Touche LLP regarding change in principal independent public accounting firm is hereby incorporated by reference to Exhibit 16.1 to the Company’s Current Report on Form 8-K/A filed on April 30, 2009. (SEC File No. 001-13641).
	11*		Statement re: Computation of Per Share Earnings.
	12*		Computation of Ratio of Earnings to Fixed Charges.
	21*		Subsidiaries of Pinnacle Entertainment, Inc.
	23.1*		Consent of Ernst & Young LLP.
	23.2*		Consent of Deloitte & Touche LLP.

103

Exhibit
Number			Description of Exhibit
	31.1	*	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
	31.2	*	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
	32*	*	Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer.
	99.1	*	Government Regulations and Gaming Issues.
	99.2		Preliminary Order for Disciplinary Action, dated January 27, 2010, of the Missouri Gaming Commission is hereby incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on January 29, 2010. (SEC File No. 001-13641).
	99.3		Letter dated January 20, 2010 from the Executive Director of the Missouri Gaming Commission is hereby incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on January 25, 2010. (SEC File No. 001-13641).
	99.4	*	Form of Power of Attorney for the Designation and Appointment of a Trustee For the Purposes of Conducting Casino Gambling Operations as required by the Indiana Gaming Commission.

*	Filed herewith.
**	Furnished herewith.
†	Management contract or compensatory plan or arrangement.

104

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.

	PINNACLE ENTERTAINMENT, INC. (Registrant)
Dated: February 26, 2010	By:	/s/ John V. Giovenco
		John V. Giovenco
		Interim Chief Executive Officer

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

By:	/s/ John V. Giovenco John V. Giovenco	Dated: February 26, 2010
	Interim Chief Executive Officer and Director
	(Principal Executive Officer)
By:	/s/ Stephen H. Capp Stephen H. Capp	Dated: February 26, 2010
	Executive Vice President and Chief Financial Officer
	(Principal Financial and Accounting Officer)
By:	/s/ Stephen C. Comer	Dated: February 26, 2010
	Stephen C. Comer
	Director
By:	/s/ Richard J. Goeglein	Dated: February 26, 2010
	Richard J. Goeglein
	Director
By:	/s/ Ellis Landau	Dated: February 26, 2010
	Ellis Landau
	Director
By:	/s/ Bruce A. Leslie	Dated: February 26, 2010
	Bruce A. Leslie
	Director
By:	/s/ James L. Martineau	Dated: February 26, 2010
	James L. Martineau
	Director
By:	/s/ Michael Ornest	Dated: February 26, 2010
	Michael Ornest
	Director
By:	/s/ Lynn P. Reitnouer	Dated: February 26, 2010
	Lynn P. Reitnouer
	Director

105

PINNACLE ENTERTAINMENT, INC.

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

For the years ended December 31, 2007, 2008 and 2009
(in thousands)

	As of		2007					As of		2008					As of		2009					As of
Reserve Description	1/1/07		Additions		Deductions			12/31/07		Additions		Deductions			12/31/08		Additions		Deductions			12/31/09
Allowance for doubtful accounts	$	8,979	$	4,553	$	(2,067	)	$	11,465	$	4,074	$	(3,691	)	$	11,848	$	2,496	$	(3,559	)	$	10,785

106

PINNACLE ENTERTAINMENT, INC.

EXHIBIT INDEX

Exhibit
Number			Description of Exhibit
	3.1		Restated Certificate of Incorporation of Pinnacle Entertainment, Inc., as amended, is hereby incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K filed on May 9, 2005. (SEC File No. 001-13641).
	3.2		Restated Bylaws of Pinnacle Entertainment, Inc. as of January 13, 2010, are hereby incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on January 19, 2010. (SEC File No. 001-13641).
	4.1	†	Pinnacle Entertainment, Inc. 2001 Stock Option Plan is hereby incorporated by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-8 filed on June 6, 2001. (SEC File No. 333-62378).
	4.2	†	Form of First Amendment to Pinnacle Entertainment, Inc. 2001 Stock Option Plan is hereby incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K filed on January 30, 2004. (SEC File No. 001-13641).
	4.3	†	Form of Stock Option Agreement for Pinnacle Entertainment, Inc. 2001 Stock Option Plan is hereby incorporated by reference to Exhibit 4.5 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004. (SEC File No. 001-13641).
	4.4	†	Pinnacle Entertainment, Inc. 2002 Stock Option Plan is hereby incorporated by reference to Exhibit 4.4 to the Company’s Registration Statement on Form S-8 filed on July 16, 2003. (SEC File No. 333-107081).
	4.5	†	First Amendment to Pinnacle Entertainment, Inc. 2002 Stock Option Plan is hereby incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S-8 filed on July 16, 2003. (SEC File No. 333-107081).
	4.6	†	Second Amendment to Pinnacle Entertainment, Inc. 2002 Stock Option Plan is hereby incorporated by reference to Exhibit 4.6 to the Company’s Registration Statement on Form S-8 filed on July 16, 2003. (SEC File No. 333-107081).
	4.7	†	Form of Stock Option Agreement for Pinnacle Entertainment, Inc. 2002 Stock Option Plan is hereby incorporated by reference to Exhibit 4.10 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004. (SEC File No. 001-13641).
	4.8	†	Pinnacle Entertainment, Inc. 2005 Equity and Performance Incentive Plan, As Amended is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 27, 2008. (SEC File No. 001-13641).
	4.9	†	Amendment to Pinnacle Entertainment, Inc. 2005 Equity And Performance Incentive Plan, As Amended is hereby incorporated by reference to Exhibit 4.12 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008. (SEC File No. 001-13641).
	4.10	†	Form of Restricted Stock Agreement and Form of Restricted Stock Grant Notice for 2005 Equity and Performance Incentive Plan of Pinnacle Entertainment, Inc. is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 6, 2006. (SEC File No. 001-13641).
	4.11	†	Form of Stock Option Grant Notice and Form of Stock Option Agreement for the Pinnacle Entertainment, Inc. 2005 Equity and Performance Incentive Plan, As Amended is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 15, 2008. (SEC File No. 001-13641).
	4.12	†	Form of Grant of Other Stock Unit Awards for the Pinnacle Entertainment, Inc. 2005 Equity and Performance Incentive Plan, As Amended is hereby incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on December 15, 2008. (SEC File No. 001-13641).

107

Exhibit
Number			Description of Exhibit
	4.13	†	Form of Director Stock Option Grant Notice and Form of Director Stock Option Agreement for the Pinnacle Entertainment, Inc. 2005 Equity and Performance Incentive Plan, As Amended is hereby incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on February 10, 2010. (SEC File No. 001-13641).
	4.14	†	Nonqualified Stock Option Agreement dated as of January 11, 2003 by and between Pinnacle Entertainment, Inc. and Stephen H. Capp is hereby incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S-8 filed on July 16, 2003. (SEC File No. 333-107081).
	4.15	†	Nonqualified Stock Option Agreement dated as of April 10, 2002 by and between Pinnacle Entertainment, Inc. and Daniel R. Lee is hereby incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2002. (SEC File No. 001-13641).
	4.16	†	Nonqualified Stock Option Agreement dated as of April 10, 2002 by and between Pinnacle Entertainment, Inc. and Daniel R. Lee is hereby incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2002. (SEC File No. 001-13641).
	4.17	†	Nonqualified Stock Option Agreement dated as of August 1, 2008 by and between Pinnacle Entertainment, Inc. and Carlos Ruisanchez is hereby incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2008. (SEC File No. 001-13641).
	4.18		Indenture dated as of March 15, 2004, governing the 8.25% Senior Subordinated Notes due 2012, by and among Pinnacle Entertainment, Inc., the guarantors identified therein and The Bank of New York is hereby incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 30, 2004. (SEC File No. 001-13641).
	4.19		First Supplemental Indenture, dated as of December 3, 2004, governing the 8.25% Senior Subordinated Notes due 2012, by and among Pinnacle Entertainment, Inc., the guarantors identified therein and The Bank of New York is hereby incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on December 7, 2004. (SEC File No. 001-13641).
	4.20		Second Supplemental Indenture, dated as of October 19, 2005, governing the 8.25% Senior Subordinated Notes due 2012, by and among Pinnacle Entertainment, Inc., the guarantors identified therein and The Bank of New York Trust Company, N.A., is hereby incorporated by reference to Exhibit 4.23 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006. (SEC File No. 001-13641).
	4.21		Third Supplemental Indenture, dated as of November 17, 2006, governing the 8.25% Senior Subordinated Notes due 2012, by and among Pinnacle Entertainment, Inc., the guarantors identified therein and The Bank of New York Trust Company, N.A., is hereby incorporated by reference to Exhibit 4.24 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006. (SEC File No. 001-13641).
	4.22		Fourth Supplemental Indenture, dated as of January 30, 2007, governing the 8.25% Senior Subordinated Notes due 2012, by and among Pinnacle Entertainment, Inc., the guarantors identified therein and The Bank of New York Trust Company, N.A., is hereby incorporated by reference to Exhibit 4.25 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006. (SEC File No. 001-13641).
	4.23		Fifth Supplemental Indenture, dated as of May 29, 2007, governing the 8.25% Senior Subordinated Notes due 2012, by and among Pinnacle Entertainment, Inc., the guarantors identified therein and The Bank of New York Trust Company, N.A., is hereby incorporated by reference to Exhibit 4.25 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007. (SEC File No. 001-13641).

108

Exhibit
Number			Description of Exhibit
	4.24		Sixth Supplemental Indenture, dated as of June 7, 2007, governing the 8.25% Senior Subordinated Notes due 2012, by and among Pinnacle Entertainment, Inc., the guarantors identified therein and The Bank of New York Trust Company, N.A., is hereby incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2007. (SEC File No. 001-13641).
	4.25		Seventh Supplemental Indenture, dated as of July 16, 2009, governing the 8.25% Senior Subordinated Notes due 2012, by and among Pinnacle Entertainment, Inc., the guarantors identified therein and The Bank of New York Mellon Trust Company, N.A., is hereby incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q filed on August 4, 2009. (SEC File No. 001-13641).
	4.26	*	Eighth Supplemental Indenture, dated as of February 5, 2010, governing the 8.25% Senior Subordinated Notes due 2012, by and among Pinnacle Entertainment, Inc., the guarantors identified therein and The Bank of New York Mellon Trust Company, N.A.
	4.27		Form of 8.25% Senior Subordinated Note due 2012 is hereby incorporated by reference to Exhibit A contained in Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 30, 2004. (SEC File No. 001-13641).
	4.28		Indenture dated as of June 8, 2007, governing the 7.50% Senior Subordinated Notes due 2015, by and among Pinnacle Entertainment, Inc., the guarantors identified therein and The Bank of New York Trust Company is hereby incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on June 11, 2007. (SEC File No. 001-13641).
	4.29		First Supplemental Indenture, dated as of July 16, 2009, governing the 7.50% Senior Subordinated Notes due 2015, by and among Pinnacle Entertainment, Inc., the guarantors identified therein and The Bank of New York Mellon Trust Company, N.A., is hereby incorporated by reference to Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q filed on August 4, 2009. (SEC File No. 001-13641).
	4.30	*	Second Supplemental Indenture, dated as of February 5, 2010, governing the 7.50% Senior Subordinated Notes due 2015, by and among Pinnacle Entertainment, Inc., the guarantors identified therein and The Bank of New York Mellon Trust Company, N.A.
	4.31		Form of 7.50% Senior Subordinated Note due 2015 is hereby incorporated by reference to Exhibit A contained in Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on June 11, 2007. (SEC File No. 001-13641).
	4.32		Indenture dated as of August 10, 2009, governing the 8.625% Senior Notes due 2017, by and among the Company, the guarantors identified therein and The Bank of New York Mellon Trust Company, N.A. is hereby incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on August 13, 2009. (SEC File No. 001-13641).
	4.33	*	First Supplemental Indenture, dated as of February 5, 2010, governing the 8.625% Senior Notes due 2017, by and among Pinnacle Entertainment, Inc., the guarantors identified therein and The Bank of New York Mellon Trust Company, N.A.
	4.34		Form of 8.625% Senior Note due 2017 is hereby incorporated by reference to Exhibit A contained in Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on August 13, 2009. (SEC File No. 001-13641).
	4.35		Registration Rights Agreement, dated as of August 10, 2009, among the Company, the guarantors identified therein and J.P. Morgan Securities Inc., Banc of America Securities LLC, Barclays Capital Inc., Deutsche Bank Securities Inc. as representatives of the several initial purchasers is hereby incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on August 13, 2009. (SEC File No. 001-13641).

109

Exhibit
Number		Description of Exhibit
	10.1	Second Amended and Restated Credit Agreement, dated as of December 14, 2005, among Pinnacle Entertainment, Inc., the Lenders referred to therein, Lehman Brothers Inc., and Bear, Stearns & Co. Inc., as Joint Advisors, Joint Lead Arrangers and Joint Book Runners, Wells Fargo, N.A., as Lead Arranger, Société Générale, Deutsche Bank Securities Inc., and Wells Fargo Bank, N.A., as Joint Documentation Agents, Bear Stearns Corporate Lending Inc., as Syndication Agent, and Lehman Commercial Paper Inc., as Administrative Agent, is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 20, 2005. (SEC File No. 001-13641).
	10.2	First Amendment dated as of December 22, 2005, to the Second Amended and Restated Credit Agreement, dated as of December 14, 2005, among Pinnacle Entertainment, Inc., the Lenders referred to therein, Lehman Brothers Inc., and Bear, Stearns & Co. Inc., as Joint Advisors, Joint Lead Arrangers and Joint Book Runners, Wells Fargo, N.A., as Lead Arranger, Société Générale, Deutsche Bank Securities Inc., and Wells Fargo Bank, N.A., as Joint Documentation Agents, Bear Stearns Corporate Lending Inc., as Syndication Agent, and Lehman Commercial Paper Inc., as Administrative Agent, is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 23, 2005. (SEC File No. 001-13641).
	10.3	Second Amendment, dated as of October 11, 2006, to the Second Amended and Restated Credit Agreement dated as of December 14, 2005 (as amended by that First Amendment to the Second Amended and Restated Credit Agreement, dated December 22, 2005), among Pinnacle Entertainment, Inc., the Lenders referred to therein, Lehman Brothers Inc., and Bear, Stearns & Co. Inc., as Joint Advisors, Joint Lead Arrangers and Joint Book Runners, Wells Fargo Bank, N.A., as Lead Arranger, Société Générale, Deutsche Bank Securities Inc., and Wells Fargo Bank, N.A., as Joint Documentation Agents, Bear Stearns Corporate Lending Inc., as Syndication Agent, and Lehman Commercial Paper Inc., as Administrative Agent, is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 17, 2006. (SEC File No. 001-13641).
	10.4	Third Amendment, dated as of November 17, 2006, to the Second Amended and Restated Credit Agreement dated as of December 14, 2005 (as amended by that First Amendment to the Second Amended and Restated Credit Agreement, dated December 22, 2005 and that Second Amendment to the Second Amended and Restated Credit Agreement, dated as of October 11, 2006), among Pinnacle Entertainment, Inc., the Lenders referred to therein, Lehman Brothers Inc., and Bear, Stearns, & Co. Inc., as Joint Advisors, Joint Lead Arrangers and joint Book Runners, Wells Fargo Bank, N.A., as Lead Arranger, Société Générale, Deutsche Bank Securities Inc., and Wells Fargo Bank, N.A., as Joint Documentation Agents, Bear Stearns Corporate Lending Inc., as Syndication Agent, and Lehman Commercial Paper Inc., as Administrative Agent, is hereby incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on November 22, 2006. (SEC File No. 001-13641).
	10.5	Fourth Amendment to Second Amended and Restated Credit Agreement, dated as of July 21, 2009, by and between Pinnacle Entertainment, Inc., Lehman Commercial Paper Inc., as the administrative agent, and the Required Lenders is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 24, 2009. (SEC File No. 001-13641).
	10.6	Amendment, Resignation, Waiver, Consent and Appointment Agreement, dated as of July 24, 2009, by and between Pinnacle Entertainment, Inc., Lehman Commercial Paper Inc. and Barclays Bank PLC is hereby incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on August 4, 2009. (SEC File No. 001-13641).
	10.7	Third Amended and Restated Credit Agreement, dated as of February 5, 2010, among Pinnacle Entertainment, Inc., the Lenders referred to therein, Banc of America Securities LLC and JPMorgan Securities Inc., as Joint Lead Arrangers and Joint Book Runners, Bank of America, N.A., JPMorgan Chase Bank, N.A., Calyon New York Branch, Deutsche Bank Trust Company Americas and UBS Securities LLC, as Syndication Agents, Capital One National Association, as the Documentation Agent, and Barclays Bank PLC as the Administrative Agent is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 8, 2010. (SEC File No. 001-13641).

110

Exhibit
Number			Description of Exhibit
	10.8	†	Second Amendment and Restatement of the Pinnacle Entertainment, Inc. Executive Deferred Compensation Plan, effective December 30, 2007 is hereby incorporated by reference to Exhibit 10.6 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007. (SEC File No. 001-13641).
	10.9	*†	Summary of Director Compensation
	10.10	†	Third Amended and Restated Employment Agreement, dated December 22, 2008, between Pinnacle Entertainment, Inc. and Daniel R. Lee is hereby incorporated by reference to Exhibit 10.9 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008. (SEC File No. 001-13641).
	10.11	†	Separation Agreement dated as of November 7, 2009 between Pinnacle Entertainment, Inc. and Daniel R. Lee is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 12, 2009. (SEC File No. 001-13641).
	10.12	†	Amended and Restated Employment Agreement dated December 22, 2008 between Pinnacle Entertainment, Inc. and Stephen H. Capp is hereby incorporated by reference to Exhibit 10.10 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008. (SEC File No. 001-13641).
	10.13	†	Amended and Restated Employment Agreement dated December 22, 2008 between Pinnacle Entertainment, Inc. and John A. Godfrey is hereby incorporated by reference to Exhibit 10.11 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008. (SEC File No. 001-13641).
	10.14	†	Amended and Restated Employment Agreement dated December 22, 2008 between Pinnacle Entertainment, Inc. and Carlos Ruisanchez is hereby incorporated by reference to Exhibit 10.12 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008. (SEC File No. 001-13641).
	10.15	†	Amended and Restated Employment Agreement dated December 22, 2008 between Pinnacle Entertainment, Inc. and Alain Uboldi is hereby incorporated by reference to Exhibit 10.13 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008. (SEC File No. 001-13641).
	10.16	*†	Amended and Restated Employment Agreement dated December 22, 2008 between Pinnacle Entertainment, Inc. and Clifford D. Kortman
	10.17	*†	First Amendment to Amended and Restated Employment Agreement dated December 18, 2009 between Pinnacle Entertainment, Inc. and Clifford D. Kortman
	10.18	†	Employment Agreement dated October 6, 2006 between Pinnacle Entertainment, Inc. and Wade W. Hundley is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 12, 2006. (SEC File No. 001-13641).
	10.19	†	Separation Agreement and General Release dated as of June 5, 2008 by and among Pinnacle Entertainment, Inc. and Wade W. Hundley is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 6, 2008. (SEC File No. 001-13641).
	10.20		Form of Lease by and between the Webster Family Limited Partnership and the Diuguid Family Limited Partnership and Pinnacle Gaming Development Corp. (executed by the parties on December 11, 1998 and subsequently assigned by Pinnacle Gaming Development Corp. to Belterra Resort Indiana, LLC), is hereby incorporated by reference to Exhibit B contained in Exhibit 10.47 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1998. (SEC File No. 001-13641).

111

Exhibit
Number		Description of Exhibit
	10.21	Form of Lease by and between Daniel Webster, Marsha S. Webster, William G. Diuguid, Sara T. Diuguid, J.R. Showers, III and Carol A. Showers, and Pinnacle Gaming Development Corp. (executed by the parties on December 11, 1998 and subsequently assigned by Pinnacle Gaming Corp. to Belterra Resort Indiana, LLC), is hereby incorporated by reference to Exhibit B contained in Exhibit 10.51 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 1998. (SEC File No. 001-13641).
	10.22	Commercial Lease dated September 9, 1996 by and between State of Louisiana, State Land Office and PNK (Bossier City), Inc. (f/k/a Casino Magic of Louisiana, Corp.), is hereby incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2003. (SEC File No. 001-13641).
	10.23	Ground Lease Agreement dated as of August 21, 2003 by and between PNK (LAKE CHARLES), L.L.C., and Lake Charles Harbor & Terminal District, is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 19, 2003. (SEC File No. 001-13641).
	10.24	Addendum Number One dated as of July 5, 2005 to Memorandum of Lease dated August 21, 2003, by and between PNK (LAKE CHARLES) L.L.C. and Lake Charles Harbor & Terminal District is hereby incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2005. (SEC File No. 001-013641).
	10.25	Ground Lease Agreement, effective as of August 1, 2007, by and between PNK (LAKE CHARLES), L.L.C. and Lake Charles Harbor & Terminal District is hereby incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on November 30, 2007. (SEC File No. 001-13641).
	10.26	Guaranty Agreement, effective as of August 1, 2007, by and between Pinnacle Entertainment, Inc. and Lake Charles Harbor & Terminal District is hereby incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on November 30, 2007. (SEC File No. 001-13641).
	10.27	Redevelopment Agreement dated as of April 22, 2004 by and between the Land Clearance for Redevelopment Authority of the City of St. Louis and Pinnacle Entertainment, Inc. is hereby incorporated by reference to Exhibit 10.43 to the Company’s Amendment No. 1 to Registration Statement on Form S-4 filed on June 7, 2004. (SEC File No. 333-115557).
	10.28	First Amendment to Redevelopment Agreement and First Amendment to Option For Ground Lease dated as of December 23, 2004 by and between the Land Clearance for Redevelopment Authority of the City of St. Louis and Pinnacle Entertainment, Inc. is hereby incorporated by reference to Exhibit 10.51 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005. (SEC File No. 001-13641).
	10.29	Second Amendment to Redevelopment Agreement dated as of July 21, 2005 by and between the Land Clearance for Redevelopment Authority of the City of St. Louis and Pinnacle Entertainment, Inc. is hereby incorporated by reference to Exhibit 10.52 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005. (SEC File No. 001-13641).
	10.30	Third Amendment to the Redevelopment Agreement dated August 21, 2006 by and between Land Clearance for Redevelopment Authority of the City of St. Louis and Pinnacle Entertainment, Inc. is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 24, 2006. (SEC File No. 001-13641).
	10.31	Lease and Development Agreement dated as of August 12, 2004 by and between the St. Louis County Port Authority and Pinnacle Entertainment, Inc. is hereby incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2004. (SEC File No. 001-13641).

112

Exhibit
Number		Description of Exhibit
	10.32	Letter Agreement dated as of August 12, 2004 by and between the St. Louis County Port Authority and Pinnacle Entertainment, Inc. is hereby incorporated by reference to Exhibit 10.54 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005. (SEC File No. 001-13641).
	10.33	Second Amendment to Lease and Development Agreement dated as of October 7, 2005 by and between St. Louis County Port Authority and Pinnacle Entertainment, Inc. is hereby incorporated by reference to Exhibit 10.55 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005. (SEC File No. 001-13641).
	10.34	Third Amendment to Lease and Development Agreement dated as of August 11, 2006 by and between the St. Louis County Port Authority and Pinnacle Entertainment, Inc. is hereby incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2006. (SEC File No. 001-13641).
	10.35	Fourth Amendment to Lease and Development Agreement dated as of January 18, 2007 by and between the St. Louis County Port Authority and Pinnacle Entertainment, Inc. is hereby incorporated by reference to Exhibit 10.38 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006. (SEC File No. 001-13641).
	10.36	Fifth Amendment to Lease and Development Agreement dated as of March 30, 2007 by and between St. Louis County Port Authority and Pinnacle Entertainment, Inc. is hereby incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2007. (SEC File No. 001-13641).
	10.37	Sixth Amendment to Lease and Development Agreement dated November 26, 2007 by and between the St. Louis County Port Authority and Pinnacle Entertainment, Inc. is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 30, 2007. (SEC File No. 001-13641).
	10.38	Seventh Amendment to Lease and Development Agreement dated February 19, 2010 by and between the St. Louis County Port Authority and Pinnacle Entertainment, Inc. is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 22, 2010. (SEC File No. 001-13641).
	10.39	Indemnification Trust Agreement dated as of August 16, 2005 by and between Pinnacle Entertainment, Inc. and Wilmington Trust Company and, as an additional party, Bruce Leslie, as Beneficiaries’ Representative, is hereby incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2005. (SEC File No. 001-13641).
	10.40	Exercising of Option to Lease Additional Property situated in Calcasieu Parish, Louisiana and Exercise of Option to Lease Additional Property is hereby incorporated by reference to Exhibit 10.64 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006. (SEC File No. 001-13641).
	10.42	Standard Form of Agreement, dated November 27, 2007, between PNK (SCB), L.L.C. and Manhattan Construction Company is hereby incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on November 30, 2007. (SEC File No. 001-13641).
	10.43	Purchase Agreement, dated as of July 27, 2009, by and among Pinnacle Entertainment, Inc. and J.P. Morgan Securities Inc., Banc of America Securities LLC, Barclays Capital Inc., Deutsche Bank Securities Inc., as representatives of the several Initial Purchasers named in Schedule 1 of the Purchase Agreement is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 31, 2009. (SEC File No. 001-13641).
	10.44	Settlement Agreement, dated May 9, 2008, between Pinnacle Entertainment, Inc. and Allianz Global Risks US Insurance Company is hereby incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2008. (SEC File No. 001-13641).

113

Exhibit
Number			Description of Exhibit
	10.45		Settlement Agreement, dated February 22, 2008, between Pinnacle Entertainment, Inc. and Arch Specialty Insurance Company is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 26, 2008. (SEC File No. 001-13641).
	10.46		Settlement Agreement and Mutual Release, effective February 3, 2010, between Pinnacle Entertainment, Inc. and RSUI Indemnity Company is hereby incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 10, 2010. (SEC File No. 001-13641).
	10.47		Memorandum of Understanding, effective February 3, 2010, between Pinnacle Entertainment, Inc. and RSUI Indemnity Company is hereby incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on February 8, 2010. (SEC File No. 001-13641).
	10.48	*†	Summary of Compensatory Arrangement between Pinnacle Entertainment, Inc. and John V. Giovenco.
	10.49		Agreement for Guaranteed Maximum Price Construction Services, dated August 8, 2008, between Casino One Corporation and Yates/Paric, a Joint Venture is hereby incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2008. (SEC File No. 001-13641).
	10.50	†	Pinnacle Entertainment, Inc. Executive Health Expense Plan is hereby incorporated by reference to Exhibit 10.45 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008. (SEC File No. 001-13641).
	10.51	†	Pinnacle Entertainment, Inc. Director Health and Medical Insurance Plan is hereby incorporated by reference to Exhibit 10.47 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008. (SEC File No. 001-13641).
	10.52	†	2008 Amended and Restated Pinnacle Entertainment, Inc. Directors Deferred Compensation Plan is hereby incorporated by reference to Exhibit 10.48 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008. (SEC File No. 001-13641).
	10.53	†	First Amendment to the Second Amendment and Restatement of the Pinnacle Entertainment, Inc. Executive Deferred Compensation Plan, effective December 24, 2008 is hereby incorporated by reference to Exhibit 10.49 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008. (SEC File No. 001-13641).
	10.54	*†	Form of Amendment to Stock Option Agreements for Directors
	10.55	*†	Form of Amendment to Stock Option Agreements and Employment Agreements for Executive Officers
	10.56	*†	Amendment to Separation Agreement, effective February 11, 2010, between Pinnacle Entertainment, Inc. and Daniel R. Lee
	16.1		Letter of Deloitte & Touche LLP regarding change in principal independent public accounting firm is hereby incorporated by reference to Exhibit 16.1 to the Company’s Current Report on Form 8-K/A filed on May 13, 2009. (SEC File No. 001-13641).
	16.2		Letter of Deloitte & Touche LLP regarding change in principal independent public accounting firm is hereby incorporated by reference to Exhibit 16.1 to the Company’s Current Report on Form 8-K/A filed on April 30, 2009. (SEC File No. 001-13641).
	11	*	Statement re: Computation of Per Share Earnings.
	12	*	Computation of Ratio of Earnings to Fixed Charges.
	21	*	Subsidiaries of Pinnacle Entertainment, Inc.
	23.1	*	Consent of Ernst & Young LLP.

