Form 10-K ISLE OF CAPRI CASINOS For: Apr 24

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TABLE OF CONTENTS
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K


(Mark One)
ý		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended April 24, 2016
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 0-20538

ISLE OF CAPRI CASINOS, INC.
(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)		41-1659606 (I.R.S. Employer Identification Number)
600 Emerson Road, Suite 300, St. Louis, Missouri (Address of principal executive offices)		63141 (Zip Code)

Registrant's telephone number, including area code: (314) 813-9200

Securities Registered Pursuant to Section 12(b) of the Act:

Common Stock, $.01 Par Value Per Share		NASDAQ

(Title of Class)		(Name of each exchange on which registered)

Securities Registered Pursuant to Section 12(g) of the Act:

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 ý

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 o No ý

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 12 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 ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No o

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. o

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


Large accelerated filer o		Accelerated filer ý		Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company o

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

The aggregate market value of the voting and non-voting stock held by non-affiliates¹ of the Company is $475,736,976, based on the last reported sale price of 19.22 per share on October 23, 2015 on the NASDAQ Stock Market; multiplied by 24,752,184 shares of Common Stock outstanding and held by non-affiliates of the Company on such date.

As of June 17, 2016, the Company had a total of 41,275,288 shares of Common Stock outstanding (which excludes 790,860 shares held by us in treasury).

Part III incorporates information by reference to the Registrant's definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year.

(1): Affiliates for the purpose of this item refer to the directors, named executive officers and/or persons owning 10% or more of the Company's common stock, both of record and beneficially; however, this determination does not constitute an admission of affiliate status for any of the individual stockholders.

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ISLE OF CAPRI CASINOS, INC.

FORM 10-K

INDEX



PART I		2
ITEM 1.	BUSINESS	2
ITEM 1A.	RISK FACTORS	11
ITEM 1B.	UNRESOLVED STAFF COMMENTS	23
ITEM 2.	PROPERTIES	23
ITEM 3.	LEGAL PROCEEDINGS	26
ITEM 4.	MINE SAFETY DISCLOSURES	26
PART II		27
ITEM 5.	MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	27
ITEM 6.	SELECTED FINANCIAL DATA	28
ITEM 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	31
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	46
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	47
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	92
ITEM 9A.	CONTROLS AND PROCEDURES	92
ITEM 9B.	OTHER INFORMATION	92
PART III		92
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	92
ITEM 11.	EXECUTIVE COMPENSATION	93
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	93
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, DIRECTOR INDEPENDENCE	93
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	93
PART IV		94
ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	94
SIGNATURES		95 - 96

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DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report contains statements that we believe are, or may be considered to be, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact included in this Annual Report regarding the prospects of our industry or our prospects, plans, financial position or business strategy, may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking words such as "may," "will," "expect," "intend," "estimate," "foresee," "project," "anticipate," "believe," "plans," "forecasts," "continue" or "could" or the negatives of these terms or variations of them or similar terms. Furthermore, such forward-looking statements may be included in various filings that we make with the SEC or press releases or oral statements made by or with the approval of one of our authorized executive officers. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these expectations may not prove to be correct and are not guarantees of future performance. These forward-looking statements are subject to certain known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements. Factors that might cause actual results to differ include, but are not limited to, those discussed in the section entitled "Risk Factors" beginning on page 10 of this report. Readers are cautioned not to place undue reliance on any forward-looking statements contained herein, which reflect management's opinions only as of the date hereof. Except as required by law, we undertake no obligation to revise or publicly release the results of any revision to any forward-looking statements. You are advised, however, to consult any additional disclosures we make in our reports to the SEC. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained in this Annual Report.

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PART I

ITEM 1. BUSINESS

Overview

We are a developer, owner and operator of branded gaming facilities and related dining, lodging and entertainment facilities in regional markets in the United States. We currently own or operate 14 gaming and entertainment facilities in Colorado, Florida, Iowa, Louisiana, Mississippi, Missouri and Pennsylvania. Collectively, these properties feature over 12,000 slot machines and over 300 table games (including approximately 80 poker tables), approximately 2,200 hotel rooms and more than 40 restaurants. We also operate a harness racing track at our casino in Florida. Our portfolio of properties provides us with a diverse geographic footprint that minimizes geographically concentrated risks caused by weather, regional economic difficulties, gaming tax rates and regulations imposed by local gaming authorities.

We operate under two brands, Isle and Lady Luck. Isle-branded facilities are generally in larger markets with a regional draw and offer expanded amenities, whereas Lady Luck-branded facilities are typically in smaller markets drawing from a more local customer base. Our senior management team has significant gaming experience spanning numerous jurisdictions. We focus on three core principles, (1) exceptional guest experience, (2) targeted allocation of capital, and (3) prudent fiscal management.

1. Exceptional guest experience—We focus on customer satisfaction and delivering superior guest experiences by providing popular gaming, dining and entertainment experiences designed to exceed customer expectations in a clean, safe, friendly and fun environment. We focus on initiatives to increase length of stay including refreshing several of our casino floors, improving the rewards and benefits of our loyalty program, focusing on guest service and providing high-quality targeted non-gaming amenities at a reasonable value and price point.

These non-gaming amenities have included the development of several proprietary food, beverage and entertainment offerings, including the introduction of Lone Wolf bars and Otis and Henry's restaurants, a buffet concept called Farmer's Pick focused on locally-sourced where possible, fresh food, and live entertainment. Lone Wolf bars and Otis & Henry's restaurants are open in seven of our properties and Farmer's Pick Buffets are open in Pompano, Waterloo, Vicksburg, Boonville and Cape Girardeau.

Both our Isle-branded and Lady Luck-branded properties share a unified marketing message, which changes from time-to-time; it is currently Play More, Be Happy. Our marketing messages are designed to make our customers feel welcome and comfortable at our properties. In fiscal 2015, we completed the introduction of our enhanced customer loyalty program, Fan Club, which is aimed at attracting new customers and increasing visitation from our current customers. We believe we benefited from this program in fiscal 2016 and we are planning to roll out further enhancements during fiscal 2017. Our marketing teams continuously evaluate and modify our marketing and promotional calendars in order to stimulate guest engagement and generate repeat visitation.

We also focus on hiring friendly, capable employees who will provide great customer service. We enable our employees to own the customer experience and provide continuous training to achieve results. In order to measure our progress, we bonus our property management teams and employees based on their achievement of customer service scores that are based on customer feedback generated through regular surveys.

2. Targeted Allocation of Capital—We believe that continuous targeted reinvestment of capital into our properties and technology enhances our guest experience and fosters customer loyalty. We plan to continue to focus on refreshing all areas of our business that impact our guest experience. This includes refreshing our casino floors to provide the latest games for our customers to play, renovating

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and refreshing our hotel room product, public areas and food and beverage outlets and strengthening our technology infrastructure.

In fiscal 2016, we continued to refresh our casino floors, spending approximately $19 million on games and casino floor equipment. In fiscal 2016, we also completed the remodel of the hotel rooms in the south tower in Bettendorf and the hotel and most of the remaining non-gaming areas in Boonville. We also added new parking in Caruthersville, renovated the casino floor in Kansas City and renovated a restaurant at Pompano among other projects.

In May 2015, we began construction of a land-based gaming and entertainment facility in Bettendorf, with a current estimated cost of approximately $60 million to replace our current riverboat casino. The new facility includes all new restaurants, a single consolidated hotel check-in, new entrance and new casino. We expect to open the facility in late June 2016.

In fiscal 2017, we plan to remodel and rebrand our buffets in Black Hawk and Kansas City among other projects.

We also continuously update and enhance our information technology (including our legacy systems) to facilitate efficiencies in our operations. help our employees do their jobs better, enhance our security and improve guest experience. In fiscal 2016, we upgraded the casino management systems at Bettendorf and Lula and upgraded our hotel management systems across our enterprise, which included enhanced online booking engines among other projects. We are currently developing our social gaming platform under the Lady Luck brand that will include a full suite of play for fun games. We expect to launch the site in late summer 2016.

