Tim Cope - President and CFO Lyle Berman - CEO.

Colin King - Kirr, Marbach & Company David Hargreaves - Sterne, Agee David Schwartz - PWL.

Good day, ladies and gentlemen. And welcome to the Second Quarter 2014 Lakes Entertainment Incorporated Earnings Conference Call. My name is Juanita, and I'll be your coordinator for today. At this time, all participants are in a listen-only mode. We will be facilitating a question-and-answer session towards the end of this conference.

(Operator Instructions) As a reminder, this conference is being recorded for replay purposes. I would now like to turn the call over to Mr. Tim Cope. Please proceed..

Thank you, Juanita. Good afternoon. And welcome to Lakes Entertainment’s second quarter 2014 earnings conference call. On the call with me is Mr. Lyle Berman, Lakes’ Chairman of the Board and Chief Executive Officer.

As we begin our prepared remarks, I would like to remind everyone that this call may contain forward-looking statements, including statements concerning business strategies and their intended results and similar statements concerning anticipated future events.

These statements are subject to risks and uncertainties, including those risks described in our filings with the SEC and actual results may differ materially. Lyle will begin our discussion today with a general overview and update on our casino projects.

I will then discuss the first quarter financial results and recent business events and then, we'll conduct a question-and-answer session. Now, I will turn the call over to Lyle Berman..

Thank you, Tim, and welcome everyone to Lakes' second quarter 2014 earnings call. I will start by discussing the second quarter operating results at our Rocky Gap Casino Resort, which is located in Western, Maryland.

Rocky Gap is a AAA four diamond resort that includes a casino, hotel, event center, spa, four restaurants and the only Jack Nicklaus Signature Golf Course in Maryland. The casino currently features 577 slot machines, 15 table games including poker, a casino center bar, a hotel lobby bar and several food outlets.

Although, Rocky Gap experienced construction disruptions, related to the addition of new parking spaces and the expansion and refurbishment of other areas during the quarter, finance results have been in line with expectations and up significantly from prior year. May 22, 2013 marks the one year anniversary of the casino opening. I meant 2014.

At June total revenue was up approximately 50% compared to June of last year. July continued to show a strong trend with approximately 15% increase in year-over-year growth in revenue.

During early July, we completed the construction of 150 additional surface parking spaces located in close proximity to the casino, which provide additional convenient parking for our guests. We also recently completed the refurbishment of the fitness center and golf pro shop, both of which have been well received.

We have upgraded the outdoor activities area and offer several recreational options including bikes, paddle boats, fishing gear and boats.

We have improved the outdoor lounge area with enhanced outdoor food and beverage service, additional fire pits and more seating With a cost of approximately $3.5 million, these upgrade reflect our commitment to providing an exceptional guest service.

As we previously announced during the second quarter, we entered into an agreement to sell our interest in the Dania Casino & Jai Alai for approximately $2.6 million. We received an initial payment of $1 million in April at which time 40% of our original ownership in Dania was transferred to the buyer.

The remaining purchase price will be paid in three equal semi-annual installments of approximately $530,000 and 20% of our original ownership in Dania will be transferred to the buyer upon each payment. We expect to receive the next payment in October 2014.

We continue to maintain a 10% ownership interest in Rock Ohio Ventures, 80% ownership in the Horseshoe Casino in Cleveland, the Horseshoe Casino in Cincinnati, Thistledown Racino and Turfway Park in Kentucky.

The Horseshoe Casino in Cleveland features approximately 1,700 slot machines, 89 table games, a 30 table poker room and multiple food and beverage outlets. The Horseshoe Casino in Cincinnati features approximately 2,000 slot machines, 87 table games, a 31-table World Series of poker room, several food and beverage outlets and a parking structure.

The Thistledown Racino in North Randall, Ohio, features its existing racetrack, 1,100 video lottery terminals and new dining and nightlife options. Turfway Park is a premier thoroughbred horse racing track located in Florence Kentucky. We currently have cash and short-term investments in excess of $80 million.

In addition, the Jamul Indian Village is required to begin repayment of our principal on our $60 million note receivable when and if a casino opens and certain third party construction and development funds have been repaid. Interest payments of 4.25% on our note receivable would be required immediately upon a casino opening.