114

Exhibit
Number			Description of Exhibit
	23.2	*	Consent of Deloitte & Touche LLP.
	31.1	*	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
	31.2	*	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
	32*	*	Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer.
	99.1	*	Government Regulations and Gaming Issues.
	99.2		Preliminary Order for Disciplinary Action, dated January 27, 2010, of the Missouri Gaming Commission is hereby incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on January 29, 2010. (SEC File No. 001-13641).
	99.3		Letter dated January 20, 2010 from the Executive Director of the Missouri Gaming Commission is hereby incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on January 25, 2010. (SEC File No. 001-13641).
	99.4	*	Form of Power of Attorney for the Designation and Appointment of a Trustee For the Purposes of Conducting Casino Gambling Operations as required by the Indiana Gaming Commission.

*	Filed herewith.
**	Furnished herewith.
†	Management contract or compensatory plan or arrangement.

115

EX-4.26

Exhibit 4.26

EIGHTH SUPPLEMENTAL INDENTURE

Eighth Supplemental Indenture (this “Supplemental Indenture”), dated as of February 5, 2010, among PNK (River City), LLC, a Missouri limited liability company (the “Guarantying Subsidiary”), a direct subsidiary of Pinnacle Entertainment, Inc., a Delaware corporation (the “Company”), the Company, the other Guarantors (as defined in the Indenture referred to herein) and The Bank of New York Mellon Trust Company, N.A., a national banking corporation and successor to The Bank of New York Trust Company, N.A., successor to The Bank of New York, as trustee under the Indenture referred to below (the “Trustee”).

W I T N E S S E T H

WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture, dated as of March 15, 2004, and as amended as of December 3, 2004, and as further amended as of October 19, 2005, and as further amended as of November 17, 2006, and as further amended as of January 30, 2007, and as further amended as of May 29, 2007, and as further amended as of June 7, 2007, and as further amended as of July 16, 2009 (collectively, the “Indenture”), providing for the issuance of 8¹/4% Senior Subordinated Notes due 2012 (the “Notes”);

WHEREAS, the Indenture provides that under certain circumstances the Guarantying Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guarantying Subsidiary shall unconditionally guarantee all of the Company’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein (the “Guaranty”); and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Guarantying Subsidiary and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

1. Capitalized Terms. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

2. Agreement to Guaranty. The Guarantying Subsidiary hereby agrees to provide an unconditional Guaranty on the terms and subject to the conditions set forth in the Guaranty and in the Indenture including but not limited to Article 11 thereof.

3. No Recourse Against Others. No past, present or future director, officer, employee, incorporator, member, partner, stockholder or agent of the Guarantying Subsidiary, as such, shall have any liability for any obligations of the Company or any of the Guarantying Subsidiary under the Notes, any Guaranties, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of the Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the SEC that such a waiver is against public policy.

4. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

5. Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

6. Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.

7. The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guarantying Subsidiary and the Company.

[Signature pages follow]

- 2 -

IN WITNESS WHEREOF, the parties hereto have caused this Eighth Supplemental Indenture to be duly executed as of the date first above written.

ACE GAMING, LLC,
a New Jersey limited liability company
By:	PNK Development 13, LLC,
	a New Jersey limited liability company,
Its:	Sole Member
	By:	Biloxi Casino Corp.,
		a Mississippi corporation
	Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer and Treasurer

AREH MLK LLC,
a Delaware limited liability company
By:	Biloxi Casino Corp.,
	a Mississippi corporation
Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer and Treasurer

MITRE ASSOCIATES LLC,
a Delaware limited liability company
By:	PNK Development 13, LLC,
	a New Jersey limited liability company,
Its:	Sole Member
	By:	Biloxi Casino Corp.,
		a Mississippi corporation
	Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer and Treasurer

- 3 -

PSW PROPERTIES LLC,
a Delaware limited liability company
By:	Biloxi Casino Corp.,
	a Mississippi corporation
Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer and Treasurer

PNK DEVELOPMENT 13, LLC,
a New Jersey limited liability company
	By:	Biloxi Casino Corp.,
		a Mississippi corporation
	Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer and Treasurer

PINNACLE ENTERTAINMENT, INC.,

a Delaware corporation

BILOXI CASINO CORP.,

a Mississippi corporation

CASINO MAGIC CORP.,

a Minnesota corporation

CASINO ONE CORPORATION,

a Mississippi corporation

PNK (BOSSIER CITY), INC.,

a Louisiana corporation

ST. LOUIS CASINO CORP.,

a Missouri corporation

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer and/or Treasurer

- 4 -

BELTERRA RESORT INDIANA, LLC,
a Nevada limited liability company
By:	Pinnacle Entertainment, Inc,
Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

BOOMTOWN, LLC,
a Delaware limited liability company
By:	Pinnacle Entertainment, Inc,
Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

PNK (LAKE CHARLES), L.L.C.,
a Louisiana limited liability company
By:	Pinnacle Entertainment, Inc.,
Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

PNK (RENO), LLC,
a Nevada limited liability company
By:	Pinnacle Entertainment, Inc,
Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

- 5 -

LOUISIANA-I GAMING,
a Louisiana Partnership in Commendam
By:	Boomtown, LLC,
Its:	General Partner
	By:	Pinnacle Entertainment, Inc.,
		its Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

PNK (ES), LLC,
a Delaware limited liability company
By:	Pinnacle Entertainment, Inc.
Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

PNK (ST. LOUIS RE), LLC,
a Delaware limited liability company
By:	Pinnacle Entertainment, Inc.
Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

AREP BOARDWALK PROPERTIES LLC,
a Delaware limited liability company
By:	Biloxi Casino Corp.
its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer and Treasurer

- 6 -

PNK DEVELOPMENT 7, LLC,
a Delaware limited liability company
By:	Pinnacle Entertainment, Inc.
Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

PNK DEVELOPMENT 8, LLC,
a Delaware limited liability company
By:	Pinnacle Entertainment, Inc.
Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

PNK DEVELOPMENT 9, LLC,
a Delaware limited liability company
By:	Pinnacle Entertainment, Inc.
Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

- 7 -

PNK (SCB), L.L.C.,
a Louisiana limited liability company
By:	PNK Development 7, LLC,
Its:	Sole Member
	By:	Pinnacle Entertainment, Inc.
	Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

PNK (BATON ROUGE) PARTNERSHIP,
a Louisiana partnership
By:	PNK Development 8, LLC,
Its:	Managing Partner
	By:	Pinnacle Entertainment, Inc.,
	Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

- 8 -

PNK (CHILE 1), LLC,
a Delaware limited liability company
By:	Pinnacle Entertainment, Inc.,
	a Delaware corporation,
Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

PNK (CHILE 2), LLC,
a Delaware limited liability company
By:	Pinnacle Entertainment, Inc.,
	a Delaware corporation,
Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

PNK (RIVER CITY), LLC,
a Missouri limited liability company
By:	Pinnacle Entertainment, Inc.,
	a Delaware corporation
Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

PNK (STLH), LLC,
a Delaware limited liability company
By:	Pinnacle Entertainment, Inc.,
	a Delaware corporation
Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

- 9 -

PRESIDENT RIVERBOAT CASINO-MISSOURI, INC., a Missouri corporation
By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer and Treasurer
YANKTON INVESTMENTS, LLC, a Nevada limited liability company
By:	/s/ John A. Godfrey
	Name:	John A. Godfrey
	Its: Manager

OGLE HAUS, LLC,
an Indiana limited liability company
By:	Belterra Resorts Indiana, LLC,
	a Nevada limited liability company
Its:	Sole Member
	By:	Pinnacle Entertainment, Inc.,
		a Delaware corporation,
	Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

- 10 -

The Bank of New York Mellon Trust Company, N.A., as Trustee
By:	/s/ Teresa Petta
	Name:	Teresa Petta
	Title:	Vice President

- 11 -

EX-4.30

Exhibit 4.30

SECOND SUPPLEMENTAL INDENTURE

Second Supplemental Indenture (this “Supplemental Indenture”), dated as of February 5, 2010, among PNK (River City), LLC, a Missouri limited liability company (the “Guarantying Subsidiary”), a subsidiary of Pinnacle Entertainment, Inc. (or its permitted successor), a Delaware corporation (the “Company”), the Company, the other Guarantors (as defined in the Indenture referred to herein) and The Bank of New York Mellon Trust Company, N.A., and successor to The Bank of New York Trust Company, N.A., as trustee under the Indenture referred to below (the “Trustee”).

W I T N E S S E T H

WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture (the “Original Indenture”), dated as of June 8, 2007 and as further amended by the First Supplemental Indenture, dated as of July 16, 2009 (together with the Original Indenture, the “Indenture”) providing for the issuance of 7¹/2% Senior Subordinated Notes due 2012 (the “Notes”);

WHEREAS, the Indenture provides that under certain circumstances the Guarantying Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guarantying Subsidiary shall unconditionally guarantee all of the Company’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein (the “Guaranty”); and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Guarantying Subsidiary and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

1. Capitalized Terms. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

2. Agreement to Guaranty. The Guarantying Subsidiary hereby agrees to provide an unconditional Guaranty on the terms and subject to the conditions set forth in the Guaranty and in the Indenture including but not limited to Article 11 thereof.

3. No Recourse Against Others. No past, present or future director, officer, employee, incorporator, stockholder or agent of the Guarantying Subsidiary, as such, shall have any liability for any obligations of the Company or the Guarantying Subsidiary under the Notes, any Guaranties, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of the Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the SEC that such a waiver is against public policy.

4. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

5. Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

6. Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.

7. The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guarantying Subsidiary and the Company.

[Signature pages follow]

- 2 -

IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be duly executed as of the date first above written.

ACE GAMING, LLC,
a New Jersey limited liability company
By:	PNK Development 13, LLC,
	a New Jersey limited liability company,
Its:	Sole Member
	By:	Biloxi Casino Corp.,
		a Mississippi corporation
	Its:	Sole Member
		By:	/s/ Stephen H. Capp Name: Stephen H. Capp
			Title: Chief Financial Officer and Treasurer

AREH MLK LLC,
a Delaware limited liability company
By:	Biloxi Casino Corp.,
	a Mississippi corporation
Its:	Sole Member
	By:	/s/ Stephen H. Capp
		Name: Stephen H. Capp
		Title: Chief Financial Officer and Treasurer

MITRE ASSOCIATES LLC,
a Delaware limited liability company
By:	PNK Development 13, LLC,
	a New Jersey limited liability company,
Its:	Sole Member
	By:	Biloxi Casino Corp.,
		a Mississippi corporation
	Its:	Sole Member
		By:	/s/ Stephen H. Capp Name: Stephen H. Capp
			Title: Chief Financial Officer and Treasurer

- 3 -

PSW PROPERTIES LLC,
a Delaware limited liability company
By:	Biloxi Casino Corp.,
	a Mississippi corporation
Its:	Sole Member
	By:	/s/ Stephen H. Capp
		Name: Stephen H. Capp
		Title: Chief Financial Officer and Treasurer
PNK DEVELOPMENT 13, LLC,
a New Jersey limited liability company
	By:	Biloxi Casino Corp.,
		a Mississippi corporation
	Its:	Sole Member
		By:	/s/ Stephen H. Capp
			Name: Stephen H. Capp
			Title: Chief Financial Officer and Treasurer
PINNACLE ENTERTAINMENT, INC.,
a Delaware corporation
BILOXI CASINO CORP.,
a Mississippi corporation
CASINO MAGIC CORP.,
a Minnesota corporation
CASINO ONE CORPORATION,
a Mississippi corporation
PNK (BOSSIER CITY), INC.,
a Louisiana corporation
ST. LOUIS CASINO CORP.,
a Missouri corporation
By:	/s/ Stephen H. Capp
	Name: Stephen H. Capp
	Title: Chief Financial Officer and/or Treasurer

- 4 -

BELTERRA RESORT INDIANA, LLC,
a Nevada limited liability company
By:	Pinnacle Entertainment, Inc,
Its:	Sole Member
	By:	/s/ Stephen H. Capp Name: Stephen H. Capp
		Title: Chief Financial Officer
BOOMTOWN, LLC,
a Delaware limited liability company
By:	Pinnacle Entertainment, Inc,
Its:	Sole Member
	By:	/s/ Stephen H. Capp Name: Stephen H. Capp
		Title: Chief Financial Officer
PNK (LAKE CHARLES), L.L.C.,
a Louisiana limited liability company
By:	Pinnacle Entertainment, Inc.,
Its:	Sole Member
	By:	/s/ Stephen H. Capp Name: Stephen H. Capp
		Title: Chief Financial Officer
PNK (RENO), LLC,
a Nevada limited liability company
By:	Pinnacle Entertainment, Inc,
Its:	Sole Member
	By:	/s/ Stephen H. Capp
		Name: Stephen H. Capp
		Title: Chief Financial Officer

- 5 -

LOUISIANA-I GAMING, a Louisiana Partnership in Commendam
By:	Boomtown, LLC,
Its:	General Partner
	By:	Pinnacle Entertainment, Inc., its Sole Member
		By:	/s/ Stephen H. Capp Name: Stephen H. Capp
			Title: Chief Financial Officer
PNK (ES), LLC, a Delaware limited liability company
By:	Pinnacle Entertainment, Inc.
Its:	Sole Member
	By:	/s/ Stephen H. Capp
		Name: Stephen H. Capp
		Title: Chief Financial Officer
PNK (ST. LOUIS RE), LLC, a Delaware limited liability company
By:	Pinnacle Entertainment, Inc.
Its:	Sole Member
	By:	/s/ Stephen H. Capp
		Name: Stephen H. Capp
		Title: Chief Financial Officer
AREP BOARDWALK PROPERTIES LLC, a Delaware limited liability company
By:	Biloxi Casino Corp.
its:	Sole Member
	By:	/s/ Stephen H. Capp
		Name: Stephen H. Capp
		Title: Chief Financial Officer and Treasurer

- 6 -

PNK DEVELOPMENT 7, LLC, a Delaware limited liability company
By:	Pinnacle Entertainment, Inc.
Its:	Sole Member
	By:	/s/ Stephen H. Capp
		Name: Stephen H. Capp
		Title: Chief Financial Officer
PNK DEVELOPMENT 8, LLC, a Delaware limited liability company
By:	Pinnacle Entertainment, Inc.
Its:	Sole Member
	By:	/s/ Stephen H. Capp
		Name: Stephen H. Capp
		Title: Chief Financial Officer
PNK DEVELOPMENT 9, LLC, a Delaware limited liability company
By:	Pinnacle Entertainment, Inc.
Its:	Sole Member
	By:	/s/ Stephen H. Capp
		Name: Stephen H. Capp
		Title: Chief Financial Officer

- 7 -

PNK (SCB), L.L.C., a Louisiana limited liability company
By:	PNK Development 7, LLC,
Its:	Sole Member
	By:	Pinnacle Entertainment, Inc.
	Its:	Sole Member
		By:	/s/ Stephen H. Capp
			Name: Stephen H. Capp
			Title: Chief Financial Officer
PNK (BATON ROUGE) PARTNERSHIP, a Louisiana partnership
By:	PNK Development 8, LLC,
Its:	Managing Partner
	By:	Pinnacle Entertainment, Inc.,
	Its:	Sole Member
		By:	/s/ Stephen H. Capp
			Name: Stephen H. Capp
			Title: Chief Financial Officer

- 8 -

PNK (CHILE 1), LLC,
a Delaware limited liability company
By:	Pinnacle Entertainment, Inc.,
	a Delaware corporation,
Its:	Sole Member
	By:	/s/ Stephen H. Capp
		Name: Stephen H. Capp
		Title: Chief Financial Officer
PNK (CHILE 2), LLC,
a Delaware limited liability company
By:	Pinnacle Entertainment, Inc.,
	a Delaware corporation,
Its:	Sole Member
	By:	/s/ Stephen H. Capp
		Name: Stephen H. Capp
		Title: Chief Financial Officer
PNK (RIVER CITY), LLC,
a Missouri limited liability company
By:	Pinnacle Entertainment, Inc.,
	a Delaware corporation
Its:	Sole Member
	By:	/s/ Stephen H. Capp
		Name: Stephen H. Capp
		Title: Chief Financial Officer
PNK (STLH), LLC,
a Delaware limited liability company
By:	Pinnacle Entertainment, Inc.,
	a Delaware corporation
Its:	Sole Member
	By:	/s/ Stephen H. Capp
		Name: Stephen H. Capp
		Title: Chief Financial Officer

- 9 -

PRESIDENT RIVERBOAT CASINO-MISSOURI, INC.,
a Missouri corporation
By:	/s/ Stephen H. Capp
	Name: Stephen H. Capp
	Title: Chief Financial Officer and Treasurer
YANKTON INVESTMENTS, LLC,
a Nevada limited liability company
By:	/s/ John A. Godfrey
	Name: John A. Godfrey
	Its: Manager
OGLE HAUS, LLC,
an Indiana limited liability company
By:	Belterra Resorts Indiana, LLC,
	a Nevada limited liability company
Its:	Sole Member
	By:	Pinnacle Entertainment, Inc.,
		a Delaware corporation,
	Its:	Sole Member
		By:	/s/ Stephen H. Capp
			Name: Stephen H. Capp
			Title: Chief Financial Officer

- 10 -

The Bank of New York Mellon Trust Company, N.A., as Trustee
By:	/s/ Teresa Petta
	Name:	Teresa Petta
	Title:	Vice President

- 11 -

EX-4.33

Exhibit 4.33

FIRST SUPPLEMENTAL INDENTURE

First Supplemental Indenture (this “Supplemental Indenture”), dated as of February 5, 2010, among PNK (River City), LLC (the “Guarantying Subsidiary”), a Missouri limited liability company and a subsidiary of Pinnacle Entertainment, Inc., a Delaware corporation (the “Company”), the Company, the other Guarantors (as defined in the Indenture referred to herein) and The Bank of New York Mellon Trust Company, N.A., as trustee under the Indenture referred to below (the “Trustee”).

W I T N E S S E T H

WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture (the “Indenture”), dated as of August 10, 2009 providing for the issuance of 8.625% Senior Notes due 2017 (the “Notes”);

WHEREAS, the Indenture provides that under certain circumstances the Guarantying Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guarantying Subsidiary shall unconditionally guarantee all of the Company’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein (the “Guaranty”); and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Guarantying Subsidiary and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

1. Capitalized Terms. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

2. Agreement to Guaranty. The Guarantying Subsidiary hereby agrees to provide an unconditional Guaranty on the terms and subject to the conditions set forth in the Guaranty and in the Indenture including but not limited to Article 10 thereof.

4. No Recourse Against Others. No past, present or future director, officer, employee, incorporator, stockholder or agent of the Guarantying Subsidiary, as such, shall have any liability for any obligations of the Company or any Guarantying Subsidiary under the Notes, any Guaranties, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of the Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the SEC that such a waiver is against public policy.

5. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

6. Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

7. Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.

8. The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guarantying Subsidiary and the Company.

[Signature pages follow]

- 2 -

IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed as of the date first above written.

ACE GAMING, LLC,
a New Jersey limited liability company
By:	PNK Development 13, LLC,
	a New Jersey limited liability company,
Its:	Sole Member
	By:	Biloxi Casino Corp.,
		a Mississippi corporation
	Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer and Treasurer

AREH MLK LLC,
a Delaware limited liability company
By:	Biloxi Casino Corp.,
	a Mississippi corporation
Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer and Treasurer

MITRE ASSOCIATES LLC,
a Delaware limited liability company
By:	PNK Development 13, LLC,
	a New Jersey limited liability company,
Its:	Sole Member
	By:	Biloxi Casino Corp.,
		a Mississippi corporation
	Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer and Treasurer

- 3 -

PSW PROPERTIES LLC,
a Delaware limited liability company
By:	Biloxi Casino Corp.,
	a Mississippi corporation
Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer and Treasurer

PNK DEVELOPMENT 13, LLC,
a New Jersey limited liability company
	By:	Biloxi Casino Corp.,
		a Mississippi corporation
	Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer and Treasurer

PINNACLE ENTERTAINMENT, INC.,

a Delaware corporation

BILOXI CASINO CORP.,

a Mississippi corporation

CASINO MAGIC CORP.,

a Minnesota corporation

CASINO ONE CORPORATION,

a Mississippi corporation

PNK (BOSSIER CITY), INC.,

a Louisiana corporation

ST. LOUIS CASINO CORP.,

a Missouri corporation

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer and/or Treasurer

- 4 -

BELTERRA RESORT INDIANA, LLC,
a Nevada limited liability company
By:	Pinnacle Entertainment, Inc,
Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

BOOMTOWN, LLC,
a Delaware limited liability company
By:	Pinnacle Entertainment, Inc,
Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

PNK (LAKE CHARLES), L.L.C.,
a Louisiana limited liability company
By:	Pinnacle Entertainment, Inc.,
Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

PNK (RENO), LLC,
a Nevada limited liability company
By:	Pinnacle Entertainment, Inc,
Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

- 5 -

LOUISIANA-I GAMING,
a Louisiana Partnership in Commendam
By:	Boomtown, LLC,
Its:	General Partner
	By:	Pinnacle Entertainment, Inc.,
		its Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

PNK (ES), LLC,
a Delaware limited liability company
By:	Pinnacle Entertainment, Inc.
Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

PNK (ST. LOUIS RE), LLC,
a Delaware limited liability company
By:	Pinnacle Entertainment, Inc.
Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

AREP BOARDWALK PROPERTIES LLC,
a Delaware limited liability company
By:	Biloxi Casino Corp.
its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer and Treasurer

- 6 -

PNK DEVELOPMENT 7, LLC,
a Delaware limited liability company
By:	Pinnacle Entertainment, Inc.
Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

PNK DEVELOPMENT 8, LLC,
a Delaware limited liability company
By:	Pinnacle Entertainment, Inc.
Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

PNK DEVELOPMENT 9, LLC,
a Delaware limited liability company
By:	Pinnacle Entertainment, Inc.
Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

- 7 -

PNK (SCB), L.L.C.,
a Louisiana limited liability company
By:	PNK Development 7, LLC,
Its:	Sole Member
	By:	Pinnacle Entertainment, Inc.
	Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

PNK (BATON ROUGE) PARTNERSHIP,
a Louisiana partnership
By:	PNK Development 8, LLC,
Its:	Managing Partner
	By:	Pinnacle Entertainment, Inc.,
	Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

- 8 -

PNK (CHILE 1), LLC,
a Delaware limited liability company
By:	Pinnacle Entertainment, Inc.,
	a Delaware corporation,
Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

PNK (CHILE 2), LLC,
a Delaware limited liability company
By:	Pinnacle Entertainment, Inc.,
	a Delaware corporation,
Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

PNK (RIVER CITY), LLC,
a Missouri limited liability company
By:	Pinnacle Entertainment, Inc.,
	a Delaware corporation
Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

PNK (STLH), LLC,
a Delaware limited liability company
By:	Pinnacle Entertainment, Inc.,
	a Delaware corporation
Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

- 9 -

PRESIDENT RIVERBOAT CASINO-MISSOURI, INC.,

a Missouri corporation

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer and Treasurer

YANKTON INVESTMENTS, LLC,

a Nevada limited liability company

By:	/s/ John A. Godfrey
	Name:	John A. Godfrey
	Its: Manager

OGLE HAUS, LLC,
an Indiana limited liability company
By:	Belterra Resorts Indiana, LLC,
	a Nevada limited liability company
Its:	Sole Member
	By:	Pinnacle Entertainment, Inc.,
		a Delaware corporation,
	Its:	Sole Member

By:	/s/ Stephen H. Capp
	Name:	Stephen H. Capp
	Title:	Chief Financial Officer

- 10 -

The Bank of New York Mellon Trust Company, N.A.,

as Trustee

By:	/s/ Teresa Petta
	Name:	Teresa Petta
	Title:	Vice President

- 11 -

EX-10.9

Exhibit 10.9

Summary of Director Compensation

Director Fees

The compensation of the Company’s non-employee directors is paid in the form of an annual retainer, meeting and chair fees and stock-based awards. During 2009 and 2010, the fees that each non-employee director, Chairman of the Board, lead director, or committee chair, is entitled to receive are the following:

• An annual retainer of $70,000 (which consisted of $60,000 in cash and $10,000 in phantom stock units);

• An additional $20,000 retainer for the Chair of the Audit Committee;

• An additional $100,000 retainer for the Interim Non-Executive Chairman of the Board as of December 10, 2009; prior to that date there was a lead director who was entitled to $60,000 retainer;

• An additional $20,000 retainer for the Chair of the Compensation Committee;

• An additional $10,000 retainer for the Chair of the Corporate Governance and Nominating Committee;

• An additional $7,500 retainer for the Chair of the Risk Management Committee;

• An attendance fee of $1,500 for regularly scheduled Board or committee meetings, other than Audit Committee and Executive Search Committee (which was formed in November 2009) meeting fees which are $2,000 per meeting; and

• An attendance fee of $500 for telephonic special meetings of the Board of Directors.

Option Grants

In 2009, Pinnacle granted to each director who was then serving 15,000 options, which were granted on the date of the 2009 Annual Meeting of Stockholders. The exercise price for each option was the closing price of Pinnacle Common Stock on the date of grant. All of the options vested immediately upon the date of grant. In addition, on the date of the 2009 Annual Meeting of Stockholders, all prior options granted to the directors vested immediately on such date.