We also believe our long-term success will depend upon increasing the quality, reach and scope of our operating portfolio, including targeted development projects, rebranding projects, and identifying profitable growth and/or expansion and acquisition opportunities.

3. Prudent fiscal management—We believe that our business benefits from a cost-effective approach to creating valuable customer experiences and a stronger balance sheet.

We continually strive to find ways to make our business processes more efficient and focus on reducing our operating costs while maintaining or improving customer service levels. In fiscal 2014, we undertook a company-wide effort to identify a variety of cost savings measures to improve our operating performance and implemented measures that we believe reduced our costs by over $12 million annually.

We have also monetized non-core assets, including the sale and closure of certain assets in Natchez in October 2015, the sale of our casino in Davenport in February 2014, the sale of our casino and hotel in Biloxi in November 2012 and the sale of one of our two riverboat casinos in Lake Charles in February 2012. Generally, we used proceeds from these sales to reduce our debt and/or reinvest into our existing business.

Over the past five years, we reduced debt by approximately $270 million, or 23%, which includes $70 million paid off in fiscal 2016, through the disciplined application of our free cash flow, asset sales and a series of financing transactions. We plan to maintain this discipline through continued efforts to further reduce our cost structure, applying discipline in the evaluation and execution of future capital projects and actively managing our capital structure to lower our cost of capital.

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Casino Properties

The following is an overview of our casino properties as of April 24, 2016:

Property	Date Acquired or Opened

Colorado
Isle Casino Hotel—Black Hawk	December 1998	1,074	34	238	1,100
Lady Luck Casino—Black Hawk	April 2003	454	15	164	1,200
Florida
Pompano Park	July 1995/April 2007	1,446	42	—	3,800
Iowa
Bettendorf	March 2000	963	17	509	2,057
Marquette	March 2000	534	8	—	475
Waterloo	June 2007	941	26	195	1,500
Louisiana
Lake Charles	July 1995	1,157	49	493	2,539
Mississippi
Lula	March 2000	871	20	451	1,611
Vicksburg	June 2010	616	7	—	977
Missouri
Boonville	December 2001	914	20	140	1,100
Cape Girardeau	October 2012	923	26	—	1,049
Caruthersville	June 2007	557	9	—	1,151
Kansas City	June 2000	979	18	—	1,426
Pennsylvania
Nemacolin	July 2013	597	29	—	766

		12,026	320	2,190	20,751

Colorado

Isle Casino Hotel-Black Hawk

Isle Casino Hotel-Black Hawk commenced operations in December 1998, is located on an approximately 10-acre site and is one of the first gaming facilities reached by customers arriving from Denver via Highway 119, the main thoroughfare connecting Denver to Black Hawk. The property includes a land-based casino with 1,074 slot machines, 25 standard table games, a nine table poker room, a 238-room hotel and 1,100 parking spaces in an attached parking garage. Isle Casino Hotel-Black Hawk also offers customers three restaurants, including a 128-seat Farraddays restaurant, a 270-seat Calypso's buffet and a 42-seat Tradewinds Marketplace. The property also has approximately 5,000 square feet of flex space that can be used for meetings and special events.

Lady Luck Casino-Black Hawk

Lady Luck Casino-Black Hawk, which we acquired in April 2003 and rebranded in June 2009, is located across the intersection of Main Street and Mill Street from the Isle Casino Hotel-Black Hawk. The property consists of a land-based casino with 454 slot machines, 10 standard table games, five poker tables, a 164-room hotel that opened in December 2005 and 1,200 parking spaces in our parking structure connecting Isle Casino Hotel-Black Hawk and Lady Luck Casino-Black Hawk. The property also offers guests dining in a 93-seat Otis & Henry's restaurant as well as a grab-and-go fast serve food cart that is located in the main level of the facility. The property also has approximately 2,250 square

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feet of flex space that can be used for meetings and special events. Our Black Hawk sites are connected via sky bridges.

When casinos having multiple gaming licenses in the same building are combined, the Black Hawk/Central City market consists of 23 gaming facilities (seven of which have more than 500 slot machines), which in aggregate, generated gaming revenues of approximately $674 million in the twelve months ended April 2016. Our Black Hawk properties generated casino revenues for fiscal 2016 of approximately $136 million. Black Hawk is the closest gaming market to the Denver, Colorado metropolitan area, which has a population of approximately 3.1 million and is located approximately 40 miles east of Black Hawk and serves as the primary feeder market for Black Hawk.

Florida

Pompano

In 1995, we acquired Pompano Park, a harness racing track located in Pompano Beach, Florida and opened the casino in April 2007. Pompano Park is located off of Interstate 95 and the Florida Turnpike on a 223-acre owned site, near Fort Lauderdale, midway between Miami and West Palm Beach. Pompano Park is the only racetrack licensed to conduct harness racing in Florida.

Our Pompano facility includes 1,446 slot machines, a 42-table poker room, a 120-seat Farraddays restaurant, a 110-seat Bragozzos Italian restaurant, a 280-seat Farmer's Pick buffet, a newly renovated 120-seat Myron's Deli, a 12-seat express grab-and-go food outlet, a feature bar, a sports bar, an outdoor trackside food truck and bar and 3,800 parking spaces.

Approximately 2.8 million people reside within a 25-mile radius of our Pompano facility, which competes with seven other pari-mutuels and three Native American gaming facilities in the market. The Pompano facility generated approximately $179 million in casino revenues for fiscal 2016. While casino revenues are not available for all market competitors, we estimate that we operate approximately 10% of the slot machines in the market.

Iowa

Bettendorf

Our Bettendorf property was acquired in March 2000 and is located off of Interstate 74, an interstate highway serving the Quad Cities metropolitan area, which consists of Bettendorf and Davenport, Iowa and Moline and Rock Island, Illinois. The property currently consists of a dockside casino offering 963 slot machines and 17 table games. The property includes two hotel towers (the North Tower and South Tower) with 509 hotel rooms, of which the 259 rooms in the South Tower were renovated in fiscal 2016. In addition, the property contains 40,000 square feet of flexible convention/banquet space, a 142-seat Farraddays' restaurant, a 262-seat Calypso's buffet, a 26-seat Tradewinds Marketplace and 2,057 parking spaces. We have agreements with the City of Bettendorf, Iowa under which we manage and provide financial and operating support for the QC Waterfront Convention Center that is adjacent to our hotel. The QC Waterfront Convention Center opened in January 2009.

We expect to open our new land-based casino on June 24, 2016, on the current Bettendorf property between our two hotel towers. Our estimated investment in this project is approximately $60 million. The new 35,000 square foot facility will include approximately 1,000 slot machines and 20 table games, a consolidated single hotel check-in, a grand new entrance and valet drop off. The property will replace its current food offerings with a Farmer's Pick Buffet, a Keller's American Grill Restaurant and a Keller's Express. Other new amenities include the Lone Wolf Bar located directly on the gaming floor, as well as a new fitness center and VIP lounge.

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The Quad Cities metropolitan area currently has three gaming operations, including our gaming facility in Bettendorf and the Rhythm City facility in Davenport, which we sold during February 2014. The three casinos in the Quad Cities generated total gaming revenues of approximately $189 million for the twelve months ended April 2016. Our Bettendorf property generated casino revenues for fiscal 2016 of approximately $69 million. Bettendorf also competes with other gaming operations in Illinois and Iowa and a competitor will be moving the Rhythm City casino to a new land-based location in June 2016. Approximately 905,000 people reside within 60 miles of our Bettendorf property.

Marquette

Our Marquette, Iowa property, which we acquired in March 2000, is approximately 60 miles north of Dubuque, Iowa. The property consists of a dockside casino offering 534 slot machines and 8 table games, a marina and 475 parking spaces. The facility operates as a Lady Luck casino and includes a 132-seat buffet restaurant, a 22-seat Otis and Henry's Express food outlet and a 155-seat Lone Wolf restaurant and bar.

