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Lakes Gaming Inc. Announces Settlement of Shareholder Lawsuits

The agreement calls for Lakes to pay $9 million dollars to the Grand Casino shareholders and $9 million dollars to the Stratosphere shareholders for full and final settlement for all federal and state related actions.

Lyle Berman, Chairman and Chief Executive Officer of Lakes stated, ``We feel it is in the best interest of Lakes and its shareholders to resolve these lawsuits. Settlement of these two complaints removes one of the major uncertainties that has been associated with our company.''

The complaints by the shareholder groups were originally filed in 1996 against various defendants including Grand Casinos, Inc. The complaints included allegations of misrepresentations, federal and state securities law violations and various other claims in connection with the Stratosphere project. As part of the transaction establishing Lakes Gaming, Inc. as a separate public company on December 31, 1998, Lakes agreed to indemnify Grand for all obligations arising out of these lawsuits.

The settlement agreement is subject to final approval by the respective courts, which is expected to occur later this summer. The $18 million will be placed by Lakes into an escrow account on behalf of the recipients in the middle of July. The net after tax effect of the settlement will be a one-time charge to Lakes earnings of approximately $1.00 per share.

Lakes Gaming, Inc. is a publicly held casino management company that was formed through a distribution to shareholders of Grand Casinos, Inc. effected in December 1998. The company currently manages the largest casino resort in Louisiana and has entered into development and management agreement with three separate tribes for three new casino operations. Lakes Gaming, Inc. common shares are traded on the Nasdaq National Market under the trading symbol ``LACO''.

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