EX-10.16

Exhibit 10.16

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is made this 22^nd day of December 2008 (the “Effective Date”), by and between PINNACLE ENTERTAINMENT, INC., a Delaware corporation (the “Company”), and CLIFFORD D. KORTMAN, an individual (“Executive”), with respect to the following facts and circumstances:

RECITALS

The Company and Executive entered into an Employment Agreement effective as of March 14, 2003 (the “Original Agreement”) pursuant to which Executive serves as Senior Vice President — Construction/Development of the Company. The Board of Directors of the Company (the “Board”) determined that it was in the best interests of the Company and its stockholders to assure that the Executive continued to serve in such capacities beyond the term provided for in the Original Agreement and, further, to assure that the Company will have the continued dedication of Executive, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined herein). The Board believed it was imperative to diminish the inevitable distraction of Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control and to encourage Executive’s full attention and dedication to the Company, particularly in the event of any threatened or pending Change of Control, and to provide Executive with compensation and benefits arrangements upon a Change of Control that ensure that the compensation and benefits expectations of Executive will be satisfied and that are competitive with those of other corporations. Therefore, in order to accomplish these objectives, the Board caused the Company to supersede the Original Agreement by entering into an amended Employment Agreement effective as of June 13, 2006 (the “2006 Agreement”). The Board has determined that it is in the best interest of the Company and of Executive to amend and restate the 2006 Agreement to comply with the provisions of Internal Revenue Code Section 409A and to address certain technical matters.

NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements set forth herein, the parties hereto agree as follows:

ARTICLE 1.

EMPLOYMENT AND TERM

1.1 Employment. The Company agrees to engage Executive in the capacity as Senior Vice President — Construction/Development, and as President of the Company’s subsidiary, Pinnacle Design & Construction, LLC, and Executive hereby accepts such engagement by the Company upon the terms and conditions specified below.

Kortman December 2008

1.2 Term. The term of this Agreement shall commence as of the Effective Date and, unless earlier terminated under Article 6 below, shall continue in force until June 13, 2009, provided that commencing on June 13, 2008 and as of June 13 of each year thereafter (a “Renewal Date”), this Agreement shall automatically renew for additional one-year periods (each, a “Renewal Period”), unless either party gives notice of non-renewal at least ninety (90) days prior to the next Renewal Date. The term of this Agreement, including any Renewal Periods, is referred to as the “Term.”

ARTICLE 2.

DUTIES OF EXECUTIVE

2.1 Duties. Executive shall perform all the duties and obligations generally associated with the positions of Senior Vice President — Construction/Development, and as President of Pinnacle Design & Construction, LLC, subject to the control and supervision of the Company’s Chief Executive Officer (the “Chief Executive Officer”), and such other executive duties consistent with the foregoing as may be assigned to him from time to time by the Chief Executive Officer. Executive shall perform the services contemplated herein faithfully, diligently, to the best of his ability and in the best interests of the Company. Executive shall at all times perform such services in compliance with, and to the extent of his authority, shall to the best of his ability cause the Company to be in compliance with, any and all laws, rules and regulations applicable to the Company of which Executive is aware. Executive may rely on the Company’s inside counsel and outside lawyers in connection with such matters. Executive shall, at all times during the Term, in all material respects adhere to and obey any and all written internal rules and regulations governing the conduct of the Company’s employees, as established or modified from time to time; provided, however, in the event of any conflict between the provisions of this Agreement and any such rules or regulations, the provisions of this Agreement shall control.

2.2 Location of Services. Executive’s principal place of employment shall be at the Company’s headquarters in Las Vegas, Nevada, or at such other location as Executive and the Chief Executive Officer shall agree upon. Executive understands he will be required to travel to the Company’s various operations as part of his employment.

2.3 Exclusive Service. Except as otherwise expressly provided herein, Executive shall devote his entire business time, attention, energies, skills, learning and best efforts to the business of the Company. Executive may participate in social, civic, charitable, religious, business, educational or professional associations so long as such participation does not materially interfere with the duties and obligations of Executive hereunder. This Section 2.3, however, shall not be construed to prevent Executive from making passive outside investments so long as such investments do not require material time of Executive or otherwise interfere with the performance of Executive’s duties and obligations hereunder. Executive shall not make any investment in an enterprise that competes with the Company without the prior written approval of the Company after full disclosure of the facts and circumstances; provided, however, that this sentence shall not preclude Executive from owning up to one-half percent (0.5%) of the securities of a publicly traded entity (a “Permissible Investment”). During the Term, Executive shall not directly or indirectly work for or provide services to or, except as permitted above, own an equity interest in any person, firm or entity engaged in the casino gaming, card club or horse racing business. In this regard, and for purposes of this section only, Executive acknowledges that the gaming industry is national in scope and that accordingly this covenant shall apply throughout the United States.

Kortman December 2008

2

ARTICLE 3.

COMPENSATION

3.1 Base Salary. In consideration for Executive’s services hereunder, the Company shall pay Executive an annual base salary, effective as of June 13, 2006, at the rate of not less than Four Hundred Twenty-Five Thousand Dollars ($425,000) per year during each of the years of the Term; payable in accordance with the Company’s regular payroll schedule from time to time (less any deductions required for Social Security, state, federal and local withholding taxes, and any other authorized or mandated similar withholdings). Executive’s annual base salary shall be reviewed by the Chief Executive Officer and, if appropriate, the Compensation Committee of the Board (the “Committee”) at least annually beginning no more than twelve (12) months from the date hereof and may be increased (but not decreased) at the discretion of the Board. If Executive’s annual salary is increased, the increased amount shall not be reduced for the remainder of the Term.

3.2 Annual and Other Bonuses. Executive shall be entitled to earn bonuses with respect to each year of the Term during which Executive is employed under this Agreement in the discretion of the Chief Executive Officer and, if appropriate, the Committee. Any such bonus earned by Executive shall be paid annually by March 15^th following the conclusion of the Company’s fiscal year, except for any portion of the bonus which is subject to required deferral by the Company and except for any portion of the bonus which Executive shall elect to defer. Bonuses relative to partial years (or a termination caused by death or disability) shall be prorated. Executive may also receive special bonuses in addition to his annual bonus eligibility at the discretion of the Chief Executive Officer and, if appropriate, the Committee.

3.3 Stock Options. Prior to June 13, 2008 and at appropriate times thereafter (no less frequently than within forty (40) months of the prior review), the Committee shall review Executive’s long-term compensation and, in consultation with the Chief Executive Officer, shall consider granting additional stock options and/or other long term incentive compensation.

ARTICLE 4.

EXECUTIVE BENEFITS

4.1 Vacation. In accordance with the general policies of the Company applicable generally to other senior executives of the Company pursuant to the Company’s personnel policies from time to time, Executive shall be entitled to not less than four weeks vacation each calendar year, without reduction in compensation.

Kortman December 2008

3

4.2 The Company Employee Benefits. Executive shall receive all group insurance and pension plan benefits and any other benefits on the same basis as they are available generally to other senior executives of the Company under the Company personnel policies in effect from time to time.

4.3 Benefits. Executive shall receive all other such benefits as the Company may offer to other senior executives of the Company generally under the Company personnel plans, practices, policies and programs in effect from time to time, such as health and disability insurance coverage and paid sick leave. In the event that the Company’s group health plan does not cover the annual physical examination of Executive and Executive’s spouse, if any, or any pregnancy of Executive’s spouse, if any, the Company shall bear the cost of such examinations or the medical costs of such pregnancy.

4.4 Indemnification. Executive shall have the benefit of indemnification to the fullest extent permitted by applicable law, which indemnification shall continue after the termination of this Agreement for such period as may be necessary to continue to indemnify Executive for his acts while an officer of the Company. In addition, the Company shall cause Executive to be covered by the current policies of directors and officers liability insurance in accordance with their terms, to the maximum extent of the coverage available for any director or officer of the Company. The Company shall use commercially reasonable efforts to cause the current policies of directors and officers liability insurance to be maintained throughout the term of Executive’s employment with the Company and for such period thereafter as may be necessary to continue to cover acts of Executive during the term of his employment (provided that the Company may substitute therefor, or allow to be substituted therefor, policies of at least the same coverage and amounts containing terms and conditions which are, in the aggregate, no less advantageous to the insured in any material respect). In the event of any merger or other acquisition of the Company, the Company shall no later than immediately prior to consummation of such transaction purchase the longest applicable “tail” coverage available under the directors and officers liability insurance in effect at the time of such merger or acquisition.

ARTICLE 5.

REIMBURSEMENT FOR EXPENSES

5.1 Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive in the performance of his duties or otherwise in furtherance of the business of the Company in accordance with the policies of the Company in effect from time to time. Executive shall keep accurate and complete records of all such expenses, including but not limited to, proof of payment and purpose. Executive shall account fully for all such expenses to the Company. No reimbursement will be made later than the close of the calendar year following the calendar year in which the expense was incurred. Expenses eligible for reimbursement in any one taxable year shall not affect the amount of expenses eligible for reimbursement in any other taxable year, and the right to expense reimbursement shall not be subject to liquidation or exchange for any other benefit.

Kortman December 2008

4

ARTICLE 6.

TERMINATION

6.1 Termination for Cause. Without limiting the generality of Section 6.2, the Company shall have the right to terminate Executive’s employment, without further obligation or liability to Executive, upon the occurrence of any one or more of the following events, which events shall be deemed termination for cause (“Cause”).

6.1.1 Failure to Perform Duties. If Executive neglects to perform the material duties of his employment under this Agreement in a professional and businesslike manner, other than due to his disability (except due to substance or alcohol abuse), after having received written notice specifying such failure to perform and a reasonable opportunity to perform.

6.1.2 Willful Breach. If Executive willfully commits a material breach of this Agreement and fails to cure such breach within thirty (30) days of written notice thereof or a material willful breach of his fiduciary duty to the Company.

6.1.3 Wrongful Acts. If Executive is convicted of a felony involving acts of moral turpitude or commits fraud, misrepresentation, embezzlement or other acts of material misconduct against the Company (including violating or condoning the violation of any material rules or regulations of gaming authorities which could have a material adverse effect on the Company) that would make the continuance of his employment by the Company materially detrimental to the Company.

6.1.4 Failure To Be Licensed. If Executive fails to be licensed in all jurisdictions in which the Company or its subsidiaries has gaming facilities within the date required by any jurisdiction, or if any of such licenses shall be revoked or suspended at any time during the Term, then the Company may by written notice to Executive terminate the Agreement for Cause. Executive agrees to promptly submit to the licensing requirements of all jurisdictions in which the Company or its subsidiaries does business. The Company shall bear all expenses incurred in connection with such licenses.

6.2 Termination Without Cause. Notwithstanding anything to the contrary herein, the Company shall have the right to terminate Executive’s employment under this Agreement at any time without Cause by giving notice of such termination to Executive. Failure by the Company to extend the Term for any Renewal Period shall not be a termination of this Agreement without Cause.

Kortman December 2008

5

6.3 Termination by Executive for Good Reason. Executive may terminate his employment under this Agreement on thirty (30) days prior notice to the Company for good reason (“Good Reason”). For purposes of this Agreement, “Good Reason” shall mean and be limited to (a) a material breach of this Agreement by the Company (including without limitation any material reduction in the authority, duties or responsibilities of Executive, or any relocation of his or its principal place of business outside the greater Las Vegas metropolitan area (without Executive’s consent); or (b) a change of control with respect to the Company (a “Change of Control”) followed by (i) any diminution of Executive’s authority, duties or responsibilities as set forth in Section 2.1; or (ii) during the first twelve (12) months following a Change of Control, the failure of the Company to award Executive an annual bonus equal to at least seventy-five percent (75%) of the average amount of the annualized bonus paid to Executive for the last two (2) full years; or (iii) Executive’s termination by the Company other than at the end of the Term of this Agreement; or (iv) termination of his employment by Executive in his sole and absolute discretion at any time during the twelve (12) months immediately following the first anniversary date of the Change of Control. Except in the cases set forth in clauses (b)(iii) and (b)(iv) of the preceding sentence, however, “Good Reason” shall not exist unless Executive gives notice of proposed termination within 30 days following the breach or condition giving rise to Good Reason, and there is a failure of the Company to remedy the breach or condition giving rise to Good Reason within thirty (30) days after such notice (or as soon thereafter as practicable so long as it commences effectuation of such remedy within such time period and diligently pursues such remedy to completion as soon as practicable). For purposes of this Agreement, a “Change of Control” shall mean the occurrence of any of the following:

(i) The direct or indirect acquisition by an unrelated “Person” or “Group” of “Beneficial Ownership” (as such terms are defined below) of more than 50% of the voting power of the Company’s issued and outstanding voting securities in a single transaction or a series of related transactions;

(ii) The direct or indirect sale or transfer by the Company of substantially all of its assets to one or more unrelated Persons or Groups in a single transaction or a series of related transactions;

(iii) The merger, consolidation or reorganization of the Company with or into another corporation or other entity in which the Beneficial Owners of more than 50% of the voting power of the Company’s issued and outstanding voting securities immediately before such merger or consolidation do not own more than 50% of the voting power of the issued and outstanding voting securities of the surviving corporation or other entity immediately after such merger, consolidation or reorganization; or

(iv) During any consecutive 12-month period, individuals who at the beginning of such period constituted the Board of the Company (together with any new Directors whose election to such Board or whose nomination for election by the stockholders of the Company was approved by a vote of a majority of the Directors of the Company then still in office who were either Directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of the Company then in office.

Kortman December 2008

6

None of the foregoing events, however, shall constitute a Change of Control if such event is not a “Change in Control Event” under Treasury Regulations Section 1.409A-3(i)(5) or successor IRS guidance. For purposes of determining whether a Change of Control has occurred, the following Persons and Groups shall not be deemed to be “unrelated”: (A) such Person or Group directly or indirectly has Beneficial Ownership of more than 50% of the issued and outstanding voting power of the Company’s voting securities immediately before the transaction in question, (B) the Company has Beneficial Ownership of more than 50% of the voting power of the issued and outstanding voting securities of such Person or Group, or (C) more than 50% of the voting power of the issued and outstanding voting securities of such Person or Group are owned, directly or indirectly, by Beneficial Owners of more than 50% of the issued and outstanding voting power of the Company’s voting securities immediately before the transaction in question. The terms “Person,” “Group,” “Beneficial Owner,” and “Beneficial Ownership” shall have the meanings used in the Securities Exchange Act of 1934, as amended. Notwithstanding the foregoing, (I) Persons will not be considered to be acting as a “Group” solely because they purchase or own stock of the Company at the same time, or as a result of the same public offering, (II) however, Persons will be considered to be acting as a “Group” if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction, with the Company, and (III) if a Person, including an entity, owns stock both in the Company and in a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar transaction, with the Company, such shareholders shall be considered to be acting as a Group with other shareholders only with respect to the ownership in the corporation before the transaction.

6.4 Death or Disability. This Agreement shall terminate on the death or “Disability” of Executive. Executive will be deemed to have a “Disability” when he is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or begins receiving income replacement benefits for a period of not less than three months under an accident and health plan of the Company or an affiliate by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months. If there should be a dispute between the Company and Executive as to Executive’s physical or mental Disability for purposes of this Agreement, the question shall be settled by the opinion of an impartial reputable physician or psychiatrist agreed upon by the parties or their representatives, or if the parties cannot agree within ten (10) days after a request for designation of such party, then a physician or psychiatrist designed by the Clark County Medical Association or similar body. The certification of such physician or psychiatrist as to the questioned dispute shall be final and binding upon the parties hereto.

Kortman December 2008

7

6.5 Effect of Termination.

6.5.1 Payment of Salary and Expenses Upon Termination. Any termination under this Section 6 shall be effective upon receipt of notice by Executive or the Company, as the case may be, of such termination or upon such other later date as may be provided herein or specified by the Company or Executive in the notice (the “Termination Date”), except as otherwise provided in this Section 6. If this Agreement is terminated, all benefits provided to Executive by the Company hereunder shall thereupon cease, except as provided in this Section 6.5, and the Company shall pay or cause to be paid to Executive all accrued but unpaid base salary, any compensation previously voluntarily deferred by Executive, payable in accordance with the provisions of the applicable deferred compensation plan and in accordance with Executive’s elections under such deferred compensation plan, and vacation benefits. In addition, promptly upon submission by Executive of his unpaid expenses incurred prior to the Termination Date and owing to Executive pursuant to Article 5, reimbursement for such expenses shall be made. If the Agreement is terminated by the Company for “Cause,” or by Executive without “Good Reason,” Executive shall not be entitled to receive any payments other than as specified in this Section 6.5.1, and provided that Executive may exercise any vested options.

6.5.2 Termination Due to Death or Disability. If this Agreement is terminated due to death or Disability, the following shall apply:

(a) Executive shall be entitled to an amount equal to the sum of (i) Executive’s annual base salary in effect on the date of termination; plus (ii) the greater of the amount of Executive’s bonus (including all deferred amounts) in the year prior to such termination or the average of the annual bonuses (including all deferred amounts) paid to Executive in the three (3) consecutive years prior to the year of termination (the “Bonus Amount”) times (iii) one hundred fifty percent (150%) of the sum of (i) and (ii) above (the “Death or Disability Severance Benefit”); provided that in the event of death, the amount of such Death Severance Benefit shall be reduced by the amount of any life insurance provided by the Company; and, provided, further, that the amount of such Disability Severance Benefit shall be reduced under the circumstances specified in this Section 6.5.2. In addition, Executive shall be entitled to receive any amounts payable under Section 6.5.1 above a pro rata bonus for the year of death or Disability (which bonus shall be calculated by taking the Bonus Amount and multiplying it by a fraction, the numerator of which is the number of days in the year in which Executive was employed before death or Disability and the denominator of which is 365); such pro rata bonus shall be payable within thirty (30) days after death or Disability. The base salary component of the Death or Disability Severance Benefit shall be payable to Executive or his estate monthly in equal installments over a period of eighteen (18) months after the termination of Executive’s employment (the “Death or Disability Severance Benefit Period”) and seventy five percent (75%) of the bonus component shall be paid within thirty (30) days after death or Disability, and twenty five percent (25%) of

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the bonus component shall be payable in three annual installments on the anniversaries of death or Disability; provided that if during such period a Change of Control shall occur, the full amount of any unpaid Death or Disability Severance Benefit shall be paid to Executive or his estate in a lump sum. If, during the Disability Severance Benefit Period Executive is able to work in capacities similar to those for which he is employed hereunder, he shall have a duty to seek employment and to advise the Company of all compensation paid or payable to him from such employment. Such amounts shall reduce the amount of Disability Severance Benefits payable by the Company hereunder.

(b) Any outstanding unvested stock options at the date of death or Disability which would otherwise vest during the eighteen (18) months following death or Disability shall immediately become vested and may be exercised in accordance with their terms. The remaining unvested options shall immediately terminate.

(c) Executive shall also be entitled to receive health benefits coverage for Executive and his dependents, and disability insurance coverage for Executive, under the same plan(s) or arrangement(s) under which Executive was were covered immediately before his death or Disability or plan(s) established or arrangement(s) provided by the Company or any of its Subsidiaries thereafter for the benefit of senior executives (“Health and Disability Coverage Continuation”). Such health benefits and disability coverage shall be paid for by the Company to the same extent as if Executive were still employed by the Company, and Executive, or his Dependents in the event of his death, will be required to make such payments as Executive would be required to make if Executive were still employed by the Company. The benefits provided under this Section 6.5.2(c) shall continue until the earliest of (a) five (5) years; (b) the date on which Executive ceases to be Disabled during the five (5) year period; and (c) the date Executive (and in the case of his dependents, the dependents) becomes covered or eligible for coverage under any other group health plan or group disability plan (as the case may be) not maintained by the Company or any of its Subsidiaries; provided, however, that if such other group health plan excludes any pre-existing condition that Executive or Executive’s dependents may have when coverage under such group health plan would otherwise begin, coverage under this Section 6.5.2(c) shall continue (but not beyond the period described in clause (a) of this sentence) with respect to such pre-existing condition until such exclusion under such other group health plan lapses or expires. In the event Executive is required to make an election under Sections 601 through 607 of the Employee Retirement Income Security Act of 1974, as amended (commonly

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known as COBRA) to qualify for the benefits described in this Section 6.5.2(c), the obligations of the Company and its Subsidiaries under this Section 6.5.2(c) shall be conditioned upon Executive’s timely making such an election. Any payment or reimbursement of benefits under this Section 6.5.2(c) that is taxable to Executive or his dependents shall be made by December 31 of the calendar year following the calendar year in which Executive or his dependent incurred the expense. Expenses eligible for reimbursement in any one taxable year shall not affect the amount of expenses eligible for reimbursement in any other taxable year, and the right to expense reimbursement shall not be subject to liquidation or exchange for any other benefit.

(d) The provisions of Sections 7.4, 7.5, 7.6 and 7.7 shall apply both during and after the termination of the Disability Severance Benefit Period.

6.5.3 Termination Without Cause or Termination by Executive for Good Reason Other than in Connection with a Change of Control. If the Company terminates Executive without Cause or Executive terminates for Good Reason other than in connection with a Change of Control as contemplated by Section 6.5.4, the following shall apply:

(a) Executive shall be entitled to receive an amount equal to one hundred fifty percent (150%) times (i) Executive’s annual base salary (the “Base Severance Benefit”) in effect on the date of termination; plus (ii) the Bonus Amount, excluding any deferred bonus which was at the Company’s election rather than Executive’s. The Base Severance Benefit shall be paid to Executive in equal monthly installments over eighteen (18) months immediately following the date of termination in accordance with the Company’s regular salary payment schedule from time to time. Seventy five percent (75%) of the Bonus Amount shall be paid within thirty (30) days after the termination of employment, and twenty five percent (25%) of the Bonus Amount shall be payable in three annual installments on the anniversaries of the termination of employment. In addition, Executive shall be entitled to receive any amounts payable under Section 6.5.1 above and a pro rata annual bonus for the year of termination calculated and payable as provided in Section 6.5.2(a), including any deferred bonus which was at the Company’s election rather than Executive’s; such pro rata annual bonus shall be payable within thirty (30) days after termination of employment. The payments contemplated herein shall not be subject to any duty of mitigation by Executive nor to offset for any income earned by Executive following termination.

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(b) In addition to those already vested, all of Executive’s outstanding stock options which would have vested in the eighteen (18) months following termination shall be fully vested and exercisable as of the date of termination. Any remaining unvested options shall immediately terminate.

(c) Executive shall also be entitled to receive Health and Disability Coverage Continuation for himself and his dependents, as applicable, on the terms provided in Section 6.5.2(c) above; provided that the maximum continuation period shall be eighteen (18) months from the date of termination.

(d) The provisions of Sections 7.3, 7.5, 7.6 and 7.7 shall apply from the date of termination, but the provisions of Section 7.4 (“Covenant Not to Compete”) shall not apply.

6.5.4 Termination Without Cause or Termination by Executive for Good Reason Within the Twenty-Four (24) Months After a Change of Control. If the Company terminates Executive without Cause or Executive terminates for Good Reason within twenty-four (24) months after a Change of Control, or if Executive terminates in his sole and absolute discretion within the twelve (12) months immediately following the first anniversary date of a Change of Control, the following shall apply:

(a) The Company shall pay to Executive in lieu of the Base Severance Benefit, in a lump sum as soon as practicable, but in no event later than thirty (30) days after the termination of Executive’s employment, (i) an amount (the “Change of Control Severance Benefit”) equal to two (2) times Executive’s annual base salary in effect on the date of termination, plus (ii) two (2) times the largest annual bonus (including all deferred amounts) that was paid to Executive during the three (3) years preceding the Change of Control; plus (iii) a pro rated bonus for the year of termination (which bonus shall be calculated by taking the Bonus Amount and multiplying it as provided in section 6.5.2(a) plus (iv) any amounts payable under Section 6.5.1. Executive shall also be entitled to receive a continuation of health and disability insurance coverage as specified in Section 6.5.2(c). In addition to those already vested, all unvested stock options held by Executive shall be immediately and fully vested and exercisable by Executive.

(b) The “Covenant Not to Compete” set forth in Section 7.4 below shall not apply in any respect to Executive (and Executive’s compliance therewith shall not be a condition to the Company’s obligations hereunder), and the term of the “No Hire Away Policy” in Section 7.5 shall be limited to six (6) months from the date of termination.

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6.5.5 Occurrence of a Change of Control With Six Months After Termination Without Cause or by Executive for Good Reason. If a Change of Control occurs within six months after the date of termination of Executive by the Company without Cause or the date of termination by Executive with Good Reason, the following shall apply:

(a) Executive shall receive (i) the Change of Control Severance Benefit set forth in Section 6.5.4(a)(i), less the amount of any payments Executive has already received under the first sentence of Section 6.5.3(a), and (ii) continuation of health and disability coverage as specified in Section 6.5.2(c).

(b) The “Covenant Not to Compete” set forth in Section 7.4 below shall not apply in any respect to Executive (and Executive’s compliance therewith shall not be a condition to the Company’s obligations hereunder), and the term of the “No Hire Away Policy” in Section 7.5 shall be limited to six (6) months from the date of termination.

6.5.6 Additional Payments. In the event that any payments that Executive may receive under this Agreement or otherwise shall constitute a change in control payments under Section 280G of the Code which would subject Executive to an excise tax under Section 4999 of the Code, Executive shall be entitled to receive additional tax gross-up payments from the Company as set forth in Appendix A hereto. Notwithstanding the foregoing provisions of this Section 6.5.6, if it shall be determined that Executive is entitled to the Gross Up Payment, but that the Payments do not exceed 105% of the greatest amount that could be paid to Executive such that the receipt of the Payments would not give rise to any Excise Tax (the “Reduced Amount”), then no Gross Up Payment shall be made to Executive and the Payments, in the aggregate, shall be reduced to the Reduced Amount. If the Company elects to provide coverage under Section 6.5.2(c), 6.5.3(c), 6.5.4(a) or 6.5.5(a) under self-insured insurance plans rather than under insurance policies, the Company shall indemnify Executive for any tax liability he incurs on payment of claims under the insurance plans that he would not have incurred if the claims had been paid under insurance policies. Any such tax indemnification amounts shall be paid to or for the benefit the Executive by December 31 of the calendar year following the calendar year in which the additional tax is remitted, or, if no additional tax is remitted, by December 31 of the calendar year following the calendar year in which there is a final and non-appealable settlement or other resolution of an audit or litigation relating to such additional tax. The Company shall pay to Executive a payment (the “Gross Up Payment”) in an amount such that, after payment by Executive of all income taxes and the excise tax imposed by Internal Revenue Code Section 4999, or any similar provision of state or local tax law (the “Excise Tax”) imposed on benefits under this agreement, on all other payments from the Company to Executive in the nature of compensation, and on the Gross Up Payment itself, and any interest or penalties (other than interest and penalties imposed by reason of Executive’s failure to file timely tax returns or to pay taxes shown due on such returns and any tax liability, including interest and penalties, unrelated to the Excise Tax or the Gross Up Amount), Executive shall be placed in the same tax position with respect to benefits under this Agreement and all other payments from the Company to Executive in the nature of compensation as Executive would have been if the Excise Tax had never been enacted.