This note was written off our books in prior years. The Jamul Tribe is working with Penn National Gaming to develop a casino on the Tribe’s existing reservation. Penn previously announced that it has launched construction activities at the site and is planning to open the casino in mid-2016.

We continue to evaluate various business opportunities to maximize value for our shareholders. With that, I’ll turn the call back over to Tim to provide an overview of financial results.

Tim?.

Thank you, Lyle. Second quarter results. Net earnings for the second quarter of 2014 were $0.1 million compared to net earnings of $0.2 million for the second quarter of 2013. Earnings from operations were $0.3 million for the second quarter of 2014 compared to a loss from operations of $1.2 million for the second quarter of 2013.

Basic and diluted earnings per share were less than $0.01 for the second quarter of 2014, compared to basic and diluted earnings per share of $0.01 for the second quarter of 2013. Lakes Entertainment second quarter of 2014, net revenues of $14.1 million, compared to prior year second quarter net revenues of $8.5 million.

Second quarter 2014 net revenues were related to the operation of Rocky Gap. Lakes acquired this property in August 2012 and as Lyle mentioned, gaming operations began on May 22, 2013. During the second quarter of 2013, net revenue of $4.8 million were related to the operation of Rocky Gap.

Also included in prior year second quarter net revenues were $3.7 million of management fees related to the management of the Red Hawk Casino near Sacramento, California, owned by the Shingle Springs Band of Miwok Indians.

There were no management fees earned during the second quarter of 2014 due to the August 29, 2013 termination of the management agreement for the Red Hawk Casino.

During the second quarter of 2014 and 2013, property operating expenses for Rocky Gap were $8.2 million and $3.4 million respectively and primarily related to gaming operations, rooms, food and beverage and golf.

The increase in property operating expenses resulted primarily from the inclusion of gaming related expenses in the entire current year quarter. Gaming commenced in May 2013. Therefore gaming expenses were included for only a portion of the prior year second quarter.

For the first second of 2014, selling, general and administrative expenses were $5.7 million compared to $4.6 million for the second quarter of 2013. Included in these amounts were Lakes' corporate selling, general and administrative expenses of $1.9 million and $2.0 million during the second quarters of 2014 and 2013 respectively.

Lakes' corporate selling, general and administrative expenses consist primarily of payroll and related expenses and professional fees as well as $0.4 million of business development cost. Rocky Gap selling, general and administrative expenses were $3.8 million and $2.6 million during the second quarters of 2014 and 2013, respectively.

The increase in Rocky Gap selling, general and administrative expenses was due primarily to increases in marketing and advertising expenses, and payroll and related expenses related to the addition of gaming during May of 2013.

As Lyle mentioned, during the second quarter of 2014, Lakes entered into an agreement to sell its interest in Dania Casino and highlighting Dania Beach Florida for a total of $2.6 million.

Upon receipt of the payment during the second quarter of 2014, Lakes recognized a $1 million gain on sale of cost method investment since this asset had previously been written off. During the second quarter of 2013, Lakes recognized preopening expenses of $0.9 million related to the Rocky Gap project.

There were no preopening expenses during the current year period. Depreciation and amortization was $0.9 million for the three months ended June 29, 2014 compared to $0.5 million for the three months ended June 30, 2013. The increase was due primarily to depreciation on Rocky Gap fixed assets.

The Company has existing net operating loss carry forwards of approximately $72 million that are available to offset future taxable income. In summary, we are pleased with the performance of Rocky Gap, although ongoing construction projects had an impact on the second quarter operations, the property still performed well.

With the recent completion on this projects including the addition of 150 new parking spaces, the expansion on the fitness center and remodel of the golf shop, which we completed in early July we have already seen an increase in visitation and we're looking forward to operating the remainder of the summer and fall seasons with these new offerings.

In addition we continued to evaluate new business opportunities to enhance shareholder value. Now let's turn the call over to the operator for questions..

(Operator Instructions). Your first question comes from the line of Tom [indiscernible] with RBC. Please proceed..

Do you guys envision a scenario where we would sell our interest in Rock Ohio?.

