UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2008

OR

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 333-88829

Diamond Jo, LLC	Peninsula Gaming, LLC	Peninsula Gaming Corp.
(Exact name of registrants as specified in their charter)	(Exact name of registrants as specified in their charter)	(Exact name of registrants as specified in their charter)

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

42-1483875	20-0800583	25-1902805
(I.R.S. Employer Identification No.)	(I.R.S. Employer Identification No.)	(I.R.S. Employer Identification No.)

301 Bell Street

Dubuque, Iowa 52001

(563) 690-4975

(Registrant’s telephone number including area code)

Securities registered pursuant to Section 12 (g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes x No o

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes x No o

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

Large accelerated filer o

Accelerated filer o

Non-accelerated filer x

Smaller reporting company o

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

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

TABLE OF CONTENTS

		Page

PART I		3

ITEM 1.	BUSINESS	3

ITEM 1A.	RISK FACTORS	10

ITEM 1B	UNRESOLVED STAFF COMMENTS	16

ITEM 2.	PROPERTIES	16

ITEM 3.	LEGAL PROCEEDINGS	17

ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	17

PART II		17

ITEM 5.	MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	17

ITEM 6.	SELECTED FINANCIAL DATA	18

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	19

ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	33

ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	34

ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	34

ITEM 9A.	CONTROLS AND PROCEDURES	34

ITEM 9B.	OTHER INFORMATION	35

PART III		35

ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS OF THE REGISTRANT, AND CORPORATE GOVERNANCE	35

ITEM 11.	EXECUTIVE COMPENSATION	37

ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	43

ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	45

ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	46

PART IV		47

ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	47

	SIGNATURES	55

PART I

ITEM 1.

BUSINESS

General

Peninsula Gaming, LLC, a Delaware limited liability company (“PGL”), was formed in 2004 and is a holding company with no independent operations whose primary assets are its equity interests in its wholly owned subsidiaries. The Company is a wholly owned subsidiary of Peninsula Gaming Partners, LLC, a Delaware limited liability company (“PGP”). PGP’s only other subsidiary is OED Acquisition, LLC, a Delaware limited liability company (“OEDA”). PGL’s direct and indirect wholly owned operating subsidiaries consist of:

Diamond Jo, LLC, a Delaware limited liability company (“DJL”), which was formed in 1999 and owns and operates the Diamond Jo casino in Dubuque, Iowa;

The Old Evangeline Downs, L.L.C., a Louisiana limited liability company (“EVD”), which owns and operates the Evangeline Downs Racetrack and Casino, or “racino”, in St. Landry Parish, Louisiana, and four off-track betting parlors (“OTB”) in Louisiana; and

Diamond Jo Worth, LLC, a Delaware limited liability company (“DJW”), which owns and operates the Diamond Jo casino in Worth County, Iowa.

In addition, PGL is the parent of wholly owned Peninsula Gaming Corp., a Delaware corporation (“PGC”), which was formed in 2004 and has no assets or operations, and wholly owned Diamond Jo Worth Holdings, LLC, a Delaware limited liability company (“DJWH”), which has no independent operations and whose sole assets are its equity interests in its wholly owned subsidiaries. DJWH’s subsidiaries are DJW and Diamond Jo Worth Corp., a Delaware corporation (“DJWC”), which has no assets or operations.

As used herein, unless otherwise stated or the context otherwise refers to PGL individually, the terms “we”, “us”, “our” or the “Company” refer to PGL and its subsidiaries.

We currently operate three reportable segments: (1) the gaming operations of DJL, consisting of the Diamond Jo casino in Dubuque, Iowa (“Diamond Jo”), (2) the gaming operations of EVD, consisting of the casino, racetrack and OTBs operated by EVD in Louisiana (“Evangeline Downs”), and (3) the gaming operations of DJW, consisting of the casino in Worth County, Iowa (“Diamond Jo Worth”). See Note 12 to the consolidated financial statements for financial information about our segments.

Our address is 301 Bell Street, Dubuque, Iowa 52001 and our telephone number is (563) 690-4975. Our annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and amendments to these reports, filed by us with the Securities and Exchange Commission (“SEC”), are available on the SEC’s website at http://www.sec.gov.

Business

Diamond Jo. On December 10, 2008, DJL opened its new land-based casino to the public. The new Diamond Jo is a two-story, approximately 188,000 square foot facility located in the Port of Dubuque, a waterfront development on the Mississippi River in downtown Dubuque, Iowa and is accessible from each of the major highways in the area. The Diamond Jo includes 923 slot machines, 17 table games and a five table poker room. Additional amenities include a 30-lane state of the art bowling center, a 33,000 square foot event center and two banquet rooms. The new facility also features five dining outlets, The Kitchen Buffet, a 200-seat live action buffet, 120-seat Woodfire Grille, the casino’s signature high-end restaurant, 190-seat Mojo’s sports bar, a deli and a snack shop, as well as three full service bars located on or near the casino floor. The Diamond Jo is open 24 hours per day, seven days per week.

The Diamond Jo has approximately 680 surface parking spaces conveniently available to our patrons, together with valet parking. In addition, the City of Dubuque, Iowa recently opened a four-story public parking facility adjacent to the new casino. The parking facility includes 1,083 parking spaces and offers free parking to the public with direct access to the new casino facility from all four levels of the parking facility.

Evangeline Downs. The Evangeline Downs Racetrack and Casino is located in Opelousas, Louisiana. This facility has a southern Louisiana Cajun roadhouse theme on the exterior, with a complimentary regional Acadian atmosphere on the interior. The racino currently includes a casino with 1,425 slot machines, parking spaces for approximately 2,544 cars and five buses, and several dining options. Our dining venues include a 312-seat Cajun buffet, a 90-seat fine-dining Blackberry’s restaurant, a 60-seat Po-Boys Food Court, a 90-seat Café 24/7 and a 202-seat Mojo’s sports bar with a 37-seat patio. In addition, a raised bar and lounge area known as Zydeco’s occupies the center of our casino floor. In the clubhouse, Silk’s Fine Dining offers a varied menu and the grandstand area contains a concession and bar for our patrons’ convenience. The racino includes a one-mile dirt track, a recently completed 7/8 mile turf track, stables for 980 horses, a grandstand and clubhouse seating for 1,295 patrons, and apron and patio space for an additional 3,000 patrons. EVD is open 24 hours per day, seven days per week.

EVD is currently in the process of renovating its casino floor to improve the overall gaming experience for our patrons. This $3.7 million renovation includes, among other things, the purchase of 100 new slot machines, new slot signage and new casino carpeting as well as an overall redesign of the casino floor layout to provide more space for patrons.

In addition, in February 2009, EVD entered into a letter of intent with a third party operator to allow the third party to design, develop, construct and operate a hotel with a minimum of 100 rooms adjacent to the racino on land owned by EVD. Under the terms of the letter of intent, the hotel will include at least 25 suites, five meeting rooms and an indoor pool. EVD will lease the land on which the hotel will be located for a lease fee of 2% of gross revenue of the hotel. The agreement also contains a purchase option which allows EVD to purchase the hotel from the third party operator. Any agreement related to the building of the hotel by the third party operator is subject to approval by the Louisiana State Gaming Control Board and the ability of the third party operator to obtain financing for the project.

OTBs. EVD currently operates four OTBs: one in Port Allen, Louisiana; one in New Iberia, Louisiana; one in Henderson, Louisiana; and one in Eunice, Louisiana. Each of these OTBs offers simulcast pari-mutuel wagering seven days a week and is equipped to serve alcoholic and non-alcoholic beverages and food. The Port Allen OTB is located immediately off Interstate 10, across the Mississippi River from Baton Rouge. The two-story Port Allen facility offers off-track betting, 74 video poker machines, a full-service bar, a cafe and a VIP lounge. EVD’s New Iberia OTB operation offers simulcast pari-mutuel wagering and is equipped to serve alcoholic and non-alcoholic beverages and food. The Henderson OTB, which opened in May 2005, seats 60 patrons and features a restaurant and full service bar. In August 2007, we opened our approximately 1,250 square foot expansion and began operating 46 video poker machines in Henderson. The Eunice facility offers off-track betting, 68 video poker machines, a full service bar and private parking for its patrons. Under Louisiana’s racing and off-track betting laws, we have a right of prior approval with respect to any applicant seeking a permit to operate an OTB within a 55-mile radius of our Evangeline Downs racetrack, which effectively gives us the exclusive right, at our option, to operate additional OTBs within such a radius, provided that such OTB is not also within a 55-mile radius of another horse racetrack.

Diamond Jo Worth. The Diamond Jo Worth casino opened to the public in April 2006 in Northwood, Iowa which is located in north-central Iowa, near the Minnesota border and approximately 30 miles north of Mason City. Our casino is situated on a 36-acre site approximately an equal distance between Minneapolis, Minnesota and Des Moines, Iowa at the intersection of Interstate 35 and Highway 105. The exterior design of Diamond Jo Worth incorporates a regional gristmill and riverboat theme, with a complementary riverside docking facility atmosphere on the interior. As a result of an approximately 30,000 square foot casino expansion, which opened to the public in April 2007, the Diamond Jo Worth casino currently has 920 slot machines, 25 table games and 7 poker tables in operation, as well as parking spaces for approximately 1,300 vehicles, a 5,200 square foot event center and several dining options, including a 190-seat buffet restaurant, a 114-seat steakhouse restaurant, which opened in January 2008, and a coffee shop. Diamond Jo Worth is open seven days a week. In November 2006, a 100-room hotel development adjacent to the casino opened which is owned and operated by a third party. Under an agreement between DJW and the third party operator, DJW has the option to purchase the hotel from the third party operator. DJW also operates a convenience store and gas station at the site.

Competition

All of our gaming properties face competition from other gaming operations. The decision to visit one of our properties over that of a competitor is influenced by a number of factors including, but not limited to, customer service, slot machine payouts, slot loyalty programs and convenience. In addition, our competitors may offer amenities that our properties may not have. Our competitors may also have less debt than we do, which may allow them to be able to react more quickly than we can to changes in their gaming market and the gaming industry.

Diamond Jo. The Diamond Jo’s principal competition is the only other licensed gaming facility in Dubuque, the Dubuque Greyhound Park & Casino (the “DGP”). The DGP is located approximately three miles north of the Port of Dubuque and offers some amenities that Diamond Jo does not have, including live and simulcast greyhound racing, and, on a limited basis, simulcast horse racing. As a not-for-profit organization, the DGP has developed strong relationships with the local community and city officials by distributing a percentage of its cash flow, through contributions, to the City of Dubuque and local charities. DGP’s facility includes 1,000 slot machines, 16 table games and 4 poker tables. DGP is currently renovating its gaming facility. The renovation is expected to include a new restaurant, entertainment facility and additional gaming space. In addition, a group of private investors opened a hotel adjacent to the DGP in October 2005. The DGP is owned and operated by the Dubuque Racing Association (“DRA”). As a not-for-profit organization, the DRA distributes a percentage of its cash flow to the City of Dubuque and local charities.

Riverboat gaming licenses in the State of Iowa are granted to not-for-profit “qualified sponsoring organizations” and can be issued jointly to a not-for-profit qualified sponsoring organization and a boat operator. The granting of new licenses requires regulatory approval, which includes, among other things, satisfactory feasibility studies. The DRA is the not-for-profit qualified sponsoring organization that, pursuant to a contract between the parties, holds the gaming license together with us as the operator.

The Iowa Racing and Gaming Commission rescinded its rule limiting riverboat gaming licenses in Iowa and in May 2005 granted four new gaming licenses (including ours in Worth County). The closest of these licensees to the Diamond Jo is located in Waterloo, Iowa which is approximately 85 miles away from the Diamond Jo.

Evangeline Downs. The nearest competitor to Evangeline Downs is a Native American casino located approximately 50 miles to the north of the racino, including several miles off the highway in Marksville, Louisiana. Beyond that, patrons in Lafayette need to drive approximately 75 miles to reach riverboat casinos in Baton Rouge and approximately 100 miles to reach riverboat casinos in Lake Charles and a Native American casino in Kinder. Because our competition in Marksville is situated more than 20 miles off the highway, we believe that the ease of highway access for Evangeline Downs provides a competitive advantage.

Louisiana law currently places limitations on the number and types of gaming facilities that may operate in the state. Currently, there are only four horse racetracks in Louisiana with licenses to conduct live racing. Under the Pari-Mutuel Act, each of the four horse racetracks (including our racino) is permitted to install slot machines at its facilities. The horse racetrack nearest to the racino site that is allowed to have gaming operations is located in Vinton, Louisiana, near Lake Charles, which is more than 100 miles away from the racino. In addition, current Louisiana law permits only 15 riverboat gaming licenses, all of which have currently been awarded. Also, under current Louisiana law, the only non-Native American land-based casino permitted to operate in the state is the land-based casino currently operating in New Orleans, more than 100 miles from Lafayette. Native American gaming facilities operate pursuant to compacts with the State of Louisiana. There currently are only four federally-recognized Native American tribes in Louisiana and only three Native American casinos are currently operating in Louisiana, the closest being in Marksville, which is approximately 50 miles from Evangeline Downs. The fourth tribe, which to our knowledge currently does not have a compact with the State of Louisiana, has proposed to develop a casino in DeSoto Parish, more than 150 miles from the racino.

Diamond Jo Worth. Diamond Jo Worth’s primary competition is the Native American gaming operations in Minnesota, the closest being approximately 110 miles from the Diamond Jo Worth casino. In addition, a casino in Emmetsburg, Iowa, approximately 90 miles from Diamond Jo Worth casino, commenced operations in June 2006 and a casino in Waterloo, Iowa opened in the summer of 2007, which is located approximately 120 miles from the Diamond Jo Worth casino.

Employees

We maintain a staff of approximately 430 to 460 full-time equivalent employees at the Diamond Jo, a staff of approximately 550 to 600 full-time equivalent employees at Evangeline Downs and a staff of approximately 330 to 380 full-time equivalent employees at the Diamond Jo Worth, depending upon the time of the year. None of our employees are covered by a collective bargaining agreement. We have not experienced any labor problems resulting in a work stoppage, and believe we maintain good relations with our employees.

Regulatory Matters

We and our subsidiaries are subject to regulation by the State of Iowa, the State of Louisiana, and, to a lesser extent, by federal law. We and our subsidiaries are subject to regulations that apply specifically to live racing facilities and the gaming and pari-mutuel industry, in addition to regulations applicable to businesses generally. Our racino is subject to the Pari-Mutuel Act and the Louisiana Horse Racing Act. Laws and regulations applicable to our current racetrack and our racino are administered by the Louisiana State Gaming Control Board and the Louisiana State Racing Commission. Legislative or administrative changes in applicable legal requirements, including legislation to prohibit casino gaming, have been proposed in the past. It is possible that the applicable requirements to operate an Iowa or Louisiana gaming facility will become more stringent and burdensome, and that taxes, fees and expenses may increase. It is also possible that the number of authorized gaming licenses in Iowa or Louisiana may increase, which would intensify the competition that we face. Our failure to comply with detailed regulatory requirements may be grounds for the suspension or revocation of one or more of our respective licenses which would have a material adverse effect on our respective businesses.

Iowa Gaming Regulation

Our Diamond Jo and Diamond Jo Worth operations are subject to Chapter 99F of the Iowa Code and the regulations promulgated under that Chapter and the licensing and regulatory control of the Iowa Racing and Gaming Commission. Our license is subject to annual renewal.

Under Iowa law, the legal age for gaming is 21, and wagering on a “gambling game” is legal when conducted by a licensee on the gaming floor of an “excursion gambling boat” or a "gambling structure." An “excursion gambling boat” is an excursion boat or moored barge and a "gambling structure" is any man-made stationary structure which does not contain a race track and is approved by the Iowa Racing and Gaming Commission. A “gambling game” is any game of chance authorized by the Iowa Racing and Gaming Commission.

The legislation permitting gambling in Iowa authorizes the granting of licenses to “qualified sponsoring organizations.” A “qualified sponsoring organization” is defined as a nonprofit corporation organized under Iowa law, whether or not exempt from federal taxation, or a person or association that can show to the satisfaction of the Iowa Racing and Gaming Commission that the person or association is eligible for exemption from federal income taxation under Sections 501(c)(3), (4), (5), (6), (7), (8), (10) or (19) of the Internal Revenue Code. Such nonprofit corporation may operate the excursion gambling boat or gambling structure itself, or it may enter into an agreement with another operator to operate the boat or structure on its behalf. An operator must be approved and licensed by the Iowa Racing and Gaming Commission. DRA, a not-for-profit corporation organized for the purpose of operating a pari-mutuel greyhound racing facility in Dubuque, Iowa, first received an excursion gambling boat license in 1990 and has served as the “qualified sponsoring organization” of the Diamond Jo since March 18, 1993. DRA entered into an operating agreement (the “DRA Operating Agreement”) with Greater Dubuque Riverboat Entertainment Company, the previous owner and operator of the Diamond Jo, authorizing Greater Dubuque Riverboat Entertainment Company to operate excursion gambling boat gaming operations in Dubuque. The Iowa Racing and Gaming Commission approved the DRA Operating Agreement on March 18, 1993. The term of the DRA Operating Agreement expires on December 31, 2018. We assumed the rights and obligations of Greater Dubuque Riverboat Entertainment Company under the DRA Operating Agreement.

During 2005, the DRA Operating Agreement was amended to provide for, among other things, the following:

The DRA is authorized to operate up to 1,500 gaming positions at DGP.

Extension of the operating agreement through December 31, 2018.

From February 2006 (the date that DGP commenced operation of table games) through August 31, 2006 (the date a competing casino facility opened to the public in Riverside, Iowa), DRA was contractually obligated to pay to DJL $0.33 for each $1.00 of reduction in DJL’s adjusted gross gaming receipts, subject to a maximum 15% decline and certain payment deferral conditions. Beginning September 1, 2006 and continuing through November 18, 2008, DRA was contractually obligated to pay to DJL $0.33 for each $1.00 of reduction in DJL’s adjusted gross gaming receipts above a 7% decline from the base period and subject to a maximum 21% decline and certain payment deferral conditions.

DJL paid to DRA the sum of $.50 for each patron admitted on the boat through December 9, 2008. During 2008, 2007 and 2006, these payments approximated $0.3 million, $0.4 million and $0.4 million, respectively. Commencing December 10, 2008, the date DJL moved its operations to its new facility, DJL is required to pay to the DRA 4.5% of DJL’s adjusted gross receipts. These payments approximated $0.2 million for the year ended December 31, 2008.

During 2008, 2007 and 2006, DJL recorded other revenue of approximately $1.6 million, $1.9 million and $1.6 million, respectively, related to this agreement, of which $0.7 million and $2.5 million has been recorded as a long-term receivable and is included in deposits and other assets on the Company’s balance sheets at December 31, 2008 and 2007, respectively. At December 31, 2008 and 2007, $3.4 million and $0.3 million, respectively, is recorded as a short-term receivable on the Company’s balance sheets.

In a separate agreement with the City of Dubuque, we extended our leases for certain real property, including various parking lots around the casino, through December 2018. The current lease calls for lease payments of $500,000 annually. However, under DJL’s operating agreement with the DRA, the DRA is required to reimburse DJL for all lease payments paid to the City as described in this paragraph.

The Worth County Development Authority (“WCDA”), a not-for-profit corporation, was organized on July 14, 2003 for the purpose of serving as a qualified sponsoring organization for an excursion gambling boat license to be held in Worth County, Iowa. Pursuant to an operator’s agreement with the WCDA (the “WCDA Operating Agreement”), DJW is entitled to own and operate an excursion gambling boat in Worth County, Iowa. As the “qualified sponsoring organization” for DJW, WCDA receives 5.76% of DJW’s adjusted gross receipts. In 2008, 2007 and 2006, DJW expensed $4.5 million, $4.3 million and $2.8 million, respectively, under this agreement. The WCDA Operating Agreement expires on March 31, 2015, but is subject to automatic three year renewal periods.

Under Iowa law, a license to conduct gaming may be issued in a county only if the county electorate has approved the gaming. The electorate of Dubuque County, Iowa, which includes the City of Dubuque, approved gaming on May 17, 1994 by referendum, with 80% of the electorate voting in favor of gaming conducted by DJL. The electorate of Worth County, Iowa, approved gaming on June 24, 2003 by referendum, including gaming conducted by DJW, with 75% of the electorate voting in favor. In addition, a referendum must be held every eight years in each of the counties where gambling games are conducted and the proposition to continue to allow gambling games in such counties must be approved by a majority of the county electorate voting on the proposition. Such a referendum took place for DJL on November 5, 2002 with 79% of the electorate voting on the proposition favoring continued gaming on excursion gambling boats in Dubuque County. The next referendum in both Dubuque County and Worth County is scheduled for 2010. If any reauthorization referendum is defeated, Iowa law provides that any previously issued gaming license will remain valid and subject to renewal for a total of nine years from the date of original issuance of the license, subject to earlier non-renewal or revocation under Iowa law and regulations applicable to all licenses.

Proposals to amend or supplement Iowa’s gaming statutes are frequently introduced in the Iowa state legislature. In addition, the state legislature sometimes considers proposals to amend or repeal Iowa law and regulations, which could effectively prohibit gaming in gambling structures in the State of Iowa, limit the expansion of existing operations or otherwise affect our operations. Although we do not believe that a prohibition of gaming in Iowa is likely, we can give no assurance that changes in Iowa gaming laws will not occur or that the changes will not have a material adverse effect on our business.

Substantially all of DJL’s and DJW’s material transactions are subject to review and approval by the Iowa Racing and Gaming Commission. All contracts or business arrangements, verbal or written, with any related party or in which the term exceeds three years or the total value of the contract exceeds $100,000 are agreements that qualify for submission to and approval by the Iowa Racing and Gaming Commission subject to certain limited exceptions. The agreement must be submitted within 30 days of execution and approval must be obtained prior to implementation unless the agreement contains a written clause stating that the agreement is subject to commission approval. Additionally, contracts negotiated between DJL or DJW and a related party must be accompanied by economic and qualitative justification.

We must submit detailed financial, operating and other reports to the Iowa Racing and Gaming Commission. We must file weekly gaming reports indicating adjusted gross receipts received from gambling games. Additionally, we must file annual financial statements covering all financial activities related to our operations for each fiscal year. We must also keep detailed records regarding our equity structure and owners.

Iowa has a graduated wagering tax on excursion gambling boat gaming equal to 5% of the first one million dollars of adjusted gross receipts, 10% on the next two million dollars of adjusted gross receipts and 22% on adjusted gross receipts of more than three million dollars. In addition, Iowa excursion gambling boats and gambling structures share equally in costs of the Iowa Racing and Gaming Commission and related entities to administer gaming in Iowa. For the fiscal year ending December 31, 2008, DJL’s and DJW’s share of such expenses were approximately $0.7 million each. Further, DJL paid to the City of Dubuque a fee equal to $.50 per passenger through the date it began operations at its new moored barge facility.

In accordance with legislation passed in 2004, all excursion gambling boat licensees, including DJL, were assessed an amount based on the licensee’s adjusted gross receipts to be deposited into the Rebuild Iowa Infrastructure Fund. DJL’s total assessment was $2.1 million, which was paid in two equal payments of $1.05 million on May 2005 and May 2006, respectively. DJL recorded the payments as a long term deposit on its consolidated balance sheet. Beginning in July 2010, we may offset gaming taxes in an amount equal to 20% of the total assessment in each of the succeeding five fiscal years thereafter. DJW was not included in this assessment as it was not licensed at the time of the assessment.

In connection with obtaining its gaming license, DJW is required to pay under an executory agreement a license fee of $5.0 million payable in five equal annual installments of $1.0 million. DJW paid the first four installments in June 2005, May 2006, May 2007 and May 2008 with the remaining installment due in May 2009.

If the Iowa Racing and Gaming Commission decides that a gaming law or regulation has been violated, the Iowa Racing and Gaming Commission has the power to assess fines, revoke or suspend licenses or to take any other action as may be reasonable or appropriate to enforce the gaming rules and regulations. In addition, renewal is subject to, among other things, continued satisfaction of suitability requirements.

We are required to notify the Iowa Racing and Gaming Commission as to the identity of, and may be required to submit background information regarding, each director, corporate officer and owner, partner, joint venture, trustee or any other person who has a beneficial interest, direct or indirect, in DJL or DJW. The Iowa Racing and Gaming Commission may also request that we provide them with a list of persons holding beneficial ownership interests in DJL or DJW . For purposes of these rules, “beneficial interest” includes all direct and indirect forms of ownership or control, voting power or investment power held through any contract, lien, lease, partnership, stockholding, syndication, joint venture, understanding, relationship, present or reversionary right, title or interest, or otherwise. The Iowa Racing and Gaming Commission may limit, make conditional, suspend or revoke the license of a licensee in which a director, corporate officer or holder of a beneficial interest is found to be ineligible as a result of want of character, moral fitness, financial responsibility, or professional qualifications or due to failure to meet other criteria employed by the Iowa Racing and Gaming Commission.

If any gaming authority, including the Iowa Racing and Gaming Commission, requires any person, including a holder of record or beneficial owner of securities, to be licensed, qualified or found suitable, the person must apply for a license, qualification or finding of suitability within the time period specified by the gaming authority. The person would be required to pay all costs of obtaining the license, qualification or finding of suitability. If a holder of record or beneficial owner of any of the Company’s 8 3/4% senior secured notes due 2012 (the “Peninsula Gaming Notes”), DJW’s 11% senior secured notes due 2012 (the “DJW Notes”), or any membership interest in PGL, PGP, DJL or DJW is required to be licensed, qualified or found suitable and is not licensed, qualified or found suitable by such gaming authority within the applicable time period, the Peninsula Gaming Notes, DJW Notes, or membership interests, as the case may be, would be subject to regulatory redemption procedures.