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6.5.7 I.R.C. Section 409A. In the event that any compensation with respect to Executive’s separation from service is “deferred compensation” within the meaning of Section 409A of the Code and the regulations thereunder (“Section 409A”), the stock of the Company or any affiliate is publicly traded on an established securities market or otherwise, and Executive is determined to be a “specified employee,” as defined in Section 409A(a)(2)(B)(i) of the Code, payment of such compensation shall be delayed as required by Section 409A. Such delay shall last six months from the date of Executive’s separation from service, except in the event of Executive’s death. Within thirty (30) days following the end of such six-month period, or, if earlier, Executive’s death, the Company will make a catch-up payment to Executive equal to the total amount of such payments that would have been made during the six-month period but for this Section 9.1. The catch-up payment amount shall accrue simple interest at the prime rate of interest as published by the Bank of America as of the beginning of the deferral period, which interest shall be paid with the catch-up payment. The Company will place an amount in a “rabbi trust” with an independent trustee reasonably acceptable to Executive equal to the catch-up payment plus the interest that will accrue thereon. Wherever payments under this Agreement are to be made in installments, each such installment shall be deemed to be a separate payment for purposes of Section 409A. Payments of compensation or benefits on Executive’s termination of employment (other than accrued salary and vacation pay, other accrued amounts that must be paid under applicable law, and “welfare benefits” specified in Treasury Regulations Section 1.409A-1(a)(5)) shall be paid only if and when the termination of employment constitutes a “separation from service” under Treasury Regulation Section 1.409A-1(h).

6.5.8 Suspension. In lieu of terminating Executive’s employment hereunder for Cause under Section 6.1, the Company shall have the right, at its sole election, to suspend the performance of duties by Executive under this Agreement during the continuance of events or circumstances under Section 6.1 for an aggregate of not more than thirty (30) days during the Term (the “Default Period”) by giving Executive written notice of the Company’s election to do so at any time during the Default Period. The Company shall have the right to extend the Term beyond its normal expiration date by the period(s) of any suspension(s). The Company’s exercise of its right to suspend the operation of this Agreement shall not preclude the Company from subsequently terminating Executive’s employment hereunder. Executive shall not render services to any other person, firm or corporation in the casino business during any period of suspension. Executive shall be entitled to continued compensation and benefits pursuant to the provisions of this Agreement during the Default Period.

6.6 Exercisability of Options. Except with respect to options granted prior to the date hereof, all vested options will terminate on the earlier of (a) the expiration of the ten (10) year term of such options, or (b) one (1) year after the termination of Executive’s employment with the Company, regardless of the cause of such termination, except that, in the event of a termination for “Cause” or Executive’s termination without Good Reason, all vested options will terminate on the earlier of (I) the expiration of the ten (10) year term of such options, or (II) ninety (90) days after the termination. As provided in the stock option agreements, unvested options will terminate on the termination of Executive’s employment with the Company, except to the extent that such options become vested as a result of such termination under the terms of the governing stock option agreement or this Agreement. With respect to options granted prior to the date hereof, any option exercise extension shall be limited to the maximum amount permitted which would not trigger a modification under Section 409A.

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6.7 No-Exclusivity of Rights. Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in any plan, program, policy or practice provided by the Company or its subsidiaries and for which the Executive may quality, nor shall anything herein limit or otherwise affect such rights as Executive may have under any other contract or agreement with the Company or its subsidiaries at or subsequent to the Date of Termination (“Other Benefits”) shall be payable in accordance with such plan, policy, practice or program or contract or agreement, except as explicitly modified by this Agreement. Notwithstanding the foregoing, if Executive receives payments and benefits pursuant to Article VI of this Agreement, Executive shall not be entitled to any severance pay or benefits under any severance plan, program or policy of the Company and its subsidiaries, unless otherwise specifically provided therein in a specific reference in or to this Agreement.

6.8 Full Settlement. The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any setoff, counterclaim, recoupment, defense, or other claim, right or action that the Company may have against the Executive or others, except to the extent of the mitigation and setoff provisions provided for in this Agreement. Except as expressly provided for herein, in no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not Executive obtains other employment. The Company agrees to pay as incurred, to the full extent permitted by law, all legal fees and expenses that the Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company, Executive or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by Executive about the amount of any payment pursuant to this Agreement), plus, in each case, interest on any delayed payment at the applicable federal rate provided for in Section 7872(f)(2)(A) of the Code.

6.9 Release. It shall be a condition for Executive’s right to receive any severance benefits hereunder that he execute a general release in favor of the Company and its affiliates in the form attached hereto as Appendix B and covering such additional matters as may be reasonably requested by the Company, which release shall not encompass the payments contemplated hereby. The timing of payments under this Agreement upon the execution of the general release shall be governed by the following provisions:

(a) The Company must deliver the release to Executive for execution no later than fourteen (14) days after Executive’s termination of employment. If the Company fails to deliver the release to Executive within such fourteen (14) day period, Executive will be deemed to have satisfied the release requirement and will receive payments conditioned on execution of the release as though Executive had executed the release and all revocation rights had lapsed at the end of such 14 day period.

(b) Executive must execute the release within forty-five (45) days from its delivery to him.

(c) If Executive has revocation rights, Executive shall exercise such rights, if at all, not later than seven (7) days after executing the release.

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(d) In any case in which the release (and the expiration of any revocation rights) could only become effective in a particular tax year of Executive, payments conditioned on execution of the release shall begin within thirty (30) days after the release becomes effective and revocation rights have lapsed.

(e) In any case in which the release (and the expiration of any revocation rights) could become effective in one of two taxable years of Executive depending on when Executive executes the release, payments conditioned on execution of the release shall not begin before the first business day of the later of such tax years.

ARTICLE 7.

CONFIDENTIALITY

7.1 Nondisclosure of Confidential Material. In the performance of his duties, Executive may have access to confidential records, including, but not limited to, development, marketing, organizational, financial, managerial, administrative and sales information, data, specifications and processes presently owned or at any time hereafter developed or used by the Company or its agents or consultants that is not otherwise part of the public domain (collectively, the “Confidential Material”). All such Confidential Material is considered secret and is disclosed to Executive in confidence. Executive acknowledges that the Confidential Material constitutes proprietary information of the Company which draws independent economic value, actual or potential, from not being generally known to the public or to other persons who could obtain economic value from its disclosure or use, and that the Company has taken efforts reasonable under the circumstances, of which this Section 7.1 is an example, to maintain its secrecy. Except in the performance of his duties to the Company or as required by a court order or any gaming regulator or as required for his personal tax or legal advisors to advise him, Executive shall not, directly or indirectly for any reason whatsoever, disclose, divulge, communicate, use or otherwise disclose any such Confidential Material, unless such Confidential Material ceases to be confidential because it has become part of the public domain (not due to a breach by Executive of his obligations hereunder). Executive shall also take all reasonable actions appropriate to maintain the secrecy of all Confidential Information. All records, lists, memoranda, correspondence, reports, manuals, files, drawings, documents, equipment, and other tangible items (including computer software), wherever located, incorporating the Confidential Material, which Executive shall prepare, use or encounter, shall be and remain the Company’s sole and exclusive property and shall be included in the Confidential Material. Upon termination of this Agreement, or whenever requested by the Company, Executive shall promptly deliver to the Company any and all of the Confidential Material, not previously delivered to the Company, that is in the possession or under the control of Executive.

7.2 Assignment of Intellectual Property Rights. Any ideas, processes, know-how, copyrightable works, maskworks, trade or service marks, trade secrets, inventions, developments, discoveries, improvements and other matters that may be protected by intellectual property rights, that relate to the Company’s business and are the results of Executive’s efforts during the Term (collectively, the “Executive Work Product”), whether conceived or developed alone or with others, and whether or not conceived during the regular working hours of the Company, shall be deemed works made for hire and are the property of the

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Company. In the event that for whatever reason such Executive Work Product shall not be deemed a work made for hire, Executive agrees that such Executive Work Product shall become the sole and exclusive property of the Company, and Executive hereby assigns to the Company his entire right, title and interest in and to each and every patent, copyright, trade or service mark (including any attendant goodwill), trade secret or other intellectual property right embodied in Executive Work Product. The Company shall also have the right, in its sole discretion to keep any and all of Executive Work Product as the Company’s Confidential Material. The foregoing work made for hire and assignment provisions are and shall be in consideration of this agreement of employment by the Company, and no further consideration is or shall be provided to Executive by the Company with respect to these provisions. Executive agrees to execute any assignment documents the Company may require confirming the Company’s ownership of any Executive Work Product. Executive also waives any and all moral rights with respect to any such works, including without limitation any and all rights of identification of authorship and/or rights of approval, restriction or limitation on use or subsequent modifications. Executive promptly will disclose to the Company any Executive Work Product.

7.3 No Unfair Competition After Termination of Agreement. Executive hereby acknowledges that the sale or unauthorized use or disclosure of any of the Company’s Confidential Material obtained by Executive by any means whatsoever, at any time before, during or after the Term shall constitute unfair competition. Executive shall not engage in any unfair competition with the Company either during the Term or at any time thereafter.

7.4 Covenant Not to Compete. In the event this Agreement is terminated by the Company for “Cause” under Section 6.1 above, or by Executive, for a reason other than one specified in Section 6.3 above, then for a period of one year after the effective date of such termination, Executive shall not, directly or indirectly, work for or provide services to or own an equity interest (except for a Permissible Investment) in any person, firm or entity engaged in the casino gaming, card club or horseracing business which competes against the Company in any “market” in which the Company owns or operates a casino, card club or horseracing facility. For purposes of this Agreement, “market” shall be defined as the area within a 100 mile radius of any casino, card club or horseracing facility owned or operated or under construction by the Company.

7.5 No Hire Away Policy. In the event this Agreement is terminated prior to the normal expiration of the Term, either by the Company for cause under Section 6.1 above, or by Executive, for a reason other than one specified in Section 6.3 above, then for a period of one (1) year after the effective date of such termination, Executive shall not, directly or indirectly, for himself or on behalf of any entity with which he is affiliated or employed, hire any person known to Executive to be an employee of the Company or any of its subsidiaries (or any person known to Executive to have been such an employee within six (6) months prior to such occurrence). Executive shall not be deemed to hire any such person so long as he did not directly or indirectly engage in or encourage such hiring.

7.6 No Solicitation. During the Term and for a period of one (1) year thereafter, or, if sooner, for a period of one (1) year after earlier termination of this Agreement prior to expiration of the Term, and regardless of the reason for such termination (whether by the Company or Executive), Executive shall not directly or indirectly, for himself or on behalf of any entity with which he is affiliated or employed, solicit any employee of the Company or any of its subsidiaries (or any person who was such an employee within six (6) months prior to such occurrence) or encourage any such employee to leave the employment of the Company or any of its subsidiaries.

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7.7 Non-Solicitation of Customers. During the Term and for a period of one (1) year thereafter, or, if sooner, for a period of one (1) year after the earlier termination of this Agreement prior to the expiration of the Term, and regardless of the reason for such termination (whether by the Company or Executive), Executive shall not solicit any customers of the Company or its subsidiaries or any of their respective casinos or card clubs, or knowingly encourage any such customers to leave the Company’s casinos or card clubs or knowingly encourage any such customers to use the facilities or services of any competitor of the Company or its subsidiaries. Executive shall at no times use proprietary customer lists or Confidential Material to solicit customers.

7.8 Irreparable Injury. The promised service of Executive under this Agreement and the other promises of this Article 7 are of special, unique, unusual, extraordinary, or intellectual character, which gives them peculiar value, the loss of which cannot be reasonably or adequately compensated in damages in an action at law.

7.9 Remedies for Breach. Executive agrees that money damages will not be a sufficient remedy for any breach of the obligations under this Article 7 and Article 2 hereof and that the Company shall be entitled to injunctive relief (which shall include, but not be limited to, restraining Executive from directly or indirectly working for or having an ownership interest (except for a Permissible Investment) in any person engaged in the casino, gaming or horseracing businesses in any market which the Company or its affiliates owns or operates any such business, using or disclosing the Confidential Material) and to specific performance as remedies for any such breach. Executive agrees that the Company shall be entitled to such relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, without the necessity of proving actual damages and without the necessity of posting a bond or making any undertaking in connection therewith. Any such requirement of a bond or undertaking is hereby waived by Executive and Executive acknowledges that in the absence of such a waiver, a bond or undertaking might otherwise be required by the court. Such remedies shall not be deemed to be the exclusive remedies for any breach of the obligations in this Article 7, but shall be in addition to all other remedies available at law or in equity.

ARTICLE 8.

ARBITRATION

8.1 General. Except for a claim for injunctive relief under Section 7.9, any controversy, dispute, or claim between the parties to this Agreement, including any claim arising out of, in connection with, or in relation to the formation, interpretation, performance or breach of this Agreement shall be settled exclusively by arbitration, before a single arbitrator, in accordance with this Article 8 and the then most applicable rules of the American Arbitration Association. Judgment upon any award rendered by the arbitrator may be entered by any state or federal court having jurisdiction thereof. Such arbitration shall be administered by

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the American Arbitration Association. Arbitration shall be the exclusive remedy for determining any such dispute, regardless of its nature. Notwithstanding the foregoing, either party may in an appropriate matter apply to a court for provisional relief, including a temporary restraining order or a preliminary injunction, on the ground that the award to which the applicant may be entitled in arbitration may be rendered ineffectual without provisional relief. Unless mutually agreed by the parties otherwise, any arbitration shall take place in Las Vegas, Nevada.

8.2 Selection of Arbitrator. In the event the parties are unable to agree upon an arbitrator, the parties shall select a single arbitrator from a list of nine arbitrators drawn by the parties at random from the “Independent” (or “Gold Card”) list of retired judges or, at the option of Executive, from a list of nine persons (which shall be retired judges or corporate or litigation attorneys experienced in executive employment agreements) provided by the office of the American Arbitration Association having jurisdiction over Las Vegas, Nevada. If the parties are unable to agree upon an arbitrator from the list so drawn, then the parties shall each strike names alternately from the list, with the first to strike being determined by lot. After each party has used four strikes, the remaining name on the list shall be the arbitrator. If such person is unable to serve for any reason, the parties shall repeat this process until an arbitrator is selected.

8.3 Applicability of Arbitration; Remedial Authority. This agreement to resolve any disputes by binding arbitration shall extend to claims against any parent, subsidiary or affiliate of each party, and, when acting within such capacity, any officer, director, stockholder, employee or agent of each party, or of any of the above, and shall apply as well to claims arising out of state and federal statutes and local ordinances as well as to claims arising under the common law. In the event of a dispute subject to this paragraph the parties shall be entitled to reasonable discovery subject to the discretion of the arbitrator. The remedial authority of the arbitrator (which shall include the right to grant injunctive or other equitable relief) shall be the same as, but no greater than, would be the remedial power of a court having jurisdiction over the parties and their dispute. The arbitrator shall, upon an appropriate motion, dismiss any claim without an evidentiary hearing if the party bringing the motion establishes that he or it would be entitled to summary judgment if the matter had been pursued in court litigation. In the event of a conflict between the applicable rules of the American Arbitration Association and these procedures, the provisions of these procedures shall govern.

8.4 Fees and Costs. Any filing or administrative fees shall be borne initially by the party requesting arbitration. The Company shall be responsible for the costs and fees of the arbitration, unless Executive wishes to contribute (up to 50%) of the costs and fees of the arbitration. Notwithstanding the foregoing, the prevailing party in such arbitration, as determined by the arbitrator, and in any enforcement or other court proceedings, shall be entitled, to the extent permitted by law, to reimbursement from the other party for all of the prevailing party’s costs (including but not limited to the arbitrator’s compensation), expenses, and attorneys’ fees.

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8.5 Award Final and Binding. The arbitrator shall render an award and written opinion, and the award shall be final and binding upon the parties. If any of the provisions of this paragraph, or of this Agreement, are determined to be unlawful or otherwise unenforceable, in whole or in part, such determination shall not affect the validity of the remainder of this Agreement, and this Agreement shall be reformed to the extent necessary to carry out its provisions to the greatest extent possible and to insure that the resolution of all conflicts between the parties, including those arising out of statutory claims, shall be resolved by neutral, binding arbitration. If a court should find that the arbitration provisions of this Agreement are not absolutely binding, then the parties intend any arbitration decision and award to be fully admissible in evidence in any subsequent action, given great weight by any finder of fact, and treated as determinative to the maximum extent permitted by law.

ARTICLE 9.

MISCELLANEOUS

9.1 Amendments. The provisions of this Agreement may not be waived, altered, amended or repealed in whole or in part except by the signed written consent of the parties sought to be bound by such waiver, alteration, amendment or repeal.

9.2 Entire Agreement. This Agreement and the stock option agreements between the Company and Executive constitute the total and complete agreement of the parties and supersedes all prior and contemporaneous understandings and agreements heretofore made, including the Original Agreement and the 2006 Agreement, and there are no other representations, understandings or agreements.

9.3 Counterparts. This Agreement may be executed in one of more counterparts, each of which shall be deemed and original, but all of which shall together constitute one and the same instrument. The exchange of copies of this Agreement and of signature pages by facsimile transmission or by e-mail shall constitute effective execution and delivery of this Agreement as to the parties and may be used in lieu of the original Agreement for all purposes. Signatures of the parties transmitted by facsimile or by e-mail shall be deemed to be their original signatures for any purpose whatsoever.

9.4 Severability. Each term, covenant, condition or provision of this Agreement shall be viewed as separate and distinct, and in the event that any such term, covenant, condition or provision shall be deemed by an arbitrator or a court of competent jurisdiction to be invalid or unenforceable, the court or arbitrator finding such invalidity or unenforceability shall modify or reform this Agreement to give as much effect as possible to the terms and provisions of this Agreement. Any term or provision which cannot be so modified or reformed shall be deleted and the remaining terms and provisions shall continue in full force and effect.

9.5 Waiver or Delay. The failure or delay on the part of the Company, or Executive to exercise any right or remedy, power or privilege hereunder shall not operate as a waiver thereof. A waiver, to be effective, must be in writing and signed by the party making the waiver. A written waiver of default shall not operate as a waiver of any other default or of the same type of default on a future occasion.

Kortman December 2008

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9.6 Successors and Assigns. This Agreement shall be binding on and shall inure to the benefit of the parties to it and their respective heirs, legal representatives, successors and assigns, except as otherwise provided herein. Except as provided in this Section 9.6, without the prior written consent of Executive, this Agreement shall not be assignable by the Company. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. “Company” means the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid that assumes and agrees to perform this Agreement by operation of law or otherwise.

9.7 No Assignment or Transfer by Executive. Neither this Agreement nor any of the rights, benefits, obligations or duties hereunder may be assigned or transferred by Executive. Any purported assignment or transfer by Executive shall be void.

9.8 Necessary Acts. Each party to this Agreement shall perform any further acts and execute and deliver any additional agreements, assignments or documents that may be reasonably necessary to carry out the provisions or to effectuate the purpose of this Agreement.

9.9 Governing Law. This Agreement and all subsequent agreements between the parties shall be governed by and interpreted, construed and enforced in accordance with the laws of the State of Nevada.

9.10 Notices. All notices, requests, demands and other communications to be given under this Agreement shall be in writing and shall be deemed to have been duly given on the date of service, if personally served on the party to whom notice is to be given, or 48 hours after mailing, if mailed to the party to whom notice is to be given by certified or registered mail, return receipt requested, postage prepaid, and properly addressed to the party at his address set forth as follows or any other address that any party may designate by written notice to the other parties:

To Executive:	Clifford D. Kortman
	3800 Howard Hughes Parkway
	Las Vegas, NV 89169
	Telephone: 702 784-7777
	Facsimile: 702 784-7773

Kortman December 2008

20

To the Company:	Pinnacle Entertainment, Inc.
	3800 Howard Hughes Parkway
	Las Vegas, NV 89169
	Attn: General Counsel
	Telephone: 702 784-7777
	Facsimile: 702 784-7773
with copy to:	Irell & Manella LLP
	1800 Avenue of the Stars, Suite 900
	Los Angeles, CA 90067-4276
	Attn: Al Segel
	Telephone: 310 277-1010
	Facsimile: 310 284-3052

9.11 Headings and Captions. The headings and captions used herein are solely for the purpose of reference only and are not to be considered as construing or interpreting the provisions of this Agreement.

9.12 Construction. All terms and definitions contained herein shall be construed in such a manner that shall give effect to the fullest extent possible to the express or implied intent of the parties hereby.

9.13 Counsel. Executive has been advised by the Company that he should consider seeking the advice of counsel in connection with the execution of this Agreement and Executive has had an opportunity to do so. Executive has read and understands this Agreement, and has sought the advice of counsel to the extent he has determined appropriate. The Company shall reimburse Executive for the reasonable fees and expenses of Executive’s counsel in connection with this Agreement.

9.14 Withholding of Compensation. Executive hereby agrees that the Company may deduct and withhold from the compensation or other amounts payable to Executive hereunder or otherwise in connection with Executive’s employment any amounts required to be deducted and withheld by the Company under the provisions of any applicable Federal, state and local statute, law, regulation, ordinance or order.

9.15 References to Sections of the Code. All references in this Agreement and Appendix A hereto to sections of the Code shall be to such sections and to any successor or substantially comparable sections of the Code or to any successor thereto.

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9.16 Effect of Delay. Executive’s or the Company’s failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right Executive or the Company may have hereunder, including without limitation the right of Executive to terminate employment for Good Reason pursuant to Section 6.5.3, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on the date first written above.

EXECUTIVE	THE COMPANY
CLIFFORD D. KORTMAN	PINNACLE ENTERTAINMENT, INC.
/s/ Clifford D. Kortman	By:	/s/ John A. Godfrey John A. Godfrey,
		Executive Vice President, General Counsel and Secretary

Kortman December 2008

22

Appendix A

Tax Gross-up Payments

(a) Anything in this Agreement to the contrary notwithstanding and except as set forth below, in the event it shall be determined that any Payment would be subject to the Excise Tax, then Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by Executive of all taxes (excluding any interest, additions, increases or penalties imposed with respect to such taxes except for interest, additions, increases or penalties with respect to the Excise Tax), including, without limitation, any income taxes (except for any interest, additions, increases and penalties imposed with respect thereto) and the Excise Tax imposed upon the Payment and the Gross-Up Payment, Executive is placed in the same tax position with respect to the Payment as Executive would have been in if the Excise Tax had never been enacted.

(b) Subject to the provisions of Section (c), all determinations required to be made under this appendix, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s independent accounting firm or such other nationally recognized certified public accounting firm as may be designated by Executive (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Subject to Section (e) below, any Gross-Up Payment, as determined pursuant to this appendix shall be paid by the Company to Executive within five (5) days of the receipt of the Accounting Firm’s determination. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section (c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.

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(c) Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten (10) business days after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which it gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:

(i) give the Company any information reasonably requested by the Company relating to such claim,

(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company,

(iii) cooperate with the Company in good faith in order effectively to contest such claim, and

(iv) permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section (c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim; provided, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(d) If Executive becomes entitled to receive any refund with respect to the Gross-Up Payment or the Excise Tax, Executive shall promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If Executive would have received a refund of all or any portion of the Gross-Up Payment or the Excise Tax, except that a taxing authority offset the amount of such refund against other tax liabilities, interest, or penalties, Executive shall pay the amount of such offset over to the Company, together with the amount of interest Executive would have received from the taxing authority if such offset had been an actual refund, promptly after receipt of notice from the taxing authority of such offset.

(e) Notwithstanding any other provision of this appendix, the Company may withhold and pay over to the Internal Revenue Service for the benefit of Executive all or any portion of the Gross-Up Payment that it determines in good faith that it is or may be in the future required to withhold, and Executive hereby consents to such withholding.

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(f) Subject to the foregoing provisions of this Appendix that may require earlier payment, any Gross-Up Payment shall be paid to or for the benefit the Executive by December 31 of the calendar year following the calendar year in which the Excise Tax is remitted, or, if no Excise Tax is remitted, by December 31 of the calendar year following the calendar year in which there is a final and non-appealable settlement or other resolution of an audit or litigation relating to the Excise Tax.

(g) Definitions. The following terms shall have the following meanings for purposes of this appendix.

(i) “Excise Tax” shall mean the excise tax imposed by Section 4999 of the Code, together with any interest or penalties imposed with respect to such excise tax.

((ii) A “Payment” shall mean any payment or distribution in the nature of compensation (within the meaning of Section 280G(b)(2) of the Code) to or for the benefit of Executive, whether paid or payable pursuant to this Agreement or otherwise.

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APPENDIX B

RELEASE and RESIGNATION

For valuable consideration, receipt of which is hereby acknowledged, the undersigned                      (“Executive”), for himself and his spouse, heirs, estate, administrators and executors, hereby fully and forever releases and discharges Pinnacle Entertainment, Inc., a Delaware corporation (the “Company”), and each of its subsidiaries and the officers, directors, employees, attorneys and agents of the Company and each such subsidiary, of and from any and all claims, demands, causes of action of any kind or nature, in law, equity or otherwise, whether known or unknown, which Executive has had, may have had, or now has, or may have, arising out of or in connection with Executive’s employment with the Company and/or its subsidiaries or the termination of such employment; provided, however, that nothing contained herein is intended to nor shall constitute a release of the Company from any obligations it may have to Executive under any written employment agreement between Executive and the Company in effect as of the date hereof, or any deferred compensation plan or arrangement in which Executive participates or any rights of indemnification under the Company’s Articles, Bylaws, Indemnity Trust Agreement or the like, or coverage under Director and Officer Insurance, nor shall it prevent Executive from exercising his rights, if any, under any such employment agreement or under any stock option, restricted stock or similar agreement in effect as of the date hereof in accordance with their terms.

Executive represents and warrants that he has not assigned or in any way conveyed, transferred or encumbered all or any portion of the claims or rights covered by this release.

Executive hereby resigns from all positions as an officer, director or employee of the Company and each of its subsidiaries or affiliates effective the date hereof and further agrees to execute such further evidence of such resignations as may be necessary or appropriate to effectuate the foregoing.

Executed this            day of           , 20     .

Executive

Kortman December 2008

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EX-10.17

Exhibit 10.17

FIRST AMENDMENT TO

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS FIRST AMENDMENT TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT (“Amendment”) is made effective as of the 18^th day of December, 2009, by and between PINNACLE ENTERTAINMENT, INC., a Delaware corporation (the “Company”), and CLIFFORD D. KORTMAN, an individual (“Executive”), with respect to the following facts and circumstances:

RECITALS

The Company and Executive entered into an Amended and Restated Employment Agreement effective December 22, 2008 (the “Agreement”) with Executive having the title Senior Vice President — Construction/Development.

Effective December 10, 2009, the Board of Directors of the Company elected the Executive as Executive Vice President of Construction and Development.

The Company and Executive desire to amend the Agreement to reflect Executive’s current title and to make certain conforming changes.

NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements set forth herein, the parties hereto agree as follows:

AMENDMENTS

1. Article 1, Section 1.1 of the Agreement (Employment) is hereby deleted in its entirety and replaced with the following new Article 1, Section 1.1:

“1.1 Employment. The Company agrees to engage Executive in the capacity as Executive Vice President of Construction and Development, and as President of the Company’s subsidiary, Pinnacle Design & Construction, LLC, and Executive hereby accepts such engagement by the Company upon the terms and conditions specified below.”

