TO

                               BUYOUT AND RELEASE

                      (ARGOVITZ - SHINGLE SPRINGS PROJECT)



     THIS CONSENT AND AGREEMENT TO BUYOUT AND RELEASE is made and entered into

this 30th day of January, 2003, by and among Jerry A. Argovitz ("Argovitz")

Lakes KARSS-Shingle Springs, L.L.C., a Delaware limited liability company (the

"Project Company"), Lakes Entertainment, Inc. f/k/a Lakes Gaming, Inc. ("Lakes

Entertainment"), and Lakes Shingle Springs, Inc. (hereinafter referred to as

"LASS" and which entity is a wholly owned subsidiary of Lakes Gaming and

Resorts, LLC which is a wholly owned subsidiary of Lakes Entertainment).



                                    RECITALS



WHEREAS, Kean Argovitz Resorts-Shingle Springs, L.L.C. ("KARSS" and a limited

liability company owned by Kevin M. Kean ("Kean") and Argovitz) previously

entered into a Development Agreement, Management Agreement and related documents

(the "Original Development Documents") with the Shingle Springs Band of Miwok

Indians (the "Tribe") related to the design, construction and management of a

new Indian gaming facility on its tribal lands (the "Project");



WHEREAS, pursuant to a letter agreement dated June 21, 1999 (the "Letter

Agreement") between KARSS and Lakes Entertainment, such parties agreed to form a

joint venture to design, construct and manage the Project and in connection

therewith executed or caused to be executed each of the documents described

below (collectively with the Letter Agreement, the "Joint Venture Documents"):



      (i)   LASS and KARSS created and are the sole members of the Project

            Company pursuant to that certain Operating Agreement dated July 29,

            1999 (the "Operating Agreement");



      (ii)  Pursuant to that certain Assignment and Assumption Agreement dated

            July 29, 1999 between LASS and the Project Company, KARSS assigned

            to the Project Company all of KARSS's right, title and interest in

            and to the Original Development Documents;



      (iii) Pursuant to that certain Assignment and Assumption Agreement and

            Consent to Assignment and Assumption dated July 29, 1999, among

            Lakes Entertainment, LASS and KARSS, Lakes Entertainment assigned to

            LASS all of Lakes Entertainment's right, title and interest in and

            to the Letter Agreement;



      (iv)  Pursuant to that certain Guaranty dated July 29, 1999 executed by

            Lakes Entertainment in favor of KARSS (the "Guaranty"), Lakes

            Entertainment





{PAGE}





            guaranteed the obligations of LASS under the Operating Agreement and

            certain other documents described with specificity therein;



      (v)   Pursuant to that certain Management Agreement dated July 29, 1999

            between LASS and the Project Company (the "LASS Management

            Agreement"), the parties agreed that LASS would provide certain

            management services on behalf of the Project Company with respect to

            the Project;



      (vi)  Pursuant to the Letter Agreement and the Operating Agreement, LASS

            has extended certain loans to the Project Company referred to as the

            "Development Loan" and "Equity Advance" which are evidenced by a

            certain Promissory Note dated July 29, 1999 made payable by the

            Project Company to LASS in (the "Project Company Note"), which Note

            is secured by that certain Security Agreement dated July 29, 1999

            executed by the Project Company in favor of LASS, pursuant to which

            the Project Company granted LASS a security interest in all of its

            assets; such Note is also sometimes referred to as the "Interim

            Promissory Note"; and



      (vii) LASS extended a $970,000 loan to KARSS the repayment of which is

            evidenced by certain Promissory Note dated July 29, 1999 made

            payable by KARSS to LASS in the original principal amount of

            $970,000 (the "KARSS Note"), which Note is secured by that certain

            Pledge Agreement dated July 29, 1999 executed by KARSS in favor of

            LASS (the "KARSS Pledge Agreement") pursuant to which KARSS granted

            LASS a security interest in all of KARSS membership interest and

            related rights in and to the Project Company; and



WHEREAS, the Original Development Documents were amended and restated pursuant

to that certain Memorandum of Agreement Regarding Gaming Development and

Management Agreement (the "Amended Management Agreement") and related documents

dated as of May 5, 2000 (as heretofore and hereafter amended, the Amended

Management Agreement and such related documents shall be collectively referred

to as the "Amended Development Documents");