The Horse Racing Act and The Pari-Mutuel Act

The Horse Racing Act has been in effect since 1968 and is the basis for the current statutory scheme regulating live and off-track betting for horse racing. The Horse Racing Act states, among other things, that certain policies of Louisiana with respect to horse racing are to: (i) encourage the development of the business of horse racing with pari-mutuel wagering on a high plane; (ii) encourage the development of the breeding and ownership of race horses; (iii) regulate the business of horse racing by licensed horse racing tracks in the state and to provide the orderly conduct of racing; (iv) provide financial assistance to encourage the business of racing horses; and (iv) provide a program for the regulation, ownership, possession, licensing, keeping and inoculation of horses.

The Pari-Mutuel Act became effective on July 9, 1997 and provides for numerous controls and supervision over the operation of slot facilities and requires us to comply with complex and extensive requirements. Failure to adhere to these statutes and regulations will result in serious disciplinary action against us, including monetary fines and suspension or revocation of our licenses.

The Pari-Mutuel Act allows only one facility in each of St. Landry Parish, Bossier Parish, Calcasieu Parish and Orleans Parish to be licensed to operate slot machines at a live horse racing facility. EVD is presently the only “eligible facility” in St. Landry Parish under the Pari-Mutuel Act. The Pari-Mutuel Act requires (among other things) that two conditions be met prior to the opening and operation of a slot machine casino at a live-racing venue. First, a parish-wide referendum must approve the operation. In 1997, voters in St. Landry Parish voted to approve the slot machine casino at the racino site. Secondly, the Pari-Mutuel Act requires that an appropriate tax be levied on the slot machine operation. In 2000, an 18.5% license tax was levied upon taxable net slot machine proceeds. Therefore, we believe that both of the conditions required by the Pari-Mutuel Act have been met with respect to the racino at our site in Opelousas within St. Landry Parish.

The Pari-Mutuel Act also provides that the “designated gaming space” in any eligible facility cannot exceed 15,000 square feet, that the licensee will not allow underage gaming and that notice of toll-free telephone assistance for compulsive gamblers will be posted at the facility. EVD currently complies with these requirements.

The Pari-Mutuel Act requires that licensees supplement horse racing purses and pay certain other fees from slot machine proceeds. The Pari-Mutuel Act also levies taxes on the net slot machine proceeds. Licensees must pay 15% of gross slot machine proceeds to supplement purses at their facilities, pay 2% to the Louisiana Thoroughbred Breeders Association and also pay 1% to the Louisiana Quarter Horse Breeders Association. In addition to these payments, we will pay 18.5% of the net slot machine proceeds (net of the payments described above) as state taxes and 4% as local taxes. The effective rate of total taxes and fees is therefore approximately 36.5% of our adjusted gross slot revenue. Additionally, we also pay the Louisiana State Racing Commission $0.25 each day for each patron who enters the racino on live race days from the hours of 6:00 pm to midnight, attends a live race at our horse racetrack, enters the racino during non-racing season, from the hours of noon to midnight, Thursday through Monday, or enters any one of our OTBs.

To remain an “eligible facility” under the Pari-Mutuel Act, each year we must, among other things, have a minimum of 80 live racing days in a consecutive 20-week period.

Louisiana State Racing Commission

Pari-mutuel betting and the conducting of live horse race meets in Louisiana are strictly regulated by the Louisiana State Racing Commission, which was created pursuant to the Horse Racing Act. The Louisiana Racing Commission is comprised of 10 members. In order to be approved to conduct a live race meet and to operate pari-mutuel wagering (including off-track betting), an applicant must show, among other things: (i) racing experience; (ii) financial qualifications; (iii) moral and financial qualifications of applicant and applicant’s partners, officers and officials; (iv) the expected effect on the breeding and horse industry; and (v) the expected effect on the State’s economy.

In 2000, we received from the Louisiana State Racing Commission a license to conduct live race meets and to operate pari-mutuel wagering at our prior facility. The initial term of the license was renewed on April 20, 2007 for 10 years or through April 19, 2017. On December 19, 2002, we received approval to transfer our operations under our license from Lafayette Parish to St. Landry Parish upon completion of our new horse racetrack. As a condition to the approval of our racing license, we are required to offer pari-mutuel wagering in the defined casino gaming space at the time we conduct slot machine gaming. Our racino includes monitors and other equipment to facilitate live and simulcast wagering within the casino area in compliance with this condition.

The Louisiana State Racing Commission promulgates rules, regulations and conditions for the holding, conducting and operating of all racetracks in the state. Failure to adhere to these regulations may result in substantial fines or the suspension or revocation of our racing license. A revocation or suspension of the racing license would, in turn, result in the revocation or suspension of our gaming license to conduct slot machine operations. Any alteration in the regulation of these activities could have a material adverse effect on our operations.

The Louisiana State Gaming Control Board

In 1996, Louisiana created the Louisiana Gaming Control Board (the “Board”), which was granted all of the regulatory authority, control and jurisdiction to license and monitor gaming facilities in Louisiana, including our racino. To receive a gaming license an applicant and its management must apply to the Board and be investigated by the Louisiana State Police Gaming Enforcement Division (the “Division”) prior to licensing. The Board and the Division must determine that the applicant is suitable to conduct the gaming operations, including that the applicant (and its owners, officers, directors and key employees) is of good character, honesty and integrity, that its prior activities, reputation and associations pose no threat to the public interest or to the effective regulation of the industry and that the applicant is capable of conducting the operation of the slot machine facility. The Board must also determine that the applicant has adequate financing from a source suitable and acceptable to the Board.

The applicant for a gaming license, its directors, officers, key personnel, partners, and persons holding a 5% or greater equity or economic interest in the applicant will be required to be found suitable by the Board. To receive a license the applicant must file an extensive application with the Board, disclosing personal, financial, criminal, business and other information. The applicant is required to pay all costs of investigation. An application for a finding of suitability of a person may be denied for any cause deemed reasonable by the Board. Any other person who is found to have a material relationship to or a material involvement with a gaming company also may be required to be investigated in order to be found suitable or be licensed as a business associate of an applicant. Key employees, controlling persons or others who exercise significant influence upon the management or affairs of a gaming company may be deemed to have such a relationship or involvement.

If the Board were to find a director, officer or key employee of an applicant unsuitable for licensing purposes or unsuitable to continue having a relationship with an applicant, the applicant would have to dismiss and sever all relationships with such person. The applicant would have similar obligations with regard to any person who refuses to file appropriate applications. Each gaming employee must obtain a gaming employee permit which may be revoked upon the occurrence of certain specified events.

An applicant must also demonstrate that the proposed gaming operation has adequate financial resources generated from suitable sources and adequate procedures to comply with the operating controls and requirements imposed by the laws and regulations in the State of Louisiana. Additionally, the applicant must submit plans and specifications of the gaming premises specifying the layout and design of the gaming space. Proof of tax compliance, both state and federal, is also required. This submission is followed by a thorough investigation by the regulatory authorities of the applicant, its business probity, the premises and other matters. An application for any gaming license, approval or finding of suitability may be denied for any cause that the regulatory authorities deem reasonable.

We received our gaming license to operate slot machines at our racino from the Louisiana Gaming Control Board on January 21, 2003 and it was renewed on December 11, 2007. The license is for 5 years and must be renewed 60 days before January 21, 2013. The Board retains absolute discretion over the right to renew our license.

EVD’s gaming license authorizes the use of 15,000 square feet of designated gaming space. EVD submitted for approval its current layout for the casino, which incorporates 1,425 slot machines, which was approved October 21, 2008. If EVD wants to change the type and/or design of its slot machines, it must once again seek and obtain approval of both the Division and go before the Board to obtain such approval. Once any new machines are installed, they must be inspected by regulators and tested prior to the approval of their operation. The moving of the machines within the approved gaming area also requires the approval of the Louisiana State Police with oversight of the Louisiana Gaming Control Board.

To maintain our gaming license, each year we must remain an “eligible facility” under the Pari-Mutuel Act. This means that we must, among other things, have a minimum of 80 live racing days in a consecutive 20-week period each year of live horse race meetings at the new horse racetrack and must be a licensed racing association.

Although we have obtained our license to conduct slot machine operations, we continue to be subject to ongoing monitoring and compliance requirements by the Board and the Division. We have obtained from the Board a video draw poker establishment license and owner device license. The video draw poker establishment license allows us to operate video draw poker devices at our approved OTB locations but not the racino, and the owner device license allows us to own those machines. Regulations require us to comply with rigorous accounting and operating procedures, including the submission of detailed financial and operating reports. Our accounting records must include accurate, complete and permanent records of all transactions pertaining to revenue. Detailed ownership records must be kept on site available for inspection. All records must be retained for a period of five years. Audited financial statements are required to be submitted to the Division. Internal controls have been approved and in place beginning the first day of operation. These controls include handling of cash, tips and gratuities, slot operations, and count room procedures and management information systems. Each licensed facility is required by the Board to maintain cash or cash equivalent amounts on site sufficient to protect patrons against defaults in gaming debts owed by the licensee. In addition, licensees are subject to currency transaction reporting regulations.

We must also strictly comply with mandated operating procedures and supply detailed reports disclosing such compliance. Regulation of a casino’s methods of operations is extensive and will include substantially all aspects of our casino operation. Operating procedures that are subject to regulation include slot machine maintenance and operation, cash management and cash procedures, cage procedures, drop procedures, regulation of weapons in the casino, parking, access to the premises and records by regulators, gaming credit and advertising, surveillance and security standards, safeguards against underage gambling, compulsive gambling programs, physical layout and progressive jackpots.

The Board retains the power to suspend, revoke, condition, limit or restrict our license to conduct slot machine operations as a sanction for violating licensing terms or for any cause they deem reasonable. In addition, monetary fines for violations may be levied against us, and our gaming operation revenues may be forfeited to the state under certain circumstances. Initial enforcement actions against a licensee are brought by the Division and are heard before an administrative law judge to whom the Board has delegated decision making power. Either party may appeal the ruling of the administrative law judge before the full Board. Either party may further appeal the ruling of the Board in state court. The laws, regulations and procedures pertaining to gaming are subject to the interpretation of the regulatory authorities and may be amended. Any changes in such laws or regulations, or their current interpretations, could have a material adverse effect on our business, financial condition, results of operations and ability to meet our payment obligations under the Peninsula Gaming Notes and our other indebtedness.

The Board has broad regulatory power over securities issuances and incurrence of indebtedness by gaming facilities. Substantially all loans, leases, private sales of securities, extensions of credit, refinancing and similar financing transactions entered into by a licensee must be approved by the Board. Pursuant to a letter dated January 31, 2003, December 5, 2006 and July 19, 2007, the Board exempted the offering of the Peninsula Gaming Notes (as defined herein) from any requirement for prior approval by the Board. However, at any time, any holder of the Peninsula Gaming Notes may be called before the Board to undergo a suitability investigation in the event the Board determines that such holder exercises a material influence over us or our operations.

At any time the Board may investigate and require the finding of suitability of any shareholder or beneficial shareholder (and if the shareholder is a corporate or partnership entity, then the shareholders or partners of the entity), officer, partner, member, manager or director of a licensee if the Board believes such holder exercises a material influence over the licensee. Furthermore, all holders of more than a 5% interest in the licensee, or proposed purchasers of more than a 5% interest are automatically investigated and are required to submit to suitability requirements of the Board. Any sale or transfer of more than a 5% interest in any gaming licensee is subject to the approval of the Board.

If the Board finds that any security holder or proposed security holder, including a holder of our debt securities or the debt securities of our subsidiaries, is not qualified pursuant to existing laws, rules and regulations, and if as a result it determines that the licensee is no longer qualified to continue as a licensee, it can propose action necessary to protect the public interest, including the suspension or revocation of a license or permit. It may also issue, under penalty of revocation of license, a condition of disqualification naming the person and declaring that such person may not (a) receive dividends or interest on securities of the licensee, (b) exercise any right conferred by securities of the licensee, (c) receive remuneration or any other economic benefit from the licensee or (d) continue in an ownership or economic interest in the licensee or remain as a director, partner, officer, or manager of the licensee. A security issued by a licensee must generally disclose these restrictions.

Other Regulations

Our businesses are subject to various federal, state and local laws and regulations in addition to gaming regulations. These laws and regulations include, but are not limited to, restrictions and conditions concerning alcoholic beverages, environmental matters, employees, currency transactions, taxation, zoning and building codes, and marketing and advertising. Such laws and regulations could change or could be interpreted differently in the future, or new laws and regulations could be enacted. Material changes, new laws or regulations, or material differences in interpretations by courts or governmental authorities could adversely affect our operating results.

ITEM 1A. RISK FACTORS

Future Operating Performance —Our future operating performance could be adversely affected by disruptions in operations and reduced patronage of our properties as a result of poor economic conditions, severe weather and other factors.

Our future operating performance could be adversely affected by disruptions and reduced patronage of our properties as a result of poor economic conditions, severe weather and other factors. The impact of these factors will be more significant to us than it would be to a more diversified gaming company. Any or all of our properties could be completely or partially closed due to, among other things, severe weather, casualty, mechanical failure, including the failure of our slot machines, physical damage or extended or extraordinary maintenance or inspection. For example, hurricane Gustav forced the closure of Evangeline Downs for five days in 2008. Severe or inclement weather may also cause the closure of, or limit the travel on, highways which provide access to our properties and could reduce the number of people visiting these facilities. In addition, to maintain our gaming license for our racino, we must have a minimum of 80 live racing days in a consecutive 20-week period each year of live horse race meetings at the racetrack, and poor weather conditions may make it difficult for us to comply with this requirement. Although we maintain insurance policies, insurance proceeds may not adequately compensate us for all economic consequences of any such event.

We are also vulnerable to any adverse changes in general political, financial and economic conditions (including as a result of international conflict) and any negative economic, competitive, demographic or other conditions affecting the States of Iowa and Louisiana, the cities of Dubuque and Northwood, Iowa, and Opelousas, Louisiana and the surrounding areas from which we expect to attract patrons. If the economy of any of these areas suffers a downturn or if any of these areas’ larger employers lay off workers, we may be adversely affected by the decline in disposable income of affected consumers. In addition, the current recession or further downturn in the general economy, or in a region constituting a significant source of customers for our properties, could have a negative impact on our operations. Any of the foregoing factors could limit or result in a decrease in the number of patrons at any of our properties or a decrease in the amount that patrons are willing to wager.

Debt — Our substantial indebtedness could adversely affect our business, financial condition and results of operations and prevent us from fulfilling our obligations under our senior credit facilities, the Peninsula Gaming Notes and DJW Notes.

As of December 31, 2008, we had approximately $416.3 million of total debt outstanding. Our significant indebtedness could have important consequences such as:

limiting our ability to obtain additional financing to fund our working capital requirements, capital expenditures, debt service, costs to complete the various development projects at DJL, DJW, and EVD and general corporate or other obligations;

limiting our ability to use operating cash flow in other areas of our business because we must dedicate a significant portion of these funds to make principal and interest payments on our indebtedness;

increasing our interest expense if there is a rise in interest rates, because a portion of our borrowings may be under our senior credit facilities and, as such, we will have interest rate periods with short-term durations (typically 30 to 180 days) that require ongoing resetting at the then current rates of interest;

causing our failure to comply with the financial and restrictive covenants contained in the indentures that govern the Peninsula Gaming Notes and the DJW Notes and our senior credit facilities, which could cause a default under those instruments and which, if not cured or waived, could have a material adverse effect on us;

placing us at a competitive disadvantage to our competitors who may not be as highly leveraged; and

increasing our vulnerability to and limiting our ability to react to changing market conditions, changes in our industry and economic downturns.

Any of the factors listed above could have a material adverse effect on our business, financial condition and results of operations. In addition, we have the capacity to issue additional indebtedness, including the ability to incur additional indebtedness under the revolving portion of our senior credit facilities, subject to the limitations imposed by the agreements covering our indebtedness.

Restrictive Covenants - The indentures governing the Peninsula Gaming Notes and the DJW Notes and our senior secured credit facilities contain covenants that significantly restrict our operations.

The indentures governing the Peninsula Gaming Notes and the DJW Notes and the agreements governing our senior secured credit facilities contain, and any other future debt agreements may contain, numerous covenants imposing financial and operating restrictions on our business. These restrictions may affect our ability to operate our business, may limit our ability to take advantage of potential business opportunities as they arise and may adversely affect the conduct of our current business. These covenants place restrictions on our ability and the ability of our subsidiaries to, among other things:

pay dividends or make other distributions or restricted payments to PGP;

redeem stock;

incur indebtedness or issue preferred membership interests;

make certain investments;

create liens;

· agree to payment restrictions affecting the subsidiary guarantors;

consolidate or merge;

sell or otherwise transfer or dispose of assets, including equity interests of our restricted subsidiaries;

enter into transactions with our affiliates;

designate our subsidiaries as unrestricted subsidiaries; and

use the proceeds of permitted sales of our assets.

Our PGL Credit Facility limits DJL’s and EVD’s ability to pay dividends, make loans and distributions to PGL and DJW and also requires DJL and EVD to meet, among other things, certain minimum EBITDA and maximum capital expenditure requirements. Our indenture governing the DJW Notes also limits DJW’s ability to make loans and distributions to PGL. Due to these limitations on the payment of dividends, making loans and other distributions, PGL may not, on its own, be able to satisfy its obligations under the Peninsula Gaming Notes, which obligations must therefore be satisfied by DJL, co-issuer of the Peninsula Gaming Notes, and EVD, guarantor of the Peninsula Gaming Notes. In addition, due to the limitations discussed above, DJW may not be able to receive dividends or distributions from PGL or any of its restricted subsidiaries to help satisfy its obligations under the DJW Notes or DJW’s senior credit facility. Non-compliance with the financial ratios and tests contained in our debt agreements may adversely affect our ability to incur more debt, adequately finance our operations or capital needs in the future or to pursue attractive business opportunities that may arise in the future. Our ability to meet these ratios and tests and to comply with other provisions governing our indebtedness may be adversely affected by our operations and by changes in economic or business conditions or other events beyond our control. Our failure to comply with our debt-related obligations could result in an event of default under the notes and our other indebtedness.

History of Net Losses —We have had a net loss in recent years and may experience net losses in the future.

We had net losses in 2007 of $5.2 million, 2005 of $3.4 million and 2004 of $45.1 million (including $37.6 million related to a loss on early retirement of debt). As we continue to execute our business strategy, we may experience net losses in the future, which could have an adverse affect on our business, prospects, financial condition, results of operations and cash flows.

Licensing —If we fail to meet the minimum live racing day requirements, our gaming license with respect to the racino will be canceled and all slot machine gaming at the racino must cease.

Louisiana gaming regulations and our gaming license require that we, among other things, have a minimum of 80 live racing days in a consecutive 20-week period each year of live horse race meetings at the horse racetrack. Live racing days typically vary in number from year to year and are based on a number of factors, many of which are beyond our control, including the number of suitable race horses and the occurrence of severe weather. If we fail to have the minimum number of live racing days, our gaming license with respect to the racino may be canceled, and the casino will be required to cease operations. Any cessation of our operation would have a material adverse affect on our business, prospects, financial condition, results of operations and cash flows.

Reauthorization of Gaming in Iowa —The Dubuque County and Worth County electorate must vote in 2010 and every eight years thereafter whether to continue to allow riverboat gaming in Dubuque County and Worth County, Iowa. If gaming is discontinued, it is unlikely that DJL or DJW will be able to conduct its gaming operations.

Under Iowa law, a license to conduct gaming may be issued in a county only if the county electorate has approved the gaming, and a reauthorization referendum requiring majority approval must be held every eight years. On November 5, 2002, the electorate of Dubuque County, Iowa, which includes the City of Dubuque, approved gaming by approximately 79% of the votes cast. On June 24, 2003, Worth County, Iowa approved gaming in the county by approximately 75% of the votes cast. If any reauthorization referendum is defeated in either Dubuque or Worth County in 2010, it is unlikely that DJL or DJW, respectively, would be able to conduct gaming operations, and, in that case, we may not be able to continue to service our indebtedness, including the Peninsula Gaming and DJW Notes.

Liquor Regulation —Revocation of any of our liquor licenses, which are subject to extensive regulation, could have a material adverse effect on our gaming operations.

The sale of alcoholic beverages at our properties is subject to licensing, control and regulation by state and local agencies in Iowa and Louisiana. Subject to limited exceptions, all persons who have a financial interest in DJL, EVD, PGL, or DJW by ownership, loan or otherwise, must be disclosed in an application filed with, and are subject to investigation by, Iowa and Louisiana liquor agencies. All liquor licenses are subject to annual renewal, are revocable and are not transferable. The liquor agencies have broad powers to limit, condition, suspend or revoke any liquor license. Any disciplinary action with respect to any of our liquor licenses could, and any failure to renew or revocation of our liquor licenses would, have a material adverse effect on our business.

Competition —We face intense competition in our gaming markets and increased competition may have a material adverse effect on our business, financial condition and results of operations.

The gaming industry is intensely competitive. If our existing competitors expand and/or upgrade their facilities or operate more efficiently than we do, new gaming firms enter the markets in which we operate or our competitors offer amenities that our casinos do not have, we could lose market share or our gaming markets could become saturated and new opportunities for expanding our business could become limited. As a result, increased competition could have a material adverse effect on our business, financial condition, results of operations and cash flows.

In Dubuque, Iowa, we face competition primarily from the DGP. DGP’s facility includes 1,000 slot machines, 16 table games and 4 poker tables. DGP is currently renovating its gaming facility. The renovation is expected to include a new restaurant, entertainment facility and additional gaming space. In addition, a group of private investors opened a hotel adjacent to the DGP in October 2005. The DGP is owned and operated by the Dubuque Racing Association, or DRA. Besides the DGP, we also currently face limited competition from other gaming facilities located approximately 60 to 120 miles from our operations. In May 2005, the Iowa Racing and Gaming Commission granted 4 new licenses (including ours in Worth County). The closest of these licensees to the Diamond Jo is one located in Waterloo, Iowa, approximately 85 miles to the west of Dubuque, which opened in June 2007.

Our primary competition at the Diamond Jo Worth casino is from the Native American gaming operations in Minnesota, the closest being approximately 110 miles from the Diamond Jo Worth casino. In addition, a new casino in Emmetsburg, Iowa, located approximately 90 miles from Diamond Jo Worth casino, commenced operations in June 2006. As noted above, a new casino located in Waterloo, Iowa opened in June 2007 and is located approximately 120 miles from our Diamond Jo Worth casino.

In Louisiana, the nearest competitor to Evangeline Downs is a Native American casino located approximately 50 miles to the south of Lafayette, including several miles off the highway in Marksville, Louisiana. We also face competition from several other casinos and pari-mutuel gaming facilities located 50 to 100 miles from our racino, including Native American casinos in Kinder, Louisiana, and riverboat casinos in Baton Rouge and Lake Charles, Louisiana. The nearest horse racetrack to our racino that is allowed to have gaming operations is located in Vinton, Louisiana. We also face competition from truck stop video poker parlors and OTBs in the areas surrounding Lafayette and Opelousas, Louisiana.

We could also face additional competition if Louisiana or Iowa or any of the states bordering Iowa or Louisiana adopts laws authorizing new or additional gaming.

We also compete to some extent with other forms of gaming on both a local and national level, including state-sponsored lotteries, charitable gaming, on- and off-track wagering, internet gaming, and other forms of entertainment, including motion pictures, sporting events and other recreational activities. It is possible that these secondary competitors could reduce the number of visitors to our facilities or the amount they are willing to wager, which could have a material adverse effect on our ability to generate revenue or maintain our profitability and cash flows.

Increased competition may require us to make substantial capital expenditures to maintain and enhance the competitive positions of our properties, including updating slot machines to reflect changing technology, refurbishing rooms and public service areas periodically, replacing obsolete equipment on an ongoing basis and making other expenditures to increase the attractiveness and add to the appeal of our facilities. Because we are highly leveraged, after satisfying our obligations under our outstanding indebtedness, there can be no assurance that we will have sufficient funds to undertake these expenditures or that we will be able to obtain sufficient financing to fund such expenditures. If we are unable to make such expenditures, our competitive position could be materially adversely affected.

Governmental Regulation —Extensive gaming and racing-related regulation continuously impacts our operations and changes in such laws may have a material adverse effect on our operations by, among other things, prohibiting or limiting gaming in the jurisdictions in which we operate.

The ownership, management and operation of our gaming facilities are subject to extensive laws, regulations and ordinances which are administered by the Iowa Racing and Gaming Commission, the Louisiana State Gaming Control Board, the Louisiana State Racing Commission and various other federal, state and local government entities and agencies. We are subject to regulations that apply specifically to the gaming industry and horse racetracks and casinos, in addition to regulations applicable to businesses generally. If current laws, regulations or interpretations thereof are modified, or if additional laws or regulations are adopted, it could have a material adverse effect on our business.

Legislative or administrative changes in applicable legal requirements, including legislation to prohibit casino gaming, have been proposed in the past. For example, in 1996, the State of Louisiana adopted a statute in connection with which votes were held locally where gaming operations were conducted and which, had the continuation of gaming been rejected by the voters, might have resulted in the termination of operations at the end of their current license terms. During the 1996 local gaming referendums, Lafayette Parish voted to disallow gaming in the Parish, whereas St. Landry Parish, the site of our racino, voted in favor of gaming. All parishes where riverboat gaming operations are currently conducted voted to continue riverboat gaming, but there can be no guarantee that similar referenda might not produce unfavorable results in the future. Proposals to amend or supplement the Louisiana Riverboat Economic Development and Gaming Control Act and the Pari-Mutuel Act also are frequently introduced in the Louisiana State legislature. In the 2001 session, a representative from Orleans Parish introduced a proposal to repeal the authority of horse racetracks in Calcasieu Parish (the site of Delta Downs) and St. Landry Parish (the site of our racino) to conduct slot machine gaming at such horse racetracks and to repeal the special taxing districts created for such purposes. If adopted, this proposal would have effectively prohibited us from operating the casino portion of our racino. In addition, the Louisiana legislature, from time to time, considers proposals to repeal the Pari-Mutuel Act.

Similarly, in Iowa, the county electorate must reauthorize gaming every eight years. See “Reauthorization of Gaming in Iowa.”

