UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2011.
For the quarterly period ended March 31, 2012.
or
o	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File Number: 333-~~88829~~117800

	PENINSULA GAMING, LLC		PENINSULA GAMING CORP.
	(Exact name of registrants as specified in their charter)		(Exact name of registrants as specified in their charter)

	DELAWARE		DELAWARE
	(State or other jurisdiction of incorporation or organization)		(State or other jurisdiction of incorporation or organization)

	20-0800583		25-1902805
	(I.R.S. Employer Identification No.)		(I.R.S. Employer Identification No.)

301 Bell Street

Dubuque, Iowa 52001

(563) 690-4975

(Address, including zip code, and telephone number, including area code, of principal executive offices)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes xo No ox

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.:

Large Accelerated Filer o Accelerated Filer o Non-Accelerated Filer x Smaller reporting company o

Indicate by check mark if the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

All of the common equity interests of Peninsula Gaming, LLC (the “Company”) are held by Peninsula Gaming Partners, LLC. All of the common equity interests of Diamond Jo, LLC, The Old Evangeline Downs, L.L.C., Diamond Jo Worth, LLC, Belle of Orleans, L.L.C., Kansas Star Casino, LLC and Peninsula Gaming Corp. are held by the Company.

PENINSULA GAMING, LLC

INDEX TO FORM 10-Q

	Page
Part I. Financial Information	3
Part I - Financial Information	3
Item 1. Financial Statements	3
Item 1 - Financial Statements	3
Peninsula Gaming, LLC:
Condensed Consolidated Balance Sheets (Unaudited) as of March 31, 2012 and December 31, 2011	3
Condensed Consolidated Balance Sheets (Unaudited) as of September 30, 2011 and December 31, 2010	3
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) for the Three Months Ended March 31, 2012 and 2011	4
Condensed Consolidated Statements of Operations (Unaudited) for the Three and Nine Months Ended September 30, 2011 and 2010	4
Condensed Consolidated Statement of Changes in Member's Deficit (Unaudited) for the Three Months Ended March 31, 2012	5
Condensed Consolidated Statement of Changes in Member's Deficit and Comprehensive Loss (Unaudited) for the Nine Months Ended September 30, 2011	5
Condensed Consolidated Statements of Cash Flows (Unaudited) for the Three Months ended March 31, 2012 and 2011	6
Condensed Consolidated Statements of Cash Flows (Unaudited) for the Nine Months ended September 30, 2011 and 2010	6
Notes to Condensed Consolidated Financial Statements (Unaudited)	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3. Quantitative and Qualitative Disclosures About Market Risk	26
Item 3 - Quantitative and Qualitative Disclosures About Market Risk	23
Item 4. Controls and Procedures	27
Item 4 - Controls and Procedures	24
Part II. Other Information	28
Part II - Other Information	24
Item 1. Legal Proceedings	28
Item 1 - Legal Proceedings	24
Item 6. Exhibits	28
Item 5 – Other Information	25
Signatures	29
Item 6 - Exhibits	26
Signatures	27

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PENINSULA GAMING, LLC

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands)

	September 30, 2011		December 31, 2010
	March 31, 2012		December 31, 2011
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	7647,~~823~~037	$	1968,~~650~~151
Restricted cash—purse settlements		48,~~926~~672		4,~~178~~186
Accounts receivable, net		2,~~722~~703		12,~~466~~026
Receivables from affiliates		~~124~~-		117
Inventories		1,~~351~~821		1,~~450~~621
Prepaid expenses and other assets		65,~~633~~898		46,~~825~~205
Total current assets		9266,~~579~~131		3182,~~686~~306
PROPERTY AND EQUIPMENT, NET		~~345~~407,~~224~~503		~~271~~400,~~881~~923
OTHER ASSETS:
Deferred financing costs, net of amortization of $9,046 and $6,342, respectively		28,290		23,536
Deferred financing costs, net of amortization of $10,980 and $10,055, respectively		26,626		27,285
Goodwill		85,308		85,308
Licenses and other intangibles		106,~~673~~775		78106,~~403~~713
Deposits and other assets		57,~~506~~052		305,~~684~~648
Investment available for sale		19,~~036~~304		1819,~~307~~047
Total other assets		~~244~~245,~~813~~065		~~236~~244,~~238~~001
TOTAL	$	~~682~~718,~~616~~699	$	~~539~~727,~~805~~230
LIABILITIES AND MEMBER’S DEFICIT
CURRENT LIABILITIES:
Accounts payable	$	4,~~047~~101	$	3,~~598~~885
Construction payable		166,~~191~~415		-17,535
Purse settlement payable		610,~~280~~488		5,~~803~~884
Accrued payroll and payroll taxes		78,~~434~~694		68,~~417~~843
Accrued interest		8,~~399~~490		2024,~~137~~678
Other accrued expenses		1916,~~266~~487		1327,~~306~~471
Payable to affiliates		~~1,213~~832		~~667~~1,441
Current maturities of long-term debt and leases		419,~~202~~935		122,~~643~~999
Total current liabilities		6775,~~032~~442		51112,~~571~~736
LONG-TERM LIABILITIES:
8 3/8% senior secured notes, net of discount		319,~~632~~661		~~235~~319,~~535~~646
10 3/4% senior notes, net of discount		352,~~250~~407		~~297~~352,~~997~~327
Senior secured credit facilities		-		35,~~500~~000
Term loans		28,~~284~~716		36,~~567~~135
Notes and leases payable, net of discount		~~898~~19		28346
Obligation under Minimum Assessment Agreement		18,308		18,523
Obligation under assessment arrangements		32,006		18,742
Other liabilities		~~976~~953		~~953~~961
Total long-term liabilities		~~694~~713,~~348~~762		~~560~~703,~~103~~157
Total liabilities		~~761~~789,~~380~~204		~~611~~815,~~674~~893
COMMITMENTS AND CONTINGENCIES (Note 6)
MEMBER’S DEFICIT:
Common member’s interest		9,000		9,000
Accumulated deficit		(9283,~~025~~924)		(84101,~~254~~881)
Accumulated other comprehensive income		4,~~261~~419		34,~~385~~218
Total member’s deficit		(7870,~~764~~505)		(7188,~~869~~663)
TOTAL	$	~~682~~718,~~616~~699	$	~~539~~727,~~805~~230

See notes to condensed consolidated financial statements.

PENINSULA GAMING, LLC

CONDENSED CONSOLIDATED STATEMENTS OF ~~OPERATIONS~~COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

(in thousands)

		Three Months Ended September 30, 2011		Three Months Ended September 30, 2010	Nine Months Ended September 30, 2011		Nine Months Ended September 30, 2010
	Three Months Ended March 31, 2012		Three Months Ended March 31, 2011
REVENUES:
Casino	$	77130,~~437~~747	$	75,~~480~~568	$	~~229,903~~	$	~~225,022~~
Racing		42,~~007~~170		42,~~571~~423		~~11,921~~		~~12,436~~
Video poker		1,~~410~~597		1,~~089~~466		~~4,296~~		~~3,370~~
Food and beverage		78,~~043~~477		6,~~941~~508		~~20,417~~		~~20,143~~
Other		43,~~249~~567		3,~~540~~739		~~11,738~~		~~9,333~~
Less promotional allowances		(1011,~~273~~755)		(9,~~673~~303)		~~(29,507)~~		~~(27,890)~~
Total net revenues		83134,~~873~~803		8180,~~948~~401		~~248,768~~		~~242,414~~
EXPENSES:
Casino		3051,~~830~~680		30,~~304~~873		~~92,924~~		~~91,969~~
Racing		32,~~922~~282		42,~~223~~462		~~11,295~~		~~11,435~~
Video poker		1,~~185~~190		~~906~~1,128		~~3,485~~		~~2,660~~
Food and beverage		45,~~501~~231		4,~~555~~099		~~13,161~~		~~13,022~~
Other		32,~~252~~173		21,~~512~~952		~~7,960~~		~~6,380~~
Selling, general and administrative		1419,~~827~~154		14,~~035~~144		~~43,305~~		~~41,185~~
Depreciation and amortization		710,~~099~~442		7,~~315~~222		~~21,463~~		~~22,142~~
Pre-opening expense		~~3,923~~-		81,057		~~6,863~~		33
Development expense		-		-		-		28
Affiliate management fees		2,411		1,540
Affiliate management fees		1,565		1,535		4,708		4,493
(Gain) loss on disposal of assets		(20)		34
Loss on disposal of assets		9		17		86		54
Total expenses		94,543		64,511
Total expenses		71,113		65,410		205,250		193,401
INCOME FROM OPERATIONS		40,260		15,890
INCOME FROM OPERATIONS		12,760		16,538		43,518		49,013
OTHER INCOME (EXPENSE):
OTHER INCOME (EXPENSE):
Interest income		562		600
Interest income		559		680		1,775		1,672
Interest expense, net of amounts capitalized		(18,411)		(16,581)
Interest expense, net of amounts capitalized		(17,079)		(14,929)		(51,215)		(44,684)
Loss from equity affiliate		(28)		(37)
Gain (loss) from equity affiliate		3		-		(62)		-
Total other expense		(17,877)		(16,018)
Total other expense		(16,517)		(14,249)		(49,502)		(43,012)
NET INCOME (LOSS)		22,383		(128)
NET (LOSS) INCOME	$	(3,757)	$	2,289	$	(5,984)	$	6,001
OTHER COMPREHENSIVE INCOME (LOSS):
Unrealized gain (loss) on investment available for sale		201		(45)
Total other comprehensive income (loss)		201		(45)
COMPREHENSIVE INCOME (LOSS)	$	22,584	$	(173)

See notes to condensed consolidated financial statements.

PENINSULA GAMING, LLC

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN MEMBER’S DEFICIT (UNAUDITED)

AND COMPREHENSIVE LOSS (UNAUDITED)

(in thousands)

	COMMON MEMBER'S INTEREST		ACCUMU-LATED DEFICIT		ACCUMU-LATED OTHER COMPRE-HENSIVE INCOME		TOTAL MEMBER'S DEFICIT		~~COMPRE-HENSIVE LOSS~~
BALANCE, DECEMBER 31, 2010	$	9,000	$	(84,254)	$	3,385	$	(71,869)
BALANCE, DECEMBER 31, 2011	$	9,000	$	(101,881)	$	4,218	$	(88,663)
Net loss				(5,984)				(5,984)	$	(5,984)
Net income				22,383				22,383
Unrealized gain on available for sale security						876		876		876
Unrealized gain on investment available for sale						201		201
Member contributions				~~4,567~~244				~~4,567~~244
Member distributions				(64,~~354~~670)				(64,~~354~~670)
Comprehensive loss										(5,108)
BALANCE, MARCH 31, 2012	$	9,000	$	(83,924)	$	4,419	$	(70,505)
BALANCE, SEPTEMBER 30, 2011	$	9,000	$	(92,025)	$	4,261	$	(78,764)

See notes to condensed consolidated financial statements.

PENINSULA GAMING, LLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)

	Nine Months Ended September 30, 2011		Nine Months Ended September 30, 2010
	Three Months Ended March 31, 2012		Three Months Ended March 31, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(5,984)	$	6,001
Net income (loss)	$	22,383	$	(128)
Adjustments to reconcile net (loss) income to net cash flows from operating activities:
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Depreciation and amortization		2110,~~463~~442		227,~~142~~222
Non-cash interest		21,~~772~~111		~~3,382~~888
(Gain) loss from equity affiliate		62		-
Loss from equity affiliate		28		37
Non-cash compensation		~~430~~244		~~374~~154
Loss on disposal of assets		86		54
(Gain) loss on disposal of assets		(20)		34
Changes in operating assets and liabilities:
Restricted cash — purse settlements		(~~748~~4,486)		(~~470~~4,418)
Receivables		(~~1,268~~682)		(~~1,095~~12)
Receivables from affiliates		~~(7)~~117		-40
Inventories		99(200)		~~179~~11
Prepaid expenses and other assets		~~(1,160)~~211		~~(371)~~939
Payables		14,~~302~~888		~~773~~4,468
Accrued expenses		(1014,~~964~~297)		(1512,~~351~~645)
Payable to affiliates		~~546~~(609)		~~429~~28
Net cash flows from operating activities		619,~~629~~130		16(3,~~047~~382)
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in cash value of life insurance for premiums paid		(77321)		(~~229~~191)
Advances under note receivable to related party		-		(2,300)
Purchase of investment		(1,000)		-
Proceeds from sale of investment		285		-
Proceeds from note receivable to related party		31		-
Proceeds from note receivable		60		-
Business acquisition and licensing costs		(122)		(2,639)
Business acquisition and licensing costs		(3,428)		(329)
Construction project development costs		(25,050)		(17,478)
Construction project development costs		(59,279)		(8,265)
Purchase of property and equipment		(2,499)		(4,299)
Purchase of property and equipment		(6,700)		(6,864)
Proceeds from sale of property and equipment		52		51
Proceeds from sale of property and equipment		73		159
Net cash flows from investing activities		(28,909)		(24,556)
Net cash flows from investing activities		(69,066)		(17,828)
CASH FLOWS FROM FINANCING ACTIVITIES:
Deferred financing costs		~~(7,311)~~-		(~~737~~6,715)
Principal payments on debt		(15,~~225~~984)		(~~1,720~~402)
Proceeds from senior notes		~~138,000~~-		-138,000
Proceeds from senior secured credit facilities		-		16,000
Proceeds from term loan		4,319		-
Payments on senior secured credit facilities		(35,~~500~~000)		(163,~~000~~500)
Loan to owner		-		(10)
Member distributions		(4,670)		(3,125)
Proceeds from repayment of loan by owner		-		1,733
Net cash flows from financing activities		(11,335)		124,258
Member distributions		(6,354)		(8,450)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(21,114)		96,320
Net cash flows from financing activities		119,610		(9,184)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		68,151		19,650
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		57,173		(10,965)
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	47,037	$	115,970
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		19,650		34,537
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	76,823	$	23,572
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest	$	58,693	$	55,170
Cash paid during the period for interest, net of capitalized interest	$	31,342	$	26,887
SUPPLEMENTAL SCHEDULE OF NON-CASH ACTIVITIES:
Property and equipment acquired, but not paid	$	167,~~398~~392	$	914,309
Property and equipment acquired in exchange for obligation under assessment arrangements		71,~~378~~508		-508
Deferred financing costs incurred in exchange for obligation under assessment arrangements		~~147~~454		-
Unrealized gain on investment available for sale		876		3,696
Property and equipment acquired in exchange for indebtedness		854		-
Property contributions from parent		3,803		-
Unrealized gain (loss) on investment available for sale		201		(45)
Gaming license contribution from parent		43		-
Property contributions from parent		-		3,803
Prepaid expense contribution from parent		291		-
Gaming license contribution from parent		-		43
Property and equipment acquired in exchange for indebtedness		3,371		-
Prepaid expense contribution from parent		-		291
Deferred financing costs incurred, but not paid		-		252
Gaming license acquired, but not paid		-		567

See notes to condensed consolidated financial statements.

PENINSULA GAMING, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Organization and Basis of Presentation

Peninsula Gaming, LLC (“PGL” or the “Company”), a Delaware limited liability company, is a casino entertainment holding company with gaming operations in local markets in Iowa, ~~and~~ Louisiana and ~~is currently developing a gaming operation near Wichita,~~ Kansas. PGL’s wholly owned subsidiaries consist of: (i) Diamond Jo, LLC, a Delaware limited liability company (“DJL”), that owns and operates the Diamond Jo casino in Dubuque, Iowa; (ii) Diamond Jo Worth, LLC, a Delaware limited liability company (“DJW”), that owns and operates the Diamond Jo casino in Worth County, Iowa; (iii) The Old Evangeline Downs, L.L.C., a Louisiana limited liability company (“EVD”), that owns and operates the Evangeline Downs Racetrack and Casino, or racino, in Opelousas, Louisiana and ~~five~~four off-track betting (“OTB”) parlors in Louisiana; (iv) Belle of Orleans, L.L.C., a Louisiana limited liability company (“ABC”), that owns and operates the Amelia Belle Casino in Amelia, Louisiana; (v) Kansas Star Casino, LLC, a Kansas limited liability company (“"KSC”"), ~~formed~~which toowns the assets of the Kansas Star Casino, Hotel and Event Center in ~~accordance~~Mulvane, ~~with~~Kansas ~~our~~(excluding ~~agreements~~lottery ~~with~~gaming equipment, which is owned by the State of Kansas~~, own~~) and ~~operate~~manages the ~~Kansas~~lottery ~~Star~~gaming ~~Casino,~~operations ~~Hotel~~on behalf ~~and~~of ~~Event~~the ~~Center~~State of Kansas (“"Kansas Star”"), inwhich ~~Mulvane,~~opened ~~Kansas~~its interim facility on December 20, ~~which~~ is2011 ~~currently~~as ~~under~~discussed ~~construction~~below in the Kansas Star Developments section; and (vi) Peninsula Gaming Corp. (“PGC”), a Delaware corporation with no assets or operations. The Company is a wholly owned subsidiary of Peninsula Gaming Partners, LLC, a Delaware limited liability company (“PGP”).

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments, consisting only of normal recurring entries unless otherwise disclosed, necessary to present fairly the financial information of the Company for the interim periods presented and have been prepared in accordance with accounting principles generally accepted in the United States of America. The interim results reflected in the financial statements are not necessarily indicative of results expected for the full year or other periods.

The financial statements contained herein should be read in conjunction with the audited financial statements and accompanying notes to the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2010~~2011. Accordingly, footnote disclosure that would substantially duplicate the disclosure in the audited financial statements has been omitted in the accompanying unaudited financial statements.

