Landrys Restaurants (LNY) SC 13E3/A Going private transaction (amended)

Presentation

to

the

Special

Committee

–

May

12,

2008

Project Lasso

Exhibit 99.1(c)(2)

PROJECT LASSO

Disclaimer

This presentation and the information contained herein is confidential and has been prepared for the benefit and use of the

Special Committee (the “Special Committee”) of the Board of Directors of Lasso (the “Company”) in order to assist the

Special Committee in evaluating, on a preliminary basis, the proposal the Company has received and does not convey any

right of publication or disclosure, in whole or in part, to any other party without the prior written consent of Cowen.  This

presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in

conjunction with, the oral briefing provided by Cowen.

The information in this presentation is based upon any management forecasts supplied to Cowen and reflects prevailing

conditions and Cowen’s views as of this date, all of which are accordingly subject to change.  Cowen’s estimates constitute

Cowen’s judgment and should be regarded as indicative, preliminary and for illustrative purposes only.  In preparing this

presentation, Cowen has with your consent, assumed and relied, without independent investigation, upon the accuracy and

completeness of all financial and other information provided to us by the management of the Company or which is publicly

available.  Cowen’s analysis is not and does not purport to be appraisals of the assets, stock or business of the Company or

any other entity.  Cowen does not make representations as to the actual value which may be received in connection with a

transaction nor the legal, tax or accounting effects of consummating a transaction.  Unless expressly contemplated hereby,

the information in this presentation does not take into account the effects of a possible transaction or transactions involving

an actual or potential change of control, which may have significant valuation and other effects.  This presentation does not

represent a fairness opinion, recommendation, valuation or opinion of any kind.

The information contained herein, as well as any other advice, services or other information provided to you by Cowen, is

being provided in connection with an actual or potential mandate or engagement and may not be used or relied upon in

any manner, nor are any duties or obligations created with respect thereto, except and to the extent specifically set forth in

a written engagement letter or other agreement with Cowen.  This presentation does not constitute a commitment by

Cowen or any of its affiliates to underwrite, subscribe for or place any securities to extend or arrange credit or to provide

any other service.

Cowen policy mandates that no Cowen employee may directly or indirectly offer a Company favorable research or threaten

to change research as consideration or inducement for the receipt of business or compensation.

1

PROJECT LASSO

Table of Contents

I.

Executive Summary

2

II.

Restaurant and Gaming Industry Trends

4

III.

Lasso Observations

10

IV.

Valuation Overview

28

V.

Strategic Alternatives Overview

56

A.

Status Quo

B.

Divestiture of a Division

C.

Sale/Leaseback

D.

Sale of the Company

VI.

Questions and Discussion

78

VII.

Appendix

79

A.

Weighted Average Cost of Capital

B.

Additional Operating Analysis

Page

I.

Executive Summary

3

PROJECT LASSO

Executive Summary

On January 28, 2008, Tilman J. Fertitta, Lasso’s Chairman, President and CEO,

submitted a $23.50 per share proposal for Lasso and the Special Committee was formed

to review the proposal

On

March

31,

2008,

Cowen

was

engaged

by

the

Special

Committee

to

evaluate

available

strategic

alternatives

that

could

maximize

shareholder

value

for

Lasso

On

April

4,

2008,

Mr.

Fertitta

revised

his

proposal

for

Lasso

to

$21.00

per

share

Since our engagement, we have performed the following:

Conducted due diligence on Lasso, including two days in Houston with Lasso senior

management

Reviewed documents provided by Lasso's management team and Lasso's advisor

Met with the respective SVP/COOs of the restaurant divisions

Reviewed selected operating properties

Reviewed various analyses on the value of Lasso’s real estate

Met with Lasso’s advisors to discuss current operations

In the following strategic alternatives analysis, we have provided:

An overview of the current industry trends

A review of Lasso’s business, operations and financial results

A summary of our valuation analysis for Lasso

A

review

of

the

potential

strategic

alternatives

that

we

believe

are

available

to

Lasso, with potential benefits and considerations for each alternative

II.

Restaurant and Gaming Industry

Trends

5

PROJECT LASSO

Current Restaurant Market Trends

The restaurant industry has come under increased pressure over the last several

quarters amid growing fear of a prolonged economic slowdown, falling housing prices, a

tightened credit market and resurgent inflation

Input costs for restaurant companies, such as food, wages and energy, have increased

materially over the last few quarters

Although

restaurant

companies

realized

4.0%

menu

price

increases

in

Q1

2008

(just

short of a 17-year high of 4.1%), the total increase for restaurant input costs was 6.2%

in Q1 2008, resulting in (2.2%) relative pricing power (“RPP”)

Additionally, same-store sales results declined across most subsectors throughout 2007

and continue to be weak in 2008

Same-store sales for casual dining companies have been hit particularly hard and

have been below the broader restaurant universe since the beginning of 2004

Earnings estimates for restaurant companies have been reduced significantly to reflect

the challenging environment

Restaurant stocks traded down, on average, approximately 22.0% in 2007 and another

7.0% 2008 year-to-date

With the decrease in restaurant stock prices, EBITDA multiples have converged to

historical averages that the industry has not seen in several years, with many stocks

trading

in

the

5.0x

-

7.0x

range

The casual dining segment is currently trading below 10-year average historical

EBITDA multiples

Deal activity in both the equity and M&A markets has slowed considerably in recent

months, due mainly to weak overall industry performance, a tightened credit market

and concerns about future performance because of constrained consumer spending

6

PROJECT LASSO

Declining Relative Pricing Power

Despite Q1 2008 menu price increases of 4.0% (close to a 17-year high of 4.1%), restaurants were not able to offset

input cost inflation of 6.2%

This declining relative pricing power environment continues an ongoing trend from 2007

•

Food costs increased 8.8% in Q4 2007 and 8.5% in Q1 2008

•

Wages increased 6.8% in Q4 2007 and 5.6% in Q1 2008

–

Federal minimum wage increased to $5.85 in July 2007 and will increase to $6.55 in July 2008

•

Energy costs increased 3.3% in Q4 2007 and 3.0% in Q1 2008

These

“negative

RPP”

environments

are

actually

typical

of

a

pre-recessionary

year,

where

restaurant

input-cost

inflation

for

its

general

‘commodities’

(such

as

food

and

lower-skill

labor)

are

often

bid-up

during

the

last

year

of

an

economic growth cycle

Relative Pricing Power Components

RPP Components

2005

2006

2007

Q1'07

Q2'07

Q3'07

Q4'07

Q1'08

Menu Price Increases

3.2%

3.1%

3.6%

3.3%

3.4%

3.8%

4.0%

4.0%

Input Costs

3.6%

2.5%

6.5%

5.2%

6.6%

5.9%

6.8%

6.2%

Food (42.5% of Input Costs)

1.8%

0.7%

7.6%

6.3%

8.7%

6.5%

8.8%

8.5%

Wages (37.5% of Input Costs)

5.3%

3.9%

6.8%

6.3%

6.6%

7.1%

6.8%

5.6%

Other (15.0% of Input Costs)

2.2%

2.5%

2.3%

2.6%

2.3%

2.2%

2.3%

2.4%

Energy (5.0% of Input Costs)

9.7%

6.9%

1.3%

(3.3%)

2.3%

2.6%

3.3%

3.0%

RPP

(0.4%)

0.6%

(2.5%)

(1.9%)

(3.2%)

(2.1%)

(2.8%)

(2.2%)

Note: Per Wall Street research.

7

PROJECT LASSO

Recent Casino and Gaming Market Trends

The casino and gaming industry has seen a slowdown in recent months

Rising gas and airline costs have significantly increased transportation costs for

consumers traveling to Las Vegas and other gaming destination locations

In

addition,

consumers

have

curbed

spending

due

to

the

continued

housing

downturn,

escalating

food

and

fuel

costs,

diminishing

credit

and

recession

worries

Historically, the gaming industry has been fairly recession proof, but this cycle

downturn may be different for two reasons:

•

Today, there is an ample supply of locations to gamble, whereas in the past,

choices

were

geographically

limited

(primarily

to

Nevada

and

New

Jersey).

As

a

result, consumers may be more likely to gamble closer to their local market.  Las

Vegas, in particular, may feel this impact most from Asian gamblers choosing to

visit Macau

•

Diversification of revenues into non-gaming channels, such as dining and

entertainment, results in increased cyclicality in a cautionary economic

environment

The

majority

of

casino

and

gaming

stocks

traded

down

in

2007

and

have

continued

to

trade down in the 2008 year-to-date period

While

the

casino

and

gaming

M&A

market

was

fairly

active

in

2006

and

2007

(with

several deals still pending), it has slowed considerably in recent months, due mainly to

weak overall industry performance and a tightened credit market

Note: Per Wall Street Research, Las Vegas Convention and Visitors Authority and the Gaming Control Board.

8

PROJECT LASSO

Recent Casino and Gaming Market Trends (Cont.)

There

has

been

a

decline

in

key

traffic

and

spending

metrics

for

the

Las

Vegas

and

Laughlin markets

Average daily room rates:

•

Las Vegas room rates were down approximately 29.0% for the week ended

4/26/08 and are down approximately 15.0% Q2-to-date (after a 6.0% decline in

Q1)

Gaming revenues:

•

Year-to-date gaming revenues, through February, for Las Vegas and Laughlin

are down 3.6% and 4.9%, respectively

Visitor volume and convention attendance:

•

Laughlin visitor volume is down 4.1% year-to-date through February

•

Convention traffic has been relatively flat in Las Vegas, but has declined 10.7%

in Laughlin year-to-date through February

Although foreign visitors taking advantage of the weak dollar have helped offset

traffic and spending trends somewhat, they represent less than 15.0% of visitors

In addition, projections for new rooms/casinos are expected to increase future room

supply substantially

Approximately

40,000

rooms

are

expected

to

be

added

in

Las

Vegas

between

2008

and 2012

Modest

supply

growth

is

expected

through

2009,

but

2010

and

2011

room

supply

growth

is

expected

to

reach

unprecedented

levels

(8.1%

and

12.0%

growth

per

year, respectively)

Note: Per Wall Street Research, Las Vegas Convention and Visitors Authority and the Gaming Control Board.

9

PROJECT LASSO

Indexed Stock Performance

Restaurant and Casino and Gaming Stock Performance

Note: Factset as of May 8, 2008. 

Comparable

Restaurants

include: Benihana,

Brinker

International,

California

Pizza

Kitchen,

CEC

Entertainment,

McCormick

&

Schmick’s,

O’Charley’s

and

Ruby

Tuesday.

Comparable

Casino

and

Gaming

includes:

Ameristar

Casinos,

Boyd

Gaming,

Isle

of

Capri

Casinos,

Monarch

Casino

&

Resort,

Pinnacle

Entertainment,

Riviera

Holdings

and

Trump Entertainment.

Reflecting the trends on the

previous pages, restaurant

and casino and gaming

stocks have declined

significantly over the last 12

months, well below the

broader markets

Lasso’s stock has traded

consistently with these two

groups over this period

(70.0%)

(60.0%)

(50.0%)

(40.0%)

(30.0%)

(20.0%)

(10.0%)

0.0%

10.0%

20.0%

5/08/07

7/09/07

9/06/07

11/05/07

1/07/08

3/07/08

5/07/08

Lasso

Comparable Restaurants

Comparable Casino and Gaming

S&P 500

III.

Lasso Observations

11

PROJECT LASSO

77.2% of total 2007 revenue

68.4% of total 2007 EBITDA

1.8% 2007 revenue growth

Lasso Overview

Restaurants

Gaming

Hospitality

Entertainment

Lasso consists of two main

operating divisions with

very different sizes,

profitability and growth

prospects

Restaurant Division

22.8% of total 2007 revenue

31.6% of total 2007 EBITDA

15.0% 2007 revenue growth

Gaming Division

12

PROJECT LASSO

Historical

GAAP

Income

Statement

(2004

-

2007)

(US$

and

shares

in

millions,

except

per

share

data)

Historical GAAP Income Statement

Note: Lasso completed the acquisition of the Golden Nugget on September 27, 2005. Excludes discontinued operations.

(a)

2004

–

2007

taxes

normalized

at

32.0%.

(b)

Includes

$11.0

million

in

mandatory

cash

that

is

physically

held

on

premises

of

the

Golden

Nugget

properties

per

discussions

with

Lasso

management.

Historical

2004

2005

2006

2007

Total Revenues

783.4

$       

877.3

$       

1,114.2

$    

1,171.9

$    

Costs and Expenses:

Cost of Sales

219.3

227.8

253.2

259.9

Labor

225.5

262.8

362.0

379.4

Other Operating

193.9

217.6

282.0

295.8

Unit-level Profit

144.8

169.1

217.0

236.8

General and Administrative

48.0

46.8

50.4

51.0

Pre-opening

3.0

3.0

5.3

4.0

Stock Compensation Expense

0.4

0.7

7.6

4.8

EBITDA

93.3

118.7

153.8

177.1

Depreciation and Amortization

38.1

43.7

56.3

65.7

EBIT

55.2

75.0

97.5

111.4

Asset Impairment Expense

1.7

-

3.5

-

Interest

10.5

31.2

49.1

72.3

Other

13.5

0.0

(2.4)

(2.2)

Pretax Income

29.5

43.7

47.3

41.3

Taxes (As Reported)

(10.1)

13.7

13.2

14.0

Net Income from Continuing Operations (As Reported)

39.6

$         

30.0

$         

34.1

$         

27.3

$         

Taxes (Adjusted) (a)

11.5

17.1

18.4

16.1

Net Income from Continuing Operations (Adjusted)

18.0

$         

26.7

$         

28.8

$         

25.2

$         

EPS from Continuing Operations (Adjusted)

$0.65

$1.16

$1.31

$1.30

Average Shares Outstanding

27.8

23.0

22.0

19.4

Growth:

Total Revenues

12.0%

27.0%

5.2%

EBITDA

27.1%

29.6%

15.2%

Net Income from Continuing Operations (Adjusted)

48.1%

8.1%

(12.7%)

EPS from Continuing Operations (Adjusted)

79.1%

13.0%

(1.0%)

Margins:

Unit-level Profit

18.5%

19.3%

19.5%

20.2%

EBITDA

11.9%

13.5%

13.8%

15.1%

Net Income from Continuing Operations (Adjusted)

2.3%

3.0%

2.6%

2.1%

Balance Sheet:

Cash

(b)

45.3

$          

31.3

$          

39.6

$          

Total Debt

817.9

711.2

888.7

13

PROJECT LASSO

Historical and Projected Units by Concept

Unit Ramp Analysis by Concept

Note:

Per

public

filings

and

discussion

with

Lasso

management

as

of

April

2008.

While Lasso owns many

attractive restaurant

concepts, the diversification

adds to the complexity of

the Lasso story for investors

In addition, analysts do not

expect any of the concepts,

besides Saltgrass

Steakhouse, to have any

meaningful growth

Current Units by Concept

Number of

Number of

Restaurants

Restaurants

Saltgrass

Steak House

44

T-Rex

1

Rainforest Café

28

Yak & Yeti

1

Landry's Seafood House

26

Brenner's Steakhouse

1

Chart House

26

Gandy Dancer

1

The Crab House

7

River Crab

1

C.A. Muer

(Charley's Crab)

5

Meriwether's

1

Grotto

5

Fish Tales

1

Aquariums

4

Fisherman's Wharf

1

Babin's

Seafood House

4

The Flying Dutchman

1

Willie G's

4

Fuddrucker's

1

Joe's Crab Shack

3

Red Sushi Bar

1

Cadillac Bar

3

La Griglia

1

Big Fish

3

Peohe's

1

Captain Crab

3

Pesce

1

Harlow's Restaurant

2

The Rusty Duck

1

Vic & Anthony's

2

Simms Landing

1

Historical

Projected

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Number of Restaurants:

Landry's Division

41

41

39

41

47

52

44

45

45

45

45

45

The Crab House

15

16

13

11

9

11

11

10

10

10

10

10

Chart House

0

0

27

26

25

26

26

26

26

26

26

26

C.A. Muer

(Charley's Crab)

0

0

15

15

15

15

13

12

12

12

12

12

Rainforest Café

27

25

25

26

27

26

31

30

30

30

30

30

Saltgrass

Steak House

0

0

27

29

30

32

37

44

45

48

51

54

Joe's Crab Shack

105

109

121

138

144

149

10

3

3

3

3

3

T-Rex

0

0

0

0

0

0

0

1

2

2

2

2

Red Sushi

0

0

0

0

0

0

0

0

1

1

1

1

Yak & Yeti

0

0

0

0

0

0

0

1

1

1

1

1

Other

NA

NA

NA

NA

0

0

7

7

7

7

7

7

Total

188

191

267

286

297

311

179

179

182

185

188

191

Total (Excluding Joe's)

83

82

146

148

153

162

169

176

179

182

185

188

Annual Growth %

(1.2%)

78.0%

1.4%

3.4%

5.9%

4.3%

4.1%

1.7%

1.7%

1.6%

1.6%

14

PROJECT LASSO

Historical Division-level Contribution and Growth

(US$ in millions)

Historical Division-Level Contribution and Growth

Note: Per Lasso management. Differences between these figures and audited financials are as a result of reclassifications of inter-company revenues, discontinued operations

and Joe's Crab Shack eliminations.