To date, we have obtained all governmental licenses, findings of suitability, registrations, permits and approvals necessary for the operation of our properties owned by DJL, EVD and DJW. However, we can give no assurance that any additional licenses, permits and approvals that may be required will be given or that existing ones will be renewed or will not be revoked. Renewal is subject to, among other things, continued satisfaction of suitability requirements. Any failure to renew or maintain our licenses or to receive new licenses when necessary would have a material adverse effect on us.

The legislation permitting riverboat gaming in Iowa authorizes the granting of licenses to “qualified sponsoring organizations.” Such “qualified sponsoring organizations” may operate the gambling structure itself, subject to satisfying necessary licensing requirements, or it may enter into an agreement with an operator to operate gambling on its behalf. An operator must be approved and licensed by the Iowa Racing and Gaming Commission. The DRA, a not-for-profit corporation organized for the purpose of operating a pari-mutuel greyhound racing facility in Dubuque, Iowa, first received a riverboat gaming license in 1990 and, pursuant to the Amended DRA Operating Agreement, has served as the “qualified sponsoring organization” of the Diamond Jo since March 18, 1993. The term of the Amended DRA Operating Agreement expires on December 31, 2018. WCDA, pursuant to the WCDA Operating Agreement, serves as the “qualified sponsoring organization” of Diamond Jo Worth. The term of the WCDA Operating Agreement expires on March 31, 2015 and is subject to automatic three year renewal periods. If the Amended DRA Operating Agreement or WCDA Operating Agreement were to terminate, or if the DRA or WCDA were to otherwise discontinue acting as our “qualified sponsoring organization” with respect to our operation of the Diamond Jo and Diamond Jo Worth, respectively, and we were unable to obtain a license from the Iowa Racing and Gaming Commission for an alternative “qualified sponsoring organization” to act on our behalf, we would no longer be able to continue our Diamond Jo or Diamond Jo Worth operations, which would materially and adversely affect our business, results of operations and cash flows.

Legislative Changes —Changes in legislative rules and regulations may have a material adverse effect on our operations.

Changes in federal or state laws, rules and regulations, including tax laws, affecting the gaming industry, or in the administration of such laws, could have a material adverse affect on our business. Regulatory commissions and state legislatures from time to time consider limitations on the expansion of gaming in jurisdictions where we operate and other changes in gaming laws and regulations. Proposals at the national level have included a federal gaming tax and limitations on the federal income tax deductibility of the cost of furnishing complimentary promotional items to customers, as well as various measures which would require withholding on amounts won by customers or on negotiated discounts provided to customers on amounts owed to gaming companies. Proposals at the state level have also included changes in the gaming tax rate. It is not possible to determine with certainty the likelihood of possible changes in tax or other laws affecting the gaming industry or in the administration of such laws. The changes, if adopted, could have a material adverse effect on our business, results of operations and cash flows.

Legislation in various forms to ban indoor tobacco smoking has recently been enacted or introduced in many states and local jurisdictions, including the jurisdictions in which we operate. The current restrictions permit smoking on the casino gaming floor in the jurisdictions in which we operate. If additional restrictions on smoking are enacted in jurisdictions in which we operate, particularly if such restrictions ban tobacco smoking on the casino gaming floor, our business could be materially and adversely affected.

Environmental Matters —We are subject to environmental laws and potential exposure to environmental liabilities. This may affect our ability to develop, sell or rent our property or to borrow money where such property is required to be used as collateral.

We are subject to various federal, state and local environmental laws, ordinances and regulations, including those governing discharges to air and water, the generation, handling, management and disposal of petroleum products or hazardous substances or wastes, and the health and safety of our employees. Permits may be required for our operations and these permits are subject to renewal, modification and, in some cases, revocation. In addition, under environmental laws, ordinances or regulations, a current or previous owner or operator of property may be liable for the costs of removal or remediation of some kinds of hazardous substances or petroleum products on, under, or in its property, without regard to whether the owner or operator knew of, or caused, the presence of the contaminants, and regardless of whether the practices that resulted in the contamination were legal at the time they occurred. In addition, as part of our business in Worth County, Iowa, we operate a gas station, which includes a number of underground storage tanks containing petroleum products. The presence of, or failure to remediate properly, the substances may adversely affect the ability to sell or rent the property or to borrow funds using the property as collateral. Additionally, the owner of a site may be subject to claims by third parties based on damages and costs resulting from environmental contamination emanating from a site.

We have reviewed environmental assessments, in some cases including soil and groundwater testing, relating to our currently owned and leased properties in Dubuque, Iowa, and other properties we may lease from the City of Dubuque or other parties. As a result, we have become aware that there is contamination present on some of these properties apparently due to past industrial activities. With respect to parcels we currently own or lease, we believe, based on the types and amount of contamination identified, the anticipated uses of the properties and the potential that the contamination, in some cases, may have migrated onto our properties from nearby properties, that any cost to clean up these properties will not result in a material adverse effect on our earnings and cash flows. We have also reviewed environmental assessments and are not aware of any environmental liabilities related to our properties at EVD and DJW.

We do not anticipate any material adverse effect on our earnings, cash flows or competitive position relating to existing environmental matters, but it is possible that future developments could lead to material costs of environmental compliance for us and that these costs could have a material adverse effect on our business and financial condition, operating results and cash flows.

Taxation —An increase in the taxes and fees that we pay could have a material adverse effect on us, and might reduce the cash flow available to service our indebtedness.

We are subject to significant taxes and fees relating to our gaming operations, which are subject to increase at any time. Currently, in Iowa, we are taxed at an effective rate of approximately 21% of our adjusted gross receipts by the State of Iowa, we pay the City of Dubuque a fee equal to $0.50 per patron and we pay a fee equal to 4.5% and 5.76% of adjusted gross receipts to the DRA and WCDA, respectively. In addition, all Iowa riverboats share equally in costs of the Iowa Racing and Gaming Commission and related entities to administer gaming in Iowa, which is currently approximately $0.7 million per year per riverboat. Currently, in Louisiana, we are taxed at an effective rate of approximately 36.5% of our adjusted gross slot revenue and pay to the Louisiana State Racing Commission a fee of $0.25 for each patron who enters the racino on live race days from the hours of 6:00 pm to midnight, enters the racino during non-racing season from the hours of noon to midnight Thursday through Monday, or enters any one of our OTBs. In addition, there have been proposals in the past to tax all gaming establishments, including riverboat casinos, at the federal level. Any material increase in taxes or fees, or in costs of the Iowa Racing and Gaming Commission, the Louisiana State Racing Commission and related entities, would have a material adverse affect on our business.

Difficulty in Attracting and Retaining Qualified Employees —If we are unable to attract and retain a sufficient number of qualified employees or are required to substantially increase our labor costs, our business, results of operations, cash flows and financial condition will be materially adversely affected.

The operation of our business requires qualified executives, managers and skilled employees with gaming industry experience and qualifications to obtain the requisite licenses. We may have difficulty attracting and retaining a sufficient number of qualified employees and may be required to pay higher levels of compensation than we have estimated in order to do so. If we are unable to attract and retain a sufficient number of qualified employees for our current operations or are required to substantially increase our labor costs, we may not be able to operate our business in a cost effective manner or at all.

We are dependent upon the available labor pool of unskilled and semi-skilled employees. We are also subject to the Fair Labor Standards Act, which governs matters such as minimum wage, overtime and other working conditions. In February 2007, the State of Iowa passed a bill increasing the minimum wage for Iowa workers. Effective April 1, 2007, the minimum wage for the State of Iowa increased from $5.15 per hour to $6.20 per hour and then to $7.25 effective January 1, 2008. Effective July 24, 2007 and July 24, 2008, the federal minimum wage increased to $5.85 and $6.55, respectively, and is scheduled to increase to $7.25 per hour effective July 24, 2009. Current Iowa law effectively requires that we pay Iowa employees 25% more than the federally mandated minimum wage rates. While DJL and DJW currently pay all of their employees more than the current minimum wage levels, these scheduled changes in minimum wage laws could increase our payroll costs in the future and have an adverse effect on our liquidity. Further changes in applicable state or federal laws and regulations, particularly those governing minimum wages, could increase labor costs, which could have a material adverse effect on the cash flow available to service our indebtedness.

Energy Costs — Our operations are affected by increases in energy costs.

We are a large consumer of electricity and other energy in connection with the operation of our gaming properties. Accordingly, increases in energy costs may have a negative impact on our operating results. Additionally, higher energy and gasoline prices which affect our customers may result in reduced visitation to our casinos and racino and a reduction in our revenues.

Interested Party Matters —All of the Company’s voting equity interests are indirectly beneficially owned in the aggregate by managers and executive officers of PGP and such ownership may give rise to conflicts of interest.

All of the Company’s voting equity interests are indirectly beneficially owned or controlled in the aggregate by M. Brent Stevens, Michael Luzich and Terrance W. Oliver. Specifically, Mr. Stevens, our Chief Executive Officer, is also the Chairman of the Board of Managers of PGP and the Chief Executive Officer of PGP, DJL, EVD, PGL and DJW. Mr. Stevens indirectly beneficially owns or controls (through his beneficial ownership or control of voting equity interests in PGP) approximately 66.2% of the Company’s voting equity interests. Mr. Luzich, our President and Secretary, is also a Manager of PGP and the President and Secretary of PGP, PGL, DJL, EVD and DJW. Mr. Luzich indirectly beneficially owns (through his ownership of voting equity interests in PGP) approximately 32.3% of the Company’s voting equity interests. Mr. Oliver, a Manager of PGP, indirectly beneficially owns (through his direct ownership of interests in The Oliver Family Trust) approximately 1.5% of the Company’s voting equity interests. Andrew Whittaker, a Manager of PGP, indirectly beneficially owns (through his indirect ownership of voting equity interests in PGP) approximately 4.2% (which is included in the calculation of the 66.2% owned or controlled by Mr. Stevens) of the Company’s voting equity interests. In addition, Mr. Stevens has the right to designate three of the five members of PGP’s board of managers, including one of the two independent managers, and Mr. Luzich has the right to designate two of the five members of PGP’s board of managers, including one of the two independent managers, for so long as Mr. Stevens and Mr. Luzich, respectively, beneficially hold at least 5% of the voting equity interests of PGP.

Because of their controlling interests, these individuals have the power to elect a majority of our managers, appoint new management and approve any action requiring the approval of holders of our equity interests, including adopting amendments to our certificate of formation, approving mergers or sales of substantially all of our assets or changes to our capital structure.

PGP is primarily responsible for managing DJL, EVD and DJW operations as well as supervising all development projects. Neither PGP nor any of its affiliates is restricted from managing other gaming operations, including new gaming ventures or facilities that may compete with ours, except that certain restrictions under the Amended DRA Operating Agreement will terminate if we or any of our affiliates operate another facility in Dubuque County or the adjoining counties of Illinois or Wisconsin. If PGP or any of its affiliates decides to manage other gaming operations, such activities could require a significant amount of attention from PGP’s officers and managers and require them to devote less time to managing our operations. While we believe that any new ventures will not detract from PGP’s ability to manage and operate our business, there can be no assurance that such ventures would not have a material adverse effect on us.

* * * * * * *

In addition to the foregoing, you should consider each of the factors set forth in this Annual Report in evaluating our business and our prospects. The factors described in our Part 1 Item 1A are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently consider immaterial may also impair our business operations. This report is qualified in its entirety by these risk factors. If any of the foregoing risks actually occur, our business, financial condition and results of operation could be materially harmed. In that case, the results of our future operations could decline significantly.

ITEM 1B.

UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2.

PROPERTIES

DJL owns approximately 7 acres of land in the Port of Dubuque on which DJL’s new 188,000 square foot casino is built. We currently have approximately 680 surface parking spaces that are in close proximity to the Diamond Jo located on properties that we own, lease or to which we are given access at no cost pursuant to a non-exclusive use agreement with a third party. Our property lease currently requires us to pay $500,000 annually. All rent payments associated with this lease are reimbursed to us by the DRA under the Amended DRA Operating Agreement.

The EVD racino sits on and is bounded by approximately 649 acres of owned land located in Opelousas, Louisiana that we purchased in 2002 and 2003. We have constructed a 170,000 square foot building and a one mile dirt and 7/8 mile turf racetrack on this site. A portion of the purchase price for certain parcels of such land was financed by the seller of such parcels by EVD issuing a $3,850,000 note payable to the seller. The note is payable in seven annual installments and bears interest at a rate of 8.75%. The note is collateralized by a mortgage on the property. Simultaneously with the payment of each annual installment, the seller agreed to release from the mortgage one of seven parcels of land into which the land was equally divided. As of December 31, 2008, EVD has paid five of the seven annual installments.

In addition, EVD owns the land, building and improvements of the Port Allen OTB and leases the facilities that comprise the New Iberia, Henderson and Eunice OTBs.

The DJW casino and convenience store is located on 36 acres of owned land in Worth County, Iowa. With the completion of the expansion project in 2007, the casino building is now approximately 75,000 square feet. We currently have approximately 1,300 parking spaces that are in close proximity to Diamond Jo Worth located on properties that we own or lease. DJW leases 10 acres of land north of the casino that require DJW to pay $52,000 per year as rent through June 2016. The property lease also allows for the purchase of the leased land at the expiration of the lease for a total purchase price of $750,000.

In addition, DJW owns 268 acres of land approximately 10 miles northwest of the casino in Emmons, Minnesota on which a “member’s only” 93 acre 9-hole golf course and 9-station sporting clay course and 176 acre hunting facility, known as Pheasant Links, is located, together with a 4,500 square foot clubhouse. DJW also leases 30 acres of adjacent land for $3,000 per year through September 2010 for use as additional hunting land.

ITEM 3.

LEGAL PROCEEDINGS

In October 2003, EVD filed a Petition for Declaratory Judgment in the 27th Judicial District Court in St. Landry Parish, Louisiana, naming as opposing parties the Secretary of the Department of Revenue and Taxation for the State of Louisiana (the “Department”), the St. Landry Parish School Board and the City of Opelousas. EVD sought a judgment declaring that sales taxes were not due to the defendants on purchases made by EVD and its contractors in connection with the construction and furnishing of the Evangeline Downs Racetrack and Casino, which was constructed in St. Landry Parish in 2003-2004. EVD’s action was based on Louisiana statutory law which provides that racetracks are not required to pay taxes and fees other than those provided in the racing statutes, and that taxes and fees provided in the racing statutes are in lieu of, among other things, all state and local sales taxes. The St. Landry Parish School Board and the City of Opelousas questioned the application of the racing statutes to the construction and furnishing of the casino portion of the facility, thereby leading to the filing of this action. Subsequently, the Department adopted a similar position as the St. Landry Parish School Board and the City of Opelousas.

On February 20, 2008, EVD and the Department entered into a Settlement Agreement (the “Settlement Agreement”) which settled tax disputes between EVD and the Department arising out of audits conducted by the Department of the taxable years ended December 31, 2002, 2003 and 2004 for which EVD previously accrued and paid. The Department and EVD also reached an agreement regarding the payment of sales tax by EVD for tax years beginning on or after January 2005 for which EVD paid an additional $0.3 million to the Department for the tax years 2005 through and including 2007. The sales and use tax dispute with St. Landry Parish and the City of Opelousas remains open. EVD has accrued management’s best estimate of all sales and use taxes that may be due to St. Landry Parish or the City of Opelousas as of December 31, 2008. Amounts impacting expenses related to this dispute with all parties, excluding taxes associated with ongoing purchases and sales for the applicable year, were $1.1 million in 2006 and $(0.2) million in 2007.

During the second quarter of 2008, EVD settled an arbitration dispute with the general contractor of its racino and executed a settlement agreement whereby EVD agreed to pay the general contractor approximately $0.8 million to settle all claims related to the arbitration. Accordingly, in the second quarter of 2008, EVD recorded an $0.8 million reduction in the $1.6 million liability for unpaid billings from the contractor previously recorded on the Company’s balance sheet with a corresponding reduction in property and equipment.

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

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

PART II

ITEM 5.

MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

There is no established public trading market for any of PGL’s, DJL’s or PGC’s common equity securities.

As of December 31, 2008, PGP was the only holder of record of the common equity of PGL and DJL and PGC are wholly owned subsidiaries of PGL. In fiscal years 2008 and 2007, PGL and/or its subsidiaries paid distributions totaling $4.1 million and $6.4 million, respectively, to PGP in respect of (i) certain consulting and financial advisory services related to PGP development, (ii) board fees and actual out-of-pocket expenses incurred by members of the board of managers of PGP (the “Board of Managers”) in their capacity as board members, and (iii) tax, accounting, legal and administrative costs and expenses of PGP. These amounts were recorded as member distributions.

Significant restrictions exist on our ability to make member distributions. See Note 4 to the consolidated financial statements for information on such restrictions.

ITEM 6. SELECTED FINANCIAL DATA

The following table represents selected consolidated financial data of PGL for the five years ended December 31, 2008.

The selected historical financial data for such periods are derived from our audited consolidated financial statements. All years presented include DJL’s operations and EVD’s gaming and horse racing operations, and the three years ended December 31, 2008 includes DJW’s operations (casino opened in April 2006). The selected financial data set forth below should be read in conjunction with, and is qualified in its entirety by reference to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our consolidated financial statements and the related notes included elsewhere in this document.

	Year Ended December 31,
	2008		2007		2006		2005		2004
	(Dollars in thousands)
Statement of Operations Data
REVENUES:
Casino	$227,269		$222,147		$200,734		$146,790		$120,190
Racing	17,986		19,146		22,146		17,578		17,380
Video Poker	5,901		4,533		3,715		2,339		2,715
Food and beverage	16,767		15,801		15,315		13,511		11,464
Other	11,809		11,501		10,087		2,710		1,434
Less promotional allowances	(20,579	)	(19,935)		(17,580)		(13,855)		(11,464)
Total net revenues	259,153		253,193		234,417		169,073		141,719
EXPENSES:
Casino	97,421		94,389		84,971		67,180		58,079
Racing	15,739		15,959		18,579		15,335		14,010
Video poker	4,349		3,751		2,949		1,767		2,034
Food and beverage	13,174		12,428		11,701		9,849		9,218
Other	7,564		7,080		6,605		1,720		1,076
Selling, general and administrative	34,657		49,770		43,924		28,454		24,247
Depreciation and amortization	20,134		20,728		20,820		16,249		12,356
Pre-opening expense	785		375		966		310		367
Development expense	(922	)	8,041		777		575		242
Management severance and recruiting	—		—		—		—		593
Affiliate management fees	5,401		5,218		4,516		2,057		757
Impairment on asset held for sale	831		—		—		—		—
(Gain) loss on disposal of assets	95		2,731		210		(16)		(716)
Total expenses	199,228		220,470		196,018		143,480		122,263
Income from operations	59,925		32,723		38,399		25,593		19,456
OTHER INCOME (EXPENSE):
Interest income	2,465		2,628		955		516		170
Interest expense, net of amounts capitalized	(39,634	)	(40,505)		(32,741)		(29,133)		(26,775)
Loss on early retirement of debt	—		—		—		—		(37,566)
Interest expense related to preferred member’s interest, redeemable	—		—		(285)		(360)		(360)
Total other expense	(37,169	)	(37,877)		(32,071)		(28,977)		(64,531)
Net income (loss) to common member’s interests	$22,756		$(5,154)		$6,328		$(3,384)		$(45,075)

Ratio of earnings to fixed charges(1)	1.5	x	0.9	x	1.2	x	0.9	x	0.3	x


Cash Flow Data	Year Ended December 31,
	2008			2007			2006			2005			2004
	(Dollars in thousands)
Cash flows from (used in) operating activities		$40,394			$42,299			$41,821			$21,527			$(21,875	)
Cash flows used in investing activities		(67,601	)		(50,555	)		(31,980	)		(52,142	)		(6,786	)
Cash flows from (used in) financing activities		23,812			(6,565	)		34,302			32,889			18,007
Distributions to common member		(4,078	)		(6,424	)		(2,494	)		(4,624	)		(7,031	)

	Year Ended December 31,
	2008			2007			2006			2005			2004
Balance Sheet Data	(Dollars in thousands)
Current assets		$52,146			$52,288			$67,231			$24,731			$17,418
Total assets		437,276			371,927			353,810			287,628			243,069
Current liabilities		59,109			45,379			49,346			47,886			34,270
Total long-term obligations		430,150			386,170			360,965			310,349			271,398
Total member’s deficit		(51,983	)		(59,622	)		(56,501	)		(70,607	)		(62,599	)

___________________

(1) For purposes of determining the ratio of earnings to fixed charges, earnings are defined as net income (loss) to common member’s interests plus fixed charges. Fixed charges include interest expense on all indebtedness, including amounts capitalized, amortization of deferred financing costs and debt discount, and preferred member’s interest redeemable, and loss on early retirement of debt. Earnings were insufficient to cover fixed charges for the years ended December 31, 2007, 2005 and 2004 by $6.0 million, $3.7 million and $46.3 million, respectively.

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with, and is qualified in its entirety by, our “Selected Financial Data” and the consolidated financial statements and the related notes thereto appearing elsewhere in this report.

Forward Looking Statements

Some statements contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include the words “may,” “estimate,” “intend,” “continue,” “believe,” “expect,” or “anticipate” and other similar words. These forward-looking statements generally relate to plans and objectives for future operations and are based upon management’s reasonable estimates of future results or trends. Although we believe that the plans and objectives reflected in or suggested by such forward-looking statements are reasonable, such plans or objectives may not be achieved. Actual results may differ from projected results due, but not limited, to unforeseen developments, including developments relating to the following:

the availability and adequacy of our cash flows to satisfy our obligations, including payment obligations under the Peninsula Gaming Notes, the DJW Notes, the PGL Credit Facility and the DJW Credit Facility and additional funds required to support capital improvements and development;

economic, competitive, demographic, business and other conditions in our local and regional markets;

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

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

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

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

the termination of our operating agreement with the DRA and/or the WCDA or the failure of the DRA and/or the WCDA to continue as our “qualified sponsoring organization;”

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

· changes in federal or state tax obligations;

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

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

other factors discussed in our other filings with the SEC.

Overview

We own and operate (i) the Diamond Jo casino in Dubuque, Iowa with 923 slot machines and 17 table games and 5 poker tables, which commenced operations at its new facility in December 2008, (ii) the Evangeline Downs racino in Opelousas, Louisiana with 1,425 slot machines and a one-mile dirt and 7/8 mile turf horse racetrack and four OTBs located throughout south central Louisiana and (iii) the Diamond Jo Worth casino in Worth County, Iowa with 920 slot machines, 25 table games and 7 poker tables which opened to the public in April 2006 and subsequently expanded in April 2007.

Results of Operations

Our results of operations discussed below include the consolidated results of operations of PGL, DJL, EVD and DJW for the years ended December 31, 2008, 2007 and 2006.

Statement of Operations Data

(in thousands)

									Year Ended December 31,
									2008		2007				2006
General corporate									$ 1,386		$ (14,820			)	$(11,035		)
Diamond Jo									8,972		641				9,996
Evangeline Downs									28,814		26,073				23,838
Diamond Jo Worth									20,753		20,829				15,600
Income from operations									$ 59,925		$ 32,723				$ 38,399
	Diamond Jo				Evangeline Downs					Diamond Jo Worth
	Year Ended December 31,				Year Ended December 31,					Year Ended December 31,
	2008		2007	2006	2008		2007	2006		2008			2007			2006

Revenues:
Casino	$ 42,675		$ 40,589	$ 44,784	$ 105,844		$ 107,467	$ 106,558		$ 78,750			$ 74,091			$ 49,392
Racing					17,986		19,146	22,146
Video Poker					5,901		4,533	3,715
Food and beverage	2,793		2,425	2,642	9,867		10,218	10,803		4,107			3,158			1,870
Other	2,122		2,373	1,948	1,664		1,527	1,308		8,023			7,601			6,831
Less promotional allowances	(5,226	)	(4,723)	(4,795)	(9,069	)	(9,875)	(9,478)		(6,284		)	(5,337)			(3,307)
Net revenues	42,364		40,664	44,579	132,193		133,016	135,052		84,596			79,513			54,786
Expenses:
Casino	18,936		18,055	18,844	50,381		50,409	50,133		28,104			25,925			15,994
Racing					15,739		15,959	18,579
Video Poker					4,349		3,751	2,949
Food and beverage	2,505		2,370	2,455	7,411		7,475	7,563		3,258			2,583			1,683
Other	249		25	39	275		273	295		7,040			6,782			6,271
Selling, general and administrative	7,745		7,639	8,387	15,097		15,317	16,556		13,592			12,397			8,241
Depreciation and amortization	3,488		4,448	4,176	8,011		8,971	13,094		8,578			7,265			3,536
Pre-opening expense	745		91		8		70	19		32			214			947
Development expense	(968	)	7,974	624	46		67	109								44
Affiliate management fees					1,840		1,829	1,839		3,227			3,030			2,396
Impairment of asset held for sale	831
(Gain) loss on disposal of assets	(139	)	(579)	58	222		2,822	78		12			488			74
Total expenses	33,392		40,023	34,583	103,379		106,943	111,214		63,843			58,684			39,186
Income (loss) from operations	$ 8,972		$ 641	$ 9,996	$ 28,814		$ 26,073	$ 23,838		$ 20,753			$ 20,829			$ 15,600

% of net revenues	21%		2%	22%	22%		20%	18%		25%			26%			28%

2008 Compared to 2007

Net revenues increased $6.0 million, or 2%, to $259.2 million in 2008 from $253.2 million in 2007. This increase was primarily related to an increase in casino revenues at DJW of $4.7 million which was largely a result of the expansion of the casino which opened to the public in April 2007. Casino revenues at DJL also increased $2.1 million as explained below, contributing to the increase in net revenues in 2008 compared to 2007. Casino revenue increases at DJW and DJL were partially offset by a decrease in net revenues at EVD of $0.8 million. This decrease at EVD is due to the negative effects of hurricane Gustav which forced the closure of our facility for five days in the third quarter of 2008. In addition to the actual days in which the casino was closed to the public, EVD was impacted by the after effects of Gustav for several more days which drove down attendance at our casino.

