Golden presentation

Lottery Facility Gaming Review Board Presentation

August 14, 2008

GOLDEN HEARTLAND – OUR SITE

GOLDEN HEARTLAND – RIGHT LOCATION

GOLDEN HEARTLAND – RIGHT SIZEOver 240 acres secured.

GOLDEN HEARTLAND - DESIGNby Friedmutter

GOLDEN HEARTLAND - DESIGNby Friedmutter

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GOLDEN HEARTLAND - DESIGNby Friedmutter

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by FriedmutterGOLDEN HEARTLAND - DESIGN

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by FriedmutterGOLDEN HEARTLAND - DESIGN

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by FriedmutterGOLDEN HEARTLAND - DESIGN

GOLDEN HEARTLAND – RIGHT SIZE FACILITY

Phase I

Casino 131,804 sf

Hotel 272,000 sf

Banquet Space 25,000 sf

Restaurants 55,395 sf

Bars 24,852 sf

Support/BOH 117,214 sf

Misc 20,425 sf

Phase I Total: 646,690 sf

Phase II

Residential Lofts 293,689 sf

Bowling 61,468 sf

Other Retail 167,527 sf

Restaurants 52,622 sf

Phase II Total: 734,998 sf

by Friedmutter

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Tom Watson DesignGOLDEN HEARTLAND – CHAMPIONSHIP GOLF COURSE

Golf Revenue Year 1 Year 2 Year 3 Year 4 Year 5

Greens fees $ 1,732,500 $ 1,784,475 $ 1,838,009 $ 1,893,150 $ 1,949,944

Pro Shop $ 337,500 $ 347,625 $ 358,054 $ 368,795 $ 379,859

Locker Rentals $ 100,000 $ 103,000 $ 106,090 $ 109,273 $ 112,551

Initiation Fee (Members) $ 1,687,500 $ 168,750 $ 168,750 $ 168,750 $ 168,750

Total $ 3,857,500 $ 2,403,850 $ 2,470,903 $ 2,539,968 $ 2,611,104

Average # of spectators at a PGA event 150,000 – 200,000Average # of spectators at a “Champions” PGA event 75,000 - 150,000Average # of rounds of golf / year* 33,750 Average green fees at our facility $ 70

*based on 25 golf days per month for 9 months

Tom Watson DesignGOLDEN HEARTLAND – CHAMPIONSHIP GOLF COURSE

GOLDEN HEARTLAND - SITE PLANExpansion Opportunities

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GOLDEN HEARTLAND – SITE PLANConvenient and Accessible

GARAGE

Slot and Video PokerDenom % of Floor # of Games

1 Cent 54.00% 13505 Cent 5.00% 12510 Cent 0.64% 1625 Cent 27.00% 67550 Cent 1.60% 40

$1 10.00% 250$2 0.32% 8$5 1.00% 25$10 0.20% 5$25 0.16% 4$100 0.08% 2

Total 2,500

Table Games # of Games

Blackjack 53

Craps 5

Roulette 4

Baccarat 3

Pai Gow 4

Texas Hold’em 3

Three/Four Card Poker

4

Let it Ride 2

Flop Poker 2

Poker Room Tables 18

Total 98

Proposed Game Mix

GOLDEN HEARTLAND – RIGHT SIZE CASINO

Christiansen Capital Advisors indicated the casino market could optimally support 2,786 gaming machines in Wyandotte County.

What is the RIGHT SIZE for the Market?GOLDEN HEARTLAND – MARKET OVERVIEW

Casinos Population* # slots # tablesGaming Floor sq ft

Convention Space

Hotel Rooms

KC Missouri Casinos

Ameristar Casino Hotel - KC 2,500,000 3,015 105 140,000 14,520 184

Argosy Riverside Casino 2,500,000 1,924 47 62,000 18,000 258

Harrah's North KC Casino 2,500,000 1,793 72 60,133 10,000 392

Isle of Capri - KC 2,500,000 1,525 32 40,000 - -

Wyandotte Proposed Casinos

Golden Heartland 2,500,000 2,500 98 132,000 25,000 300

Hard Rock / Speedway 2,500,000 3,000 100 171,650 77,000 300

Legends Sun 2,500,000 2,000 85 115,000 35,000 350

Pinnacle 2,500,000 2,300 85 100,000 100,000 500

*Based on total population within 100 miles.

GOLDEN HEARTLAND – RIGHT TEAMManagement Experience

Blake L. Sartini Chairman / President / Chief Executive Officer

• Over 28 years of experience in the hotel, casino and gaming industry

Rod S. Atamian Executive Vice President / Secretary & Treasurer

• Over 15 years of gaming management experience in hotels and casinos with a focus in finance

Steve A. Arcana Chief Operating Officer

• Over 23 years of experience in hotels and casinos with a focus including 8 years of gaming management

Matthew W. Flandermeyer Vice President / Chief Financial Officer

• Over 17 years of experience in food and beverage industry

Christopher Abraham Vice President of Marketing

• Over 18 years of experience in the hotel casino industry with 13 years of gaming management experience

Sheila Pankas Director of Compliance & Community Relations

• Over 13 years of gaming experience in the gaming regulatory industry.