Our Marquette property is the only gaming facility in the Marquette, Iowa market and generated casino revenues of approximately $27 million in fiscal 2016. We believe most of our Marquette customers are from northeast Iowa and Wisconsin, which includes approximately 490,000 people within 60 miles of our property. We compete for those customers with other gaming facilities in Dubuque, Iowa and Native American casinos in southwestern Wisconsin.

Waterloo

Our Waterloo, Iowa property opened in June 2007 and is located adjacent to Highway 218 and US 20. The property consists of a single-level casino offering 941 slot machines, 22 table games and four poker tables. The property also offers a wide variety of non-gaming amenities, including a 96-seat Otis & Henry's restaurant, a 218-seat Farmer's Pick buffet, 65-seat Lone Wolf restaurant and bar, 5,000 square feet of meeting space, 1,500 parking spaces and a 195-room hotel, which includes 27 suites.

Our Waterloo property is the only gaming facility in the Waterloo, Iowa market and approximately 685,000 people live within 60 miles of the property. We compete with other casinos in eastern Iowa. We generated casino revenues of approximately $89 million in fiscal 2016.

Louisiana

Lake Charles

Our Lake Charles property commenced operations in July 1995 and is located on a 19-acre site along Interstate 10, the main thoroughfare connecting Houston, Texas to Lake Charles, Louisiana. In February 2012, we consolidated our gaming operations onto one gaming vessel offering 1,157 slot machines, 36 table games, including 13 poker tables, two hotels offering 493 rooms, a 96,000 square foot land-based pavilion and entertainment center, and 2,539 parking spaces, including approximately 1,160 spaces in an attached parking garage. The pavilion and entertainment center offer customers a wide variety of non-gaming amenities, including a 100-seat Otis & Henry's restaurant and a 240-seat Farmers' Pick buffet. During fiscal 2016, we remodeled and rebranded the fast casual restaurant to a Lone Wolf Express, which features American favorites and a selection of Asian items. In addition, we updated and rebranded the bar to a Lone Wolf, which features free live entertainment and can accommodate 171 guests. The pavilion also has a 14,750 square foot entertainment center comprised of a 1,142-seat special events center designed for concerts, banquets and other events, meeting facilities and administrative offices.

The Lake Charles market consists of three dockside gaming facilities, the newest of which opened in December 2014, a Native American casino and a pari-mutuel facility/racino. In addition, a Native

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American electronic bingo hall recently opened approximately 100 miles north of Houston. The market includes approximately 8,800 slot machines and approximately 280 table games. For the twelve months ended April 2016, the three gaming facilities and one racino, in the aggregate, generated gaming revenues of approximately $895 million. Revenues for the Native American property are not published. Casino revenues for our Lake Charles property for fiscal 2016 were approximately $131 million. Lake Charles is the closest gaming market to the Houston metropolitan area, which has a population of approximately 6.2 million and is located approximately 140 miles west of Lake Charles. We believe that our Lake Charles property attracts customers primarily from southeast Texas, including Houston, Beaumont, Galveston, Orange and Port Arthur and from local area residents. Approximately 500,000 and 1.7 million people reside within 50 and 100 miles, respectively, of the Lake Charles property.

Mississippi

Lula

Our Lula property, which we acquired in March 2000, is located off of Highway 49, the only road crossing the Mississippi River between Mississippi and Arkansas for more than 50 miles in either direction. The property consists of two dockside casinos containing 871 slot machines and 20 table games, two on-site hotels with a total of 451 rooms, a land-based pavilion and entertainment center, 1,611 parking spaces and a 28-space RV Park. The pavilion and entertainment center offer a wide variety of non-gaming amenities, including a 130-seat Otis & Henry's restaurant, a 240-seat Calypso's buffet and a 57-seat Otis & Henry's Express.

Our Lula property is the only gaming facility in Coahoma County, Mississippi and generated casino revenues of approximately $57 million in fiscal 2016. Lula draws a significant amount of business from the Little Rock, Arkansas metropolitan area, which has a population of approximately 725,000 and is located approximately 120 miles west of the property. Coahoma County is also located approximately 60 miles southwest of Memphis, Tennessee, which is primarily served by eight casinos in Tunica County, Mississippi. Lula also competes with Native American casinos in Oklahoma and racinos in West Memphis, Arkansas and Hot Springs, Arkansas. Approximately 65,000 and 1.0 million people reside within 25 and 60 miles, respectively, of our Lula property.

Vicksburg

Our Vicksburg property, which we acquired in June 2010, is located off Interstate 20 and Highway 61 in western Mississippi, approximately 50 miles west of Jackson, Mississippi. The property consists of a dockside casino offering 616 slot machines and seven table games. During fiscal 2013, the property was rebranded to a Lady Luck, which involved significant changes in appearance and renovation of all restaurants. The property offers a 200-seat Farmer's Pick buffet, a 48-seat Otis & Henry's, a 64-seat Lone Wolf bar and an 18-seat Otis & Henry's Express. The property has 977 parking spaces.

The Vicksburg market consists of five dockside casinos which generated total gaming revenues of approximately $233 million for the twelve months ended April 2016. Our Vicksburg property generated casino revenues of approximately $39 million in fiscal 2016. Approximately 700,000 people reside within 60 miles of the property.

Missouri

Boonville

Our Boonville property, which opened in December 2001, is located three miles off Interstate 70, approximately halfway between Kansas City and St. Louis. The property consists of a single level dockside casino offering 914 slot machines, 20 table games, a 140-room hotel, a 32,400 square foot

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pavilion and entertainment center and 1,100 parking spaces. The pavilion and entertainment center offer customers a wide variety of non-gaming amenities, including a 202-seat Farmer's Pick Buffet, a 94-seat Farraddays' restaurant, a 26-seat Tradewinds Marketplace, an 850-seat ballroom and a 200 seat event center.

Our Boonville property is the only gaming facility in central Missouri and generated casino revenues of approximately $82 million in fiscal 2016. We believe that our Boonville casino attracts customers primarily from the approximately 615,000 people who reside within 60 miles of the property which includes the Columbia and Jefferson City areas.

Cape Girardeau

Our Cape Girardeau property, which opened in October 2012, is located three and a half miles from Interstate 55 in Southeast Missouri, approximately 120 miles south of St. Louis, Missouri. The dockside casino offers 923 slot machines, 22 table games and 4 poker tables. The pavilion and entertainment center offer a wide variety of non-gaming amenities, which includes a 110-seat Lone Wolf bar and lounge, a 230-seat Farmer's Pick buffet, a 122-seat Farraddays' restaurant, a 12-seat Lone Wolf Express and a 59-seat Keller's restaurant and bar that overlooks the Mississippi river. The property also operates a 7,725 square foot event center with seating for up to 600 patrons and has 1,049 parking spaces.

Our Cape Girardeau property is the only gaming facility in the Cape Girardeau, Missouri market and generated casino revenues of approximately $64 million in fiscal 2016. Our operations primarily compete with other gaming operations in Southwest Illinois and Southeast Missouri. Approximately 640,000 people reside within 60 miles of our property, which includes Carbondale and Marion, Illinois, Paducah, Kentucky and Sikeston, Missouri.

Caruthersville

Our Caruthersville property was acquired in June 2007 and is a riverboat casino located along the Mississippi River in Southeast Missouri. The dockside casino offers 557 slot machines and nine table games. The property offers a 40,000 square foot pavilion, which includes a 147-seat Lone Wolf bar and lounge and a 232-seat Otis & Henry's restaurant. The property has 1,151 parking spaces.

Our Caruthersville facility generated casino revenues of approximately $37 million in fiscal year 2016. Approximately 610,000 people reside within 60 miles of the property. Our casino in Cape Girardeau is located approximately 85 miles north of our Caruthersville casino.

Kansas City

Our Kansas City property, which we acquired in June 2000, is the closest gaming facility to downtown Kansas City and consists of a dockside casino offering 979 slot machines and 18 table games, a 172-seat Calypso's buffet, a 162-seat Lone Wolf restaurant and bar, a 44-seat Tradewinds Marketplace and 1,426 parking spaces.