WHEREAS, to achieve regulatory approvals in a timely manner for the Amended

Management Agreement and related documents and agreements, if necessary, related

to the Project from the National Indian Gaming Commission (the "NIGC") and other

applicable regulatory authorities (the "Regulatory Approvals"), KARSS and

Argovitz have agreed to enter into this Agreement;



WHEREAS, the parties hereto believes that its execution of this Agreement is in

the best interest of the Tribe to preserve and protect the Project, from which

all tribal members should benefit, and in order to move the Project forward in a

timely manner without delay, the parties hereto desire to enter into this

Agreement; and



WHEREAS, Lakes Entertainment and Lakes Resorts, to the best of their knowledge

and based upon conversations with staff of the NIGC, believe this Agreement will

be acceptable to the









                                       2

{PAGE}



NIGC and the NIGC will take no affirmative action to nullify or otherwise

disrupt this Agreement.



NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency

of which is hereby acknowledged and to induce the Project Company, LASS, Lakes

Entertainment and KARSS to enter into the KARSS Buyout Agreement (as hereinafter

defined), the parties agree as follows:



1.    BUYOUT/RIGHT OF REPURCHASE. Pursuant to that certain Buyout and Release

Agreement dated January 30, 2003 between KARSS, the Project Company, Lakes

Entertainment and LASS (the "KARSS Buyout Agreement") and for and in

consideration of $1.00, KARSS has absolutely sold and conveyed to LASS all of

KARSS's right, title and interest in the Project Company and each of the Joint

Venture Documents (the "Transferred Rights"). The parties hereto acknowledge and

agree that if and when Argovitz has obtained all necessary Regulatory Approvals

so as to permit such party to be a member of the Project Company, then Argovitz

shall upon providing written notice thereof to LASS (each such date hereinafter

referred to as a "Regulatory Approval Notice Date") have the right for the

payment of $1.00 to repurchase the Transferred Rights in lieu of the making any

elections under Section 2 hereof and Argovitz shall be admitted to the Project

Company on substantially the same terms as are applicable to KARSS under the

Joint Venture Documents on the date hereof; provided further however, that (a)

Argovitz shall respectively only be entitled to a fifteen percent (15%)

ownership interest and related financial rights in the Project Company under the

Joint Venture Documents, (b) Argovitz shall (i) assume fifty percent (50%) of

the then outstanding obligations under the KARSS Note by executing a new

promissory note in favor of LASS, which Note shall continue to accrue interest

from the date hereof, be secured and otherwise be repayable on the same terms

and conditions currently applicable to KARSS under the terms of the KARSS Note,

the KARSS Pledge Agreement and the other applicable Joint Venture Documents,

including without limitation, that the repayment of such obligation will be

secured by a first priority security interests upon Argovitz's membership

interest and rights in the Project Company, and (ii) as a further condition

hereto, Argovitz shall assume 50% of the "KAR Note" as contemplated by Section

1(b) of the Argovitz Jamul Consent and the same shall be cross-collateralized

and repayable by the same collateral under the KARSS Pledge Agreement described

above on the same terms as are provided under Section 23 of the "Letter

Agreement" referenced in the Recitals to this Agreement, and (c) Argovitz shall

not be entitled to any share of profits or income of the Project Company

accruing from the Project or any other source prior to the applicable Regulatory

Approval Notice Date. As of September 30, 2002, fifty percent of the KARSS Note

obligation would have equaled principal of $485,000 and accrued interest of

$112,038.50.



2.    SALE OF ASSET ELECTION. If Agrovitz shall so elect in a written notice to

LASS at any time prior to exercising his rights under Section 1 hereof (such

notification date hereinafter referred to as a "Election Date"), his rights

under Section 1 hereof shall terminate and in lieu thereof LASS shall pay to

Argovitz, the "Purchase Amount" as set forth below as the sole payment for his

past interest in the Project and Project Company. The "Purchase Amount" shall be

equal to $1,000,000 for each year or portion thereof (and such annual amount

shall be prorated based on a









                                       3

{PAGE}





365 day year in which both of the following conditions were satisfied for only

part of any calendar year) that both of the following conditions are satisfied:

(a) Class III Gaming is being conducted at the new Project and (b) during such

period either the Project Company is the manager of the Project (with LASS or

another Subsidiary of Lakes Entertainment continuing as a member of such entity)

or LASS or another Subsidiary of Lakes Entertainment is the direct manager of

the Project; provided however that (i) such amounts shall be payable only during

the initial term of the Amended Management Agreement which term may be up to

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