Kansas Star Developments

OnThe ~~January~~Kansas ~~14,~~Star ~~2011,~~is ~~PGP’s~~being ~~Contract~~developed toin ~~Serve~~two asphases. KSC ~~Lottery~~began ~~Gaming~~casino ~~Facility~~gaming ~~Manager~~operations ~~for the South Central Gaming Zone~~ on ~~behalf~~December of20, ~~the~~2011 ~~Kansas~~in ~~Lottery~~its ~~(“Kansas~~interim ~~Management~~facility. Amenities ~~Contract”)~~currently ~~was~~include ~~approved~~1,411 byslots ~~the~~machines, ~~Kansas~~35 ~~Racing~~table games and ~~Gaming~~5 ~~Commission~~poker ~~(“KRGC”)~~tables. Completion ~~and~~of ~~upon~~the ~~such~~remainder ~~approval,~~of ~~became~~the ~~effective~~first ~~and~~phase ~~was~~of ~~then~~the ~~assigned~~project tois ~~KSC.~~expected Inin ~~March~~January ~~2011,~~2013 ~~KSC~~and ~~purchased~~is ~~two~~expected ~~parcels~~to ofinclude ~~land~~1,836 inslot ~~Mulvane~~machines, ~~Kansas~~45 ~~totaling~~table ~~approximately~~games, ~~202~~10 ~~acres~~poker ontables, ~~which~~150 ~~the~~hotel ~~Kansas~~rooms ~~Star~~in isa ~~being~~third ~~constructed.~~party ~~This~~operated ~~land~~hotel, ~~effectively~~approximately ~~gives~~2,800 ~~the~~parking ~~Company~~spaces, ~~all~~a ~~the~~buffet, ~~land~~steakhouse, ~~needed~~deli, toa ~~complete~~casino ~~the~~bar ~~Kansas~~as ~~Star~~well ~~facility~~as ina ~~compliance~~poker ~~with~~themed ~~the~~bar, ~~terms~~and ofa ~~the~~162,000 ~~Kansas~~square ~~Management~~foot ~~Contract. In~~indoor ~~March~~event ~~2011,~~center ~~KSC~~(which ~~broke~~currently ~~ground~~houses onour ~~the~~interim ~~Kansas Star development~~operations).

~~We plan on completing construction of the Kansas Star in two phases.~~ The first phase of the project is expected to include 1,500 slot machines, 40 table games, 5 poker tables, 150 hotel rooms in a third party operated hotel, approximately 2,700 parking spaces, a buffet, steakhouse, deli and a 162,000 square foot indoor event center. While the first phase of the project is not expected to be completed until January 2013, KSC plans to begin operating 1,310 slots machines and 32 table games within the event center with a soft opening in December 2011 and a grand opening in January 2012. The second phase of the project is expected to include ~~500~~164 additional slot machines (thus expanding the total to 2,000 slot machines), ~~10 additional table games (bringing~~ the ~~total to 50 table games), a sports themed bar, the~~ development of an equine complex for events and shows that includes multiple arenas and barn facilities, parking for recreational vehicles, and 150 additional hotel rooms (bringing the total to 300 rooms). The second phase is scheduled for completion by January 2015.

The current budget for the Kansas Star project is approximately $~~314~~329 million (excluding capitalized interest which is estimated to be approximately $6 million). Total cost to open the interim casino iswas ~~expected to be approximately~~ $~~182~~179 million including approximately $15.4 million for publicly-owned utilities that are being financed by the City of Mulvane, Kansas (“Mulvane”) as described below. The remaining cost for the first phase of the project is expected to be approximately $78102 million, including approximately $2019 million to complete the initial 150 hotel rooms of the third party financed and developed hotel and $5.2 million of additional publicly-owned utilities being financed by Mulvane as discussed further below. The second phase of the Kansas Star project is budgeted at $5448 million, which ~~include~~includes approximately $19 million for the expansion to a the third party ~~developed~~ hotel from 150 to 300 rooms.

On March 7, 2011, KSC entered into a Development Agreement with Mulvane (“Mulvane Development Agreement”) related to the provision of water, sewer, and electrical utilities to the Kansas Star site. This agreement sets forth certain parameters governing the use of public financing for the provision of such utilities, through the issuance of general obligation bonds by Mulvane, paid for through the imposition of a special tax assessment on the Kansas Star site payable over 15 years in an amount equal to Mulvane’s full obligations under the general obligation bonds. The total cost of sewer and water utilities improvements being financed by Mulvane are expected to be approximately $1519.46 million, which includes the second phase of improvements to Mulvane’s waste water treatment plant.

During the first quarter 2012, Mulvane completed various infrastructure improvements that were needed to support the Kansas Star development. The costs to design, construct and finance these improvements were financed with proceeds from temporary notes issued by Mulvane. In March 2012, these temporary notes were redeemed with proceeds from the issuance of $14.4 million of Mulvane general obligation bonds. KSC’s special tax assessment related to these bonds is approximately $1.2 million annually. Payments under the special tax assessment are secured by an irrevocable letter of credit of $3.6 million issued by the Company in favor of Mulvane. In April 2012, letters of credit issued by the Company totaling $14.5 million that secured the temporary notes were released by Mulvane and are no longer outstanding.

During 2012 and 2013, Mulvane will perform additional infrastructure improvements that will benefit the Kansas Star site. During the construction period of the additional infrastructure improvements, Mulvane will issue additional temporary notes, the proceeds of which will be used to pay for the construction costs of the improvements. Upon completion of the improvements, these temporary notes will be redeemed with proceeds from the issuance by Mulvane of ~~the~~additional 15 year general obligation bonds. As of ~~September~~March 3031, ~~2011~~2012, Mulvane has not issued ~~$10.0~~any ~~million of~~ temporary notes~~. All~~ ~~temporary~~related ~~notes~~to ~~issued~~these byadditional ~~Mulvane~~infrastructure ~~are~~improvements; ~~secured~~however, byit ~~irrevocable~~is ~~letters~~anticipated ofthat ~~credit~~Mulvane ~~issued~~will byissue ~~the~~an ~~Company~~additional $5.2 million in ~~favor~~temporary ofnotes ~~Mulvane~~during 2012 and 2013 to fund these additional infrastructure improvements. As of ~~September~~March 3031, ~~2011~~2012, the Company has issued $155.42 million in letters of credit ~~under the PGL Credit Facility~~ in favor of Mulvane to secure the ~~current and~~ future issuances of temporary notes related to ~~the~~these additional infrastructure improvements. The amount of the currently outstanding letters of credit supporting the construction of these additional utilities improvements ~~shall~~will be reduced to an amount equal to three times the annual special assessment tax imposed on KSC ~~plus~~upon ~~outstanding~~completion ~~letters~~ of ~~credit~~these ~~issued~~additional ~~related to infrastructure~~ improvements toand beissuance ~~completed in future years. We expect the outstanding letters~~ of ~~credit related to~~ the ~~infrastructure~~additional ~~improvements~~general toobligation ~~be reduced to approximately $4~~bonds.~~7 million which is expected to occur during the first half of 2012.~~

On March 23, 2011, KSC and Conlon Construction Co. (“Conlon”) executed an AIA A133-2009 Agreement Between Owner and Construction Manager as Constructor (the “Phase 1A GMP Contract”). On August 1, 2011, KSC and Conlon Construction Co. (“Conlon”) executed an AIA A133-2009 Agreement Between Owner and Construction Manager as Constructor (the “Phase 1B GMP Contract”, and, together with the Phase 1A GMP Contract, the “GMP Contracts”). The GMP Contracts provide that Conlon will act as Construction Manager for the construction of the Kansas Star project, and that the project will be completed on a “cost of work plus a fee” basis, with a guaranteed maximum price (the “GMP Amount”), and on a designated construction completion schedule. The GMP Contracts provide that Conlon will prepare a preliminary GMP Amount based on Conlon’s estimate of the cost of work, including contingencies, and Conlon’s management fee for each phase of the project. The GMP Amount for Phase 1A has been agreed to at $63.4 million. The final GMP Amount for Phase 1B of the project is expected to be agreed to between KSC and Conlon in the first quarter of 2012. The GMP Amount for phase two of the project will be established by the parties as the development of the project proceeds.

The GMP Contracts effectively limit the total cost of the first phase of the project to the designated GMP Amount, and imposes financial penalties, including liquidated damages for failing to complete construction by the dates set forth in the Kansas Management Contract. If the total cost of the project falls below the GMP Amount, certain of the cost savings will be shared 60%/40% between KSC and Conlon, respectively. The GMP Amount is subject to amendment by change orders approved by KSC and the dates for completion of construction may be adjusted as a result of the occurrence of certain events, including force majeure.

The GMP Contracts also contain other customary provisions, including provisions relating to the scope of work and responsibilities of the parties, termination, compensation and payment calculations and schedules, indemnification, insurance and bond requirements, dispute resolution and assignment of contract.

On May 17, 2011, KSC executed an agreement with a third party hotel developer to develop a 300 room hotel at the Kansas Star. KSC will contribute $1.0 million in cash, land, and certain site work for the project and the hotel developer will finance, construct, own and operate the hotel.

2. Summary of Significant Accounting Policies

Capitalized Interest— The Company capitalizes interest costs associated with significant construction projects. The Company capitalizes interest on amounts expended on significant construction projects at the average cost of borrowed money. Capitalization of interest ceases when the project is substantially complete. The Company capitalized $0.83 million and $10.31 million during the three ~~and nine~~ months ended ~~September~~March 3031, 2012 and 2011, respectively, related to the development project at KSC. ~~There was no interest capitalized during the three and nine months ended September 30, 2010.~~

~~Deferred~~Goodwill ~~Financing~~and ~~Costs—~~Licenses ~~Costs associated with the issuance of financing agreements have been deferred~~ and ~~are~~Other ~~being~~Intangible ~~amortized~~Assets— ~~over~~There ~~the~~were ~~life~~no ofchanges ~~the~~in ~~related instrument/agreement using~~ the ~~effective~~carrying ~~interest~~amount ~~method. During the nine months ended September 30, 2011, the Company deferred additional costs~~ of ~~$5.7~~goodwill ~~million~~during ~~related to~~ the ~~$80.0~~three million tack on offering to its 8 3/8% Senior Secured Notes due 2015 (the “PGL Secured Notes”) consummated on February 9, 2011 and $50.0 million tack on offering to its 10 3/4% Senior Unsecured Notes due 2017 (the “PGL Unsecured Notes” and, together with the PGL Secured Notes, the “PGL Notes”) consummated on February 1, 2011. During the nine months ended ~~September~~March 3031, ~~2011, the Company also deferred additional costs of $1~~2012.5 Licenses ~~million under the amended~~ and ~~restated~~other ~~loan~~intangibles ~~and~~are ~~security~~summarized ~~agreement entered into by PGL, DJL, EVD, ABC, DJW and KSC (collectively, the “Borrowers”) with Wells Fargo Capital Finance, Inc. (“Wells Fargo”)~~ as ~~the~~follows ~~arranger and agent on October 22, 2009~~ (“PGL Credit Facility”) due to the Second Amendment to the Amended and Restated Loan and Security Agreement executed on February 2, 2011 (the “Second Amendment”). During the nine months ended September 30, 2011, the Company also deferred additional costs of $0.1 million under the KSC Term Loan as discussed in ~~Note 4 and $0.1 million under the Mulvane Development Agreement as discussed in Other Accrued Expenses below.~~thousands):

	March 31, 2012
	Gross Carrying Value		Accumulated Amortization		Net Book Value
Intangible assets with indefinite lives:
Gaming licenses	$	73,135	$	-	$	73,135
Kansas Management Contract		28,135		-		28,135
Tradename		2,454		-		2,454
Horse racing license		1,308		-		1,308
Intangible assets with finite lives:
Tradename		2,135		(516)		1,619
Customer relationships and customer list		242		(118)		124
Total	$	107,409	$	(634)	$	106,775

	December 31, 2011
	Gross Carrying Value		Accumulated Amortization		Net Book Value
Intangible assets with indefinite lives:
Gaming licenses	$	73,013	$	-	$	73,013
Kansas Management Contract		28,135		-		28,135
Tradename		2,454		-		2,454
Horse racing license		1,308		-		1,308
Intangible assets with finite lives:
Tradename		2,135		(462)		1,673
Customer relationships and customer list		242		(112)		130
Total	$	107,287	$	(574)	$	106,713

Amortization expense for intangible assets for each of the three months ended March 31, 2012 and 2011 was $ 0.1 million. Annual amortization expense for intangible assets is expected to be $ 0.2 million per year for 2012 through 2016.

~~Goodwill~~Obligation ~~and~~Under ~~Licenses~~Assessment ~~and~~Arrangements— ~~Other~~Under ~~Intangible~~the ~~Assets—~~Mulvane ~~There~~Development ~~were~~Agreement, noKSC ~~changes~~is inobligated to pay for certain infrastructure improvements constructed by Mulvane ultimately through the ~~carrying~~imposition of a special tax assessment on the Kansas Star site payable over 15 years in an amount ofequal ~~goodwill~~to ~~during~~Mulvane’s obligations under the ~~nine~~general ~~months~~obligation ~~ended~~bonds. On ~~September~~March 3029, ~~2011~~2012, Mulvane issued $14. ~~Licenses~~4 ~~and~~million ~~other~~of ~~intangibles~~general ~~are~~obligation ~~summarized~~bonds as ~~follows~~discussed (in ~~thousands):~~Note 1. The special tax assessment related to these general obligation bonds is approximately $1.2 million per year paid semi-annually in May and December of each year with the first payment due in December 2012. In addition, KSC is obligated to reimburse Mulvane for any construction costs incurred for which temporary notes have not yet been issued. At March 31, 2012, Mulvane had incurred $0.9 million of construction costs related to the second phase of the infrastructure improvements for which temporary notes had not yet been issued. At March 31, 2012 KSC has recorded an obligation of $15.3 million of which $13.8 million is included in Obligation under assessment arrangements within long-term liabilities and $1.5 million is included in Other accrued expenses within current liabilities.

	September 30, 2011
	Gross Carrying Value		Accumulated Amortization		Net Book Value
Intangible assets with indefinite lives:
Gaming licenses	$	72,911	$	-	$	72,911
Kansas Management Contract		28,135		-		28,135
Tradename		2,454		-		2,454
Horse racing license		1,308		-		1,308
Intangible assets with finite lives:
Tradename		2,135		(409)		1,726
Customer relationships and customer list		242		(103)		139
Total	$	107,185	$	(512)	$	106,673

In addition, at March 31, 2012, under the Minimum Assessment Agreement, dated October 1, 2007, among DJL, the City of Dubuque, Iowa (the “City”) and the City Assessor of the City of Dubuque (the “Minimum Assessment Agreement”), in which DJL and the City agreed to a minimum taxable value related to DJL’s new casino of $57.9 million, DJL has recorded an obligation of $20.1 million of which $18.2 million is included in Obligation under assessment arrangements within long-term liabilities and $1.9 million is included in Other accrued expenses within current liabilities.

	December 31, 2010
	Gross Carrying Value		Accumulated Amortization		Net Book Value
Intangible assets with indefinite lives:
Gaming licenses	$	72,575	$	-	$	72,575
Tradename		2,454		-		2,454
Horse racing license		1,308		-		1,308
Intangible assets with finite lives:
Tradename		2,135		(249)		1,886
Customer relationships and customer list		242		(62)		180
Total	$	78,714	$	(311)	$	78,403

Other Accrued Expenses— At December 31, 2011, included in Other accrued expenses within current liabilities was $13.3 million in infrastructure improvements and issue costs associated with the temporary notes under the Mulvane Development Agreement at KSC as discussed in Note 1. On March 29, 2012, the temporary notes associated with the $13.3 million in infrastructure improvements and issue costs recorded at December 31, 2011 were redeemed with the issuance of $14.4 million of 15 year general obligation bonds as discussed above under Obligation Under Assessment Arrangements. Accordingly, the $13.3 million is no longer included in Other accrued expenses within current liabilities and is classified in Obligation under assessment arrangements within long-term liabilities based on the special tax assessment payment schedule as discussed above.

~~Amortization~~Variable ~~expense~~Interest ~~for~~Entity ~~intangible~~(“VIE”)— On ~~assets~~January 19, 2012, KSC contributed $1.0 million in cash to KSC Lodging, L.C. (“KSC Lodging”) in exchange for ~~each~~an ofadditional ~~the~~22% ~~three~~equity ~~months~~interest ~~ended~~in ~~September~~KSC 30Lodging (bringing KSC’s total equity interest in KSC Lodging to 56%) in accordance with an executed agreement under which KSC Lodging has agreed to finance, ~~2011~~construct, own and ~~2010~~operate ~~was~~the ~~$0.1~~300 ~~million~~room hotel at the Kansas Star. ~~Amortization~~ The ~~expense~~Company ~~for~~is ~~intangible~~not ~~assets~~considered ~~for~~to ~~each~~be ofthe primary beneficiary and thus the ~~nine~~VIE ~~months~~is ~~ended~~not ~~September~~consolidated 30into the financial statements of the Company but, ~~2011~~rather, ~~and~~is ~~2010~~recorded ~~was~~as an equity investment. At March 31, 2012 the $01.20 million~~. Annual~~ ~~amortization~~equity ~~expense~~investment ~~for~~is ~~intangible~~included in Deposits and other assets isin ~~expected~~the toCompany’s becondensed $0consolidated balance sheets.3 ~~million~~The ~~for~~liabilities ~~2011~~in the Company’s condensed consolidated balance sheets that relate to KSC’s variable interests in KSC Lodging and ~~$0.2~~the ~~million~~Company’s ~~per~~maximum ~~year~~exposure ~~for~~to loss as a result of its agreements with KSC Lodging at March 31, 2012 ~~through~~and ~~2015.~~December 31, 2011 are as follows (in thousands):

During the nine months ended September 30, 2011, KSC recorded $28.1 million as an indefinite life intangible asset which includes (i) the $25.0 million privilege fee paid to the State of Kansas and (ii) $3.1 million of additional fees required to be paid to KRGC upon approval of the Kansas Management Contract.

	2012		2011

Carrying amount of liabilities	$	-	$	-
Maximum exposure to loss		1,000		1,000

Deposits— At December 31, 2010, included in Deposits and other assets was a $25.0 million deposit related to the refundable privilege fee paid to the State of Kansas for the Kansas Management Contract. Upon approval of the Kansas Management Contract the $25.0 million privilege fee was no longer refundable. As such, the $25.0 million has been included as a cost of the management contract at KSC and is included in Licenses and other intangibles as of September 30, 2011.

