Lakes Entertainment Announces Termination of managing the Red Hawk Casino
PLACERVILLE, Calif. (Placerville News Wire) Lakes Entertainment, Inc. announced that today, it received a cash payment of $57.1 million per the terms of the Debt Termination Agreement that Lakes entered into with the Shingle Springs Band of Miwok Indians on July 16, 2013. Upon receipt of such payment, the management agreement, under which Lakes had been managing the Red Hawk Casino for the Tribe, was terminated.
Tim Cope, President and Chief Financial Officer of Lakes stated, "We are proud to have been involved in the development and management of this first-class casino property and we wish the Shingle Springs Tribe continued success." Mr. Cope added, "This payment gives us greater financial flexibility as we continue to pursue new opportunities."
SOURCE: Lakes Entertainment, Inc.
PLACERVILLE, CA, Aug 29, 2013 (Marketwired via COMTEX) -- The Shingle Springs Band of Miwok Indians, a federally recognized tribal government that owns and operates Red Hawk Casino through its Shingle Springs Tribal Gaming Authority, refinanced the Tribe's existing debt today, paying off approximately $524 million in debt and payment obligations, and securing a $245 million bank loan and $260 million in bonds.
The refinance transaction enabled the Tribe to buy out its management contractor, Lakes Entertainment, Inc., for approximately $57.1 million, which is far less than would be owed by the Tribe had the company performed the contract over its full term.
The transaction, combined with the buyout of Lakes Entertainment, enables the Tribe to recover substantial financial relief under its recently-amended state compact which strikes a fair balance between the Tribe and the state.
"The Tribe is finally in a position to benefit from its own gaming operation," said Tribal Chairman Nicholas H. Fonseca. "That is the way it is supposed to work, and in fact, federal law requires it. What it means is that the Red Hawk Casino will be financially stronger, and the Tribe will be able to use gaming revenues to support its government in meaningful ways, for the betterment of its people."
While the refinance will have a favorable financial impact on the Tribe and its Red Hawk Casino, the termination of Lakes will have no effect on the operation of the gaming facility, which opened in December 2008.
"The Tribe's contractual relationship with Lakes ended today, but it remains business as usual," said Yolanda Tayaba, Chairperson of the Shingle Springs Tribal Gaming Authority, the tribal governmental agency that operates Red Hawk Casino.
The Tribe's 278,000 square foot gaming facility is located on the Tribe's reservation in El Dorado County, about 35 miles east of Sacramento, Calif.
The Tribe's Red Hawk Casino generates positive economic benefits to El Dorado County with minimal environmental impact. The Tribe and Red Hawk Casino spend more than $60 million in direct payroll and benefits each year for their approximately 1,350 employees. Most of Red Hawk's visitors come from outside El Dorado County, and the casino's location captures California gaming and entertainment dollars that would otherwise go elsewhere.