July 15, 1997
Casino Magic of Louisiana, Corp.
Jefferson Casino Corporation
1701 Old Minden Road
Bossier City, Louisiana 71111
Gentlemen:
We have acted as counsel to Casino Magic of Louisiana, Corp., a Louisiana
corporation (the "Company"), and its parent corporation, Jefferson Casino
Corporation ("Jefferson Corp." or the "Guarantor"), a Louisiana corporation,
in connection with the Indenture dated August 22, 1996 among the Company,
Jefferson Corp. and First Union Bank of Connecticut as Trustee (the
"Indenture"), the Registration Rights Agreement dated August 22, 1996 (the
"Registration Rights Agreement") among the Company, the Guarantor and
Wasserstein Perella Securities, Inc., Jefferies & Company, Inc. and Deutsche
Morgan Grenfell (the latter three persons collectively the "Initial
Purchasers") and the exchange offer (the "Exchange Offer") pursuant to the
Registration Rights Agreement of up to $115 million aggregate principal amount
of 13% Series B First Mortgage Notes Due 2003 with Contingent Interest (the
"Series A Notes") and together with the Series B Notes, the "Notes"). Any
capitalized term used in this opinion letter which is not defined herein shall
have the meaning attributed to same in the Indenture. We have also acted as
counsel to the Company and Guarantor in connection with a registration
statement on Form S-4(No. 333-14535) filed on October 21, 1996 with the
Securities and Exchange Commission and as amended through Amendment No. 4
thereto to be filed on or about the date hereof (the "Registration
Statement"), as required by the Registration Rights Agreement, and we hereby
consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to this firm in the prospectus included in the
Registration Statement under the captions "Certain Federal Income Tax
Consequences" and "Legal Matters."
This firm is a registered limited liability partnership organized under the
laws of the State of Texas. The opinions hereinafter set forth are limited to
questions arising under the laws of the State of New York and the Federal Laws
of the United States of America as in effect on the date hereof, and no
opinion is expressed as to the laws of any other jurisdiction.
In connection with this opinion letter we have examined copies of the
Registration Statement and of the following (the "Transaction Documents").
Casino Magic of Louisiana, Corp.
July 15, 1997-Page 2
1. Purchase Agreement between Casino Magic of Louisiana, Corp., and
Wasserstein Perella Securities, Inc., Jefferies & Company, Inc. and Deutsche
Morgan Grenfell/C.J. Lawrence, Inc. as Initial Purchasers of the $115,000
First Mortgage Notes due 2003 (the "Purchase Agreement").
2. The Indenture and the forms of Notes attached thereto.
3. The Registration Rights Agreement.
4. Stock Pledge and Security agreement by Jefferson Casino Corporation in
favor of First Union Bank of Connecticut as trustee for the benefit of the
holders of the Notes (the "Stock Pledge and Security Agreement")
(collectively, such documents, Nos. 1-4 above, referred to as the "New York
Documents"). We have also examined copies of certain of the other Collateral
Documents.
In addition, we have examined originals or photostatic, certified or conformed
copies of all such agreements, documents, instruments, corporate records,
certificates of public officials, public records and certificates of officers
of the Company and Jefferson Corp. as we have deemed necessary or appropriate
in the circumstances. In our examination, we have assumed (i) the genuineness
of all signatures, the authenticity of all documents submitted to us as
originals, the conformity to original documents of all documents submitted to
us as certified or photostatic copies thereof, and the authenticity of the
originals of such certified or photostatic copies; (ii) the due authorization,
execution and delivery of all agreements and documents by all parties other
than the Company or Jefferson Corp.; (iii) the legal right, power, and
authority of all such parties other than the Company or Jefferson Corp. under
all applicable laws and regulations to enter into, execute and deliver such
agreements and documents and to consummate the transactions contemplated
thereby; and (iv) that the New York Documents and the Collateral Documents are
legal, valid and binding obligations of the Initial Purchasers, the Trustee,
and any other Person or party thereto other than the Company or Jefferson
Corp., enforceable against such persons in accordance with their respective
terms. In addition, we have relied upon factual representations made to us by
the Company and Jefferson Corp. and the assumptions set forth herein.