Other Accrued Expenses— Under the Mulvane Development Agreement, KSC is obligated to pay for certain infrastructure improvements constructed by Mulvane ultimately through the imposition of a special tax assessment on the Kansas Star site payable over 15 years in an amount equal to Mulvane’s obligations under the general obligation bonds as discussed in Note 1. Currently, KSC is obligated to reimburse Mulvane for any funds expended from the proceeds of the temporary bonds issued by Mulvane with such payments secured by letters of credit issued by PGL. Due to KSC’s use of the infrastructure improvements and its obligations under the letters of credit currently, and ultimately under the special assessment with Mulvane (which will repay the principal and interest on the general obligation bonds), KSC recorded a capital asset and an obligation to Mulvane to the extent proceeds from the temporary bonds were used to construct the infrastructure improvements. As of September 30, 2011, Mulvane has incurred construction costs of approximately $6.9 million related to the infrastructure improvements and approximately $0.1 million in issue costs associated with the temporary notes. Accordingly, KSC has recorded an obligation of $7.0 million which is included in Other accrued expenses within current liabilities as the temporary notes that were issued are due within the next twelve months.

Pre-opening Expense— Costs associated with start-up activities for new or expanded operations are expensed as incurred. For the three and nine months ended September 30, 2011, the Company incurred $3.9 million and $6.9 million of start-up costs related to the development project at KSC and consists primarily of pre-opening payroll, professional service fees, and regulatory costs.

Use of Estimates— The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates involve the fair value of DJW’s investment in $22.7 million in aggregate principal amount of 7.5% Urban Renewal Tax Increment Revenue Bonds, Taxable Series 2007 (“City Bonds”), the periodic review of the carrying value of assets for impairment, the estimated useful lives for depreciable assets, and the estimated liabilities for slot club awards.

Recently ~~Issued~~Adopted Accounting Standards— In ~~April~~May ~~2010~~2011, the Financial Accounting Standards Board (“FASB”) ~~issued~~amended the guidance regarding fair value measurement and disclosure. The amended guidance clarifies the ~~accounting~~application ~~for~~of ~~casino~~existing ~~base~~fair ~~jackpot~~value ~~liabilities~~measurement and disclosure requirements. The Company adopted this guidance in the first quarter of ~~2011~~2012 with no material impact to the Company’'s financial statements.

In ~~May~~June 2011, the FASB amended requirements for the ~~guidance~~presentation ~~regarding~~of ~~fair~~other ~~value~~comprehensive ~~measurement~~income ~~and~~(“OCI”), ~~disclosure.~~requiring ~~The~~presentation ~~amended~~of ~~guidance~~comprehensive ~~clarifies~~income ~~the~~in ~~application~~either a single, continuous statement of ~~existing~~comprehensive ~~fair~~income ~~value~~or ~~measurement~~on ~~and~~separate ~~disclosure~~but ~~requirements.~~consecutive ~~The~~statements, ~~amendment~~the isstatement ~~effective~~of ~~for~~operations and the statement of OCI. The Company atadopted this guidance in the ~~beginning~~first quarter of ~~January~~ 2012 and has elected to present comprehensive income in a single, ~~with~~continuous ~~early~~statement ~~adoption~~of ~~prohibited~~comprehensive income. The new guidance was applied retrospectively. The adoption of this ~~amendment~~guidance isdid not ~~expected~~impact ~~to materially affect~~ the Company's financial position, results of operations or cash flows and only impacted the presentation of OCI on the financial statements.

In ~~June~~September 2011, the FASB amended ~~requirements~~the ~~for~~guidance ~~the~~regarding ~~presentation~~testing of ~~other~~goodwill ~~comprehensive~~for ~~income~~impairment. The ~~(OCI),~~amended ~~requiring~~guidance ~~presentation~~provides ofentities ~~comprehensive~~with ~~income~~the inoption ~~either~~of afirst ~~single,~~assessing ~~continuous~~qualitative ~~statement~~factors ofto ~~comprehensive~~determine ~~income~~whether orit onis ~~separate~~more ~~but~~likely ~~consecutive~~than ~~statements,~~not that the ~~statement~~fair value of ~~operations~~a ~~and~~reporting ~~the~~unit ~~statement~~is ofless ~~OCI.~~than ~~The~~its ~~amendment~~carrying isamount. ~~effective~~If ~~for~~it ~~the~~is ~~Company~~determined, aton the ~~beginning~~basis of ~~January~~qualitative ~~2012~~factors, ~~with~~that ~~early~~the ~~adoption~~fair ~~permitted.~~value ~~The~~of ~~adoption~~the ofreporting ~~this~~unit ~~guidance~~is ~~will~~more likely than not ~~impact~~less than the ~~Company's~~carrying ~~financial~~amount, ~~position~~the two-step impairment test would still be required, ~~results~~otherwise ofno ~~operations~~further oranalysis ~~cash~~is ~~flows~~required. ~~and~~The ~~will~~Company ~~only~~adopted ~~impact~~this amendment in the ~~presentation~~first quarter of ~~OCI~~2012 onwith no material impact to the Company’s financial statements.

In September 2011, the FASB amended the guidance regarding testing of goodwill for impairment. The amended guidance provides entities with the option of first assessing qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If it is determined, on the basis of qualitative factors, that the fair value of the reporting unit is more likely than not less than the carrying amount, the two-step impairment test would still be required, otherwise no further analysis is required. The amendment is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011, with early adoption permitted. The adoption of this guidance will not have an impact on the Company’s financial statements.9

3. Property and Equipment

Property and equipment at ~~September~~March 3031, ~~2011~~2012 and December 31, ~~2010~~2011 is summarized as follows (in thousands):

	September 30, 2011		December 31, 2010
	March 31, 2012		December 31, 2011
Land and land improvements	$	1938,~~781~~763	$	1938,~~748~~493
Buildings, riverboat and improvements		~~255~~340,~~980~~968		~~254~~340,~~754~~755
Furniture, fixtures and equipment		~~104~~134,~~904~~176		~~101~~133,~~046~~509
Computer equipment		1315,~~448~~594		1215,~~988~~450
Vehicles		~~848~~1,046		~~775~~1,001
Construction in progress		8927,~~504~~540		115,~~702~~453
Subtotal		~~484~~558,~~465~~087		~~391~~544,~~013~~661
Accumulated depreciation		(~~139~~150,~~241~~584)		(~~119~~143,~~132~~738)
Property and equipment, net	$	~~345~~407,~~224~~503	$	~~271~~400,~~881~~923

Depreciation expense during the three months ended ~~September~~March 3031, ~~2011~~2012 and ~~2010~~2011 was $710.04 million and $7.2 million, respectively. ~~Depreciation expense during the nine months ended September 30, 2011 and 2010 was $21.3 million and $21.9 million, respectively.~~

4. Debt

Long-term debt consists of the following (in thousands):

	September 30, 2011			December 31, 2010
	March 31, 2012			December 31, 2011
8 3/8% senior secured notes due August 15, 2015, net of discount of $368 and $4,465, respectively, secured by substantially all the assets of the Company and its subsidiaries and the equity of the Company	$	319,632		$	235,535
8 3/8% senior secured notes due August 15, 2015, net of discount of $339 and $354, respectively, secured by substantially all the assets of the Company and its subsidiaries and the equity of the Company	$	319,661		$	319,646
10 3/4% senior unsecured notes due August 15, 2017, net of discount of $2,750 and $7,003, respectively		352,250			297,997
10 3/4% senior unsecured notes due August 15, 2017, net of discount of $2,593 and $2,673, respectively		352,407			352,327
$50,000 revolving line of credit under a loan and security agreement of PGL, DJL, EVD, ABC, DJW, and KSC with Wells Fargo, interest rate at prime plus a margin of 2.5% with a floor of 6.0% (rate of 6.0% at September 30, 2011 and December 31, 2010), maturing January 15, 2015, secured by substantially all assets of PGL, DJL, EVD, ABC, DJW, and KSC and is guaranteed up to $5.0 million by the Company’s Chief Executive Officer			-		3,500
$50,000 revolving line of credit under a loan and security agreement of PGL, DJL, EVD, ABC, DJW, and KSC with Wells Fargo, interest rate at prime plus a margin of 2.5% with a floor of 6.0% (rate of 6.0% at March 31, 2012 and December 31, 2011), maturing January 15, 2015, secured by substantially all assets of PGL, DJL, EVD, ABC, DJW, and KSC and is guaranteed up to $5.0 million by the Company’s Chief Executive Officer		-			5,000
Term loan under a loan and security agreement of PGL, DJL and EVD with American Trust & Savings Bank, interest rate at 6.5%, due in installments through December 1, 2013, secured by certain assets of DJL		3,981			5,183
Term loan under a loan and security agreement of PGL, DJL, and EVD with American Trust & Savings Bank, interest rate at 6.5%, due in installments through December 1, 2013, secured by certain assets of DJL		3,146			3,567
Notes payable and capital lease obligations, net of discount of $163 and $0, respectively, interest rates at 6.0% - 14.4%, due 2011 – 2015		3,403			55
Term loan under a loan and security agreement of PGL and KSC with American Trust & Savings Bank, interest rate at 6.5%, due in installments through December 1, 2016, secured by certain assets of KSC		8,991			5,202
Total debt		679,266			542,270
Notes payable and capital lease obligations, net of unamortized discount based on imputed interest rates at 6.0% - 14.4% of $427 and $689, respectively, due 2012 – 2015		16,533			20,711
Less current portion		(4,202)			(1,643)
Total debt		700,738			706,453
Total long term debt	$	675,064		$	540,627
Less current portion		(19,935)			(22,999)
Total long term debt	$	680,803		$	683,454

Principal maturities of debt (excluding discount and debt repaid during the period January 1, 2011 through September 30, 2011) for the Company, for each of the years ending December 31 listed below have been updated to include: (1) the $50.0 million PGL Unsecured Notes tack-on issuance; (2) the $80.0 million PGL Secured Notes tack-on issuance; and (3) the Second Amendment under the PGL Credit Facility as discussed below. Such maturities are summarized as follows (in thousands):

2011	$	1,643
2012		1,733
2013		1,850
2014		9
2015		323,503
Thereafter		355,000
	$	683,738

PGL Notes

OnThe ~~January~~Company’s 278 3⁄8% Senior Secured Notes due 2015 (the “PGL Secured Notes”) and 10 3⁄4% Senior Unsecured Notes due 2017 (the “PGL Unsecured Notes” and, ~~2011~~together with the PGL Secured Notes, the ~~Company~~“PGL ~~commenced~~Notes”) are guaranteed on a ~~consent~~senior ~~solicitation~~secured ~~seeking~~basis toand ~~amend~~senior ~~the~~unsecured ~~indenture~~basis, ~~governing~~respectively, by DJL, EVD, DJW, ABC and KSC (collectively, the “Subsidiary Guarantors”). The PGL Secured Notes toand ~~allow~~the ~~for~~related guarantees are secured by a security interest in the ~~issuance~~Company’s and the Subsidiary Guarantors’ respective existing and future assets (other than certain excluded assets) and by a limited recourse pledge of ~~additional~~100% ~~secured~~of ~~notes~~the ~~under~~equity ~~that~~interests ~~indenture~~of PGL by PGP. OnThe ~~February~~security 2,interest ~~2011,~~on the ~~Company~~collateral ~~consummated~~that secures the ~~consent~~PGL ~~solicitation~~Secured Notes and ~~adopted~~the related guarantees are subject to the ~~amendments~~prior liens of the PGL Credit Facility. The PGL Unsecured Notes are effectively subordinated to the ~~indenture~~PGL ~~governing~~Credit Facility, the PGL Secured Notes and other secured indebtedness of the Company and the Subsidiary Guarantors to the extent of the collateral securing such indebtedness. PGL has no significant independent assets or operations and the guarantees of the Subsidiary Guarantors are full and unconditional and joint and several.

~~On February 1, 2011, the Company issued an additional $50.0 million in aggregate principal amount of PGL Unsecured Notes at an issue price of 108%, plus accrued interest from August 15, 2010.~~10

On The ~~February~~indentures 9,governing ~~2011,~~the PGL Notes limit the Company’s ~~issued~~and anthe ~~additional~~Subsidiary ~~$80.0~~Guarantors’ ~~million~~ability into, ~~aggregate~~among ~~principal~~other ~~amount~~things, ofincur ~~PGL~~more ~~Secured~~debt, ~~Notes~~pay atdividends anor ~~issue~~make ~~price~~other ofdistributions ~~105%~~to PGP, ~~plus~~redeem ~~accrued~~stock, ~~interest~~make ~~from~~certain ~~August~~investments, 15create liens, ~~2010~~enter into transactions with affiliates, merge or consolidate, and transfer or sell assets.

The PGL ~~Secured~~ Notes and the PGL ~~Unsecured~~Credit ~~Notes~~Facility ~~are~~do ~~guaranteed~~not onlimit athe ~~senior~~Company’s ~~secured~~ability ~~basis~~to transfer assets between the Company and ~~senior~~the ~~unsecured~~Subsidiary ~~basis,~~Guarantors. Under ~~respectively,~~the byindentures ~~DJL~~governing the PGL Notes, ~~EVD~~the Company is allowed, ~~DJW~~subject to certain conditions and limitations set forth therein, ~~ABC~~to make payments and ~~KSC~~distributions ~~(collectively~~to PGP, ~~the~~including ~~“Subsidiary~~in ~~Guarantors”). The~~respect ~~PGL~~of ~~Secured~~(i) ~~Notes~~certain consulting and ~~the~~financial ~~related~~advisory ~~guarantees~~services, ~~are~~(ii) ~~secured~~board byfees aand ~~security~~actual ~~interest~~out-of-pocket inexpenses ~~the~~incurred ~~Company’s~~by ~~and~~members of the ~~Subsidiary~~ ~~Guarantors’~~board ~~respective~~of ~~existing~~managers ~~and~~of ~~future~~PGP, ~~assets~~ and (~~other~~iii) ~~than~~tax, ~~certain~~accounting, ~~excluded~~licensure, ~~assets)~~legal and byadministrative acosts ~~limited~~and ~~recourse~~expenses ~~pledge~~ of ~~100%~~PGP. ofIn addition, the ~~equity~~Company ~~interests~~may ofpay ~~PGL~~dividends byor make other distributions to PGP~~. The~~, ~~security~~in ~~interest~~addition onto the ~~collateral~~distributions ~~that~~above, ~~secures~~if the ~~PGL~~combined ~~Secured~~interest ~~Notes~~coverage ratio of the Company and the ~~related~~Subsidiary ~~guarantees~~Guarantors ~~are~~is ~~subject~~not less than 2.0 to 1.0 for the ~~prior~~immediately ~~liens~~preceding offour full fiscal quarters and subject to certain aggregate net income and cash proceeds received from the ~~PGL~~sale ~~Credit~~of ~~Facility.~~equity interest limits. The ~~PGL~~Company ~~Unsecured Notes~~may ~~are~~also ~~effectively~~pay ~~subordinated~~dividends toor ~~the~~make ~~PGL~~other ~~Credit~~distributions ~~Facility,~~with Specified Equity Contributions (as defined in the ~~PGL~~indentures ~~Secured~~governing ~~Notes~~the ~~and~~PGL ~~other~~Notes). ~~secured~~Substantially ~~indebtedness~~all of the Company’s ~~and~~net ~~the~~assets ~~Subsidiary~~were ~~Guarantors~~restricted from distribution to PGP under the ~~extent~~PGL ofNotes and the ~~collateral~~PGL ~~securing~~Credit ~~such~~Facility, ~~indebtedness.~~subject ~~The~~to ~~guarantees~~the ofabove ~~the~~exceptions ~~Subsidiary~~and ~~Guarantors~~including ~~are~~amounts ~~full~~allowed ~~and~~for ~~unconditional~~certain investments and ~~joint~~other ~~and~~restricted ~~several~~payments.

PGL Credit Facility

OnAs ~~January~~of March 31, ~~2011~~2012, the ~~Borrowers~~Company had no outstanding advances under its $50.0 million senior secured credit facility (the “PGL Credit Facility”). ~~and~~In ~~Wells~~addition, ~~Fargo~~as ~~executed~~of March 31, 2012, the Company had outstanding letters of credit under the PGL Credit Facility of $ 21.7 million resulting in available borrowings thereunder of $ 28.3 million. In April 2012, a ~~Consent~~portion ~~agreement~~of ~~that~~the ~~permitted~~outstanding ~~KSC~~letters toof ~~join~~credit under the PGL Credit Facility related to the Mulvane infrastructure improvements, as adiscussed ~~Borrower~~further in Note 1, were reduced resulting in outstanding letters of credit under the PGL Credit Facility and available borrowings thereunder of $10.8 million and $39.2 million, respectively.

OnDJL ~~February~~Term 2, 2011, the Borrowers under the PGL Credit Facility and Wells Fargo executed the Second Amendment which, among other things, (i) permitted the issuance of up to $80.0 million in aggregate principal amount of additional PGL Secured Notes, (ii) provided for a reduction in the maximum revolver amount under the facility from $58.5 million to $50.0 million, (iii) extended the maturity date of the facility from January 15, 2014 to January 15, 2015, and (iv) permitted certain capital expenditures in connection with the development of the Kansas Star.Loan

On May 111, ~~2011~~2008, ~~the~~PGL, ~~Borrowers~~DJL ~~under~~and EVD (collectively, the ~~PGL~~“DJL ~~Credit~~FF&E ~~Facility~~Borrowers”) entered into a Loan and ~~Wells~~Security ~~Fargo~~Agreement ~~executed~~(“DJL Term Loan”) with American Trust & Savings Bank. Proceeds from the ~~Third~~DJL ~~Amendment~~Term Loan were used to ~~Amended~~finance ~~and~~the ~~Restated~~purchase ~~Loan~~of certain furniture, fixtures and ~~Security~~equipment ~~Agreement~~related ~~which~~to ~~increased~~DJL’s ~~the~~casino ~~limit~~development in 2008. Commencing on ~~issued~~January 1, 2009 and ~~outstanding~~continuing ~~letters~~through ofDecember ~~credit~~1, ~~allowed~~2013, ~~under~~the DJL FF&E Borrowers shall pay principal plus accrued interest in equal monthly installments. Interest on the ~~PGL~~DJL ~~Credit~~Term ~~Facility~~Loan ~~from~~accrues ~~$10~~at a rate of 6.05% ~~million~~per toannum. As of March 31, 2012, DJL had outstanding advances of $253.01 million under the DJL Term Loan.