2. Article 2, Section 2.1 of the Agreement (Duties) is hereby deleted in its entirety and replaced with the following new Article 2, Section 2.1:

“2.1 Duties. Executive shall perform all the duties and obligations generally associated with the positions of Executive Vice President of Construction and Development, and as President of Pinnacle Design & Construction, LLC, subject to the control and supervision of the Company’s Chief Executive Officer (the “Chief Executive Officer”), and such other executive duties consistent with the foregoing as may be assigned to him from time to time by the Chief Executive Officer. Executive shall perform the services contemplated herein faithfully, diligently, to the best of his ability and in the best interests of the Company. Executive shall at all times perform such services in compliance with, and to the extent of his authority, shall to the best of his ability cause the Company to be in compliance with, any and all laws, rules and regulations applicable to the Company of which Executive is aware. Executive may rely on the Company’s inside counsel and outside lawyers in connection with such matters. Executive shall, at all times during the Term, in all material respects adhere to and obey any and all written internal rules and regulations governing the conduct of the Company’s employees, as established or modified from time to time; provided, however, in the event of any conflict between the provisions of this Agreement and any such rules or regulations, the provisions of this Agreement shall control.”

3. Except as modified herein, all other terms of the Agreement shall remain in full force and effect. In the event of a conflict between the terms of the Agreement and this Amendment, the terms of this Amendment shall apply. No modification may be made to the Agreement or this Amendment except in writing and signed by both the Company and Executive.

[SIGNATURE APPEAR ON THE FOLLOWING PAGE]

- 2 -

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered effective as of the date first written above.

EXECUTIVE	PINNACLE ENTERTAINMENT, INC.
/s/ Clifford D. Kortman Clifford D. Kortman	By:	/s/ John A. Godfrey John A. Godfrey, Executive Vice President,
		Secretary and General Counsel

- 3 -

EX-10.48

Exhibit 10.48

Summary of Compensatory Arrangement between Pinnacle Entertainment, Inc. and John V. Giovenco

John V. Giovenco shall be entitled to receive $75,000 per month as compensation for his service as Interim Chief Executive Officer of Pinnacle Entertainment, Inc. (the “Company”), retroactive to November 7, 2009. In addition, Mr. Giovenco received fully vested options on November 24, 2009 and February 8, 2010, covering 50,000 shares of the Company’s common stock for each grant. The exercise price for each option was the closing price of the Company’s common stock on the date of grant. The options will be exercisable until one year following Mr. Giovenco’s cessation of service as a director for any reason, but in no event shall the options be exercisable more than ten years from the date of grant. At the end of Mr. Giovenco’s term as Interim Chief Executive Officer, Mr. Giovenco shall be eligible to receive a discretionary bonus as determined by the Board of Directors of the Company.

EX-10.54

Exhibit 10.54

FORM OF AMENDMENT TO STOCK OPTION AGREEMENTS FOR DIRECTORS

This Amendment is made as of  _________  , 20  _____  by and between Pinnacle Entertainment, Inc., a Delaware corporation (the “Company”) and  _____________  (“Director”), with reference to the following facts:

A. The Company has granted stock options to Director under one or more stock option agreements to compensate him for his service on the Company’s Board of Directors.

B. The Company has determined that it is in its best interests to ensure that, in the event that Director ceases to be a member of the Company’s Board of Directors, he will have an adequate opportunity to exercise his stock options.

NOW, THEREFORE, the Company and Director hereby agree as follows:

1. Each stock option agreement between the Company and Director which is currently in force is hereby amended so that, in the event that Director ceases for any reason to be a member of the Company’s Board of Directors, Director may exercise each of his vested stock options until the expiration of one year from the date Director ceased to be a member of the Company’s Board of Directors, or, if longer, the applicable period specified in the stock option agreement governing such stock option for exercisability of such stock option following the date on which Director ceases to be a member of the Company’s Board of Directors; provided, however, that in no event shall a stock option be exercisable more than ten years from the date such stock option was granted.

2. In all other respects, the terms and provisions of each stock option agreement between the Company and Director are hereby ratified and declared to continue in full force and effect.

IN WITNESS WHEREOF, this Amendment has been executed by the Company and Director as of the date first above written.

PINNACLE ENTERTAINMENT, INC.
By:
	DIRECTOR

EX-10.55

Exhibit 10.55

FORM OF AMENDMENT TO STOCK OPTION AGREEMENTS
AND EMPLOYMENT AGREEMENT FOR EXECUTIVE OFFICERS

This Amendment is made as of  ____________  , 20  _____  by and between Pinnacle Entertainment, Inc., a Delaware corporation (the “Company”) and  ________________  (“Executive”), with reference to the following facts:

A. The Company employs Executive, and, to compensate Executive for his services, has granted stock options to Executive under one or more stock option agreements.

B. The Company believes that it is in its best interests to ensure that Executive will have ample opportunity to exercise his stock options should his employment be terminated without Cause or should he resign for Good Reason.

NOW, THEREFORE, the Company and Executive hereby agree as follows:

1. Each stock option agreement currently in force between the Company and Executive, and the Employment Agreement currently in force between the Company and Executive, are hereby amended so that, in the event that the Company terminates Executive’s employment without “Cause” or that Executive terminates his employment with the Company for “Good Reason,” Executive may exercise each of his vested stock options until the expiration of the earlier of (a) ten years from the date such stock option was granted, or (b) one year from the date that Company terminated Executive’s employment without “Cause” or Executive terminated his employment with the Company for “Good Reason.” The terms “Cause” and “Good Reason” shall be as defined in Executive’s Employment Agreement with the Company.

2. In all other respects, the terms and provisions of each stock option agreement between the Company and Executive, and of Executive’s current Employment Agreement with the Company, are hereby ratified and declared to continue in full force and effect.

IN WITNESS WHEREOF, the Company and Executive have executed this Amendment as of the date first above written.

PINNACLE ENTERTAINMENT, INC.
By:
	EXECUTIVE

EX-10.56

Exhibit 10.56

AMENDMENT TO SEPARATION AGREEMENT

This Amendment to Separation Agreement (the “Amendment”) is made this 11th day of February, 2010 by and between PINNACLE ENTERTAINMENT, INC. (the “Company”) and DANIEL R. LEE (“Executive” and together with the Company, the “Parties”) with reference to the following facts:

A. On November 7, 2009 the Parties entered into a Separation Agreement setting forth the rights and obligations of the Parties in connection with Executive’s separation from the Company.

B. The Parties wish to amend the Separation Agreement in the manner set forth herein.

Accordingly, the Separation Agreement is amended as follows:

1. Accrued Salary, Expenses and Prorated Bonus. The last sentence of Section 3(a) of the Separation Agreement is amended to read as follows:

“In addition, Executive shall be entitled to receive a bonus for the 2009 year in the amount of $749,325, payable six (6) months and one (1) day after the Separation date.”

2. Accelerated Vesting — Stock Options. Section 3(c) of the Separation Agreement is amended by the addition of the following sentence at the end of that Section:

“Notwithstanding the preceding sentence, Executive agrees that options held by him covering 483,333 shares at an exercise price of $14.70 shall expire and cease to be exercisable concurrently with the execution of this Amendment.”

Except as amended as provided in Sections 1. and 2. above, the Separation Agreement remains in full force and effect.

Executed on the year and date set forth above.

DANIEL R. LEE		PINNACLE ENTERTAINMENT, INC.
By:	/s/ Daniel R. Lee	By:	/s/ John A. Godfrey
	Daniel R. Lee		John A. Godfrey, Executive Vice
			President and General Counsel

SPOUSAL CONSENT

By her signature below, the spouse of Daniel R. Lee agrees to be bound by all of the items and conditions of the foregoing Amendment to Separation Agreement.

Dated: February 11, 2010

By:	/s/ Suzanne Lee
	Suzanne Lee

EX-11

Exhibit 11

Pinnacle Entertainment, Inc.
Computation of Earnings Per Share

	For the three months ended December 31,
	Basic									Diluted (a)
	2009			2008			2007			2009			2008			2007
	(in thousands, except per share data)
Average number of common shares outstanding		60,080			59,981			59,852			60,080			59,981			59,852
Average common shares due to assumed conversion of stock options		—			—			—			—			—			—
Total shares		60,080			59,981			59,852			60,080			59,981			59,852
Income (loss) from continuing operations, net	$	(242,326	)	$	(297,783	)	$	(18,004	)	$	(242,326	)	$	(297,783	)	$	(18,004	)
Income (loss) from discontinued operations, net		306			85			(1,192	)		306			85			(1,192	)
Net income (loss)	$	(242,020	)	$	(297,698	)	$	(19,196	)	$	(242,020	)	$	(297,698	)	$	(19,196	)
Per share data:
Income (loss) from continuing operations, net	$	(4.03	)	$	(4.97	)	$	(0.30	)	$	(4.03	)	$	(4.97	)	$	(0.30	)
Income (loss) from discontinued operations, net		0.00			(0.00	)		(0.02	)		0.00			(0.00	)		(0.02	)
Net income per share	$	(4.03	)	$	(4.97	)	$	(0.32	)	$	(4.03	)	$	(4.97	)	$	(0.32	)

	For the years ended December 31,
	Basic									Diluted (a)
	2009			2008			2007			2009			2008			2007
	(in thousands, except per share data)
Average number of common shares outstanding		60,056			59,966			59,221			60,056			59,966			59,221
Average common shares due to assumed conversion of stock options		—			—			—			—			—			—
Total shares		60,056			59,966			59,221			60,056			59,966			59,211
Income (loss) from continuing operations, net	$	(257,830	)	$	(370,196	)	$	44		$	(257,830	)	$	(370,196	)	$	44
Income (loss) from discontinued operations, net		(472	)		47,599			(1,450	)		(472	)		47,599			(1,450	)
Net income (loss)	$	(258,302	)	$	(322,597	)	$	(1,406	)	$	(258,302	)	$	(322,597	)	$	(1,406	)
Per share data:
Income (loss) from continuing operations, net	$	(4.29	)	$	(6.17	)	$	0.00		$	(4.29	)	$	(6.17	)	$	0.00
Income (loss) from discontinued operations, net		(0.01	)		0.79			(0.02	)		(0.01	)		0.79			(0.02	)
Net income per share	$	(4.30	)	$	(5.38	)	$	(0.02	)	$	(4.30	)	$	(5.38	)	$	(0.02	)

(a) When the computed diluted values are antidilutive, the basic per share values are presented on the face of the Consolidated Income Statements.

EX-12

Exhibit 12

Pinnacle Entertainment, Inc.
Computation of Ratio of Earnings to Fixed Charges

	2005			2006			2007			2008			2009
	(in thousands)
Earnings:
Pre-tax income (loss)	$	(17,350	)	$	102,909		$	(1,851	)	$	(424,741	)	$	(255,086	)
Add fixed charges		62,385			62,023			72,339			82,521			102,228
Less capitalized interest		(7,130	)		(5,750	)		(42,851	)		(25,144	)		(13,758	)
Total earnings	$	37,905		$	159,182		$	27,637		$	(367,364	)	$	(166,616	)
Fixed charges
Interest expense — inclusive of the amortization of debt issuance costs	$	49,535		$	53,678		$	25,715		$	53,049		$	84,315
Capitalized interest		7,130			5,750			42,851			25,144			13,758
Estimated interest portion of rent expense		5,720			2,595			3,773			4,328			4,155
Total fixed charges	$	62,385		$	62,023		$	72,339		$	82,521		$	102,228
Ratio of earnings to fixed charges		0.61 x			2.57 x			0.38 x		$	(4.45)x		$	(1.63)x

EX-21

Exhibit 21

Pinnacle Entertainment, Inc.
List of Subsidiaries

Subsidiary	State of Organization	Name(s) under which Subsidiary does Business
ACE Gaming, LLC	New Jersey
AREH MLK LLC	Delaware
AREP Boardwalk Properties LLC	Delaware
Belterra Resort Indiana, LLC	Nevada	Belterra Casino Resort & Spa
BILOXI CASINO CORP.	Mississippi
Boomtown, LLC	Delaware
Brighton Park Maintenance Corp.	New Jersey	Brighton Park
Casino Magic Corp.	Minnesota
Casino Magic (Europe) B.V.	Netherlands
Casino Magic Hellas Management Services, S.A.	Greece
Casino Magic Management Services Corp.	Minnesota
Casino Magic Neuquén SA	Argentina	Casino Magic, Casino Magic Argentina, Casino Magic Hotel & Casino, Casino Magic Neuquén, Casino Magic San Martin de Los Andes, Casino Magic Junin de Los Andes, and Casino Magic Caviahue
Casino One Corporation	Mississippi	Lumière Place Casino & Hotels
Double Bogey, LLC	Texas
Landing Condominium, LLC	Missouri
Louisiana-I Gaming, A Louisiana Partnership in Commendam	Louisiana	Boomtown New Orleans
Mitre Associates LLC	Delaware
OGLE HAUS, LLC	Indiana	Best Western Ogle Haus Inn
Pinnacle Design & Construction, LLC	Nevada
PNK (Baton Rouge) Partnership	Louisiana
PNK (BOSSIER CITY), Inc.	Louisiana	Boomtown Bossier
PNK (CHILE 1), LLC	Delaware
PNK (CHILE 2), LLC	Delaware
PNK Development 1, Inc.	Delaware
PNK Development 2, Inc.	Delaware
PNK Development 3, Inc.	Delaware
PNK Development 4, Inc.	Delaware
PNK Development 5, Inc.	Delaware
PNK Development 6, Inc.	Delaware
PNK Development 7, LLC	Delaware
PNK Development 8, LLC	Delaware
PNK Development 9, LLC	Delaware
PNK Development 10, LLC	Delaware
PNK Development 11, LLC	Nevada
PNK Development 12, LLC	Nevada
PNK Development 13, LLC	New Jersey
PNK Development 15, LLC	Pennsylvania
PNK Development 16, LLC	Indiana
PNK Development 17, LLC	Nevada
PNK Development 18, LLC	Delaware
PNK Development 19, LLC	Delaware
PNK Development 20, LLC	Delaware
PNK Development 21, LLC	Delaware
PNK Development 22, LLC	Delaware

Subsidiary	State of Organization	Name(s) under which Subsidiary does Business
PNK Development 23, LLC	Nevada
PNK Development 24, LLC	Nevada
PNK Development 25, LLC	Nevada
PNK Development 26, LLC	Nevada
PNK Development 27, LLC	Nevada
PNK Development 28, LLC	Delaware
PNK (ES), LLC	Delaware	HoteLumière
PNK (EXUMA), LIMITED	Bahamas
PNK (Kansas), LLC	Kansas
PNK (LAKE CHARLES), L.L.C.	Louisiana	L’Auberge du Lac Casino Resort
PNK (RENO), LLC	Nevada	Boomtown Reno
PNK (River City), LLC	Missouri	River City Casino
PNK (SCB), L.L.C.	Louisiana	Sugarcane Bay
PNK (STLH), LLC	Delaware
PNK (ST. LOUIS RE), LLC	Delaware
Port St. Louis Condominium, LLC	Missouri
President Riverboat Casino-Missouri, Inc.	Missouri	President Casino
PSW Properties LLC	Delaware
Realty Investment Group, Inc.	Delaware
St. Louis Casino Corp.	Missouri
Yankton Investments, LLC	Nevada

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in Registration Statement No. 333-158268 on Form S-3 and Registration Statements Nos. 033-63793, 333-27501, 333-31065, 333-67155, 333-86223, 333-31162, 333-60616, 333-62378, 333-107081, 333-134130, 333-157988 and 333-157990 on Form S-8 of our reports dated February 26, 2010 with respect to the consolidated financial statements and financial statement schedule of Pinnacle Entertainment, Inc. and the effectiveness of internal control over financial reporting of Pinnacle Entertainment, Inc., included in this Annual Report on Form 10-K for the year ended December 31, 2009.

/s/ Ernst & Young LLP

Las Vegas, Nevada
February 26, 2010

EX-23.2

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 333-158268 on Form S-3 and Registration Statement Nos. 033-63793, 333-27501, 333-31065, 333-67155, 333-86223, 333-31162, 333-60616, 333-62378, 333-107081, 333-134130, 333-157988 and 333-157990 on Form S-8 of our report dated March 9, 2009, relating to the consolidated financial statements and financial statement schedule of Pinnacle Entertainment, Inc. appearing in the Annual Report on Form 10-K of Pinnacle Entertainment, Inc. for the year ended December 31, 2009.

/s/ DELOITTE & TOUCHE LLP
Las Vegas, NV
February 26, 2010

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 333-158268 on Form S-3 and Registration Statement Nos. 033-63793, 333-27501, 333-31065, 333-67155, 333-86223, 333-31162, 333-60616, 333-62378, 333-107081, 333-134130, 333-157988 and 333-157990 on Form S-8 of our report dated March 9, 2009, relating to the consolidated financial statements and financial statement schedule of Pinnacle Entertainment, Inc. (which report on the financial statements and related financial statement schedule expressed an unqualified opinion and included an explanatory paragraph regarding the adoption of a new accounting principle) appearing in the Annual Report on Form 10-K of Pinnacle Entertainment, Inc. for the year ended December 31, 2009.

/s/ DELOITTE & TOUCHE LLP
Las Vegas, NV
February 26, 2010

EX-31.1

Exhibit 31.1

CERTIFICATION

I, John V. Giovenco, certify that:

1. I have reviewed this annual report on Form 10-K of Pinnacle Entertainment, Inc.;

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 13a-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 most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) 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 or 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: February 26, 2010

/s/ John V. Giovenco John V. Giovenco

Interim Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Stephen H. Capp, certify that:

1. I have reviewed this annual report on Form 10-K of Pinnacle Entertainment, Inc.;

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 13a-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 most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) 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 or 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: February 26, 2010

/s/ Stephen H. Capp Stephen H. Capp

Executive Vice President and Chief Financial Officer

EX-32

Exhibit 32

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 Pinnacle Entertainment, Inc. (the “Company”) on Form 10-K for the fiscal year ended December 31, 2009, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 26, 2010

/s/ John V. Giovenco
Name:	John V. Giovenco
Title:	Interim Chief Executive Officer
/s/ Stephen H. Capp
Name:	Stephen H. Capp
Title:	Executive Vice President and
	Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-99.1

Exhibit 99.1

GOVERNMENT REGULATION AND GAMING ISSUES

The ownership and operation of gaming companies are subject to extensive regulation. In particular, Indiana, Louisiana, Missouri, Nevada, New Jersey, and the Province of Neuquen in Argentina have laws, statutes, ordinances and/or regulations (collectively, “Gaming Laws”) affecting the operation of our gaming business and the ownership and disposition of our securities. We summarize these Gaming Laws below.

Our certificate of incorporation requires that any person (as defined in our certificate of incorporation) who owns or controls our securities must comply with Gaming Laws governing such person’s “suitability” as an investor. These provisions apply to all the securities offered by us. Any purchaser or holder of securities that we have offered shall be deemed to have agreed to such provisions. If a person owns or controls our securities or the securities of our affiliated companies and is determined by a gaming authority to be unsuitable to own or control such securities or in the sole discretion of our board of directors is deemed likely to jeopardize our right to conduct gaming activities in any of the jurisdictions in which we conduct or intend to conduct gaming activities, we may redeem, and if required by a gaming authority shall redeem, such person’s securities to the extent required by the gaming authority or deemed necessary or advisable by us.

If a gaming authority requires us, or if we deem it necessary or advisable, to redeem a holder’s securities, we will serve notice on the holder who holds the securities subject to redemption and will call for the redemption of the securities of such holder at a redemption price equal to that required to be paid by the gaming authority making the finding of unsuitability, or if such gaming authority does not require a certain price per share to be paid, a sum deemed reasonable by us.

Indiana. The ownership and operation of riverboat casinos at Indiana-based sites are subject to extensive state regulation under the Indiana Riverboat Gambling Act (the “Indiana Act”), as well as regulations which the Indiana Gaming Commission (the “Indiana Commission”) has adopted pertaining to the Indiana Act. The Indiana Act grants broad and pervasive regulatory powers and authorities to the Indiana Commission. The comprehensive regulations cover ownership, reporting, rules of game and operational matters; thus, the Indiana Act and regulations are significant to prospects for successfully operating the Belterra facility. The Indiana Act has been challenged based on its constitutionality on two occasions and was found constitutional on both occasions.

The Indiana Act authorizes the issuance of up to ten riverboat owner’s licenses to be operated from counties that are contiguous to the Ohio River and Lake Michigan. In October 2000, Belterra, the tenth riverboat, commenced operations along the Ohio River. Five of the riverboats are in counties contiguous to the Ohio River and five are in counties contiguous to Lake Michigan. The Indiana Act originally included an eleventh license for a county contiguous to Patoka Lake. In April 2003, the Indiana General Assembly passed legislation that eliminated the license for a county contiguous to Patoka Lake, but authorized the establishment and operation of a riverboat casino in Orange County, Indiana. Under this legislation, the Indiana Commission is authorized to enter into an operating agreement for up to 20 years with a qualified operator for this facility. The Indiana Commission has selected an operator for the facility and has entered into an operating agreement with this operator. The Orange County riverboat casino began operations in November 2006.

In 2007, the Indiana General Assembly adopted legislation that authorized the holders of Indiana’s two parimutuel racing permits to obtain gambling game licenses from the Indiana Commission and install up to 2,000 slot machines at their respective racetracks. The first of these new racinos opened on June 2, 2008 in Anderson, and the second racino opened one week later in Shelbyville. Both racinos are regulated by the Indiana Commission.

A riverboat owner’s license is a revocable privilege and is not a property right under the Indiana Act. An Indiana license entitles the licensee to own and operate one riverboat. In 2003, the Indiana General Assembly passed legislation that permits a company to own up to 100% of two separate riverboat owner licenses. Under the Indiana Act, however, no person may have an ownership interest in more than two

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Indiana riverboat licenses. An Indiana riverboat owner’s license has an initial effective period of five years; thereafter, a license is subject to annual renewal. After the expiration of the initial license, the Indiana Commission will conduct a complete re-investigation every three years, but the Indiana Commission reserves the right to investigate licenses at any times it deems necessary. The Indiana Commission has broad discretion over the initial issuance of licenses and over the renewal, revocation, suspension, restriction and control of riverboat owner’s licenses. Officers, directors and principal owners of the actual license holder and employees who are to work on the riverboat are subject to substantial disclosure requirements as a part of securing and maintaining necessary licenses. The license granted to Belterra had an initial five-year term, which expired on October 22, 2005. We submitted a formal request for a renewal of Belterra’s riverboat owner’s license within the timetable established by the Indiana Commission, and on November 17, 2005, the Indiana Commission approved the renewal of Belterra’s riverboat owner’s license for a period of one year. Our riverboat owner’s license was renewed again on September 14, 2006 and will continue to be subject to annual renewal. The Indiana Commission completed its triennial investigation of Belterra in 2009, and our most recent one-year renewal was granted by the Indiana Commission on November 12, 2009, retroactive to October 23, 2009.

The 2009 General Assembly enacted legislation that allows the Indiana Commission to adopt a resolution authorizing a trustee to temporarily conduct gambling operations on a riverboat if (1) the Indiana Commission revokes or declines to renew the owner’s license; (2) a proposed transferee is denied an owner’s license when attempting to purchase the riverboat and the person attempting to sell the riverboat is unable or unwilling to retain ownership or control; or (3) a licensed owner agrees in writing to relinquish control of the riverboat. Each riverboat licensee is required to submit for approval by the Indiana Commission a written power of attorney identifying the person who would serve as the licensed owner’s trustee to operate the riverboat. The Indiana Commission has developed a model Power of Attorney (“POA”) that grants the trustee broad and exclusive authority to exercise and perform those acts and powers concerning real and personal property transactions, litigation, insurance, employees and banking transactions. The model POA, which each licensee is required to execute by March 4, 2010, also authorizes the trustee, on behalf of the licensee, to commence, manage, and consent to relief in a case involving the licensee under the bankruptcy code without the consent of the licensee. A riverboat’s owner has 180 days after the date that the resolution is adopted to sell the riverboat and its related properties to a suitable owner who is approved by the Indiana Commission. If the owner is unable to sell the property within that time frame, the trustee may take any action necessary to sell the property to a person who meets the requirements for licensure under the Indiana Act. During the time period that the trustee is operating the casino gambling operation, the trustee has exclusive and broad authority over the casino gambling operations.

Contracts to which Belterra is party are subject to disclosure and approval processes imposed by the regulations. A riverboat owner licensee may not enter into or perform any contract or transaction in which it transfers or receives consideration which is not commercially reasonable or which does not reflect the fair market value of the goods or services rendered or received. All contracts are subject to approval by the Indiana Commission. Suppliers of gaming equipment and materials must also be licensed under the Indiana Act.

Licensees are statutorily required to disclose to the Indiana Commission the identity of all directors, officers and persons holding direct or indirect beneficial interests of 1% or greater. The Indiana Commission also requires a broad and comprehensive disclosure of financial and operating information on licensees and their principal officers, their parent corporations and other upstream owners. The Indiana Act prohibits contributions to a candidate for a state, legislative, or local office, to a candidate’s committee or to a regular party committee by the holder of a riverboat owner’s license or a supplier’s license, by an officer of a licensee, by an officer of a person that holds at least a 1% interest in the licensee or by a person holding at least a 1% interest in the licensee. The Indiana Commission has promulgated a rule requiring quarterly reporting of such licensees, officers, and persons.

Prior to June 2002, riverboats were required to conduct excursions, which limited the times during which patrons could enter the riverboat. In June 2002, the Indiana General Assembly authorized riverboats to either continue conducting excursions or to implement a flexible boarding schedule and remain dockside in order to allow patrons to enter the riverboat at any time during operating hours. Each of the 10 riverboats in operation at the time implemented flexible scheduling. Belterra began dockside operation on August 1, 2002.

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The 2002 legislation also created a graduated wagering tax structure for riverboats implementing flexible scheduling. Under the Indiana Act, “adjusted gross receipts” (“AGR”) means the total of all cash and property received from gaming less cash paid out as winnings and uncollectible gaming receivables (not to exceed 2%). Those riverboats electing to operate dockside are subject to the following graduated wagering tax based on a state fiscal year (July 1 of one year through June 30 of the following year):

• 15% of the first $25 million of AGR.

• 20% of AGR in excess of $25 million, but not exceeding $50 million.

• 25% of AGR in excess of $50 million, but not exceeding $75 million.

• 30% of AGR in excess of $75 million, but not exceeding $150 million.

• 35% of AGR in excess of $150 million, but not exceeding $600 million.

• 40% of AGR in excess of $600 million.

The Indiana Act also prescribes an additional tax for admissions, based on $3 per person for riverboats operated from counties contiguous to Lake Michigan and the Ohio, and $4 per person for the riverboat in Orange County. Real property taxes are imposed on riverboats at rates determined by local taxing authorities. Income to us from Belterra is subject to the Indiana adjusted gross income tax. Sales on a riverboat and at related resort facilities are subject to applicable use, excise and retail taxes. The Indiana Act requires a riverboat owner licensee to directly reimburse the Indiana Commission for the costs of inspectors and agents required to be present while authorized gaming is conducted.

In its 2003 legislative session, the Indiana General Assembly authorized riverboat casinos to remain open 24 hours per day, seven days a week, with those hours to be set at the election of the riverboat. In July 2003, Belterra began continuous 24-hour gaming each day of the week. The 2003 Indiana General Assembly also imposed a retroactive wagering tax on all riverboats, moving the effective date of the 2002 graduated wagering tax from August 1, 2002 to July 1, 2002. The State Department of Revenue has assessed this retroactive tax on the riverboats, without providing an offset for taxes paid at a higher tax rate during that one-month period. Belterra and the other riverboat casinos filed protests with the state, asserting that this interpretation of the legislation is erroneous and should be set aside. These protests were not successful.