(a)

Lasso completed the acquisition of the Golden Nugget on September 27, 2005.

(b)

Pre-opening is allocated at the unit-level for the restaurants. 2007 unit-level profit adjustments per discussions with Lasso management. Discontinued operations are

allocated

to

the

Landry’s

division.

Leap

year

adjustment

is

allocated

to

the

restaurants

on

a

pro

rata

basis.

(c)

G&A allocation to Golden Nugget per discussions with Lasso management. Restaurant G&A includes adjustments for non-recurring litigation costs.

Both revenue and unit-level

profit growth have

remained fairly flat at the

restaurant level

The Golden Nugget division,

however, saw strong

revenue and unit-level

profit growth between 2006

and 2007

%

D

%

D

2005

2006

2007

2005-2006

2006-2007

Revenue

Landry's Division

$413.2

$448.1

$455.2

8.4%

1.6%

Saltgrass

152.8

168.8

175.2

10.5%

3.8%

Rainforest Café

and T-Rex

253.5

268.7

271.2

6.0%

0.9%

Restaurant Total

819.5

885.6

901.6

8.1%

1.8%

Golden Nugget

(a)

65.6

231.3

265.9

252.4%

15.0%

Total

$885.1

$1,116.9

$1,167.6

26.2%

4.5%

Unit-level Profit

(b)

Landry's Division

$76.0

$83.6

$83.8

9.9%

0.3%

Saltgrass

31.7

35.2

37.8

11.1%

7.3%

Rainforest Café

and T-Rex

47.2

47.8

49.2

1.2%

2.9%

Restaurant Total

155.0

166.6

170.8

7.5%

2.5%

Golden Nugget

(a)

11.8

48.7

64.0

312.2%

31.3%

Total

$166.8

$215.3

$234.8

29.1%

9.0%

Unit-level

Profit

Margin

Landry's Division

18.4%

18.6%

18.4%

Saltgrass

20.8%

20.9%

21.6%

Rainforest Café

and T-Rex

18.6%

17.8%

18.2%

Restaurant Total

18.9%

18.8%

18.9%

Golden Nugget

(a)

18.0%

21.1%

24.1%

Total

18.8%

19.3%

20.1%

G&Aand Other

(c)

Restaurants

$43.2

Golden Nugget

(a)

5.0

Total

$47.4

$58.0

$48.2

Division-level EBITDA

(b)(c)

Restaurants

$127.6

Golden Nugget

(a)

59.0

Total

$119.4

$157.3

$186.5

15

PROJECT LASSO

(4.2%)

(5.7%)

(3.2%)

1.1%

(1.4%)

(6.8%)

0.5%

(1.2%)

2.7%

(0.9%)

(0.8%)

2.2%

3.5%

4.1%

2.0%

0.2%

0.3%

(1.2%)

(0.3%)

0.1%

0.3%

(1.7%)

0.4%

3.5%

(5.4%)

0.3%

(3.1%)

(0.2%)

0.1%

(8.0%)

(6.0%)

(4.0%)

(2.0%)

0.0%

2.0%

4.0%

6.0%

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

2001

2002

2003

2004

2005

2006

2007

2008

Same-Store Sales Growth

Lasso

Same-Store

Sales

Growth

(Q1

2001

-

Q1

2008)

Note:

Quarterly

same-store

sales

per

Lasso

management.

Results

for

2005

and

after

do

not

include

same-store

sales

for

discontinued

Joe’s

Crab

Shack

locations.

Results

for

2004 and prior include same-store sales for Joe’s Crab Shack.

With the exception of the

mid-single digit same-store

sales results in 2006, Lasso

has historically seen flat to

slightly negative same-store

sales figures 

16

PROJECT LASSO

Lasso Income Statement Comparison

(US$ and shares in millions, except per share data)

2007 Results vs. Budget vs. Research

We also reviewed the 2007

performance versus the

prior year, budget and

research analyst estimates

2007

2007

2006

Change

2007

Actual vs.

Analyst

Actual vs.

Actual

Actual

vs. 2006

Budget

(a)

Budget

Estimate

Analyst Est.

Revenues

$1,171.9

$1,114.2

5.2%

$1,178.5

(0.6%)

$1,243.4

(5.7%)

Gross Margin

22.2%

22.7%

(55) bp

NA

NA

23.4%

(118) bp

G&A Ratio

4.8%

5.2%

(45) bp

4.2%

51 bp

4.3%

44 bp

Operating Margin

9.5%

8.4%

107 bp

9.0%

54 bp

9.5%

1 bp

Operating Income

$111.4

$94.0

18.5%

$105.6

5.4%

$118.1

(5.7%)

Interest Expense

$72.3

$49.1

47.2%

$53.6

34.8%

$55.6

30.0%

Pretax Margin

3.5%

4.2%

(72) bp

4.4%

(87) bp

5.0%

(150) bp

Net Income

$27.3

$34.1

(20.0%)

$35.2

(22.5%)

$42.5

(35.8%)

Diluted EPS

$1.41

$1.55

(9.0%)

$1.60

(11.9%)

$1.90

(25.8%)

Shares Outstanding

19.4

22.0

(11.8%)

22.0

(11.8%)

22.4

(13.4%)

Note:Estimates from Wall Street research published April 2, 2007 after the release of selected Q4 2006 data on March 30, 2007.

(a)    Per Lasso management version "2007 Update - Flat Case".

17

PROJECT LASSO

Lasso Debt Overview

(US$ in millions)

Debt Overview

Lasso has a number of debt

facilities at both the

restaurant and gaming

divisions

Description

Initial

Fund Date

Expiration

Date

Amount

Comments

Restaurant Division

$300 Million Bank Syndicate Credit Facility

Dec. 2004

12/28/2009

$    87.0

LIBOR + 150 bps; interest only

9.5% Senior Notes

Oct. 2007

12/15/2014

395.7

9.5%; interest only; noteholder

put option at 101 from

2/28/2009 to 12/15/2011; upon change-of-control, must

repurchase at 101, Tilman

Fertitta

is excluded

7.5% Senior Notes

Dec. 2004

12/15/2014

4.3

7.5%; interest only; upon change-of-control, must repurchase

at 101, Tilman

Fertitta

is excluded; represents portion not

tendered in exchange for 9.5% Senior Notes

Non-recourse Long-term Note Payable

(a)

May 2003

May 2010

10.6

9.39% interest

Seller Note

NA

Nov. 2010

4.0

7.0%; interest paid monthly

Other Long-term Notes

NA

Varied

0.0

$49,939 at various interest rates; principal and interest paid

monthly

Total Restaurant Debt

Gaming Division

$  501.7

$50 Million Revolving Credit Facility

Jun. 2007

6/30/2013

$    12.0

LIBOR + 200 bps; interest only

$330 Million First Lien Term Loan

Jun. 2007

6/30/2014

210.0

LIBOR + 200 bps; 1% of principal paid quarterly beginning

9/30/2009; no prepayment penalty; Tilman

Fertitta

excluded

from change-of-control acceleration

$165 Million Second Lien Term Loan

Jun. 2007

12/31/2014

165.0

LIBOR + 325 bps; interest only; prepayment allowed after two

years, 2% penalty in year 2, 1% penalty in years 3 and 4;

Tilman

Fertitta

excluded from change-of-control acceleration

Total Gaming Debt

$  387.0

Total Debt

$  888.7

Cash

(b)

28.6

Net Debt

860.1

$

Note:

Per Lasso public filings and management as of December 31, 2007.

(a) 

Represents the mortgage note for the Holiday Inn.

(b)

Excludes $11.0 million in mandatory cash that is physically held on premises of the Golden Nugget properties per discussions with Lasso management.

18

PROJECT LASSO

Net Debt/

Company Name

LTM EBITDA

Bob Evans

1.6x

O'Charley's

1.6x

Brinker

1.6x

Red Robin Gourmet Burgers

1.4x

Jack In The Box

1.4x

McDonald's

1.3x

Wendy's

1.2x

Papa John's

1.1x

Cheesecake Factory

0.8x

McCormick & Schmick's

0.8x

Benihana

0.6x

Starbucks

0.6x

Tim Hortons

0.6x

Texas Roadhouse

0.6x

Panera Bread

0.2x

California Pizza Kitchen

0.1x

BJ's Restaurants

NM

Buffalo Wild Wings

NM

Caribou Coffee

NM

Chipotle Mexican Grill

NM

Kona Grill

NM

Luby's

NM

Peets Coffee & Tea

NM

Rubio's Restaurants

NM

Mean

2.5x

Median

2.0x

Net Debt/

Company Name

LTM EBITDA

Domino's Pizza

7.6x

Perkin's and Marie Callender's

6.6x

IHOP

6.6x

Sbarro

5.9x

Steak N Shake

4.4x

Real Mex Restaurants

4.3x

Carrols Restaurant Group

4.3x

Sonic

3.8x

Lasso

3.8x

Dave & Buster's

3.5x

Ruby Tuesday

3.5x

Denny's Corp.

3.5x

CBRL Group

3.4x

Einstein Noah Restaurant Group

3.3x

Jamba Juice

2.7x

AFC Enterprises

2.7x

CKE Restaurants

2.4x

Darden

2.4x

Krispy Kreme

2.3x

Morton's

2.0x

Ruth's Chris

2.0x

Burger King

1.6x

CEC Entertainment

1.6x

Yum! Brands

1.6x

P.F. Chang's

1.6x

Net Debt/

Company Name

LTM EBITDA

Trump Entertainment Resorts

11.5x

Las Vegas Sands Corp.

11.5x

Isle of Capri Casinos

8.2x

Pinnacle Entertainment

8.1x

MTR Gaming Group

7.3x

Lasso

6.5x

Ameristar Casinos

5.6x

MGM Mirage

5.6x

Riviera Holdings

4.8x

Boyd Gaming Corp.

4.1x

Penn National Gaming

3.6x

Wynn Resorts

3.2x

Century Casinos

2.4x

Lakes Entertainment

1.4x

Dover Downs

1.4x

Churchill Downs

0.7x

Monarch Casino and Resort

NM

Mean

5.4x

Median

5.2x

Comparable Leverage Levels

Note: As of May 8, 2008.

(a)

Lasso net debt is allocated based on the relevant operating subsidiary.

After allocating the Lasso

debt to the appropriate

operating subsidiaries,

Lasso's leverage levels are

above average vs. its peers

Restaurants

(a)

Casino

and

Gaming

(a)

19

PROJECT LASSO

Stock Price at Various EBITDA Multiples

(US$ and shares in millions)

Benefits/Concerns with Lasso’s Leverage

(a)

Includes 2007 EBITDA adjustments per discussions with Lasso management.

(b)

Excludes

$11.0

million

in

mandatory

cash

that

is

physically

held

on

premises

of

the

Golden

Nugget

properties

per

discussions

with

Lasso

management.

(c)

Valuation adjustments per discussions with Lasso management.

(d)

Basic shares from 10-K for the period ended December 31, 2007. Options outstanding per Lasso management as of April 2008.

(e)

Stock price as of May 8, 2008.

Due to current leverage

levels, Lasso’s stock price is

extremely sensitive to

movements in the EBITDA

multiple

Enterprise Value/EBITDA

5.9x

6.1x

6.3x

6.5x

6.7x

6.9x

7.1x

7.3x

2007 Adjusted EBITDA

(a)

$186.5

$186.5

$186.5

$186.5

$186.5

$186.5

$186.5

$186.5

Implied Enterprise Value

1,105.7

1,143.0

1,180.3

1,217.6

1,254.9

1,292.2

1,329.5

1,366.8

Less: Net Debt

(b)

(860.1)

(860.1)

(860.1)

(860.1)

(860.1)

(860.1)

(860.1)

(860.1)

Plus: Valuation Adjustments 

(c)

11.8

11.8

11.8

11.8

11.8

11.8

11.8

11.8

Implied Equity Value

$257.4

$294.7

$332.0

$369.3

$406.6

$444.0

$481.3

$518.6

Fully Diluted Shares (Basic + CSEs) 

(d)

16.353

16.390

16.456

16.510

16.555

16.592

16.644

16.699

Implied Stock Price

$15.74

(e)

$17.98

$20.18

$22.37

$24.56

$26.76

$28.91

$31.05

% EBITDA Multiple Increase

3.4%

6.7%

10.1%

13.5%

16.9%

20.2%

23.6%

% Stock Price Increase

14.2%

28.2%

42.1%

56.1%

70.0%

83.7%

97.3%

20

PROJECT LASSO

The publicly available information details some of Lasso’s owned properties, but provides limited

information on owned restaurants and non-operating properties

Owned properties identified in the public filings include the corporate office, warehouse,

Golden Nugget properties, Kemah boardwalk, downtown Aquarium, Holiday Inn Galveston

and the Inn at the Ballpark

The balance sheet

(a)

provides the following detail as well:

Through diligence with Lasso management, additional real estate information received includes:

A schedule of all fee properties

Gross, net and real property market

value for each of the properties

An appraisal of the owned restaurant

and specialty properties

A schedule of non-strategic excess

real estate

Real Estate Overview

Note: Per discussions with Lasso management, unless otherwise noted.

(a)

Per Lasso 10-K as of December 31, 2007.

(b)

Estimate from Snyder Valuation received May 8, 2008.

Gross book value

$363,257,915

Net book value

302,598,994

Assessed real property market value

127,167,947

Appraisal value 

(b)

320,640,000

Corporate headquarters

16,000,000

Non-strategic excess real estate

30,000,000

As of 12/31/07

Land

$          266,353,085

Buildings and improvements

550,185,139

Furniture, fixtures and equipment

316,971,409

Leasehold improvements

408,810,343

Construction in progress

12,150,593

1,554,470,569

Less: accumulated depreciation

(304,399,153)

Property and equipment, net

$     1,250,071,416

21

PROJECT LASSO

Restaurant Research Coverage Landscape

(US$ in millions)

Current Restaurant Research Coverage

Note: Enterprise

Value

as

of

May

8,

2008.

Research

coverage

per

Bloomberg

as

of

May

2008.

Despite an enterprise value

of $1.1 billion, Lasso has

only five research analysts

currently covering the stock

Additionally, no casino and

gaming research analysts

currently cover Lasso

Ent.

Val.

BofA

Bear

CIBC

Citi

Cowen

Deutsche

GS

JPM

Lehman

ML

MS

PJ

RBC

TWP

UBS

Wach.

Subtotal

Other

Total

McDonald's

$78,447.1

X

X

X

X

X

X

X

X

X

X

X

11

6

17

Yum! Brands

23,270.1

X

X

X

X

X

X

X

X

X

X

X

11

2

13

Starbucks

12,424.7

X

X

X

X

X

X

X

X

X

X

10

6

16

Darden

7,299.9

X

X

X

X

X

X

X

X

X

X

10

8

18

Tim Hortons

6,316.5

X

X

X

X

X

X

X

7

7

14

Burger King

4,625.7

X

X

X

X

X

X

X

7

5

12

IHOP

3,277.9

X

X

2

3

5

Brinker

3,136.1

X

X

X

X

X

X

X

X

8

7

15

Chipotle Mexican Grill

2,967.1

X

X

X

X

X

X

X

X

X

9

8

17

Wendy's

2,702.6

X

X

X

X

X

X

X

X

X

9

1

10

Domino's Pizza

2,465.1

X

X

X

X

X

5

1

6

Sonic

2,162.6

X

X

X

X

X

X

X

7

9

16

Jack In The Box

2,069.5

X

X

X

X

X

X

6

5

11

Cheesecake Factory

1,607.9

X

X

X

X

X

X

X

X

8

12

20

CBRL Group

1,573.9

X

X

2

7

9

Panera

Bread

1,619.4

X

X

X

X

X

X

X

X

8

8

16

CEC Entertainment

1,338.1

X

1

7

8

Bob Evans

1,171.8

0

5

5

Lasso

1,117.5

X

1

4

5

Ruby Tuesday

1,026.1

X

X

X

X

4

8

12

P.F. Chang's

946.9

X

X

X

X

X

X

X

X

8

11

19

CKE Restaurants

922.0

X

X

2

6

8

Texas Roadhouse

902.5

X

X

X

X

X

X

6

11

17

Papa John's

880.9

0

4

4

Red Robin

842.1

X

X

X

X

X

5

7

12

Denny's Corp.