EVD’s casino revenue decreased $1.7 million to $105.8 million in 2008 compared to $107.5 million in 2007. This decrease is the direct result of a $2.4 million decrease in the third quarter 2008 compared to the third quarter of 2007 which was primarily related to the impact of hurricane Gustav as discussed above. EVD continues its focus on controlled spending of promotional allowances through improvements to the database marketing programs to target more profitable customers. Promotional allowances as a percentage of casino revenues decreased to 8.6% in 2008 from 9.2% in 2007. EVD’s casino win per gaming position per day increased to $204 in 2008 from $181 in 2007.

DJL’s casino revenues increased by $2.1 million to $42.7 million in 2008 from $40.6 million in 2007. We believe this increase was primarily related to the opening of DJL’s new casino on December 10, 2008. In addition, DJL’s operations were negatively impacted by adverse weather conditions during the fourth quarter of 2007. DJL’s slot revenue increased 4% to $39.5 million in 2008 from $37.8 million in 2007, and DJL’s table game revenue increased 14% to $3.2 million for 2008 compared to $2.8 million for 2007. DJL’s casino win per gaming position per day increased to $131 in 2008 from $123 in 2007.

DJW’s casino revenues increased by $4.7 million, or 6%, to $78.8 million in 2008 compared to $74.1 million in 2007 due primarily to the timing of the opening of the casino expansion in April 2007 coupled with more adverse weather conditions during the fourth quarter of 2007 compared to 2008. DJW’s slot revenues increased 6% to $72.2 million in 2008 over 2007 while table game revenues increased 7% to $6.6 million in 2008. DJW’s win per gaming position per day decreased to $198 for 2008 compared to $214 for 2007 primarily due to the increase in the number of gaming positions associated with the additional table games added as part of the April 2007 expansion.

Casino operating expenses increased $3.0 million to $97.4 million for 2008 from $94.4 million for 2007 due primarily to (i) an increase in gaming taxes at DJW and DJL related to the increase in gaming revenue and (ii) an increase in casino payroll and other operating expenses at DJW directly related to the casino expansion.

Racing revenues at EVD for 2008 were $18.0 million compared to $19.1 million for 2007. This decrease was primarily due to running five less live thoroughbred horse racing nights in 2008 compared to 2007 as well as the impact of hurricane Gustav which forced us to close our OTB’s for five days plus the continuing after effects of the hurricane.

Consistent with a decrease in racing revenues as noted above, racing expenses decreased to $15.7 million for 2008 from $16.0 million for 2007.

Video poker revenues at EVD for 2008 were $5.9 million compared to $4.5 million for 2007. The increase in video poker revenues was primarily attributable to the addition of video poker at our Henderson OTB in August 2007 as well as increases in video poker revenue at both our Port Allen and Eunice OTBs of 10% and 29%, respectively, which was primarily attributable to recent renovations at the Port Allen facility as well as continuous updating of the video poker machines at these OTBs to provide the latest and most popular games.

While video poker revenues at EVD increased 31% year over year, video poker expenses only increased 16% to $4.3 million for 2008 from $3.7 million for 2007 as EVD was able to improve video poker revenues at its Eunice and Port Allen OTBs without significant increases in labor and other operating expenses. In addition, EVD benefited from a change in the effective rate used to calculate taxes and purses. Effective July 1, 2008, the combined effective rate for taxes and purses on video poker revenues was reduced to 38% from 42.5%.

Food and beverage revenues and other revenues increased $1.3 million during 2008 compared to 2007 due primarily to (i) an increase in food and beverage revenues of $0.9 million at DJW related to the opening of a new high-end restaurant in January 2008 and the continued success of DJW’s buffet restaurant that was added in June 2007 as part of the casino expansion and (ii) an increase in other revenue at DJW of $0.4 million primarily related to an increase in convenience store fuel revenues due to an increase in fuel prices in 2008 over 2007. Consistent with these increases in sales, DJW realized relative increases in food and beverage and other expenses.

Selling, general and administrative expenses decreased $15.1 million to $34.7 million for 2008 from $49.8 million for 2007. This decrease was due primarily to a $16.9 million decrease in non-cash expenses related to a decrease in the intrinsic value of PGP incentive units granted to certain executive officers of the Company in 2005. This decrease was partially offset by a $1.2 million increase in general and administrative expenses associated with operations at DJW primarily related to additional costs associated with the casino expansion along with a $0.7 million increase in general corporate expenses.

Depreciation and amortization expenses decreased to $20.1 million for 2008 from $20.7 million for 2007 due primarily to decreases at EVD and DJL of $1.0 million and $1.0 million, respectively, related to assets that became fully depreciated during 2008. These decreases were partially offset by an increase at DJW of $1.3 million primarily related to the impact of the depreciation on the assets associated with the DJW casino expansion. Included in depreciation expense at DJL is accelerated depreciation on certain depreciable assets that will either be contributed to the Dubuque County Historical Society (the “Historical Society”) or are not being utilized at its new casino facility. Accelerated depreciation on these assets began during the fourth quarter of 2006 and DJL continued to depreciate the remaining net book value of those assets less their estimated fair market value at the date of contribution or estimated net realizable value up to the date that DJL commenced operations at the new facility. Depreciation expense for 2008 and 2007 increased by approximately $1.0 million and $0.8 million, respectively, as a result of accelerated depreciation on these assets.

At December 31, 2008 we performed our annual impairment test on goodwill and indefinite lived intangible assets and determined that the estimated fair value exceeded its carrying value as of that date. Based on that review, management determined that there was no impairment of goodwill or indefinite lived intangible assets. While we do not expect significant changes in our operations at DJW and EVD over the next 12 months, we do anticipate a material increase in operations at DJL due to the opening of our new casino facility. However, the current economic crisis experienced across the country could have a negative effect on our future operations. If a material negative impact would occur, it may have an impact on our periodic review of goodwill for impairment.

Pre-opening expenses of $0.8 million for 2008 relate primarily to expenses incurred by DJL with respect to start-up activities surrounding its new casino facility. Pre-opening expenses of $0.4 million in 2007 relate primarily to expenses incurred by DJW with respect to its expansion.

In connection with DJL’s new casino development, DJL expensed $7.7 million in 2007 to development expense relating to certain of its unconditional obligations under an agreement with the Historical Society. The obligations include the contribution by DJL to the Historical Society of (i) the dockside pavilion through a 99 year lease, (ii) the Diamond Jo vessel and (iii) cash. See Note 2 to the consolidated financial statements for a further discussion of this agreement. In addition, the Company expensed $0.3 million of other development costs in 2007. In 2008, DJL and the Historical Society reached a revised agreement to sell the vessel and split the proceeds evenly between DJL and the Historical Society. Based on this agreement, DJL reduced its outstanding obligation to the Historical Society related to the Diamond Jo vessel with a corresponding credit to development expense.

Affiliate management fees of $5.4 million and $5.2 million for 2008 and 2007, respectively, relate to management fees paid to related parties under various management services and consulting agreements at EVD and DJW which are based on net revenues and EBITDA. These fees increased primarily due to increased revenues at DJW.

DJL recorded an impairment charge of $0.8 million in December 2008 related to the decrease in the fair market value of the Diamond Jo vessel. See Note 3 to the consolidated financial statements for further discussion of this impairment.

In 2007, EVD expensed $2.6 million as a loss on disposal of assets related primarily to the write-off of initial architectural and design costs related to the EVD hotel project. See Note 3 to the consolidated financial statements for further discussion of this disposal.

Interest income of approximately $2.5 million for 2008 is primarily related to interest earned on DJW’s investment in its available for sale security. Interest income of approximately $2.6 million for 2007 is primarily related to interest earned on cash deposits invested in interest bearing accounts as well as interest earned on DJW’s investment in its available for sale security during the fourth quarter of 2007. Interest expense, net of amounts capitalized, decreased $0.9 million to $39.6 million during 2008 from $40.5 million for 2007. This decrease is primarily due to a $1.7 million decrease in interest expense at DJL primarily related to a $3.0 million increase in capitalized interest related to the construction of the new casino and parking facility, partially offset by an increase in interest expense associated with its obligations under its minimum assessment agreement with the City of Dubuque, Iowa of $0.8 million along with increases related to the interest on the drawings on its line of credit and term loan of $0.4 million and $0.1 million, respectively. The decrease in interest expense at DJL is partially offset by an increase in interest expense at DJW of approximately $1.1 million primarily related to the issuance of an additional $23 million principal amount of DJW Notes in October 2007, partially offset by a decrease in interest expense associated with the call premium on the excess cash flow offer in 2007 for the DJW Notes. Interest expense of approximately $3.3 million and $0.8 million was capitalized as part of the casino development and other construction projects during 2008 and 2007, respectively.

2007 Compared to 2006

Net revenues increased $18.8 million, or 8%, to $253.2 million in 2007 from $234.4 million in 2006. This increase was primarily related to an increase in casino revenues at DJW of $24.7 million due primarily to 2007 being a full year of operations and the expansion of the casino which opened to the public in April 2007. This increase is partially offset by a decrease in casino revenues at DJL of $4.2 million as discussed below.

EVD continued to show casino revenue growth in 2007 over 2006 despite a very strong first half of 2006 which benefited from the effects of hurricanes Katrina and Rita. Casino revenue was up 1% to $107.5 million in 2007 compared to 2006. EVD’s casino win per gaming position per day increased to $181 in 2007 from $179 in 2006.

DJL’s casino revenues decreased by $4.2 million to $40.6 million in 2007 from $44.8 million in 2006. We believe this decrease was primarily related to the expansion of a local competitor’s gaming facility from May 2005 to March 2006, which resulted in an increase in the number of slot machines and the introduction of video poker and table games at the competitor’s facility. In addition, DJL’s operations were negatively impacted by adverse weather conditions during the fourth quarter of 2007 which impacted revenue at DJL for 15 days in 2007 compared to only one day during the same period in 2006. DJL’s slot revenue decreased 6% to $37.8 million in 2007 from $40.2 million in 2006, and DJL’s table game revenue decreased 39% to $2.8 million for 2007 compared to $4.6 million for 2006. DJL’s casino win per gaming position per day decreased to $123 in 2007 from $135 in 2006.

DJW’s casino revenues increased by $24.7 million, or 50%, to $74.1 million in 2007 compared to $49.4 million in 2006 due primarily to the timing of the initial opening of the casino in April 2006 and the expansion in April 2007, which increase was partially offset by adverse weather conditions during the fourth quarter of 2007. At DJW, adverse weather conditions siginficantly impacted revenue for 15 days in 2007 compared to four days during the same period in 2006. DJW’s slot revenues increased 50% to $68.0 million in 2007 over 2006 while table game revenues increased 48% to $6.1 million in 2007 over 2006. Consistent with a strong increase in casino revenues, DJW’s win per gaming position per day increased to $294 for 2007 compared to $271 for the period April 4, 2006 (date of opening the casino to the public) through December 31, 2006.

Casino operating expenses increased $9.4 million to $94.4 million for 2007 from $85.0 million for 2006 due primarily to an increase in DJW casino expenses of $9.9 million due to timing of the opening of the casino and the casino expansion. This increase was partially offset by a $0.8 million decrease in casino expenses at DJL primarily related to a decrease in gaming taxes as a result of the decrease in casino revenues.

Racing revenues at EVD for 2007 were $19.1 million compared to $22.1 million for 2006. This decrease is primarily driven by a decrease in revenue earned from live racing at the racino. During the first quarter of 2006, EVD ran an additional live race meet for another Louisiana racetrack which was damaged by Hurricane Rita in late 2005. EVD did not run any live meets during the first quarter of 2007.

Consistent with a decrease in racing revenues as noted above, racing expenses decreased to $16.0 million for 2007 from $18.6 million for 2006.

Video poker revenues at EVD for 2007 were $4.5 million compared to $3.7 million for 2006. The increase in video poker revenues is attributable to continued growth and market penetration at our OTB in Eunice, Louisiana which added video poker operations in April 2006, and to the addition of video poker at our OTB in Henderson, Louisiana.

Consistent with an increase in video poker revenues as described above, video poker expenses increased $0.9 million to $3.8 million for 2007 from $2.9 million for 2006.

Food and beverage revenues, other revenues and promotional allowances increased primarily due to the timing of the opening of the DJW casino and expansion.

Other revenues, net of other expenses, increased $0.9 million due primarly to an increase in other revenues at DJL associated with the DRA’s contractual obligation under its operating agreement to pay DJL $0.33 for each $1.00 reduction in DJL’s adjusted gross receipts as well as an increase in commissions earned at EVD and DJW.

Selling, general and administrative expenses increased $5.9 million to $49.8 million for 2007 from $43.9 million for 2006. This increase was due primarily to (i) a $4.2 million increase in expenses at DJW due primarily to the timing of the opening of the casino and the casino expansion as well as an increase in the amount paid to the WCDA which is based on casino revenues and (ii) a $1.7 million increase in expenses associated with a non-cash charge related to an increase in the fair value and percentage vested of PGP incentive units granted to certain executive officers of the Company in 2005. In December 2006, the employment agreements of the executive officers to which PGP incentive units were granted were amended to move the obligations under the incentive unit plan from PGL to PGP. As such, the liability associated with these incentive units was assumed by PGP; however, the related expense associated with the increase in the fair value and percentage vested is allocated to PGL and such expense is reflected in PGL’s consolidated statement of operations.

Depreciation and amortization expenses decreased slightly to $20.7 million for 2007 from $20.8 million for 2006. Depreciation of buildings and equipment related to DJW increased $3.7 million, primarily due to the timing of the opening of the casino in April 2006 and the expansion of the casino in April 2007, while depreciation expense at EVD decreased $4.1 million. The decrease in depreciation expense at EVD is attributable to certain assets with a three year depreciable life becoming fully depreciated in December 2006. Also included in depreciation expense in 2006 at EVD is an impairment charge associated with long-lived assets at EVD’s Alexandria OTB of approximately $0.4 million. The $0.3 million increase in depreciation expense at DJL is associated with accelerating depreciation on certain depreciable assets that will either be contributed to the Historical Society or will not be utilized at its new casino facility. Accelerated depreciation on these assets began during the fourth quarter of 2006 and DJL will continue to depreciate the remaining net book value of those assets less their estimated fair market value at the date of contribution or estimated net realizable value up to the date that DJL estimates commencing operations at the new facility. Depreciation expense for 2007 and 2006 increased by approximately $0.8 million and $0.2 million, respectively, as a result of accelerated depreciation on these assets. At December 31, 2007, we performed our annual impairment test on goodwill and indefinite lived intangible assets and determined that the estimated fair value exceeded its carrying value as of that date. Based on that review, management determined that there was no impairment of goodwill and indefinite lived intangible assets.

Pre-opening expenses of $0.4 million for 2007 relate primarily to expenses incurred by DJW with respect to its expansion. Pre-opening expenses of $1.0 million in 2006 relate primarily to expenses incurred by DJW with respect to start-up activities surrounding the new casino development.

In relation to DJL’s new casino development, DJL expensed $7.7 million in 2007 to development expense relating to certain of its unconditional obligations under the Historical Society Agreement. The obligations include the contribution by DJL to the Historical Society of (i) the dockside pavilion through a 99 year lease, (ii) the Diamond Jo vessel and (iii) cash.

Affiliate management fees of $5.2 million and $4.5 million for 2007 and 2006, respectively, relate to management fees paid to related parties under various management services and consulting agreements at EVD and DJW which are based on net revenues and EBITDA.

Interest income of approximately $2.6 million for 2007 and $1.0 million for 2006 is primarily related to interest earned on cash deposits invested in interest bearing accounts. The increase is due to increased funds available for investment due to the borrowings at the end of 2006, as discussed below, and timing of capital expenditures. Net interest expense, including interest expense related to DJL’s redeemable preferred membership interests in 2006, increased $7.5 million to $40.5 million during 2007 from $33.0 million in 2006. This increase is primarily due to (i) an increase in interest of approximately $6.1 million related to the additional issuance of DJW Notes in the amount of $20.0 million in August 2006, $36.5 million in December 2006 and $23.0 million in October 2007 and (ii) an increase in interest of approximately $1.8 million related to the additional issuance of Peninsula Gaming Notes in the amount of $22.0 million in December 2006.

Seasonality and Inflation

Our operations are subject to seasonal fluctuations. Our Iowa operations are typically weaker from November through February as a result of adverse weather conditions, and are typically stronger from March through October. Our Louisiana horse racing operations are also subject to seasonal fluctuations. Our horse racing operations are usually stronger during live racing season which generally runs from April through November. In general, our payroll and general and administrative expenses are affected by inflation. Although inflation has not had a material effect on our business to date, we could experience more significant effects of inflation in future periods.

Liquidity and Capital Resources

Cash Flow Activities

Our cash balance decreased $3.4 million to $38.7 million at December 31, 2008 from $42.1 million at December 31, 2007.

Cash flows from operating activities were $40.4 million in 2008, a decrease of $1.9 million when compared to $42.3 million in 2007. The decrease is primarily due to payments for accrued fees under DJW’s management services agreement as well as timing of payment of normal operating expenses.

Cash flows used in investing activities during 2008 was $67.6 million, consisting of (i) payments of $56.8 million for construction and other development costs associated with the DJL casino development project, (ii) cash outflows of $6.8 million related to the development of the turf track, the hotel development project and the casino floor remodel at EVD, (iii) cash outflows of $5.7 million at PGL, DJL, EVD and DJW primarily related to the acquisition of slot machines and slot machine conversions and general maintenance capital expenditures and (iv) business acquisition and licensing costs of $1.5 million primarily related to DJW’s license agreement with the State of Iowa requiring a $1.0 million payment in May 2008. These payments were partially offset by proceeds from the sale of property and equipment in the amount of $3.2 million, mainly related to the sale of the waste water treatment facility assets at DJW as discussed further in Note 3 to the consolidated financial statements.

Cash flows from financing activities during 2008 of $23.8 million reflects net proceeds from senior secured credit facilities of $30.5 million, proceeds from DJL’s term loan in the amount of $8.0 million, partially offset by payments on debt of $9.2 million, member distributions of $4.1 million and deferred financing costs paid of $1.4 million.

Cash flows from operating activities were $42.3 million in 2007, an increase of $0.5 million when compared to $41.8 million in 2006. This increase is due to increased operating performance at DJW due to timing of the opening of the casino in April 2006 and the casino expansion in 2007, as well as an increase in operating performance at EVD, offset by a decrease in operating performance at DJL due to increased competition from the expansion of a local competitor in 2006 as well as the effects of adverse weather conditions in the fourth quarter of 2007 and an increase in general corporate payroll and operating expenses.

Cash flows used in investing activities during 2007 was $50.6 million consisting of cash outflows of (i) payments of approximately $34.4 million for construction and other development costs associated with various projects, including the DJW casino expansion project, the DJL casino development project and the EVD hotel development project, (ii) cash outflows of $14.7 million for the purchase of 7.5% Urban Renewal Tax Increment Revenue Bonds, Taxable Series 2007 (the “City Bonds”) by DJW, (iii) cash outflows of $6.5 million used for general maintenance capital expenditures at DJL, EVD and DJW, (iv) payments to long-term deposit of $6.4 million by DJL in accordance with the Development Agreement with the City of Dubuque, Iowa and (v) business acquisition and licensing costs of $1.5 million. These outflows were partially offset by proceeds from our restricted cash balance designated for construction and other development costs associated with the Worth County casino development and expansion project of $13.0 million.

Cash flows used in financing activities during 2007 of $6.6 million reflects the proceeds of $22.7 million from the offering of $23.0 million in additional DJW Notes, partially offset by (i) aggregate principal payments on debt of $13.7 million, including principal payments under the term loan portion of the PGL Credit Facility of $4.7 million, (ii) payment of deferred financing costs of $9.1 million primarily related to the discount associated with the purchase of the City Bonds by DJW with a corresponding non-cash contribution to DJL and (iii) member distributions of approximately $6.4 million.

As of December 31, 2008, the Company had $28.5 million outstanding advances under the revolver portion of the PGL Credit Facility and outstanding letters of credit of approximately $0.9 million. The available borrowing amount under the PGL Credit Facility at December 31, 2008, after reductions for amounts borrowed and letters of credit outstanding at DJL and EVD, was $33.9 million. In addition, as of December 31, 2008, DJW had $2.0 million outstanding advances under the DJW Credit Facility and outstanding letters of credit of approximately $0.7 million. The available borrowing amount under the DJW Credit Facility at December 31, 2008, after reductions for amounts borrowed and letters of credit outstanding at DJW, was $2.3 million. As of December 31, 2008, DJL had $8.0 million outstanding under the Term Loan.

Financing Activities

On April 16, 2004, DJL and PGC completed a private placement of $233 million principal amount of 8 ¾% senior secured notes due 2012 (the “Peninsula Gaming Notes”). The Peninsula Gaming Notes were issued at a discount of approximately $3.3 million. Interest on the Peninsula Gaming Notes is payable semi-annually on April 15 and October 15 of each year, beginning on October 15, 2004. Upon a corporate restructuring, the Company also became a co-issuer of the Peninsula Gaming Notes.

On December 22, 2006, the Company, DJL, and PGC, as co-issuers, issued and sold to a third party investor in a private placement $22.0 million aggregate principal amount of Peninsula Gaming Notes (“Additional Peninsula Gaming Notes”). The Company used a portion of the net proceeds from this issuance of the Additional Peninsula Gaming Notes to pay down borrowings under its existing senior credit facility and to finance, in part, the construction of the new casino at DJL.

The indenture governing the Peninsula Gaming Notes limits the Company’s ability to, among other things, incur more debt; pay dividends or make other distributions to PGP and DJW (for so long as DJW is an unrestricted subsidiary); redeem stock; make certain investments; create liens; enter into transactions with affiliates; merge or consolidate; and transfer or sell assets.

The Peninsula Gaming Notes do not limit DJL’s or EVD’s ability to transfer net assets between PGL, DJL and EVD. Under the indenture governing the Peninsula Gaming Notes, the Company is allowed to make distributions to PGP in respect of (i) certain consulting and financial advisory services related to PGP development, (ii) board fees and actual out-of-pocket expenses incurred by members of the Board of Managers in their capacity as board members, and (iii) tax, accounting, legal and administrative costs and expenses of PGP. These amounts were recorded as member distributions. In addition, the Company can pay dividends or make other distributions to PGP and DJW, in addition to the distributions above, if the combined interest coverage ratio of PGL, DJL and EVD (as defined in the indenture) is not less than 2.0 to 1.0 for the most recently ended four full fiscal quarters and subject to certain aggregate net income and cash proceeds received from the sale of equity interest limits. The Company may also incur more indebtedness if the combined interest coverage ratio of PGL, DJL and EVD (as defined in the indenture) is not less than 2.0 to 1.0 for the most recently ended four full fiscal quarters determined on a pro forma basis as if the additional debt had been incurred at the beginning of the period. As of December 31, 2008, the combined interest coverage ratio was greater than 2.0 to 1.0. Subject to the foregoing provisions, all of the net assets of PGL, DJL and EVD are restricted except for $22.5 million.

The Peninsula Gaming Notes are full and unconditional obligations of DJL as a co-issuer. PGL and PGC, also co-issuers, have no independent assets (other than PGL’s investment in its subsidiaries) or operations. The Peninsula Gaming Notes are secured by substantially all the assets of PGL, DJL and EVD subject to the prior lien of the PGL Credit Facility as discussed below. The Peninsula Gaming Notes are also fully and unconditionally guaranteed, subject to the prior lien of the PGL Credit Facility as discussed below, by EVD. Further, EVD and DJL have pledged their equity interests as collateral.

In July 2005, DJW completed a private placement of $40.0 million aggregate principal amount of DJW Notes. In connection with the offering of the DJW Notes, DJW was designated an “unrestricted subsidiary” by the Company under the indenture governing the Peninsula Gaming Notes, and DJW was released of its obligations under the PGL Credit Facility. The DJW Notes bear interest at a rate of 11% per year, payable semi-annually on April 15 and October 15 of each year.

The DJW Notes are secured by a pledge of the equity of DJW and DJWC and substantially all of DJW’s current and future assets. The lien on the collateral that secures the DJW Notes is contractually subordinated to the liens securing up to $5.0 million of indebtedness under the DJW Credit Facility as discussed below. The DJW Notes, which mature on April 15, 2012, are redeemable at the Company’s option, in whole or in part at any time or from time to time, on and after April 15, 2008 at certain specified redemption prices set forth in the indenture governing the DJW Notes. The holders of the DJW Notes also have the right to require repayment upon a change in control. The indenture governing the DJW Notes contains a number of restrictive covenants and agreements, including covenants that limit the ability of DJW to, among other things: (1) pay dividends, redeem stock or make other distributions or restricted payments; (2) incur indebtedness or issue preferred shares; (3) make certain investments; (4) create liens; (5) consolidate or merge; (6) sell or otherwise transfer or dispose of assets; (7) enter into transactions with affiliates; (8) use proceeds of permitted asset sales and (9) change its line of business. Specifically, DJW is prohibited from making any dividends or other distributions to PGL, subject to certain limited exceptions.

DJW is permitted to make dividends or other distributions to PGL to pay certain income tax obligations. Further, DJW can make dividends and other distributions to PGL to pay PGP’s and PGL’s corporate overhead costs in connection with their indirect and direct ownership of DJW, including, but not limited to, tax preparation, accounting, licensure, legal and administrative fees and expenses. Additionally, DJW may make dividends and other distributions to PGL in respect of certain payments under PGP’s and PGL’s management agreements and to pay reasonable directors’ or managers’ fees and expenses, so long as any payments with respect to any management agreement or certain employee, consulting or similar agreements do not, in the aggregate, in any fiscal year exceed (a) for 2006, $0.5 million, (b) for 2007, the product of 1.333333 multiplied by 4.0% of DJW’s Consolidated EBITDA (as defined in the indenture governing the DJW Notes) for the nine months ended December 31, 2006 and (c) for any fiscal year thereafter, 4.0% of DJW’s Consolidated EBITDA for the preceding fiscal year. Finally, DJW can make additional dividends and other distributions not to exceed $0.5 million. In addition, DJW can pay dividends or make other distributions to PGL or PGP, in addition to the distributions above, if the interest coverage ratio (as defined in the indenture) is not less than 2.0 to 1.0 for the most recently ended four full fiscal quarters and subject to certain aggregate net income and cash proceeds received from the sale of equity interest limits. The Company may also incur more indebtedness if the interest coverage ratio is not less than 2.0 to 1.0 for the most recently ended four full fiscal quarters determined on a pro forma basis as if the additional debt had been incurred at the beginning of the period. As of December 31, 2008, the interest coverage ratio was greater than 2.0 to 1.0. Subject to the foregoing provisions, all of the net assets of DJW are restricted.