As of September 30, 2011, the Company had no outstanding advances under the PGL Credit Facility. In addition, as of September 30, 2011, the Company had outstanding letters of credit under the PGL Credit Facility of $17.1 million, including $15.4 million related to the construction of the infrastructure improvements by Mulvane as discussed in Note 1, resulting in available borrowings thereunder of $32.9 million.

KSC Term Loan

OnFrom ~~June~~January 1, ~~2011,~~2012 ~~PGL~~through ~~and KSC (collectively~~ the ~~“KSC~~expiration ~~FF&E~~of ~~Borrowers”) entered into a Loan and Security Agreement with American Trust and Savings Bank (~~the ~~“KSC~~draw ~~Term~~down ~~Loan”). The~~period ~~KSC~~on ~~Term~~March ~~Loan~~1, ~~allows~~2012, ~~the~~ KSC ~~FF&E~~borrowed ~~Borrowers~~an toadditional ~~request advances of up to~~ $144.03 million ~~during the period of June 1, 2011 through March 1, 2012 (the “Draw Down Period”)~~ to finance the purchase of certain furniture, fixtures and equipment related to the Kansas Star development. Nounder ~~principal payments are due until January 1, 2012 and interest shall accrue on all advances at~~ a ~~rate~~Loan ~~equal to 6.5% per annum~~ and isSecurity ~~payable~~Agreement ~~the~~with ~~first~~PGL ~~of each month in arrears. Commencing on January 1, 2012~~ and ~~continuing~~KSC ~~through December 1, 2016~~ (collectively the “~~Term~~KSC ~~Period”), the~~ FF&E Borrowers”) ~~shall~~and ~~pay~~American ~~principal~~Trust inand ~~equal~~Savings ~~monthly~~Bank ~~installments, plus accrued interest, with~~ (the ~~first~~“KSC ~~principal payment due on January 1, 2012. Interest during the~~ Term ~~Period shall be calculated at a rate of 6~~Loan”).~~5% per annum.~~ As of ~~September~~March 3031, ~~2011~~2012, KSC had no outstanding advances of $9.0 million under the KSC Term Loan.

Notes Payable - Slot Vendor Financing

In January 2012, KSC ~~has~~entered ~~agreements~~into an agreement with ~~various~~a ~~slot~~third ~~vendors~~party vendor to finance ~~approximately~~an additional $210.49 million of slot ~~machines~~machine purchases over a period of ~~twelve~~12 months at zero percent ~~financing for the interim phase of the project~~. As of ~~September~~March 3031, ~~2011~~2012, KSC ~~has~~had ~~recorded~~ $316.5 million inrecorded ~~slot~~related ~~financing~~to ~~for~~slot ~~equipment~~machine ~~received~~financings aswith ofvarious ~~September 30, 2011~~vendors.

Compliance

As of ~~September~~March 3031, ~~2011~~2012, the Company was in compliance with the terms of the agreements governing its outstanding indebtedness.

5. Fair Value Measurements

Under GAAP, certain assets and liabilities must be measured at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The Company had ~~one~~two financial ~~instrument~~instruments that must be measured at fair value in the financial statements, an investment available for sale and an investment in a money market. The Company currently does not have non-financial assets and non-financial liabilities that are required to be measured at fair value on a recurring basis. GAAP establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes these inputs into three broad levels. The three levels are as follows:

GAAP establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes these inputs into three broad levels. The three levels are as follows:

Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date;

Level 2-Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs); and

Level 3-Unobservable inputs that reflect the Company’s estimate about the assumptions that market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available, including its own data.

~~The Company had no Level 1 or Level 2 financial instruments at September 30, 2011 and December 31, 2010. The Company had one Level 3 financial instrument at September 30, 2011 and December 31, 2010.~~ 11

~~DJW~~The ~~holds~~Company anhad ~~investment~~no inLevel a1 ~~single~~financial ~~municipal~~instruments ~~bond~~at ~~issuance~~March ~~that~~31, is2012 ~~classified as available for sale~~ and ishad ~~recorded~~one atLevel ~~fair~~1 ~~value. DJW~~financial ~~is the only holder of this~~ instrument ~~and~~at ~~there~~December is31, ~~no quoted market price for this instrument~~2011. The ~~estimate~~Company ofheld ~~the~~an ~~fair value of such~~ investment ~~was~~in ~~determined using~~ a ~~combination~~money ~~of current~~ market ~~rates~~whose and estimates of market conditions for instruments with similar terms, maturities, and degrees of risk and an estimate from an independent source of what market participants would use in pricing the bonds. Unrealized gains and losses on this instrument resulting from changes in the fair value ofequaled ~~the~~its ~~instrument~~carrying ~~are~~value ~~not charged to earnings, but rather are recorded as other comprehensive income (loss) in the member’s deficit section~~ of ~~the Company’s balance sheets~~$18. ~~The~~6 ~~discount associated~~million ~~with~~at ~~this~~December ~~investment~~31, ~~is netted with the investment on the balance sheets and is being accreted over the life of the investment using the effective interest method~~2011. ~~The accretion of such discount is included in interest income on the statements of operations.~~

InThe ~~accordance~~Company ~~with~~had ~~the~~no ~~fair value hierarchy described above, the following table shows the fair value of the Company’s~~ Level 32 financial ~~asset~~instruments ~~that is required to be measured~~ at ~~fair~~March ~~value as of September 30, 2011 and December~~ 31, ~~2010,~~2012 ~~which is classified as “Investment available for sale” in the balance sheets ($0.3 million is classified in Prepaid~~ and ~~other assets at September 30, 2011 and~~ December 31, ~~2010) (in thousands):~~2011.

		Total Carrying Value at September 30, 2011				Fair Value Measurements at September 30, 2011				Total Carrying Value at December 31, 2010		Fair Value Measurements at December 31, 2010
Investment available for sale		$	19,341			$	19,341		$	18,592		$	18,592

The Company had one Level 3 financial instrument at March 31, 2012 and December 31, 2011.

DJW holds an investment in a single municipal bond issuance that is classified as available for sale and is recorded at fair value. DJW is the only holder of this instrument and there is no quoted market price for this instrument. The ~~following~~estimate ~~table~~of ~~summarizes~~the fair value of such investment was determined using a combination of current market rates and estimates of market conditions for instruments with similar terms, maturities, and degrees of risk and an estimate from an independent source of what market participants would use in pricing the bonds. Unrealized gains and losses on this instrument resulting from changes in the fair value of the instrument are not charged to earnings, but rather are recorded as other comprehensive income (loss) in the member’s deficit section of the Company’s ~~Level~~balance 3sheets. The ~~assets~~discount associated ~~and~~with ~~liabilities~~this ~~for~~investment is netted with the ~~three~~investment on the balance sheets and ~~nine~~is ~~months~~being ~~ended~~accreted ~~September~~over ~~30,~~the ~~2011~~life ~~and~~of ~~2010~~the (investment using the effective interest method. The accretion of such discount is included in ~~thousands~~interest income on the statements of comprehensive income (loss):.

	Three Months Ended September 30, 2011		Three Months Ended September 30, 2010		Nine Months Ended September 30, 2011		Nine Months Ended September 30, 2010
Investment available for sale:
Balance at beginning of the reporting period	$	19,334	$	18,563	$	18,592	$	14,741
Total gains (losses) (realized or unrealized):
Included in earnings		52		50		158		144
Included in other comprehensive income (loss)		(45)		(32)		876		3,696
Transfers in or out of Level 3		-		-		-		-
Purchases, sales, issuances and settlements:
Settlements		-		-		(285)		-
Ending balance at September 30, 2011 and 2010	$	19,341	$	18,581	$	19,341	$	18,581

In accordance with the fair value hierarchy described above, the following table shows the fair value of the Company’s Level 3 financial asset that is required to be measured at fair value as of March 31, 2012 and December 31, 2011, which is classified as “Investment available for sale” in the balance sheets ($0.3 million is classified in Prepaid and other assets at March 31, 2012 and December 31, 2011) (in thousands):

	Three Months Ended September 30, 2011		Three Months Ended September 30, 2010			Nine Months Ended September 30, 2011				Nine Months Ended September 30, 2010
	Total Carrying Value at March 31, 2012		Fair Value Measurements at March 31, 2012			Total Carrying Value at December 31, 2011		Fair Value Measurements at December 31, 2011
Gains included in earnings attributable to the change in unrealized gains relating to assets still held at the reporting date included in interest income	$	52	$	50		$	158			$	144
Investment available for sale	$	19,609	$	19,609	$	19,352		$	19,352

The following table summarizes the changes in fair value of the Company’s Level 3 assets for the three months ended March 31, 2012 and 2011 (in thousands):

	Three Months Ended March 31, 2012		Three Months Ended March 31, 2011
Balance at beginning of the year	$	19,352	$	18,592
Total gains (losses) (realized or unrealized):
Included in earnings		56		53
Included in other comprehensive income (loss)		201		(45)
Transfers in or out of Level 3		-		-
Purchases, sales, issuances and settlements		-		-
Ending balance at March 31, 2012 and 2011	$	19,609	$	18,600

		Three Months Ended March 31, 2012				Three Months Ended March 31, 2011
Gains included in earnings attributable to the change in unrealized gains relating to assets still held at the reporting date included in interest income		$	56			$	53

We are exposed to price valuation risk on our Level 3 financial instruments due to changes in the municipal bond market, interest rates, and the stability of the overall market. We have estimated our Level 3 unobservable inputs risk exposure using sensitivity analysis and have defined our valuation risk exposure as the potential overstatement or understatement of the DJW investment available for sale asset with respect to changes in market conditions that may affect pricing assuming a hypothetical change in price of 100 basis points. Assuming price was to increase or decrease by 100 basis points, the estimated impact on all Level 3 financial instruments would result in the fair value of the recorded investment available for sale and other comprehensive income (loss) to increase or decrease by approximately $0.2 million at March 31, 2012.

6. Commitments and Contingencies

Under the Company’s and PGP’s operating agreements, the Company and PGP have agreed, subject to a few exceptions, to indemnify and hold harmless PGP and PGP’s members from liabilities incurred as a result of their positions as sole manager of the Company and as members of PGP, respectively.

OnNeither ~~May~~the ~~13,~~Company ~~2011,~~nor ~~the~~its ~~State~~subsidiaries ofare ~~Iowa~~parties ~~moved~~to ~~"in~~any ~~the~~pending ~~interest~~or ofprobable ~~justice"~~legal toproceedings ~~dismiss~~other ~~misdemeanor~~than ~~charges~~litigation ~~filed~~arising ~~against~~in ~~PGP,~~the ~~its~~normal ~~Chief~~course ~~Executive~~of ~~Officer~~business. Management ~~and~~does ~~Chief~~not ~~Operating~~believe ~~Officer~~that ~~for~~adverse ~~alleged~~determinations ~~violations~~in ofany ~~State~~or ofall ~~Iowa campaign~~such ~~contribution~~litigation ~~laws. The~~would ~~Court~~have ~~approved~~a ~~the~~material ~~motion~~effect ~~and~~on ~~ordered~~ the ~~complete~~Company’s ~~dismissal~~financial condition, results of ~~all~~operations ~~charges~~or cash flows.

13 The Kansas Management Contract contractually obligates KSC to open certain phases of the project by certain specified dates. With certain exceptions, the permanent gaming facility must be completed by January 14, 2013, and the entire construction project (as set forth in the contract) must be completed no later than January 14, 2015. In addition, as of January 14, 2015, KSC is obligated to have made a minimum investment in infrastructure related to the Kansas Star development of $225.0 million, inclusive of any third party investments but exclusive of a $25.0 million privilege fee. The Company is currently on-track to meet these completion dates and financial obligations. See additional discussion of the Kansas Star development in Note 1.

Neither the Company nor its subsidiaries are parties to any pending or probable legal proceedings other than litigation arising in the normal course of business. Management does not believe that adverse determinations in any or all such litigation would have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

The Kansas Management Contract contractually obligates KSC to open certain phases of the project by certain specified dates. With certain exceptions, the interim gaming facility must open for business no later than February 14, 2012, while the permanent gaming facility must be completed by January 14, 2013, and the entire construction project (as set forth in the contract) must be completed no later than January 14, 2015. In addition, as of January 14, 2015, KSC is obligated to have made a minimum investment in infrastructure related to the Kansas Star development of $225.0 million, inclusive of any third party investments but exclusive of the $25.0 million privilege fee as discussed in Note 2. The Company is currently on-track to meet these completion dates and financial obligations. See additional discussion of the Kansas Star development in Note 1.

7. Related Party Transactions

During the three months ended ~~September~~March 3031, ~~2011~~2012 and ~~2010 and the nine months ended September 30,~~ 2011 ~~and 2010~~, the Company distributed $1.57 million, ~~$4.9 million, $6.4 million~~ and $63.71 million, respectively, to PGP primarily for (i) certain consulting and financial advisory services ~~related~~of to PGP development expenses, (ii) board fees and actual out-of-pocket expenses incurred by members of the board of managers of PGP in their capacity as board members and (iii) tax, accounting, licensure, legal and administrative costs and expenses related to PGP. These amounts were recorded as member distributions. InOn ~~September~~March ~~2010~~30, ~~the~~2012, ~~Company~~PGP ~~made~~repurchased acertain ~~$1.7~~previously ~~million~~granted ~~cash~~and ~~distribution~~vested ~~which~~profits ~~was~~interests ~~recorded~~from ascertain aexecutive ~~member~~officers ~~distribution~~of ~~to PGP,~~ the ~~proceeds~~Company ofin ~~which~~the ~~were~~amount ~~used by PGP to repay all~~ of ~~the~~$3.0 ~~outstanding~~million ~~principal~~which ~~and~~was ~~interest~~funded onby a ~~loan~~distribution ~~due~~of ~~to the Company~~$3. ~~Such~~0 ~~loan~~million ~~was~~from ~~previously~~PGL ~~recorded~~to ~~as a note receivable within Total Member’s Deficit~~PGP. During the ~~nine~~three months ended ~~September~~March 3031, 2011, the Company received contributions of $4.61 million from PGP primarily for land and capitalized costs related to the Kansas Star development project that were paid by PGP.

~~The~~During ~~Company expensed $0.1 million during~~ each of the three months ended ~~September~~March 3031, ~~2011~~2012 and ~~2010~~2011, ~~and~~the Company expensed $0.42 million ~~during each of the nine months ended September 30, 2011 and 2010,~~ as affiliate management fees, related to other compensation and board fees payable to board members of PGP representing services provided to PGL.

In accordance with a management services agreement between OED Acquisition LLC (“OEDA”), a wholly owned subsidiary of PGP, and EVD, under which EVD pays to OEDA (an affiliate) a base management fee of 0.44% of net revenue (less net food and beverage revenue) plus an incentive fee ranging from 0.75% to 1.25% based on earnings before interest, taxes, depreciation, amortization and non-recurring charges, EVD expensed $ 0.2 million in affiliate management fees payable to OEDA during each of the three months ended ~~September~~March 3031, ~~2011~~2012 and ~~2010 and $0.5 million in affiliate management fees payable to OEDA during each of the nine months ended September 30,~~ 2011 ~~and 2010~~.

In accordance with a management services agreement between DJW and PGP under which DJW pays to PGP a base management fee of 1.75% of net revenue (less net food and beverage revenue) plus an incentive fee ranging from 3% to 5% based on earnings before interest, taxes, depreciation, amortization and non-recurring charges, DJW expensed management fees of $0.~~8 million, $0.~~7 million, ~~$2.1 million,~~ and $2.0.6 million during the three months ended ~~September~~March 3031, ~~2011~~2012 and ~~2010 and the nine months ended September 30,~~ 2011 ~~and 2010~~, respectively.

EVD and PGP are parties to a consulting agreement with a board member of PGP. Under the consulting agreement, EVD, DJW, ABC and ~~ABC~~KSC must each pay the board member a fee equal to 2.5% of EVD’s, DJW’s, ABC’s and ~~ABC~~KSC’s earnings before interest, taxes, depreciation, amortization and charges associated with the impairment of assets, development expenses, pre-opening expenses, management and consulting fees, corporate allocations, gains or losses on the disposal of assets and extraordinary gains or losses, in each case, applicable to such period. EVD expensed $0.2 million of affiliate management fees during each of the three months ended ~~September~~March 3031, ~~2011~~2012 and ~~2010~~2011, ~~and~~respectively, related to this agreement. DJW expensed $0.62 million of affiliate management fees during each of the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012 and ~~2010~~2011, related to this agreement. ~~DJW~~ ABC expensed $0.31 million ~~and $0.2 million~~ of affiliate management fees during each of the three months ended ~~September~~March 3031, ~~2011~~2012 and ~~2010~~2011, ~~respectively~~related ~~and~~to this agreement. KSC expensed $0.7 million of affiliate management fees during ~~each of~~ the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012 ~~and 2010,~~ related to this agreement. ~~ABC~~KSC ~~expensed~~had ~~$0.1~~no ~~million~~expense ofunder ~~affiliate~~this ~~management~~agreement ~~fees~~ during ~~each of~~ the three months ended ~~September~~March 3031, 2011 ~~and~~as ~~2010 and $0~~2.35% ~~million~~fee ofon ~~affiliate~~earnings ~~management~~as ~~fees~~detailed ~~during~~above ~~each~~was ofeffective beginning the ~~nine~~first ~~months~~full ~~ended~~month ~~September~~subsequent ~~30,~~to ~~2011 and 2010~~operations, ~~related~~or toJanuary ~~this agreement~~2012.