686.7

0

7

7

Carrols Restaurant

521.6

X

X

X

3

3

6

Buffalo Wild Wings

505.7

X

X

X

X

4

10

14

California Pizza Kitchen

420.5

X

X

X

X

4

10

14

Steak N Shake

400.8

0

7

7

AFC Enterprises

379.0

X

1

4

5

O'Charley's

376.7

X

1

6

7

BJ's Restaurants

333.5

X

X

X

3

9

12

Einstein Noah

340.6

X

X

X

3

1

4

Peets

Coffee & Tea

306.3

X

X

2

5

7

Ruth's Chris

266.7

X

X

X

X

X

X

X

7

4

11

Krispy

Kreme

251.4

0

1

1

McCormick & Schmick's

183.4

X

X

X

X

4

5

9

Morton's

199.1

X

X

X

X

4

5

9

Benihana

182.4

0

4

4

Luby's

168.9

0

1

1

Jamba

Juice

108.6

X

1

4

5

Cosi

84.6

X

X

2

3

5

Rubio's Restaurants

53.1

0

2

2

Kona Grill

51.3

X

1

7

8

Caribou Coffee

45.5

X

X

X

3

2

5

22

PROJECT LASSO

Current Research Sentiment

The research community is

cautious regarding Lasso

due to a lack of

transparency, debt

refinancing risk and the

complexity of the business

Recent Commentary from Lasso Research Coverage

Note: Per Wall Street Research.  Rating, EPS and price target are from the most recent available research report, unless noted as "(prior)".

Research Analyst

Comments

Rating

EPS

BB&T

Barry Stouffer

March 12, 2008

Investors should note that the range of possible results next year is "wide enough

to drive a truck through." (March 12, 2008)

In our view, Lasso has taken a lack of transparency to new heights, making earnings

forecasting more challenging.  The lack of unit growth means that EPS will be highly

sensitive to changes in comps and margins.  We believe this variability will be

exacerbated going forward by the Q307 repurchase of roughly 20% of the outstanding

stock and given that interest expense will consume about 70% of FY08 operating

income in our revised EPS model. (November 14, 2007)

We believe a credible argument could be made that Lasso should trade on the lower

end of the industry range based on several factors, including a high degree of

leverage, lack of transparency with respect to the performance of the company's

various operations, well below-average historical return on assets, limited EPS

momentum and poor earnings visibility. (November 14, 2007)

Hold

2008E –

$1.15

2008E (prior) –

$1.27

2008E (prior) -

$1.39

2009E –

$1.30

CL King

Michael Gallo

April 7, 2008

The primary risk is that Lasso will need to refinance its debt by early 2009 and that

the

credit markets remain very challenging.  Additionally, Lasso operates in the

challenging consumer and restaurant environment. (April 7, 2008)

Lasso noted that it will not provide any guidance for 2008, given the uncertainty of

rates and timing of a potential refinancing of its Senior Notes.

(March 12, 2008)

Neutral

Strong Buy (prior)

2008E –

$1.50

2008E (prior) –

$1.70

2009E –

$1.50

SMH Capital

William Hamilton

March 12, 2008

Because of the potential impact and lack of visibility on timing, management

refrained from providing earnings guidance for 2008. (March 12, 2008)

Management has shifted the company's focus away from the lower-end casual dining

and toward a blend of high-end restaurants and gaming.  We applaud that move but,

in our opinion, the growth strategy going forward is not very clear and a lack of

transparency clouds visibility. (November 20, 2007)

The conflicting trends between the restaurant and gaming business, along with the

lack of transparency, lead us to believe that there is no compelling reason now to buy

or sell the stock. (August 21, 2007)

Neutral

2008E –

$1.60

2008E (prior) –

$1.50

2008E (prior) –

$1.73

2009E –

$1.64

23

PROJECT LASSO

51.3%

9.2%

39.5%

Insider Ownership

Top Ten Institutional Holders

Other Holders

Summary Ownership Profile

Ownership by Major Classification

Note: Factset as of May 2008.

(a)

Basic shares from 10-K for the period ended December 31, 2007.

(b)

Options outstanding per Lasso management as of April 2008.

Lasso’s ownership is highly

concentrated between the

CEO, Tilman J. Fertitta, and

the top ten institutional

shareholders

Shareholder Class / Owner

Shares

Options

Total

% of Total

Direct Insider and Beneficial Ownership

Tilman

J. Fertitta

5,731,481

900,000

6,631,481

38.0%

Steven L. Scheinthal

55,800

76,500

132,300

0.8%

Richard H. Liem

38,143

15,000

53,143

0.3%

K. Kelly Roberts

7,856

3,000

10,856

0.1%

Jeffrey L. Cantwell

4,495

9,000

13,495

0.1%

Kenneth W. Brimmer

3,713

6,000

9,713

0.1%

Michael S. Chadwick

3,000

14,800

17,800

0.1%

Michael H. Richmond

3,000

7,200

10,200

0.1%

Joe Max Taylor

3,000

2,000

5,000

0.0%

Total Insider Ownership

5,850,488

1,033,500

6,883,988

39.5%

Top Ten Institutional Ownership

Deutsche Bank Investment Management, Inc.

1,717,073

-

1,717,073

9.9%

Dimensional Fund Advisors, Inc.

1,557,740

-

1,557,740

8.9%

Royce & Associates LLC

1,051,000

-

1,051,000

6.0%

Columbia Management Advisors, Inc.

1,042,886

-

1,042,886

6.0%

Goldman Sachs Asset Management LP (US)

941,761

-

941,761

5.4%

Barclays Global Investors NA (California)

713,078

-

713,078

4.1%

Peregrine Capital Management, Inc.

655,034

-

655,034

3.8%

Vanguard Group, Inc.

480,642

-

480,642

2.8%

Wasatch Advisors, Inc.

433,799

-

433,799

2.5%

American Financial Group Asset Management

356,300

-

356,300

2.0%

Top Ten Institutional Ownership

8,949,313

-

8,949,313

51.3%

Other Holders

1,344,745

253,019

1,597,764

9.2%

Total Shares Outstanding

16,144,546

(a)

1,286,519

(b)

17,431,065

100.0%

24

PROJECT LASSO

14.00

16.00

18.00

20.00

22.00

24.00

26.00

28.00

30.00

32.00

34.00

$36.00

05/06/05

10/09/05

03/15/06

08/19/06

01/23/07

06/29/07

12/03/07

05/08/08

0

400

800

1,200

1,600

2,000

(Price)

(Volume in 000s)

Current Bid as of

April 4, 2008 =

$21.00

Initial Bid as of

January 28, 2008

= $23.50

Lasso Three-Year Historical Stock Performance

Lasso Three-Year Historical Stock Price/Volume Chart

Note: Factset as of May 8, 2008.

After trading between

$25.00 and $35.00 for most

of

2005

-

2007,

Lasso

has

traded between $15.00 and

$20.00 for most of 2008

25

PROJECT LASSO

14.00

15.00

16.00

17.00

18.00

19.00

20.00

21.00

22.00

23.00

$24.00

12/31/07

01/18/08

02/05/08

02/24/08

03/13/08

04/01/08

04/19/08

05/08/08

0

400

800

1,200

1,600

2,000

(Price)

(Volume in 000s)

Initial bid as of

January 28,

2008

announced at

$23.50 per

share, a 41.0%

premium to the

prior day stock

price

Revised bid as of

April 4, 2008

announced at $21.00

per share, a 37.3%

premium to the prior

day stock price

Lasso Year-to-Date Stock Performance

Lasso Year-to-date Stock Price/Volume Chart

Note: Factset as of May 8, 2008.

Lasso has consistently

traded below the

outstanding offer price, with

that discount currently

around 33.4%

26

PROJECT LASSO

Pending Refinancing

The potential need to refinance the $395.7 million, 9.5% Senior Notes by February 2009

is one of Lasso's greatest business risks

Creates significant overhang on the stock

Results in limited EPS visibility for analysts and investors

Interest expense may increase substantially, but impact is uncertain given current

volatility in the credit market

Optimal timing of refinancing remains an issue

•

It

is

possible

that

rates

continue

to

increase

over

the

next

six

months

and

financing becomes even more difficult to attain

Every

1.0%

increase/decrease

in

the

interest

rate

for

the

$395.7

million

Senior

Notes

impacts

EPS

by

approximately

$0.16

-

$0.17

annually

27

PROJECT LASSO

Lasso Strengths and Headwinds

Lasso is an established company with many strengths

Operates many well-respected restaurant concepts with solid unit economics

Successfully navigated the turnaround of the Golden Nugget brand

Posted solid financial results in 2007 with strong, stable EBITDA

Has grown through selective, opportunistic acquisitions

Has built a valuable real estate portfolio

Management

team

has

deep

experience

in

the

restaurant

and

gaming

industries

Despite these strengths, there are currently a number of headwinds for Lasso's business

$395.7 million, 9.5% Senior Notes will potentially need to be refinanced by February 2009

and the current lending environment is challenging

Current environment creates possibility of significant margin compression

•

Same-store sales are currently soft

•

Commodity costs continue to rise

•

Labor costs (minimum wage, health care, etc.) continue to rise

There is limited growth opportunity for Lasso's restaurant concepts (with the possible

exception of Saltgrass Steakhouse)

California lawsuits for tip credits create additional potential future legal exposure

Although the gaming industry has historically been fairly recession proof, this downturn could

be more severe as a result of increased supply and recent diversification into non-gaming

channels

Broader trends in the restaurant industry, gaming industry and macroeconomic environment

remain challenging

Given the complexity of Lasso’s business model and the current headwinds, investors

and

research

analysts

find

it

challenging

to

appropriately

value

Lasso

IV.

Valuation Overview

29

PROJECT LASSO

Key assumptions in the projections include:

Flat

same-store

sales

from

2008

-

2011

(with

flat

corresponding

restaurant-level

margins as well)

Three

new

Saltgrass

Steakhouse

units

per

year

from

2009

-

2011

•

New units require $3.0 million of capital expenditures and $250,000 of pre-

opening

•

New units generate $3.0 million of revenue and $450,000 of restaurant-level

profit per year (mid-year convention used)

New 500-room hotel tower requires $158.5 million of additional capital

expenditures and is completed April 1, 2010

Interest rate assumptions:

•

Based on the terms of the existing debt

•

No refinancing assumptions: $395.7 million Senior Notes remain at 9.5%

through 2011

–

However, in select analyses we have evaluated the impact of refinancing the

Senior Notes

Effective tax rate of 32.0%

Lasso Projection Assumptions

Cowen relied on the

projections provided by

Lasso management to

perform our valuation

analysis

Note: Per

Lasso management as of April 2008.

30

PROJECT LASSO

Historical

Projected

2007

2008

2009

2010

2011

Total Revenues

1,171.9

$ 

1,213.4

$ 

1,273.5

$ 

1,330.0

$ 

1,354.0

$ 

Costs and Expenses:

Cost of Sales

259.9

271.4

282.2

286.4

289.5

Labor

379.4

393.2

414.0

437.1

445.8

Other Operating

295.8

309.8

324.7

337.2

331.0

Unit-level Profit

236.8

239.0

252.6

269.3

287.6

General and Administrative

51.0

46.9

47.5

47.5

47.5

Pre-opening

4.0

2.3

0.8

0.8

0.8

Stock Compensation Expense

4.8

4.0

3.6

3.6

3.6

EBITDA

177.1

185.8

200.8

217.4

235.8

Depreciation and Amortization

65.7

74.2

76.7

83.8

87.3

EBIT

111.4

111.6

124.1

133.6

148.5

Interest

72.3

80.0

75.0

79.1

76.4

Other

(2.2)

-

-

-

-

Pretax Income

41.3

31.6

49.1

54.5

72.1

Taxes

13.2

10.1

15.7

17.4

23.1

Net Income from Continuing Operations

28.1

$       

21.5

$       

33.4

$       

37.1

$       

49.0

$       

EPS from Continuing Operations

$1.45

$1.31

$2.04

$2.27

$3.00

Average Shares Outstanding

19.4

16.4

16.4

16.4

16.4

Growth:

Total Revenues

5.2%

3.5%

5.0%

4.4%

1.8%

EBITDA

15.2%

4.9%

8.0%

8.3%

8.4%

Net Income from Continuing Operations

(12.7%)

(23.4%)

55.4%

11.0%

32.2%

EPS from Continuing Operations

(1.0%)

(9.1%)

55.4%

11.0%

32.2%

Margins:

Unit-level Profit

20.2%

19.7%

19.8%

20.2%

21.2%

EBITDA

15.1%

15.3%

15.8%

16.3%

17.4%

Net Income from Continuing Operations

2.4%

1.8%

2.6%

2.8%

3.6%

Balance Sheet:

Cash

(a)

39.6

$        

23.0

$        

26.8

$        

80.7

$        

149.7

$      

Total Debt

888.7

921.5

931.1

919.1

882.1

Projected Consolidated Income Statement

Lasso

Projected

Income

Statement

(2007

-

2011)

(US$

and

shares

in

millions,

except

per

share

data)

Note: Per Lasso management as of April 2008.

(a)

Includes $11.0 million in mandatory cash that is physically held on premises of the Golden Nugget properties per discussions with Lasso management.

31

PROJECT LASSO

Projected Division-Level Contribution —

Restaurant Division

Projected

Income

Statement

(2007

-

2011)

—

Restaurant

Division

(US$

in

millions)

Note: Per Lasso management as of April 2008.

(a)

Assumes $5.0 million of G&A is allocated to Golden Nugget per discussions with Lasso management.

The restaurant division is

projected to have limited

revenue growth, with

earnings growth primarily

from declining interest

expense

Historical

Projected

2007

2008

2009

2010

2011

Total Revenues

906.0

$   

948.7

$   

983.5

$   

988.0

$   

997.0

$   

Costs and Expenses:

Cost of Sales

245.4

256.9

266.4

267.6

270.0

Labor

271.0

283.8

294.2

295.5

298.2

Other Operating

216.8

230.2

240.4

241.6

244.1

Unit-level Profit

172.8

177.7

182.6

183.3

184.6

General

and

Administrative

(a)

46.0

41.9

42.5

42.5

42.5

Pre-opening

4.0

2.3

0.8

0.8

0.8

Stock Compensation Expense

4.8

4.0

3.6

3.6

3.6

EBITDA

118.1

129.6

135.8

136.4

137.8

Depreciation and Amortization

47.7

51.4

52.1

52.7

53.2

EBIT

70.4

78.2

83.6

83.8

84.6

Interest

32.2

44.2

41.3

38.0

34.3

Pretax Income

38.2

34.0

42.4

45.8

50.3

Taxes

12.2

10.9

13.6

14.7

16.1

Net Income from Continuing Operations

26.0

$      

23.1

$      

28.8

$      

31.2

$      

34.2

$      

Growth:

Total Revenues

4.7%

3.7%

0.5%

0.9%

EBITDA

9.7%

4.7%

0.5%

1.0%

Net Income from Continuing Operations

(10.9%)

24.5%

8.2%

9.8%

Margins:

Unit-level Profit

19.1%

18.7%

18.6%

18.5%

18.5%

EBITDA

13.0%

13.7%

13.8%

13.8%

13.8%

Net Income from Continuing Operations

2.9%

2.4%

2.9%

3.2%

3.4%

Balance Sheet:

Cash

22.1

$       

3.0

$         

6.8

$         

60.7

$       

128.8

$     

Total Debt

501.7

462.9

410.2

400.0

400.0

32

PROJECT LASSO

Valuation Considerations for Selected Concepts

Advantages

Considerations

Strong positioning

Implementation of professional service

system has substantially improved service

levels

Strong relationships with concierges help

drive traffic

Limited future growth

The Landry's division contains a number of

"one-off" concepts with limited synergies

Advantages

Considerations

Impressive AUVs and restaurant-level profit

(especially at the Disney units)

Unique concept with broad, differentiated

appeal

Lease-termination provisions create

significant uncertainty and business risk

Recent sale process was unsuccessful

Performance is highly dependent upon

tourism (increased potential volatility)

Limited expansion potential

Advantages

Considerations

Strong positioning of brand in core markets

Impressive AUVs and restaurant-level

margins for Texas units

Potential for strong future unit growth

Units outside Texas, especially recent

openings, have not performed as well

Regional concentration, with limited footprint

outside of Texas

Recent sale process was unsuccessful

33

PROJECT LASSO

Projected Division-Level Contribution —

Gaming Division

Projected Income Statement (2007

-

2011)

—

Gaming

Division

(US$ in millions)

Note:

Per

Lasso

management

as

of

April

2008.