On August 31, 2006, DJW entered into the First Supplemental Indenture to the Indenture dated as of July 19, 2005 (the “DJW First Supplemental Indenture”) which permitted, among other things, the issuance by DJW on August 31, 2006 of an additional $20 million principal amount of DJW Notes, the proceeds of which were used in part to fund the expansion of the DJW casino. In addition, the DJW First Supplemental Indenture requires DJW to offer to buy back a portion of the DJW Notes on a semi-annual basis, beginning March 31, 2007, with 50% of Excess Cash Flow (as defined therein) at a premium of 7.5%. Such provision was determined to be an embedded derivative and was fair valued and separated from the DJW Notes at date of issuance since it was not clearly and closely related. As of December 31, 2008 and December 31, 2007, the fair value of the put option was approximately $0.8 million and $1.3 million, respectively. The fair value of the put option was determined to be the present value of the estimated premium payments through the maturity of the DJW Notes. The fair value of the put option is revalued at the end of each reporting period with a corresponding (benefit) charge to interest expense. During the years ended December 31, 2008 and 2007, the Company (credited) expensed $(0.2) million and $0.9 million, respectively, as interest expense related to the change in the fair value of the embedded derivative. In addition, DJW redeemed $1.7 million, $1.4 million and $2.4 million principal amount of DJW Notes, plus applicable premium and accrued interest, in November 2008, May 2008 and November 2007, respectively, based on the Excess Cash Flow provision.

In addition, in October 2008, DJW redeemed $2.2 million principal amount of DJW Notes with excess proceeds from the sale of the waste water treatment facility assets as discussed further in Note 3 to the consolidated financial statements.

On December 21, 2006, DJW entered into the Second Supplemental Indenture to the Indenture dated as of July 19, 2005 which permitted, among other things, the issuance by DJW on December 21, 2006 of an additional $36.5 million principal amount of DJW Notes and the distribution of up to $35.0 million of the net proceeds of such issuance to PGL. The distribution was made to PGL in 2006 and was used to pay down borrowings under the PGL Credit Facility and to finance, in part, the current construction of the new casino at DJL.

On October 16, 2007, DJW entered into the Third Supplemental Indenture to the Indenture dated as of July 19, 2005 which permitted, among other things, the issuance by DJW on October 16, 2007 of an additional $23.0 million principal amount of DJW Notes at a purchase price of 98.5% of the principal amount thereof, the proceeds of which were used to fund the purchase of DJW’s investment in the City Bonds.

We may from time to time seek to retire or purchase our outstanding securities, including units under our incentive unit plan, through cash purchases and/or exchanges, redemptions, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions or other factors. The amounts involved may be material.

On June 16, 2004, DJL and EVD (the “Borrowers”) jointly entered into a loan and security agreement with Wells Fargo Foothill, Inc. (“Wells Fargo”) as the arranger and agent which was later amended in November 2004, July 2005, December 2006, June 2008 and October 2008 (as amended, the “PGL Credit Facility”). The PGL Credit Facility consists of a revolving credit facility which permits the Borrowers to request advances and letters of credit up to the lesser of the maximum revolver amount of $65.0 million (less amounts outstanding under letters of credit) and a specified borrowing base (the “Borrowing Base”). The Borrowing Base is the lesser of the combined EBITDA (as defined in the PGL Credit Facility) of the Borrowers for the 12 months immediately preceding the current month end multiplied by 150% and the combined EBITDA of the Borrowers for the most recent quarterly period annualized multiplied by 150%. At December 31, 2008, the maximum revolver amount was $63.3 million. The borrowings under the revolver portion of the PGL Credit Facility bear interest at a rate equal to the Wells Fargo prime rate plus a margin of 2.5% with a floor of 6%, or 6% at December 31, 2008. The available borrowing amount at December 31, 2008, after reductions for amounts borrowed and letters of credit outstanding at DJL and EVD, was $33.9 million. As of December 31, 2008, there were $28.5 million outstanding advances under the revolver portion of the PGL Credit Facility and outstanding letters of credit of approximately $0.9 million.

The Borrowers are jointly and severally liable under the PGL Credit Facility and such borrowings are collateralized by substantially all of the assets of the Borrowers. Borrowings under the PGL Credit Facility are guaranteed by PGL and PGC.

The PGL Credit Facility contains a number of restrictive covenants, including covenants that limit the Borrowers’ ability to, among other things: (1) incur more debt; (2) create liens; (3) enter into any merger, consolidation, reorganization, or recapitalization, or reclassify its capital stock; (4) dispose of certain assets; (5) guarantee the debt of others; (6) pay dividends or make other distributions; (7) make investments; and (8) enter into transactions with affiliates. The PGL Credit Facility also contains financial covenants including a minimum combined EBITDA (as defined by the PGL Credit Facility) of the Borrowers and limitations on capital expenditures at DJL and EVD.

Specifically, the Borrowers are prohibited from making any dividends or other distributions to PGP (through PGL) or any of PGL’s unrestricted subsidiaries, subject to certain limited exceptions (such restrictions at December 31, 2008 are less restrictive than the restrictions under the Peninsula Gaming Notes).

On June 30, 2008, the Borrowers entered into a Fifth Amendment to Loan and Security Agreement (the “Fifth Amendment”) with Wells Fargo which amended the PGL Credit Facility.

The Fifth Amendment provides, among other things, that:

The term of the PGL Credit Facility is extended to January 15, 2012;

Capital expenditures will be permitted, in addition to those otherwise previously permitted by the terms of the PGL Credit Facility, in an aggregate amount not to exceed (i) $25 million by EVD in connection with the project to design, develop, construct, equip and operate the new hotel project adjacent to EVD’s casino and racetrack in Opelousas, Louisiana, including the remodeling of the existing casino exterior, casino floors and restaurants, (ii) $8 million by EVD to develop an off-track betting parlor in St. Martin Parish, Louisiana, and (iii) $85 million by DJL in connection with the project to design, develop, construct, equip and operate the Dubuque Casino;

The prepayment premium for early termination by the Borrowers has been reduced to $1.3 million for the period starting from the date of the Fifth Amendment to the first anniversary of such date, $0.7 million for the period starting from the first anniversary of the date of the Fifth Amendment to the second anniversary, and $0 during the period of time from the second anniversary of the date of the Fifth Amendment;

The resetting of restrictions related to permitted investments, restricted payments and indebtedness;

All obligations shall have a minimum interest rate of 6.00% per annum;

An increase in the required minimum combined EBITDA of the Borrowers to $40 million for each 12 month period ended on June 30, 2008 and on the last day of each fiscal quarter thereafter; and

Commencing March 1, 2009, Borrowers must establish a reserve against available borrowings under the PGL Credit Facility at a rate of approximately $0.6 million times the number of months that have elapsed during the period commencing on February 1, 2009 and ending on February 28, 2010. The reserve shall be released upon the repayment of EVD’s outstanding 13% senior notes due March 1, 2010.

On October 6, 2008, the Borrowers entered into a Sixth Amendment to Loan and Security Agreement (the “Sixth Amendment”) with Wells Fargo which further amended the PGL Credit Facility.

The Sixth Amendment incorporates the changes contemplated by a fee letter entered into with Wells Fargo in connection with the execution of the Fifth Amendment which allowed for certain flexible borrowing conditions to assist Wells Fargo in the successful syndication of $25.0 million of the advances under the PGL Credit Facility. Such syndication was completed on October 6, 2008.

The Sixth Amendment provides, among other things, that (i) the applicable margin for all advances made under the PGL Credit Facility with respect to base rate loans, LIBOR rate loans and letters of credit was increased to 2.50%, 4.00% and 4.00%, respectively and (ii) the required minimum combined EBITDA of the Borrowers measured on a trailing twelve month fiscal quarter-end basis increase to $42.0 million for 2009 and $44.0 million for 2010 and thereafter.

On October 4, 2006, DJW and DJWC entered into a senior secured revolving credit facility with American Trust & Savings Bank that was subsequently amended on December 21, 2006, October 16, 2007 and November 26, 2008 (as amended, the “DJW Credit Facility”). The DJW Credit Facility permits DJW to request advances and letters of credit of up to $5.0 million. Advances under the DJW Credit Facility bear interest at a rate equal to the greater of (i) at DJW’s option, either LIBOR plus a margin of 1.85%-2.20% or the Wall Street Journal prime rate less a margin of 1.0%, or 2.25% at December 31, 2008, and (ii) 5%. The DJW Credit Facility expires on March 31, 2010. The available borrowing amount under such facility at December 31, 2008, after reductions for amounts borrowed and letters of credit outstanding at DJW, was $2.3 million. As of December 31, 2008, there were $2.0 million outstanding advances under the DJW Credit Facility and outstanding letters of credit of approximately $0.7 million.

The DJW Credit Facility contains a number of restrictive covenants, including covenants that limit DJW’s ability to, among other things, incur or guarantee more debt and create liens. In addition, the DJW Credit Facility requires that, on an annual basis, DJW repay all advances (other than amounts designated under letters of credit) and such repayment of all advances must continue for a period of five days, after which, DJW will be allowed to resume requesting advances. The DJW Credit Facility also contains customary events of default, including nonpayment of principal and interest when due, violation of covenants, material inaccuracy of representations and warranties, bankruptcy events, and material judgments. Certain of the events of default are subject to a grace period.

DJW’s and DJWC’s obligations under the DJW Credit Facility are secured by a security interest in substantially all of DJW’s and DJWC’s tangible and intangible assets. The DJW Credit Facility is secured by substantially the same assets that secure the DJW Notes. Pursuant to an intercreditor agreement between DJW and American Trust and Savings Bank, the lien on the collateral securing the DJW Credit Facility is contractually senior to the lien on the collateral securing the DJW Notes and the related guarantees. The Company’s Chief Executive Officer agreed to unconditionally guarantee DJW’s payment obligations to the lender under the DJW Credit Facility.

On May 1, 2008, PGL, DJL and EVD (collectively, the “FF&E Borrowers”) entered into a Loan and Security Agreement (“Term Loan”) with American Trust & Savings Bank. The Term Loan allows the FF&E Borrowers to request advances of up to $8.0 million during the period May 1, 2008 through December 31, 2008 (the “Draw Down Period”) to finance the purchase of certain furniture, fixtures and equipment related to DJL’s new casino development. No principal payments are due during the Draw Down Period and interest shall accrue on all advances at a rate equal to the Wall Street Journal prime rate per annum and is payable the first of each month in arrears. Commencing on January 1, 2009 and continuing through December 1, 2013 (the “Term Period”), the FF&E Borrowers shall pay principal plus accrued interest in equal monthly installments, with the first payment due on February 1, 2009. Interest during the Term Period shall be calculated at a rate of 6.5% per annum. As of December 31, 2008, DJL had outstanding advances of $8.0 million under the Term Loan.

The Company was in compliance with all debt covenants as of December 31, 2008.

Liquidity

In addition to our cash on hand, we currently have the following sources of funds for our business: (i) cash flows from operations, (ii) available borrowings under the PGL Credit Facility and (iii) available borrowings under the DJW Credit Facility. The available borrowing amount at December 31, 2008, after reductions for amounts borrowed and letters of credit outstanding under the PGL Credit Facility and the DJW Credit Facility was $33.9 million and $2.3 million, respectively. Contractual restrictions and other provisions contained in the agreements governing our consolidated indebtedness, including our senior credit facilities and the indentures governing the Peninsula Gaming Notes and the DJW Notes, limit or restrict our ability to use the funds available to us at each of our gaming properties.

Remaining cash outflows related to the development of DJL’s new casino project are expected to be approximately $12.5 million. In addition, our capital expenditures for the next twelve months related to EVD’s planned event center development are expected to be approximately $4.5 million. Remaining capital expenditures for DJL and EVD for the next twelve months, excluding amounts discussed above, are expected to be approximately $6.3 million. DJL and EVD’s debt maturities for the next twelve months are expected to be approximately $6.0 million. DJL and EVD’s member distributions to PGP for the next twelve months are expected to be approximately $2.4 million. The Company plans to finance these expected cash requirements with: (i) a portion of the available cash on hand at the Company, DJL and EVD of $17.1 million at December 31, 2008, excluding amounts needed for normal operations, (ii) cash generated from operations and (iii) available borrowings under the PGL Credit Facility. There can be no assurances that such projects will be completed in the estimated time frames or at the estimated costs.

For DJW, we expect our capital expenditures for the next twelve months to be approximately $3.5 million, including the $1.0 million payment due in May 2009 related to DJW’s gaming license. DJW’s debt maturities for the next twelve months are expected to be approximately $2.7 million. DJW’s member distributions to PGP for the next twelve months are expected to be approximately $1.1 million. The Company plans to finance these expected cash requirements with: (i) a portion of the available cash on hand at DJW of $21.6 million at December 31, 2008, excluding amounts needed for normal operations and (ii) cash generated from operations.

Based on our cash on hand, expected cash flows from operations and our available sources of financing, we believe we will have adequate liquidity to satisfy our current operating needs at each of our gaming properties and to service our outstanding indebtedness for the next twelve months.

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

Contractual Obligations and Commitments and Contingent Liabilities

Our future contractual obligations and commitments at December 31, 2008 were as follows (in thousands of dollars):

	Payments due by Period
Contractual Obligations	Total		Less Than 1 Year		2 – 3 Years		4 – 5 Years		Thereafter

Long-Term Debt		$418,824		$8,646		$11,286		$398,892		$ -
Interest on Long-Term Debt		122,072		38,084		73,571		10,417		-
Operating Leases		3,148		1,199		1,148		496		305
Purchase Commitments (1)		58,429		3,473		5,543		4,032		45,381
Other Long-Term Liabilities (2)		5,958		4,384		854		294		426
Total Contractual Obligations		$608,431		$55,786		$92,402		$414,131		$46,112

(1) Includes approximately $50.0 million related to DJL’s future obligations under a minimum assessment agreement with the City of Dubuque, Iowa (“City”) over a period of 27 years and approximately $3.5 million related to DJL’s obligation for capital expenditures under a development agreement with the City over 40 years.

(2) Included in other long-term liabilities is $4.1 million related to our unconditional obligation to contribute DJL’s dockside pavilion to the Historical Society. Such transfer occurred in January 2009 and represented a noncash payment of our obligation under the Historical Society Agreement. The obligation is classified as long-term because the related assets are still in use by DJL and included in property and equipment, net.

The following shows our contingent obligations at December 31, 2008 based on expiration dates (in millions):

	Less Than 1 Year		1 – 3 Years		4 – 5 Years	Thereafter

Standby letters of credit	$ 1.6	$ —		$ —			$ —

Off-Balance Sheet Transactions

Other than as disclosed above, we do not maintain any off-balance sheet transactions, arrangements, obligations or other relationships with unconsolidated entities or others that are reasonably likely to have a material current or future effect on our financial condition, cash flows, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Recent Accounting Pronouncements

In May 2008, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 162, The Hierarchy of Generally Accepted Accounting Principles (“GAAP”) (“SFAS 162”). The purpose of the new standard is to provide a consistent framework for determining what accounting principles should be used when preparing U.S. GAAP financial statements. Previous guidance did not properly rank the accounting literature. The new standard is effective 60 days following the Securities and Exchange Commission’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. The adoption of SFAS 162 is not expected to have a material effect on the Company’s financial statements.

In April 2008, the FASB released staff position (“FSP”) SFAS No. 142-3, Determination of the Useful Life of Intangible Assets. The FSP requires entities to disclose information for recognized intangible assets that enable users of financial statements to understand the extent to which expected future cash flows associated with intangible assets are affected by the entity’s intent or ability to renew or extend the arrangement associated with the intangible asset. The FSP also amends the factors an entity should consider in developing the renewal or extension assumptions used in determining the useful life of recognized intangible assets under SFAS No. 142, Goodwill and Other Intangible Assets. The FSP will be applied prospectively to intangible assets acquired after the FSP’s effective date, but the disclosure requirements will be applied prospectively to all intangible assets recognized as of, and after, the FSP’s effective date. The FSP is effective for fiscal years beginning after December 15, 2008, with early adoption prohibited. The adoption of SFAS No. 142-3 is not expected to have a material effect on the Company’s financial statements.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133 (“SFAS 161”). SFAS 161 requires, among other things, enhanced disclosure about the volume and nature of derivative and hedging activities and a tabular summary showing the fair value of derivative instruments included in the balance sheet and statement of operations. SFAS 161 also requires expanded disclosure of contingencies included in derivative instruments related to credit-risk. SFAS 161 is effective for fiscal years and interim periods beginning after November 15, 2008. The adoption of SFAS 161 is not expected to have a material effect on the Company’s financial statements.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations (“SFAS 141R”). SFAS 141R significantly changes the way companies account for business combinations and will generally require more assets acquired and liabilities assumed to be measured at their acquisition-date fair value. Under SFAS 141R, legal fees and other transaction-related costs are expensed as incurred and are no longer included as a cost of acquiring the business. SFAS 141R also requires, among other things, acquirers to estimate the acquisition-date fair value of any contingent consideration and to recognize any subsequent changes in the fair value of contingent consideration in earnings. In addition, restructuring costs the acquirer expected, but was not obligated to incur, will be recognized separately from the business acquisition. SFAS 141R applies to the Company prospectively for business combinations occurring on or after January 1, 2009. The Company expects SFAS 141R will have an impact on accounting for business combinations, but the effect will be dependent upon any potential future acquisition.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (“SFAS 159”). SFAS 159 permits entities to choose to measure certain eligible financial assets and financial liabilities at fair value (the fair value option). SFAS 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. Unrealized gains and losses on items for which the fair value option is elected would be reported in earnings. As of January 1, 2008, the Company chose not to elect the fair value option for any eligible financial assets or liabilities existing at that date. The Company will consider whether to elect the fair value option for new eligible financial assets or liabilities entered into in the future on an instrument by instrument basis.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“SFAS 157”). SFAS 157 defines fair value, establishes a methodology for measuring fair value, and expands the required disclosure for fair value measurements. In February 2008, the FASB issued FASB Staff Position No. FAS 157-2, “Effective Date of FASB Statement No. 157,” which amends SFAS No. 157 by delaying its effective date by one year for non-financial assets and non-financial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis. Therefore, beginning on January 1, 2008, this standard applies prospectively to fair value measurements of financial instruments and recurring fair value measurements of non-financial assets and non-financial liabilities. On January 1, 2009, the standard will also apply to all other fair value measurements. The Company is currently evaluating the impact on the Company’s financial statements of the delayed provisions of SFAS No. 157. The Company adopted SFAS No. 157 on January 1, 2008, as required, for financial instruments and recurring fair value measurements of non-financial assets and liabilities. The adoption did not have a material effect on the Company’s financial statements. See Note 5 for additional information on fair value measurements and disclosures.

Critical Accounting Policies

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

Understanding our critical accounting policies and related risks is important in evaluating our financial condition and results of operations. The critical accounting policies used in preparation of the Company’s financial statements involve a significant use of management judgment on matters that are inherently uncertain and are described below. If actual results differ significantly from management’s estimates, there could be a material effect on our financial condition, results of operations and cash flows. Management regularly discusses the identification and development of these critical accounting policies with the Audit Committee of the Board of Managers. There have been no significant changes to the Company’s critical accounting policies during the year ended December 31, 2008.

Goodwill, Intangible and Other Long-Lived Assets. We evaluate our goodwill, intangible and other long-lived assets for impairment on a periodic basis. For goodwill and intangible assets with indefinite lives, we compare the carrying values to fair values on an annual basis or sooner if an indication of impairment exists. Other long-lived assets are reviewed for impairment when management plans to dispose of assets or when events or circumstances indicate a possible impairment. For assets to be disposed of, we recognize the asset at the lower of carrying value or fair market value less costs of disposal, as estimated based on comparable asset sales, solicited offers, or a discounted cash flow model. For assets to be held and used, we review for impairment whenever indicators of impairment exist. We then compare the estimated future cash flows of the asset, on an undiscounted basis, to the carrying value of the asset. If the undiscounted cash flows exceed the carrying value, no impairment is indicated. If the undiscounted cash flows do not exceed the carrying value, then an impairment loss is recorded based on the fair value of the asset, typically measured using a discounted cash flow model. All recognized impairment losses, whether for assets to be disposed of or assets to be held and used, are recorded as operating expenses.

Our goodwill is related to our DJL operations. Our intangible assets consist of our tradename and our slot machine and electronic video game and horse racing licenses related to our operations at EVD and our gaming license at DJW. We intend to use the EVD tradename for the foreseeable future and our EVD and DJW licenses are renewable subject to our compliance with state gaming and racing regulations and subject to voter approval of gaming in Worth County, Iowa every eight years. Our intangible assets, therefore, have been determined to have indefinite lives and are not amortized. Should these assets in the future be determined to have finite lives because of our decision to discontinue the use of the EVD tradename or our inability to renew our licenses at EVD or DJW, the intangible assets could become impaired and require an impairment charge and any unimpaired amounts would be amortized over their remaining useful lives.

There are several estimates, assumptions and decisions in measuring impairments of long-lived assets. First, management must determine the usage of the asset. To the extent management decides that an asset will be sold, it is more likely that an impairment may be recognized. Assets must be tested at the lowest level for which identifiable cash flows exist. This means that some assets must be grouped, and management must use judgment in the grouping of assets. Future cash flow estimates are, by their nature, subjective and actual results may differ materially from our estimates. Our estimates of cash flows are based on the current regulatory, social and economic climates, recent operating information and budgets of the various properties where we conduct operations. These estimates could be negatively impacted by changes in federal, state or local regulations, economic downturns, or other events affecting various forms of travel and access to our properties.

Goodwill and intangible assets are also subject to impairment by, among other factors, significant changes in gaming tax rates, competition and regulatory requirements; lack of license renewals; lack of voter reapproval in Iowa; and changes in the way we use our EVD tradename. At December 31, 2008, 2007 and 2006, we completed an annual impairment testing of all of our goodwill and intangible assets with indefinite lives and no impairments were indicated. We are required to perform an analysis of our goodwill and intangible assets at least on an annual basis. If our ongoing estimates of future cash flows are not met, we may have to record impairment charges in future accounting periods.

While we do not expect significant changes in our operations at DJW and EVD over the next twelve months, we do anticipate a material increase in operations at DJL due to the opening of our new casino facility. However, the current economic crisis experienced across the country could have a negative effect on our future operations. If a material negative impact would occur, it may have an impact on our periodic review of goodwill for impairment.

As part of the Historical Society Agreement, in December 2007, DJL expensed $1.2 million to development expense related to its obligation to contribute the Diamond Jo vessel to the Historical Society. The expense was based on the fair market value of the vessel as determined by an independent third party appraisal. In January 2009, DJL received and accepted an offer to purchase the vessel for approximately $0.4 million. Based on the accepted offer, DJL recorded an impairment charge of $0.8 million in December 2008 related to the decrease in the fair market value of the vessel.

During the quarter ended June 30, 2006, management determined the undiscounted future cash flows of its Alexandria OTB did not support the recoverability of the fixed assets attributable to the OTB’s operation. As such, the Company recognized an impairment charge for the OTB’s assets that exceeded their estimated fair market value. The impairment charge of $0.4 million is included in depreciation and amortization in the consolidated statement of operations and is part of the Evangeline Downs operating segment.

Investment Valuation. Investment in the City Bonds were valued and recorded as $7.8 million and $12.5 million at December 31, 2008 and 2007, respectively. Our available for sale investment is not traded. Fair value is based on considerable judgment using a combination of current market rates and estimates of market conditions for similar instruments, estimates from two independent sources of what market participants would use in pricing the bond and the fair value of the Peninsula Gaming Notes at December 31, 2008. Due to the illiquid nature of the investment, changes in market risks could have a significant impact on the fair value. A 10% change in the value of the investment at December 31, 2008 would change member's deficit by $0.8 million.

Equity Based Compensation. Units granted by PGP to our employees under PGP’s Incentive Unit Plan contain a put option exercisable by the employee and are recorded at their estimated intrinsic value (which is the increase in the fair market value of the units granted based on a market multiple of forecasted total segment operating earnings) with a corresponding expense (credit) recorded within the statement of operations based on the percentage vested and any change in estimated intrinsic value at each reporting period. Fair market value of the units can change due to numerous factors including those previously mentioned under “Goodwill, Intangible and Other Long-Lived Assets”, and slower than anticipated increases or declines in operating revenues, unanticipated operating cost increases, construction delays, the market’s perception of the economy in general, the gaming industry, risk, interest rates, and alternative investments. Significant changes in estimates and forecasts related to the calculation of the estimated intrinsic value of the units may have a material effect on our results of operations in the period in which the revised estimate is made.

As of December 31, 2008, there was approximately $2.0 million of compensation expense related to nonvested awards which have not been recognized in the consolidated statement of operations and are scheduled to vest upon a change in control of the Company.

A $1 change in the estimated intrinsic value of the units at December 31, 2008 would increase or decrease compensation expense by $0.1 million for the year ended December 31, 2008.

Litigation. An estimated loss from a loss contingency is recorded when information available prior to issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Accounting for contingencies such as legal matters requires the use of judgment as to the probability of the outcome and the amount. Many legal contingencies can take years to be resolved. An adverse outcome could have a material impact on our financial condition, operating results and cash flows.