Amy Sances Corporate Counsel & Director of Business Development

• Over 11 years of legal experience in litigation, governmental relations, gaming and transactional matters

Management ExperienceGOLDEN HEARTLAND – RIGHT TEAM

Golden Heartland

MARKETING PLAN

Regional and Outer Market

Advertising and Promotion

Player DevelopmentRegional Offices / Junkets

Regional Advertising/Promotion

Target Cities

Regional Advertising / Promotion

Create awareness in markets pre-disposed to gaming by conducting aggressive pre-opening and continuing regional marketing campaigns

Main Focus PointsTom Watson Signature Golf Course4-Star Resort & SpaDining ExperiencesEntertainment KCK Destination Retail Amenities

Regional PeriodicalsUSA Today, Sports Illustrated, Golf Digest, People

Billboards – Proximity to thoroughfares and airports

Television – Travel and leisure

Website – Comprehensive on-line and e-marketing campaign

Regional Advertising / Promotion

Player Development

Strategically position and operate regional offices in major feeder cities for player development fulfillment

Identify players that currently frequent Las Vegas and other regional gaming markets

Increase visits from existing players

The combination of airports, special events, retail, sporting events, entertainment and championship golf creates the exact formula necessary to ensure that our Branch and Independent Junket offices operate successfully

Player Development

Branch Office Locations

Golden Heartland

LOCAL MARKET

Local Market

Direct MarketingLoyalty ProgramsLocal Business AlliancesAdvertisingPromotion

Local and Direct Marketing

Utilize management experience in KC market to maximize revenue opportunities from loyal Kansas City, MO gamers

Concentrate investment on new and infrequent guests to solidify their loyalty

Provide superior loyalty program (i.e. player’s club) creating an incentive for gamers to choose Kansas and Golden Heartland over competing Missouri casinos

Local and Direct Marketing

The size of a company’s national database does not dictate success or market dominance

Market dominance is created by the right product, service, marketing and loyalty programs offering the very best guest experience on a consistent basis

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Direct Mail

Local Market Promotions & Advertising

Partner with local Kansas-based businesses to conduct programs and promotions creating a “sense of community” among locals in KCK

Neighborhood PartnersPoints for Services

GasRetail ShoppingAutoDepartment Stores

Create large-scale retail promotions to generate buzz, excitement and public relations opportunities that drive additional trips and entertainment spending from Missouri gamers

Projected volumes of tourism

1.6 million local visitors + 2.2 million visitors outside Wyandotte County = 3.9 million visitors in 2011.

Over 400,000 visitors from over 100 miles away in the first year and increasing to over 485,000 by 2014.

4.6 million visitors in 2014 with the introduction of Phase II.

GOLDEN HEARTLAND - VISITORS

GOLDEN HEARTLAND – TOURIST SPENDING

2011

Visitation Driver100+ Mile Visitors

Average Spend per Visitor per

Day

Average # of

Days

Total 100+Mile Visitor

Spending

Total Average

Spend Per Visitor

Casino 328,790 $ 110 1.50 $54,250,283 $ 165

Hotel 67,485 $ 115 2.25 $17,461,680 $ 259

Golf 5,648 $ 310 1.50 $ 2,626,088 $ 465

TOTAL 401,922 $ 114 - $74,338,051 $ 185

GOLDEN HEARTLAND – PROJECTED REVENUE

Year 1 Year 2 Year 3

Slot Revenue $ 186,150,000 $ 209,875,000 $ 225,387,500

Table Game Revenue $ 46,720,000 $ 49,640,000 $ 52,560,000

Poker Revenue $ 6,405,750 $ 6,570,000 $ 6,734,250

Total Gaming Revenue $ 239,275,750 $ 266,085,000 $ 284,681,750

Other Revenue $ 49,552,124 $ 52,892,143 $ 55,005,502

Total Facility Revenue $ 288,827,874 $ 318,977,143 $ 339,687,252

GOLDEN HEARTLAND – SUMMARY OF TAX STRUCTURE

Revenue ThresholdsPercentage to

the State

$0 - 250 million 22%

over $250 - 300 million 23%

over $300 - 350 million 24%

over $350 - 400 million 25%

over $400 - 450 million 26%

over $450 - 500 million 27%

over $500 million 28%

GOLDEN HEARTLAND – STATE REVENUE Based on lottery contract tax structure for each proposed facility