(a)

Casino overhead included in labor costs. Assumes $5.0 million of G&A is allocated to Golden Nugget per discussions with Lasso management.

(b)

Includes

$11.0

million

in

mandatory

cash

that

is

physically

held

on

premises of the Golden Nugget properties per discussions with Lasso management.

The gaming division is

projected to have steady

revenue growth and

expanding EBITDA margins

Historical

Projected

2007

2008

2009

2010

2011

Total Revenues

265.9

$   

264.7

$   

290.0

$   

342.0

$   

357.0

$   

Costs and Expenses:

Cost of Sales

14.5

14.5

15.9

18.8

19.5

Labor

110.1

109.4

119.8

141.6

147.6

Other Operating

77.3

79.6

84.3

95.6

86.9

Unit-level Profit

64.0

61.2

70.0

86.0

103.0

General and Administrative

(a)

5.0

5.0

5.0

5.0

5.0

Pre-opening

-

-

-

-

-

Stock Compensation Expense

-

-

-

-

-

EBITDA

59.0

56.2

65.0

81.0

98.0

Depreciation and Amortization

18.0

22.8

24.5

31.2

34.1

EBIT

40.9

33.4

40.5

49.8

63.9

Interest

37.8

35.8

33.7

41.1

42.1

Pretax Income

3.2

(2.4)

6.7

8.7

21.7

Taxes

1.0

(0.8)

2.2

2.8

7.0

Net Income from Continuing Operations

2.1

$       

(1.6)

$      

4.6

$        

5.9

$        

14.8

$      

Growth:

Total Revenues

(0.5%)

9.6%

17.9%

4.4%

EBITDA

(4.7%)

15.6%

24.6%

21.0%

Net Income from Continuing Operations

NM

NM

29.0%

149.9%

Margins:

Unit-level Profit

24.1%

23.1%

24.1%

25.1%

28.9%

EBITDA

22.2%

21.2%

22.4%

23.7%

27.5%

Net Income from Continuing Operations

0.8%

NM

1.6%

1.7%

4.1%

Balance Sheet:

Cash

(b)

17.5

$      

20.0

$       

20.0

$       

20.0

$       

20.8

$       

Total Debt

387.0

458.6

520.9

519.1

482.1

34

PROJECT LASSO

Current Valuation Multiples

The public markets are

currently valuing Lasso as

follows from the publicly

available information:

Lasso’s

Current

Valuation

(US$

and

shares

in

millions,

except

per

share

data)

Current Valuation

Stock

Price

(a)

$15.74

Shares

Outstanding

(a)

16.1

CSEs

from

Options

Outstanding

(b)

0.2

Fully

Diluted

Shares

16.4

Fully

Diluted

Market

Cap

$257.4

Total

Debt

(c)

888.7

Total

Cash

(c)(d)

28.6

Net

Debt

$860.1

Current Enterprise Value

$1,117.5

Financial Statistics and Estimates

Valuation Multiples

2007

Revenue

(c)

$1,171.9

2007

EBITDA

(c)

$177.1

Enterprise Value/LTM EBITDA

6.3x

2008E

EPS

(Consensus)

(e)

$1.41

2008E

P/E

(Consensus)

(e)

11.2x

2008E

EPS

(Mgmt.)

(f)

1.31

2008E

P/E

(Mgmt.)

(f)

12.0x

2009E

EPS

(Consensus)

(e)

1.48

2009E

P/E

(Consensus)

(e)

10.6x

2009E

EPS

(Mgmt.)

(f)

2.04

2009E

P/E

(Mgmt.)

(f)

7.7x

(a)

Stock price as of May 8, 2008. Basic shares from 10-K for the period ended December 31, 2007.  

(b)

Total options outstanding per Lasso management as of April 2008.

(c)

Financial statistics as of December 31, 2007.

(d)   Excludes $11.0 million in mandatory cash that is physically held on premises of the Golden Nugget properties per discussions with Lasso management.

(e)

Consensus EPS estimates per Reuters.

(f)

EPS estimates per Lasso management.

35

PROJECT LASSO

Valuation Adjustments

(US$ in millions)

Item

Adjustments

Possible Excess Value (Status Quo):

Value of Excess Corporate Real Estate

30.0

$               

Value of Dealership Land

1.8

Estimated Aggregate Pending Litigation Settlements

(a)

(20.0)

Total Valuation Adjustments

11.8

$               

EBITDA Adjustments

(US$ in millions)

Item

Adjustments

Estimated 2007 EBITDA Adjustments (Status Quo):

Operating Expense:

Discontinued Operations

2.8

$                  

Leap Year Adjustment

(0.8)

G&A Expense:

Discontinued Operations

0.0

2007 Non-recurring Litigation Costs

7.5

Total 2007 EBITDA Adjustments

9.5

$                  

Lasso Valuation Adjustments

Additionally, and where

appropriate, Lasso’s

valuation and EBITDA have

been adjusted for non-

recurring or atypical

expenses per discussions

with Lasso management, as

follows:

Note: Adjustments per discussions with Lasso management.

(a)

Includes estimates for numerous pending litigation settlements.

36

PROJECT LASSO

Projected

2009

2010

2011

EBIT

124.1

$           

133.6

$           

148.5

$           

Interest (13.0% Interest on New Senior Notes)

88.2

94.5

96.0

Pre-Tax Income

35.8

39.1

52.5

Taxes

11.5

12.5

16.8

Net Income from Continuing Operations

24.4

$            

26.6

$            

35.7

$            

EPS (Refinanced)

1.49

$            

1.63

$            

2.18

$            

EPS (Current Capital Structure)

2.04

$            

2.27

$            

3.00

$            

% EPS Change

(27.0%)

(28.2%)

(27.1%)

Average Shares Outstanding

16.4

16.4

16.4

Mgt.

Interest Rate

Proj.

11.0%

12.0%

13.0%

14.0%

15.0%

16.0%

2009

2.04

$ 

1.83

$   

1.66

$   

1.49

$   

1.32

$   

1.15

$   

0.99

$   

2010

2.27

1.96

1.79

1.63

1.46

1.30

1.13

2011

3.00

2.49

2.34

2.18

2.03

1.88

1.72

Valuation Adjustments for Potential Refinancing

In select analyses, where

appropriate, the impact of a

potential refinancing has

been considered

To evaluate the impact of a potential refinancing, we have assumed the following:

Refinancing occurs at year-end 2008

Refinance the $395.7 million, 9.5% interest rate Senior Notes

Assume $395.7 million of new debt at a 13.0% interest rate per discussions with

Lasso management

Tax rate of 32.0%

Excludes impact of fees

Lasso

Income

Statement

Impact

at

13.0%

Interest

(US$

and

shares

in

millions,

except

per

share

data)

EPS Sensitivity to Various Interest Rates

Note: Assumptions per discussions with Lasso management.

37

PROJECT LASSO

Current Adjusted Valuation

Including pro forma

valuation adjustments and

2007 EBITDA adjustments,

as well as pro forma

refinancing assumptions for

the restaurant-level debt,

Lasso is currently valued as

follows:

Lasso’s Current Valuation

(US$ and shares in millions, except per share data)

Current Valuation

Stock

Price

(a)

$15.74

Shares

Outstanding

(a)

16.1

CSEs

from

Options

Outstanding

(b)

0.2

Fully Diluted Shares

16.4

Fully Diluted Market Cap

$257.4

Total

Debt

(c)

$888.7

Total

Cash

(c)(d)

28.6

Net Debt

$860.1

Valuation

Adjustments

(e)

(11.8)

Adjusted Enterprise Value

$1,105.7

Adjusted Financial Statistics and Estimates

Valuation Multiples

2007 Revenue

(c)

$1,171.9

2007

EBITDA

(c)(e)

186.5

Enterprise Value/LTM EBITDA

5.9x

2008E

EPS

(Consensus)

(f)

$1.41

2008E P/E (Consensus)

(f)

11.2x

2008E

EPS

(Mgmt.)

(g)

1.31

2008E P/E (Mgmt.)

(g)

12.0x

2009E

EPS

(Consensus)

(f)

1.48

2009E P/E (Consensus)

(f)

10.6x

2009E

EPS

(Mgmt.)

(g)

2.04

2009E P/E (Mgmt.)

(g)

7.7x

2009E

EPS

(Mgmt.

with

Refinancing)

(h)

1.49

2009E P/E (Mgmt. with Refinancing)

(h)

10.6x

(a)

Stock price as of May 8, 2008. Basic shares from 10-K for the period ended December 31, 2007.

(b)

Total options outstanding per Lasso management as of April 2008.

(c)

Financial statistics as of December 31, 2007.

(d)   Excludes $11.0 million in mandatory cash that is physically held on premises of the Golden Nugget properties per discussions with Lasso management.

(e)

Includes valuation and 2007 EBITDA adjustments per discussions with Lasso management.

(f)

Consensus EPS estimates per Reuters.

(g)

EPS estimates per Lasso management.

(h)

Assumes pro forma interest from the refinancing of the $395.7 million, 9.5% interest rate restaurant debt on December 31, 2008 at 13.0% per discussions with Lasso

management.

38

PROJECT LASSO

Valuation Discussion

We focused on 2007 EBITDA and forward earnings as the key drivers of valuation, as

well as:

Adjustments for unusual events (valuation and 2007 EBITDA)

Expected revenue and earnings growth rates

Cash flow needs/generation

Execution risk, including significant capital expenditures in the Golden Nugget

Where

appropriate,

we

evaluated

a

refinancing

of

the

9.5%

Senior

Notes

and

its

impact on EPS

We excluded the impact of net operating losses

We focused on the following primary valuation methodologies:

Sum-of-the-parts analysis

•

Valuation of comparable public companies

•

Valuation of comparable M&A transactions

•

Discounted cash flow analysis

Analysis of premiums paid for comparable public companies

Cowen took into account a

variety of considerations

when valuing Lasso

39

PROJECT LASSO

Premiums

paid

for

2007

-

2008

YTD

transactions

with

equity

values

between

$250.0

million

and

$1.0 billion

Considered

“pre-affected”

price

as

of

January

28,

2008

and

current

price

as

of

May

8,

2008

Compared to 1-day, 1-week, 1-month and 3-month spot prices

Based on EBITDA, P/E and

trading multiples for

comparable companies

Premiums Paid Analysis

Valuation Approach

Given Lasso’s disparate

operating divisions, Cowen

primarily relied upon the

following valuation

methodologies:

Sum-of-the-Parts Analysis

Comparable Companies

Discounted Cash Flow

Comparable Acquisitions

Analyzed the restaurant and gaming operations by division using the following methodologies:

Comparable Companies

Comparable Acquisitions

DCFs

Management four-year

unlevered free cash flow

projections

Appropriate discount rate

applied based on WACC

Appropriate terminal value

multiples

Evaluated comparable

acquisition transactions

based on public

information

Primarily focused on

EBITDA multiples

40

PROJECT LASSO

$10.00

$12.00

$14.00

$16.00

$18.00

$20.00

$22.00

$24.00

$26.00

$28.00

$30.00

$32.00

$34.00

$36.00

$38.00

$40.00

3-Months ($27.75)

1-Month ($19.87)

1-Week ($14.79)

1-Day ($16.67)

3-Months ($20.40)

1-Month ($16.11)

1-Week ($16.10)

1-Day ($15.79)

Restaurant and Gaming Division

2007 EBITDA

2009E P/E (Mgmt. with Refinancing)

2009E P/E (Mgmt.)

2008E P/E (Mgmt.)

2007 EBITDA

Current Bid = $21.00

Stock Price

Valuation Summary

Valuation Summary

Sum-of-the-Parts Analysis:

Comparable Companies Analysis

Comparable

Acquisitions

Analysis

Discounted

Cash

Flow

Analysis

Premiums Paid Analysis:

Spot

Prices

Prior

to

May

8,

2008

Spot

Prices

Prior

to

January

28,

2008

(a)

(a)

Reflects pre-affected price prior to initial $23.50 offer.

41

PROJECT LASSO

Valuation Summary (Cont.)

Valuation Summary

(US$ in millions, except per share data)

Lasso

Multiple

Implied

Implied

Implied

Methodology

Figure

Range

Enterprise Value

Equity Value

(a)

Stock Price

(b)

Sum-of-the-Parts Valuation Analysis

Comparable Companies Analysis

2007 EBITDA

(c)

Restaurant Division

$127.6

5.0x

-

6.0x

$638.0

-

$765.6

$170.2

-

$297.8

$10.45

-

$17.95

Gaming Division

59.0

7.0x

-

9.0x

412.7

-

530.6

32.2

-

150.1

1.97

-

9.04

Total

$186.5

5.6x

-

6.9x

$1,050.7

-

$1,296.2

$202.4

-

$447.9

$12.42

-

$26.99

2008E P/E (Mgmt.)

(d)

Restaurant Division

$23.1

13.0x

-

17.0x

$768.5

-

$861.0

$300.8

-

$393.3

$18.37

-

$23.83

Gaming Division

(1.6)

13.0x

-

17.0x

359.1

-

352.5

(21.4)-

(28.0)

(1.31)-

(1.70)

Total

$21.5

13.0x

-

17.0x

$1,127.6

-

$1,213.6

$279.4

-

$365.3

$17.06

-

$22.13

2009E P/E (Mgmt.)

(d)

Restaurant Division

$28.8

11.0x

-

15.0x

$784.5

-

$899.7

$316.8

-

$432.0

$19.19

-

$25.93

Gaming Division

4.6

11.0x

-

13.0x

431.0

-

440.1

50.4

-

59.6

3.06

-

3.58

Total

$33.4

11.0x

-

14.7x

$1,215.5

-

$1,339.9

$367.2

-

$491.6

$22.25

-

$29.51

2009E P/E (Mgmt. with Refinancing)

(e)

Restaurant Division

$19.8

11.0x

-

15.0x

$685.5

-

$764.6

$217.7

-

$296.9

$13.30

-

$18.00

Gaming Division

4.6

11.0x

-

13.0x

431.0

-

440.1

50.4

-

59.6

3.08

-

3.61

Total

$24.4

11.0x

-

14.6x

$1,116.4

-

$1,204.8

$268.1

-

$356.5

$16.39

-

$21.61

Comparable Acquisitions Analysis

2007 EBITDA

(c)

Restaurant Division

$127.6

5.0x

-

6.0x

$638.0

-

$765.6

$170.2

-

$297.8

$10.45

-

$17.95

Gaming Division

59.0

7.0x

-

9.0x

412.7

-

530.6

32.2

-

150.1

1.97

-

9.04

Total

$186.5

5.6x

-

6.9x

$1,050.7

-

$1,296.2

$202.4

-

$447.9

$12.42

-

$26.99

Discounted Cash Flow Analysis

2007 EBITDA

(c)

Restaurant Division (Exit Multiples of 5.0x -

6.0x, 12.5% -

14.5% Discount Rate)

$127.6

4.9x

-

5.9x

$627.6

-

$753.5

$159.9

-

$285.8

$9.86

-

$17.44

Gaming Division (Exit Multiples of 7.0x -

9.0x, 11.5% -

13.5% Discount Rate)

59.0

6.7x

-

9.3x

392.2

-

551.1

11.7

-

170.6

0.72

-

10.50

Total

$186.5

5.5x

-

7.0x

$1,019.9

-

$1,304.6

$171.6

-

$456.4

$10.58

-

$27.95

Premiums Paid Analysis

Spot Prices Prior to May 08, 2008

(f)

1-Day ($15.79)

$15.79

10.5%

-

35.6%

$1,134.1

-

$1,201.2

$285.9

-

$352.9

$17.45

-

$21.40

1-Week ($16.10)

16.10

13.1%

-

37.8%

1,146.9

-

1,214.4

298.6

-

366.1

18.21

-

22.18

1-Month ($16.11)

16.11

14.0%

-

39.5%

1,149.5

-

1,219.4

301.2

-

371.1

18.36

-

22.48

3-Months ($20.40)

20.40

12.5%

-

41.6%

1,227.5

-

1,328.9

379.2

-

480.6

22.95

-

28.88

Spot Prices Prior to January 28, 2008

(g)

1-Day ($16.67)

$16.67

10.5%

-

35.6%

$1,150.5

-

$1,221.5

$302.2

-

$373.2

$18.42

-

$22.60

1-Week ($14.79)

14.79

13.1%

-

37.8%

1,122.1

-

1,183.7

273.8

-

335.4

16.73

-

20.38

1-Month ($19.87)

19.87

14.0%

-

39.5%

1,222.3

-

1,308.7

374.1

-

460.5

22.65

-

27.72

3-Months ($27.75)

27.75

12.5%

-

41.6%

1,369.7

-

1,510.3

521.4

-

662.0

31.22

-

39.28

(a)

Assumes net debt of $848.3 million, which includes valuation adjustments per discussion with Lasso management and excludes $11.0 million in mandatory cash 

that is physically held on premises of the Golden Nugget properties; allocated based on previous schedules.