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

We are exposed to interest rate risk due to changes in interest rates with respect to our long-term variable interest rate debt borrowings under the PGL Credit Facility and DJW Credit Facility. As of December 31, 2008, the Company had outstanding borrowings under the PGL Credit Facility of $28.5 million and outstanding borrowings under the DJW Credit Facility of $2.0 million. We have estimated our market risk exposure using sensitivity analysis. We have defined our market risk exposure as the potential loss in future earnings and cash flows with respect to interest rate exposure of our market risk sensitive instruments assuming a hypothetical increase in market rates of interest of 100 basis points. Assuming we borrow the maximum amount allowed under the PGL Credit Facility and DJW Credit Facility (currently an aggregate amount of $68.3 million at December 31, 2008) and if market rates of interest on our variable rate debt increase by 100 basis points, the estimated additional annual interest expense would be approximately $0.7 million.

We are also exposed to fair value risk due to changes in interest rates with respect to our long-term fixed interest rate available for sale investment and debt borrowings. Our fixed rate available for sale investment is recorded at fair value, and therefore, is directly impacted by changes in interest rates and market risks. Our fixed rate debt instruments are not generally affected by a change in the market rates of interest, and therefore, such changes generally do not have an impact on future earnings. However, future earnings and cash flows may be impacted by changes in interest rates related to indebtedness incurred to fund repayments as such fixed rate debt matures. The following table contains information relating to our fixed rate available for sale investment and debt borrowings as of December 31, 2008 (dollars in thousands):

Description	Maturity	Interest Rate		Carrying Value	Fair Value
Available for sale investment	2011 - 2037	7 ½	%	$ 7,828	$ 7,828	(1)
8 ¾% senior secured notes	April 15, 2012	8 ¾	%	253,237	163,200	(2)
11% senior secured notes	April 15, 2012	11	%	111,258	105,116	(2)
13% senior notes with contingent interest of EVD	March 1, 2010	13	%	6,877	6,219	(2)
Senior credit facility	January 15, 2012	6	% (3)	28,500	28,500
Senior credit facility	March 31, 2010	5	% (3)	2,000	2,000
Term loan	December 1, 2013	3.25	% (3)	8,000	7,429
Notes payable, capital lease obligations and other financial instruments	2009—2011	6 % - 8 ¾	%	6,958	7,128	(2)
Derivative liability	April 15, 2012		N/A	790	790	(2)
Obligation under Minimum Assessment Agreement	2011 - 2037		N/A	16,394	8,648	(2)

(1) Our available for sale investment is not traded. Fair value is based on considerable judgment using a combination of current market rates and estimates of market conditions for similar instruments, estimates from two independent sources of what market participants would use in pricing the bond and the fair value of the Peninsula Notes at December 31, 2008. Due to the illiquid nature of the investment, changes in market risks could have a significant impact on the fair value.

(2) Represents fair value as of December 31, 2008 based on current market interest rates and estimates of market conditions for instruments with similar terms, maturities, and degrees of risk.

(3) Such borrowings are made under variable interest rates. The interest rate listed is as of December 31, 2008.

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The report of independent registered public accounting firm, consolidated financial statements and the notes thereto and the consolidated financial statement schedule are included beginning on page F-1.

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A.

CONTROLS AND PROCEDURES

Disclosure Controls and Procedures. We maintain disclosure controls and procedures (as defined in Rule 13a-l 5(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding management’s disclosure control objectives. Under the supervision and with the participation of our management, we evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2008. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2008.

Internal Control Over Financial Reporting.

(a) Management’s Annual Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Our internal control over financial reporting is a process designed, under the supervision of the Chief Executive Officer and Chief Financial Officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Our internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2008. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework. Based on this assessment, management determined that we maintained effective internal control over financial reporting as of December 31, 2008.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report.

(b) Changes in Internal Control Over Financial Reporting

There were no significant changes in our internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) that occurred during our fourth quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B.

OTHER INFORMATION

None.

PART III

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS OF THE REGISTRANT, AND CORPORATE GOVERNANCE

Executive Officers and Managers

PGP is our sole managing member. The following table sets forth the names and ages of the executive officers of the Company, DJL and PGC and of the managers of PGP.

Name	Age		Position

M. Brent Stevens		48	Chief Executive Officer of the Company, DJL and PGC and Chairman of the Board of Managers of PGP
Michael S. Luzich		54	President and Secretary of the Company, DJL and PGC and Manager of PGP
Jonathan C. Swain		43	Chief Operating Officer of the Company, DJL and PGC
Natalie A. Schramm		38	Chief Financial Officer of the Company, DJL and PGC
Terrance W. Oliver		59	Manager of PGP
Andrew Whittaker		47	Manager of PGP

Management Profiles

The following is a brief description of the business experience of each of the individuals listed in the preceding table. Presently, PGP’s board of managers is comprised of five managers; however, the fifth manager has not been appointed.

M. Brent Stevens. Mr. Stevens is our Chief Executive Officer and is the Chairman of the Board of Managers of PGP, which offices he has held since 1999. Mr. Stevens also serves as Chief Executive Officer of PGC, DJL, EVD and DJW. Since 1990, Mr. Stevens has been employed by Jefferies & Company, Inc., and presently is an Executive Vice President in the Investment Banking department.

Michael S. Luzich. Mr. Luzich is our President and Secretary and has been a manager of PGP since 1999. Mr. Luzich also serves as President and Secretary of PGC, DJL, EVD, and DJW. Mr. Luzich is the founder and President of the Cambridge Investment Group, LLC, an investment and development company located in Las Vegas, Nevada. Prior to October 1995, Mr. Luzich was a founding partner and director of Fitzgeralds New York, Inc. and Fitzgeralds Arizona Management, Inc., which are development companies responsible for the Turning Stone Casino near Syracuse, New York for the Oneida Tribe and the Cliff Castle Casino near Sedona, Arizona for the Yavapai-Apachi Tribe, respectively.

Jonathan C. Swain. Mr. Swain was hired as Chief Operating Officer of PGL in July 2004. Mr. Swain also serves as Chief Operating Officer of PGC, DJL, EVD, and DJW. Mr. Swain served from 2000 through July 2004 as Vice President and General Manager of Palace Station, Santa Fe Station and Sunset Station, three properties of Station Casinos Inc., a hotel and gaming company headquartered in Las Vegas, Nevada. In 1999 and 2000, Mr. Swain served as Vice President and General Manager of the Hard Rock Hotel and Casino in Las Vegas. From 1995 through 1999, Mr. Swain worked for the Aztar Resorts Inc., serving as the Corporate Vice President of Marketing and President of the Las Vegas Tropicana. Aztar Resorts, Inc. is a hotel and gaming company headquartered in Phoenix Arizona. From 1993 to 1995, Mr. Swain served as Vice President of Marketing and as Executive Director of International Marketing with the Trump Taj Mahal in Atlantic City, New Jersey.

Natalie A. Schramm. Ms. Schramm is our Chief Financial Officer, which office she has held since 1999. Ms. Schramm also served as General Manager of Diamond Jo Dubuque from January 1, 2003 to May 1, 2007. Ms. Schramm joined our predecessor, Greater Dubuque Riverboat Entertainment Company, L.C., in November 1996. Prior to this she was employed by Aerie Hotels and Resorts in Illinois as Corporate Accounting Manager where she was responsible for the corporate accounting functions of a casino and several hotels. She is a graduate of the University of Iowa with a degree in Accounting and is a Certified Public Accountant.

Terrance W. Oliver. Mr. Oliver is a manager of PGP, which office he has held since 1999. Since 1993, Mr. Oliver has served as a director of Mikohn Gaming Corporation/Progressive Gaming International Corp. (“PGIC”), a gaming equipment manufacturer headquartered in Las Vegas. From September 2008 to present, Mr. Oliver has served as interim Chief Executive Officer of PGIC. Since 2004, Mr. Oliver has served as director and Chairman of the Board of Reno Lumber, a wholesale lumber company based in Sparks, Nevada.

Andrew Whittaker. Mr. Whittaker is a manager of PGP, which office he has held since 1999. Since 1990, Mr. Whittaker has been employed by Jefferies & Company, Inc., where he is presently a Vice Chairman.

Audit Committee

Terrance W. Oliver and Andrew Whittaker serve on the Company’s audit committee. Our board of managers has determined that each of Messrs. Oliver and Whittaker is an “audit committee financial expert” as that term is used in Item 401(h)(2) of Regulation S-K adopted by the SEC. Although we are not a “listed issuer” within the meaning of Rule 10A-3 under the Exchange Act, our board of managers has determined that each of Messrs. Oliver and Whittaker would be considered an “independent” director within the meaning of the rules of the New York Stock Exchange for listed companies and within the meaning of Rule 10A-3 under the Exchange Act.

Compliance with Section 16(a) of the Exchange Act.

Not applicable.

Code of Ethics

The Company has adopted a code of ethics that applies to our Chief Executive Officer, Chief Financial Officer or persons performing a similar function. A copy of our code of ethics may be obtained, free of charge, upon written request to our principal place of business.

ITEM 11.

EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

Overview

This compensation discussion and analysis describes the material elements of the compensation awarded to, earned by, or paid to our executive officers who are considered to be “named executive officers” during our last fiscal year. Our named executive officers include our chief executive officer, chief financial officer, and our remaining two executive officers, other than the chief executive officer and chief financial officer, who were serving as executive officers at the end of 2008, whose names are set forth below in the table under “Executive Compensation — Summary Compensation Table.”

Compensation Objectives

Our compensation program is designed to attract and retain talented and dedicated executive officers, ensure executive compensation is aligned with our corporate strategies and business objectives, promote the achievement of key strategic and financial performance measures by linking short- and long-term cash and equity incentives to the achievement of measurable corporate and individual performance goals, and align executives’ incentives with the creation of equity-holder value.

To achieve these objectives, we have designed and implemented incentive compensation to primarily reward our executives for positive financial performance.

Overall, our aim is to offer our executives total compensation opportunities that represent compensatory levels similar to comparable companies and general market practices.

Processes and Procedures for Determining Compensation

PGP’s operating agreement has delegated certain powers traditionally vested in the Board of Managers to an executive committee consisting of the Chief Executive Officer and President and Secretary of PGP and the Company. Among the powers and responsibilities delegated to the executive committee under the operating agreement is the authority, subject to the approval of the Board of Managers, to unanimously approve the engagement of all of our executive officers whose compensation exceeds $100,000 annually. In the event that the executive committee is unable to reach a unanimous determination as to any such engagement within a reasonable period of time, the executive committee submits the prospective engagement to the independent managers of the Board of Managers, who then make a final determination. The Chief Executive Officer determines changes to salary and bonus compensation of our executive officers. The Company has no compensation committee.

The Board of Managers administers PGP’s 2004 Amended and Restated Incentive Unit Plan, referred to as the IUP. Awards under the IUP are recommended by the Chief Executive Officer and considered by the Board of Managers. Our Chief Executive Officer abstains from decisions made by the Board of Managers relating to his own compensation.

Compensation Components

We compensate our executives through a mix of base salary, cash bonus awards, and equity-based compensation rewards under PGP’s Incentive Unit Plan.

Base Salaries

Base salaries for our named executive officers are intended to be competitive with comparable companies. We establish base salaries for our executives based on the scope of their responsibilities, and take into account competitive market compensation paid by comparable companies for similar positions. Our Chief Executive Officer evaluates executive performance and reaches base salary compensation decisions based upon a subjective and careful analysis of each executive’s specific contributions. Our Chief Executive Officer takes into consideration the level of responsibility and experience of each named executive officer and the knowledge and skill required to perform such executive’s job requirements.

In the case of certain named executive officers, base salaries were initially set in employment agreements, which typically provide for a minimum increase in base salary each year. See “Executive Compensation — Employment and Consulting Agreements.” Neither Mr. Stevens, our Chief Executive Officer, nor Mr. Luzich, our President and Secretary, receives compensation in the form of a base salary. Each year, based on each individual’s performance and contribution and other factors described above, our Chief Executive Officer reviews and, if appropriate, adjusts salary levels for each of our other named executive officers within the parameters of such officer’s employment agreement.

Cash Bonuses

Cash bonuses for our named executive officers are intended to be competitive with comparable companies. Our named executive officers can earn additional cash incentive compensation each year to provide annual incentive for excellence in business and individual performance. Our cash bonuses, as opposed to our equity grants, are designed to more immediately reward our executive officers for their performance during the most recent year and are intended to reward the achievement of annual corporate financial and individual performance goals. We believe the immediacy of these cash bonuses, in contrast to our equity grants which vest over a period of time, provides a significant incentive to our executives towards achieving their respective individual objectives. We believe our cash bonuses are an important motivating factor to our executive officers, in addition to being a significant factor in attracting and retaining certain of our executive officers. After reviewing individual performances and industry peers, the Chief Executive Officer determines bonuses and other incentive awards on a fully discretionary basis. In those cases where a named executive officer has an employment agreement, provision for the payment of a cash bonus is made on terms consistent with our general cash bonus policy. Mr. Luzich and Mr. Stevens do not receive compensation in the form of a cash bonus.

Equity-Based Compensation

We believe that positive long-term Company performance is best achieved through an ownership culture that provides incentive to our executive officers through the use of equity compensation. PGP adopted the IUP to provide for the grant of profits interests to certain employees, including our named executive officers. The IUP was adopted to, among other things: (i) align compensation rewards with operating results and equity-holder value; (ii) attract and retain qualified individuals; (iii) motivate participants to achieve long-range goals; (iv) provide competitive compensation opportunities; and (v) provide a higher return on equity by focusing award participation on those individuals with a demonstrated capacity to increase growth in equity value. We believe that this strategy is consistent with our business goals, including equity-holder return, employee retention, and revenue and segment operating earnings growth.

The Board of Managers, with the consultation and advice of the Chief Executive Officer, selects the recipients and sets the terms of profits interests granted under the IUP. Generally, profits interests granted under the IUP will be subject to terms and conditions customary for such plans, which may include vesting requirements, transfer restrictions, satisfaction of budget-related performance criteria and similar conditions and qualifications, in each case, as approved by PGP’s Board of Managers or a subcommittee thereof. Holders of profits interests issued under the IUP are entitled to receive distributions from operating profits on a pro rata basis with holders of common units of PGP (but only to the extent of profits allocated to holders of profits interests after the date of grant), and distributions on liquidation only to the extent of their pro rata share of any undistributed operating profits allocated to holders of profits interests and any further appreciation in the fair market value of PGP after the date of grant. Under the terms of the IUP, PGP may grant profits interests from time to time representing up to 15.5% of its outstanding capital interests on a fully diluted basis. As of December 31, 2008, PGP has granted profits interests representing 15.5% of its outstanding capital interests on a fully diluted basis, and no additional profits interests have been reserved for future issuance under the IUP.

In determining the size of equity grants to our executive officers, our Board of Managers considers our company-level performance, the applicable executive officer’s performance, comparative equity ownership of our competitors and peer group, the amount of equity previously awarded to the applicable executive officer, the vesting of such awards and the recommendations of management and any other consultants or advisors that our Board of Managers may choose to consult. We currently do not have any formal plan requiring us to grant, or not to grant, equity compensation on specified dates. We do not have any equity ownership guidelines for our executive officers.

Benefits and other Compensation

We maintain broad-based benefits that are provided to all employees, including health and dental insurance, life and disability insurance, and a 401(k) plan. These benefits are designed to be competitive to attract and retain qualified employees. Certain of these benefits require the employee to pay a premium, with the Company paying the remainder of the premiums. These benefits are offered on the same basis to all employees, except that the Company maintains $1 million life insurance policies for each of our Chief Financial Officer and our Chief Operating Officer, the beneficiary of which is named by the Chief Financial Officer and Chief Operating Officer, respectively. We also provide supplemental health insurance for certain of our named executive officers that provides for payment of up to $10,000 per claim and $100,000 in the aggregate per participant annually for out-of-pocket expenses and deductible costs. In addition, we offer a deferred compensation plan to certain senior level positions including our Chief Operating Officer and our Chief Financial Officer.

Our 401(k) retirement plan is available to all eligible employees. Company matching contributions to the 401(k) plan are made at the discretion of the Board of Managers. In 2008 and 2007, the Company matched elective employee-participant contributions of our participating employees, including our named executive officers, on a basis of 50% of the employee’s contribution up to 8% of their compensation, subject to federal limits. Certain employees, including the named executive officers, are eligible to receive an automobile allowance and membership fees to clubs and associations paid by us. In addition, we provide a deferred compensation plan under which eligible employees may defer compensation and with respect to which we match 100% of any deferred compensation up to the first five percent of the employee’s total compensation.

Board of Managers Report

The Board of Managers has reviewed the Compensation Discussion and Analysis section and discussed it with management. Based on such review and discussions, the Board of Managers has recommended the inclusion of the Compensation Discussion and Analysis in our Annual Report on Form 10-K for the fiscal year ended December 31, 2008.

M. BRENT STEVENS

MICHAEL S. LUZICH

TERRANCE W. OLIVER

ANDREW WHITTAKER

EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth information concerning the compensation paid to our named executive officers for services rendered in all capacities to PGL, DJL, EVD and DJW, as applicable, during 2008, 2007 and 2006 and allocable to the Company. None of our named executive officers participate in or have account balances in qualified or non-qualified defined benefit plans sponsored by us. Earnings on deferred compensation are not reflected in the other compensation column because the return on earnings is calculated in the same manner and at the same rate as earnings on externally managed publicly available mutual funds. See “Executive Compensation — Non-qualified Deferred Compensation.”

Name and Principal Position	Year	Salary ($)		Bonus ($) (1)		Stock Awards ($) (2)			All Other Compensation ($)			Total ($)
M. Brent Stevens	2008		—		—		—			243,754	(3)		243,754
Chief Executive Officer	2007		—		—		—			268,474	(3)		268,474
	2006		—		—		—			207,522	(3)		207,522

Natalie A. Schramm	2008		310,352		250,000		(1,311,757	)		57,425	(4)		(693,980	)
Chief Financial Officer	2007		252,878		225,000		2,054,411			53,440			2,585,729
	2006		240,173		180,000		1,732,955			40,539			2,193,667

Michael S. Luzich	2008		—		—		—			1,788,617	(5)		1,788,617
President and Secretary	2007		—		—		—			1,787,097	(5)		1,787,097
	2006		—		—		—			1,683,112	(5)		1,683,112

Jonathan C. Swain	2008		514,228		550,000		(5,247,026	)		139,632	(6)		(4,043,166	)
Chief Operating Officer	2007		439,789		500,000		8,242,020			127,793			9,309,602
	2006		417,692		400,000		6,751,819			58,668			7,628,179

_______________

(1)		Bonus amounts reflect compensation in the fiscal year earned regardless of the year in which paid.

(2)		Amounts in this column reflect the dollar amount of IUP awards recognized for financial statement reporting purposes for the fiscal years ended December 31, 2008, 2007 and 2006 in accordance with Statement of Financial Accounting Standards No. 123 (Revised 2004) Share-Based Payment. Assumptions used in the calculation of these amounts are included in Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies included elsewhere in this Form 10-K.

(3)		Mr. Stevens did not receive a cash salary or bonus from the Company in 2008, 2007 or 2006. All Other Compensation represents compensation from PGP in respect of services allocable to the Company. In addition to the above compensation, Mr. Stevens also receives annual board fees for serving on the Board of Managers of PGP, which fees are allocated between PGP and the Company. See “Manager Compensation – Manager Compensation Table.”

(4)		In 2008, Ms. Schramm received $1,042 in premiums paid on life insurance, $8,462 in automobile allowance, $4,565 in membership fees of clubs and associations, $9,418 in supplemental health insurance reimbursements, $7,750 in matching contributions to our 401(k) plan, and $26,188 in matching contributions to our deferred compensation plan.

(5)		Mr. Luzich did not receive a cash salary or bonus from the Company in 2008, 2007 or 2006. All Other Compensation represents fees earned pursuant to a consulting agreement with PGP and EVD. See “Executive Compensation — Employment and Consulting Agreements.” In addition to the above compensation, Mr. Luzich also receives annual board fees for serving on the Board of Managers of PGP, which fees are allocated between PGP and the Company. See “Manager Compensation – Manager Compensation Table.”

(6)

In 2008, Mr. Swain received $1,156 in premiums paid on life insurance, $54,795 in housing allowance, $8,462 in automobile allowance, $6,553 in membership fees of clubs and associations, $11,162 in supplemental health insurance reimbursements, $7,750 in matching contributions to our 401(k) plan, and $49,754 in matching contributions to our deferred compensation plan.

Grants of Plan-Based Awards

PGP did not make any grants under its IUP in 2008.

Outstanding Equity Awards At Fiscal Year-End

The following table sets forth information regarding outstanding equity awards (consisting solely of awards under the IUP) held by our named executive officers as of December 31, 2008.

Name	Number of Units That Have Not Vested (#)	Market Value of Units That Have Not Vested ($) (1)
M. Brent Stevens	—	—

Natalie A. Schramm	3,319 (2)	400,329

Michael S. Luzich	—	—

Jonathan C. Swain	13,275 (2)	1,601,316

_______________

(1) As there is no trading market for these units, the amounts in this column represent estimated intrinsic value of the IUPs at December 31, 2008.

(2) Units vest upon a change of control or recapitalization of the Company.

At a meeting of the Board of Managers of PGP held on February 25, 2005, PGP approved grants of profits interests under the IUP to certain executive officers of PGP and/or its subsidiaries aggregating 10.50% of the outstanding membership units of PGP on a fully diluted basis, of which 2% was awarded to Mr. Swain and 0.5%, awarded to Ms. Schramm and the balance awarded to Messrs. Stevens and Luzich for certain services rendered to PGP (and thus are not reflected in the table above). The terms of the awards reflected in the table above include specified vesting schedules, acceleration of vesting upon the occurrence of certain events, anti dilution protection, transfer restrictions and other customary terms and provisions.

At a meeting of the Board of Managers of PGP held on September 12, 2005, PGP granted awards of profits interests under the IUP to certain executive officers of the Company and its subsidiaries aggregating 5.0% of the outstanding membership units of PGP on a fully diluted basis, of which 4% was awarded to Mr. Swain and 1.0% was awarded to Ms. Schramm, in each case subject to certain anti-dilution provisions which are designed to preserve the percentage of profits interest originally granted.

Under the terms of the awards granted on September 12, 2005, 20% of the profits interests vest on each of the first and second anniversaries of the grant date and an additional 40% vest on the third anniversary, provided that in each of those preceding years the Company and its subsidiaries achieves certain target consolidated segment operating earnings set forth in the Company’s annual budget. Such consolidated segment operating earning targets were met in each of the three years. Upon a change of control or recapitalization, the remaining 20% of the profits interests granted and any remaining unvested interests vest immediately. If the employee is terminated without cause, the profits interests vest immediately. All profits interests that do not vest in accordance with their terms shall be forfeited and cancelled.

Equity Vested

The following table sets forth information regarding the vesting of IUP awards held by the named executive officers during the year ended December 31, 2008.


Name	Number of Units Acquired on Vesting (#)	Value Realized on Vesting ($) (1)
M. Brent Stevens	—	—

Natalie A. Schramm	6,637	841,762

Michael S. Luzich	—	—

Jonathan C. Swain	26,550	3,367,049

_________________

(1) As there is no trading market for these units, the amounts in this column represent estimated aggregate intrinsic value of the IUPs on the vesting date.

Pension Benefits

None of our named executive officers participate in qualified or non-qualified defined benefit pension plans sponsored by us. Our Board of Managers may elect to adopt qualified or non-qualified defined benefit plans in the future if it determines that doing so is in our best interests.

Non-qualified Deferred Compensation Plan

The following table sets forth information as of December 31, 2008 with respect to each of our named executive officers under the deferred compensation plan that provides for the deferral of compensation on a basis that is not tax-qualified. In addition, the table shows contributions made under the deferred compensation plan by the named executive officers and the Company in 2008 together with fiscal year end balances.

Name	Executive Contributions in Last Fiscal Year ($)	Registrant Contributions in Last Fiscal Year ($) (1)	Aggregate Earnings in Last Fiscal Year ($) (2)	Aggregate Balance at Last Fiscal Year End ($) (3)
M. Brent Stevens	—	—	—	—

Natalie A. Schramm	26,188	26,188	(58,363)	120,695

Michael S. Luzich	—	—	—	—

Jonathan Swain	49,754	49,754	(111,997)	210,814

______________

(1)	Contributions are included in the “All Other Compensation” column of the Summary Compensation Table.

(2)	No amounts shown in the "Aggregate Earnings in Last Fiscal Year" column are reported as compensation in the Summary Compensation Table.

(3)	Amounts shown represent all amounts due under the deferred compensation plan. At December 31, 2008, Mr. Swain's and Ms. Schramm’s entire aggregate balances under the deferred compensation plan were fully vested.

The Peninsula Gaming, LLC - Executive Nonqualified Excess Plan, referred to as the deferred compensation plan, is a non-qualified deferred compensation plan that allows eligible executives, including certain named executive officers, and other key-employees to defer up to 20% of their base salary and up to 80% of their cash bonus compensation. Under the deferred compensation plan, we match 100% of any deferred compensation up to the first five percent of the employee’s total compensation deferred. The deferred compensation plan is not intended to provide for the payment of above-market or preferential earnings on compensation deferred under the plan. Earnings on deferred compensation are calculated in the same manner and at the same rate as earnings on certain externally managed publicly available mutual funds. Employee deferrals are deemed to be invested in these funds in accordance with the applicable employee’s election. Employees under the deferred compensation plan do not actually own any share of the investment options he or she elects.

All employee contributions to the deferred compensation plan are fully vested at the time of deferral. All Company match contributions vest over a three year period commencing on the employee’s first day of employment. In addition, all balances under the deferred compensation plan will become fully vested upon the employee’s death, disability or reaching normal retirement age or upon a change of control of the Company. Qualifying distribution events under the plan include, but are not limited to, the applicable employee’s separation from service, disability or death, change in control of the Company and hardship withdrawals.