8. Segment Information

The Company is organized around geographical areas and ~~has~~operates or manages five reportable segments: (1) Diamond Jo Dubuque operations, which comprise the Diamond Jo casino in Dubuque, Iowa, (2) Diamond Jo Worth operations, which comprise the Diamond Jo Worth casino operations in Northwood, Iowa, (3) Evangeline Downs operations, which comprise the casino, racetrack and OTBs operated by EVD in Opelousas, Louisiana and the surrounding area, (4) Amelia Belle operations, which comprise the Amelia Belle casino in Amelia, Louisiana, and (5) Kansas Star operations, which ~~will~~comprise ~~operate~~ the Kansas Star Casino, Hotel and Event Center in Mulvane, Kansas ~~and~~that isopened ~~currently~~its ~~under~~interim ~~development~~facility on December 20, 2011.

The accounting policies for each segment are the same as those described in Note 2 above and in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2010~~2011. The Company evaluates performance and allocates resources based upon, among other considerations, segment operating earnings (as defined below).

The tables below present information about reported segments as of and for the years ended (in thousands):

	Net Revenues From External Customers Three Months Ended September 30,				Net Revenues From External Customers Nine Months Ended September 30,
	Net Revenues From External Customers Three Months Ended March 31,
	2011		2010		2011		2010
	2012		2011
Diamond Jo Dubuque	$	17,~~970~~629	$	1716,~~681~~757	$	~~51,962~~	$	~~52,144~~
Diamond Jo Worth		2423,~~607~~940		2221,~~792~~585		~~70,687~~		~~66,158~~
Evangeline Downs		2830,~~799~~092		2928,~~071~~618		~~88,850~~		~~87,409~~
Amelia Belle		12,~~497~~878		1213,~~404~~441		~~37,269~~		~~36,703~~
Total	$	83,873	$	81,948	$	248,768	$	242,414
Kansas Star		50,264		-
Total	$	134,803	$	80,401

	Segment Operating Earnings Three Months Ended September 30, (1)				Segment Operating Earnings Nine Months Ended September 30, (1)
	Segment Operating Earnings (1) Three Months Ended March 31,
	2011		2010		2011		2010
	2012		2011
Diamond Jo Dubuque	$	6,~~484~~056	$	65,~~226~~691	$	~~18,297~~	$	~~17,966~~
Diamond Jo Worth		109,~~399~~921		98,~~716~~692		~~29,237~~		~~27,818~~
Evangeline Downs		68,~~913~~917		78,~~320~~579		~~23,722~~		~~23,335~~
Amelia Belle		34,~~707~~272		34,~~916~~383		~~11,348~~		~~11,679~~
Total property segment operating earnings (1)		27,503		27,178		82,604		80,798
Kansas Star		26,786		-
General corporate		(2,147)		(1,765)		(6,677)		(5,035)
Total property segment operating earnings (1)		55,952		27,345
Total segment operating earnings (1)		25,356		25,413		75,927		75,763
General Corporate		(2,859)		(2,313)
Gain on settlement (2)		-		-		711		-
Total segment operating earnings (1)		53,093		25,032
Depreciation and amortization		(7,099)		(7,315)		(21,463)		(22,142)
Gain on settlement (2)		-		711
Pre-opening expense		(3,923)		(8)		(6,863)		(33)
Depreciation and amortization		(10,442)		(7,222)
Development expense		-		-		-		(28)
Pre-opening expense		-		(1,057)
Affiliate management fees		(12,~~565~~411)		(1,~~535~~540)		~~(4,708)~~		~~(4,493)~~
Loss on disposal of assets		(9)		(17)		(86)		(54)
Gain (loss) on disposal of assets		20		(34)
Gain (loss) from equity affiliate		3		-		(62)		-
Loss from equity affiliate		(28)		(37)
Interest income		~~559~~562		~~680~~600		~~1,775~~		~~1,672~~
Interest expense, net of amounts capitalized		(1718,~~079~~411)		(1416,~~929~~581)		~~(51,215)~~		~~(44,684)~~
Net (loss) income	$	(3,757)	$	2,289	$	(5,984)	$	6,001
Net income (loss)	$	22,383	$	(128)

_______________

(1) Segment operating earnings is defined as net income (loss) ~~income~~ plus depreciation and amortization, pre-opening expense, ~~development expense,~~ affiliate management fees, loss on disposal of assets, loss from equity affiliate, and interest expense, net of amounts capitalized less interest income, gain ~~from~~on ~~equity~~disposal ~~affiliate~~of assets, and gain on settlement.

(2) “Gain on settlement” relates to a ~~one-time~~ gain on a financial settlement with the predecessor owner of ABC during the first quarter of 2011 and is included in Other revenue for the ~~nine~~three months ended ~~September~~March 3031, 2011.

	Interest Income (Expense), net Three Months Ended March 31,				Depreciation and Amortization Three Months Ended March 31,
	2012		2011		2012		2011
General Corporate	$	(17,304)	$	(16,017)	$	78	$	57
Diamond Jo Dubuque		(534)		(561)		1,732		2,290
Diamond Jo Worth		483		486		1,429		1,464
Evangeline Downs		77		88		1,640		1,823
Amelia Belle		-		1		1,714		1,588
Kansas Star		(571)		22		3,849		-
Total	$	(17,849)	$	(15,981)	$	10,442	$	7,222

	Total Assets
	March 31, 2012		December 31, 2011

General Corporate	$	21,218	$	21,781
Diamond Jo Dubuque		156,692		156,997
Diamond Jo Worth		78,797		77,449
Evangeline Downs		144,052		143,829
Amelia Belle		107,597		107,308
Kansas Star		210,343		219,866
Total	$	718,699	$	727,230

	Cash Expenditures for Additions to Long-Lived Assets
	Three Months Ended March 31, 2012		Three Months Ended March 31, 2011

General Corporate	$	2,012	$	142
Diamond Jo Dubuque		287		821
Diamond Jo Worth		324		972
Evangeline Downs		1,156		1,428
Amelia Belle		609		1,076
Kansas Star		23,283		19,977
Total	$	27,671	$	24,416

	Interest Expense, net Three Months Ended September 30,				Interest Expense, net Nine Months Ended September 30,
	2011		2010		2011		2010
General Corporate	$	(16,516)	$	(14,219)	$	(49,521)	$	(42,812)
Diamond Jo Dubuque		(504)		(574)		(1,614)		(1,724)
Diamond Jo Worth		485		492		1,461		1,459
Evangeline Downs		56		49		237		57
Amelia Belle		2		3		7		8
Kansas Star		(43)		-		(10)		-
Total	$	(16,520)	$	(14,249)	$	(49,440)	$	(43,012)

	Depreciation and Amortization Three Months Ended September 30,				Depreciation and Amortization Nine Months Ended September 30,
	2011		2010		2011		2010
General Corporate	$	72	$	55	$	202	$	117
Diamond Jo Dubuque		2,297		2,313		6,907		6,868
Diamond Jo Worth		1,369		1,433		4,206		4,719
Evangeline Downs		1,724		1,970		5,297		5,871
Amelia Belle		1,637		1,544		4,851		4,567
Total	$	7,099	$	7,315	$	21,463	$	22,142

	Total Assets
	September 30, 2011		December 31, 2010
General Corporate	$	22,633	$	42,581
Diamond Jo Dubuque		159,741		164,660
Diamond Jo Worth		81,520		78,733
Evangeline Downs		145,428		142,377
Amelia Belle		111,569		111,454
Kansas Star		161,725		-
Total	$	682,616	$	539,805

Cash Expenditures for Additions to Long-Lived Assets Nine Months Ended September 30, 2011 Nine Months Ended September 30, 2010

General corporate	$	1,458	$	579
Diamond Jo Dubuque		1,299		1,851
Diamond Jo Worth		1,570		1,529
Evangeline Downs		2,369		7,180
Amelia Belle		1,462		4,319
Kansas Star		61,249		-
Total	$	69,407	$	15,458

9. Fair Value of Financial Instruments

The fair value of the Company’s financial instruments consisting of cash and cash equivalents, restricted cash, receivables, payables and ~~current~~ accrued expenses approximate their recorded amounts due to the short term nature of the instruments. The fair value and recorded amounts for the Company’s investment available for sale, note receivable, obligation under ~~minimum~~ assessment ~~agreement~~arrangements and debt instruments at ~~September~~March 3031, ~~2011~~2012 and December 31, ~~2010~~2011 are as follows (in thousands):

		September 30, 2011						December 31, 2010
			March 31, 2012						December 31, 2011
		Fair Value			Recorded Amount			Fair Value			Recorded Amount
	Fair Value Hierarchy		Fair Value			Recorded Amount			Fair Value			Recorded Amount
Investment available for sale		$	19,341		$	19,341		$	18,592		$	18,592
Money market investment	Level 1		$	-		$	-		$	18,606		$	18,606
Note receivable			2,467			2,382			2,536			2,302
Investment available for sale	Level 3			19,609			19,609			19,352			19,352
8 3/8% senior secured notes			319,200			319,632			255,000			235,535
Note receivable	Level 3			2,417			2,417			2,400			2,400
10 3/4% senior unsecured notes			346,125			352,250			331,688			297,997
8 3/8% senior secured notes	Level 2			338,640			319,661			340,000			319,646
Senior secured credit facility			-			-			3,500			3,500
10 3/4% senior unsecured notes	Level 2			391,831			352,407			372,750			352,327
Term loans			3,981			3,981			5,183			5,183
Senior secured credit facility	Level 2			-			-			5,000			5,000
Notes payable, capital lease obligations and other financial instruments			4,033			3,870			591			591
Term loans	Level 2			12,137			12,137			8,769			8,769
Obligation under Minimum Assessment Agreement			25,938			20,224			25,012			20,458
Notes payable, capital lease obligations and other financial instruments	Level 2			17,446			17,019			21,878			21,189
Obligation under assessment arrangements	Level 3			40,380			34,532			26,416			20,658

Fair value information is based on current market interest rates and estimates of market conditions for instruments with similar terms, maturities, and degrees of risk.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the condensed consolidated financial statements and the related notes thereto appearing elsewhere in this report.

Forward Looking Statements

We make forward-looking statements in this report. These forward-looking statements relate to our outlook or expectations for earnings, revenues, expenses, asset quality or other future financial or business performance, strategies or expectations, or the impact of legal, regulatory or supervisory matters on our business, results of operations or financial condition. Specifically, forward-looking statements may include:

· statements relating to our plans, intentions, expectations, objectives or goals;

·	statements relating to our future economic performance, business prospects, revenue, income and financial condition, and any underlying assumptions relating to those statements; and

·	statements preceded by, followed by or that include the words “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target” or similar expressions.

These statements reflect our management’s judgment based on currently available information and involve a number of risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. With respect to these forward-looking statements, our management has made assumptions regarding, among other things, economic trends, customer behaviors, the availability of financing and overall liquidity.

Future performance cannot be ensured. Actual results may differ materially from those in the forward-looking statements. Some factors that could cause our actual results to differ include, but are not limited to:

· the availability and adequacy of our cash flows to satisfy our obligations, including payment obligations under the PGL Notes and the PGL Credit Facility and additional funds required to support capital improvements, ~~complete the Kansas Star development~~ and ~~pursue future~~ development;

· economic, competitive, demographic, business, ~~regulatory, political~~ and other conditions in our local and regional markets;

· changes or developments in the laws, regulations, or taxes in the gaming and horse racing industry;

17· actions taken or omitted to be taken by third parties, including customers, suppliers, competitors, members, and shareholders, as well as legislative, regulatory, judicial and other governmental authorities;

· actions taken or omitted to be taken by third parties, including customers, suppliers, competitors, members and shareholders, as well as legislative, regulatory, judicial and other governmental authorities;

·	changes in business strategy, capital improvements, development plans, including those due to environmental remediation concerns, or changes in personnel or their compensation, including federal, state and local minimum wage requirements;

·	the loss of any license or permit, including the failure to obtain an unconditional renewal of a required gaming license on a timely basis;

·	the termination of our operating agreement with our “qualified sponsoring organizations,” the Dubuque Racing Association (“DRA”) and/or the Worth County Development Authority (“WCDA”), or the failure of the DRA and/or the WCDA to continue as our “qualified sponsoring organization;”

· the loss of our facilities due to casualty, weather, mechanical failure, or any extended or extraordinary maintenance or inspection that may be required;

·	changes in federal or state tax obligations;

· potential exposure to environmental liabilities, changes or developments in the laws, regulations or taxes in the gaming or horse racing industry or a decline in the public acceptance of gaming or horse racing and other unforeseen difficulties associated with our operations;

· ~~failure~~decline toin ~~meet~~ the ~~contractually-obligated~~public ~~construction~~acceptance ~~dates, delays, cost overruns or the imposition~~ of ~~additional~~gaming ~~costs related to the construction of the Kansas Star, the third party hotel,~~ or ~~the~~horse ~~financing~~racing ofand ~~publicly-owned~~other ~~offsite~~unforeseen ~~utilities,~~difficulties orassociated ~~delays~~with inour ~~obtaining requisite governmental approvals related to the operation of the Kansas Star~~operations;

·	failure to meet the contractually-obligated construction dates, or delays or cost overruns related to the construction of the Kansas Star or delays in obtaining requisite governmental approvals related to the operation of the Kansas Star;

·	adverse outcomes of any legal proceedings in which we may become involved from time to time;

· adverse circumstances, changes, developments or events relating to or resulting from our ownership and control of DJL, DJW, EVD, ABC, and KSC; and

·	other factors discussed in our other filings with the SEC.

You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this document. Except as required by law, we undertake no obligation to publicly update or release any revisions to these forward-looking statements to reflect any events or circumstances after the date of this document or to reflect the occurrence of unanticipated events.

Executive Summary

We own and operate ~~four~~or manage five casinos located in Iowa, ~~and~~ Louisiana~~. In addition~~, weand ~~are currently developing the~~ Kansas ~~Star in Mulvane, Kansas~~. ~~See Note 1 to the condensed consolidated financial statements for more information on the Kansas Star development project.~~ Our corporate offices are located in Dubuque, Iowa. Our ~~current operating~~ properties consist of:

1. Diamond Jo Dubuque operations, which comprise the Diamond Jo casino operations in Dubuque, Iowa ~~and~~ serving the eastern Iowa, northwest Illinois, and southwest Wisconsin gaming markets;

2.	Diamond Jo Worth operations, which comprise the Diamond Jo casino operations in Northwood, Iowa serving north central Iowa and south central Minnesota;

3. EVD operations, which comprise the casino, racetrack, and OTB’s operated by EVD in Louisiana, serving the greater Lafayette, Louisiana area; ~~and~~

4. Amelia Belle operations, which comprise the Amelia Belle Casino in Amelia, Louisiana serving the southern Louisiana markets.; and

5.	Kansas Star operations, which comprise the Kansas Star casino operations in Mulvane, Kansas that opened on December 20, 2011 serving south central Kansas and is managed on behalf of the State of Kansas.

Our properties offer a variety of amenities including various food and beverage outlets and entertainment venues.

While we are very excited about the current development project in Kansas, we continue to maintain our focus on our four existing operations and are pleased with the operating results of the third quarter of 2011, especially in Iowa where we saw positive quarter over quarter segment operating earnings growth of 7% and 4% in Worth County and Dubuque, respectively. At Evangeline Downs, results continued to reflect the results of a down turn in the racing industry. Weakness in simulcast betting as well as the closure of several racetracks throughout the country that historically showed EVD’s live race meets were the primary factors in a 6% decline in segment operating earnings at EVD. Despite a weak Louisiana economy, segment operating earnings on the casino side of the operations remained substantially flat as compared to the third quarter of 2010. To combat the continued weakness in the southern Louisiana market, we increased our direct mail and marketing promotions at ABC to attract more visits to the property. Visitors at ABC increased 3% in the third quarter 2011 over the third quarter 2010. While we were successful in driving a slight increase in net revenues, our segment operating earnings fell approximately 5% due primarily to these additional costs.

Recent Developments

In January 2011, PGP’s Kansas Management Contract was approved by the KRGC and upon such approval, became effective. The Kansas Management Contract was subsequently assigned to KSC and allows KSC to design, develop, and operate the Kansas Star Casino, Hotel and Event Center in Mulvane, Kansas.

In March 2011, KSC purchased two parcels of land totaling approximately 202 acres on which the Kansas Star will be developed. This land effectively gives the Company all the land needed to develop the Kansas Star facility in compliance with the terms of the Kansas Management Contract. In March 2011, KSC broke ground on the Kansas Star development project. See Note 1 to the condensed consolidated financial statement for additional information on the Kansas Star project.

Also in March 2011, a third party developer and operator opened a new 60-room hotel in close proximity to our DJW casino.

On May 13, 2011, the State of Iowa moved "in the interest of justice" to dismiss misdemeanor charges filed against PGP, its Chief Executive Officer and Chief Operating Officer for alleged violations of Iowa State campaign contribution laws. The Polk County District Court approved the motion and ordered the complete dismissal of all charges.

On May 17, 2011, KSC executed an agreement with a third party hotel developer to develop the 300 room hotel at the Kansas Star. KSC will contribute $1.0 million in cash, land, and certain site work for the project and the hotel developer will finance, construct, own and operate the hotel.

Results of Operations

The following table sets forth certain information concerning our results of operations for the three ~~and nine~~ months ended ~~September 30~~March 31, ~~2011~~2012 and ~~2010~~2011.