$50

$70

$90

$110

$130

$150

$170

1 2 3 4 5

LegendsPNKSpeedwayGolden

Total value of the lottery contractsGOLDEN HEARTLAND

$59.50

$69.50

$79.50

$89.50

$99.50

$109.50

$119.50

$129.50

$139.50

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Fees

 (Millio

ns o

f Dol

lars

)

Golden

PNK

Legends

Speedway

1152

1327

1511

1178

1378

1581

1000

1100

1200

1300

1400

1500

1600

1700

Projected + 15% +30%Christiansen Capital Projections

Tax

Dol

lars

(in

Mill

ions

)

AverageCompetitorGolden

GOLDEN HEARTLAND – STATE REVENUE Incremental Tax Dollars to State over 15 yr Contract under Golden Structure

$26 MM

$51 MM

$70 MM

GOLDEN HEARTLAND – LOCAL IMPACT

Golden Heartland will employ 1,850 team members (FTE’s).

In aggregate, over 11,000 jobs will be created during the construction phase and over 8,000 during the operational phase.

Total economic output from construction is $1.4 billion and $578 million from the operational phase.

GOLDEN HEARTLAND – LOCAL IMPACT

Benefit ItemState of Kansas Edwardsville

Bonner Springs

Unified Government Total

Casino Revenue Sharing $66,484,020 $ 2,077,626 $ 193,219 $ 6,039,658 $ 74,794,523

Property Taxes $ 207,173 $ 6,985,219 $11,532,371 $19,278,023 $ 38,002,786

Sales and Use Taxes $ 4,691,904 $ 337,258 $ 959,013 $ 1,991,846 $ 7,980,021

Other Taxes $25,000,000 $ 191,033 $ 77,660 $ 1,313,477 $ 26,582,170

TOTAL $96,383,097 $ 9,591,136 $12,762,263 $28,623,004 $147,359,500

Use Resort & Casino Golf Course Total

Build-out $ 445,545,064 $ 17,717,233 $ 463,262,297

FFE 25,298,136 - $ 25,298,136

Land 13,500,000 10,000,000 $ 23,500,000

Equipment 87,838,170 - $ 87,838,170

Preopening Cost 7,000,000 - $ 7,000,000

Financial/Taxes/Legal 2,000,000 1,000,000 $ 3,000,000

Contingency 26,608,456 1,122,987 $ 27,731,443

Capitalized Interest 22,000,000 2,000,000 $ 24,000,000

TOTAL $ 629,789,826 $ 31,840,220 $ 661,630,046

GOLDEN HEARTLAND – PROPOSED INVESTMENT

GOLDEN HEARTLAND – CONSTRUCTION TIMELINE

2008 Sep - Selection of Lottery Gaming Facility Manager

2009 Feb - Golf Course final design

Mar - Hotel foundation begins

Jun - Casino foundation complete

Nov - Clubhouse construction complete

2010 Jan - Roadway construction complete

Mar - Casino façade complete

Jun - Garage complete

Oct - Hotel interior complete

Dec - Hotel complete; Golf Course complete

2011 Jan - Casino interiors complete; Landscape complete

Feb - Golden Casino Grand Opening

EQUITY

1. Imbedded project equity – excess land value

2. Equity from affiliates – Golden Gaming, Inc. and Golden Mardi Gras, Inc.

3. Private equity partner in the project

4. Retail / residential development partner

5. Equity from Stockholder

GOLDEN HEARTLAND – SOURCES OF FUNDING

DEBT

1. Project specific bank/bond financings

2. Bank/bond financing through affiliates

3. Loans from Stockholders

Other Considerations

None of the project infrastructure will be derived from or financed by state or local retailers’ sales tax revenues or tax increment financings.

None of the land secured for any component of the project will be acquired through eminent domain.

GOLDEN HEARTLAND – FINANCING

GOLDEN HEARTLAND - COMPLIANCEA Responsible Manager

Operating in the gaming industry is a privilege, not a right!

Compliance Plan

Plan contains policies to address the companies commitment to adherence to all laws, not just gaming laws

Plan incorporates training of all employees on regulatory requirements specific to their position

Compliance Committee

Committee members include independent gaming professionals, corporate executives and facility team members

School Districts

Police/Fire

Local Hospital

GOLDEN HEARTLAND – LOCAL COMMITMENT

Golden Heartland is committed to the community!

GOLDEN HEARTLAND – THE RIGHT CHOICE•• RIGHT LOCATIONRIGHT LOCATION

- Unmatched site (over 240 acres)- Opportunity for future expansion

•• RIGHT SIZERIGHT SIZE- World-class facility- Top quality amenities

•• RIGHT TEAMRIGHT TEAM- Experienced operator delivering realistic promises- Tom Watson designed championship golf course- Friedmutter designed resort

•• MOST REVENUEMOST REVENUE- Most tax revenue to state of Kansas and municipalities

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