Employment and Consulting Agreements

Michael S. Luzich

Mr. Luzich is party to a consulting agreement with PGP and EVD pursuant to which he is entitled to receive compensation in an aggregate annual amount equal to (a) 2% of DJL’s unconsolidated earnings before interest, taxes, depreciation, amortization and non-recurring charges, plus (b) 2.5% of EVD’s and DJW’s earnings before interest, taxes, depreciation, amortization and non-recurring charges plus (c) 2.5% of earnings before interest, taxes, depreciation, amortization and non-recurring charges of any future gaming operations acquired, directly or indirectly, by PGP. The consulting agreement has a one-year term and, subject to the occurrence of various termination events, is renewable automatically for successive one-year terms. Under this agreement, Mr. Luzich is also entitled to reimbursement of reasonable business expenses as approved by the Board of Managers of PGP.

Jonathan C. Swain

In September 2007, Mr. Swain entered into an amended and restated employment agreement with PGL to serve as Chief Operating Officer. Under the terms of his employment agreement, Mr. Swain is entitled to receive from PGL a base annual salary of $440,000, to be adjusted upward annually on January 1 of each year of the term of the agreement by not less than 5% of prior year’s compensation. In addition to the base salary, Mr. Swain is entitled to receive an annual cash bonus payable by PGL based on his performance during the previous fiscal year determined on a basis consistent with bonuses paid to similarly situated executive officers of PGL, but not less than $100,000. Mr. Swain has also been granted profits interest under the IUP aggregating 6%, of which 5.2% are vested with the remaining 0.8% vesting upon the occurrence of a change of control or recapitalization of PGP. For more information relating to payment obligations of the Company upon termination of Mr. Swain’s employment, see “Executive Compensation – Potential Payments Upon Termination or Change of Control”. Mr. Swain’s employment agreement has a term of three years. Mr. Swain’s 2009 salary was set at $522,953.

Natalie A. Schramm

In September 2007, Ms. Schramm entered into an amended and restated employment agreement with PGL to serve as Chief Financial Officer. Under the terms of her employment agreement, Ms. Schramm is entitled to receive from PGL a base annual salary of $253,755, to be adjusted upward annually on January 1 of each year of the term of the agreement by not less than 5% of prior year’s compensation. In addition to the base salary, Ms. Schramm is entitled to receive an annual cash bonus payable by PGL based on her performance during the previous fiscal year determined on a basis consistent with bonuses paid to similarly situated executive officers of PGL. Ms. Schramm has also been granted profits interest under the IUP aggregating 1.5%, of which 1.3% are vested with the remaining 0.2% vesting upon the occurrence of a change of control or recapitalization of PGP. For more information relating to payment obligations of the Company upon termination of Ms. Schramm’s employment, see “Executive Compensation – Potential Payments Upon Termination or Change of Control”. Ms. Schramm’s employment agreement has a term of three years. Ms. Schramm’s 2009 salary was set at $315,000.

Potential Payments Upon Termination or Change of Control

Michael S. Luzich

Mr. Luzich’s consulting agreement does not provide for payments upon termination of service or a change of control of the Company.

Jonathan C. Swain and Natalie A. Schramm

In the event a change of control, as defined in the agreements, is consummated at any time during the term of such executive officer’s employment agreement term, such individual is entitled to receive an amount equal to twelve months’ pay based on the annual compensation provided, including all benefits accrued and the average of the bonuses received in the two calendar years immediately preceding the calendar year in which the change of control occurs. If a change of control would have occurred on December 31, 2008, Mr. Swain and Ms. Schramm would be entitled to $1,537,105 and $795,967, respectively, under the change of control section of their agreements. If such officer is terminated for any reason other than for cause or as part of a mutual termination, as defined in the applicable employment agreement, such officer is entitled to receive as severance pay the greater of (a) the balance of base compensation due to such officer for the reminder of the term or (b) twelve months’ base compensation and a prorated share of the cash bonus to which such officer would have been entitled to had such officer’s employment continued through the end of the current calendar year. Upon termination of such officer’s employment or upon the occurrence of a change of control or recapitalization of PGP, such officer is entitled at such officer’s option to cause PGP to redeem all vested membership interests granted to such officer under the IUP for cash at the fair market value at the time of the termination of employment or a change of control or recapitalization, as applicable.

MANAGER COMPENSATION

Manager Compensation Table

The following table sets forth a summary of the compensation we paid to our Managers in 2008:

Name	Fees Earned or Paid in Cash		Total
M. Brent Stevens		$ 78,750		$ 78,750

Michael S. Luzich		3,750		3,750

Terrance W. Oliver		3,750		3,750

Andrew Whittaker		3,750		3,750

All managers serving on the Board of Managers receive annual board fees for serving on the Board of Managers of PGP, which fees are allocated between PGP and the Company (of which the portion allocated to the Company is reflected in the table above), and are reimbursed for their travel and out-of-pocket expenses related to their attendance at Board of Managers meetings. The Audit Committee of the Board of Managers consists of Messrs. Oliver and Whittaker, neither of whom receive additional fees for service on such committee.

Compensation Committee Interlocks and Insider Participation

We have no standing compensation committee. All compensation decisions are made by either the Chief Executive Officer, or in the case of compensation of our Chief Executive Officer, the Board of Managers.

ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
	RELATED STOCKHOLDER MATTERS

PGP currently owns all of our outstanding common membership interests and is our sole managing member.

The table below sets forth, as of December 31, 2008, information regarding the beneficial ownership of outstanding membership interests of PGP by:

(a)

each person or entity known by us to own beneficially 5% or more of the common membership interests of PGP;

(b)

each manager and executive officer of PGP; and

(c)

all managers and executive officers of PGP as a group.

The following information is helpful to an understanding of, and qualifies the beneficial ownership data contained in, the table set forth below. PGP has three outstanding classes of membership interests: (i) convertible preferred interests, which are convertible at the option of the holder into non-voting common membership interests; (ii) voting common membership interests; and (iii) non-voting common membership interests, which outstanding interests consist of awards under the IUP. Mr. Stevens holds 369,855 PGP membership interests directly and 413,333 PGP common membership interests indirectly through PGP Investors, LLC, a Delaware limited liability company. Mr. Stevens is the sole managing member of PGP Investors, LLC and exercises voting and investment power over the PGP common membership interests owned by PGP Investors, LLC. Mr. Stevens and Mr. Whittaker, managers of PGP, are an Executive Vice President and a Vice Chairman, respectively, of Jefferies & Company, Inc. (“Jefferies”). In addition, Jefferies and some of its affiliates, officers and employees are members of PGP Investors, LLC. Mr. Whittaker holds an economic interest in approximately 41,667 PGP common membership interests indirectly through his membership in PGP Investors, LLC, but does not exercise voting or investment power with respect to these PGP common membership interests. Mr. Oliver holds his interest through The Oliver Family Trust. The total holdings of all managers and executive officers as a group includes the 413,333 PGP common membership interests held by PGP Investors, LLC, over which Mr. Stevens exercises sole voting and investment power.

Name and Address of Beneficial Owner	Voting Common Membership Interests Beneficially Owned	Percent of Class		Non-voting Common Membership Interests Beneficially Owned	Percent of Class		Convertible Preferred Membership Interests Beneficially Owned	Percent of Class

M. Brent Stevens c/o Diamond Jo, LLC 600 Star Brewery Dr., Suite 110 Dubuque, Iowa 52001	661,667	66.17	%	91,248	29.73	%	30,273	9.54	%

PGP Investors, LLC(1) 11100 Santa Monica, 10th Floor Los Angeles, CA 90071	413,333	41.33	%	—	—		—	—

Michael S. Luzich c/o Diamond Jo, LLC 600 Star Brewery Dr., Suite 110 Dubuque, Iowa 52001	323,333	32.33	%	91,248	29.73	%	30,273	9.54	%

Terrance Oliver c/o Diamond Jo, LLC 600 Star Brewery Dr., Suite 110 Dubuque, Iowa 52001	15,000	1.50	%	—	—		—	—

Andrew Whittaker(1) c/o Diamond Jo, LLC 600 Star Brewery Dr., Suite 110 Dubuque, Iowa 52001	41,667	4.17	%	—	—		—	—

Jonathan Swain c/o Diamond Jo, LLC 600 Star Brewery Dr., Suite 110 Dubuque, Iowa 52001	—	—		99,543	32.43	%	—	—

Natalie Schramm c/o Diamond Jo, LLC 600 Star Brewery Dr., Suite 110 Dubuque, Iowa 52001	—	—		24,886	8.11	%	—	—

All managers and executive officers as a group (7 persons)	1,000,000	100.00	%	306,925	100.00	%	60,546	19.08	%

______________

(1)	These interests are attributable to Mr. Stevens and are included in the calculation of his beneficial ownership and percentage of ownership data.

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

DJW Credit Facility Guarantee

In connection with entering into the DJW Credit Facility, our Chief Executive Officer agreed to unconditionally guarantee DJW’s payment obligations to the lender thereunder. For more information regarding the DJW Credit Facility, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources”.

Managing Member Indemnification

Under our operating agreement and the operating agreement of PGP, we and PGP have agreed, subject to few exceptions, to indemnify and hold harmless PGP and the members of PGP, as the case may be, from liabilities incurred as a result of their positions as our sole manager and as members of PGP.

Operating Agreement of PGP

In accordance with PGP’s operating agreement, the Board of Managers is composed of five individuals, two of whom must be independent managers. At any time that M. Brent Stevens, together with any entity controlled by Mr. Stevens, beneficially holds at least 5% of the voting common membership interests of PGP, Mr. Stevens is entitled to designate three of PGP’s managers, including one of the two independent managers. The two independent managers are required to serve as members of the independent committee. At any time that Michael Luzich, together with any entity controlled by Mr. Luzich, beneficially holds at least 5% of the voting common membership interests of PGP, Mr. Luzich is entitled to designate two of PGP’s managers, including the other independent manager. In consideration for their execution of personal guarantees to provide credit support for EVD’s credit facilities, each of Messrs. Luzich and Stevens were granted, separately from the IUP, profits interests of 1.5% of PGP’s fully diluted membership interests by PGP’s board of managers. Messrs. Stevens and Luzich are entitled to receive distributions on liquidation in respect of such profits interests only to the extent of any appreciation in the fair market value of PGP interests since the date of grant of such profits interests.

Presently, the Board of Managers is composed of four managers. If not appointed earlier, a fifth manager may be appointed by Mr. Stevens at a future meeting of managers. A manager may resign at any time, and the member who designates a manager may remove or replace that manager from the Board of Managers at any time.

On May 21, 2003, PGP’s operating agreement was amended to create an executive committee consisting of Messrs. Luzich and Stevens. Under the amendment, the executive committee manages our business and affairs. The executive committee meets weekly or as otherwise agreed upon between Messrs. Luzich and Stevens. Other than with respect to any officers whose responsibilities include any project or real estate development, all executive officers of PGP and its subsidiaries shall report to the Chief Executive Officer of PGP. The executive committee shall, subject to the approval of the Board of Managers, unanimously approve the engagement of all of our executive officers (whose compensation exceeds $100,000 annually), attorneys and accountants. In the event that the executive committee is unable to reach a unanimous determination as to any such engagement within a reasonable period of time, the executive committee shall submit the prospective engagement to the independent managers the Board of Managers board, whose determination shall be final.

At a meeting of the Board of Managers held on February 25, 2005, PGP approved certain amendments to its operating agreement to permit certain amendments to PGP’s 2004 Incentive Unit Plan, including increasing the percentage of profits interests issuable under such plan from 10% to 12% of PGP’s outstanding membership interests on a fully diluted basis. The Board of Managers approved an additional amendment to its operating agreement on September 12, 2005 to increase the percentage of profits interests issuable under the 2004 Incentive Unit Plan to 15.5% of PGP’s outstanding membership interests on a fully diluted basis.

Management Services Agreement — DJL, OEDA, and EVD

DJL and OEDA (together, the “Operators”) manage and operate EVD’s racino near Lafayette, Louisiana and EVD’s OTBs pursuant to a management services agreement. Although the Operators may obtain services from affiliates to the extent necessary to perform their obligations, the Operators are fully responsible for all obligations under the agreement. Fees under the management services agreement are shared between DJL and OEDA, with DJL receiving 75% and OEDA receiving 25% of such fees.

Pursuant to the terms of the management services agreement, the Operators are entitled to receive in the aggregate a basic management fee equal to 1.75% of net revenue (less net food and beverage revenue) and an incentive fee equal to:

· 3.0% of the first $25.0 million of EBITDA (as defined below);

· 4.0% of the amount in excess of $25.0 million but less than $30.0 million of EBITDA; and

· 5.0% of the amount in excess of $30.0 million of EBITDA.

Under the management services agreement, “EBITDA” is defined as earnings before interest, income taxes, depreciation and amortization. In calculating earnings, the basic management fee, the incentive fee and reimbursables payable under the management services agreement are excluded. During 2008, 2007 and 2006, EVD expensed affiliate management fees payable to OEDA of $0.9 million, $0.8 million and $0.9 million, respectively, related to this agreement.

The Board of Managers of the Company unanimously approved the entry into the management services agreement by DJL, OEDA and EVD. The Board of Managers considered whether the terms and conditions of the management services agreement were on terms no less favorable than those that could be obtained on an arms’-length basis from independent third parties.

Management Services Agreement — DJW and PGP

In 2005, DJW entered into a management services agreement (“MSA”) with PGP. Pursuant to the terms of that agreement, PGP designed, developed, constructed, manages and operates the new casino in Worth County, Iowa and provided certain pre-opening services in connection therewith. Commencing in April 2006 (commencement of operations at the new casino), PGP is entitled to receive a basic management fee equal to 1.75% of net revenue (less net food and beverage revenue) and an incentive fee equal to:

· 3.0% of the first $25.0 million of EBITDA (as defined below);

· 4.0% of EBITDA in excess of $25.0 million but less than $30.0 million of EBITDA; and

· 5.0% of EBITDA in excess of $30.0 million.

“EBITDA” is defined in the management services agreement as earnings before interest, income taxes, depreciation and amortization; provided, however, that in calculating earnings, the basic management fee, the incentive fee payable under the management services agreement shall not be deducted. The management services agreement will terminate on the later of (i) April 2014 or (ii) the date of sale by PGP of its beneficial ownership of the DJW’s membership interests. During 2008, 2007 and 2006, the Company expensed affiliate management fees of $2.4 million, $2.2 million and $1.7 million, respectively, related to this agreement.

The Board of Managers of the Company unanimously approved the entry into the management services agreement by DJW. The Board of Managers considered whether the terms and conditions of the management services agreement were on terms no less favorable than those that could be obtained on an arms’-length basis from independent third parties.

ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The aggregate fees billed by Deloitte & Touche LLP for the years ended December 31, 2008 and 2007 were as follows:

(in thousands):	2008		2007
Audit fees		$ 497		$ 608
Audit-related fees (1)		107		235
Tax fees (2)		62		54
All other fees		—		—

_____________________

(1) Quarterly and annual internal control procedures related to compliance with state gaming regulations, internal control procedures related to financial reporting, and quarterly net slot machine proceeds audits.

(2) Tax compliance services.

In accordance with our internal policies, all fees related to audit and permissible non-audit services rendered by our independent accountants are required to be pre-approved by our audit committee. In addition, all of the services described above in this Item 14 for the years ended December 31, 2008 and 2007 have been approved by our audit committee.

PART IV

ITEM 15.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) The following documents are filed as a part of this report:

(1)

Financial Statements—see Index to Consolidated Financial Statements and Schedule appearing on page F-1.

(2)

Financial Statement Schedules—see Index to Consolidated Financial Statements and Schedule appearing on

page F-1.

(3)

Exhibits:

INDEX TO EXHIBITS

Exhibit Number		Description of Exhibit*
3.1		Certificate of Formation of Peninsula Gaming Company, LLC—incorporated herein by reference to Exhibit 3.1A of Peninsula Gaming Company, LLC’s Form S-4 filed October 12, 1999. (With regard to applicable cross-references in this Form 10-K, Peninsula Gaming Company, LLC’s Form S-4, Current, Quarterly and Annual Reports were filed with the SEC under File No. 333-88829).

3.2		Amendment to Certificate of Formation of Peninsula Gaming Company, LLC—incorporated by reference to Exhibit 3.1B of Peninsula Gaming Company, LLC’s Form S-4 filed October 12, 1999.

3.3		Certificate of Amendment to the Certificate of Formation of Peninsula Gaming Company, LLC, dated March 10, 2004—incorporated herein by reference to Peninsula Gaming Company, LLC’s Quarterly Report on Form 10-Q filed May 14, 2004.

3.4		Amended and Restated Operating Agreement of Peninsula Gaming Company, LLC—incorporated herein by reference to Exhibit 3.2 of Peninsula Gaming Company, LLC’s Form S-4 filed on October 12, 1999.

3.5		Certificate of Formation of Peninsula Casinos, LLC, dated February 27, 2004—incorporated by reference to Exhibit 3.3A of Peninsula Gaming, LLC’s Form S-4 filed July 30, 2004.

3.6		Certificate of Amendment to the Certificate of Formation of Peninsula Casinos, LLC, dated March 9, 2004—incorporated by reference to Exhibit 3.3B of Peninsula Gaming, LLC’s Form S-4 filed July 30, 2004
3.7		Operating Agreement of Peninsula Gaming, LLC (formerly known as Peninsula Casinos, LLC), dated June 14, 2004—incorporated by reference to Exhibit 3.4 of Peninsula Gaming, LLC’s Form S-4 filed July 30, 2004.

3.8		Certificate of Incorporation of The Old Evangeline Downs Capital Corp., dated January 20, 2003—incorporated herein by reference to Exhibit 3.4 of The Old Evangeline Downs Capital Corp.’s Form S-4 filed May 28, 2003. (With regard to applicable cross-references in this registration statement, The Old Evangeline Downs Capital Corp.’s Form S-4, Current, Quarterly and Annual Reports were filed with the SEC under File No. 333-105587).

3.9		Certificate of Amendment to the Certificate of Incorporation of The Old Evangeline Downs Capital Corp., dated June 17, 2004—incorporated by reference to Exhibit 3.5B of Peninsula Gaming, LLC’s Form S-4 filed July 30, 2004.

3.10		By-laws of The Old Evangeline Downs Capital Corp.—incorporated herein by reference to Exhibit 3.5 of The Old Evangeline Downs Capital Corp.’s Form S-4 filed May 28, 2003.

4.1		Specimen Certificate of Common Stock of Peninsula Gaming Corp. (formerly known as The Old Evangeline Downs Capital Corp.)—incorporated by reference to Exhibit 4.1 of Peninsula Gaming, LLC’s Form S-4 filed July 30, 2004.

4.2		Indenture, dated February 25, 2003, by and among The Old Evangeline Downs, L.L.C., The Old Evangeline Downs Capital Corp. and U.S. Bank National Association—incorporated herein by reference to Exhibit 4.1 of The Old Evangeline Downs, L.L.C.’s Form S-4 filed May 28, 2003.

4.3		Supplemental Indenture, dated as of March 25, 2004, by and among The Old Evangeline Downs, L.L.C., The Old Evangeline Downs Capital Corp. and U.S. Bank National Association—incorporated by reference to Exhibit 4.3B of Peninsula Gaming, LLC’s Form S-4 filed July 30, 2004.

4.4		Indenture, dated as of April 16, 2004, by and among Diamond Jo, LLC (formerly known as Peninsula Gaming Company, LLC), The Old Evangeline Downs Capital Corp., the Subsidiary Guarantors named therein and U.S. Bank National Association—incorporated by reference to Exhibit 4.4A of Peninsula Gaming, LLC’s Form S-4 filed July 30, 2004.

4.5		Supplemental Indenture among Peninsula Gaming, LLC, Diamond Jo, LLC (formerly known as Peninsula Gaming Company, LLC), The Old Evangeline Downs Capital Corp. and U.S. Bank National Association, dated as of June 16, 2004—incorporated by reference to Exhibit 4.4B of Peninsula Gaming, LLC’s Form S-4 filed July 30, 2004.

4.6		Registration Rights Agreement, dated April 16, 2004, by and among Diamond Jo, LLC (formerly known as Peninsula Gaming Company, LLC), The Old Evangeline Downs Capital Corp., the Guarantors named therein and Jefferies & Company, Inc.—incorporated by reference to Exhibit 4.5A of Peninsula Gaming, LLC’s Form S-4 filed July 30, 2004

4.7		Joinder of Peninsula Gaming, LLC, dated June 16, 2004, to the Registration Rights Agreement, dated April 16, 2004, by and among Diamond Jo, LLC (formerly known as Peninsula Gaming Company, LLC), The Old Evangeline Downs Capital Corp., the Guarantors named therein and Jefferies & Company, Inc.—incorporated by reference to Exhibit 4.5B of Peninsula Gaming, LLC’s Form S-4 filed July 30, 2004

4.8		Pledge and Security Agreement, dated as of April 16, 2004, among Diamond Jo, LLC (formerly known as Peninsula Gaming Company, LLC), The Old Evangeline Downs Capital Corp., OED Acquisition, LLC, Peninsula Gaming Corporation, The Old Evangeline Downs, L.L.C. and U.S. Bank National Association—incorporated by reference to Exhibit 4.6A of Peninsula Gaming, LLC’s Form S-4 filed July 30, 2004.

4.9		Supplement to Security Agreement by Peninsula Gaming, LLC, dated June 16, 2004—incorporated by reference to Exhibit 4.6B of Peninsula Gaming, LLC’s Form S-4 filed July 30, 2004.

4.10		Trademark Security Agreement, dated April 16, 2004, by Diamond Jo, LLC in favor of U.S. Bank National Association—incorporated by reference to Exhibit 4.7 of Peninsula Gaming, LLC’s Form S-4 filed July 30, 2004.

4.11		Form of 8 3¤4% Senior Secured Notes due 2012—incorporated by reference to Exhibit 4.8 of Peninsula Gaming, LLC’s Form S-4 filed July 30, 2004.

4.12		Intercreditor Agreement between U.S. Bank National Association and Wells Fargo Foothill, Inc., dated April 16, 2004—incorporated by reference to Exhibit 4.9A of Peninsula Gaming, LLC’s Form S-4 filed July 30, 2004.

4.13		Acknowledgement of Peninsula Gaming, LLC, dated June 16, 2004, to the Intercreditor Agreement between U.S. Bank National Association and Wells Fargo Foothill, Inc., dated April 16, 2004—incorporated by reference to Exhibit 4.9B of Peninsula Gaming, LLC’s Form S-4 filed July 30, 2004.
4.14		Supplement to Security Agreement by Peninsula Gaming, LLC, dated June 30, 2005—incorporated herein by reference to Exhibit 4.1 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed November 14, 2005.

4.15		Supplement to Security Agreement by Diamond Jo Worth Corp., dated June 30, 2005—incorporated herein by reference to Exhibit 4.2 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed November 14, 2005.

4.16		Supplemental Indenture among Diamond Jo Worth Corp., Peninsula Gaming, LLC, Diamond Jo, LLC, Peninsula Gaming Corp. and U.S. Bank National Association, dated as of June 30, 2005—incorporated herein by reference to Exhibit 4.3 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed November 14, 2005.

4.17		Acknowledgement of Diamond Jo Worth Corp., dated June 30, 2005, to the Intercreditor Agreement between U.S. Bank National Association and Wells Fargo Foothill, Inc., dated April 16, 2004—incorporated herein by reference to Exhibit 4.4 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed November 14, 2005.

4.18		Supplement to Security Agreement by Diamond Jo Worth Holdings, LLC, dated June 30, 2005—incorporated herein by reference to Exhibit 4.5 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed November 14, 2005.

4.19		Supplemental Indenture among Diamond Jo Worth Holdings, LLC, Peninsula Gaming, LLC, Diamond Jo, LLC, Peninsula Gaming Corp. and U.S. Bank National Association, dated as of June 30, 2005—incorporated herein by reference to Exhibit 4.6 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed November 14, 2005.

4.20		Acknowledgement of Diamond Jo Worth Holdings, LLC, dated June 30, 2005, to the Intercreditor Agreement between U.S. Bank National Association and Wells Fargo Foothill, Inc., dated April 16, 2004—incorporated herein by reference to Exhibit 4.7 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed November 14, 2005.

4.21		Indenture among Diamond Jo Worth, LLC, Diamond Jo. Worth Corp. and U.S. Bank National Association, as Trustee, dated as of July 19, 2005—incorporated herein by reference to Exhibit 10.2 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed August 16, 2005.

4.22		Pledge and Security Agreement, dated as of July 19, 2005, among Diamond Jo Worth, LLC, Diamond Jo Worth Corp., Diamond Jo Worth Holdings, LLC and U.S. Bank National Association, as Trustee—incorporated herein by reference to Exhibit 10.4 of Peninsula Gaming, LLC’s Form 10-Q filed August 16, 2005.

4.23		First Supplemental Indenture dated August 31, 2006 by and among Diamond Jo Worth, LLC, Diamond Jo Worth Corp. and US Bank National Association, as trustee—incorporated herein by reference to Exhibit 10.1 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed November 14, 2006.

4.24		Second Supplemental Indenture dated December 21, 2006 by and among Diamond Jo Worth, LLC, Diamond Jo Worth Corp. and US Bank National Association, as trustee- incorporated by reference to Exhibit 4.24 of Peninsula Gaming, LLC’s Annual Report on Form 10-K filed April 2, 2007.

4.25		Consent to Loan and Security Agreement, dated as of July 30, 2007, by and between Diamond Jo, LLC, The Old Evangeline Downs, L.L.C. and Wells Fargo Foothill, Inc. – incorporated by reference to Exhibit 4.1 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed November 13, 2007.

4.26		Third Supplemental Indenture dated October 16, 2007 by and among Diamond Jo Worth, LLC, Diamond Jo Worth Corp. and US Bank National Association, as trustee - incorporated by reference to Exhibit 4.28 of Peninsula Gaming, LLC’s Annual Report on Form 10-K filed March 28, 2008.

10.1		Operating Agreement, dated February 22, 1993, by and among Dubuque Racing Association, Ltd. and Greater Dubuque Riverboat Entertainment Company, L.C.—incorporated herein by reference to Exhibit 10.9A of Peninsula Gaming Company, LLC’s Form S-4 filed October 12, 1999.