The Kansas City market consists of four dockside gaming facilities, a land-based facility which opened in February 2012 and a Native American casino. Operating statistics for the Native American casino are not published. The four dockside gaming facilities and the land-based facility generated gaming revenues of approximately $748 million for the twelve months ended April 2016. Our Kansas City property generated casino revenues of approximately $77 million during fiscal 2016. We believe that our Kansas City casino attracts customers primarily from the Kansas City metropolitan area, which has approximately 2.0 million residents.

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Pennsylvania

Nemacolin

Lady Luck Nemacolin opened July 1, 2013. The property is located on the 2,000 acre Nemacolin Woodlands Resort in Western Pennsylvania. The casino property includes 597 slot machines, 29 table games, a 133-seat Otis & Henry's restaurant, a 83-seat Lone Wolf restaurant, bar and lounge and 766 parking spots. The Nemacolin Woodlands Resort includes over 300 rooms, suites, townhouses and luxury homes for the property guests, as well as numerous activities for the outdoor enthusiast.

Our Nemacolin property is the only casino in Fayette County, Pennsylvania and generated $41 million of gaming revenues during fiscal year 2016. We believe that our casino attracts customers staying at the Nemacolin Woodlands Resort as well as from the 2.5 million people who reside within 60 miles of the property. The closest competing casino to Nemacolin is approximately 60 miles away. The Nemacolin facility competes primarily with a casino and a racino in the Pittsburgh, Pennsylvania area and a casino in Rocky Gap, Maryland.

Marketing

We continue to focus on profitable revenue growth through our strategic initiatives: optimizing customer reinvestment, innovating revenue channels and improving our customers' experience. Our targeted promotions, direct mail and fun entertainment options reflect our strong dedication to lifecycle management. We strive to deliver the right message to each of our customers at the right time and through the right channel.

Our marketing programs and initiatives are focused on the following areas:

Channel Optimization: In the highly-competitive markets in which we operate, it is critical for us to stay in-tune with our customers and offer relevant and competitive services and programs in the right channel. Our marketing strategies will continue to be refined as technology, media preferences and communication channels evolve.

Database Marketing and Analytics: We have compiled an extensive database of customer information over time. This information is being used in new ways, including predictive modeling, which allows us to maximize customer profitability and improve targeting within our programming.

Regional Marketing Management Model: The conversion to a regional management model in marketing operations in fiscal 2015 has improved our sharing of best practices and time-to-market. This approach allows us to maximize the effect of our most talented employees, yielding best practices on profitability, marketing and operations.

Fan Club®: Fan Club, our customer loyalty program, provides customers the opportunity to earn same-day benefits based on their level of play. The five-tier program provides customers with unique rewards based on individual tier. In fiscal 2015, we moved the last four properties using legacy loyalty programs to Fan Club so that each property in the enterprise now offers Fan Club benefits to its guests. As with all marketing strategies, we will continually reevaluate the benefits of Fan Club and make adjustments to improve the experience for our guests and the efficient of our marketing.

Retail Development: We continue our commitment to retail customers via enhanced food & beverage quality, engaging entertainment and fun promotions. Our current communication strategy is fully-integrated, using digital, social and traditional media to reach customers in a variety of ways. By diversifying our communication channels, we ensure that retail guests remain engaged with us regardless of their individual media consumption preferences. Our focus on new and more

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effective mass communication strategies will improve the return on investment of our buys and yield a better understanding of how our media strategy drives revenues.

Brand: Our brands are a reflection of our culture, our customers and who we are. Our service culture and commitment to providing an exceptional, casual, come as you are experience, is manifested in every aspect of our marketing and property experience.

Employees

As of April 24, 2016, we employed approximately 6,600 full and part-time people. We have a collective bargaining agreement with UNITE HERE covering approximately 470 employees at our Pompano property which was renewed in June 2015 and expires on May 31, 2018. We believe that our relationship with our employees is satisfactory.

Governmental Regulations

The gaming and racing industries are highly regulated and we must maintain our licenses and pay gaming taxes to continue our operations. Each of our facilities is subject to extensive regulation under the laws, rules and regulations of the jurisdiction where it is located. These laws, rules and regulations generally relate to the responsibility, financial stability and character of the owners, managers and persons with financial interests in the gaming operations. Violations of laws in one jurisdiction could result in disciplinary action in other jurisdictions. A more detailed description of the regulations to which we are subject is contained in Exhibit 99.1 to this Annual Report on Form 10-K.

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, food service, smoking, environmental matters, employees and employment practices, 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.

Available Information

Our web site is www.isleofcapricasinos.com. Our electronic filings with the U.S. Securities and Exchange Commission (including all annual reports on Form 10-K, quarter reports on Form 10-Q, and current reports on Form 8-K, and any amendments to these reports), including the exhibits, are available free of charge through our web site as soon as reasonably practicable after we electronically file them with or furnish them to the U.S. Securities and Exchange Commission. The information found on our website is not part of this or any other report we file with, or furnish to, the U.S. Securities and Exchange Commission.

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ITEM 1A. RISK FACTORS

An investment in our securities is subject to risks inherent to our business. We have described below what we currently believe to be the material risks and uncertainties in our business. Additional risks and uncertainties not presently known to us or that we currently consider immaterial may also impair our business operations. Before making an investment decision, you should carefully consider the risks and uncertainties described below, together with all of the other information included or incorporated by reference in this Annual Report on Form 10-K.

This Annual Report on Form 10-K is qualified in its entirety by these risk factors. We also face other risks and uncertainties beyond what is described below. If any of the following risks actually occur, our business, financial condition and results of operations could be materially and adversely affected. If this were to happen, the value of securities, including our common stock, could decline significantly. You could lose all or part of your investment.

We face significant competition from other gaming operations, including Native American gaming facilities, and from legalization or expansion of gaming by states in or near where we own properties, that could have a material adverse effect on our future operations.

The gaming industry is intensely competitive and we face a high degree of competition in the markets in which we operate. We have numerous competitors, including land-based casinos, dockside casinos, riverboat casinos, casinos located on racing tracks, pari-mutuel operations or Native American-owned lands and video lottery and poker machines not located in casinos. We also compete with other forms of legalized gaming and entertainment such as online computer gambling, bingo, pull tab games, card parlors, sports books, fantasy sports websites, "cruise-to-nowhere" operations, pari-mutuel or telephonic betting on horse racing and dog racing, state-sponsored lotteries, jai-alai, and, in the future, may compete with gaming at other venues. In addition, we compete more generally with other forms of entertainment for the discretionary spending of our customers. We also face the risk that existing competitors will expand their operations and the risk that Native American gaming will continue to grow. For example, an existing competitor of our Bettendorf, Iowa property in Davenport opened its land-based gaming facility on June 16, 2016 replacing its previous riverboat casino. Some of our competitors may have better name recognition, marketing and financial resources than we do; competitors with more financial resources may therefore be able to improve the quality of, or expand, their gaming facilities in a way that we may be unable to match.

In addition, we also face the risk of further legalization and/or expansion of gaming. Certain states have recently legalized and other states are currently considering legalizing gaming. Our existing casinos attract a significant number of their customers from Houston, Texas; South Florida; Little Rock, Arkansas; and Denver, Colorado. Our continued success depends upon drawing customers from each of these geographic markets. In the past, legislation to legalize or expand gaming has been introduced that would impact some of these markets. For example, the Arkansas attorney general recently certified a proposed ballot initiative to amend the Arkansas Constitution to permit up to four gaming establishments. If the ballot initiative is successful, it could adversely affect our Lula property. Additionally, from time to time the State of Florida has entered into or amended gaming compacts with Native American Casinos or enacted, amended or discussed possible changes in gaming laws which could have positive or negative impacts on our Pompano operations. Recently the First District court of Appeals for the State of Florida ruled that a pari-mutuel operator in Gadsden County was entitled to a slot license from the Florida division of pari-mutuel wagering based on the court's interpretation of legislation passed in 2010. The court's ruling was challenged; however, if the ruling is upheld, it may apply to other counties in Florida and could lead to further expansion of gaming that could adversely affect our Pompano operation.