This is Lyle. Certainly that is something that we consider on a regular basis. It’s a non-operating asset and certainly deploying cash and something that generated earnings and cash would be desirable. So it’s something we continue to evaluate..

How would the shareholders ascertain whether or not we’ve received fair value in our interest in Rock Ohio?.

Well I think they would have to rely on management. It's our goal to maximize shareholder value. I'm personally a large shareholder as is Tim Cope and I think that that’s the management and Board of Directors decision..

Okay. Last call you were going to look into whether or not you could disclose some of the information you have received in order to file our tax return.

Have you come with many…?.

We did look into that. We are on a non-disclosure NDA with Rock Ohio and we looked into it, we talked to them about it but at this point they want us to continue to honor our non-disclosure agreement. There is information out there in the public domain relative to the volume and the size and scope of the facilities.

Tim do you want to add anything?.

No I think that’s appropriate, Lyle. At this point we’re legally contracted to honor our confidentiality agreement with Rock Ohio..

And supersedes your obligation of transparency to your shareholders..

We got to be transparent to our shareholders. Certainly we evaluate our $21 million investment on our balance sheet every quarter and certainly we’ve determined there is no impairment to that value at this point in time. Other than that we really don’t -- we certainly want to be as transparent as possible to our shareholders at all times.

Unfortunately we’re into this other contractual obligation..

Your next question comes from the line of Steven Habercorn [ph] a private investor. Please proceed..

That was a nice quarter.

How long ago did we invest the $20 million in Rock Ohio?.

Tim, can you give those dates?.

It approximately started I think in about 2010, and then a little bit over throughout time..

So it’s been about three years, would you say?.

Yes, I would say that, yes.

Clearly most of the money was invested prior to the casinos opening. .

So it'd be at least two, three years ago?.

I think that would be correct..

My question is like the other gentlemen. We have no report on any return on net investment. You seem to know nothing about it? Telling us that we should look in the public area. That’s not really the place. It’s supposed to come from the company and here is my concern.

In today’s statement that was issued with the earnings, you said you had another $80 million to invest.

How do we know you’re not going to invest that just as secretly and I'm not concerned about you Lyle and you Tim? I am concerned -- what do we know about other people? Do we know that the operating the casino, and I don’t mean this discouragingly, that picking excessive fees, that they're employing people with the same credibility that you would respect? How do we know that’s been taken care off? How do we know they’re not trading on this? And my other question is you keep referring to this; we need to contract the NDA.

Back in April I asked to find out where it is and could I see it? I've never had a response to that.

Could you help me on that?.

Well number one we don’t invest money secretively. We certainly disclose when we invest and what we invest in..

What I meant secretly, we're not getting any results. I didn’t mean….

The reasons that people own stocks is they do rely on management to make the right decisions for them going forward. Regarding the confidentiality agreement I thought, and Tim, you can correct me on this but I thought that was a public document that we had filed and we had told Steven about, we had guided him where it's high..

The actual agreement that contains the confidentiality language is not a public filing. And Steve [indiscernible] fact that we one but it is not a public file document. .

But I think with transparency and full disclosure, shareholders should be able to see that and see when it was done, when it was dated, when it went into effect. It's a serious amount of money, $200 million and then it goes to the credibility of investing the next $80 million. And when I say hidden, I mean hidden that we’re not getting any results.

That’s highly unusual. So -- and when the $20 million was invested, it was the majority of what the Company had at that time. So it’s serious investment. If you could look into that and get me the data; I wrote that letter in April and haven’t had a direct response. You showed me something in the last quarterly…..

We will look into that, I don’t think it would be [indiscernible] but I don’t think we have an issue in maybe filing our confidentiality agreement as a public document..

Okay. My next question is, repeatedly and I may not have the verbiage exact, but you alluded to the value of the Company and then there’s hidden value and undiscovered value in assets.

What specifically do you know that we don’t know when you make those statements?.

I think when we said that we think we’re undervalued we’re looking at the sum total of the assets of our Company, as compared to the stock -- the public value of the stock. And when we value our assets, then they're pretty much all disclosed. There aren’t any hidden ones. We have an NOL of $72 million, which has value going forward.

We've disclosed certainly that the….