10.2		Amendment to Operating Agreement, dated February 22, 1993, by and among Dubuque Racing Association, Ltd. and Greater Dubuque Riverboat Entertainment Company, L.C.—incorporated herein by reference to Exhibit 10.9B of Peninsula Gaming Company, LLC’s Form S-4 filed October 12, 1999.

10.3		Amendment to Operating Agreement, dated March 4, 1993, by and among Dubuque Racing Association, Ltd. and Greater Dubuque Riverboat Entertainment Company, L.C.—incorporated herein by reference to Exhibit 10.9C of Peninsula Gaming Company, LLC’s Form S-4 filed October 12, 1999.

10.4		Third Amendment to Operating Agreement, dated March 11, 1993, by and among Dubuque Racing Association, Ltd. and Greater Dubuque Riverboat Entertainment Company, L.C.—incorporated herein by reference to Exhibit 10.9D of Peninsula Gaming Company, LLC’s Form S-4 filed October 12, 1999.

10.5		Fourth Amendment to Operating Agreement, dated March 11, 1993, by and among Dubuque Racing Association, Ltd. and Greater Dubuque Riverboat Entertainment Company, L.C.—incorporated herein by reference to Exhibit 10.9E of Peninsula Gaming Company, LLC’s Form S-4 filed October 12, 1999.

10.6		Fifth Amendment to Operating Agreement, dated April 9, 1993, by and among Dubuque Racing Association, Ltd. and Greater Dubuque Riverboat Entertainment Company, L.C.—incorporated herein by reference to Exhibit 10.9F of Peninsula Gaming Company, LLC’s Form S-4 filed October 12, 1999.

10.7		Sixth Amendment to Operating Agreement, dated November 29, 1993, by and among Dubuque Racing Association, Ltd. and Greater Dubuque Riverboat Entertainment Company, L.C.—incorporated herein by reference to Exhibit 10.9G of Peninsula Gaming Company, LLC’s Form S-4 filed October 12, 1999.

10.8		Seventh Amendment to Operating Agreement, dated April 6, 1994, by and among Dubuque Racing Association, Ltd. and Greater Dubuque Riverboat Entertainment Company, L.C.—incorporated herein by reference to Exhibit 10.9H of Peninsula Gaming Company, LLC’s Form S-4 filed October 12, 1999.

10.9		Eighth Amendment to Operating Agreement, dated April 29, 1994, by and among Dubuque Racing Association, Ltd. and Greater Dubuque Riverboat Entertainment Company, L.C.—incorporated herein by reference to Exhibit 10.9I of Peninsula Gaming Company, LLC’s Form S-4 filed October 12, 1999.

10.10		Ninth Amendment to Operating Agreement, dated July 11, 1995, by and among Dubuque Racing Association, Ltd. and Greater Dubuque Riverboat Entertainment Company, L.C.—incorporated herein by reference to Exhibit 10.9J of Peninsula Gaming Company, LLC’s Form S-4 filed October 12, 1999.

10.11		Tenth Amendment to Operating Agreement, dated July 15, 1999, by and among Dubuque Racing Association, Ltd. and Greater Dubuque Riverboat Entertainment Company, L.C.—incorporated herein by reference to Exhibit 10.9K of Peninsula Gaming Company, LLC’s Form S-4 filed October 12, 1999.

10.12		Operating Agreement Assignment, dated July 15, 1999, by and among Greater Dubuque Riverboat Entertainment Company, L.C. and Peninsula Gaming Company, LLC—incorporated herein by reference to Exhibit 10.10 of Peninsula Gaming Company, LLC’s Form S-4 filed October 12, 1999.

10.13		Ice Harbor Parking Agreement Assignment dated July 15, 1999, by and among Greater Dubuque Riverboat Entertainment Company, L.C. and Peninsula Gaming Company, LLC—incorporated herein by reference to Exhibit 10.13 of Peninsula Gaming Company, LLC’s Form S-4 filed October 12, 1999.

10.14		First Amendment to Sublease Agreement, dated July 15, 1999, by and among Dubuque Racing Association, Ltd. and Greater Dubuque Riverboat Entertainment Company, L.C.—incorporated herein by reference to Exhibit 10.14 of Peninsula Gaming Company, LLC’s Form S-4 filed October 12, 1999.

10.15		Sublease Assignment, dated July 15, 1999, by and among Greater Dubuque Entertainment Company, L.C. and Peninsula Gaming Company, LLC—incorporated herein by reference to Exhibit 10.15 of Peninsula Gaming Company, LLC’s Form S-4 filed October 12, 1999.

10.16		Iowa Racing and Gaming Commission Gaming License, dated July 15, 1999—incorporated herein by reference to Exhibit 10.16 of Peninsula Gaming Company, LLC’s Form S-4 filed October 12, 1999.

10.17		Assignment of Iowa IGT Declaration and Agreement of Trust, dated July 15, 1999 by and among Greater Dubuque Riverboat Entertainment Company, L.C. and Peninsula Gaming Company, LLC—incorporated herein by reference to Exhibit 10.17 of Peninsula Gaming Company, LLC’s Form S-4 filed October 12, 1999.

10.18		Amended and Restated Management Services Agreement, dated as of February 25, 2003, by and among The Old Evangeline Downs, L.L.C., OED Acquisition, LLC and Peninsula Gaming Company, LLC—incorporated herein by reference to Exhibit 10.15 of Peninsula Gaming Company, LLC’s Form 10-Q Quarterly Report for the quarter ended September 30, 2003.

10.19		Loan and Security Agreement, dated as of June 16, 2004, by and among Diamond Jo, LLC (formerly known as Peninsula Gaming Company, LLC, The Old Evangeline Downs, L.L.C. and Wells Fargo Foothill, Inc—incorporated by reference to Exhibit 10.19 of Peninsula Gaming, LLC’s Form S-4 filed July 30, 2004.

10.20		Guarantor Security Agreement, dated as of June 16, 2004, by and among Peninsula Gaming, LLC, The Old Evangeline Downs Capital Corp. and Wells Fargo Foothill, Inc—incorporated by reference to Exhibit 10.20 of Peninsula Gaming, LLC’s Form S-4 filed July 30, 2004.
10.21		Intercompany Subordination Agreement, dated as of June 16, 2004, by and among The Old Evangeline Downs, L.L.C., Diamond Jo, LLC (formerly known as Peninsula Gaming Company, LLC, The Old Evangeline Downs Capital Corp., Peninsula Gaming, LLC and Wells Fargo Foothill, Inc—incorporated by reference to Exhibit 10.21 of Peninsula Gaming, LLC’s Form S-4 filed July 30, 2004.

10.22		Management Fees Subordination Agreement, dated as of June 16, 2004, by and among The Old Evangeline Downs, L.L.C., The Old Evangeline Downs Capital Corp., Diamond Jo, LLC (formerly known as Peninsula Gaming Company, LLC, OED Acquisition, LLC and Wells Fargo Foothill, Inc.—incorporated by reference to Exhibit 10.22 of Peninsula Gaming, LLC’s Form S-4 filed July 30, 2004.

10.23		Post Closing Letter, dated June 16, 2004, from Wells Fargo Foothill, Inc. to The Old Evangeline Downs, L.L.C. and Diamond Jo, LLC (formerly known as Peninsula Gaming Company, LLC—incorporated by reference to Exhibit 10.23 of Peninsula Gaming, LLC’s Form S-4 filed July 30, 2004.

10.24		Guaranty by The Old Evangeline Downs Capital Corp. in favor of Wells Fargo Foothill, Inc., dated June 16, 2004—incorporated by reference to Exhibit 10.25 of Peninsula Gaming, LLC’s Form S-4 filed July 30, 2004

10.25		Purchase Agreement among Diamond Jo Worth, LLC, Diamond Jo Worth Corp., Diamond Jo Worth Holdings, LLC, Diamond Jo, LLC and Jefferies & Company, Inc.—incorporated herein by reference to Exhibit 10.3 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed August 16, 2005.

10.26		Borrower Supplement No. 1 by Diamond Jo Worth, LLC, dated as of May 13, 2005—incorporated herein by reference to Exhibit 10.2 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed November 14, 2005.

10.27		Second Amendment to Loan and Security Agreement, dated as of July 12, 2005, by and among Diamond Jo, LLC, The Old Evangeline Downs, L.L.C., Diamond Jo Worth, LLC and Wells Fargo Foothill, Inc.—incorporated herein by reference to Exhibit 10.6 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed August 16, 2005.

10.28		Stock Pledge Agreement Supplement by Peninsula Gaming, LLC, dated as of May 13, 2005—incorporated herein by reference to Exhibit 10.4 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed November 14, 2005.

10.29		Acknowledgement and Agreement by Diamond Jo Worth, LLC, dated July 12, 2005—incorporated herein by reference to Exhibit 10.5 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed November 14, 2005.

10.30		Acknowledgment of Diamond Jo Worth, LLC, dated May 13, 2005—incorporated herein by reference to Exhibit 10.6 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed November 14, 2005.

10.31		First Amendment to Intercompany Subordination Agreement, dated as of May 13, 2005, by and among The Old Evangeline Downs, L.L.C., Diamond Jo Worth, LLC, Diamond Jo, LLC, Peninsula Gaming Corp., Peninsula Gaming, LLC, OED Acquisition, LLC and Wells Fargo Foothill, Inc.—incorporated herein by reference to Exhibit 10.7 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed November 14, 2005.

10.32		Act of Second Amendment of Multiple Obligations Mortgage, dated as of July 12, 2005, between The Old Evangeline Downs, L.L.C. and Wells Fargo Foothill, Inc.—incorporated herein by reference to Exhibit 10.8of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed November 14, 2005.

10.33		Second Amendment to Iowa Shore Mortgage, dated as of July 12, 2005, between Diamond Jo, LLC and Wells Fargo Foothill, Inc.—incorporated herein by reference to Exhibit 10.9 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed November 14, 2005.

10.34		Subordination Agreement, dated as of July 12, 2005, between Diamond Jo, LLC and U.S. Bank National Association, as Trustee—incorporated herein by reference to Exhibit 10.10 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed November 14, 2005.

10.35		Mortgage, Assignment of Rents, Security Agreement and Fixture Financing Statement, dated May 13, 2005, between Diamond Jo Worth, LLC and Well Fargo Foothill, Inc., as Agent —incorporated herein by reference to Exhibit 10.11 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed November 14, 2005.

10.36		Second Amendment to First Preferred Ship Mortgage, dated as of July 12, 2005, between Diamond Jo, LLC and Wells Fargo Foothill, Inc.—incorporated herein by reference to Exhibit 10.12 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed November 14, 2005.


10.37		Amended and Restated Mortgage, Assignment of Rents, Security Agreement and Fixture Financing Statement, dated July 19, 2005, between Diamond Jo Worth, LLC and Well Fargo Foothill, Inc., as Agent—incorporated herein by reference to Exhibit 10.5 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed August 16, 2005.

10.38		Assignment of Mortgage, Assignment of Rents, Security Agreement and Fixture Financing Statement by U.S. Bank National Association, dated July 19, 2005—incorporated herein by reference to Exhibit 10.9 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed November 14, 2005.

10.39		Release of Real Estate Mortgage by Wells Fargo Foothill, Inc., dated July 19, 2005—incorporated herein by reference to Exhibit 10.53 of Peninsula Gaming, LLC’s Annual Report on Form 10-K filed March 30, 2006.

10.40		Cash Collateral and Disbursement Agreement, dated as of July 19, 2005, by and among Diamond Jo Worth, LLC, Diamond Jo Worth Corp. and U.S. Bank National Association, as Trustee and Disbursement Agent—incorporated herein by reference to Exhibit 10.14 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed November 14, 2005.

10.41		Multi-Party Blocked Account Agreement, dated as of July 19, 2005, by and among Diamond Jo Worth, LLC, U.S. Bank National Association, as trustee, and U.S. Bank National Association, as securities intermediary—incorporated herein by reference to Exhibit 10.53 of Peninsula Gaming, LLC’s Annual Report on Form 10-K filed March 30, 2006.

10.42		Multi-Party Blocked Account Agreement, dated as of July 19, 2005, by and among Diamond Jo Worth, LLC, U.S. Bank National Association, as trustee, and U.S. Bank National Association, as securities intermediary—incorporated herein by reference to Exhibit 10.53 of Peninsula Gaming, LLC’s Annual Report on Form 10-K filed March 30, 2006.

10.43		Multi-Party Blocked Account Agreement, dated as of July 19, 2005, by and among Diamond Jo Worth, LLC, U.S. Bank National Association, as trustee, and American Trust and Savings Bank, as depositary—incorporated herein by reference to Exhibit 10.53 of Peninsula Gaming, LLC’s Annual Report on Form 10-K filed March 30, 2006.

10.44		Multi-Party Blocked Account Agreement, dated as of July 19, 2005, by and among Diamond Jo Worth, LLC, U.S. Bank National Association, as trustee, and American Trust and Savings Bank, as depositary—incorporated herein by reference to Exhibit 10.53 of Peninsula Gaming, LLC’s Annual Report on Form 10-K filed March 30, 2006.

10.45		Management Services Agreement, dated July 19, 2005, between Diamond Jo Worth, LLC and Peninsula Gaming Partners—incorporated herein by reference to Exhibit 10.1 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed August 16, 2005.

10.46		Eleventh Amendment to Operating Agreement, dated as of May 31, 2005, by and between Dubuque Racing Association, Ltd. And Diamond Jo, LLC—incorporated herein by reference to Exhibit 10.16 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed November 14, 2005.

10.47		Standard Form of Agreement between Owner and Architect, dated March 1, 2005, between Diamond Jo Worth, LLC and KGA Architecture—incorporated herein by reference to Exhibit 10.7 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed August 16, 2005.

10.48		General Conditions of Standard Form of Agreement between Owner and Architect, dated March 1, 2005, between Diamond Jo Worth, LLC and KGA Architecture—incorporated herein by reference to Exhibit 10.8 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed August 16, 2005.

10.49		Standard Form of Agreement between Owner and Contractor, dated as of June 6, 2005, between Diamond Jo Worth, LLC and Henkel Construction Company—incorporated herein by reference to Exhibit 10.9 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed August 16, 2005.

10.50		Offer to Purchase Real Estate, Acceptance and Lease, dated September 27, 2006, between Diamond Jo, LLC and Dubuque County Historical Society—incorporated herein by reference to Exhibit 10.1 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed November 14, 2006.

10.51		Closing Agreement, dated September 27, 2006, between Diamond Jo, LLC and Dubuque County Historical Society—incorporated herein by reference to Exhibit 10.1 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed November 14, 2006.

10.52		Real Estate Ground Lease, dated September 27, 2006, between Diamond Jo, LLC and Dubuque County Historical Society—incorporated herein by reference to Exhibit 10.1 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed November 14, 2006.

10.53		Amended and Restated Operator’s Agreement, dated November 5, 2004, by and among the Worth County Development Authority, an Iowa not-for-profit corporation, and Diamond Jo Worth, LLC- incorporated by reference to Exhibit 10.56 of Peninsula Gaming, LLC’s Annual Report on Form 10-K filed April 2, 2007.

10.54		PGP’s Amended and Restated 2004 Incentive Unit Plan- incorporated by reference to Exhibit 10.57 of Peninsula Gaming, LLC’s Annual Report on Form 10-K filed April 2, 2007.

10.55		Form of Incentive Unit Plan Agreement- incorporated by reference to Exhibit 10.58 of Peninsula Gaming, LLC’s Annual Report on Form 10-K filed April 2, 2007.

10.56		Construction Agreement, dated August 18, 2006, between Diamond Jo Worth, LLC and Henkel Construction Company- incorporated by reference to Exhibit 10.59 of Peninsula Gaming, LLC’s Annual Report on Form 10-K filed April 2, 2007.

10.57		Third Amendment to Loan and Security Agreement and Consent, dated December 6, 2006- incorporated by reference to Exhibit 4.25 of Peninsula Gaming, LLC’s Annual Report on Form 10-K filed April 2, 2007.

10.58		Fourth Amendment to Loan and Security Agreement and Consent, dated December 22, 2006- incorporated by reference to Exhibit 4.26 of Peninsula Gaming, LLC’s Annual Report on Form 10-K filed April 2, 2007.

10.59		Purchase Agreement among Peninsula Gaming LLC, Diamond Jo, LLC, Peninsula Gaming Corp., and Jefferies & Company, Inc., dated December 22, 2006- incorporated by reference to Exhibit 10.60 of Peninsula Gaming, LLC’s Annual Report on Form 10-K filed April 2, 2007.

10.60		Employment Agreement, dated September 7, 2007, by and between Peninsula Gaming, LLC and Jonathan Swain - incorporated by reference to Exhibit 10.1 of Peninsula Gaming, LLC’s Current Report on Form 8-K filed September 13, 2007.

10.61		Employment Agreement, dated September 7, 2007, by and between Peninsula Gaming, LLC and Natalie Schramm - incorporated by reference to Exhibit 10.2 of Peninsula Gaming, LLC’s Current Report on Form 8-K filed September 13, 2007.


10.62		General Conditions of the Contract for Construction, dated September 25, 2007, between Diamond Jo, LLC and Conlon Construction Company – incorporated by reference to Exhibit 10.3 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed November 13, 2007.

10.63		Standard Form of Agreement Between Owner and Contractor, dated September 25, 2007, between Diamond Jo, LLC and Conlon Construction Company– incorporated by reference to Exhibit 10.4 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed November 13, 2007.

10.64		Abbreviated Standard Form of Agreement Between Owner and Architect, dated May 21, 2007, between Diamond Jo, LLC and Youngblood Wucherer Sparer Architects, Ltd. – incorporated by reference to Exhibit 10.5 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed November 13, 2007.

10.65		Minimum Assessment Agreement, dated October 1, 2007, among Diamond Jo, LLC, the City of Dubuque, Iowa and the City Assessor of the City of Dubuque, Iowa - incorporated by reference to Exhibit 10.63 of Peninsula Gaming, LLC’s Annual Report on Form 10-K filed March 28, 2008.

10.66		Bond Purchase Contract, dated October 1, 2007, among Diamond Jo, LLC, the City of Dubuque, Iowa and Robert W. Baird & Co- incorporated by reference to Exhibit 10.64 of Peninsula Gaming, LLC’s Annual Report on Form 10-K filed March 28, 2008.

10.67		Amended and Restated Port of Dubuque Public Parking Facility Development Agreement, dated October 1, 2007, between the City of Dubuque, Iowa and Diamond Jo, LLC- incorporated by reference to Exhibit 10.65 of Peninsula Gaming, LLC’s Annual Report on Form 10-K filed March 28, 2008.

10.68		First Change Order dated April 19, 2008, between Diamond Jo, LLC and Conlon Construction Company – incorporated by reference to Exhibit 10.1 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed August 14, 2008.

10.69		Loan and Security Agreement dated May 1, 2008 by and between Diamond Jo, LLC, The Old Evangeline Downs, L.L.C. and American Trust and Savings Bank – incorporated by reference to Exhibit 4.1 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed August 14, 2008.

10.70		Second Change Order dated June 12, 2008, between Diamond Jo, LLC and Conlon Construction Company – incorporated by reference to Exhibit 10.2 of Peninsula Gaming, LLC’s Quarterly Report on Form 10-Q filed August 14, 2008.

10.71		Fifth Amendment to Loan and Security Agreement, dated June 30, 2008 by and between Diamond Jo, LLC, The Old Evangeline Downs, L.L.C. and Wells Fargo Foothill, Inc. - incorporated by reference to Exhibit 10.1 of Peninsula Gaming, LLC’s Current Report on Form 8-K filed July 7, 2008.

10.72		Sixth Amendment to Loan and Security Agreement, dated October 6, 2008 by and between Diamond Jo, LLC, The Old Evangeline Downs, L.L.C. and Wells Fargo Foothill, Inc. - incorporated by reference to Exhibit 10.1 of Peninsula Gaming, LLC’s Current Report on Form 8-K filed October 9, 2008.

12.1†		Computation of ratio of earnings to fixed charges.

21.1†		Subsidiaries of the Registrants.

31.1†		Certification of M. Brent Stevens, Chief Executive Officer.

31.2†		Certification of Natalie A. Schramm, Chief Financial Officer.

____________________

*	Unless otherwise noted, exhibits have been previously filed and are incorporated by reference.

†	Filed herewith.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, each of the registrants has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 26, 2009.

	PENINSULA GAMING, LLC

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

	PENINSULA GAMING CORP.

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

	DIAMOND JO, LLC

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

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of each of the registrants and in the capacities indicated on March 26, 2009.

	PENINSULA GAMING, LLC

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

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

	By:	/s/ Michael S. Luzich
		Michael S. Luzich
		President, Secretary and Manager

	By:	/s/ Terrance W. Oliver
		Terrance W. Oliver
		Manager

	By:	/s/ Andrew Whittaker
		Andrew Whittaker
		Manager

	PENINSULA GAMING CORP.

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

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

	By:	/s/ Michael S. Luzich
		Michael S. Luzich
		President, Secretary and Manager

	By:	/s/ Terrance W. Oliver
		Terrance W. Oliver
		Manager

	By:	/s/ Andrew Whittaker
		Andrew Whittaker
		Manager

	DIAMOND JO, LLC

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

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

	By:	/s/ Michael S. Luzich
		Michael S. Luzich
		President, Secretary and Manager

	By:	/s/ Terrance W. Oliver
		Terrance W. Oliver
		Manager

	By:	/s/ Andrew Whittaker
		Andrew Whittaker
		Manager

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE

Consolidated Financial Statements and Schedule of Peninsula Gaming, LLC:
Report of Independent Registered Public Accounting Firm		F-2
Consolidated Balance Sheets — December 31, 2008 and 2007		F-3
Consolidated Statements of Operations — Years Ended December 31, 2008, 2007 and 2006		F-4
Consolidated Statements of Changes in Member’s Deficit and Comprehensive Income (Loss) — Years Ended December 31, 2008, 2007 and 2006		F-5
Consolidated Statements of Cash Flows — Years Ended December 31, 2008, 2007 and 2006		F-6
Notes to Consolidated Financial Statements		F-7
Consolidated Financial Statement Schedule — Valuation and Qualifying Accounts — Years Ended December 31, 2008, 2007 and 2006		S-1

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Peninsula Gaming, LLC

Dubuque, Iowa

We have audited the accompanying consolidated balance sheets of Peninsula Gaming, LLC and subsidiaries (the “Company”) as of December 31, 2008 and 2007, and the related consolidated statements of operations, changes in member’s deficit and comprehensive income (loss), and cash flows for each of the three years in the period ended December 31, 2008. Our audits also included the consolidated financial statement schedule listed in the Index to Consolidated Financial Statements and Schedule. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material respects, the financial position of Peninsula Gaming, LLC and subsidiaries as of December 31, 2008 and 2007, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2008, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/ DELOITTE & TOUCHE LLP

Cedar Rapids, Iowa
March 23, 2009

F-2

PENINSULA GAMING, LLC

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2008 AND 2007

(in thousands)

	2008			2007
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$ 38,705			$ 42,100
Restricted cash — purse settlements		5,013			4,902
Accounts receivable, net		5,038			3,000
Receivables from affiliates		271			—
Inventories		1,199			911
Prepaid expenses and other assets		1,920			1,375
Total current assets		52,146			52,288
PROPERTY AND EQUIPMENT, NET		263,154			188,812
OTHER ASSETS:
Deferred financing costs, net of amortization of $14,021 and $10,325, respectively		19,174			21,785
Goodwill		53,083			53,083
Licenses and other intangibles		38,506			37,016
Deposits and other assets		3,385			6,452
Investment available for sale		7,828			12,491
Total other assets		121,976			130,827
TOTAL		$437,276			$371,927
LIABILITIES AND MEMBER’S DEFICIT
CURRENT LIABILITIES:
Accounts payable		$4,608			$3,489
Construction payable		12,324			4,884
Purse settlement payable		6,804			6,723
Accrued payroll and payroll taxes		5,104			5,618
Accrued interest		7,815			7,797
Other accrued expenses		10,387			9,800
Payable to affiliates		3,575			3,921
Current maturities of long-term debt and leases		8,492			3,147
Total current liabilities		59,109			45,379
LONG-TERM LIABILITIES:
8 3/4% senior secured notes, net of discount		253,237			252,789
11% senior secured notes, net of discount		111,258			116,358
13% senior notes, net of discount		6,877			6,853
Senior secured credit facilities		28,500			—
Term loan		6,697			—
Notes and leases payable, net of discount		1,229			1,887
Obligation under Minimum Assessment Agreement		16,394			—
Other liabilities		5,958			8,283
Total long-term liabilities		430,150			386,170
Total liabilities		489,259			431,549
COMMITMENTS AND CONTINGENCIES
MEMBER’S DEFICIT:
Common member’s interest		9,000			9,000
Accumulated deficit		(53,971	)		(66,424	)
Accumulated other comprehensive loss		(7,012	)		(2,198	)
Total member’s deficit		(51,983	)		(59,622	)
TOTAL		$ 437,276			$ 371,927

See notes to consolidated financial statements.

F-3

PENINSULA GAMING, LLC

CONSOLIDATED STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 2008, 2007 AND 2006

(in thousands)

	2008			2007			2006

REVENUES:
Casino	$	227,269		$	222,147		$	200,734
Racing		17,986			19,146			22,146
Video poker		5,901			4,533			3,715
Food and beverage		16,767			15,801			15,315
Other		11,809			11,501			10,087
Less promotional allowances		(20,579	)		(19,935	)		(17,580	)
Total net revenues		259,153			253,193			234,417
EXPENSES:
Casino		97,421			94,389			84,971
Racing		15,739			15,959			18,579
Video poker		4,349			3,751			2,949
Food and beverage		13,174			12,428			11,701
Other		7,564			7,080			6,605
Selling, general and administrative		34,657			49,770

Peninsula Gaming, LLC 10-K