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We expect similar proposals to legalize or expand gaming will be made in the future in various states, and it is uncertain whether such proposals will be successful. Further, because the economic recession has reduced the revenues of state governments from traditional tax sources, voters and state legislatures may be more sympathetic to proposals authorizing or expanding gaming in those jurisdictions.

In addition, there is no limit on the number of gaming licenses that may be granted in several of the jurisdictions in which we operate. As a result, new gaming licenses could be awarded in these jurisdictions, which could allow new gaming operators to enter our markets that could have an adverse effect on our operating results.

We are subject to extensive regulation from gaming and other regulatory authorities that could adversely affect us.

Licensing requirements. As owners and operators of gaming and pari-mutuel wagering facilities, we are subject to extensive state and local regulation. State and local authorities require us and our subsidiaries to demonstrate suitability to obtain and retain various licenses and require that we have registrations, permits and approvals to conduct gaming operations. The regulatory authorities in the jurisdictions in which we operate have very broad discretion with regard to their regulation of gaming operators, and may for a broad variety of reasons and in accordance with applicable laws, rules and regulations, limit, condition, suspend, fail to renew or revoke a license to conduct gaming operations or prevent us from owning the securities of any of our gaming subsidiaries, or prevent other persons from owning an interest in us or doing business with us. We may also be deemed responsible for the acts and conduct of our employees. Substantial fines or forfeiture of assets for violations of gaming laws or regulations may be levied against us, our subsidiaries and the persons involved, and some regulatory authorities have the ability to require us to suspend our operations. The suspension or revocation of any of our licenses or our operations or the levy on us or our subsidiaries of a substantial fine would have a material adverse effect on our business.

To date, we have demonstrated suitability to obtain and have obtained all governmental licenses, registrations, permits and approvals necessary for us to operate our existing gaming facilities. Nevertheless, we may not be able to retain these licenses, registrations, permits and approvals, or be able to obtain any new ones in order to expand our business, or on a timely basis. Like all gaming operators in the jurisdictions in which we operate, we must periodically apply to renew our gaming licenses and have the suitability of certain of our directors, officers and employees approved. We may not be able to obtain such renewals or approvals.

In addition, regulatory authorities in certain jurisdictions must approve, in advance, any restrictions on transfers of, agreements not to encumber or pledges of equity securities issued by a corporation that is registered as an intermediary company with such state, or that holds a gaming license. If these restrictions are not approved in advance, they will be invalid.

Compliance with other laws. We are also subject to a variety of other federal, state and local laws, rules, regulations and ordinances that apply to non-gaming businesses, including zoning, environmental, construction and land-use laws and regulations governing the serving of alcoholic beverages. Under various federal, state and local laws and regulations, an owner or operator of real property may be held liable for the costs of removal or remediation of certain hazardous or toxic substances or wastes located on its property, regardless of whether or not the present owner or operator knows of, or is responsible for, the presence of such substances or wastes. We have not identified any issues associated with our properties that could reasonably be expected to have a material adverse effect on us or the results of our operations. However, several of our properties are located in industrial areas or were used for industrial purposes for many years. As a consequence, it is possible that historical or neighboring activities have affected one or more of our properties and that, as a result, environmental issues could

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arise in the future, the precise nature of which we cannot now predict. The coverage and attendant compliance costs associated with these laws, regulations and ordinances may result in future additional costs.

Regulations adopted by the Financial Crimes Enforcement Network of the U.S. Treasury Department require us to report currency transactions in excess of $10,000 occurring within a gaming day, including identification of the patron by name and social security number. U.S. Treasury Department regulations also require us to report certain suspicious activity, including any transaction that exceeds $5,000 if we know, suspect or have reason to believe that the transaction involves funds from illegal activity or is designed to evade federal regulations or reporting requirements. Substantial penalties can be imposed against us if we fail to comply with these regulations. The Financial Crime Enforcement Network of the U.S. Treasury has recently increased its focus on gaming companies.

We are required to report certain customer's gambling winning via form W-2G's to comply with current Internal Revenue Service regulations. Should these regulations change, we would expect to incur additional costs to comply with the revised reporting requirements.

In May 2016, the U.S. Department of Labor released updated rules on overtime for salaried employees. Effective December 1, 2016, certain exempt salaried employees making below $47,476 annually may qualify for overtime. We expect to incur additional costs to comply with the revised rules.

Several of our riverboats must comply with U.S. Coast Guard requirements as to boat design, on-board facilities, equipment, personnel and safety and must hold U.S. Coast Guard Certificates of Documentation and Inspection. The U.S. Coast Guard requirements also set limits on the operation of the riverboats and mandate licensing of certain personnel involved with the operation of the riverboats. Loss of a riverboat's Certificate of Documentation and Inspection could preclude its use as a riverboat casino. The U.S. Coast Guard shifted inspection duties related to permanently moored casino vessels to the individual states. Louisiana, Mississippi and Missouri have elected to utilize the services of the American Bureau of Shipping to undertake the inspections. Iowa has elected to handle the inspections through the Iowa Department of Natural Resources. The states continue the same inspection criteria as the U.S. Coast Guard in regard to annual and five year inspections. Depending on the outcome of these inspections a vessel could become subject to dry-docking for inspection of its hull, which could result in a temporary loss of service.

We are required to have third parties periodically inspect and certify all of our casino barges for stability and single compartment flooding integrity. Our casino barges and other facilities must also meet local fire safety standards. We would incur additional costs if any of our gaming facilities were not in compliance with one or more of these regulations.

Potential changes in legislation and regulation of our operations. From time to time, legislators and special interest groups have proposed legislation that would expand, restrict or prevent gaming operations in the jurisdictions in which we operate. In addition, from time to time, certain anti-gaming groups have challenged constitutional amendments or legislation that would limit our ability to continue to operate in those jurisdictions in which these constitutional amendments or legislation have been adopted.

Taxation and fees. State and local authorities raise a significant amount of revenue through taxes and fees on gaming activities. We believe that the prospect of significant revenue is one of the primary reasons that jurisdictions permit legalized gaming. As a result, gaming companies are typically subject to significant taxes and fees in addition to normal federal, state, local and provincial income taxes, and such taxes and fees are subject to increase at any time. We pay substantial taxes and fees with respect to our operations. From time to time, federal, state, local and provincial legislators and officials have proposed changes in tax laws, or in the administration of such laws, affecting the gaming industry. Any

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material increase, or the adoption of additional taxes or fees, could have a material adverse effect on our future financial results.

Our operations in certain jurisdictions depend on agreements with third parties.

Our operations in several jurisdictions depend on agreements with third parties. If we are unable to renew these agreements on satisfactory terms as they expire, our business may be disrupted and, in the event of disruptions in multiple jurisdictions, could have a material adverse effect on our financial condition and results of operations. For example, Iowa law requires that each gambling venue in Iowa must have a licensed "Qualified Sponsoring Organization," or QSO, which is a tax-exempt non-profit organization. The QSO must donate the profits it receives from casino operations to educational, civic, public, charitable, patriotic or religious uses. Each of our three Iowa properties has an agreement with a local QSO. We have the right to renew our agreements for Bettendorf and Waterloo when they expire in 2025 and 2018, respectively. In October 2015, we amended our agreement for Marquette which extended the expiration to June 2044.

We have a management agreement with Nemacolin Woodlands Resort, the owner of the gaming license issued by the Pennsylvania Gaming Control Board allowing operation of a casino at the resort. Under the terms of this agreement, we constructed and currently operate a casino at the resort. Our management agreement is subject to a buy-out provision on or after December 31, 2021, as well as other terms and conditions which could result in termination of the management agreement. The base term of the agreement is ten years, with four, five-year renewal options. Additionally, each party to the management agreement has certain termination rights. If the management agreement is terminated, we will no longer have the right to manage our casino at Nemacolin Woodlands Resort.

Our business may be adversely affected by legislation prohibiting tobacco smoking.