Based upon and subject to the foregoing and subject to the qualifications,
exceptions, assumptions and limitations set forth below, we are of the opinion
that:
Casino Magic of Louisiana, Corp.
July 15, 1997-Page 3
1. The Series B Notes (including the guarantee thereon by the Guarantor),
when authenticated by the Trustee and issued and delivered in accordance with
the terms of the Exchange Offer and the Indenture, will have been duly and
validly authenticated, issued and delivered and will constitute valid and
binding obligations of the Company and Jefferson Corp., enforceable against
the Company and Jefferson Corp. in accordance with their terms and entitled to
the benefits provided by the Indenture.
2. The Indenture has been duly executed and delivered by the Company and
Jefferson Corp. and constitutes a valid and binding obligation of the Company
and Jefferson Corp., enforceable against the Company and Jefferson Corp. in
accordance with its terms.
3. The Stock Pledge Agreement has been duly executed and delivered by
Jefferson Corp. and constitutes a valid and binding obligation of Jefferson
Corp., enforceable against Jefferson Corp.
4. The discussion under the heading "Certain Federal Income Tax
Considerations" contained in the prospectus included in the Registration
Statement is a fair and accurate summary of the material federal income tax
consequences expected to result to the Holders of the Notes from the Exchange
Offer, subject to the limitations and qualifications set forth in such
discussion.
The foregoing opinions are subject to the following qualifications,
exceptions, assumptions and limitations:
A. The enforceability of the Indenture and the Series B Notes may be (a)
limited by and subject to applicable liquidation, conservatorship, bankruptcy,
insolvency, reorganization, fraudulent transfer or conveyance, moratorium or
other similar laws affecting creditors' rights generally from time to time in
effect; (b) subject to general principles of equity, commercial reasonableness
and conscionability (regardless of whether applied in a proceeding in equity
or at law); and (c) limited by or subject to the powers of courts to award
damages in lieu of equitable remedies.
B. We express no opinion as to the enforceability of any provision
purporting to (i) waive the benefits of any statute of limitation or any
applicable bankruptcy, insolvency, stay, extension, waiver or usury law or
waive any rights under any applicable statutes or rules hereafter enacted or
promulgated; (ii) covenant to take actions, the taking of which is
discretionary with or subject to the approval of a third party or which are
otherwise subject to a contingency, the fulfillment of which is not within the
control of the party so covenanting; (iii) restricting access to legal or
equitable remedies (including without limitation, proper jurisdiction or
venue).
Casino Magic of Louisiana, Corp.
July 15, 1997-Page 4
C. The phrase "to our knowledge" as used in this opinion letter means the
current actual factual knowledge of the lawyers in the San Antonio and New
York offices of this firm who have given substantive legal representation to
the Company or Jefferson Corp. (collectively, the "Participating Attorneys").
We reiterate that our opinions as to matters of law are limited to laws
specified in the second paragraph of this opinion letter.
D. The opinions expressed as to the enforceability of the choice of law as
between the contracting parties is qualified to the extent that the following
matters relating to the New York Documents or rights or obligations of a party
thereunder may be governed by the laws of states other than New York: (i)
title to assets, due formation and existence of the Company and Jefferson
Corp., their corporate power to enter into such documents, the authorization
of such documents by all necessary action on the part of the Company and
Jefferson Corp. and similar matters governed by applicable laws of the State
of Louisiana or other states where the assets are located; and (ii) laws of
jurisdictions other than the State of New York applicable to the assignment,
conveyance or other transfer of property of the Company and Jefferson Corp.
This letter and the matters addressed herein are as of the date hereof, and we
undertake no, and hereby disclaim any, obligation to advise you of any change
in any matter set forth herein occurring after the date hereof.
Very truly yours,
/s/ Akin, Gump, Strauss, Hauer & Feld, L.L.P.
AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.