Through the establishment of purchasing goals, the Indiana Act encourages minority and women’s business enterprise participation in the riverboat gaming industry. The Indiana Commission is required to establish annual goals for the use of minority and women business enterprises by a riverboat licensee. The goals must be derived from a statistical analysis of utilization study of licensee contracts for goods and services. The Indiana Commission may suspend, limit or revoke the owner’s license or impose a fine for failure to comply with the statutory goals. Under the goals in effect through December 31, 2007, each riverboat licensee was required to expend at least 10% of the total dollar value of the licensee’s qualified contracts for goods and services with minority business enterprises and 5% with women business enterprises. In 2007, the Indiana Commission completed a utilization study of expenditures made by Indiana riverboats from January 1, 2003 to December 31, 2005 in four categories: construction; procurement/supplies; professional services; and other services. The results indicated that the only statistically significant disparity existed in expenditures made to women owned business enterprises in the construction category. On September 13, 2007, the Indiana Commission adopted a resolution establishing new expenditure goals solely in the area where the significant statistical disparity existed. These goals, effective January 1, 2008, established a 10.9% annual goal for expenditures to women owned business enterprises for the purchase of construction goods and services.

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Minimum and maximum wagers on games on the riverboat are left to the discretion of the licensee. Wagering may not be conducted with money or other negotiable currency. There are no statutory restrictions on extending credit to patrons with the exception of persons participating in the voluntary exclusion program; however, the matter of credit continues to be a matter of potential legislative action.

If an institutional investor acquires 5% or more of any class of voting securities of a licensee (or a holding or intermediary company of a licensee), the investor is required to notify the Indiana Commission and to provide additional information, and may be subject to a finding of suitability. Institutional investors who acquire 15% or more of any class of voting securities are subject to a finding of suitability. In addition, the Indiana Commission may require an institutional investor that acquires 15% or more of certain non-voting equity units to apply for a finding of suitability. Any other person who acquires 5% or more of any class of voting securities of a licensee (or a holding or intermediary company of a licensee) is required to apply to the Indiana Commission for a finding of suitability.

A riverboat licensee or an affiliate may not enter into a debt transaction of $1,000,000 or more without approval of the Indiana Commission. The Indiana Commission has taken the position that a “debt transaction” includes increases in maximum amount available under revolving credit facilities. A riverboat owner licensee or any other person may not lease, hypothecate, borrow money against or loan money against or otherwise securitize a riverboat owner’s license. Indiana Commission regulations also require a licensee or applicant (or affiliate) to conduct due diligence to ensure that each person with whom the licensee or applicant (or affiliate) enters into a debt transaction would be suitable for licensure under the Indiana Act. The Indiana Commission rules require that:

• a written request for approval of the debt transaction, along with relevant information regarding the debt transaction, be submitted to the Indiana Commission at least ten days prior to a scheduled meeting of the Indiana Commission;

• a representative of the riverboat licensee or applicant be present at the meeting to answer any questions; and

• a decision regarding the approval of the debt transaction be issued by the Indiana Commission at the next following meeting.

The Indiana Commission rules also authorize the Executive Director of the Indiana Commission to waive certain of these requirements with the approval of the chairperson of the Indiana Commission and an outside financial expert retained by the Indiana Commission. A licensee, or its parent company, that is publicly traded must notify the Indiana Commission of a public offering that will be registered with the SEC. The licensee must notify the Indiana Commission within 10 business days of the initial filing of a registration statement with the SEC. An ownership interest in a licensee may only be transferred in accordance with the Indiana Act and rules promulgated thereunder.

The Indiana Commission has promulgated a rule that prohibits distributions, excluding distributions for the payment of state or federal taxes, by a licensee to its partners, shareholders, itself or any affiliated entity if the distribution would impair the financial viability of the riverboat gaming operation. The Indiana Commission has also promulgated a rule mandating licensees to maintain a cash reserve against defaults in gaming debts. The cash reserve must be equal to licensee’s average payout for a three-day period based on the riverboat’s performance the prior calendar quarter. The cash reserve can consist of cash on hand, cash maintained in Indiana bank accounts and cash equivalents not otherwise committed or obligated.

Louisiana. The ownership and operation of our riverboat gaming vessels and the development of our future gaming operations in Louisiana are subject to the Louisiana Gaming Control Law, including the Louisiana Riverboat Economic Development and Gaming Control Act and applicable regulations (collectively, the “Louisiana Act”). The Louisiana Gaming Control Board (the “Board”) is the sole and exclusive regulatory and supervisory board for gaming operations and activities in Louisiana. The

4

Louisiana Department of Public Safety and Corrections, Office of State Police, Gaming Enforcement Section (the “Division”) provides investigatory, regulatory, and enforcement services to the Board in the implementation, administration, and enforcement of the Louisiana Act. The Louisiana Attorney General acts as legal counsel to the Board.

The Louisiana Act is based upon the public policy declarations that the development of a controlled gaming industry to promote economic development requires thorough and careful exercise of legislative power to protect the general welfare of the people by keeping the state free from criminal and corrupt elements. The Louisiana Act thus seeks, among other things, to (i) prevent unsavory or unsuitable persons from having any direct or indirect involvement with gaming at any time or in any capacity; (ii) establish and maintain responsible accounting practices and procedures; (iii) maintain effective control over the financial practices of licensees, including establishing procedures for reliable record keeping and making periodic reports to the Board; (iv) prevent cheating and fraudulent practices; (v) develop and implement comprehensive compulsive and problem gambling programs; (vi) provide a source of state and local revenues through fees; and (vii) ensure that gaming licensees, to the extent practicable, employ and contract with Louisiana residents, women, and minorities.

The Board is responsible for issuing gaming licenses and is empowered to issue up to fifteen licenses to conduct gaming activities on riverboats in accordance with applicable law. However, no more than six licenses may be granted to riverboats operating from any one designated waterway. The Louisiana Act provides that an initial license to conduct gaming operations is valid for a term of five years and may be renewed for successive five year terms after the initial term upon application and continued satisfaction of suitability standards and other provisions of the Louisiana Act.

Louisiana subsidiaries or our affiliates currently hold five riverboat gaming licenses: (i) Louisiana-I Gaming, a Partnership in Commendam, the operator of Boomtown New Orleans, which license expires March 22, 2015, subject to renewal; (ii) PNK (Bossier City), Inc., the operator of Boomtown Bossier City, which license expires November 28, 2014, subject to renewal; (iii) PNK (Lake Charles), L.L.C., the operator of L’Auberge du Lac in Lake Charles, which license expires April 19, 2012, subject to renewal; (iv) PNK (SCB), L.L.C., the developer and future operator of Sugarcane Bay in Lake Charles, which license expires December 6, 2014, subject to renewal; and (v) PNK (Baton Rouge) Partnership, the developer and future operator of a project in East Baton Rouge Parish, which license expires August 19, 2014, subject to renewal. All licensees are subject to the specific conditions imposed on the license and to all applicable provisions of the Louisiana Act, including requirements that a licensed riverboat gaming vessel replicate as nearly as practicable historic Louisiana river borne steamboat passenger vessels of the nineteenth century era and that the vessel be paddlewheel driven. All licensed riverboat gaming vessels are subject to periodic inspection and/or certification by the United States Coast Guard (in the case of certificated vessels) or by the Board-appointed third-party inspector (in the case of non-certificated vessels), all in accordance with the Louisiana Act.

A gaming license is deemed to be a pure and absolute revocable privilege under the Louisiana Act, and not a right. As such, a gaming license may be denied, revoked, suspended, conditioned, or limited at any time by the Board. To issue a license, the Board must find that the applicant has demonstrated by clear and convincing evidence that such applicant is suitable, which requires submission of detailed personal and financial information followed by a thorough investigation. Pursuant to the Louisiana Act, “suitable” means that the applicant (i) is a person of good character, honesty, and integrity; (ii) is a person whose prior activities, criminal record, if any, reputation, habits and associations do not pose a threat to the public interest of the State of Louisiana or to the effective regulation and control of gaming, or create or enhance the dangers of unsuitable, unfair, or illegal practices, methods, and activities in the conduct of gaming or the carrying on of business and financial arrangements in connection therewith; (iii) is capable of and likely to conduct the activities for which such applicant is licensed pursuant to the Louisiana Act; and (iv) is not otherwise disqualified pursuant to the Louisiana Act. In addition, the Board will not grant any license unless it finds that (i) the applicant is capable of conducting gaming operations, which means that the applicant can demonstrate the capability, either through training, education, business experience, or a combination of the above, to operate a gaming casino; (ii) the proposed financing of the riverboat and the gaming operations is adequate for the nature of the proposed operation and from a source suitable and acceptable to the Board; (iii) the applicant demonstrates a proven ability to operate a vessel of comparable

5

size, capacity, and complexity to a riverboat in its application for a license; (iv) the applicant designates the docking facilities to be used by the riverboat; (v) the applicant shows adequate financial ability to construct and maintain a riverboat; (vi) the applicant has a good faith plan to recruit, train, and upgrade minorities in all employment classifications; and (vii) the applicant will provide the maximum practical opportunities for participation by the broadest number of minority-owned businesses.

Once the Board has issued a license, the licensee must maintain suitability throughout the term of the license and any renewal terms and has a continuing duty to inform the Board of any possible violation of the Louisiana Act. In addition, other persons may be subject to the suitability standards of the Louisiana Act and may be required to hold certain permits under the Louisiana Act, including without limitation the following: (i) certain of our and the licensee’s officers, directors, key gaming employees, and non-key gaming employees; (ii) persons who manufacture any gaming device, supplies, or equipment for use under the provisions of the Louisiana Act; (iii) persons who supply, sell, lease, or repair, or contract to supply, sell, lease, or repair gaming devices, equipment, and supplies to a licensee; and (iv) persons who furnish services or goods to a licensee and receive compensation or remuneration in excess of two hundred thousand dollars per calendar year for such goods or services. We believe that we have obtained or applied for all necessary findings of suitability and/or permits with respect to such persons associated with us or our Louisiana licensed riverboat gaming vessels. The Board may, however, in its discretion require additional persons to file applications for permits or findings of suitability.

A licensee may conduct its gaming operations and develop its future operations only in accordance with the terms of the license, including the specific conditions imposed by the Board on each license, and also must comply with all restrictions and conditions relating to development of future operations and the current operation of riverboat gaming, as specified in the Louisiana Act, including provisions governing riverboat design and inspection, gaming space, rules and odds of authorized games, and permitted devices. The Louisiana Act was amended in 2001 to provide, with exceptions not applicable to the location of any of the Company’s licensees, that gaming may only be conducted on a riverboat while it is docked and that the licensee shall not conduct cruises or excursions. The Louisiana Act also prescribes grounds for the revocation, limitation, or suspension of licenses or permits, which may include failure to comply with license conditions. If a licensee holds more than one license and has a license suspended or revoked, the Board may suspend or revoke all licenses. In addition, the Division may take enforcement action against a licensee or other person who has been disciplined in another jurisdiction for gaming related activity.

A licensee must periodically report the following information to the Board, which is not confidential and is to be available for public inspection: (i) the licensee’s net gaming proceeds from all authorized games; (ii) the amount of net gaming proceeds tax paid; and, (iii) all quarterly and annual financial statements presenting historical data that are submitted to the Board, including annual financial statements that have been audited by an independent certified public accountant. An annual license fee is payable to the State of Louisiana in the amount of $50,000 for each riverboat for the first year of operation and $100,000 for each year thereafter. In addition, our Louisiana riverboat gaming vessels are subject to annual license and franchise fees in the amount of 21.5% of net gaming proceeds. The local governing authority of the parish or municipality in which the licensed berth of a riverboat is located may also levy certain admission fees, computed in various ways as provided by the Louisiana Act. As to Boomtown Bossier City, the Louisiana Act establishes that the admission fee for any riverboat located within Bossier City in Bossier Parish shall be four and five-tenths percent of monthly net gaming proceeds. For Boomtown New Orleans, the Louisiana Act provides that the admission fee for any riverboat licensed to operate within the unincorporated area of Jefferson Parish on the West Bank of the Mississippi River shall be six percent of weekly net gaming proceeds. As to L’Auberge du Lac and Sugarcane Bay, the Louisiana Act provides that the local governing authority in Calcasieu Parish may, in lieu of the admission fee, levy a fee not to exceed four and five-tenths percent of the monthly net gaming proceeds, which fee shall be established by contract between the governing authority and the licensee. As to the project in East Baton Rouge Parish, the Louisiana Act provides that the local governing authority may, in lieu of the admission fee, levy a fee not to exceed four and five-tenths percent of the monthly net gaming proceeds, which fee shall be established by contract between the governing authority and the licensee.

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The transfer of a license or an interest in a license is prohibited. The sale, assignment, transfer, pledge, or disposition of a security or securities that represent 5% or more of the total outstanding shares issued by a holder of a license is conditional and ineffective if disapproved by the Board. Moreover, the prior written approval of the Board is required of all persons involved in the sale, purchase, assignment, lease, grant or foreclosure of a security interest, hypothecation, transfer, conveyance or acquisition of an ownership interest (other than in a corporation) or economic interest of 5% or more in any licensee. Failure to obtain approval of a transfer is grounds for license revocation. A security issued by a holder of a license must generally disclose these restrictions.

Any person with an ownership interest or economic interest in a licensee may be required to submit to an investigation by the Board to determine suitability. Any person acquiring a 5% or more ownership interest or economic interest shall be subject to a suitability determination, unless otherwise exempted. Under certain circumstances, an “institutional investor” or an “institutional lender” otherwise required to be found suitable or qualified shall be presumed suitable or qualified upon submitting documentation sufficient to establish qualifications as an institutional investor or as an institutional lender, each as defined in the Louisiana Act. An institutional investor must also certify that (i) it owns, holds, or controls publicly traded securities of a licensee or its parent company 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 of the licensee; and (iii) it does not intend to exercise influence over the affairs of the issuer of the securities or of the licensee. The Division also applies to institutional lenders the certification requirements imposed on institutional investors by the Louisiana Act. The exercise of voting privileges with regard to publicly traded securities shall not be deemed to constitute the exercise of influence over the affairs of a licensee. Notwithstanding presumptions of suitability, the Board may investigate the suitability or qualifications of an institutional investor or institutional lender should the Board or the Division become aware of facts or information which may result in such institutional investor or institutional lender being found unsuitable or disqualified.

If the Board finds that the individual owner or holder of a security of a corporate licensee or intermediary company or any person with an economic interest in a licensee is not qualified under the Louisiana Act, the Board may require, under penalty of suspension or revocation of the license, that the person not (i) receive dividends or interest on securities of the licensee or company holding a license, (ii) exercise directly or indirectly a right conferred by securities of the licensee or company holding a license, (iii) receive remuneration or economic benefit from the licensee or company holding a license, or (iv) continue in an ownership or economic interest in the licensee, or remain as a manager, officer, director, or partner of a licensee.

In addition to its obligation to periodically submit detailed financial and operating reports to the Board, a licensee or person acting on a licensee’s behalf must notify the Board and obtain prior written approval whenever it (i) applies for, receives, accepts, or modifies the terms of any loan, line of credit, third-party financing agreement, sale with buy-back or lease-back provisions, or similar financing transaction; (ii) makes use of any cash, property, credit, loan, or line of credit; or (iii) guarantees or grants any other form of security for a loan. Exceptions to the requirement of prior written approval include, without limitation, transactions not exceeding $2,500,000 in which all of the lending institutions are federally regulated; transactions that do not substantially modify or alter the terms of an existing, previously approved loan transaction, or transactions involving publicly registered debt and securities sold pursuant to a firm underwriting agreement. Transactions involving publicly registered debt and securities registered with the Securities and Exchange Commission and sold pursuant to a firm underwriting agreement are, however, subject to certain notice and reporting requirements.

If it should be determined that the Louisiana Act has been violated by us or any of our Louisiana subsidiaries holding riverboat gaming licenses, the Board could revoke, suspend, limit, or condition the licenses, subject to compliance with certain statutory and regulatory procedures. In addition, we, the Louisiana subsidiaries holding riverboat gaming licenses, and the persons involved in any violations of the Louisiana Act could be subject to substantial fines for each separate violation of the Louisiana Act at the discretion of the Board. To the extent a decision of the Board is appealable, such appeal may be made to the 19th Judicial District Court for the Parish of East Baton Rouge, State of Louisiana.

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Certain related Louisiana legislation required statewide local elections on a parish-by-parish basis to determine whether to prohibit or continue to permit licensed riverboat gaming. The applicable local elections have occurred in all parishes in which we operate our riverboat gaming vessels, and the voters in those parishes voted to continue licensed riverboat gaming. However, it is noteworthy that the current legislation does not provide for any moratorium on future local elections on gaming.

Missouri. On November 3, 1992, a statewide referendum authorized gaming in the State of Missouri on the Missouri and the Mississippi Rivers. On April 29, 1993, Missouri enacted revised legislation (as amended, the “Missouri Gaming Law”) which amended the existing legislation. In a decision handed down on January 25, 1994, the Missouri Supreme Court held that games of chance were prohibited under the Missouri constitution. In a statewide election held on November 8, 1994, Missouri voters approved the adoption of an amendment to the Missouri Constitution which permits the legislature to allow games of chance to be conducted on excursion boats and floating facilities on the Mississippi River and the Missouri River. As a result of the amendment, games of chance are also permitted subject to Missouri Gaming Law. Pursuant to the Missouri Gaming Law, there are twelve operating riverboat gaming facility sites in Missouri: one in Caruthersville; one in Boonville; four in the St. Louis area; four in the Kansas City area; one in LaGrange; and one in St. Joseph.

On September 1, 2004, the Missouri Gaming Commission selected one of our subsidiaries, Casino One Corporation (“Casino One”) as a priority to be investigated to determine suitability for Class A licenses in both the City of St. Louis and in the County of St. Louis. Subsequent to receipt of these designations, Casino One filed on behalf of both the City of St. Louis and the St. Louis County sites applications to obtain permanent docking and placement of the gaming facilities in a basin within 1,000 feet of the Mississippi River. Approval for placement and permanent docking are required under the Missouri Gaming Law. On January 12, 2005 and on May 25, 2005, the Missouri Gaming Commission granted approval to Casino One of the location of the City of St. Louis and the St. Louis County gaming facilities.

In December 2006, Pinnacle acquired 100% of the stock of President Riverboat Casino Missouri (“PRC-MO”). PRC-MO is a licensee authorized to conduct gaming in Missouri and Pinnacle is a holding company of PRC-MO. PRC-MO is operating a gaming facility in St. Louis, Missouri. Pinnacle is also the holding company of Casino One which obtained a Class A license to operate a gaming facility known as Lumiere Place in St. Louis, Missouri, on November 27, 2007. Casino One also filed an application before the Missouri Gaming Commission to construct, own and operate a casino in St. Louis County, Missouri. On July 26, 2006, Pinnacle was licensed in Missouri as a “key person” business entity for the applicant for license, Casino One. As a key person business entity, Pinnacle is licensed and regulated by the Missouri Gaming Commission, and its ability to engage in certain transactions is restricted.

Effective May 30, 2008, certain amendments were made to Missouri’s gaming regulations, including 11 CSR 45-4.020(10) that provide for the division of Missouri gaming licenses into Class A and Class B Licenses. Pinnacle now holds a Class A License which allows Pinnacle to “operate” the PRC-MO and Casino One business entities. PRC-MO and Casino One now hold Class B Licenses allowing them to operate the respective riverboat gaming operations in Missouri. Based on these amended regulations, PRC-MO as operator of the President Riverboat Casino gaming facility and Casino One as operator of the Lumiere Place gaming facility became Class B license holders. Pinnacle, as the holding and parent company of PRC-MO and Casino One, holds a Class A license. Because of the change in gaming regulations establishing the new Class B Licenses, the Missouri Gaming Commission requested that Pinnacle establish a new business entity in Missouri to act as Class B Applicant for Pinnacle’s St. Louis County casino which is nearing completion. At this request of the Missouri Gaming Commission, Pinnacle renamed an existing Missouri limited liability company, PNK (River City), LLC (“River City”), which became the Class B applicant for the St. Louis County Casino known as River City Casino in December of 2009. Pinnacle will remain the Class A Licensee for River City.

Pinnacle must obtain advance approval of the Missouri Gaming Commission to transfer or issue any ownership interest in Pinnacle, PRC-MO, and/or Casino One, and/or River City or to enter into any contract or arrangement, whereby a person or group of persons acting in concert (A) owns, controls, or has power to vote twenty-five percent or more of the voting ownership interest in Pinnacle or PRC-MO, Casino One or River City, or (B) controls the election of a majority of the directors or managers of Pinnacle or PRC-MO, Casino One or River City.

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Pinnacle may not transfer or issue any ownership interest in PRC-MO, Casino One or River City without providing sixty days advance notice to the Missouri Gaming Commission. During the notice period the Commission may disapprove the transaction or require the transaction to be delayed pending further investigation.

Pinnacle may not pledge or hypothecate its ownership interest in PRC-MO, Casino One or River City, or subject such ownership interests to any type of security interest held by any entity or person other than a financial institution without providing sixty days advance notice to, and without obtaining prior approval from, the Missouri Gaming Commission. During the notice period the Commission may disapprove the transaction or require the transaction to be delayed pending further investigation. If a transfer of ownership is involved, separate notice must be provided at least thirty days prior to the transfer, and this restriction must be specifically included in the grant of the pledge, hypothecation, or security interest.

Neither the Missouri Gaming licenses of PRC-MO and Casino One, nor any interest in such licenses may be pledged, hypothecated, or transferred in any way.

The Missouri Gaming Commission must be notified of the intention to consummate any of the following transactions at least fifteen days prior to consummation, and the Commission may reopen the licensing hearing of PRC-MO or Casino One, or reconsider the application of River City, to consider the effect of the transaction on suitability for each or either licensee: (A) any issuance of an ownership interest in Pinnacle or PRC-MO, Casino One or River City if such issuance will involve five percent or greater of the ownership interest of Pinnacle or PRC-MO, Casino One or River City, assuming that all of the ownership interest in the issuance is issued and outstanding; (B) any private incurrence of debt equal to or exceeding one million dollars by Pinnacle or PRC-MO, Casino One or River City; (C) any public issuance of debt by Pinnacle or PRC-MO, Casino One or River City; or (D) any transaction involving PRC-MO, Casino One or River City and a “related party” (any key person or holding company of PRC-MO, Casino One or River City, including Pinnacle and Casino Magic Corporation, another subsidiary of Pinnacle; any person under the control of PRC-MO, Casino One or River City, or any of its key persons, including Pinnacle; or any person sharing a holding company in common with PRC-MO, Casino One or River City) where the transaction involves any of the following: (1) consideration paid for services provided by the related party or personnel working on behalf of the related party; (2) any arrangement in which consideration paid to the related party is based upon any measure of financial or business production of PRC-MO or Casino One; (3) any allocation of expenses between related parties; or (4) any loan or credit issued from the related party to PRC-MO, Casino One or River City at a rate of interest that is at least one percent higher than the “bank prime loan rate” as reported by the Federal Reserve System Board of Governors on Form H.15. Pinnacle must report the consummation of any of the following transactions to the Missouri Gaming Commission within seven days: (A) any transfer or issuance of ownership interest in Pinnacle or PRC-MO, Casino One or River City that has resulted in an entity or group of entities acting in concert owning a total ownership interest equaling five percent or greater of the ownership interest of Pinnacle or PRC-MO, Casino One or River City, or (B) any pledge or hypothecation of, or grant of a security interest in, five percent or more of the ownership interest of Pinnacle or PRC-MO, Casino One or River City, provided that if any ownership interest is transferred pursuant to a pledge, hypothecation, or security interest, separate notice to the Commission is required not later than seven days after consummation of the transfer.

PRC-MO and Casino One must notify the Missouri Gaming Commission no later than seven days following the consummation of any transaction by Pinnacle, PRC-MO, or Casino One, or River City, or any entity affiliated with PRC-MO and/or Casino One and/or River City that involves or relates to PRC-MO and/or Casino One and/or River City and has a dollar value equal to or greater than one million dollars.

River City is also required to disclose any of the above transactions to the Missouri Gaming Commission that may occur with respect to Pinnacle, and the Missouri Gaming Commission can then take into account the continuing suitability of River City to construct, own and operate the St. Louis County facilities.

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All direct, indirect or beneficial owners of our common stock, holding an interest of 5% or more in us, are subject to licensing requirements of the Missouri Gaming Commission that require the filing of an application that includes extensive suitability and financial information and is subject to review and approval of Missouri Gaming Commission. We are permitted to require any such “key person” or business that either fails to file for a license with the Missouri Gaming Commission or is not found suitable by the Missouri Gaming Commission, to divest itself of all such common stock in accordance with our certificate of incorporation. The Missouri Gaming Commission or its Director may also determine that any other holder of our common stock is subject to the above licensing requirements regardless of the percentage interest of ownership in us. Additionally, an institutional investor holding an interest of 20% or less in us for only passive investment purposes, may be exempted from these licensure requirements by the Missouri Gaming Commission.

Under the Missouri Gaming Law, the ownership and operation of riverboat gaming facilities in Missouri are subject to extensive state and local regulation. After the receipt of licensing approval from and in the discretion of the Missouri Gaming Commission, the construction of the St. Louis County facilities and the commencement of operations of the St. Louis County facilities, we, River City, our subsidiary that will operate the County project, any subsidiaries, and some of their officers and employees are and will be subject to specific regulations, including ongoing licensing requirements. As part of the application and licensing process for a gaming license, the applicant must submit detailed financial, operating and other reports to the Missouri Gaming Commission. Each applicant has an ongoing duty to update the information provided to the Missouri Gaming Commission in the application, usually within seven days of a material change in the information on file with the Commission. Casino One, PRC-MO and now River City frequently updated its application materials for the Class B License. In addition to the information required of the applicant, directors, officers, affiliated business entities and other defined “key persons” (which include individuals and companies designated by the Missouri Gaming Commission) must submit Personal Disclosure Forms, which include detailed financial information, and are subject to thorough investigations. In addition, we and some of our officers and directors have submitted Personal Disclosure Forms and applications to the Missouri Gaming Commission. All gaming employees must obtain an occupational license issued by the Missouri Gaming Commission. Suppliers are also subject to licensing requirements of the Missouri Gaming Commission.

The Class A (parent organization or controlling entity) and Class B (operator of the gaming facility) licenses are issued through application to the Missouri Gaming Commission, which requires, among other things:

• suitability investigations into an applicant’s character, financial responsibility, experience, and qualifications;

• suitability investigations into each designated key person or affiliated business entity’s character, financial responsibility, experience and qualifications;

• disclosure of required financial (see above) and other personal information on each key person or designated affiliated business entity;

• disclosure of detailed information about the applicant’s history, business, affiliations, officers, directors and owners;

• an affirmative action plan for the hiring and training of minorities and women; and

• an economic development or impact report.