Legislation in various forms to ban indoor tobacco smoking has been enacted or introduced in many states and local jurisdictions, including several of the jurisdictions in which we operate. If additional restrictions on smoking are enacted in our jurisdictions, we could experience a significant decrease in gaming revenue and particularly, if such restrictions are not applicable to all competitive facilities in that gaming market, our business could be materially adversely affected.

Our substantial indebtedness could adversely affect our financial health and restrict our operations.

We have a significant amount of indebtedness. As of April 24, 2016, we had approximately $923 million of total debt outstanding.

Our significant indebtedness could have important consequences to our financial condition, such as:

•: limiting our ability to use operating cash flow or obtain additional financing to fund working capital, capital expenditures, expansion and other important areas of our business because we must dedicate a significant portion of our cash flow to make principal and interest payments on our indebtedness;
•: causing an event of default if we fail to satisfy the financial and restrictive covenants contained in the indentures and agreements governing our senior secured credit facility, our 5.875% senior notes, our 8.875% senior subordinated notes and our other indebtedness, which could result in all of our debt becoming immediately due and payable, could permit our secured lenders to foreclose on the assets securing our secured debt and have other adverse consequences, any of which, if not cured or waived, could have a material adverse effect on us;

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•: if the indebtedness under our 5.875% senior notes, our 8.875% senior subordinated notes, our senior secured credit facility, or our other indebtedness were to be accelerated, we may not have sufficient assets to repay such indebtedness in full;
•: placing us at a competitive disadvantage to our competitors who are not as highly leveraged;
•: increasing our vulnerability to and limiting our ability to react to changing market conditions, changes in our industry and economic downturns or downturns in our business; and
•: our agreements governing our indebtedness, among other things, require us to maintain certain specified financial ratios and to meet certain financial tests. Our debt agreements also limit our ability to:
i.: borrow money;
ii.: make capital expenditures;
iii.: use assets as security in other transactions;
iv.: make restricted payments or restricted investments;
v.: incur contingent obligations; and
vi.: sell assets and enter into leases and transactions with affiliates.

A portion of our outstanding debt bears interest at variable rates. If short-term interest rates rise, our interest cost will increase our variable rate indebtedness, which will adversely affect our results of operations and available cash.

Any of the factors listed above could have a material adverse effect on our business, financial condition and results of operations. Our business may not continue to generate sufficient cash flow and future available draws under our senior secured credit facility may not be sufficient to enable us to meet our liquidity needs, including those needed to service our indebtedness.

Despite our significant indebtedness, we may still be able to incur significantly more debt. This could intensify the risks described above.

The terms of our senior secured credit facility, and the indentures governing our 5.875% senior notes, our 8.875% senior subordinated notes limit, but do not prohibit, us or our subsidiaries from incurring significant additional indebtedness in the future.

As of April 24, 2016, we have the capacity to incur additional indebtedness, including the ability to incur additional indebtedness under our line of credit, of approximately $224 million, after taking into account $8 million in letters of credit currently outstanding. If new debt is added to our current level of indebtedness, the related risks that we now face could intensify.

Our senior secured credit facility matures on April 19, 2018 and we may not be able to renew or extend it or enter into a new credit facility. In addition, our ability to renew or extend our senior secured credit facility or to enter into a new credit facility may be impaired if market conditions worsen. If we are able to renew or extend our senior secured credit facility, it may be on terms substantially less favorable than the senior secured credit facility.

Our senior secured credit facility matures on April 19, 2018. Our ability to renew or extend our existing senior secured credit facility or to enter into a new credit facility to replace the existing senior secured credit facility could be impaired if market conditions worsen. In the current environment, lenders may seek more restrictive lending provisions and higher interest rates that may reduce our borrowing capacity and increase our costs. Failure to obtain sufficient financing or financing on acceptable terms would constrain our ability to operate our business and to continue our development

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and expansion projects. Any of these circumstances could have a material adverse effect on our business, financial condition and results of operations.

We may not be able to successfully expand to new locations or recover our investment in capital projects or new properties which would adversely affect our operations and available resources.

We regularly evaluate opportunities for growth through development of gaming operations in existing or new markets, through acquiring or managing other gaming entertainment facilities or through redeveloping our existing facilities. The expansion of our operations, whether through acquisitions, development, management contracts or internal growth, could divert management's attention and could also cause us to incur substantial costs, including legal, professional and consulting fees. To the extent that we elect to pursue any new gaming acquisition, management or development opportunity, our ability to benefit from our investment will depend on many factors, including:

•: our ability to successfully identify attractive acquisition and development opportunities;
•: our ability to successfully operate any developed, managed or acquired properties;
•: our ability to generate returns, if any, may take significantly longer than we expect;
•: our ability to attract and retain competent management and employees for the new locations;
•: our ability to secure required federal, state and local licenses, permits and approvals, which in some jurisdictions are limited in number and subject to intense competition; and
•: the availability of adequate financing on acceptable terms.

Many of these factors are beyond our control. Additionally, from time to time there are significant disruptions in the global capital markets that may adversely impact the ability of borrowers like us to access capital. Accordingly, we could be dependent on free cash flow from operations and remaining borrowing capacity under our senior secured credit facility to implement our near-term expansion plans and fund our planned capital expenditures. Moreover, lower-than-expected results from the opening of a new property may negatively affect our operating results and financial condition and may make it more difficult to raise capital. As a result of these and other considerations, we may not be able to successfully expand to additional locations or recover our investments in any new gaming development, management opportunities or acquired facilities.

We may experience construction delays or cost overruns during our expansion or development projects that could adversely affect our operations.

From time to time, we may commence construction projects on new properties or at our current properties. For example, construction of a new $60 million land-based casino at our Bettendorf, Iowa property is nearly complete, with an expected opening date of June 24, 2016. We also evaluate other expansion opportunities as they become available and we may in the future engage in additional construction projects. The anticipated costs and construction periods for our construction projects are based upon budgets, conceptual design documents and construction schedule estimates prepared by us in consultation with our architects. Construction projects entail significant risks, which can substantially increase costs or delay completion of a project. Such risks include shortages of materials or skilled labor, unforeseen engineering, environmental or geological problems, work stoppages, weather interference and unanticipated cost increases. Most of these factors are beyond our control. In addition, difficulties or delays in obtaining any of the requisite licenses, permits or authorizations from regulatory authorities can increase the cost or delay the completion of an expansion or development. Significant budget overruns or delays with respect to expansion and development projects could adversely affect our results of operations.

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Our gaming operations rely heavily on technology services and an uninterrupted supply of electrical power. Our security systems and all of our slot machines are controlled by computers and reliant on electrical power to operate.

The absence of sufficient electrical power, open data lines, or a failure of the technology services needed to run our systems may cause us to be unable to run all or parts of gaming operations. Any unscheduled interruption in our technology services or interruption in the supply of electrical power is likely to result in an immediate, and possibly substantial, loss of revenues due to a shutdown of our gaming operations. Our systems are also vulnerable to damage or interruption from rolling blackouts, earthquakes, floods, fires, telecommunication failures, terrorist attacks, computer viruses, computer denial-of-service attacks and similar events.

Some of our casinos are located on leased property. If we default on one or more leases, the applicable lessors could terminate the affected leases and we could lose possession of the affected casino.

We lease certain parcels of land on which several of our properties are located. As a ground lessee, we have the right to use the leased land; however, we do not hold fee ownership in the underlying land. Accordingly, with respect to the leased land, we will have no interest in the land or improvements thereon at the expiration of the ground leases. Moreover, since we do not completely control the land underlying the property, a landowner could take certain actions to disrupt our rights in the land leased under the long-term leases which are beyond our control. If the entity owning any leased land chose to disrupt our use either permanently or for a significant period of time, then the value of our assets could be impaired and our business and operations could be adversely affected. If we were to default on any one or more of these leases, the applicable lessors could terminate the affected leases and we could lose possession of the affected land and any improvements on the land, including the hotels and casinos. This would have a significant adverse effect on our business, financial condition and results of operations as we would then be unable to operate all or portions of the affected facilities and may result in the default under our amended and restated credit facility.

If our key personnel leave us, our business could be adversely affected.