(b)

Basic shares from 10-K for the period ended December 31, 2007.  Options outstanding per Lasso management as of April 2008.

(c)

Includes 2007 EBITDA adjustments per discussion with Lasso management.

(d)

EPS estimates per Lasso management.

(e)

Assumes pro forma interest from the refinancing of the $395.7 million, 9.5% interest rate restaurant debt on December 31, 2008 at 13.0% per discussions with 

Lasso management.

(f)

Prices prior to current price as of May 8, 2008.  Premiums represent the first and third quartile for the specified date and transaction size range.

(g)

Prices prior to initial bid on January 28, 2008.  Premiums represent the first and third quartile for the specified date and transaction size range.

42

PROJECT LASSO

Comparable Restaurant Analysis —

Market Statistics

Market Analysis of Restaurant Companies

(US$ in millions, except per share data)

(a)

Market Value plus net debt plus minority interest.

(b)

EPS estimates and Secular Growth Rates (SGR) per Wall Street Research.

Price

52 Week

FD

Enterprise

Enterprise Value

(a)

/ LTM

PE Ratios

(b)

5-Year

PE % of SGR

(b)

Company Name

5/8/2008

Low

High

Mkt

Cap

Value

(a)

Rev

EBITDA

2008E

2009E

SGR

(b)

2008E

2009E

Benihana

$10.32

$9.06

$25.11

$158.0

$182.4

0.6x

4.7x

12.7x

11.9x

15.0%

84.9%

79.1%

Brinker

22.74

14.65

34.33

2,313.1

3,136.1

0.7x

6.0x

13.5x

11.7x

15.0%

90.0%

78.2%

California Pizza Kitchen

16.01

9.32

25.23

410.3

420.5

0.6x

5.9x

27.1x

24.2x

12.0%

226.1%

201.9%

CEC Entertainment

37.71

19.81

39.55

1,031.2

1,338.1

1.7x

7.1x

15.9x

14.2x

12.0%

132.6%

118.4%

McCormick & Schmick's

11.02

9.67

30.98

163.4

183.4

0.5x

7.5x

17.0x

13.8x

15.0%

113.0%

91.8%

O'Charley's

10.95

9.88

23.45

242.6

376.7

0.4x

4.4x

24.9x

17.7x

14.0%

177.8%

126.2%

Ruby Tuesday

8.14

5.70

28.12

420.9

1,026.1

0.7x

6.0x

17.1x

14.9x

15.0%

114.2%

99.3%

Min

0.4x

4.4x

12.7x

11.7x

12.0%

84.9%

78.2%

Mean

0.8x

5.9x

18.3x

15.5x

14.0%

134.1%

113.6%

Median

0.6x

6.0x

17.0x

14.2x

15.0%

114.2%

99.3%

Max

1.7x

7.5x

27.1x

24.2x

15.0%

226.1%

201.9%

43

PROJECT LASSO

Price

52 Week

FD

Enterprise

Enterprise Value

(a)

/ LTM

PE Ratios

(b)

5-Year

PE % of SGR

(b)

Company Name

5/8/2008

Low

High

Mkt Cap

Value

(a)

Rev

EBITDA

2008E

2009E

SGR

(b)

2008E

2009E

Ameristar Casinos

$17.25

$15.29

$38.00

$986.5

$2,527.4

2.2x

9.1x

13.6x

11.8x

10.0%

135.8%

118.2%

Boyd Gaming Corp.

18.19

17.10

54.22

1,596.3

3,697.1

1.9x

7.3x

13.8x

12.7x

17.0%

81.1%

74.8%

Isle of Capri Casinos

6.15

5.93

26.03

216.6

1,669.1

1.5x

9.4x

NM

24.6x

13.0%

NA

189.2%

Monarch Casino and Resort

13.66

12.53

31.41

251.0

235.3

1.5x

6.1x

18.0x

13.4x

15.0%

119.8%

89.3%

Pinnacle Entertainment

14.37

12.12

31.34

861.3

1,599.5

1.7x

17.6x

NM

33.4x

15.0%

NM

222.8%

Riviera Holdings

15.25

14.24

39.12

192.0

391.3

1.9x

9.4x

NA

NA

NA

NA

NA

Trump Entertainment Resorts

2.45

2.40

17.15

79.8

1,661.1

1.7x

12.6x

NM

NM

15.0%

NA

NA

Min

1.5x

6.1x

13.6x

11.8x

10.0%

81.1%

74.8%

Mean

1.8x

10.2x

31.3x

19.2x

14.2%

112.2%

138.9%

Median

1.7x

9.4x

15.9x

13.4x

15.0%

119.8%

118.2%

Max

2.2x

17.6x

79.8x

33.4x

17.0%

135.8%

222.8%

Market Analysis of Select Casino and Gaming Companies

(US$ in millions, except per share data)

Comparable Casino and Gaming Analysis —

Market Statistics

(a)

Market Value plus net debt plus minority interest.

(b)

EPS estimates and Secular Growth Rates (SGR) per Wall Street Research.

44

PROJECT LASSO

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

8.0x

9.0x

10.0x

11.0x

12.0x

13.0x

5/08

9/06

1/05

5/03

9/01

1/00

5/98

Lasso

Comparable Restaurants

Comparable Casino and Gaming

(Multiple)

10-year Casino Average (8.3x)

10-year Restaurant Average (8.1x)

10-year Lasso Average (6.5x)

Historical Trading Analysis

Analysis of Historical LTM EBITDA Trading Multiples

Even with the recent

decline, Lasso is still trading

near its 10-year average

LTM EBITDA trading

multiple, which is a discount

to both the restaurant and

casino and gaming

companies

Note: Factset as of May 8, 2008. 

Comparable

Restaurants

include:

Benihana,

Brinker

International,

California

Pizza

Kitchen,

CEC

Entertainment,

McCormick

&

Schmick’s,

O’Charley’s

and

Ruby

Tuesday.

Comparable Casino and Gaming includes: Ameristar Casinos, Boyd Gaming, Isle of Capri Casinos, Monarch Casino & Resort, Pinnacle Entertainment, Riviera Holdings and

Trump Entertainment.

45

PROJECT LASSO

Enterprise Value/

Date

Date

Ent.

LTM

LTM

Announced

Closed

Target

Acquirer

Val.

(a)

Revenue

EBITDA

3/11/2008

TBD

Hooters Inc.

Chanticleer Holdings

55.1

$      

NA

NA

12/4/2007

1/3/2008

Smokey Bones Barbeque & Grill

Sun Capital

80.0

NA

NA

11/6/2007

2/20/2008

Cameron Mitchell Restaurants

Ruth's Chris Steak House

92.0

0.9x

7.0x

8/23/2007

8/23/2007

Yard House

TSG Consumer Partners

190.0

1.7x

9.5x

8/16/2007

10/1/2007

RARE Hospitality

Darden Restaurants

1,368.3

1.3x

11.4x

7/16/2007

11/29/2007

Applebee's

IHOP

2,071.0

1.5x

9.2x

7/5/2007

10/22/2007

Champps Entertainment

F&H Acquisition Corp. (Fox & Hound)

70.9

0.3x

5.8x

6/18/2007

9/4/2007

Friendly Ice Cream Corp.

Freeze Operations (Sun Capital)

337.2

0.6x

8.1x

5/22/2007

6/14/2007

OSI Restaurant Partners (Outback)

Bain Capital, Catterton, Company Founders

3,432.2

0.9x

9.3x

5/7/2007

8/20/2007

Smith & Wollensky

Patina Restaurant Group

97.4

0.8x

13.2x

12/7/2006

3/5/2007

Hard Rock Café (sub of Rank Group PLC)

Seminole Tribe of Florida

965.0

1.9x

9.9x

10/30/2006

12/6/2006

Logan's Roadhouse

Bruckman, Rosser, Sherrill & Co.

486.0

1.2x

10.4x

10/10/2006

10/16/2006

Joe's Crab Shack

J.H. Whitney Capital Partners

192.0

0.6x

6.4x

8/18/2006

1/12/2007

Lone Star Steakhouse

Lone Star Funds

556.3

0.8x

12.3x

8/8/2006

8/10/2006

Real Mex Restaurants

Sun Capital

350.0

0.6x

6.2x

5/22/2006

6/29/2006

Main Street Restaurant Group

The Briad Group

150.3

0.6x

8.2x

12/9/2005

3/8/2006

Dave & Buster's (DAB)

Wellspring Capital Management

383.0

0.8x

6.1x

10/4/2005

2/27/2006

Fox & Hound Restaurant Group (FOXX)

Newcastle Partners and Steel Partners

179.6

1.1x

8.2x

4/29/2005

9/22/2005

Worldwide Restaurant Concepts (SZ)

Pacific Equity Partners

220.2

0.6x

8.8x

1/20/2005

3/7/2005

Charlie Brown's

Trimaran Partners

140.0

0.9x

7.0x

1/11/2005

2/23/2005

Uno Restaurant Holdings

Centre Partners

191.6

0.6x

5.6x

Comparable Restaurant M&A Transactions

(a)

Represents total consideration including the assumption of liabilities and residual cash (enterprise value) when available.

Comparable Restaurant M&A Transactions

(US$ in millions)

46

PROJECT LASSO

Enterprise Value/

Date

Date

Ent.

LTM

LTM

Announced

Closed

Target

Acquirer

Val.

(a)

Revenue

EBITDA

10/20/2004

11/30/2004

Chevy's

Real Mex Restaurants, Inc.

84.6

$      

0.3x

NA

6/16/2004

4/13/2005

Quality Dining Inc. (QDIN)

Investor Group

129.6

0.6x

5.4x

9/30/2003

3/10/2004

Garden Fresh (LTUS)

Centre Partners / Fairmont Capital

135.8

0.6x

5.4x

5/8/2003

6/30/2003

Vicorp Restaurants

Wind Point Partners

225.5

NA

4.9x

10/29/2002

1/28/2003

Ninety Nine Restaurants & Pub

O'Charley's (CHUX)

160.0

0.8x

6.2x

9/11/2002

10/4/2002

Saltgrass Steak House

Landry's Restaurants (LNY)

75.0

0.8x

5.8x

2/19/2002

2/19/2002

C. A. Muer Corp

Landry's Restaurants (LNY)

28.0

0.5x

NA

6/9/2001

8/22/2001

McCormick & Schmick's (Division of AVDO)

BRS & Castle Harlan

123.5

0.8x

6.8x

2/15/2001

5/14/2001

Vicorp Restaurants (VRES)

Goldner Hawn Johnson & Morrison / BancBoston / Fairmont

171.4

0.5x

4.1x

11/16/2000

7/17/2001

Il Fornaio (ILFO)

Bruckmann, Rosser, Sherrill & Co

74.5

0.6x

6.0x

10/25/2000

7/31/2001

Uno Restaurant Corp. (UNO)

Aaron Spencer (Chairman) and Other Management

166.7

0.7x

5.4x

9/26/2000

12/1/2000

Rainforest Café (RAIN)

Landry's Restaurants (LNY)

59.1

0.2x

2.6x

6/5/2000

10/2/2000

Buffets (BOCB)

Caxton-Iseman

566.1

0.6x

4.9x

Mean (All)

0.8x

7.3x

Median (All)

0.7x

6.6x

Mean (2005 - Current)

0.9x

8.6x

Median (2005 - Current)

0.8x

8.2x

Mean (2000 - 2004)

0.6x

5.2x

Median (2000 - 2004)

0.6x

5.4x

Comparable Restaurant M&A Transactions (Cont.)

(a)

Represents total consideration including the assumption of liabilities and residual cash (enterprise value) when available.

Comparable Restaurant M&A Transactions

(US$ in millions)

47

PROJECT LASSO

Comparable Casino and Gaming M&A Transactions

(a)

Represents total consideration including the assumption of liabilities and residual cash (enterprise value) when available.

Comparable Casino and Gaming M&A Transactions

(US$ in millions)

Enterprise Value/

Date

Date

Ent.

LTM

LTM

Announced

Closed

Target

Acquirer

Val.

(a)

Revenue

EBITDA

12/11/2007

TBD

Cannery Casino Resorts

Crown Limited

1,750.0

$ 

NA

NA

11/13/2007

1/25/2008

Isle of Capri Casinos (Black Hawk)

Isle of Capri Casinos

150.2

NA

NA

9/4/2007

9/4/2007

Jalou

Fox

Jacobs Entertainment

13.7

NA

NA

6/27/2007

3/10/2008

Binions

Gambling Hall

TLC Casino Enterprises

32.0

NA

NA

6/15/2007

TBD

Penn National Gaming

Fortress

Investment

Group

and

Centerbridge

Partners

8,717.1

3.8x

14.3x

6/4/2007

6/4/2007

Green Acres Casino Management

Gaming Entertainment

10.0

NA

NA

4/23/2007

2/20/2008

Icahn Enterprises (American Casino, Stratosphere)

Whitehall Street Fund (Goldman)

1,200.0

3.1x

13.9x

4/3/2007

11/6/2007

Gateway Casinos Income Fund

New World Gaming Partners

854.4

NM

18.8x

3/19/2007

6/11/2007

Casino Aztar

Isle of Capri Casinos

45.0

NA

NA

1/19/2007

TBD

155 East Tropicana (Hooters Casino)

NTH

Advisory

Group

and

Silverleaf

Real

Estate

95.0

1.4x

NM

12/4/2006

11/7/2007

Station Casinos

Fertitta

Colony Partners

8,675.9

NM

19.3x

12/19/2006

1/28/2008

Harrah's Entertainment

Apollo Management and TPG

27,753.3

2.9x

11.9x

12/7/2006

3/5/2007

Hard Rock Café

Seminole Tribe of Florida

965.0

2.0x

NA

9/11/2006

9/11/2006

Stanley Leisure

Genting

International

1,265.9

3.0x

16.4x

9/5/2006

11/17/2006

Sands Casino

Pinnacle Entertainment

250.0

NA

NA

8/31/2006

11/2/2006

London Clubs International

Dagger Holdings (Harrah's)

592.0

2.5x

19.1x

5/31/2006

3/1/2007

Dania Jai Alai

Boyd Gaming

152.5

NA

NA

5/17/2006

1/3/2007

Sands Regent

Herbst

Gaming

138.1

1.6x

9.2x

5/11/2006

2/5/2007

Hard Rock Casino (Las Vegas)

Morgans

Hotel Group

770.0

4.2x

NM

4/13/2006

1/3/2007

Aztar Corp (Tropicana Casino)

Wimar

Tahoe Corp. (Blackstone)

2,735.4

3.0x

12.8x

4/10/2006

2/1/2007

Stockman's Casino

Full House Resorts

25.5

2.3x

10.0x

2/14/2006

7/31/2006

Isle of Capri Casinos (Two Casinos)

Legends Gaming

240.0

1.5x

6.8x

11/29/2005

5/19/2006

Harrah's (Flamingo Casino, Laughlin)

American Real Estate Partners

170.0

NA

NA

8/22/2005

12/23/2005

Imperial Palace

Harrah's Entertainment

370.0

NA

NA

48

PROJECT LASSO

Enterprise Value/

Date

Date

Ent.

LTM

LTM

Announced

Closed

Target

Acquirer

Val.

(a)

Revenue

EBITDA

6/20/2005

10/25/2005

Argosy Casino (Baton Rouge)

Columbia Sussex Corp.

150.0

$     

1.7x

7.4x

3/23/2005

4/25/2005

MotorCity Casino

Ilitch Holdings Inc

981.3

2.3x

NA

2/28/2005

9/1/2005

Depot Casino

Sands Regent

10.2

1.9x

NA

2/4/2005

9/27/2005

Golden Nugget Casino

Landry's Restaurants

316.1

1.6x

13.4x

1/20/2005

7/22/2005

Galaxy Casino SA

Canton Treasure Group Ltd

2,359.5

NM

NA

11/3/2004

10/3/2005

Argosy Gaming

Penn National Gaming

2,149.8

2.1x

8.1x

7/15/2004

6/13/2005

Caesars Entertainment

Harrah's Entertainment

9,356.5

2.0x

8.6x

6/4/2004

4/26/2005

Mandalay Resort Group

MGM Mirage

7,659.0

2.9x

10.3x

2/6/2004

7/1/2004

Coast Casinos

Boyd Gaming

1,282.2

2.2x

8.9x

9/10/2003

7/1/2004

Horseshoe Gaming Holding Corp.