~~Statement~~Selected ofFinancial ~~Operations~~Measures ~~Data~~by Property

(Dollars in Thousands)

	Three Months Ended March 31,
	2012			2011
	(Dollars in thousands)
Net Revenues:
Diamond Jo Dubuque	$	17,629		$	16,757
Diamond Jo Worth		23,940			21,585
Evangeline Downs		30,092			28,618
Amelia Belle		12,878			13,441
Kansas Star (1)		50,264			-
Consolidated net revenues	$	134,803		$	80,401
Segment Operating Earnings:
Diamond Jo Dubuque	$	6,056		$	5,691
Diamond Jo Worth		9,921			8,692
Evangeline Downs		8,917			8,579
Amelia Belle		4,272			4,383
Kansas Star (1)		26,786			-
Total property segment operating earnings (2)		55,952			27,345
General Corporate		(2,859)			(2,313)
Total segment operating earnings (2)		53,093			25,032
Gain on settlement (3)		-			711
Depreciation and amortization		(10,442)			(7,222)
Pre-opening expense		-			(1,057)
Affiliate management fees		(2,411)			(1,540)
Gain (loss) on disposal of assets		20			(34)
Loss from equity affiliate		(28)			(37)
Interest income		562			600
Interest expense, net of amounts capitalized		(18,411)			(16,581)
Net income (loss)	$	22,383		$	(128)
Segment Operating Earnings Margins (4):
Diamond Jo Dubuque		34.4	%		34.0	%
Diamond Jo Worth		41.4	%		40.3	%
Evangeline Downs		29.6	%		30.0	%
Amelia Belle		33.2	%		32.6	%
Kansas Star (1)		53.3	%		NA
Consolidated segment operating earnings margin		39.4	%		31.1	%

	Three Months Ended September 30, 2011		Three Months Ended September 30, 2010		Nine Months Ended September 30, 2011		Nine Months Ended September 30, 2010
Net Revenues:
Diamond Jo Dubuque	$	17,970	$	17,681	$	51,962	$	52,144
Diamond Jo Worth		24,607		22,792		70,687		66,158
Evangeline Downs		28,799		29,071		88,850		87,409
Amelia Belle		12,497		12,404		37,269		36,703
Consolidated net revenues	$	83,873	$	81,948	$	248,768	$	242,414
Segment Operating Earnings:
Diamond Jo Dubuque	$	6,484	$	6,226	$	18,297	$	17,966
Diamond Jo Worth		10,399		9,716		29,237		27,818
Evangeline Downs		6,913		7,320		23,722		23,335
Amelia Belle		3,707		3,916		11,348		11,679
Total property segment operating earnings		27,503		27,178		82,604		80,798
General corporate		(2,147)		(1,765)		(6,677)		(5,035)
Total segment operating earnings		25,356		25,413		75,927		75,763
Gain on settlement (1)		-		-		711		-
Depreciation and amortization		(7,099)		(7,315)		(21,463)		(22,142)
Pre-opening expense		(3,923)		(8)		(6,863)		(33)
Development expense		-		-		-		(28)
Affiliate management fees		(1,565)		(1,535)		(4,708)		(4,493)
Loss on disposal of assets		(9)		(17)		(86)		(54)
Gain (loss) from equity affiliate		3		-		(62)		-
Interest income		559		680		1,775		1,672
Interest expense, net of amounts capitalized		(17,079)		(14,929)		(51,215)		(44,684)
Net (loss) income	$	(3,757)	$	2,289	$	(5,984)	$	6,001
Segment Operating Earnings Margins:
Diamond Jo Dubuque		36.1%		35.2%		35.2%		34.5%
Diamond Jo Worth		42.3%		42.6%		41.4%		42.0%
Evangeline Downs		24.0%		25.2%		26.7%		26.7%
Amelia Belle		29.7%		31.6%		30.4%		31.8%
Consolidated segment operating earnings margin		30.2%		31.0%		30.5%		31.3%

_______________________________

~~________________________~~(1) We opened the Kansas Star interim facility on December 20, 2011.

(12) Segment ~~“Gain~~operating onearnings ~~settlement”~~is ~~relates~~defined toas anet ~~one-time~~income ~~gain~~(loss) onplus adepreciation ~~financial~~and ~~settlement~~amortization, ~~with~~pre-opening ~~the~~expense, ~~predecessor~~affiliate ~~owner~~management offees, ~~ABC~~loss ~~during~~on ~~the~~disposal ~~first~~of ~~quarter~~assets, ofloss ~~2011~~from equity affiliate, and isinterest ~~included~~expense, innet ~~Other~~of ~~revenue~~amounts ~~for~~capitalized, ~~the~~less ~~nine~~interest ~~months~~income, ~~ended~~gain ~~September~~on ~~30,~~disposal ~~2011~~of assets and gain on settlement.

(3) “Gain on settlement” relates to a gain on a financial settlement with the predecessor owner of ABC during the three months ended March 31, 2011 and is included in Other revenue.

(4) Segment operating earnings margin is calculated as segment operating earnings divided by net revenue.

Three months ended March 31, 2012 compared to three months ended March 31, 2011

Consolidated net revenues increased $54.4 million, or 68%, to $134.8 million for the three months ended March 31, 2012 from $80.4 million for the three months ended March 31, 2011 driven primarily by the opening of the Kansas Star in December 2011. Consolidated net revenues on a same store basis increased $4.1 million, or 5%, to $84.5 million. DJL, DJW, and EVD reported net revenue growth of 5%, 11%, and 5%, respectively, during the first quarter of 2012 compared to the first quarter of 2011. Net revenue increases at each of these properties was driven primarily by increases in casino revenues at each of our properties. ABC’s net revenue decreased 4% over the prior year period due primarily to a one-time $0.7 million gain on a financial settlement with the predecessor owner of ABC during the three months ended March 31, 2011. Net revenues at KSC for the three months ended March 31, 2012 were $50.3 million.

Casino revenues increased $55.2 million, or 73%, to $130.8 million for the three months ended March 31, 2012 from $75.6 million for the three months ended March 31, 2011 driven primarily by the opening of the Kansas Star in December 2011. Casino revenues on a same store basis increased $5.1 million, or 7%, to $80.7 million. In Iowa, we continue to see strong growth as DJW’s casino revenues increased by $2.5 million, or 12%, to $22.9 million for the three months ended March 31, 2012 from $20.4 million for the three months ended March 31, 2011 while DJL’s casino revenues increased by $1.0 million, or 6%, to $17.6 million for the three months ended March 31, 2012 from $16.6 million for the three months ended March 31, 2011. Our Iowa properties continued to benefit from a strong agricultural economy in the region, which we believe helped drive an increase in spend per trip at both of our Iowa properties, as well as favorable weather during the quarter. In addition, DJL increased its share of the Dubuque, Iowa market by 220 basis points over the prior period to 55.7%. In Louisiana, both properties experienced quarter over quarter growth as EVD’s casino revenues increased by $1.5 million, or 6%, to $26.5 million for the three months ended March 31, 2012 from $25.0 million for the three months ended March 31, 2011 due primarily to an increase in spend per trip by our guests. ABC’s casino revenues increased by $0.2 million, or 1%, to $13.8 million for the three months ended March 31, 2012 from $13.6 million for the three months ended March 31, 2011. Casino revenues at KSC for the three months ended March 31, 2012 were $50.0 million.

Casino operating expenses increased 67% to $51.7 million for the three months ended March 31, 2012 from $30.9 million for the three months ended March 31, 2011. Casino expenses on a same store basis increased $2.3 million, or 7%, to $33.2 million due primarily to an increase in gaming taxes as a result of an increase in casino revenues. Casino expenses at KSC for the three months ended March 31, 2012 were $18.5 million.

Promotional allowances as a percentage of casino revenues on a same store basis were essentially flat quarter over quarter at approximately 12% for each of the three months ended March 31, 2012 and 2011. Promotional allowances as a percentage of casino revenues at KSC was 4% for the three months ended March 31, 2012.

Racing revenues at EVD decreased 8% to $2.2 million for the three months ended March 31, 2012 from $2.4 million for the three months ended March 31, 2011. This decrease is driven entirely by the closure of our New Iberia OTB in January 2012. EVD was able to capture some of that lost revenue at its St. Martinville OTB which increased its racing revenues by $0.3 million during the three months ended March 31, 2012. Consistent with racing revenues, racing expenses decreased $0.2 million quarter over quarter.

Video poker revenues and related expenses at EVD increased $0.1 million each for the three months ended March 31, 2012 to $1.6 million and $1.2 million, respectively.

Food and beverage revenues increased 31% to $8.5 million for the three months ended March 31, 2012 from $6.5 million for the three months ended March 31, 2011. Food and beverage revenues on a same store basis increased $0.5 million, or 8%, to $7.0 million due primarily to an increase in comped beverage revenue at our Louisiana properties as we continue to provide better service to our guests. Consistent with the increase in revenues, food and beverage expenses on a same store basis increased 5% to $4.3 million. Food and beverage revenues and expenses at KSC for the three months ended March 31, 2012 were $1.5 million and $0.9 million, respectively.

Other revenues decreased $0.1 million to $3.6 million for the three months ended March 31, 2012 from $3.7 million for the three months ended March 31, 2011. Other revenues on a same store basis decreased $0.6 million to $3.1 million due primarily to a $0.7 million gain at ABC on a financial settlement with the predecessor owner during the three months ended March 31, 2011 as discussed above offset by a $0.1 million increase at DJW due primarily to an increase in fuel sales related to fuel prices at its convenience store. Other expenses on a same store basis increased approximately $0.1 million over the prior year period due primarily to a $0.1 million increase in fuel costs consistent with the increase in fuel sales at DJW’s convenience store. Other revenues and expenses at KSC for the three months ended March 31, 2012 were $0.5 million and $0.1 million, respectively.

Selling, general and administrative expenses increased 35% to $19.1 million for the three months ended March 31, 2012 from $14.1 million for the three months ended March 31, 2011. Selling, general and administrative expenses on a same store basis increased $1.0 million, or 7%, to $15.1 million due primarily to a $0.6 million increase at PGL in payroll and travel related expenses due in part to additional corporate travel to the new Kansas Star property to assist in operations during the opening months of the property. Selling, general and administrative expenses at KSC for the three months ended March 31, 2012 were $4.0 million.

Depreciation and amortization increased 44% to $10.4 million for the three months ended March 31, 2012 from $7.2 million for the three months ended March 31, 2011. Depreciation and amortization on a same store basis decreased $0.6 million, or 8%, to $6.6 million due primarily to slot machines purchased during the opening of DJL’s land based facility becoming fully depreciated in the fourth quarter of 2011. Depreciation expense at KSC for the three months ended March 31, 2012 was $3.8 million.

~~Three~~Affiliate management fees were $2.4 million and $1.5 million for the three months ended ~~September~~March 3031, 2012 and 2011, ~~compared~~respectively, and relate to ~~three~~management ~~months~~fees ~~ended~~paid ~~September~~or 30accrued to related parties under various management services and consulting agreements at EVD, ~~2010~~DJW, ABC and KSC with the increase primarily related to the addition of operations at KSC.

~~Consolidated~~Pre-opening ~~net~~expenses ~~revenues~~of ~~increased~~ $1.91 million, ~~or 2%, to $83.9 million~~ for the three months ended ~~September~~March 3031, 2011 ~~from~~relate $82.0 million for the three months ended September 30, 2010. DJW reported net revenue growth of 8% driven primarily by the strong agricultural economy of the surrounding area as well as an increase in other revenues related to ~~gasoline~~start-up ~~sales~~costs ~~due~~for ~~to an increase in~~ the ~~price~~development ofproject ~~gas and the number of gallons sold over the prior year. Net revenues~~ at ~~DJL~~KSC and ~~ABC~~consist ~~both~~primarily ~~increased~~of 1%pre-opening ~~for~~professional ~~the~~services ~~three months ended September 30~~fees, ~~2011,~~regulatory ~~over~~costs ~~the~~and ~~prior year while net revenues at EVD decreased 1%~~payroll.

~~Casino~~Segment ~~revenues~~operating ~~increased~~earnings ~~$1.9~~margins ~~million,~~at ~~or 3%~~DJL, toEVD ~~$77.4~~and ~~million~~ABC for the three months ended ~~September~~March 3031, ~~2011~~2012 ~~from~~were ~~$75.5~~consistent ~~million~~with ~~for~~ the three months ended ~~September~~March 3031, ~~2010~~2011. DJW assaw ~~casino revenues at all of our properties showed~~ an increase ~~over~~in ~~the~~margins ~~prior~~of ~~year~~110 ~~period. In~~basis ~~Iowa,~~points ~~casino revenues at DJW increased 5%~~ as a result of the ~~strong~~12% ~~agricultural~~increase ~~economy~~ in ~~the surrounding area while~~ casino revenues. Segment atoperating ~~DJL~~earnings ~~increased~~margin 2%at asKSC ~~a result of DJL’s Dubuque, Iowa market share increase up from 53%~~ for the three months ended ~~September~~March 3031, ~~2010~~2012 towas ~~55% for the three months ended September 30, 2011~~53. Casino revenues at EVD and ABC increased 1% and 2%, respectively, over the prior year which were driven by aggressive direct mail and marketing campaigns to help drive visitation in the weak economic conditions of southern Louisiana. Visitors at ABC increased 3% ~~in the third quarter 2011 over the third quarter 2010~~.

~~Casino~~Other ~~operating~~expense, ~~expenses~~net of interest income, increased $1.9 million to $3017.89 million for the three months ended ~~September~~March 3031, ~~2011~~2012 from $3016.30 million for the three months ended ~~September~~March 3031, ~~2010~~2011 ~~due~~ primarily due to anthe ~~increase~~timing of the Company’s additional financing activities in ~~gaming~~February ~~taxes~~2011 ~~paid~~to assupport athe ~~result~~Kansas ofStar development project including the ~~increase~~$80.0 inmillion ~~casino~~PGL ~~revenues~~Secured Notes tack-on issuance and the $50. 0 million PGL Unsecured Notes tack-on issuance.

~~Promotional~~Our ~~allowances~~operations are subject to seasonal fluctuations. Our Iowa operations are typically weaker from November through February as a ~~percentage~~result of ~~casino~~adverse ~~revenues~~weather ~~increased~~conditions, ~~quarter~~and ~~over~~are ~~quarter~~typically stronger from March through October. Our Louisiana horse racing operations are also subject to 13seasonal fluctuations.3% ~~for~~Our ~~the~~horse ~~three~~racing ~~months~~operations ~~ended~~are ~~September~~usually 30stronger during live racing season, ~~2011~~which generally runs from 12April through December.8% ~~for~~We ~~the~~do ~~three~~not ~~months~~expect ~~ended~~to ~~September~~see 30significant seasonal fluctuations in our Kansas operations. In general, ~~2010~~our ~~due~~payroll ~~primarily~~and togeneral ~~the~~and ~~increase~~administrative inexpenses ~~promotional~~are ~~allowances~~affected atby inflation. Although inflation has not had a material effect on our ~~Louisiana~~business ~~properties~~to asdate, ~~discussed~~we ~~above~~could experience more significant effects of inflation in future periods.

Racing revenues at EVD were down quarter over quarter to $4.0 million for the three months ended September 30, 2011 from $4.6 million for the three months ended September 30, 2010. Weakness in simulcast betting as well as the closure of several racetracks throughout the country that historically showed EVD’s live race meets was the primary reason for the decline in racing revenues. Consistent with racing revenues, racing expenses decreased quarter over quarter to $3.9 million for the three months ended September 30, 2011 from $4.2 million for the three months ended September 30, 2010.

Video poker revenues at EVD increased 27%, for the three months ended September 30, 2011 to $1.4 million compared to $1.1 million for the three months ended September 30, 2010, which is due primarily to a $0.3 million increase in video poker revenues at our St. Martinville OTB where we began operating video poker machines in September 2010. Consistent with this increase in revenues, EVD experienced an increase of $0.3 million in video poker expenses to $1.2 million for the three months ended September 30, 2011 from $0.9 million for the three months ended September 30, 2010 due primarily to video poker operations at our St. Martinville OTB.

Food and beverage revenues were essentially flat quarter over quarter at $7.0 million and $6.9 million for the three months ended September 30, 2011 and 2010, respectively. Consistent with flat revenues, food and beverage expenses were also flat quarter over quarter at $4.5 million and $4.6 million for the three months ended September 30, 2011 and 2010, respectively.

Other revenues increased $0.7 million to $4.2 million for the three months ended September 30, 2011 from $3.5 million for the three months ended September 30, 2010 due primarily to a $0.8 million increase in convenience store revenues at DJW resulting from an increase in fuel prices and number of gallons sold in the third quarter of 2011 over the third quarter of 2010. Consistent with this increase in gasoline sales, DJW realized an increase in other expenses.

Selling, general and administrative expenses increased 6%, to $14.8 million for the three months ended September 30, 2011 from $14.0 million for the three months ended September 30, 2010 due primarily to a $0.4 million increase at PGL in payroll and related expenses as a result of corporate staffing changes made to support the continued growth of the Company with the current development of the Kansas Star.

Depreciation and amortization expense declined quarter over quarter to $7.1 million for the three months ended September 30, 2011 from $7.3 million for the three months ended September 30, 2010 due primarily to certain assets at EVD reaching the end of their depreciable lives.

Affiliate management fees were $1.6 million and $1.5 million for the three months ended September 30, 2011 and 2010, respectively, and relate to management fees paid or accrued to related parties under various management services and consulting agreements at EVD, DJW and ABC.

Pre-opening expenses of $3.9 million for the three months ended September 30, 2011 relate to start-up costs for the development project at KSC and consist primarily of pre-opening payroll, professional services fees, and regulatory costs.

Segment operating earnings margins for the three months ended September 30, 2011 at DJL increased to 36% over the three months ended September 30, 2010 margin of 35% due primarily to a 2% increase in casino revenues as discussed above while maintaining flat operating expenses. DJW’s segment operating earnings margins remained flat period over period while margins at our Louisiana properties declined 120 basis points and 190 basis points, respectively, due to the decline in racing revenues at EVD and the increase in direct mail and marketing costs at ABC, as discussed above.

Interest expense, net of interest income, increased $2.3 million to $16.5 million for the three months ended September 30, 2011 from $14.2 million for the three months ended September 30, 2010 primarily due to the Company’s additional financing activities in February 2011 to support the Kansas Star development project, including the $80.0 million PGL Secured Notes tack-on issuance and the $50.0 million PGL Unsecured Notes tack-on issuance offset by capitalized interest costs of $0.8 million during the three months ended September 30, 2011.

