Previous to this deal, Dania Entertainment Center entered an asset purchase agreement to acquire the Dania Jai Alai from Boyd Gaming Corporation. The deal is expected to close in the coming months.
Lakes made an initial $4 million investment in the joint venture via a convertible promissory note that will convert to equity once the the acquisition deal is closed. If the deal does not close, Lakes would likely lose such investment. Such investment was used to reimburse DEC for the non-refundable deposit it made under the Boyd Acquisition asset purchase agreement, and other development expenses.
Under the joint venture agreement, Lakes has the right to invest an additional $6 million when the Boyd Acquisition closes, which Lakes currently intends to fund. If Lakes does not make the investment and the Boyd Acquisition closes, Lakes will not be guaranteed to receive a management agreement but will be paid a development fee of $250,000. Lakes’ ownership percentage of the Casino will depend upon the terms of the additional funds necessary to cover the acquisition and the redevelopment of the Casino.
“We are currently working with DEC on the details of the casino development, and we plan for it to be a first class casino facility with exciting new games, food and beverage outlets, retail shops, Jai Alai, a hotel and other market driven amenities,” stated Lyle Berman, Lakes’ Chief Executive Officer.
In addition to this new deal to manage Dania Jai Alai, Lakes Entertainment, Inc. currently has development and management or financing agreements with two separate Tribes for operations in California casinos, for a total of two separate casino sites. The company is also managing the Red Hawk Casino & Bingo, in Placerville, CA, for the Shingle Springs Band of Miwok Indians, and has an investment in Rock Ohio Ventures, LLC for their planned casino developments in Cincinnati and Cleveland, Ohio. Lakes is also involved in other business activities, including the licensing of table games to Tribal and non-Tribal casinos.