Harrah's Entertainment

1,450.0

1.8x

8.3x

8/7/2002

3/3/2003

Hollywood Casino Corp.

Penn National Gaming

782.1

1.7x

8.5x

9/19/2000

12/19/2002

Stratosphere Corp.

Icahn Associates Corp.

77.4

0.6x

6.4x

4/24/2001

8/1/2001

Harveys Casino Resorts

Harrah's Entertainment

625.4

1.4x

6.0x

3/6/2000

5/31/2000

Mirage Resorts

MGM Grand

6,559.7

2.8x

14.3x

Mean

2.3x

11.5x

Median

2.1x

10.1x

Mean (Sub-$1.0 Billion Enterprise Value)

1.9x

10.6x

Median (Sub-$1.0 Billion Enterprise Value)

1.7x

8.9x

Mean (2005 - Current)

2.4x

13.3x

Median (2005 - Current)

2.3x

13.4x

Mean (2000 - 2004)

2.0x

8.8x

Median (2000 - 2004)

2.0x

8.5x

Comparable Casino and Gaming M&A Transactions (Cont.)

(a)

Represents total consideration including the assumption of liabilities and residual cash (enterprise value) when available.

Comparable Casino and Gaming M&A Transactions

(US$ in millions)

49

PROJECT LASSO

Discounted Cash Flow Overview —

Restaurant Division

There are two key components to the restaurant division DCF

The present value of the stream of unlevered cash flows in the projected period

The terminal value based on EBITDA in the out-year of the projected period

Projections used for the DCF model were those provided by Lasso management

Using the CAPM formula and a set of comparable restaurant companies/Lasso’s

projected beta according to Barra’s Betas, we calculated Lasso’s restaurant division

cost of capital as approximately 13.5%

Pre-tax cost of debt of 12.0%

(a)

Risk-free rate of 3.5%

(b)

Re-levered comparable company beta of 1.97

Equity risk premium of 7.1%

(c)

Size premium of 4.4%

(c)

We

presented

the

DCF

with

discount

rates

ranging

from

12.5%

-

14.5%

We

presented

the

DCF

with

exit

multiples

of

5.0x

-

6.0x

EBITDA

We utilized a discounted

cash flow (DCF) model for

the restaurant division to

calculate its intrinsic value

to Lasso

(a)

Represents a blended interest rate between Lasso’s restaurant credit facility and the estimated refinancing of the Senior Notes at 13.0%.

(b)

U.S. 10-year Treasury Yield as of April 18, 2008.

(c)

Per Ibbotson Associates data.

50

PROJECT LASSO

Discounted

Cash

Flow

Analysis

—

Restaurant

Division

(US$

in

millions,

except

per

share

data)

Discounted

Cash

Flow

Analysis

—

Restaurant

Division

Note: Valuation as of December 31, 2007.

(a)

Reflects taxes for a non-levered firm with a tax rate of 32.0% per Lasso projection model.

(b)

EBIAT reflects earnings before interest and after taxes.

(c)

Excess value adjustments per discussions with Lasso management.

(d)

2007 EBITDA adjustments per discussions with Lasso management.

Projected

Fiscal Year Ending December,

2008

2009

2010

2011

Revenue

948.7

$    

983.5

$    

988.0

$    

997.0

$    

EBITDA

129.6

135.8

136.4

137.8

EBIT

78.2

83.6

83.8

84.6

Less: Taxes

(a)

25.0

26.8

26.8

27.1

EBIAT

(b)

53.2

56.9

57.0

57.5

Plus: Depreciation and Amortization

51.4

52.1

52.7

53.2

Plus: Stock Compensation Expense

4.0

3.6

3.6

3.6

Less: Capital Expenditures

(40.0)

(22.0)

(22.0)

(22.0)

Decrease/(Increase) in Working Capital

(23.7)

3.8

0.9

1.2

Unlevered Free Cash Flow

44.8

$     

94.3

$     

92.1

$     

93.5

$     

Discount Rate

12.5%

13.5%

14.5%

Terminal EBITDA Multiple

5.0x

5.5x

6.0x

5.0x

5.5x

6.0x

5.0x

5.5x

6.0x

2011E EBITDA

$137.8

$137.8

$137.8

$137.8

$137.8

$137.8

$137.8

$137.8

$137.8

Terminal Value

688.9

757.8

826.7

688.9

757.8

826.7

688.9

757.8

826.7

PV of Terminal Value

430.1

473.1

516.1

415.1

456.6

498.1

400.8

440.9

481.0

PV of Near-term Free Cash Flows

237.4

237.4

237.4

232.0

232.0

232.0

226.8

226.8

226.8

Implied Enterprise Value

$667.5

$710.5

$753.5

$647.1

$688.7

$730.2

$627.6

$667.7

$707.8

Plus: Valuation Adjustments

(c)

11.8

11.8

11.8

11.8

11.8

11.8

11.8

11.8

11.8

Plus: Cash & Equivalents

22.1

22.1

22.1

22.1

22.1

22.1

22.1

22.1

22.1

Less: Total Debt

501.7

501.7

501.7

501.7

501.7

501.7

501.7

501.7

501.7

Implied Equity Value

$199.7

$242.8

$285.8

$179.4

$220.9

$262.4

$159.9

$200.0

$240.1

Implied Equity Value per Share

$12.26

$14.86

$17.44

$11.03

$13.54

$16.04

$9.86

$12.28

$14.69

Implied Enterprise Value as a

5.2x

5.6x

5.9x

5.1x

5.4x

5.7x

4.9x

5.2x

5.5x

Multiple of 2007 Adjusted EBITDA

(d)

51

PROJECT LASSO

Discounted

Cash

Flow

Overview

—

Gaming

Division

There are three key components to the gaming division DCF

The present value of the stream of unlevered cash flows in the projected period

The terminal value based on EBITDA in the out-year of the projected period

The impact of building the new tower at the Las Vegas Golden Nugget

Projections used for the DCF model were those provided by Lasso management

Using

the

CAPM

formula

and

a

set

of

comparable

casino

and

gaming

companies/Lasso’s

projected beta according to Barra’s Betas, we calculated Lasso’s gaming division cost of

capital as approximately 12.5%

Pre-tax cost of debt of 9.0%

Risk-free rate of 3.5%

(a)

Re-levered comparable company beta of 1.99

Equity risk premium of 7.1%

(b)

Size premium of 9.7%

(b)

We

presented

the

DCF

with

discount

rates

ranging

from

11.5%

-

13.5%

We

presented

the

DCF

with

exit

multiples

of

7.0x

-

9.0x

EBITDA

We utilized a discounted

cash flow (DCF) model for

the gaming division to

calculate its intrinsic value

to Lasso

(a)

U.S. 10-year Treasury Yield as of April 18, 2008.

(b)

Per Ibbotson Associates data.

52

PROJECT LASSO

Discounted

Cash

Flow

Analysis

—

Gaming

Division

(US$

in

millions,

except

per

share

data)

Discounted

Cash

Flow

Analysis

—

Gaming

Division

Note: Valuation as of December 31, 2007.

(a)

Reflects taxes for a non-levered firm with a tax rate of 32.0% per Lasso projection model.

(b)

EBIAT reflects earnings before interest and after taxes.

(c)

Excludes

$11.0

million

in

mandatory

cash

that

is

physically

held

on

premises

of

the

Golden

Nugget

properties

per

discussions

with

Lasso

management.

Projected

Fiscal Year Ending December,

2008

2009

2010

2011

Revenue

264.7

$    

290.0

$    

342.0

$    

357.0

$    

EBITDA

56.2

65.0

81.0

98.0

EBIT

33.4

40.5

49.8

63.9

Less: Taxes

(a)

10.7

12.9

16.0

20.4

EBIAT

(b)

22.7

27.5

33.9

43.4

Plus: Depreciation and Amortization

22.8

24.5

31.2

34.1

Plus: Stock Compensation Expense

-

-

-

-

Less: Capital Expenditures

(85.6)

(99.4)

(44.7)

(12.0)

Decrease/(Increase) in Working Capital

(4.8)

2.8

4.2

(5.5)

Unlevered Free Cash Flow

(44.9)

$   

(44.5)

$   

24.5

$     

60.0

$     

Discount Rate

11.5%

12.5%

13.5%

Terminal EBITDA Multiple

7.0x

8.0x

9.0x

7.0x

8.0x

9.0x

7.0x

8.0x

9.0x

2011E EBITDA

$98.0

$98.0

$98.0

$98.0

$98.0

$98.0

$98.0

$98.0

$98.0

Terminal Value

686.0

784.0

882.0

686.0

784.0

882.0

686.0

784.0

882.0

PV of Terminal Value

443.8

507.2

570.6

428.3

489.4

550.6

413.4

472.4

531.5

PV of Near-term Free Cash Flows

(19.5)

(19.5)

(19.5)

(20.4)

(20.4)

(20.4)

(21.1)

(21.1)

(21.1)

Implied Enterprise Value

$424.3

$487.7

$551.1

$407.9

$469.1

$530.3

$392.2

$451.3

$510.3

Plus:

Cash

&

Equivalents

(c)

6.5

6.5

6.5

6.5

6.5

6.5

6.5

6.5

6.5

Less: Total Debt

387.0

387.0

387.0

387.0

387.0

387.0

387.0

387.0

387.0

Implied Equity Value

$43.8

$107.2

$170.6

$27.4

$88.6

$149.7

$11.7

$70.7

$129.8

Implied Equity Value per Share

$2.71

$6.64

$10.50

$1.70

$5.48

$9.24

$0.72

$4.38

$8.03

Implied Enterprise Value as a

7.2x

8.3x

9.3x

6.9x

8.0x

9.0x

6.7x

7.7x

8.7x

Multiple of 2007 EBITDA

53

PROJECT LASSO

Discounted

Cash

Flow

Analysis

—

Impact

of

the

New

Tower

(US$

in

millions,

except

per

share

data)     

Discounted

Cash

Flow

Analysis

—

Impact

of

the

New

Tower

Note: Valuation as of December 31, 2007.

(a)

Reflects taxes for a non-levered firm with a tax rate of 32.0% per Lasso projection model.

(b)

EBIAT reflects earnings before interest and after taxes.

Projected

Fiscal Year Ending December,

2008

2009

2010

2011

Revenue

-

$          

-

$          

13.8

$      

51.9

$      

EBITDA

-

-

5.5

18.7

EBIT

(0.6)

(2.6)

1.6

14.7

Less: Taxes

(a)

(0.2)

(0.8)

0.5

4.7

EBIAT

(b)

(0.4)

(1.8)

1.1

10.0

Plus: Depreciation and Amortization

0.6

2.6

4.0

4.0

Plus: Stock Compensation Expense

-

-

-

-

Less: Capital Expenditures

(49.7)

(108.2)

(0.6)

-

Decrease/(Increase) in Working Capital

-

-

-

-

Unlevered Free Cash Flow

(49.5)

$   

(107.4)

$ 

4.4

$       

14.0

$     

Discount Rate

11.5%

12.5%

13.5%

Terminal EBITDA Multiple

7.0x

8.0x

9.0x

7.0x

8.0x

9.0x

7.0x

8.0x

9.0x

2011E EBITDA

$18.7

$18.7

$18.7

$18.7

$18.7

$18.7

$18.7

$18.7

$18.7

Terminal Value

130.9

149.6

168.3

130.9

149.6

168.3

130.9

149.6

168.3

PV of Terminal Value

84.7

96.8

108.9

81.7

93.4

105.1

78.9

90.1

101.4

PV of Near-term Free Cash Flows

(118.5)

(118.5)

(118.5)

(117.0)

(117.0)

(117.0)

(115.5)

(115.5)

(115.5)

Implied Enterprise Value

($33.8)

($21.7)

($9.6)

($35.3)

($23.6)

($11.9)

($36.6)

($25.4)

($14.1)

Plus: Cash & Equivalents

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Less: Total Debt

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Implied Equity Value

($33.8)

($21.7)

($9.6)

($35.3)

($23.6)

($11.9)

($36.6)

($25.4)

($14.1)

Implied Equity Value per Share

($2.10)

($1.35)

($0.60)

($2.18)

($1.46)

($0.74)

($2.27)

($1.57)

($0.87)

54

PROJECT LASSO

Selected Premiums Analysis

Selected

Premiums

Analysis

—

2007-2008

YTD

Completed

M&A

Transactions

Premiums Prior to Closing Price (Quartile)

1-Day

1-Week

1-Month

3-Months

First

Third

First

Third

First

Third

First

Third

Premiums Paid Analysis Prior to May 08, 2008

First and Third Quartile Spot Price

10.5%

35.6%

13.1%

37.8%

14.0%

39.5%

12.5%

41.6%

Spot Prices Prior to May 08, 2008:

1-Day ($15.79)

$17.45

$21.40

-

-

-

-

-

-

1-Week ($16.10)

-

-

$18.21

$22.18

-

-

-

-

1-Month ($16.11)

-

-

-

-

$18.36

$22.48

-

-

3-Months ($20.40)

-

-

-

-

-

-

$22.95

$28.88

First and Third Quartile Average Prices

10.5%

31.7%

13.1%

33.0%

14.7%

34.0%

Average Prices Prior to May 08, 2008:

1-Week ($15.76)

-

-

$17.41

$20.76

-

-

-

-

1-Month ($16.09)

-

-

-

-

$18.19

$21.40

-

-

3-Months ($17.55)

-

-

-

-

-

-

$20.13

$23.52

Premiums Paid Analysis Prior to January 28, 2008

(a)

First and Third Quartile Spot Price

10.5%

35.6%

13.1%

37.8%

14.0%

39.5%

12.5%

41.6%

Historical Spot Prices Prior to January 28, 2008 Initial $23.50 Bid:

1-Day ($16.67)

$18.42

$22.60

-

-

-

-

-

-

1-Week ($14.79)

-

-

$16.73

$20.38

-

-

-

-

1-Month ($19.87)

-

-

-

-

$22.65

$27.72

-

-

3-Months ($27.75)

-

-

-

-

-

-

$31.22

$39.28

First and Third Quartile Average Prices

10.5%

31.7%

13.1%

33.0%

14.7%

34.0%

Average Price Prior to January 28, 2008 Initial $23.50 Bid:

1-Week ($15.94)

-

-

$17.61

$20.99

-

-

-

-

1-Month ($16.31)

-

-

-

-

$18.44

$21.70

-

-

3-Months ($21.29)

-

-

-

-

-

-

$24.41

$28.53

Note: Per SDC and Factset as of May 2008. Includes all completed M&A transactions of public companies since 2007 with equity values between

         $250.0 million and $1.0 billion. 

(a)     Reflects pre-affected price prior to initial $23.50 offer.

55

PROJECT LASSO

Valuation at Various Share Prices

(a)

Except where noted, prices relative to initial bid announcement date.

(b)

Current price as of May 8, 2008.

(c)

Basic shares from 10-K for the period ended December 31, 2007. Options outstanding per Lasso management as of April 2008.

(d)

Assumes

net

debt

of

$860.1

million,

which

excludes

$11.0

million

in

mandatory

cash

that

is

physically

held

on

premises

of

the

Golden

Nugget

properties

per discussions with Lasso management.

(e)

Includes valuation and 2007 EBITDA adjustments per discussion with Lasso management.

(f)

Consensus EPS estimates per Reuters.

(g)

EPS estimates per Lasso management.

(h)

Assumes pro forma interest from the refinancing of the $395.7 million, 9.5% interest rate restaurant debt on December 31, 2008 at 13.0% per discussions with Lasso

management.