For the third quarter 2011, the Company reported a net loss of $3.8 million. Net income for the third quarter 2010 was $2.3 million. The decrease in net income is due to (i) an increase in interest expense as a result of the Company’s additional financing activities in February 2011 to support the Kansas Star development project including the $80.0 million PGL Secured Notes tack-on issuance and the $50.0 million PGL Unsecured Notes tack-on issuance and (ii) pre-opening expenses of $3.9 million during the three months ended September 30, 2011 related to the Kansas development project.

Nine months ended September 30, 2011 compared to nine months ended September 30, 2010

Consolidated net revenues increased $6.4 million, or 3%, to $248.8 million for the nine months ended September 30, 2011 from $242.4 million for the nine months ended September 30, 2010. DJW reported net revenue growth of 7% driven primarily by a successful outer market direct mail campaign during the second quarter of 2011 and a strong agricultural economy in the surrounding area as well as an increase in other revenues related to gasoline sales due to an increase in the price of gas and the number of gallons sold over the prior year. Net revenues at EVD increased 2% driven primarily by a 2% increase in casino revenues and a 26% increase in video poker revenues attributable to our new OTB in St. Martinville, Louisiana, which began video poker operations in the third quarter of 2010. Net revenues at DJL were essentially flat over the prior year due to a strong third quarter of 2011 that helped offset a tough first quarter of 2011, which was impacted by adverse weather conditions in the Eastern Iowa market during the month of February 2011. A 2% increase in net revenues at ABC is primarily attributed to $0.7 million of other revenue resulting from a gain on a financial settlement with the predecessor owner of ABC, which is included in Other revenue.

Casino revenues increased $4.9 million, or 2%, to $229.9 million for the nine months ended September 30, 2011 from $225.0 million for the nine months ended September 30, 2010. In Iowa, casino revenues at DJW increased 6% as a result of the successful outer market direct mail campaign during the second quarter of 2011 and the strong agricultural economy in the area as discussed above while casino revenues at DJL were essentially flat over the prior year. In Louisiana, EVD experienced a 2% increase in casino revenues while ABC casino revenues were primarily flat despite an 8% decline in the second quarter of 2011 as a result of the imminent threat of severe flooding with the opening of the Morganza Spillway in May 2011 and weak economic conditions as discussed above.

Casino operating expenses increased 1%, to $92.9 million for the nine months ended September 30, 2011 from $92.0 million for the nine months ended September 30, 2010 due primarily to an increase in gaming taxes paid as a result of an increase in casino revenues.

Promotional allowances as a percentage of casino revenues increased slightly to 12.8% for the nine months ended September 30, 2011 from 12.4% for the nine months ended September 30, 2010 due primarily to the increase in promotional allowances at DJW related to the outer market direct mail campaign during the second quarter of 2011.

Racing revenues at EVD decreased $0.5 million, or 4%, to $11.9 million for the nine months ended September 30, 2011 from $12.4 million for the nine months ended September 30, 2010, while racing expenses decreased slightly to $11.3 million for the nine months ended September 30, 2011 from $11.4 million for the nine months ended September 30, 2010. Weakness in simulcast betting as well as the closure of several racetracks throughout the country that historically showed EVD’s live race meets was the primary reason for the decline in racing revenues.

Video poker revenues at EVD increased 26%, for the nine months ended September 30, 2011 to $4.3 million compared to $3.4 million for the nine months ended September 30, 2010, which is due primarily to $1.1 million in video poker revenues at our St. Martinville OTB where we began operating video poker machines in September 2010. Consistent with this increase in revenues, EVD experienced an increase of $0.8 million in video poker expenses to $3.5 million for the nine months ended September 30, 2011 from $2.7 million for the nine months ended September 30, 2010 due primarily to video poker operations at our St. Martinville OTB.

Food and beverage revenues increased slightly to $20.4 million from $20.1 million for the nine months ended September 30, 2011 and 2010, respectively. Consistent with revenues, food and beverage expenses were also up slightly to $13.2 million from $13.0 million for the nine months ended September 30, 2011 and 2010, respectively.

Other revenues increased $2.4 million to $11.7 million for the nine months ended September 30, 2011 from $9.3 million for the nine months ended September 30, 2010 due primarily to a $0.7 million increase at ABC resulting from a gain on a financial settlement with the predecessor owner as discussed above and a $1.6 million increase in convenience store revenues at DJW resulting from an increase in fuel prices and number of gallons sold over 2010. Consistent with this increase in gasoline sales, DJW realized an increase in other expenses.

Selling, general and administrative expenses increased 5%, to $43.3 million for the nine months ended September 30, 2011 from $41.2 million for the nine months ended September 30, 2010 due primarily to a $1.6 million increase at PGL in payroll and related expenses as a result of corporate staffing changes made to support the continued growth of the Company with the acquisition of ABC and the current development of the Kansas Star.

Depreciation and amortization expense declined to $21.5 million for the nine months ended September 30, 2011 from $22.1 million for the nine months ended September 30, 2010 due to assets reaching the end of their depreciable lives.

Affiliate management fees were $4.7 million and $4.5 million for the nine months ended September 30, 2011 and 2010, respectively, and relate to management fees paid or accrued to related parties under various management services and consulting agreements at EVD, DJW and ABC.

Pre-opening expenses of $6.9 million for the nine months ended September 30, 2011 relate to start-up costs for the development project at KSC and consist primarily of pre-opening payroll, professional services fees, and regulatory costs.

Segment operating earnings margins for the nine months ended September 30, 2011 were consistent with the nine months ended September 30, 2010 at all properties except ABC, which saw a decline in margins as a result of the soft economy in southern Louisiana and the negative impact in the second quarter of 2011 of the imminent threat of severe flooding with the opening of the Morganza Spillway in May 2011. While ABC was not directly impacted with the flooding, the heavily publicized threat of the magnitude of the flooding had a negative impact on revenues. ABC’s margin was also negatively impacted by additional hurricane insurance coverage that began late in the second quarter of 2010.

Interest expense, net of interest income, increased $6.4 million to $49.4 million for the nine months ended September 30, 2011 from $43.0 million for the nine months ended September 30, 2010 primarily due to the Company’s additional financing activities in February 2011 to support the Kansas Star development project, including the $80.0 million PGL Secured Notes tack-on issuance and the $50.0 million PGL Unsecured Notes tack-on issuance offset by capitalized interest costs of $1.3 million during the three months ended September 30, 2011.

For the nine months ended September 30, 2011, the Company reported a net loss of $6.0 million. Net income for the nine months ended September 30, 2010 was $6.0 million. The decrease in net income is due to (i) an increase in interest expense as a result of the tack-on issuances as discussed above and (ii) pre-opening expenses of $6.9 million during the nine months ended September 30, 2011 related to the Kansas development project.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flows from Operating, Investing and Financing Activities

Our cash balance ~~increased~~decreased $5721.21 million to $7647.80 million at ~~September~~March 3031, ~~2011~~2012 from $1968.61 million at December 31, ~~2010~~2011.

Cash flows from operating activities were $619.61 million during the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012, acompared ~~decrease~~to ofa negative $93.4 million ~~when compared to $16.0 million~~ during the ~~nine~~three months ended ~~September~~March 3031, ~~2010~~2011. ~~This~~The ~~decrease~~increase in cash flows from operating activities is due primarily ~~attributed~~ to ~~approximately~~cash flows at KSC of $626.3 million ~~of pre-opening expenses paid~~ during the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012 offset by a decrease in operating cash flows at PGL due to additional interest expense related to the ~~Kansas~~timing ~~Star~~of ~~development~~the ~~and~~issuance anof ~~additional~~the ~~$3.5~~tack-on ~~million~~notes in the first quarter of ~~interest~~2011. Cash ~~paid~~flows from operating activities during the ~~nine~~first ~~months~~quarter ~~ended~~are ~~September~~impacted ~~30,~~by ~~2011~~the ~~compared~~timing toof ~~the~~our ~~nine~~semi-annual ~~months~~interest ~~ended~~payments ~~September~~on ~~30,~~our ~~2010~~senior ~~due~~notes ~~primarily~~for towhich the ~~additional~~Company ~~debt~~made ~~incurred~~a to$32.5 ~~help~~million ~~finance~~payment and a $26.8 million payment (net of accrued interest received upon the ~~Kansas~~issuance ~~Star~~of ~~development~~the tack-on notes) in February 2012 and 2011, respectively.

Cash flows used in investing activities during the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012 was $6928.19 million consisting primarily of (i) payments of $5925.30 million related to the Kansas Star development project, (ii) ~~payments~~a of $3.1.0 million ~~related~~investment in KSC Lodging as discussed in note 1 to the ~~Kansas~~condensed ~~Management~~consolidated ~~Contract~~financial statements and (iii) outflows of $62.75 million primarily related to the acquisition of slot machines and slot machine conversions and general maintenance capital expenditures. General maintenance capital expenditures are capital expenditures that relate to the replacement of or major renewals and improvements to our existing fixed assets. Major renewals and improvements are capitalized, while maintenance and repairs are expensed as incurred. Examples of general maintenance capital expenditures during the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012, excluding slot machines and slot machine conversions, include improvements to our existing owned and leased buildings and improvements and the replacement of computer equipment.

Cash flows ~~from~~used in financing activities during the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012 of $~~119~~11.63 million reflects $~~138~~4.03 million in gross proceeds from ~~the~~borrowings ~~issuance~~under ~~of $80.0 million in aggregate principal amount of PGL Secured Notes at an issue price of 105% and~~ the ~~issuance~~KSC ofTerm ~~$50.0~~Loan ~~million in aggregate principal amount of PGL Unsecured Notes at an issue price of 108%~~ offset by (i) repayment of the $3.5.0 million outstanding balance on the ~~senior~~PGL ~~credit~~Credit ~~facility~~Facility as of December 31, ~~2010~~2011, (ii) principal payments on debt of $16.~~2 million, (iii) payments of deferred financing costs of $7.3 million primarily related to the $80.~~0 million ~~PGL Secured Notes tack-on issuance~~, ~~the $50.0 million PGL Unsecured Notes tack-on issuance~~ and ~~the Second Amendment to the PGL Credit Facility and~~ (iviii) member distributions of $6.4.7 million. AIncluded ~~$2.1 million decrease~~ in member distributions during the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012 ~~over~~are ~~the~~distributions ~~same~~related ~~period in 2010 relates primarily~~ to athe ~~$1.7~~repurchase ~~million~~of ~~cash~~certain ~~distribution~~previously ingranted ~~September~~and ~~2010,~~vested ~~the~~profits ~~proceeds~~interests offrom ~~which~~certain ~~were~~executive ~~used~~officers ~~by PGP to repay all~~ of the ~~outstanding~~Company ~~principal~~which ~~and~~was ~~interest~~funded onby a ~~loan~~distribution ~~due~~of to$3.0 ~~the~~million ~~Company~~from asPGL ~~discussed in Note 7~~ to ~~the financial statements~~PGP.

As of ~~September~~March 3031, ~~2011~~2012, the Company had no outstanding advances under the PGL Credit Facility. In addition, as of ~~September~~March 3031, ~~2011~~2012, the Company had outstanding letters of credit under the PGL Credit Facility of approximately $1721.17 million, ~~including~~resulting in available borrowings thereunder of $1528.43 million. ~~related~~In toApril ~~the~~2012, ~~construction~~a portion of the ~~off-site~~outstanding ~~utilities~~letters byof credit under the ~~City~~PGL ofCredit Facility related to the Mulvane infrastructure improvements, as discussed further in Note 1 to the condensed consolidated financial statements, were reduced resulting in outstanding letters of credit under the PGL Credit Facility and available borrowings thereunder of $3210.98 million and $39. 2 million, respectively.

Financing Activities

Our financing activities may have several important effects on our future operations and are described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2010~~2011. There have been no significant changes to our financing activities during the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012 other than that as previously disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2010 and (i) the issuance of $80.0 million in aggregate principal amount of PGL Secured Notes and $50.0 million in aggregate principal amount of PGL Unsecured Notes in February~~ 2011~~, (ii) the entering into of the Second Amendment to the PGL Credit Facility in February 2011 and (iii) the entering into of the KSC Term Loan and slot vendor financing agreements~~.

General

In addition to our cash on hand, we currently have the following sources of funds for our business: (i) cash flows from operations, and (ii) available borrowings under the PGL Credit Facility ~~and (iii) available borrowings under the KSC Term Loan~~. Contractual restrictions and other provisions contained in the agreements governing our consolidated indebtedness, including the PGL Credit Facility and the indentures governing the PGL Notes, limit or restrict our ability to use the funds available to us through, among other things, limitations on capital expenditures, investments, and distributions. We do not anticipate these restrictions will have an impact on our ability to meet our cash obligations.

24As of March 31, 2012, capital expenditures for the next 12 months, exclusive of the Kansas Star development project are expected to be approximately $5.5 million including payments to a third party related to contingent development payments in an amount equal to 1% of KSC’s segment operating earnings. Capital expenditures and pre-opening costs related to the Kansas Star development for the next twelve months are expected to be $55.0 million (excluding any capitalized interest, capital expenditures to be financed with anticipated slot vendor financing by the Company and anticipated financing of the hotel and certain off-site utilities by third parties).

AsThe ofCompany’s ~~September~~debt ~~30,~~maturities ~~2011, capital expenditures~~ for the next 12 months, ~~excluding the Kansas Star development project~~ are expected to be approximately $921.06 million, ~~plus~~which ~~payments~~is tocomprised aof ~~third~~(i) ~~party~~$19.9 ~~related~~million towhich ~~contingent~~is ~~land~~currently ~~payments~~recorded in anthe ~~amount~~Company’s ~~equal~~financial tostatements 1%at ofMarch ~~KSC’s~~31, ~~segment~~2012 ~~operating~~and ~~earnings~~(ii) ~~commencing~~an ~~upon~~additional ~~opening~~$1.7 ofmillion ~~the~~related ~~casino~~ to ~~the~~anticipated ~~public.~~slot ~~Capital~~vendor ~~expenditures~~financing ~~and~~at ~~pre-opening~~KSC ~~costs~~of ~~related~~$7.2 tomillion in the ~~Kansas~~fourth ~~Star~~quarter ~~development~~2012. During ~~for~~ the next ~~twelve~~12 months, ~~are~~the ~~expected~~Company anticipates making member distributions to bePGP of approximately $836.3 million for the following items: (~~excluding~~i) ~~any~~certain ~~capitalized~~consulting ~~interest,~~and ~~capital~~financial ~~expenditures~~advisory services related to bePGP ~~financed~~development ~~with~~expenses, ~~slot~~(ii) board fees and ~~equipment~~actual ~~financing~~out-of-pocket expenses incurred by ~~the~~members ~~Company~~of ~~and~~the ~~financing~~Board of ~~the~~Managers ~~hotel~~in ~~and~~their ~~certain~~capacity ~~off-site~~as ~~utilities~~board bymembers, ~~third~~and ~~parties~~(iii) tax, ~~including~~accounting, ~~approximately~~licensure, ~~$43~~legal, ~~million~~and ~~for~~administrative ~~the~~costs ~~completion~~and expenses of ~~the~~PGP. The ~~interim~~Company ~~facility~~may ~~which~~make isadditional ~~expected~~member distributions to ~~open~~PGP ~~with~~during a2012 ~~soft~~related ~~opening~~to inthe ~~December~~redemption ~~2011~~of ~~and~~profits ainterests ~~grand~~held ~~opening~~by insenior ~~January~~management, ~~2012~~depending upon the determination of the Board that certain conditions precedent have been satisfied.

OnWe ~~May~~plan ~~17, 2011, KSC executed an agreement with a third party hotel developer~~ to ~~develop~~finance the ~~300~~foregoing ~~room~~expected ~~hotel~~cash atrequirements ~~the~~with: ~~Kansas~~(i) ~~Star. KSC~~a ~~will~~portion ~~contribute~~of ~~$1.0~~the ~~million,~~available ~~land,~~cash ~~and~~on ~~certain~~hand ~~site~~(excluding ~~work~~amounts needed for ~~the~~normal ~~project~~operations); ~~and~~(ii) ~~the~~cash ~~hotel~~generated ~~developer~~from ~~will~~operations; ~~finance, construct, own~~ and ~~operate~~(iii) ~~the~~if ~~hotel. On June 1~~necessary, ~~2011,~~available ~~KSC~~borrowings ~~entered~~under ~~into~~ the ~~KSC~~PGL ~~Term~~Credit ~~Loan which provides for financing of up to $14~~Facility.0 There ~~million~~can ofbe ~~furniture,~~no ~~fixtures~~assurances ~~and~~that ~~equipment~~such ~~purchases~~projects ~~during~~will ~~the~~be ~~interim~~completed ~~phase~~in of the ~~project. In~~estimated ~~addition,~~time ~~the~~frames ~~Company~~or ~~has agreements with various slot vendors to finance approximately $21.4 million of slot machines over a period of twelve months~~ at ~~zero percent financing for~~ the ~~interim~~estimated ~~phase of the project~~costs.