Well, let me ask you this, in the last one and the way it reads, it says we believe our overall assets have substantial value that are not fully reflected in our balance sheet.

So the purpose of some of the shareholders, an equal playing field for transparency and full disclosure, would you be able to break that down and tell us what you guys have in mind? After all, we're trusting you; like you said, trust management. We invested the money, we’re getting no input as to any return on that money.

And I’d like to know what assurances you have that the other side is….

We can get back to you on that Steven. For example on our balance sheet we don’t show we have written off the Jamul note of $60 million. However, that -- so we’re carrying that on our balance sheet for zero.

Yet when we -- because Penn has announced that they are under construction and intend to open by 2016, we think over time, we’re going to get the full value of that investments. Our NOL of $72 million, I don’t believe is also reflected on our balance sheet yet. As we start to invest money and have earnings, certainly the value of that NOL goes up.

When we talk about Rocky Gap on our balance sheet, I think I believe we carry that at our cost, which we’ve disclosed. I believe our total investment today is about a little shy of $40 million, but we believe that asset has a higher value than that. I’ll get back to you on those comparisons..

Your next question comes from the line of Rory Barry [ph] Private Investor. Please proceed..

I've a got a question for Tim Cope. Tim, the interest income is a ridiculously low sum. For six months its $71,000 on what about $85 million, which is like 1100:1%. And I can get 2.5% of the local savings in loan.

So I guess my question is why is this so ridiculously low and why don’t you declare about a $2 dividend so the shareholders can invest that money..

The start was backwards on your question Rory. Dividends have been always discussed internally and continued to be discussed as certainly a viable option of how to best utilize our $80 million of amount of cash.

In the meantime, we -- our short time term investments are invested in essentially commercial paper, corporate bonds and a minimum amount in CDs and it is conservative. I certainly agree with you on that point.

But the reason isn’t conservative investment mode at this time and so that is readily available to utilize as we progress either in new projects or we should do either the dividends or stock buyback or any other alternatives that the Board continues to discuss.

And also at this point, it looks unusually low comparatively the prior year, because if we remember, prior year interest income included the approximately 9.5% we’re earnings on our notes from Shingle Springs..

Speaking of that, do you said imminent [ph] investment in case you need to make it? Have you got anything imminent in the way of an investment in another casino or in a purchase in another company or whatever and can you tell us about it?.

Again as Lyle mentioned earlier, we do continue to evaluate new opportunities. We’ve done in a substantial amount of work for the first two quarters particularly. Nothing to disclose at this point in time, but again we continue to look..

Okay. I got another question on accounting Tim and that is basically the land that you bolt-on. You sent out a note that you as a firm purchased on the day that thing opens up the day the [ph] opens up and yet you have not taken any of the gain from the land into your accounting.

Isn’t pretty firm that they’re building out there and that they plan to open up and can’t you in effect take up that what is it $4.5 million gain on the books. Maybe discount it but at least take it up..

Well, as you pointed out, the new artists [ph] plan to open it. It currently hasn’t open yet and until such time it hasn’t open, we really can’t write that up on our books. What we will do is at the time we’re actually paying for it..

All accounts receivable is future payment and yet to put account receivable on your book and there is nothing sure that everybody is going to pay their accounts receivable and wouldn’t this fi in the definition of accounts receivable..

Well, I certainly understand the common accounts receivable, but we fully expect any accounts receivable to be paid. There certainly -- and transaction that has occurred that is a collectable transaction. In this case Jamul has not occurred.

So at the time we actually receive a payment or we record the gain or to your point if the casino is open the payment is due and we go to collect and they haven’t collected as we didn’t certainly a right to have a receivable and evaluate at that point..

However, this Lyle is talking. Bear in mind that it in the interest of being totally transparent, we certainly have disclosed that A, we ripped that off the books, but we will be doing collectible once the casino open.

So whether we recognize it or not, I realize that it would be nice -- it shows a little more earnings, but when you discuss cash, it would have no impact on our cash..

So this is another one of those undisclosed assets in fact that we’re talking..

I would call this very disclosed, but it is not carried on our balance sheet that is correct..

Okay, so why can’t you make two balance sheets?.