Multiples

at

Various

Share

Prices

(US$

and

shares

in

millions,

except

per

share

data)

Share Price

$15.74

$16.00

$17.00

$18.00

$19.00

$20.00

$21.00

$22.00

$23.00

$24.00

Premium/(Discount)

(a)

1-Day Prior Price of $16.67

(5.6%)

(4.0%)

2.0%

8.0%

14.0%

20.0%

26.0%

32.0%

38.0%

44.0%

30-Day Average Price of $16.31

(3.5%)

(1.9%)

4.2%

10.4%

16.5%

22.6%

28.8%

34.9%

41.0%

47.1%

3-Month Average Price of $21.29

(26.1%)

(24.8%)

(20.2%)

(15.5%)

(10.8%)

(6.1%)

(1.4%)

3.3%

8.0%

12.7%

52-Week High of $32.30

(51.3%)

(50.5%)

(47.4%)

(44.3%)

(41.2%)

(38.1%)

(35.0%)

(31.9%)

(28.8%)

(25.7%)

52-Week Low of $14.18

11.0%

12.8%

19.9%

26.9%

34.0%

41.0%

48.1%

55.1%

62.2%

69.3%

Current Price of $15.74

(b)

0.0%

1.7%

8.0%

14.4%

20.7%

27.1%

33.4%

39.8%

46.1%

52.5%

Implied Equity Value

(c)

$257.4

$261.7

$278.1

$294.7

$311.4

$328.4

$345.5

$362.5

$379.5

$396.6

Implied Enterprise Value

(d)

$1,117.5

$1,121.7

$1,138.2

$1,154.8

$1,171.5

$1,188.5

$1,205.5

$1,222.6

$1,239.6

$1,256.6

Valuation Adjustments

(e)

($11.8)

($11.8)

($11.8)

($11.8)

($11.8)

($11.8)

($11.8)

($11.8)

($11.8)

($11.8)

Adjusted Enterprise Value

$1,105.7

$1,109.9

$1,126.4

$1,143.0

$1,159.7

$1,176.7

$1,193.7

$1,210.8

$1,227.8

$1,244.8

Fully Diluted Shares (Basic + CSEs)

16.353

16.358

16.375

16.390

16.422

16.451

16.477

16.502

16.524

16.544

Enterprise Value/:

2007 Revenue

$1,171.9

1.0x

1.0x

1.0x

1.0x

1.0x

1.0x

1.0x

1.0x

1.1x

1.1x

2007 GAAP EBITDA

177.1

6.3x

6.3x

6.4x

6.5x

6.6x

6.7x

6.8x

6.9x

7.0x

7.1x

2007 Adjusted EBITDA

(e)

186.5

5.9x

5.9x

6.0x

6.1x

6.2x

6.3x

6.4x

6.5x

6.6x

6.7x

Implied Equity Value/:

2008E EPS (Consensus)

(f)

$1.41

11.2x

11.3x

12.1x

12.8x

13.5x

14.2x

14.9x

15.6x

16.3x

17.0x

2008E EPS (Mgmt.)

(g)

1.31

12.0x

12.2x

12.9x

13.7x

14.5x

15.2x

16.0x

16.7x

17.5x

18.3x

2009E EPS (Consensus)

(f)

1.48

10.6x

10.8x

11.5x

12.2x

12.8x

13.5x

14.2x

14.9x

15.5x

16.2x

2009E EPS (Mgmt.)

(g)

2.04

7.7x

7.8x

8.3x

8.8x

9.3x

9.8x

10.3x

10.8x

11.3x

11.8x

2009E EPS (Mgmt. with Refinancing)

(h)

1.49

10.6x

10.7x

11.4x

12.1x

12.7x

13.4x

14.1x

14.8x

15.4x

16.1x

V.

Strategic Alternatives Overview

57

PROJECT LASSO

Strategic Alternatives Overview

When considering strategic alternatives to maximize shareholder value, the Special

Committee may wish to consider, among other factors:

Projected financial performance of Lasso

Future business execution risk

Future growth potential

Potential for margin expansion

Potential need for future capital

Investor sentiment toward Lasso

Current conditions in the capital markets and overall economy

Refinancing risks

Tax bases for Lasso and the various divisions

Underlying value of current real estate portfolio, including non-operating assets

Competitive landscape

58

PROJECT LASSO

Strategic Alternatives Overview

When evaluating the

current situation, the

Special Committee may also

evaluate a range of other

potential alternatives to

determine how best to

maximize shareholder value

IPO Carve-out/Spin

Sale

Lasso

Share Repurchase

Sale/Leaseback

Status Quo

Acquisition of

Another Company

Divestiture of

Assets/Divisions

Sale of the

Company

Equity Offering

A.

Status Quo

60

PROJECT LASSO

Status Quo

Advantages of Status Quo

Opportunity to demonstrate positive performance and momentum

Opportunity for share-price appreciation if Lasso proves growth strategy over next

couple of years

Opportunity to potentially unlock value through sale of assets

Provide

shareholders

the

opportunity

to

realize

potential

future

benefit

from

the

Golden

Nugget

Maintain control of Lasso direction and culture

Under status quo, Lasso

would:

Continue to operate as a

public company

Execute current growth

plan

Potentially refinance

restaurant debt

61

PROJECT LASSO

Business execution risk (increasing competition, difficult consumer environment, risk of

executing growth plan)

Forego

current

bid

at

33.4%

premium

to

current

price

(a)

Costs and risks of potential debt refinancing

Litigation exposure

Difficulty attracting research coverage

Ability to realize operating leverage or even maintain current margins given current

industry and commodity trends

Multiple

business

units

make

evaluating

the

public

valuation

for

Lasso

challenging

for

investors

Diverse businesses are challenging to manage effectively

Status Quo (Cont.)

Status Quo Issues to Consider

(a)

As of May 8, 2008.

62

PROJECT LASSO

Projected Potential Value at LTM EBITDA Multiples

(US$ in

millions,

except

per

share

data)

The Potential Value of Status Quo

The ability to drive future

shareholder value depends

both on Lasso’s future

performance, as well as

future market multiples

2008E

2009E

2010E

2011E

EBITDA

(a) (b)

185.8

$     

200.8

$     

217.4

$     

235.8

$     

% growth

(0.4%)

8.0%

8.3%

8.4%

Current

Enterprise

Value

(b)(c)

1,105.7

$  

Current

Equity

Value

(c)

257.4

$     

Current

Stock

Price

(c)

15.74

$     

Current 2007 EBITDA Multiple

5.9x

Future Enterprise Values at Various EBITDA Multiples

5.5x

1,022.1

$  

1,104.2

$  

1,195.9

$  

1,296.8

$  

6.0x

1,115.0

1,204.5

1,304.6

1,414.7

6.5x

1,207.9

1,304.9

1,413.3

1,532.6

7.0x

1,300.9

1,405.3

1,522.0

1,650.5

7.5x

1,393.8

1,505.7

1,630.7

1,768.4

5.5x

8.37

$       

12.98

$     

22.37

$     

34.36

$     

6.0x

13.99

19.00

28.73

41.12

6.5x

19.54

24.90

34.96

47.89

7.0x

25.00

30.72

41.20

54.65

7.5x

30.39

36.48

47.44

61.41

5.5x

(71.7%)

(12.0%)

15.1%

25.0%

6.0x

(21.0%)

13.4%

27.2%

31.6%

6.5x

54.1%

35.8%

37.6%

37.4%

7.0x

152.4%

56.2%

46.9%

42.7%

7.5x

272.9%

75.1%

55.5%

47.5%

5.5x

(84.1%)

(27.4%)

2.6%

15.1%

6.0x

(55.6%)

(6.4%)

13.4%

21.2%

6.5x

(13.4%)

12.0%

22.6%

26.6%

7.0x

41.8%

28.9%

30.9%

31.4%

7.5x

109.5%

44.5%

38.5%

35.9%

(a) 

Projections per Lasso management.

(b) 

2007 EBITDA and valuation adjustments per discussions with Lasso management.

(c)

Stock price as of May 8, 2008.

(d)

Future stock prices discounted to June 30, 2008.

Future

Stock

Prices

at

Various

EBITDA

Multiples

(b)

Annualized

Return

at

Various

EBITDA

Multiples

Discounted

to

Current

Market

Price

(d)

Annualized

Return

at

Various

EBITDA

Multiples

Discounted

to

$21.00

(d)

63

PROJECT LASSO

Note: Projections per Lasso management.

(a)

Pro Forma Interest assumes the refinancing of the $395.7 million, 9.5% interest rate restaurant debt on December 31, 2008 at 13.0% per discussions with Lasso

management.

(b)

In 2008 and beyond, assumes 16.1 million shares outstanding and the conversion of in-the-money options per treasury stock method.

(c)

Stock price as of May 8, 2008.

(d)

Future stock prices discounted to June 30, 2008.

Projected Potential Value at Forward P/E Multiples

(US$ and shares in millions, except per share data)

The Potential Value of Status Quo (Cont.)

Assuming a refinancing of

the Senior Notes at a

13.0% interest rate results

in lower returns to

shareholders

2008E

2009E

2010E

2011E

EBIT

111.6

$     

124.1

$     

133.6

$     

148.5

$     

Pro Forma Interest

(a)

80.0

88.2

94.5

96.0

Pretax Income

31.6

35.8

39.1

52.5

Taxes

10.1

11.5

12.5

16.8

Pro Forma Net Income

21.5

$       

24.4

$       

26.6

$       

35.7

$       

Fully Diluted Shares

(b)

16.353

16.353

16.353

16.353

EPS

1.31

$       

1.49

$       

1.63

$       

2.18

$       

% growth

(9.1%)

13.4%

9.2%

34.1%

Current Equity Value

(c)

257.4

$

Current Stock Price

(c)

15.74

$

2008E P/E Multiple

12.0x

2009E P/E Multiple

10.6x

Future Stock Price at Various Forward P/E Multiples

10.0x

14.91

$     

16.28

$     

21.83

$     

11.0x

16.40

17.91

24.01

12.0x

17.89

19.53

26.20

13.0x

19.38

21.16

28.38

14.0x

20.87

22.79

30.56

Annualized

Return

at

Various

Forward

P/E

Multiples

Discounted

to

Current

Market

Price

(d)

10.0x

(10.3%)

2.3%

14.0%

11.0x

8.5%

9.0%

18.4%

12.0x

29.2%

15.5%

22.6%

13.0x

51.6%

21.8%

26.6%

14.0x

75.8%

28.0%

30.4%

Annualized

Return

at

Various

Forward

P/E

Multiples

Discounted

to

$21.00

(d)

10.0x

(49.6%)

(15.6%)

1.6%

11.0x

(39.0%)

(10.1%)

5.5%

12.0x

(27.4%)

(4.7%)

9.2%

13.0x

(14.8%)

0.5%

12.8%

14.0x

(1.2%)

5.6%

16.2%

B.

Divestiture of a Division

65

PROJECT LASSO

Divestiture of Assets or Divisions

Lasso could divest one or more of its concepts or divisions (e.g., Saltgrass Steakhouse,

the entire restaurant operations or the casino operations) with a sale or IPO carve-out,

thereby either reducing current debt or allowing for more resources (financial and time)

to be invested in core operations

Divestiture of a division should be considered if expected to unlock “hidden value”

Advantages

Issues to Consider

Reduces the complexity of the business,

both in terms of management and in the

eyes of Wall Street

Generates cash to fund debt repayment,

growth or acquisitions

Allows management to focus more attention

on remaining holdings

Loss of potential upside from division

Capital structure limitations

“Option value”

of division may be greater

than the potential sale price

Potential negative tax implications

Difficult to find an appropriate buyer

Disruptive for management

Potentially impacts G&A efficiencies

Advantages

Issues to Consider

Ultimately may reduce the complexity of the

business

Usually results in highest valuation —

IPO

market typically achieves a higher multiple

than the M&A market

Ability to market “the story”

to the Street —

sell on future projections

Partial proceeds to Lasso at IPO

Potentially insufficient scale as standalone

public company

Slower path to full liquidity for Lasso

Secondary offering

Stock dividend to Lasso shareholders

Costs and risks of the division being a

standalone public company

Capital markets risk (exit timing)

Execution risk (vs. sale)

Divestiture

IPO Carve-out/Spin

66

PROJECT LASSO

Note: US$ in millions.

(a)

  Per discussion with Lasso management.

(b)

  Locations from Saltgrass website as of May 2008.

(c)     G&A and EBITDA adjustments are allocated to Saltgrass Steakhouse on a pro rata basis per discussions with Lasso management.

2007 Units

2007 Run Rate AUV

$2.0 - $3.0

2007 Run Rate RLP

$0.2 - $0.5

2007 Run Rate RLP Margin

10% - 15%

Pre-2007 Units

2007 AUV

$4.4

2007 RLP

$1.0

2007 RLP Margin

23.3%

2007 Revenue

$175.2

2007 RLP

37.8

2007 EBITDA

(c)

29.4

Implied Multiple Range

6.0x

-

8.0x

Implied Ent. Val.

$176.6

-

$235.5

Less: Tax Leakage

$25.2

-

$48.1

Net Proceeds from Sale

$151.5

-

$187.4

Implied EBITDA Multiple

5.1x

-

6.4x

Texas:

Other:

Houston

15

Lousiana

1

Dallas

14

Colorado

3

San Antonio

3

Nevada

1

Austin

2

North Carolia

1

San Marcos

1

Oklahoma

1

Total

35

Tennessee

1

Total

43

Saltgrass Steakhouse Overview

Saltgrass

Steakhouse

might

be

considered

as

a

potential

standalone

public  company

However,

given

its

scale,

regional

concentration

and

performance

of

new

units,

investors

might

not

be receptive

to

Saltgrass

as

a

standalone

public

entity

Minimum

public

market

capitalization

should

be

over

$200

million

and

recent

trends

need

to

be

favorable

Investors would want to see both proof-of-concept in markets outside of Texas and strong

performance from recently opened units

Given that Saltgrass would not likely be a viable public company, the only option would be to divest it

A low tax basis of $112.1 million impacts the ability to sell

Saltgrass

in a tax-efficient manner

Operations / Valuation

Regional

Concentration

(b)

2007

Performance

(a)

67

PROJECT LASSO

Golden Nugget Overview and Valuation Considerations

Lasso completed the acquisition of the Golden Nugget on September 27, 2005

Since then, Lasso has undergone significant renovations to the Golden Nugget

properties

New restaurants and improved layout on the casino floor

Upgraded rooms to comparable Strip-level quality

New multi-level shark tank pool at the Las Vegas property

Additionally, approximately $158.5 million is being spent to build a new tower in the Las

Vegas Golden Nugget

New tower is expected to open in April 2010 and will add approximately 500 rooms

Valuation considerations for a potential sale or spin-off of the Golden Nugget properties

include:

Advantages

•

May

be

able

to

unlock

value;

casino

and

gaming

companies

tend

to

trade

at

higher multiples

•

Reduces the complexity of managing two disparate businesses

•

Future growth from the new tower may be attractive to potential buyers

Considerations

•

The current macroeconomic environment has put pressure on the casino

industry and the timing of a recovery is unclear

•

Timing concerns due to regulatory approvals

•

Stocks are currently trading at depressed multiples vs. last year

•

Potential construction risks for the new tower

•

Business lacks scale of many other leading casino operators

68

PROJECT LASSO

Assumed Trading Value of Restaurant Company

4.0x

5.0x

6.0x

7.0x

6.0x

0.54

$  

8.43

$  

16.13

$

23.68

$

7.0x

4.12

11.92

19.57

27.07

8.0x

6.53

14.27

21.86

29.31

9.0x

8.92

16.61

24.15

31.55

Assumed Trading Value of Gaming Company

6.0x

7.0x

8.0x

9.0x

4.0x

0.35

$  

4.00

$  

7.65

$  

11.22

$

5.0x

8.09

11.65

15.21

18.74

6.0x

14.22

17.77

21.24

24.71

7.0x

19.26

22.73

26.19

29.61

Assumptions

(US$ in millions)

Breakup Analysis

Sale of Restaurant Division Sensitivities

A sale of either the gaming division or restaurant division could be considered

Depending

upon

the

trading

multiple

of

the

remaining

operations,

the

sale

could

create

value for Lasso shareholders

(a)

Tax bases per discussions with Lasso management.

(b)

Net debt includes valuation adjustments per discussions with Lasso management and excludes $11.0 million in mandatory cash that is physically held on premises of the

Golden Nugget properties.

Selling either the gaming or

restaurant division could

result in an increase in

shareholder value

Sale of Gaming Division Sensitivities

2007 Division-level EBITDA (Golden Nugget)

59.0

$ 

Tax Basis (Golden Nugget)

(a)

412.7

2007 Division-level EBITDA (Restaurants)

127.6

$

Tax Basis (Restaurants)

(a)

692.3

Existing Net Debt

(b)

848.3

$

Tax Rate

32.0%

Transaction Fees

2.0%

C.