Our continued success will depend, among other things, on the efforts and skills of a few key executive officers and the experience of our property managers. Our ability to retain key personnel is affected by the competitiveness of our compensation packages and the other terms and conditions of employment, our continued ability to compete effectively against other gaming companies and our growth prospects. The loss of the services of any of these key individuals could have a material adverse effect on our business, financial condition and results of operations. We do not maintain "key man" life insurance for any of our employees.

We are effectively controlled by members of the Goldstein family and their decisions may differ from those that may be made by other stockholders.

Robert S. Goldstein, our Chairman of the Board, and Jeffrey D. Goldstein and Richard A. Goldstein, two of our directors, and various family trusts associated with members of the Goldstein family and entities associated with certain members of the Goldstein family, (collectively the "Goldstein Parties") directly and indirectly collectively own and control approximately 36.5% of our common stock as of April 24, 2016.

The Goldstein Parties have substantial control over the election of our board of directors and the outcome of the vote on substantially all other matters, including amendment of our amended and restated certificate of incorporation, amendment of our by-laws and significant corporate transactions, such as the approval of a merger or other transactions involving a sale of the Company. Such substantial control may have the effect of discouraging transactions involving an actual or potential

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change of control, which in turn could have a material adverse effect on the market price of our common stock or prevent our stockholders from realizing a premium over the market price for their shares of common stock. The interests of the Goldstein Parties may differ from those of our other stockholders.

Our amended and restated certificate of incorporation contains provisions that could delay and discourage takeover attempts that stockholders may consider favorable.

Certain provisions of our amended and restated certificate of incorporation may make it more difficult or prevent a third party from acquiring control of us, including:

•: we may not, until the Supermajority Expiration Time (as defined below) without the affirmative vote of the holders of at least 66²/3% of the Company's voting power, voting as a single class, authorize, adopt or approve certain extraordinary corporate transactions; and
•: the classification of our board of directors and staggered three-year terms of service for each class of directors.

"Supermajority Expiration Time" means the first to occur of (i) the Goldstein Group ceasing to hold common stock of the Company representing at least 22.5% of our outstanding common stock, not including any shares of Class B common stock or shares of common stock issued upon conversion of any preferred stock and (ii) April 8, 2021. The "Goldstein Group" means Robert S. Goldstein, our Chairman, and Jeffrey D. Goldstein and Richard A. Goldstein, two of our directors, spouses, children and grandchildren of certain members of the Goldstein family and entities associated with certain members of the Goldstein family.

These provisions may make mergers, acquisitions, tender offers, the removal of management and certain other transactions more difficult or more costly and could discourage or limit stockholder participation in such types of transactions, whether or not such transactions are favored by the stockholders. The provisions also could limit the price that investors might be willing to pay in the future for shares of our common stock. Further, the existence of these anti-takeover measures may cause potential bidders to look elsewhere, rather than initiating acquisition discussions with us. Any of these factors could reduce the price of our common stock.

We are subject to extensive governmental regulations that impose restrictions on the ownership and transfer of our securities.

No person may become the beneficial owner of five percent or more of any class or series of our capital stock unless such person agrees in writing to provide certain information to, and consent to a background investigation by, any applicable gaming authority. Our certificate of incorporation requires that, if in the judgment of our board of directors, a beneficial owner of our capital stock may result in the disapproval, modification, or non-renewal of any contract under which we have authority to manage any gaming operations or the loss or non-reinstatement of any license from any governmental agency to conduct any portion of our business, we may redeem such person's securities.

If we deem it necessary or advisable to redeem such securities, we will serve notice on the holder who holds securities subject to redemption and will call for the redemption of the securities of such holder at a redemption price equal to that required to be paid by the applicable gaming authority, or if such gaming authority does not require a certain price per share to be paid, a sum deemed reasonable by us, which in our discretion may be the original purchase price, the then current trading price of the securities or another price we determine. The redemption price may be paid in cash, by promissory note, or both, as required by the applicable gaming authority and, if not so required, as we elect. Unless the gaming authority requires otherwise, the redemption price will in no event exceed (i) the closing sale price of the securities on the national securities exchange on which such shares are then listed or (ii) if the shares are not then listed, then the mean between the representative bid and the ask price as quoted by any other generally recognized reporting system.

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From and after the date of redemption, such securities will no longer be deemed to be outstanding and all rights of the person who was determined to be unsuitable, other than the right to receive the redemption price, will cease. Such person must surrender the certificates for any securities to be redeemed in accordance with the requirements of the redemption notice.

Ownership and transfer of our securities could be subjected at any time to additional or more restrictive regulations, including regulation in applicable jurisdictions where there are no current restrictions on the ownership and transfer of our securities or in new jurisdictions where we may conduct our operations in the future. A detailed description of such regulations, including the requirements under gaming laws of the jurisdictions in which we operate, can be found in the Exhibit 99.1 to this Form 10-K and is incorporated herein by reference.

We have a history of fluctuations in our operating income (losses) from continuing operations, and we may incur additional operating losses from continuing operations in the future. Our operating results could fluctuate significantly on a periodic basis.

Although we had income from continuing operations of $48.3 million in fiscal 2016 and $7.3 million in fiscal 2015, respectively, we sustained a (loss) from continuing operations of $(116.8) million in fiscal 2014. Companies with fluctuations in income (loss) from continuing operations often find it more challenging to raise capital to finance improvements in their businesses and to undertake other activities that return value to their stockholders. In addition, companies with operating results that fluctuate significantly on a quarterly or annual basis may experience increased volatility in their stock prices in addition to difficulties in raising capital. There may be fluctuations in our income (losses) from continuing operations in the future, and should that occur, we may suffer adverse consequences to our business as a result, which could decrease the value of our common stock.

We may incur impairments to goodwill, indefinite-lived intangible assets, or long-lived assets, which could negatively affect our operating results.

As of April 24, 2016, we had $162.2 million of goodwill and other intangible assets. We perform annual impairment testing for goodwill and indefinite-lived intangible assets as of the first day of the fourth fiscal quarter of each year, or on an interim basis if indicators of impairment exist. For properties with goodwill and/or other intangible assets with indefinite lives, these tests could require the comparison of the implied fair value of each reporting unit to carrying value.

We must make various assumptions and estimates in performing our impairment testing. The implied fair value includes estimates of future cash flows that are based on reasonable and supportable assumptions which represent our best estimates of the cash flows expected to result from the use of the assets including their eventual disposition and by a market approach based upon valuation multiples for similar companies. Changes in estimates, increases in our cost of capital, reductions in transaction multiples, operating and capital expenditure assumptions or application of alternative assumptions and definitions, could produce significantly different results.

We also evaluate long-lived assets for impairment if indicators of impairment exist. In assessing the recoverability of the carrying value of such property, equipment and other long-lived assets, we make assumptions regarding future cash flows and residual values.

Future cash flow estimates are, by their nature, subjective and actual results may differ materially from our estimates. If our ongoing estimates of future cash flows are not met, we may have to record additional impairment charges in future accounting periods. Our estimates of cash flows are based on the current regulatory, social and economic climates, recent operating information and budgets, and current operating plans of the various properties where we conduct operations. These estimates could be negatively impacted by changes in federal, state or local regulations, economic downturns, internal operating decisions, or other events affecting various forms of travel and access to our properties.

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Inclement weather and other conditions could seriously disrupt our business and have a material, adverse effect on our financial condition and results of operations.

The operations of our facilities are subject to disruptions or reduced patronage as a result of severe weather conditions, natural disasters and other casualties. Because many of our gaming operations are located on or adjacent to bodies of water, these facilities are subject to risks in addition to those associated with other casinos, including loss of service due to casualty, forces of nature, mechanical failure, extended or extraordinary maintenance, flood, hurricane or other severe weather conditions and other disasters. For example, flooding along the Mississippi River resulted in five of our properties being closed for differing periods of time in fiscal 2012 and the harsh weather in the winter of fiscal 2014 affected regional gaming revenues. In addition, severe weather such as high winds and blizzards occasionally limits access to our land-based facilities in Colorado. The proceeds from any future insurance claim may not be sufficient to compensate us if one or more of our casinos experience a closure.