I actually we think we should be able to. Our lawyer tells we’re not supposed to do that because when we talk about undisclosed, there is -- some time it is speculative, but we’re going to look into that to see what we can -- we can put in approximate values..

I think you can do -- my accounting [ph] is a history, but I think you can do it and if you do it in a way of footnotes. In other words if you have a footnote saying this is following list of undisclosed assets, it could be taken into consideration..

Rory, all that information we’ve discussed is in our footnote..

But not as far as amount or evaluations or anything and you have to kind of dig it out..

Now well, again, they’re in the appropriate footnote. I would say with the dollar amounts. So they are there..

Okay. By the way tell Steven that I’ve got the agreement in my favor and it’s out and you can get it on the internet if you dig it out and I’ve found it. And they do furnish you with an accounting though. It says that JF with furnish you with an accounting.

So basically you wouldn’t know what the stock over is doing now, am I correct?.

Yes, we do receive their financial results on the quarterly basis..

Your next question comes from the line of Bill Rizo, Private Investor. Please proceed..

I was reading the press release a while back about the Company implementing a poison pill which seems to prevent a buyout.

Can you explain this a little and why it is in the best interest of the shareholders?.

Yes, this is Lyle Berman, calling. This actually has to go that when you look our stock prices compared to what we believe are realistic value of our assets, we've We put in a poison pill so that if somebody wanted to come and take control of the Company, they have to talk to the Board and get the Board’s concurrence with that.

We think that is in the best interest of our shareholders.

Tim, has our current proxy going out?.

Yes, it has..

In our current proxy, a shareholder of Lakes -- I should say requested but really demanded that we put it in our proxy for the Annual Meeting that he wants us to -- the shareholders to vote that A, the Board cannot put it a proxy, put in a poison pill without shareholder approval and he would like to shareholders to have us rescind the current poison pill.

We as a company and the Board have suggested, recommended to our shareholders that they vote against that. We think it’s in the best interest of the shareholders to have the poison pill and of course our Board vetted this thoroughly and came to the conclusion that it was in the best interest..

Your next question comes from the line of Colin King with Kirr, Marbach & Company. Please proceed..

Just want to -- trying to get some color on the size of acquisitions you are looking at. Would you consider investing in excess of the cash on the balance sheet? And then in terms of timing of that, is there a point in time where you’d say it’s been too long, we haven’t found any suitable acquisitions and we look to make another move.

I guess I'm just trying to figure out the timing aspect of that?.

This is Lyle Berman again. To answer the last first, certainly at some point if we could not find a suitable investment, we certainly would have to consider making major, either stock buyback or cash distributions. We haven’t set a firm date to that but it’s certainly something we discussed at the board at every board meeting.

In terms of size of an acquisition we are looking at major acquisitions that would be major to our company. We are not looking to be a conglomerate of a whole bunch of small independent not related assets.

And certainly we would certainly consider an acquisition far in excess of course if it could be financed, either perhaps by the banks, high yield bonds or even partly by the seller..

One other question for you, on the Jamul note receivable, that’s not yet on the balance sheet, would you guys consider selling that before the casino opened to someone who is more suitable to be a creditor? Or do you guys intend to hang on to that thing and just be a creditor to that casino..

The answer is we certainly will consider selling it. We believe that until the casino opens however it probably has very de minimis value. You have the risk that it never opens and of course you then don’t have anything.

And of course if it opens, certainly the success of the casino, which we really feel will be successful both because of Penn Gaming as well as the location of the casino.

But until it opens and we can document that the current interest due of 4.25% is being paid, we think that even at that point it would take a discount to phase, because of both the fact that it’s only 4.25% interest as well as Native American gaming.

However if you add in the risk of even opening or not being successful, I believe today it would have de minimis value. But certainly once the casino opens or gets very close to, it’s something we will clearly entertain..

Your next question comes from the line of David Hargreaves with Sterne, Agee. Please proceed..

If we think back to when you built Grand Casino and the quality of product that you put in the market and look around today in the post-recession environment, a lot of CapEx deferred properties with watered down odds.

What do you see in terms of opportunities to build, to come back in and build a new empire? And do you think you lean towards building or towards or towards buying? And in particular I’d be interested in getting your thoughts on in particular Harris is closing down the Tunica facility that you guys built long ago.