Sale/Leaseback

70

PROJECT LASSO

Sale/Leaseback

Advantages

Issues to Consider

Potentially unlocks value of underlying

real estate

Rates may be attractive relative to

other refinancing options

Provides liquidity for other uses,

including debt repayment, growth or

acquisitions

Potential earnings accretion

Higher rent expense (and therefore

lower cash flow)

Tax leakage due to capital gains

Limited by existing covenants

Decreased operational flexibility

Given

Lasso's

significant

real

estate

holdings,

a

sale/leaseback

may

be

a

viable

option

to

raise capital or reduce current debt levels

In addition to the economic considerations, the Special Committee would also need to

evaluate the strategic benefit of owning vs. leasing the real estate

71

PROJECT LASSO

Assumed Value of Operating Fee Simple Properties

100.0

$    

200.0

$    

300.0

$    

Estimated Tax Basis of Assets

(a)

225.0

225.0

225.0

Proceeds After Taxes

(b)

100.0

200.0

276.0

2007 EBITDA

(c)

186.5

186.5

186.5

Sale/Leaseback EBITDA Adjustments:

Incremental Rent Expense

(d)

9.5

19.0

28.5

Adjusted 2007 EBITDA

177.0

$    

167.5

$    

158.0

$    

Current 2007 EBITDA Multiple

(h)

5.9x

5.9x

5.9x

Adjusted Enterprise Value

1,049.4

$ 

993.1

$    

936.8

$    

Plus:  Valuation Adjustments

(e)

11.8

11.8

11.8

Less: Net Debt

(f)

(860.1)

(860.1)

(860.1)

Plus: Proceeds After Taxes

(b)

100.0

200.0

276.0

Adjusted Equity Value

301.1

$    

344.8

$    

364.5

$    

Fully Diluted Shares

(g)

16.402

16.476

16.504

Implied Stock Price

18.36

$    

20.93

$    

22.08

$    

Current Stock Price

(h)

15.74

$      

15.74

$      

15.74

$      

Increase/(Decrease) % to Current Price

16.6%

33.0%

40.3%

Estimated Value at Current EBITDA Multiple

(US$ and shares in millions, except per share data)

Sale/Leaseback Analysis —

EBITDA Multiple Approach

(a)

Per discussions with Lasso management.

(b)

Assumes a 32.0% tax rate.

(c)

Includes 2007 EBITDA adjustments per discussions with Lasso management.

(d)

Assumes a 9.5% capitalization rate.

(e)

Valuation adjustments per discussions with Lasso management.

(f)

Excludes

$11.0

million

in

mandatory

cash

that

is

physically

held

on

premises

of

the

Golden

Nugget

properties

per

discussions

with

Lasso

management.

(g)

Basic shares from 10-K for the period ended December 31, 2007. Options outstanding per Lasso management as of April 2008.

(h)

As of May 8, 2008.

Depending upon transaction

sizes, capitalization rates

and tax assumptions, a

sale/leaseback could result

in an increase in

shareholder value compared

to current trading levels

72

PROJECT LASSO

(a)

Per discussions with Lasso management.

(b)

Assumes a 32.0% tax rate.

(c)

Assumes a 9.5% capitalization rate.

(d)

Pro Forma Interest assumes the refinancing of the $395.7 million, 9.5% interest rate restaurant debt on December 31, 2008 at 13.0% per discussions with Lasso

management.

(e)

Assumes proceeds after taxes from sale/leaseback are used  to  pay  down refinanced 13.0% interest rate restaurant debt. 

(f)

Basic shares from 10-K for the period ended December 31, 2007. Options outstanding per Lasso management as of April 2008.

(g)

Assumes pro forma interest from the refinancing of the $395.7 million, 9.5% interest rate restaurant debt on December 31, 2008 at 13.0% per discussions with Lasso

management.

(h)

As of May 8, 2008.

Sale/Leaseback Analysis —

P/E Multiple Approach

Estimated Value at 2009E P/E Multiple                      (US$

and

shares

in

millions,

except

per

share

data)            

Assumed Value of Operating Fee Simple Properties

100.0

$   

200.0

$   

300.0

$   

Estimated Tax Basis of Assets

(a)

225.0

225.0

225.0

Proceeds After Taxes

(b)

100.0

200.0

276.0

EBIT

124.1

124.1

124.1

Sale/Leaseback EBIT Adjustments:

Incremental Rent Expense

(c)

9.5

19.0

28.5

(Decrease) in D&A from Sale/Leaseback

(a)

(16.0)

(16.0)

(16.0)

Adjusted EBIT

130.6

$   

121.1

$   

111.6

$   

Sale/Leaseback Interest Adjustments:

Pro Forma Interest

(d)

88.2

88.2

88.2

(Decrease) in Interest from Sale/Leaseback

(e)

(13.0)

(26.0)

(35.9)

Pretax Income

55.3

$      

58.8

$      

59.2

$      

Taxes

(b)

17.7

18.8

19.0

Pro Forma Net Income

37.6

$      

40.0

$      

40.3

$      

Fully Diluted Shares

(f)

16.353

16.353

16.353

Pro Forma EPS

2.30

$      

2.45

$      

2.46

$      

Current 2009E P/E (Mgmt. with Refinancing)

(g) (h)

10.6x

10.6x

10.6x

Implied Stock Price

24.30

$   

25.84

$   

26.01

$   

Current Stock Price

(h)

15.74

$     

15.74

$     

15.74

$     

Increase/(Decrease) % to Current Price

54.4%

64.2%

65.2%

D.

Sale of the Company

74

PROJECT LASSO

Sale of the Company

The

Special

Committee

could

also

pursue

a

sale

of

the

Company

in

order

to

maximize

near-term shareholder value

In the event the Special Committee elects to pursue a sale of the Company, it can

decide whether to initially negotiate exclusively with the existing bidder (with an

appropriate post-announcement market check) or conduct a broader auction process

Advantages

Issues to Consider

May provide investors a premium to

current stock price

Provides immediate liquidity to

shareholders

Removes Lasso from public scrutiny

Eliminates public-company costs and

liabilities

Sacrifices potential upside

May be challenging to maximize

valuation given current macroeconomic

environment and comparable valuations

Prior to offer, Lasso was trading near its

five-year low

Potentially limited buyer universe

Some parties may be reluctant to bid

against existing management, especially

considering approximately 40.0%

ownership position

Severance agreements and other

change-of-control costs

75

PROJECT LASSO

Note: Per  Lasso public filings and discussions with Lasso management.

(a)     Per share severance impact  based on Lasso’s 16.4 million fully diluted shares outstanding as of May 8, 2008.

Sale Considerations

Potential benefits to an acquirer include:

Elimination of public company costs

Possible sale/relocation of headquarters

Possible reduction in certain management expenses (transportation, security, etc.)

Possibility to sell certain or all of the real estate assets

Potential concerns for an acquirer include:

Tilman J. Fertitta’s severance agreement of approximately $56.0 million ($3.42 per

share

(a)

)

Required refinancing of the Golden Nugget debt and restaurant-level Senior Notes

upon change-of-control (separate from the potential restaurant-level Senior Notes

refinancing)

Regulatory approval from gaming authorities

Lease termination provisions on Disney leases

76

PROJECT LASSO

Potentially Interested Strategic Partners

Potential Interested Parties

We have included an

abbreviated list of potential

financial and strategic

acquirers

Potentially Interested Financial Buyers

APAX Partners/Saunders Karp & Megrue

Cerberus Capital Management

Leonard Green Partners

Angelo Gordon

D.E. Shaw

Lone Star Funds

Apollo Management

Freeman Spogli

Madison Dearborn

Ares Management

Golden Gate Capital

Oak Investment Partners

Bain Capital

GSO Capital

Perry Capital

Bear Stearns Merchant Banking

HBK Investments

Platinum

Blackstone

HIG Capital

Polygon Investment Partners

Carlyle

Investcorp

Ripplewood

Castle Harlan

Jefferies Capital

Sun Capital Partners

Catterton Partners

JH Whitney

TA Associates

Caxton-Iseman

JW Childs

TPG Ventures

CCMP Capital (JP Morgan Partners)

Lee Equity Partners

Weston Presidio

77

PROJECT LASSO

Overview of Offers

Tilman Fertitta's original offer of $23.50 per share was submitted on January 28, 2008

The offer did not have committed financing

On April 4, 2008, Mr. Fertitta revised the offer to $21.00 per share

The offer still does not have committed financing, but was accompanied by a "highly

confident" letter from Jefferies

The offer letter also states that Jefferies could be in a position to execute a

commitment letter within a few weeks from their commencement of due diligence

The

current

offer

represents

a

26.0%

premium

to

the

day

prior

to

the

original

announcement

and

a

33.4%

premium

to

the

current

price

(a)

Since

the

public

announcement

on

April

2,

2008,

stating

that

the

Special

Committee

had retained Cowen as an advisor, we have received limited interest from outside

parties

(a) As of May 8, 2008.

VI.

Questions and Discussion

VII.

Appendix

A.

Weighted Average Cost of

Capital

81

PROJECT LASSO

Weighted Average Cost of Capital Analysis —

Restaurant Division

(a)

U.S. 10-Year Treasury Yield as of April 2008.

(b)

From Ibbotson Associates 2007 Risk Premia Over Time Report.

(c)

Predicted Betas from Barra's Betas as of April 2008.

(d)

Book value of debt used to approximate market value; assumed to be zero for calculation purposes if company is in a net cash position.

(e)

Equity market value as of May 8, 2008.

(f)

Unlevered

Beta

=

(Levered

beta

/

(1+(1-

tax

rate)

x

(Net

Debt

to

Equity

Ratio))).

(g)

K

e

= r

f

+ ß

* (r

m

-

r

f

) + SP.

(h)

K

=

(W

e

*

K

e

)

+

(W

d

*

K

d

).

K

d

equals

after

tax

cost

of

debt.

Key Assumptions

Lasso

Risk Free Rate

(a)

3.5%

Net

Debt

to

Total

Cap.

(W

d

)

24.35%

60.00%

Equity Risk Premium

(b)

7.1%

Equity

to

Total

Cap.

(W

e

)

75.65%

40.00%

Marginal Corp. Tax Rate

40.0%

Pre-Tax Cost of Debt

12.0%

Lasso Marginal Corp. Tax Rate

32.0%

Size Premium

(b)

4.4%

Target Beta Calculations

(US$ in millions)

Levered

Net

Net Debt for

Equity

Net Debt

Unlevered

Net Debt to

Comparable Company

Equity Beta

(c)

Debt

(d)

Beta Calc

Value

(e)

to Equity

Beta

(f)

Total Cap.

Restaurants:

Benihana

1.08

$24.4

$24.4

$158.0

15.4%

0.99

13.4%

Brinker

1.28

823.0

823.0

2,313.1

35.6%

1.06

26.2%

California Pizza Kitchen

1.03

10.2

10.2

410.3

2.5%

1.02

2.4%

CEC Entertainment

1.16

306.9

306.9

1,031.2

29.8%

0.98

22.9%

McCormick & Schmick's

1.33

20.0

20.0

163.4

12.2%

1.24

10.9%

O'Charley's

0.99

134.1

134.1

242.6

55.3%

0.74

35.6%

Ruby Tuesday

1.49

605.2

605.2

420.9

143.8%

0.80

59.0%

Mean

1.19

42.1%

0.97

24.4%

Relevered

Beta

1.97

Cost

of

Equity

Capital

(K

e

)

(g)

21.81%

After

Tax

Cost

of

Debt

(K

d

)

8.16%

WACC (K)

(h)

13.62%

82

PROJECT LASSO

Weighted Average Cost of Capital Analysis —

Gaming Division

(a)

U.S. 10-Year Treasury Yield as of April 2008.

(b)

From Ibbotson Associates 2007 Risk Premia Over Time Report.

(c)

Predicted Betas from Barra's Betas as of April 2008.

(d)

Book value of debt used to approximate market value; assumed to be zero for calculation purposes if company is in a net cash position.

(e)

Equity market value as of May 8, 2008.

(f)

Unlevered

Beta

=

(Levered

beta

/

(1+(1-

tax

rate)

x

(Net

Debt

to

Equity

Ratio))).

(g)

K

e

= r

f

+ ß

* (r

m

-

r

f

) + SP.

(h)

K = (W

e

* K

e

) + (W

d

* K

d

).  K

d

equals after tax cost of debt.

Key Assumptions

Lasso

Risk Free Rate

(a)

3.5%

Net

Debt

to

Total

Cap.

(W

d

)

56.70%

70.00%

Equity Risk Premium

(b)

7.1%

Equity

to

Total

Cap.

(W

e

)

43.30%

30.00%

Marginal Corp. Tax Rate

40.0%

Pre-Tax Cost of Debt

9.0%

Lasso Marginal Corp. Tax Rate

32.0%

Size Premium

(b)

9.7%

Target Beta Calculations

(US$ in millions)

Levered

Net

Net Debt for

Equity

Net Debt

Unlevered

Net Debt to

Comparable Company

Equity Beta

(c)

Debt

(d)

Beta Calc

Value

(e)

to Equity

Beta

(f)

Total Cap.

Casino and Gaming:

Ameristar Casinos

1.37

$1,540.9

$1,540.9

$986.5

156.2%

0.71

61.0%

Boyd Gaming Corp.

1.74

2,100.9

2,100.9

1,596.3

131.6%

0.97

56.8%

Isle of Capri Casinos

1.49

1,452.5

1,452.5

216.6

670.8%

0.30

87.0%

Monarch Casino and Resort

1.16

(15.7)

0.0

251.0

0.0%

1.16

0.0%

Riviera Holdings

1.37

738.2

738.2

861.3

85.7%

0.91

46.2%

Pinnacle Entertainment

1.95

199.3

199.3

192.0

103.8%

1.20

50.9%

Trump Entertainment Resorts

1.78

1,522.1

1,522.1

79.8

1906.8%

0.14

95.0%

Mean

1.55

436.4%

0.77

56.7%

Relevered

Beta

1.99

Cost

of

Equity

Capital

(K

e

)

(g)

27.28%

After

Tax

Cost

of

Debt

(K

d

)

6.12%

WACC (K)

(h)

12.47%

B.

Additional Operating Analysis

84

PROJECT LASSO

Same-Store Sales Growth

Lasso

Same-Store

Sales

Growth

by

Concept

(Q1

2001

-

Q1

2008)

Note: Quarterly same-store sales per Lasso management.

In recent years, Chart

House has realized the most

attractive same-store sales

results

Landry's Seafood House

Rainforest Café

Saltgrass Steakhouse

Chart House

2008

Q1

(1.1%)

1.1%

(1.7%)

(1.9%)

2007

Q4

(0.1%)

(2.8%)

1.7%

(1.3%)

Q3

2.3%

(0.1%)

1.7%

0.1%

Q2

0.9%

(1.3%)

4.5%

2.9%

Q1

(2.9%)

0.4%

1.9%

2.7%

2006

Q4

2.7%

1.0%

3.4%

5.6%

Q3

9.2%

3.5%

4.9%

4.8%

Q2

4.7%

4.9%

4.5%

6.4%

Q1

5.7%

3.7%

6.3%

6.7%

2005

Q4

6.5%

2.1%

5.6%

5.1%

Q3

(3.3%)

1.5%

1.2%

9.4%

Q2

3.8%

(1.0%)

0.9%

4.3%

Q1

0.8%

(0.2%)

0.5%

9.9%

2004

Q4

(1.0%)

1.6%

1.8%

11.1%

Q3

(0.0%)

(2.3%)

1.5%

7.3%

Q2

(2.3%)

1.6%

5.2%

9.5%

Q1

2.8%

3.8%

8.5%

9.1%

2003

Q4

1.2%

1.7%

8.8%

5.1%

Q3

(0.6%)

3.1%

NA

(1.4%)

Q2

(3.1%)

(1.7%)

NA

NA

Q1

(7.3%)

(4.7%)

NA

NA

2002

Q4

(1.6%)

1.9%

NA

NA

Q3

0.3%

(3.0%)

NA

NA

Q2

4.4%

(0.3%)

NA

NA

Q1

1.9%

(1.1%)

NA

NA

2001

Q4

4.5%

(10.0%)

NA

NA

Q3

(3.8%)

(9.5%)

NA

NA

Q2

(1.2%)

(9.5%)

NA

NA

Q1

(0.4%)

(11.1%)

NA

NA

Fiscal Year

2007

1.0%

(0.9%)

2.4%

1.0%

2006

5.6%

3.3%

4.8%

5.8%

2005

1.8%

0.6%

2.1%

7.0%

2004

(0.3%)

1.0%

0.0%

9.2%

2003

(2.5%)

(0.3%)

(3.4%)

1.6%

2002

1.4%

(0.7%)

NA

NA

2001

(0.5%)

(10.0%)

NA

NA