License fees cover all related costs of the Missouri Gaming Commission investigation and are a minimum of $50,000 for the initial application and $25,000 annually thereafter. We, Casino One and River City each are undergoing a full licensing investigation and hearing in connection with its licensing as above stated.

The Missouri Gaming Law and implementing regulations impose restrictions on the use of and do not permit the transfer of the gaming licenses as well as limitations on transactions engaged in by licensees. The licenses issued by the Missouri Gaming Commission may not be transferred nor pledged as collateral. The Missouri Gaming Law regulations bar a licensee from taking any of the following actions without prior notice to, and approval by, the Missouri Gaming Commission:

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• any transfer or issuance of an ownership interest in a gaming licensee that is not a publicly held company;

• any transfer or issuance of an ownership interest of five percent or more of the issued and outstanding ownership interest of a company which is publicly traded and is a holding company;

• any private incurrence of debt by the licensee or any holding company of $1,000,000 or more;

• any public issuance of debt by a licensee or its holding company; and

• defined “significant related party transactions.”

In addition, the licensee must notify the Missouri Gaming Commission of other transactions that include the transfer of five percent or more of an ownership interest in the licensee or holding company if publicly held and any transaction of at least $1,000,000.

The restrictions on transfer of ownership apply to us as well as the direct licensee, Casino One. Gaming equipment may not be pledged. Corporate stock of some licensees may not be pledged except in narrow circumstances and subject to regulatory conditions.

Missouri statutes and administrative rules contain detailed requirements and conditions concerning the operation of a licensed excursion gaming boat facility, including, but not limited to the following:

• a charge of two dollars per gaming customer per excursion that licensees must either collect from each customer or pay itself to the Missouri Gaming Commission;

• minimum payouts;

• the payment of a 21% tax on adjusted gross receipts;

• prohibitions against providing credit to gaming customers;

• the use of credit cards and the cashing of checks by customers;

• providing security on the excursion gambling boat, including a requirement that each licensee reimburse the Missouri Gaming Commission for all costs of any Missouri Gaming Commission staff, including Missouri Highway Patrol Officers necessary to protect the public on the licensee’s riverboat;

• the receipt of liquor licenses from the Missouri Gaming Commission and local jurisdictions; and

• the adoption of minimum control standards for the conduct of gaming and the operation of the facility approved by the Missouri Gaming Commission.

The Missouri Gaming Commission has the power, as well as broad discretion in exercising this power, to revoke or suspend gaming or occupational licenses and impose other penalties for violations of the Missouri Gaming Law and the rules and regulations promulgated thereunder, including without limitation, forfeiture of all gaming equipment used for improper gaming and fines of up to three times a licensee’s highest daily gross receipts during the preceding twelve months.

The Class A license issued to Casino One in November 2007 for Lumiere Place was issued for a period of ninety days or for the period through the March 2008 Commission meeting, pending the completion of certain American Bureau of Shipping certifications as to the installation of certain strain gauge devices (the “Devices”) by Casino One at the casino dock site. Casino One and Pinnacle signed a hold harmless agreement with the Missouri Gaming Commission indemnifying the Missouri Gaming Commission as to claims and costs incurred as a result of issuance of the license to Casino One. The hold harmless agreement related to the Devices.

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On December 19, 2008, the Missouri Gaming Commission issued Casino One a Class B license for a period of one year, expiring December 19, 2009, and terminated the hold harmless agreement previously executed by Casino One and Pinnacle. The Class B license rather than a Class A license was issued by the Commission as a result of the May 30, 2008, amendments to the Missouri gaming regulations. A key person business entity license was issued to Pinnacle on July 26, 2006, expiring October 31, 2011. Pinnacle became a Class A Licensee by virtue of the May 30, 2008, amendments. The Class B License of Casino One was renewed by the Missouri Gaming Commission for a period of two years on December 2, 2009, effective December 19, 2009.

Although the Missouri Gaming Law provides no limit on the amount of riverboat space that may be used for gaming, the Missouri Gaming Commission is empowered to impose space limitations through the adoption of rules and regulations.

Previously, the Missouri Gaming Law imposed as to each customer a $500 loss limit per two-hour period established by each licensee with the approval of the Missouri Gaming Commission. However, Missouri registered voters approved of Proposition A on November 4, 2008, which amended Section 313.805(3) RSMo to provide that the Missouri Gaming Commission shall not establish any regulations or policies that limit the amount of wagers, losses, or buy-in amounts.

Specifically, Proposition A, which was a ballot referendum (1) repealed the maximum loss limit for gambling; (2) repealed the current individual maximum loss limit for gambling; (3) prohibited any future loss limits; (4) required identification to enter the gambling area only if necessary to establish that an individual is at least 21 years old; (5) restricted the number of casinos to those already built or being built; (6) increased the casino gambling tax from 20% to 21%; (7) created a new specific education fund from additional gambling tax proceeds generated as a result of this measure called the “Schools First Elementary and Secondary Education Improvement Fund”; and (8) required annual audits of this new fund.

In addition, the Missouri Gaming Commission is empowered to determine on a city and county-specific basis where “dockside” or permanently-docked gaming is appropriate and may be permitted. The Missouri Gaming Commission has authorized all twelve licensed sites to operate all or a portion of their facilities on a continuously docked basis.

Nevada. The ownership and operation of casino gaming facilities in Nevada are subject to: (i) the Nevada Gaming Control Act and the regulations promulgated thereunder (collectively, the “Nevada Act”); and (ii) various local regulations. Our gaming operations are subject to the licensing and regulatory control of the Nevada Gaming Commission (the “Nevada Commission”), the Nevada State Gaming Control Board (the “Nevada Board”) and the City of Reno. The Nevada Commission, the Nevada Board and the City of Reno are collectively referred to as 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 requiring the filing of 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. Changes in such laws, regulations and procedures could have an adverse effect on Boomtown Reno’s gaming operations.

Our subsidiary which operates Boomtown Reno and two other gaming operations that have only slot machines (the “Gaming Subsidiary”) is required to be licensed by the Nevada Gaming Authorities. The gaming licenses require the periodic payment of fees and taxes and are not transferable. We are currently registered by the Nevada Commission as a publicly traded corporation (a “Nevada Registered

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Corporation”) and have been found suitable as the parent company of the Gaming Subsidiary, which is a gaming licensee under the terms of the Nevada Act. As a Registered Corporation, we are required periodically to submit detailed financial and operating reports to the Nevada Commission and furnish any other information which the Nevada Commission may require. No person may become a stockholder of, or holder of an interest of, or receive any percentage of profits from, a gaming licensee without first obtaining licenses and approvals from the Nevada Gaming Authorities. We and the Gaming Subsidiary have obtained from the Nevada Gaming Authorities the various registrations, findings of suitability, approvals, permits and licenses required in order to engage in gaming activities in Nevada.

The Nevada Gaming Authorities may investigate any individual who has a material relationship to, or material involvement with, us or the Gaming Subsidiary in order to determine whether such individual is suitable or should be licensed as a business associate of a gaming licensee. Our and the Gaming Subsidiary’s officers, directors and certain key employees, must file applications with the Nevada Gaming Authorities and may be required to be licensed or found suitable by the Nevada Gaming Authorities. Our officers, directors and key employees who are actively and directly involved in gaming activities of the Gaming Subsidiary 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 which 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 us or the Gaming Subsidiary, the companies involved would have to sever all relationships with such person. In addition, the Nevada Commission may require us or the Gaming Subsidiary 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.

We and the Gaming Subsidiary are required to submit detailed financial and operating reports to the Nevada Commission. Substantially all material loans, leases, sales of securities and similar financing transactions by us and the Gaming Subsidiary must be reported to or approved by the Nevada Commission.

If it were determined that the Nevada Act was violated by the Gaming Subsidiary, the gaming licenses it holds could be limited, conditioned, suspended or revoked, subject to compliance with certain statutory and regulatory procedures. In addition, we, the Gaming Subsidiary and the persons involved could be subject to substantial fines for each separate violation of the Nevada Act at the discretion of the Nevada Commission. Further, a supervisor could be appointed by the Nevada Commission to operate Boomtown Reno 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 Gaming Subsidiary or the appointment of a supervisor could (and revocation of any gaming license would) negatively affect our gaming operations.

Any beneficial holder of our voting or non-voting securities, regardless of the number of shares owned, may be required to file an application, be investigated, and be found suitable as a beneficial holder of our voting 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. The applicant must pay all costs of investigation incurred by the Nevada Gaming Authorities in conducting any such investigation.

The Nevada Act requires any person who acquires beneficial ownership of more than 5% of a Nevada 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 Nevada Registered Corporation’s voting securities apply to the Nevada Commission for a finding of suitability within thirty days after the Chairman of the Nevada Board mails the written notice requiring such filing. However, an “institutional investor,” as defined in the Nevada Act, which beneficially owns more than 10% but not more than 11% of a Nevada Registered Corporation’s voting securities as a result of a stock repurchase by the Nevada Registered Corporation may not be required to file such an application. Further, an institutional investor which

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acquires more than 10%, but not more than 25%, of a Nevada Registered Corporation’s voting securities may apply to the Nevada Commission for a waiver of such finding of suitability if such institutional investor holds the voting securities for investment purposes only. An institutional investor that has obtained a waiver may hold more than 25% but not more than 29% of a Nevada Registered Corporation’s voting securities and maintain the waiver where the additional ownership results from a stock repurchase by the Nevada registered Corporation. An institutional investor shall 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 board of directors of the Nevada Registered Corporation, any change in the Nevada Registered Corporation’s corporate charter, restated bylaws, management, policies or operations of the Nevada Registered Corporation, or any of its gaming affiliates, or any other action which the Nevada Commission finds to be inconsistent with holding the Nevada 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 its 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 person who fails or refuses to apply for a finding of suitability or a license within thirty days after being ordered 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 if the record owner, after request, fails to identify the beneficial owner. Any security holder found unsuitable and who holds, directly or indirectly, any beneficial ownership of the security beyond such period of time as may be prescribed by the Nevada Commission may be guilty of a criminal offense. We are subject to disciplinary action if, after we receive notice that a person is unsuitable to be a security holder or to have any other relationship with us or the Gaming Subsidiary, we: (i) pay that person any dividend or interest upon our voting securities, (ii) allow that person to exercise, directly or indirectly, any voting right conferred through securities held by that person, (iii) pay remuneration in any form to that person for services rendered or otherwise, or (iv) fail to pursue all lawful efforts to require such unsuitable person to relinquish such person’s voting securities including, if necessary, the immediate purchase of said securities for cash at fair market value.

The Nevada Commission may, in its discretion, require the holder of any debt security of a Nevada Registered Corporation to file applications, be investigated and be found suitable to own the debt or other security of a Nevada Registered Corporation if the Nevada Commission has reason to believe that such holder’s acquisition of such debt or other security would otherwise be inconsistent with the policy of the State of Nevada. If the Nevada Commission determines that a person is unsuitable to own such security, then pursuant to the Nevada Act, the Nevada Registered Corporation can be sanctioned, including the loss of its approvals if, without the prior approval of the Nevada Commission, it: (i) pays to the unsuitable person any dividend, interest, or any distribution whatsoever; (ii) recognizes any voting right by such unsuitable person in connection with such 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.

We are required to maintain a current stock ledger in Nevada which 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 such disclosure may be grounds for finding the record holder unsuitable. We are also required to render maximum assistance in determining the identity of the beneficial owner. The Nevada Commission has the power to require that our stock certificates bear a legend indicating that the securities are subject to the Nevada Act. However, to date the Nevada Commission has not imposed such a requirement on us.

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We are not permitted to make a public offering of our securities without the prior approval of the Nevada Commission if the securities or the proceeds therefrom are intended to be used to construct, acquire or finance gaming facilities in Nevada, or to retire or extend obligations incurred for such purposes. On February 19, 2009, the Nevada Commission granted us prior approval to make public offerings for a period of two years, subject to certain conditions (the “Nevada Shelf Approval”). The Nevada Shelf Approval also applies to any affiliated company wholly owned by us (an “Affiliate”), which is a publicly traded corporation or would thereby become a publicly traded corporation pursuant to a public offering. The Nevada Shelf Approval, however, 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 Nevada Shelf Approval does not constitute a finding, recommendation or approval of the Nevada Gaming Authorities as to the accuracy or the adequacy of the prospectus or the investment merits of the securities offered thereby. Any representation to the contrary is unlawful.

Changes in control of a Nevada Registered Corporation through merger, consolidation, stock or asset acquisitions, management or consulting agreements, or any act or conduct by a person whereby such person obtains control, may not occur without the prior approval of the Nevada Commission. Entities seeking to acquire control of a Nevada Registered Corporation must satisfy the Nevada Board and Nevada Commission in a variety of stringent standards prior to assuming control of such Nevada Registered Corporation. 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, and Nevada Registered Corporations that are affiliated with those operations, may be injurious to stable and productive corporate gaming. The Nevada Commission has established a regulatory scheme to ameliorate the potentially adverse effects of these business practices upon 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 the Nevada 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 the Nevada Registered Corporation’s Board of Directors in response to a tender offer made directly to the Nevada Registered Corporation’s stockholders for the purposes of acquiring control of the Nevada 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 City of Reno, in which the Gaming Subsidiary’s operations are conducted. 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. An entertainment tax is also paid by casino operations where live entertainment is furnished in connection with an admission charge and the serving or selling of food or refreshments, or the selling of any merchandise.

Any person who is licensed, required to be licensed, registered, required to be registered, or is under common control with such persons (collectively, “Licensees”), and who 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 of such Licensee’s participation in such foreign gaming. The revolving fund is subject to increase or decrease in the discretion of the Nevada Commission. Thereafter, Licensees are required to comply with certain reporting requirements imposed by the Nevada Act. 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 ground of unsuitability.

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New Jersey. The ownership and operation of casino facilities and the conduct of gaming activities in Atlantic City, New Jersey, are subject to extensive state regulation under the New Jersey Casino Control Act (the “New Jersey Act”), the regulations of the New Jersey Casino Control Commission (the “New Jersey Commission”), and the recommendations and investigative powers of the New Jersey Division of Gaming Enforcement (the “New Jersey Division”).

The New Jersey Act and regulations concern primarily (i) the financial stability, business ability, and good character, honesty and integrity of casino licensees and casino service industry enterprise (“CSIE”) licensees, their intermediary and holding companies, and the directors, employees, security holders and lenders of each (with the exception of banks or other licensed lending institutions that make loans or hold mortgages or other liens acquired in the ordinary course of business); (ii) the nature of hotel and casino facilities; and (iii) the operating methods and financial and accounting practices used in connection therewith.

The New Jersey Act imposes a tax of eight percent (8%) on gross gaming revenues and an investment alternative tax of two and one-half percent (2.5%) of gross gaming revenues that can be fully offset by investment tax credits equal to one and one-quarter percent (1.25%) of gross gaming revenues. Credits are obtained by purchasing bonds issued by, or investing in housing or other development projects approved by, the Casino Reinvestment Development Authority. Casinos are subject to additional taxes and fees, including, among others, an annual license fee of $500.00 on every slot machine in use or maintained for use.

The Company is subject to the jurisdiction of the New Jersey Commission and the New Jersey Act by reason of (i) having been granted a Statement of Compliance that the Company is qualified to be a holding company of a casino licensee; and (ii) being an applicant for a gaming-related CSIE license. The CSIE license application was required by the New Jersey Commission as a condition of, among other things, the Company’s being able to possess, store and transport slot machines in connection with the closing of the Sands Hotel and Casino. The Company has put its New Jersey properties up for sale and does not anticipate needing to qualify as a casino holding company or, once the New Jersey properties are sold, needing a CSIE license.

The New Jersey Commission has broad discretion regarding the issuance, renewal, revocation, suspension and control of all gaming licenses. Casino licenses and CSIE licenses are not transferable, but control of an entity that holds a casino license can be transferred with the express prior written approval of the New Jersey Commission. By comparison, if control of an entity that holds a CSIE license is transferred, the license is forfeited, and the newly-controlled entity must reapply for a license. Applicants for gaming-related CSIE licenses can do business with casino licensees pursuant to transactional waivers sought by petition to the New Jersey Commission.

Participation in casino operations as a licensee is deemed a revocable privilege, not a property right. It is conditioned on the proper and continued qualification of the licensee and upon the discharge of the affirmative responsibility of each such licensee to provide to the regulatory and investigatory authorities any assistance and information necessary to ensure that the policies declared by the New Jersey Act are achieved.

The New Jersey Act imposes restrictions on the ownership and transfer of equity or debt instruments issued by an entity that holds a casino license or is deemed a holding company, intermediary company, subsidiary or “entity qualifier” of a casino licensee (collectively, “affiliates”). The New Jersey Act provides that the corporate charter of a publicly traded affiliate of a casino licensee must require that a holder of the affiliate’s securities dispose of them if the New Jersey Commission finds that the holder is not qualified under the New Jersey Act (is “disqualified”). The Act also requires that the corporate charter (or certificate of formation for an LLC) of a casino licensee or a privately-held affiliate of the licensee must:

• establish the right of prior approval by the New Jersey Commission with regard to the transfer of any interest in the entity; and

• create the absolute right of the entity to repurchase any security, share or other interest in the entity at the market price or purchase price, whichever is less, if the New Jersey Commission disapproves a transfer of the interest in accordance with the provisions of the New Jersey Act.

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The Company’s corporate charter would be amended to conform to the requirements of the New Jersey Act before an affiliate of the Company would be granted a casino license. The organic documents for any subsidiary that would become a New Jersey casino licensee and any other affiliates in the chain of ownership of the licensee would likewise need to conform.

If the New Jersey Commission finds that an individual owner or holder of the securities or other interests of a casino licensee, a CSIE licensee, or any of their affiliates is disqualified under the New Jersey Act, the New Jersey Commission may propose remedial action, including divestiture of the securities or other interests. If disqualified persons fail to divest the interests, the New Jersey Commission may revoke or suspend the license; however, if an affiliate of a casino licensee is a publicly traded company, and the New Jersey Commission makes a disqualification finding with respect to an owner or holder of any interest therein, and the New Jersey Commission also finds that:

• the affiliate has adopted the required charter provisions;

• the affiliate has made a good faith effort, including the prosecution of all legal remedies, to comply with any order of the New Jersey Commission requiring the divestiture of the interest held by the disqualified owner or holder; and

• the disqualified owner or holder does not have the ability to control the affiliate or the licensee, or to elect one or more members of the board of directors of the affiliate or licensee, then the New Jersey Commission will not take action against the casino licensee or its affiliate with respect to the continued ownership of the interest by the disqualified owner or holder.

Before a casino license or CSIE license will be granted or renewed, all security holders of a publicly traded holding company of the applicant or licensee must qualify under the New Jersey Act or have the qualification requirement waived or deemed inapplicable. Under the New Jersey Act, a security holder is presumed to have the ability to control a publicly traded corporation or to elect one or more members of its board of directors, and thus to be ineligible for waiver, if the holder owns or beneficially holds five percent (5%) or more of the voting securities of the corporation. Typically, the publicly traded issuer or its licensed casino affiliate will seek a blanket waiver for persons holding less than five percent (5%) of the issuer’s voting securities. (Holders of less than 5% of the voting securities of a CSIE or its affiliates are not “qualifiers” and therefore do not need a waiver of the qualification requirement.) The presumption of control can be rebutted by clear and convincing evidence, including a showing that a holder is an “institutional investor,” as that term is defined under the New Jersey Act, and satisfies the conditions for institutional investor waiver described below.

An institutional investor is defined by the New Jersey Act as: any retirement fund administered by a public agency for the exclusive benefit of federal, state, or local public employees; any investment company registered under the Investment Company Act of 1940, any collective investment trust organized by banks under Part Nine of the Rules of the Comptroller of the Currency; any closed end investment trust; any chartered or licensed life insurance company or property and casualty insurance company; any banking or other chartered or licensed lending institution; any investment adviser registered under the Investment Advisers Act of 1940; and such other persons as the New Jersey Commission may determine for reasons consistent with the policies of the New Jersey Act.

An institutional investor is entitled to a waiver of qualification if it holds less than ten percent (l0%) of the “equity” securities (interpreted by the New Jersey Commission to mean the voting securities) of a publicly traded holding or intermediary company of a casino licensee or gaming-related CSIE licensee, or of the CSIE licensee itself, and:

• the securities were purchased for investment purposes only;

• the New Jersey Commission finds no cause to believe the institutional investor may be found unqualified; and

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• upon request by the New Jersey Commission, the institutional investor files a certified statement to the effect that it has no intention of influencing or affecting the affairs of the issuer, the licensee, or any of the licensee’s other affiliates. Voting on matters put to the vote of the outstanding security holders does not constitute an attempt to influence.

The New Jersey Commission may grant a waiver of qualification to an institutional investor holding ten percent (10%) or more of the equity securities of a publicly traded affiliate of a casino licensee or gaming-related CSIE licensee, or of the CSIE licensee itself, upon a showing of good cause and if the conditions specified above are met.

Institutional holders of publicly traded debt securities of an affiliate of a casino licensee are entitled to a waiver of qualification if the holder’s position in the aggregate is not more than twenty percent (20%) of the total outstanding debt of the affiliate and not more than fifty percent (50%) of any outstanding publicly traded debt issue of the affiliate (such as individual series of subordinated debt ), and if the institutional investor satisfies the conditions specified above. As with equity securities, the New Jersey Commission may grant a waiver of qualification to institutional investors holding larger positions upon a showing of good cause and if the institutional investor satisfies all the conditions specified above.

The New Jersey Act and regulations do not specifically call for the qualification of holders of publicly traded debt of CSIE’s, but the New Jersey Commission could at any time require such qualification, in which case similar waiver requirements to those applied to the holders of publicly traded debt of affiliates of casino licensees would likely apply.

Generally, the New Jersey Commission requires that institutional holders seeking waiver of qualification execute a certification stating that:

• the holder has reviewed the definition of institutional investor under the New Jersey Act and believes that it meets the definition of institutional investor;

• the holder purchased the securities for investment purposes only and holds them in the ordinary course of business;

• the holder has no involvement in the business activities of, and no intention of influencing or affecting the affairs of, the issuer, the licensee or any affiliate;

• if the holder subsequently determines to influence or affect the affairs of the issuer, the licensee or any affiliate, it will provide not less than 30 days’ notice of its intent and will file an application for qualification with the New Jersey Commission before taking the action; and

• the holder acknowledges that it is subject to the jurisdiction of the New Jersey Commission and the requirements of the New Jersey Act and the regulations promulgated thereunder.

With respect to non-institutional holders of publicly traded debt securities, the New Jersey Commission generally waives the qualification requirement for holders of less than 15.0% of a series of publicly-traded debt as long as the securities remain widely distributed and freely traded in the public market, and the holder has no ability to control the issuer or the licensee. We cannot assure you that the New Jersey Commission will continue to apply the 15.0% qualification threshold. The New Jersey Commission could at any time establish a lower threshold.

Beginning on the date that the New Jersey Commission serves notice on a casino licensee or affiliate that a holder of a security or other interest has been disqualified, it will be unlawful for the holder to:

• receive any dividends or interest upon any such security or other interest;

• exercise, directly or through any trustee or nominee, any right conferred by such security or other interest; or

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• receive any remuneration in any form from the casino licensee for services rendered or otherwise.

Persons required to qualify under the New Jersey Act because they hold debt or equity securities of a casino licensee or its affiliates and who are not already qualified are required either to (i) divest within 120 days such securities as the New Jersey Commission may require to remove the need for qualification or, in the alternative, (ii) file a completed application for qualification and place the securities into an interim casino authorization (“ICA”) trust pending qualification. Unless and until the New Jersey Commission denies ICA or finds reasonable cause to believe that the investor may not be found qualified, the investor will retain the ability to direct the trustee how to vote, or whether to dispose of, the securities. If the New Jersey Commission denies ICA or finds reasonable cause to believe that the investor may be found unqualified, the New Jersey Commission can order that the trust become “operative,” in which case the investor will lose voting power, if any, over the securities but will retain the right to petition the New Jersey Commission to order the trustee to dispose of the securities.

Once an ICA trust is funded, and regardless of whether it becomes operative, the investor has no right to receive a return on the investment until the investor becomes fully qualified. Should an investor ultimately be found unqualified, the trustee would dispose of the trust property, and the proceeds would be distributed to the unqualified applicant only in an amount not to exceed the lower of the actual cost of the trust property to the unqualified applicant or the value of such trust property calculated as if the investment had been made on the date the trust became operative. Any excess proceeds would be paid to the State of New Jersey. If the securities were sold by the trustee pending qualification, the investor would receive only actual cost, with disposition of the remainder of the proceeds, if any, to await the investor’s qualification hearing.

The Company must notify the New Jersey Commission and the New Jersey Division of any new debt or equity issued and must provide them with the related documentation, including lists of holders if requested. The Company may have to petition the New Jersey Commission for waiver of the qualification requirement for particular security holders subsequent to such issuance of debt or equity securities. If necessary waivers are not granted, the holders of such debt or equity securities will either have to be found qualified by the New Jersey Commission or divest enough securities to permit waiver. There can be no assurance that necessary waivers will be granted.

If a casino license is not renewed, is suspended for more than 120 days or revoked, the New Jersey Commission can appoint a conservator to preserve and operate the business. Upon appointment, the conservator is vested with title to all the property relating to the casino hotel, subject to any and all valid liens, claims, and encumbrances. While the conservator is operating the business, the former or suspended casino licensee is entitled to a fair rate of return from net earnings, with any excess to be paid to the State. The New Jersey Commission can authorize the conservator to sell the property in bulk, subject to valid liens, claims and encumbrances, after the resolution of any suspensions of, or appeals by, the former or suspended licensee, after appropriate prior consultation with the licensee as to the reasonableness of the terms of sale, upon prior written notice to all creditors and other parties in interest, and only to persons eligible to apply for and able to qualify for a casino license under the New Jersey Act. The former or suspended licensee is entitled to the net proceeds of the sale after payment of all obligations owed to the State and to the conservator.

Argentina. In Argentina, the regulation of gaming is generally under the jurisdiction of the provinces of the country. All of our casinos in Argentina are located in the province of Neuquén. In May 1994, the Provincial Government of Neuquén enacted a casino privatization program to issue twelve-year exclusive concession agreements to operate existing casinos. The concession agreements are renewable for five or ten years, provided that certain conditions are met. The Executive Power of Neuquén granted a casino license to Casino Magic Corporation pursuant to a Concession Agreement dated December 21, 1994, between the Provincial Government of Neuquén and Casino Magic Neuquén S.A (the “Concession Agreement”). Casino Magic Corporation and Casino Magic Neuquén S.A. are direct or indirectly wholly-owned subsidiaries of ours. The Concession Agreement granted Casino Magic Neuquén S.A. the exclusive right to operate casinos in the cities of Neuquén and San Martín de los Andes in the Province of Neuquén. The Concession Agreement also granted Casino Magic Neuquén S.A. the exclusive right to operate casinos

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within 50 kilometers (31.05 miles) of its existing properties as long as those casinos are within the Province of Neuquén. It should be noted that we still retain a priority to match any bidding offer to open and operate other casinos within the Province of Neuquén, however, such casinos would not be covered by the exclusivity provisions of the Concession Agreement and provided that in the corresponding bidding process our original offer is not lower than 15% of that of the best offeror’s. We also opened a new facility in the city of Junín de los Andes, in the Province of Neuquén. This casino was opened under the scope of the existing casino license for the property located in San Martín de los Andes. In July 2005, we closed the largest of our casinos located in the city of Neuquén, which had been operating since 1995, and opened a larger facility including a more lavish casino; an upscale restaurant; a wine bar; three other casino bars; and a large entertainment venue, one mile away from the original location on approximately 20 acres owned by us. Additionally, we have obtained a casino license to open casinos in the cities of Caviahue and Copahue, in the Province of Neuquén. These casino licenses are for a term of 12 years and are renewable for an additional 10 year term at the discretion of the granting authority. In light of the above, we are currently operating four casinos in the Province of Neuquén (in the cities of Neuquén, San Martín de los Andes, Junín de los Andes, and Caviahue), and the one in Copahue in the same Province, in west central Argentina, seasonally.