And what do you think about that property now? I’d love to get your color on all these thoughts..

Well in terms of all of Lakes' and Grand Casinos experience has always been in building Greenfield construction rather than buying assets. So we just found great opportunity there.

Today there is very little opportunity in Greenfield construction the little opportunity there is this highly, highly competitive and generally a new state that says highly taxed as well. That being said, we still look at that. We are looking when we do this to do a major acquisition.

What we don’t think that in the emerging gaming market that cobbled together a number of very small properties, probably is now something we’re looking at. If you recall the Lakes was always the big dog so to speak. Wherever we opened a casino we were at least a major influence except when we did the Stratosphere.

That being said we look at all kinds of opportunities. We did have extensive talks with Caesars Palace relative to Grand Casino Tunica which didn’t materialize into anything. And we continue, I mean every time there is a casino for sale, it certainly is brought to our attention.

As we have mentioned we’re looking both within and without the gaming industry. And we have looked a number of things where we got very close. From our position, until we sign what’s called the Definitive Agreement, we don’t think it’s something that would be in the interest of shareholders to disclose.

So we haven’t got to the point of Definitive Agreements yet, but we continue looking.

Tim any addition to that one?.

No I think that’s appropriate Lyle. That is what we're busy doing and Dave, we appreciate your comments..

You share my observation that the gaming business isn’t what it used to be and it may have left some opportunities open because I think a lot of poorly capitalized companies have left a window there..

It's clearly not what it used to be. However when you look across the United States in almost all of the emerging markets, you see negative comp increases.

And I'm not suggesting that we can’t improve a number casinos that we looked at but the bottom line is that sellers just don’t seem to want to recognize that emerging gaming is not what it used to be and until things flattened out and we started seeing comp-store comp casino increases, there is certainly a high degree of risk at buying especially at the prices at many times they see..

Your next question comes from the line of Gene Harris [ph] with Lakes Entertainment. Please proceed..

My name is Gene Harris, Jr. I'm not with Lakes. I am a stockholder and I live near Rocky Gap. So I'm out there quite often. My question is we’ve got a market capitalization of $116 million.

The balance sheet show $132 million stockholders equity, close to $90 million in cash and $72 million tax loss carry forward, it seems to me that these numbers are out whack, that the market cap should be higher than it is.

Why not announce a $5 million or $10 million stock buyback over the next 18 months subject to market condition? That’s question number one..

In answer to that we do look at that on a regular basis. We discuss it at every Board meeting. All I can say is at this point we have opted not to do that but there are some definitely just problems with that too.

We have ongoing -- we are looking at a number of ongoing opportunities and certainly in order to do a stock buyback, we either have to discontinue those or we have to make public. The Company can’t buyback stock if we know something more than the shareholders know. So that is one of the issues.

I don’t know that $5 million or $10 million would do the job. I think it would be probably a bigger number and it probably might be a tender offer rather than a stock buyback from time to time in the open market because I don’t in that regard there's ever an open time where we fully disclose everything we know..

Okay, my second question is more related to Rocky Gap in particular. I enjoy going there. They've got great dealers but I do see a lot of employee turnover. Many folks just go elsewhere leave the industry whatever and I wonder if we can do something to improve retention of employees there..

Gene, this is Tim Cope. I couldn’t agree to more. Since day one just finding enough employees to start with has been a challenge and certainly retaining employees as you pointed out is continuing to be a challenge. We offer a number of training schools.

We work with the local colleges there in Cumberland and the surrounding communities to have formal training programs for the individuals.

And it just seems that on many situations that I'm not saying they don’t want to work, but maybe they get trained enough to maybe relocate to a different area, different region, but it is an ongoing challenge for us. There is no doubt about it..

Your next question comes from the line of David Schwartz with PWL. Please proceed..

Now that you’ve owned -- now that you’ve operated a casino at Rocky Gap for more than a year, have you noticed any differences in the customer base than you expected, meaning like how far people are traveling to Rocky Gap and also how much is competition from the casinos in eastern Maryland and surrounding states affecting Rocky Gap?.