~~The~~Based ~~Company’s~~on ~~debt~~our ~~maturities~~cash ~~for~~on ~~the~~hand, ~~next~~expected 12cash ~~months~~flows ~~are~~from ~~expected~~operations toand beour ~~approximately~~available ~~$17.9~~sources ~~million~~of financing, ~~which~~we isbelieve ~~comprised~~we ~~of:~~will ~~(i)~~have ~~$4.2~~adequate ~~million~~liquidity ~~which~~to is(i) ~~currently~~satisfy ~~recorded~~our incurrent ~~the~~operating ~~Company’s~~needs ~~financial~~at ~~statements~~each atof ~~September~~our ~~30,~~gaming ~~2011~~properties, (ii) ~~$12.3~~pay ~~million~~all indevelopment ~~slot~~costs ~~vendor~~associated ~~financing~~with atthe ~~KSC~~Kansas ~~expected~~Star todevelopment beas ~~incurred~~they inbecome ~~the fourth quarter 2011~~due, and (iii) ~~$1.4 million under the KSC Term Loan due~~ to ~~expected~~service ~~borrowings~~our inoutstanding ~~the~~indebtedness ~~fourth quarter 2011. The Company’s member distributions to PGP~~ for the next 12 months ~~are expected to be approximately $4~~.~~0 million.~~

WeOur ~~plan~~level toof ~~finance~~indebtedness ~~the~~will ~~foregoing~~have ~~expected~~several ~~cash~~important ~~requirements~~effects ~~with~~on our future operations including, but not limited to, the following: (i) a significant portion of ~~the~~our ~~available~~ cash onflow ~~hand~~from ~~(excluding~~operations ~~amounts~~will ~~needed~~be ~~for~~required ~~normal~~to ~~operations~~pay ~~and~~interest ~~including~~on ~~the~~our ~~gross~~indebtedness ~~proceeds~~and ~~from~~ the ~~$80.0~~indebtedness ~~million~~of ~~and~~our ~~$50.0~~subsidiaries; ~~million~~(ii) ~~PGL~~the ~~Secured~~financial ~~Notes~~covenants ~~and~~contained ~~PGL~~in ~~Unsecured~~the ~~Notes~~agreements ~~issuances,~~governing ~~respectively);~~such ~~(ii)~~indebtedness ~~cash~~will ~~generated~~require ~~from~~us ~~operations;~~to ~~(iii)~~meet ~~slot~~certain ~~vendor~~financial ~~financing~~tests and ~~available~~may ~~borrowings~~limit ~~under~~our ~~the~~respective ~~KSC~~abilities ~~Term~~to ~~Loan~~borrow ~~for~~additional ~~the~~funds ~~Kansas~~or ~~Star~~to ~~development~~transfer offunds ~~$37.9~~to ~~million~~PGP ~~(as~~or ~~allowed~~dispose ~~under~~of assets; (iii) our ~~existing~~ability ~~borrowing~~to ~~agreements);~~obtain ~~and~~additional ~~(iv)~~financing ifin ~~necessary~~the future for working capital, ~~available~~capital ~~borrowings~~expenditures, ~~under~~acquisitions ~~the~~or ~~PGL~~general ~~Credit~~corporate ~~Facility. There~~purposes ~~can~~may be noimpaired; ~~assurances~~and ~~that~~(iv) our ~~such~~ability ~~projects~~to ~~will~~adapt beto ~~completed~~changes in the ~~estimated~~gaming ~~time~~or ~~frames~~horse orracing atindustries that affect the ~~estimated~~markets ~~costs~~in which we operate could be limited.

Based on our cash on hand, expected cash flows from operations and our available sources of financing, we believe we will have adequate liquidity for the next 12 months to (i) satisfy our current operating needs at each of our gaming properties, (ii) pay all development costs associated with the Kansas Star development as they become due and (iii) to service our outstanding indebtedness.

Our level of indebtedness will have several important effects on our future operations including, but not limited to, the following: (i) a significant portion of our cash flow from operations will be required to pay interest on our indebtedness and the indebtedness of our subsidiaries; (ii) the financial covenants contained in the agreements governing such indebtedness will require us to meet certain financial tests and may limit our ability to borrow additional funds or to transfer funds to PGP or dispose of assets; (iii) our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions or general corporate purposes may be impaired; and (iv) our ability to adapt to changes in the gaming or horse racing industries that affect the markets in which we operate could be limited.

CONTRACTUAL OBLIGATIONS

A table of our contractual obligations as of December 31, ~~2010~~2011 was included in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2010~~2011. There have been no significant changes to our contractual obligations during the ~~nine~~three months ended ~~September 30~~March 31, ~~2011, except under the Kansas Management Contract we are obligated to have made a minimum investment in infrastructure related to the Kansas Star development of $225~~2012.0 million by January 14, 2015, inclusive of any third party investments but excluding the $25.0 million privilege fee, which was paid in 2010. Phase 1A of the project is expected to cost approximately $182 million and is expected to be completed by December 2011, Phase 1B is expected to cost approximately $78 million and is expected to be completed by January 2013 and Phase 2 is expected to cost approximately $54 million and is expected to be completed by January 2015. As of September 30, 2011, the Company has incurred $122 million in capitalized and start-up costs, excluding capitalized interest, related to that project.

OFF-BALANCE SHEET TRANSACTIONS

Other than as described in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2010~~2011, we do not maintain any off-balance sheet transactions, arrangements, obligations or other relationships with unconsolidated entities or others that are reasonably likely to have a material current or future effect on our financial condition, cash flows, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in accordance with ~~GAAP~~accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We periodically evaluate our policies and the estimates and assumptions related to these policies.

Understanding our critical accounting policies and related risks is important in evaluating our financial condition and results of operations. The critical accounting policies used in preparation of the Company’s financial statements involve a significant use of management judgment on matters that are inherently uncertain and are described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. If actual results differ significantly from management’s estimates, there could be a material effect on our financial condition, results of operations and cash flows. Management regularly discusses the identification and development of these critical accounting policies with the Audit Committee of the Board of Managers. There have been no significant changes to the Company’s critical accounting policies during the nine months ended September 30, 2011.22

Understanding our critical accounting policies and related risks is important in evaluating our financial condition and results of operations. The critical accounting policies used in preparation of the Company’s financial statements involve a significant use of management judgment on matters that are inherently uncertain and are described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011. If actual results differ significantly from management’s estimates, there could be a material effect on our financial condition, results of operations and cash flows. Management regularly discusses the identification and development of these critical accounting policies with the Audit Committee of the Board of Managers. There have been no significant changes to the Company’s critical accounting policies during the three months ended March 31, 2012.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to certain market risks inherent in our financial instruments that arise from transactions entered into in the normal course of business. Market risk is the risk of loss from adverse changes in market prices and interest rates. We do not currently utilize derivative financial instruments to hedge market risk. We also do not hold market risk sensitive financial instruments for trading purposes.

We are exposed to interest rate risk due to changes in interest rates with respect to our long-term variable interest rate debt borrowings under the PGL Credit Facility. As of ~~September~~March 3031, ~~2011~~2012, the Company had no outstanding borrowings under the PGL Credit Facility. We have estimated our market risk exposure using sensitivity analysis and have defined our market risk exposure as the potential loss in future earnings and cash flows with respect to interest rate exposure of our market risk sensitive instruments assuming a hypothetical increase in market rates of interest of 100 basis points. Assuming we borrow the maximum amount allowed under the PGL Credit Facility (currently an aggregate amount of $50.0 million at ~~September~~March 3031, ~~2011~~2012) and if market rates of interest on our variable rate debt increase by 100 basis points, the estimated additional annual interest expense would be approximately $0.5 million.

26We are also exposed to fair value risk due to changes in interest rates with respect to our long-term fixed interest rate investment available for sale, note receivable and debt borrowings. Our fixed rate investment available for sale is recorded at fair value, and therefore, is directly impacted by changes in interest rates and market risks. Our fixed rate note receivable and fixed rate debt instruments are not generally affected by a change in the market rates of interest, and therefore, such changes generally do not have an impact on future earnings. However, future earnings and cash flows may be impacted by changes in interest rates related to a refinancing of our note receivable and future indebtedness incurred to fund repayments as such fixed rate debt matures. The following table contains information relating to our fixed rate investment available for sale, note receivable, obligation under assessment arrangements, and debt borrowings as of March 31, 2012 (dollars in thousands):

We are also exposed to fair value risk due to changes in interest rates with respect to our long-term fixed interest rate investment available for sale, note receivable and debt borrowings. Our fixed rate investment available for sale is recorded at fair value, and therefore, is directly impacted by changes in interest rates and market risks. Our fixed rate note receivable and fixed rate debt instruments are not generally affected by a change in the market rates of interest, and therefore, such changes generally do not have an impact on future earnings. However, future earnings and cash flows may be impacted by changes in interest rates related to a refinancing of our note receivable and future indebtedness incurred to fund repayments as such fixed rate debt matures. The following table contains information relating to our fixed rate investment available for sale, note receivable, obligation under minimum assessment agreement and debt borrowings as of September 30, 2011 (dollars in thousands):

Description	Maturity	Interest Rate		Carrying Value	Fair Value
Investment available for sale	2012 - 2037	7.5	%	$ 19,609	$ 19,609	(1)
Note receivable	2012 - 2014	14.5	%	2,417	2,417	(2)
8 ⅜% senior secured notes	Aug 15, 2015	8.375	%	319,661	338,640	(2)
10 ¾% senior unsecured notes	Aug 15, 2017	10.75	%	352,407	391,831	(2)
Senior secured credit facility	January 15, 2015	6	% (3)	-	-
Term loans	2013 - 2016	6.5	%	12,137	12,137	(2)
Notes payable, capital lease obligations and other financial instruments	2012 - 2015	6.0% - 14.4	%	17,019	17,446	(2)
Obligation under assessment arrangements	2012 - 2037	3.0% - 8.0	%	34,532	40,380	(2)

Description	Maturity	Interest Rate		Carrying Value	Fair Value
Investment available for sale	2011 - 2037	7.5	%	$ 19,341	$ 19,341	(1)
Note receivable	2011 - 2014	14.5	%	2,382	2,467	(2)
8 ⅜% senior secured notes	Aug 15, 2015	8.375	%	319,632	319,200	(2)
10 ¾% senior unsecured notes	Aug 15, 2017	10.75	%	352,250	346,125	(2)
Senior secured credit facility	January 15, 2015	6	% (3)	-	-
Term loans	2013 - 2016	6.5	%	3,981	3,981	(2)
Notes payable, capital lease obligations and other financial instruments	2011 - 2015	6.0% - 14.4	%	3,870	4,033	(2)
Obligation under Minimum Assessment Agreement	2011 - 2037	8	%	20,224	25,938	(2)

___________________

(1) Our investment available for sale is not traded. The estimate of the fair value of such investment was determined using a combination of current market rates and estimates of market conditions for instruments with similar terms, maturities, and degrees of risk and an estimate from an independent source of what market participants would use in pricing the bonds. Due to the illiquid nature of the investment, changes in market risks could have a significant impact on the fair value.

(2) Represents fair value as of ~~September~~March 3031, ~~2011~~2012 based on current market interest rates and estimates of market conditions for instruments with similar terms, maturities, and degrees of risk.

(3) Such borrowings are made under variable interest rates. The interest rate listed is as of ~~September~~March 3031, ~~2011~~2012.

ITEM 4. CONTROLS AND PROCEDURES

As required by Rule 13a-15(b) under the Securities Exchange Act, and in connection with the preparation of this quarterly report on Form 10-Q, our management, including the Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the design and operation of our disclosure controls and procedures. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer each concluded that the design and operation of the disclosure controls and procedures were effective as of ~~September~~March 3031, ~~2011~~2012, in providing assurance that information required to be disclosed in reports we file or submit is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure and in providing reasonable assurance that the information is recorded, processed, summarized and reported within the time periods specified in the Security and Exchange Commission’s rules and forms.

During the three months ended ~~September~~March 3031, ~~2011~~2012, there have been no changes that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

OnNeither ~~May 13, 2011,~~ the ~~State~~Company ofnor ~~Iowa~~its ~~moved~~subsidiaries ~~"in~~are ~~the~~parties ~~interest~~to ofany ~~justice"~~pending tolegal ~~dismiss~~proceedings ~~misdemeanor~~other ~~charges~~than ~~filed~~litigation ~~against~~arising ~~PGP,~~in ~~its~~the ~~Chief~~normal ~~Executive~~course ~~Officer~~of ~~and~~business. Management ~~Chief~~does ~~Operating~~not ~~Officer~~believe ~~for~~that ~~alleged~~adverse ~~violations~~determinations ofin ~~State~~any ofor ~~Iowa campaign~~all ~~contribution~~such ~~laws.~~litigation ~~The~~would ~~Polk~~have ~~County~~a ~~District~~material ~~Court~~effect ~~approved~~on the ~~motion~~Company’s ~~and~~financial ~~ordered~~condition, ~~the~~results ~~complete~~of ~~dismissal~~operations ofor ~~all~~cash ~~charges~~flows.

Neither the Company nor its subsidiaries are parties to any pending legal proceedings other than litigation arising in the normal course of business. Management does not believe that adverse determinations in any or all such litigation would have a material adverse effect on the Company’s financial condition, results of operations or cash flows.24

ITEM 5. OTHER INFORMATION

On January 1, 2012, we adopted 2011-5, Comprehensive Income (Topic 220): Presentation of Comprehensive Income (ASU 2011-05) which requires presentation of the components of net income and other comprehensive income either as one continuous statement or as two consecutive statements and eliminates the option to present components of other comprehensive income as part of the statement of changes in member’s equity. The following presents the retrospective application of ASU 2011-05 for each of the three years ended December 31:

PENINSULA GAMING, LLC

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

	2011		2010		2009

REVENUES:
Casino	$	308,080	$	293,619	$	258,427
Racing		14,752		14,961		16,507
Video poker		5,677		4,694		5,322
Food and beverage		27,127		26,272		23,418
Other		15,176		12,483		10,580
Less promotional allowances		(38,554)		(36,671)		(27,974)
Total net revenues		332,258		315,358		286,280
EXPENSES:
Casino		125,319		120,633		107,106
Racing		14,544		14,417		15,360
Video poker		4,599		3,717		3,908
Food and beverage		17,518		16,980		16,471
Other		10,342		8,584		7,484
Selling, general and administrative		58,267		54,753		45,564
Depreciation and amortization		29,427		29,413		24,651
Pre-opening expense		10,136		33		6
Development expense		—		28		1,211
Affiliate management fees		6,185		5,756		5,318
Loss on disposal of assets		179		184		1,770
Total expenses		276,516		254,498		228,849
INCOME FROM OPERATIONS		55,742		60,860		57,431
OTHER INCOME (EXPENSE):
Interest income		2,350		2,249		2,010
Interest expense, net of amounts capitalized		(68,302)		(59,598)		(50,407)
Loss from equity affiliate		(91)		(29)		—
Loss on early retirement of debt		—		—		(22,475)
Total other expense		(66,043)		(57,378)		(70,872)
NET (LOSS) INCOME		(10,301)		3,482		(13,441)

OTHER COMPREHENSIVE INCOME:
Unrealized gain on investment available for sale		833		3,657		6,740
Total other comprehensive income		833		3,657		6,740

COMPREHENSIVE (LOSS) INCOME	$	(9,468)	$	7,139	$	(6,701)

ITEM 6. EXHIBITS

(a) Exhibits

Exhibit Number		Description
31.1		Certification of M. Brent Stevens, Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 15d-l4 of the Securities Exchange Act, as amended.
31.2		Certification of Natalie A. Schramm, Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 15d-14 of the Securities Exchange Act, as amended.
32.1		Certification pursuant to 18 U.S.C. Section 1350, as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS 101.SCH 101.CAL 101.DEF 101.LAB 101.PRE		XBRL Instance Document XBRL Taxonomy Extension Schema XBRL Taxonomy Extension Calculation Linkbase XBRL Taxonomy Extension Definition Linkbase XBRL Taxonomy Extension Label Linkbase XBRL Taxonomy Extension Presentation Linkbase

28101.INS 101.SCH 101.CAL 101.DEF 101.LAB 101.PRE XBRL Instance Document XBRL Taxonomy Extension Schema XBRL Taxonomy Extension Calculation Linkbase XBRL Taxonomy Extension Definition Linkbase XBRL Taxonomy Extension Label Linkbase XBRL Taxonomy Extension Presentation Linkbase

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the ~~Registrant~~Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, onin ~~November~~the 10City of Dubuque, ~~2011~~State of Iowa on May 4, 2012.

	PENINSULA GAMING, LLC

	By:	/s/ M. Brent Stevens
		M. Brent Stevens
		Chief Executive Officer

	By:	/s/ Natalie A. Schramm
		Natalie A. Schramm
		Chief Financial Officer
		(principal financial and principal accounting officer)

	By:	/s/ Jonathan Swain
		Jonathan Swain
		Chief Operating Officer

	PENINSULA GAMING CORP.

	By:	/s/ M. Brent Stevens
		M. Brent Stevens
		Chief Executive Officer

	By:	/s/ Natalie A. Schramm
		Natalie A. Schramm
		Chief Financial Officer
		(principal financial and principal accounting officer)

	By:	/s/ Jonathan Swain
		Jonathan Swain
		Chief Operating Officer

2927

	DIAMOND JO, LLC

	By:	/s/ M. Brent Stevens
		M. Brent Stevens
		Chief Executive Officer

	By:	/s/ Natalie A. Schramm
		Natalie A. Schramm
		Chief Financial Officer
		(principal financial and principal accounting officer)

	By:	/s/ Jonathan Swain
		Jonathan Swain
		Chief Operating Officer

DIAMOND JO WORTH , LLC By: /s/ M. Brent Stevens M. Brent Stevens Chief Executive Officer By: /s/ Natalie A. Schramm Natalie A. Schramm Chief Financial Officer (principal financial and principal accounting officer) By: /s/ Jonathan Swain Jonathan Swain Chief Operating Officer

3028

	THE OLD EVANGELINE DOWNS, L.L.C.

	By:	/s/ M. Brent Stevens
		M. Brent Stevens
		Chief Executive Officer

	By:	/s/ Natalie A. Schramm
		Natalie A. Schramm
		Chief Financial Officer
		(principal financial and principal accounting officer)

	By:	/s/ Jonathan Swain
		Jonathan Swain
		Chief Operating Officer

	BELLE OF ORLEANS, L.L.C.

	By:	/s/ M. Brent Stevens
		M. Brent Stevens
		Chief Executive Officer

	By:	/s/ Natalie A. Schramm
		Natalie A. Schramm
		Chief Financial Officer
		(principal financial and principal accounting officer)

	By:	/s/ Jonathan Swain
		Jonathan Swain
		Chief Operating Officer

	KANSAS STAR CASINO, LLC

	By:	/s/ M. Brent Stevens
		M. Brent Stevens
		Chief Executive Officer

	By:	/s/ Natalie A. Schramm
		Natalie A. Schramm
		Chief Financial Officer
		(principal financial and principal accounting officer)

	By:	/s/ Jonathan Swain
		Jonathan Swain
		Chief Operating Officer

3129

Filing Compare · PENINSULA GAMING CORP.