On July 14, 2003, the Executive Power of Neuquén approved the terms of an agreement establishing the conditions for the renewal of our casino license pursuant to which we operate our three Neuquén casinos, either for a five year or for a ten year term. In July 2005, we opened the new facility in order to qualify for and obtain the ten year extension through 2016, extension which has already been formally granted. We have finalized the construction of a hotel facility by the casino in the city of Neuquén which, upon approval by the authorities, would grant us an additional 5 year extension in the terms of our casino license, through 2021. The Concession Agreement establishes that the shareholders approved by the Provincial Government of Neuquén shall maintain control (i.e., 51% of the shareholding of the corporate capital with voting power) of the licensee. It also establishes that any transfer of shares up to 49% of its shareholding in the licensee shall not require prior authorization. Otherwise, prior authorization from the Provincial Government of Neuquén shall be required. Notwithstanding that, no transfer of shares shall be performed to those persons detailed under Section 5 of the bidding terms approved under the casino privatization program (i.e., among others, foreign persons or legal entities if in their country there are no regulations prohibiting money laundering, natural or legal persons that cannot contract with the Province of Neuquén). We cannot predict what effect the enactment of any laws, regulations or pronouncements relating to casino operations would have on the operations of Casino Magic Argentina.

Other. In addition to the requirements discussed above, if we sought to establish gaming operations in any jurisdiction in which we currently do not operate, we would need to be registered, licensed, or found suitable to conduct gaming activities in that jurisdiction and, if successful in doing so, would be subject to such jurisdiction’s regulatory requirements applicable to gaming companies. Holders of our securities would also be subject to additional requirements regarding the ownership and disposition of their securities, including possibly being called forward by applicable gaming authorities to be licensed or found suitable to be the beneficial owner of our securities.

From time to time, legislators and special interest groups have proposed legislation that would restrict or prevent gaming operations. In addition, changes in regulations affecting the casino business can impact our existing or proposed operations. Any new restriction on or prohibition of our gaming operations could force us to curtail operations and incur significant losses.

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EX-99.4

Exhibit 99.4

POWER OF ATTORNEY FOR THE DESIGNATION AND APPOINTMENT OF A TRUSTEE FOR THE PURPOSES OF CONDUCTING CASINO GAMBLING OPERATIONS
State Form 54218 (02-10)
INDIANA GAMING COMMISSION

Belterra Resort Indiana, LLC (“Owner”), an entity to which the Indiana Gaming Commission (“the Commission”) has issued a license or an operating agent contract to conduct Casino Gambling Operations at a Casino commonly known as Belterra Casino Resort & Spa (“Belterra”) in Florence, Indiana, under the laws and related regulations of the State of Indiana, hereby designates and appoints Ronald D. Gifford (“Trustee”) as the sole attorney in fact, under Ind. Code 4-33-21 or Ind. Code 4-35-12, to exercise and perform any and all of the following acts and powers for and on behalf of the Owner, subject to the following:

DEFINITIONS

1. Affiliate: Any person or entity that directly or indirectly:

(a) controls;

(b) is controlled by; or

(c) is under common control of;

another person or entity.

2. Casino: Any facility where lawful gambling is conducted under Ind. Code 4-33, Ind. Code 4-35, or any successor legislation.

3. Casino Gambling Operations: The conducting of gambling and all other activities related to Belterra, including, but not limited to, the operation of any:

(a) hotel;

(b) restaurant;

(c) golf course; or

(d) other amenity;

at or in conjunction with Belterra and its support facilities. Casino Gambling Operations do not include pari-mutuel wagering, pari-mutuel racing, the operation of an off-track or satellite betting facility, the operation of a simulcast wagering facility, or any operations conducted on the premises of the Owner’s racetrack that relate solely to activities conducted under the authority of Ind. Code 4-31.

4. Effective Date: The date that the Commission authorizes, by written resolution under Ind. Code 4-33-21-3 or Ind. Code 4-35-12-2, the Trustee to conduct Casino Gambling Operations.

5. Effective Period: The time period between and including the Effective Date and the Termination Date.

6. Owner’s License: A license or an operating agent contract issued by the Commission to own and operate a riverboat under Ind. Code 4-33 or a gambling game facility under Ind. Code 4-35.

7. Termination Date: The date that the Commission terminates, by written resolution, operation of this power of attorney.

TERMS AND CONDITIONS

1. Commencement and Termination. In recognition of, and pursuant to Ind. Code 4-33-21-4, Ind. Code 4-35-12-4, and the police and regulatory powers of the State of Indiana, this power of attorney shall become effective on the Effective Date and shall terminate on the Termination Date, both of which are at the sole discretion of the Commission. Unless expressly stated otherwise in this power of attorney, the powers, duties, and obligations granted to or imposed on any party by this power of attorney attach only during the Effective Period.

The Owner does not have the right to unilaterally terminate or amend this power of attorney, or to unilaterally appoint any other Trustee under Ind. Code 4-33-21 or Ind. Code 4-35-12.

2. Regulatory Authority; Legal Effect of Power of Attorney. This power of attorney does not change or diminish the regulatory power and authority of the Commission over the Owner or Belterra, including but not limited to the power and authority to discipline, revoke, suspend, or not renew the Owner’s License. The Commission has the same regulatory authority over the Trustee as if the Trustee were a Commission licensee. The Trustee shall perform the functions required or authorized by this power of attorney subject to both the regulatory authority of the Commission and applicable laws and court orders, as if the Trustee were the entity to which the Commission issued an Owner’s License.

Nothing in this power of attorney shall be deemed to constitute a transfer, conveyance, sale, lease or disposition of any ownership interest in the Owner, of the Owner’s License, or of any assets relevant to Casino Gambling Operations. This power of attorney shall not be construed as a merger, consolidation or similar transaction.

3. Removal and Replacement of Trustee During the Effective Period. During the Effective Period, the Trustee may be removed or replaced, or both only by the Commission for good cause through the revocation, modification, or amendment of a resolution authorizing the Trustee to conduct Casino Gambling Operations in accordance with Ind. Code 4-33-21-12 and Ind. Code 4-35-12-12. Nothing in this clause shall be deemed to prohibit the Owner or the Trustee from requesting removal or replacement, or both.

By its execution of this power of attorney, the Owner will be deemed to approve the Commission’s selection and appointment of a replacement trustee.

4. Powers and Authority of Trustee. The Trustee possesses, to the exclusion of all other persons and entities, the following powers and authority concerning Casino Gambling Operations:

(a)	Activities Required or Permitted by the Trustee. To exercise and perform all acts and powers that are necessary to conduct Casino Gambling Operations.
(b)	Real Property Transactions. To exercise and perform those acts and powers concerning real property transactions as authorized by Ind. Code 30-5-5-2.
(c)	Tangible Personal Property Transactions. To exercise and perform those acts and powers concerning tangible personal property transactions as authorized by Ind. Code 30-5-5-3.
(d)	Bond, Share, and Commodity Transactions. To exercise and perform those acts and powers concerning bond, share, and commodity transactions as authorized by Ind. Code 30-5-5-4.
(e)	Authority to Employ Persons; Payment of Costs. To exercise and perform those acts and powers concerning the employment of persons and payment of costs as authorized by Ind. Code 30-5-6-4.5.
(f)	Banking Transactions. To exercise and perform those acts and powers concerning banking transactions as authorized by Ind. Code 30-5-5-5.

(g)	Business Operating Transactions. To exercise and perform those acts and powers concerning business operating transactions as authorized by Ind. Code 30-5-5-6.
(h)	Insurance Transactions. To exercise and perform those acts and powers concerning insurance transactions as authorized by Ind. Code 30-5-5-7.
(i)	Gift Transactions. To exercise and perform those acts and powers concerning gift transactions as authorized by Ind. Code 30-5-5-9.
(j)	Claims and Litigation. To exercise and perform those acts and powers concerning claims and litigation as authorized by Ind. Code 30-5-5-11.
(k)	Records, Reports, and Statements. To exercise and perform those acts and powers concerning records, reports, and statements as authorized by Ind. Code 30-5-5-14.
(l)	Delegation of Authority. To exercise and perform those acts and powers concerning delegation of authority as authorized by Ind. Code 30-5-5-18.
(m)	All Other Matters. To exercise and perform all other matters which are reasonably required to conduct Casino Gambling Operations as authorized by Ind. Code 30-5-5-19.

5. Police and Regulatory Powers. The Owner recognizes that, pursuant to the police and regulatory powers of the State of Indiana, the Commission may take disciplinary action up to and including revocation of the Owner’s License if and when:

(a) the Owner or an Affiliate thereof fails to observe fully any obligation that is directly or indirectly referenced in this power of attorney; or

(b) the Trustee is impaired or prohibited from fulfilling the Trustee’s obligations or performing the Trustee’s functions under this power of attorney by any act or omission of the Owner or an Affiliate thereof.

6. Operations and Revenue. Unless otherwise stated in an Exhibit to this power of attorney and, if applicable, subject to the obligations imposed on the holder of a gambling game license by Ind. Code 4-35-7 and Ind. Code 4-35-8.7, the Trustee may use any or all revenues from Casino Gambling Operations to fund the ongoing nature of Casino Gambling Operations, including, but not limited to, employee retention and salaries, capital expenditures, compliance, marketing, and customer relations.

7. Scope of Authority; Ratification. The Trustee shall have the power and authority to exercise and perform all acts and powers which could have been performed by the Owner or any related entity or person who directly or indirectly controls the Owner or Belterra, and which are reasonably necessary to conduct Casino Gambling Operations. The Owner hereby authorizes, ratifies, and confirms all of the actions and conduct of the Trustee which are taken or performed pursuant to and in accordance with this power of attorney, provided, however, that the Owner may file with the Commission written objections to specific actions of the Trustee.

8. Bankruptcy. Neither the Owner nor any Affiliate thereof will commence, or consent to relief in, a case regarding Owner under Title 11 of the United States Code (“Bankruptcy Code”) prior to receiving written consent from the Trustee. A Trustee may, on behalf of the Owner, commence, manage, and consent to relief in, a case regarding Owner under the Bankruptcy Code without receiving the consent of the Owner or an Affiliate thereof.

If a third party commences a case against the Owner under the Bankruptcy Code, the Owner shall use its best efforts promptly to controvert the petition commencing the case unless the Trustee consents to the Owner’s request to act otherwise.

In the event Owner becomes party to a bankruptcy proceeding, Owner shall promptly file a motion in the bankruptcy court (and seek an expedited hearing thereon, for which the Owner shall not consent to adjournment) for authority to honor all obligations of this power of attorney and to excuse the Trustee from compliance with Section 543(a)-(c) of the Bankruptcy Code. The Trustee shall not intentionally violate applicable provisions of the Bankruptcy Code or orders of the bankruptcy court. The Trustee shall neither act nor fail to act in a manner intended to interfere with, frustrate, or prevent the Owner or an Affiliate thereof from complying with those provisions or orders, or both.

9. Qualifications of Trustee. The Trustee shall demonstrate to the Commission’s sole and continuing satisfaction, the willingness and ability to (a) apply for, receive, and maintain a Level 2 occupational license outside of the Effective Period; (b) apply for, receive, and maintain a Level 1 occupational license under Ind. Code 4-33-8 or Ind. Code 4-35-6.5 within a reasonable time after the Effective Date; (c) along with any member of the Trustee’s immediate family, be fully divested of any actual or potential ownership interest in Owner or an Affiliate thereof within a reasonable period of time after the Effective Date; (d) satisfy the requirements of any rule adopted by the Commission under Ind. Code 4-33-8-4 or Ind. Code 4-35-6.5-4; (e) conduct Casino Gambling Operations within the same standards for character, reputation, and financial integrity that are imposed upon the holder of an Owner’s License under applicable law, and (f) execute the job functions of a coporate level casino exectuive.

10. Duties of Trustee. The Trustee shall be subject to all duties imposed upon the holder of an Owner’s License under applicable law. The Trustee shall conduct Casino Gambling Operations within the same standards for character, reputation, and financial integrity that are imposed on the Owner under applicable laws. The Trustee shall act as a fiduciary for the Owner. The Trustee shall also consider the effect of his or her actions upon: (a) the amount of taxes remitted under applicable law; (b) the surrounding community; (c) the Casino’s employees; (d) the Owner’s creditors; (e) the Owner’s equity holders; and (f) pre-existing contracts applicable to the Owner that were in effect prior to the Effective Date. The Trustee shall conduct Casino Gambling Operations in a manner that enhances the credibility and integrity of Casino Gambling Operations while minimizing disruptions to tax revenues, incentive payments, employment, and credit obligations.

11. Compensation. The Trustee is entitled to reasonable compensation for carrying out the duties which are performed by the Trustee pursuant to this power of attorney. The Owner, and not the Commission, is responsible for paying the Trustee’s compensation. The compensation of the Trustee shall be limited to that which is provided in this power of attorney and in Exhibit A.

12. Restrictions. Absent a prior written waiver from the Commission, the Trustee, and if the Trustee is a business entity under 68 IAC 1-1-10, its affiliates, officers, directors and employees, shall not accept employment or other compensation by or on behalf of the Owner, any Affiliate thereof, or any entity or Affiliate thereof that purchases Belterra from the Owner for a period of one (1) year after the Termination Date.

13. Third Party Rights. This power of attorney is by and between the Trustee and the Owner, and does not create any right on behalf of any third parties except for the Commission, as outlined herein.

14. Removal and Replacement of Trustee Outside of the Effective Period. Outside of the Effective Period, the Trustee may be removed or replaced, or both only with approval of the Commission. Nothing in this clause shall be deemed to prohibit the Owner or the Trustee from requesting removal or replacement, or both.

15. Amendments. Except for the removal and replacement of the Trustee as provided in clause 3 or 14 of this power of attorney, any amendment to the power of attorney must be:

(a) mutually agreed to by the Owner and Trustee;

(b) in writing; and

(c) approved by the Commission.

16. Incorporation; Precedence. All Exhibits to this power of attorney are hereby incorporated into the power of attorney. Unless otherwise explicitly stated in an exhibit, in the event language in any Exhibit conflicts with language in this power of attorney, the language in the power of attorney takes precedence.

17. Records of Transactions; Accounting. Upon request, the Trustee shall provide accountings to the Commission promptly after the Commission requests such accountings. At the request of the Commission, the accountings shall include revenues, expenses, and capital expenditures concerning Casino Gambling Operations. A copy of any accounting shall be provided to the Owner.

18. Trustee Liability. The Trustee is not liable to the Owner or any Affiliate thereof for any loss due to the Trustee’s unintentional acts, omissions, or errors of judgment, or for the acts or defaults of another person. The Trustee is liable to the Owner or any Affiliate thereof for the consequences of any of its acts or omissions that were intended to cause harm or loss or were the result of gross negligence.

19. Liability Insurance. The Owner must purchase liability insurance, in an amount deemed acceptable by the Commission and stated in Exhibit B, to protect the Trustee from liability for any act or omission of the Trustee occurring within the scope of the Trustee’s duties. This insurance must be purchased no later than the Effective Date and remain in force during the Effective Period.

20. Indemnification. The Owner agrees to indemnify, defend, and hold harmless the Trustee from all claims and suits caused by any act or omission of the Owner and/or agents and Affiliate thereof, which may arise out of the operation of the Owner’s interests that are subject to this power of attorney.

The Owner agrees to indemnify, defend, and hold harmless the Trustee from all claims and suits caused by any act or omission of the Trustee occurring within the scope of the Trustee’s duties. This indemnification does not extend to any acts or omissions that the Trustee intends to cause harm or loss or are the result of gross negligence.

Any indemnification under this power of attorney includes judgments, court costs, reasonable attorney’s fees, and other reasonably related expenses.

21. Sale of Casino. In addition to all other power and authority granted to the Trustee by this power of attorney, and in accordance with Ind. Code 4-33-21-8 or Ind. Code 4-35-12-8, the Trustee may take any action necessary, including the commencement of, management of, and consent to relief in appropriate actions under the Bankruptcy Code, to market, negotiate terms, and ultimately sell to a suitable buyer, Belterra and other assets related to Casino Gambling Operations, provided no sale may close prior to the Commission adopting a written order of approval.

Any consideration that a suitable buyer pays for Belterra and other assets is payable at the Owner’s direction.

22. Joinder in Designation and Appointment. Each and every entity and person who directly or indirectly owns or controls the Owner is deemed to have joined in, consented to, and authorized the designation and appointment herein of the Trustee, all of whom are bound by the acts taken by the Trustee in accordance with the terms and conditions of this power of attorney.

23. No Control or Influence. Unless otherwise authorized by the Trustee and the Commission, or by the Commission as authorized in this power of attorney, the Owner and Affiliate thereof shall not directly or indirectly influence, control, or interfere with the powers or duties of the Trustee, any designee of the Trustee, or any employee or agent of the Casino Gambling Operations.

24. Incorporation of Applicable Laws. This power of attorney incorporates all applicable laws and related regulations of the State of Indiana, including, but not limited to Ind. Code 4-33, Ind. Code 4-35, and 68 I.A.C.

25. Severability. If any court or regulatory agency of competent jurisdiction holds any provision of this power of attorney to be unenforceable, the rest of the agreement shall remain in full force and effect and shall not be affected unless removal of that provision results, in the Commission’s opinion, in a material change to this agreement.

26. Governing Law. This power of attorney shall be interpreted and governed by the laws of the State of Indiana.

27. Licensure. The Trustee shall comply with any licensure requirements established by the Commission for the Trustee.

28. Execution: This power of attorney is executed this            day of                                         , 20      , by and on behalf of the Owner and each of the other entities and persons who are bound by the terms and conditions hereof through their undersigned duly authorized representatives.

Printed Name

Signature

Title

Printed Name

Signature

Title

STATE OF                                           )

                                        ) SS:

COUNTY OF                                         )

SUBSCRIBED AND SWORN to before me, a Notary Public in and for said County and State this                                                              day of                                         , 20    .

Notary Public

County of Residence

MY COMMISSION EXPIRES:

ACCEPTANCE

The undersigned Trustee accepts this power of attorney in accordance with its terms and conditions, this                                                              day of                                         , 20    .

Printed Name

Signature

This document prepared by:
	Name
	Title
	Name
	Title
	Name
	Title

BELTERRA RESORT INDIANA, LLC

EXHIBITS
TO
POWER OF ATTORNEY AND
APPOINTMENT OF A TRUSTEE

EXHIBIT A

Concurrently herewith, BELTERRA RESORT INDIANA, LLC (“Owner”) is executing a Power of Attorney for the Designation and Appointment of a Trustee For the Purposes of Conducting Casino Gambling Operations (the “POA” or “Power of Attorney”) with respect to the Belterra Resort and Casino (the “Casino”) as described in the POA.

1. Retainer. Owner agrees to pay Trustee an annual retainer in amount of Ten Thousand Dollars ($10,000.00). This retainer shall be payable on date of execution of the Power of Attorney, and each year thereafter on the same date, until the Effective Date.

2. Fees. From and after the Effective Date, the Trustee agrees to make himself available as needed to perform all duties required under the Power of Attorney. During the Effective Period, Owner shall compensate Trustee at the rate of Ten Thousand Dollars ($10,000.00) per month (pro-rated for any partial month).

3. Expenses. From and after the Effective Date, Owner shall reimburse Trustee for Trustee’s actual and reasonable out-of-pocket expenses, including without limitation for the following:

a.	Transportation, lodging, food and beverage. To minimize Trustee’s out-of-pocket expenses, Owner shall furnish reasonable hotel or other lodging, food and beverage accommodations at Owner’s facilities or elsewhere.
b.	Legal expenses.

c. Gaming licenses application and investigation fees.

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EXHIBIT B

Pinnacle Entertainment, Inc. (the “Company”) and its subsidiaries maintain a Director and Officers (“D&O”) Liability Program which currently affords coverage in amounts of up to $65 million for inside directors and $70 million for outside directors. According to its terms, the policy covers all “duly elected or appointed director, officer, governor, trustee (excluding the bankruptcy trustee), general counsel, and risk manager of the Company.” The Company has been informed by its insurance broker that this definition includes a Trustee appointed in compliance with I.C. 4-33-21.

Although the Company’s D&O coverage is reviewed annually and is subject to change, the Company agrees to provide a minimum of $10 million in D&O coverage for the Trustee during the Effective Period.

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EXHIBIT C

1. The Power of Attorney shall not be deemed to constitute the creation of any lien or preferential arrangement of any kind or nature whatsoever in respect of any interest in the Owner or of any assets relative to Casino Gambling Operations.

2. Execution of the Power of Attorney shall not be deemed to constitute a change of control of Owner or its affiliates.

3. In accordance with Paragraph 16 of the Power of Attorney, Paragraphs 4 and 6 of the Terms and Conditions section of the Power of Attorney shall be subject to this Section 3. The Trustee shall exercise his powers and authority subject to all the contractual obligations of the Owner and covenants applicable to the Owner as a restricted subsidiary of its Affiliates, including without limitation compliance with all applicable covenants contained in credit facilities, indentures, debt instruments, guarantees or other agreements or contractual arrangements to which the Owner is bound or as to which any of the Owner’s assets are subject or which are applicable to the Owner as a restricted subsidiary of its Affiliates. This Section and Section 5 apply to: (i) all contracts, agreements and covenants in effect on the Effective Date; (ii) any and all amendments, modifications or supplements thereto from and after the Effective Date as to which the Trustee agrees to be bound during the Effective Period; and (iii) any and all other additional contracts, agreements and covenants as to which the Trustee agrees to be bound during the Effective Period.

4. Nothing contained in the Power of Attorney shall prevent the Owner or its Affiliates and their representatives from communicating with the Trustee with respect to various aspects of the Casino’s business and operations, subject to Section 23 of the POA and all applicable Rules and Regulations of the Commission.

5. In accordance with Paragraph 16 of the Power of Attorney, Paragraphs 4 and 6 of the Terms and Conditions section of the Power of Attorney shall be subject to this Section 5. The Trustee shall:

(a) comply with all applicable covenants contained in credit facilities, indentures, debt instruments, guarantees or other agreements or contractual arrangements to which the Owner is bound or as to which any of the Owner’s assets are subject or which are applicable to the Owner as a restricted subsidiary of its Affiliates;

(b) use the assets relevant to Casino Gambling Operations to honor all obligations under such agreements or arrangements, including but not limited to debt obligations under credit facilities and indentures and any guarantees of debt obligations of any of the Owner’s Affiliates, to which the Owner is bound or to which its assets may be subject or which are applicable to the Owner as a restricted subsidiary of its Affiliates, and

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(c) use the assets relevant to Casino Gambling Operations to pay: (i) any tax liabilities allocable to the Owner; (ii) employee obligations (such as 401(k) matching payments) allocable to the Owner and approved by the Trustee; and (iii) the Owner’s allocable share of corporate general and administrative costs provided by the Owner’s Affiliates for the benefit of the Owner and approved by the Trustee. Any disputes concerning the Trustee’s obligation to make payment under this Subsection (c) may be presented to the General Counsel or Deputy Director of the Commission for resolution of the dispute.

6. The Trustee shall cause to be prepared for delivery to and use by the Owner and its Affiliates periodic (at least quarterly and on an annual basis, as may be reasonably requested by the Owner) financial statements reflecting the results of operations and financial condition of the Casino in a timely manner so as to enable Owner and its Affiliates to timely comply with their obligations to file financial statements with the Securities and Exchange Commission and otherwise to make financial statements available to its current and prospective investors and the securities markets. The Trustee shall afford reasonable access to the Owner, its Affiliates, and their officers, employees, agents, auditors, accountants, counsel, financial advisors and other representatives (and any potential financing sources and their respective representatives) to all financial records, books, records, contracts and other documents and information relating to the Casino so that the Owner and its Affiliates may comply with their obligations under the federal securities laws. The Trustee understands and acknowledges that any such financial statements regarding the Casino will be reflected in and included in the financial statements so filed and made available to such investors and securities markets. If requested, the Trustee shall provide to the auditors of the Owner’s Affiliates customary management representations and certifications with respect to the operations under the direct control of the Trustee.

7. The ratification provided in Paragraph 7 of the Terms and Conditions section of the Power of Attorney shall not affect Owner’s rights against the Trustee as provided in Paragraphs 10 and 18 of the Power of Attorney. The indemnification in Paragraph 20 shall not extend to matters as to which Trustee is liable under Paragraph 18.

8. In the event of a contemplated sale, the Trustee shall engage in reasonable consultation with the Owner regarding the sale process, including without limitation with respect to the selection and hiring of an investment bank and other consultants to assist in such a sale.

9. In accordance with Paragraph 16 of the Power of Attorney, Paragraphs 4 and 6 of the Terms and Conditions section shall be subject to this Section 9, which is subject to Section 3 and Section 5 of this Exhibit C. The Trustee shall not undertake the following actions or make the following decisions prior to reasonable consultation with and approval of Pinnacle Entertainment, Inc.:

(a) Entering into an agreement or contract that exceeds three (3) years in duration.

(b) Incurring or guaranteeing any debt outside the ordinary course of business by or on behalf of the Owner. For purposes of this Power of Attorney, “debt outside the ordinary course of business” is an agreement or contract for the payment of money over a period of time exceeding one (1) year, with total payments exceeding One Million Dollars ($1,000,000), or two (2) or more agreements or contracts for the payment of money over a period of time exceeding one (1) year, with aggregate total payments exceeding One Million Dollars ($1,000,000). Such agreements or contracts must also require the pledge of assets as collateral and the payment of interest or a similar related fee(s).

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10. Subject to Section 3 and Section 5 of this Exhibit C, the Trustee shall not undertake the following actions or make the following decisions prior to reasonable notice and effort at consultation with Pinnacle Entertainment, Inc.:

(a) Setting an annual budget for the Owner.

(b) Selecting and setting the compensation levels for the executive members of the Owner.

(c) Commencing liquidation or bankruptcy proceedings.

(d) Compromising or settling any claim, lawsuit or arbitration against the Owner.

(e) Agreeing to material restrictions or limitations of the Owner’s business activities.

(f) The compromise or settlement of administrative actions including disciplinary initiated by the Indiana Gaming Commission.

(g) Changing the Owner’s line of business.

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