I think we’re getting our business pretty much the way we expected it. Certainly we're a local's casino for the daytrip customer and we're an overnight casino for the more of the resort experience, most of our daytrip customers come within 60-mile radius. When you get outside of 60 miles there are other casinos that enter into the daytrip competition.

But certainly for the daytrip within 60 miles, we are pretty much own that market. When we go to the destination resort, I think if anything we’re probably a little bit disappointed in the number of people we’re getting out of the major three big cities.

We’re only a two-hour drive from Baltimore, two-hour drive from Washington DC and two-and-half from Pittsburgh. And yet I will say that, I think there's a high percentage of our overnight customers actually come from within 60 miles to 75 miles as well. So one of our challenges is to get the higher gamer that comes from a little bit further out.

I always want to say, if you’re with your wife or with your girlfriend and you want to get away for a two day, two night, three night vacation, you don’t really want to go to downtown Baltimore, downtown Pittsburgh..

And probably not.

And is there any promotion in those cities like billboards or anything to draw people to Rocky Gap?.

I'll let Tim comment on it..

Yes, this is Tim. We have done a number of test cases certainly in all those cities in terms of newspaper ads, online advertising, they determine response rates and we have found very low response rates for many of those major metropolitan areas.

So what we’ve done is, we refocused our efforts in those areas more now to group business with our meeting space, event center now open. We are starting to draw the smaller groups that are booking our resort for future attendance. So we seem to be drawing more from the city area now to the group environment..

I see.

On a different topic, is the shareholder proposal the reason why that proxy was filed three months later this year than previous years?.

No, it wasn’t. It just simply a matter of calendar and coming up with shareholder -- the date for the shareholder meeting..

And normally you have them in June this year since September, there is….

Yes. I would say -- historically, I agree with you, usually in the early part of year, although, we have had them in September in the past..

Your next question is a follow-up from the line of Steven Habercorn [ph] a private investor. Please proceed..

I don’t mean to be a smart aleck about this, but if you could do us a favor, I've heard this a few times from you and management that there's information available in the public that would relate to Ohio, to Rock gaming. You have a proven expertise in the casino business. That’s why I am a stockholder.

Could you take that information and could you put it together and tell us where you would draw a value there, because for amateurs doing it, it not the same as the professional like you and Mr. Cope. You know where it is and we understand you're just doing an approximation but it’s out there and coming from management who’s invested $20 million.

I think you kind of owe that to the stockholders, rather than send us on a haphazard chase. We don’t know what we’re doing, but it is all out there. I understand which is -- there’s a lot out there. And I think….

I hear what you’re saying, we will look into that. I know our lawyers are -- caution us against making predictions, because when they don’t come true there seems to be a high propensity to sue. On the other hand, I know we should be able to put out the information with total disclaimer that this is just the….

Right..

Nothing that….

Okay. And I tell you what; I’ll be happy to sign any agreement that I will not sue under any condition, but I think it needs your professional input. And let me ask you one other thing.

I would almost ask you to find a new law firm, because I got a letter from them, where I don’t know if they were bulling me, intimidating or what, but they were telling me that they would refuse to answer any more of my letters. I think that’s inappropriate.

I think for a member of the bar to write a letter to a stockholder like that is despicable and I think you should look for a new law firm, because I don’t know that they have the shareholder's interest in there.

And I'm not trying to be wise guy, but I would more rather focus on you looking for the numbers in the public than dissecting them because I've had people look at them and I think what’s the big deal if you think it's that. It needs to come from the company and you can put all the disclaimers on it.

But I think it’s there and for a full year $20 million investment that we know nothing about, I think that would be silly, especially, and I'm not saying this in a bad way, you have $90 million to invest. Maybe invest it at the same way and we’re never going to know anything. I’ve never I heard of anything like that. I know the Cope formula was secret.

I know the Chairman of the Board is Cope doesn’t know the formula, but we shouldn’t have that secrecy here..

Okay. We will look into it Steve..

And at this time we have no further questions. I would now like to turn the call back over to Lyle Berman for any closing remarks..

Thank you very much operator for all of your questions. We will focus on continuing to execute on our strategy of generating shareholder value. Thank you once again for your interest in Lake’s and we will speak with you again in our next earnings call. Thank you. Bye now..

Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect. Have a great day..