We have three properties that each generated more than 10% of our net revenues.

In fiscal 2016, our casinos in Pompano, Florida, Lake Charles, Louisiana and our Isle property in Black Hawk, Colorado, each generated more than 10% of our net revenues. Our ability to meet our operating and debt service requirements is dependent, in part, upon the continued success of these facilities. The operations at these facilities and any of our other facilities could be adversely affected by numerous factors, including those described in these "Risk Factors" as well as more specifically those described below:

•: risks related to local and regional economic and competitive conditions, such as a decline in the number of visitors to a facility, a downturn in the overall economy in the market, a decrease in consumer spending on gaming activities in the market or an increase in competition within and outside the state in which each property is located (for example, the effect on our Lake Charles property due to the new competitor which opened December 2014 and the effect on our Black Hawk properties due to a substantially renovated and expanded casino across the street);
•: changes in local and state governmental laws and regulations (including changes in laws and regulations affecting gaming operations and taxes) applicable to a facility;
•: impeded access to a facility due to weather, road construction or closures of primary access routes;
•: work stoppages, organizing drives and other labor problems as well as issues arising in connection with agreements with horsemen and pari-mutuel clerks; and
•: the occurrence of natural disasters or other adverse regional weather trends.

Reductions in discretionary consumer spending could have a material adverse effect on our business.

Our business has been and may continue to be adversely affected by economic fluctuations experienced in the United States, as we are highly dependent on discretionary spending by our patrons. Reductions in discretionary consumer spending or changes in consumer preferences brought about by factors such as increased unemployment, significant increases in energy prices, perceived or actual deterioration in general economic conditions, housing market instability, instability in the financial markets, perceived or actual decline in disposable consumer income and wealth, and changes in consumer confidence in the economy could reduce customer demand for the leisure activities we offer and may adversely affect our revenues and operating cash flow. We are unable to predict the frequency, length or severity of economic circumstances.

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The market price of our common stock may fluctuate significantly.

The market price of our common stock has historically been volatile and may continue to fluctuate substantially due to a number of factors, including actual or anticipated changes in our results of operations, the announcement of significant transactions or other agreements by our competitors, conditions or trends in the industry or other entertainment industries with which we compete, general economic conditions including those affecting our customers' discretionary spending, changes in the cost of gasoline, changes in the gaming markets in which we operate and changes in the trading value of our common stock. The stock market in general, as well as stocks in the gaming sector have been subject to significant volatility and extreme price fluctuations that have sometimes been unrelated or disproportionate to individual companies' operating performances. Broad market or industry factors may harm the market price of our common stock, regardless of our operating performance.

Work stoppages, organizing drives and other labor problems could negatively impact our future profits.

Some of our employees at our Pompano, Florida location are currently represented by a labor union. Labor unions are making a concerted effort to recruit more employees in the gaming industry. In addition, organized labor may benefit from new legislation or legal interpretations by the current presidential administration. We may experience additional or more successful union organizing activity in the future.

Additionally, lengthy strikes or other work stoppages at any of our casino properties or construction projects could have an adverse effect on our business and result of operations.

We are or may become involved in legal proceedings which, if adversely adjudicated or settled, could impact our financial condition.

From time to time, we are defendants in various lawsuits and gaming regulatory proceedings relating to matters incidental to our business. As with all litigation, the outcome of these matters is uncertain and, in general, litigation can be expensive and time consuming. We may not be successful in the defense or prosecution of our current or future legal proceedings, which could result in settlements or damages that could significantly impact our business, financial condition and results of operations.

Our insurance coverage may not be adequate to cover all possible losses that our properties could suffer. In addition, our insurance costs may increase and we may not be able to obtain the same insurance coverage in the future.

We may suffer damage to our property caused by a casualty loss (such as fire, natural disasters, acts of war or terrorism), that could severely disrupt our business or subject us to claims by third parties who are injured or harmed. Although we maintain insurance customary in our industry, (including property, casualty, terrorism and business interruption insurance) that insurance may not be adequate or available to cover all the risks to which our business and assets may be subject. The lack of sufficient insurance for these types of acts could expose us to heavy losses if any damages occur, directly or indirectly, that could have a significant adverse impact on our operations.

We renew our insurance policies on an annual basis. The cost of coverage may become so high that we may need to further reduce our policy limits or agree to certain exclusions from our coverage. Among other factors, it is possible that regional political tensions, homeland security concerns, other catastrophic events or any change in government legislation governing insurance coverage for acts of terrorism could materially adversely affect available insurance coverage and result in increased premiums on available coverage (which may cause us to elect to reduce our policy limits), additional exclusions from coverage or higher deductibles. Among other potential future adverse changes, in the future we may elect to not, or may not be able to, obtain any coverage for losses due to acts of terrorism.

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Our information technology and other systems are subject to cyber security risk including misappropriation of customer information or other breaches of information security.

We collect information relating to our guests and employees for various business purposes, including marketing and promotional purposes. The collection and use of personal data are governed by privacy laws and regulations enacted in the United States. We rely on information technology and other systems to maintain and transmit this personal and financial information, credit card settlements, credit card funds transmissions, mailing lists and reservations information. Our information and processes are subject to the ever-changing threat of compromised security, in the form of a risk of potential breach, system failure, computer virus, or unauthorized or fraudulent use by customers, company employees, or employees of third party vendors. The steps we take to deter and mitigate these risks may not be successful, and any resulting compromise or loss of data or systems could adversely impact, operations or regulatory compliance and could result in remedial expenses, fines, litigation, and loss of reputation, potentially impacting our financial results.

In addition, third party service providers and other business partners process and maintain proprietary business information and data related to our guests, suppliers and other business partners. Our information technology and other systems that maintain and transmit this information, or those of service providers or business partners, may also be compromised by a malicious third party penetration of our network security or that of a third party service provider or business partner, or impacted by intentional or unintentional actions or inactions by our employees or those of a third party service provider or business partner. As a result, our business information, guest, supplier, and other business partner data may be lost, disclosed, accessed or taken without their consent.

Any such loss, disclosure or misappropriation of, or access to, guests' or business partners' information or other breach of our information security can result in legal claims or legal proceedings, including regulatory investigations and actions, may have a serious impact on our reputation and may adversely affect our businesses, operating results and financial condition. Furthermore, the loss, disclosure or misappropriation of our business information may adversely affect our reputation, businesses, operating results and financial condition.

We have recently announced social gaming initiatives, which is a new line of business for us and a rapidly evolving and highly competitive market. We may not be able to compete effectively in this marketplace and our new initiatives may not be successful.

We have recently announced social gaming initiatives and expect to invest in and market social gaming and other mobile gaming platforms to our customers in casinos and beyond. Our products will compete in a rapidly evolving and highly competitive market against an increasing number of competitors, including Caesars Interactive, Churchill Downs, Penn National Gaming and Zynga. Given the open nature of the development and distribution of games for electronic devices, our business will also compete with developers and distributors who are able to create and launch games and other content for these devices using relatively limited resources and with relatively limited start-up time or expertise. We have limited experience operating in this rapidly evolving marketplace and may not be able to compete effectively.

In addition, our ability to be successful with our social gaming platform is dependent on numerous factors beyond our control that affect the social and mobile gaming industry and the online gaming industry in the United States, including the occurrence and manner of legalization of online real money gaming in the United States beyond Nevada, Delaware and New Jersey; changes in consumer demographics and public tastes and preferences; changing laws and regulations affecting social and mobile games; the reaction of regulatory bodies to social gaming initiatives by holders of gaming licenses; the availability and popularity of other forms of entertainment; any challenges to the intellectual property rights underlying our games; and outages and disruptions of our online services that may harm our business.

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Our social gaming initiatives will result in increased operating expense and increased time and attention from our management. Our social games will be complementary to our current operations and offer additional avenues of access and interaction for our customers. We do not expect our initial social gaming applications to be available for real money gaming, and we do not expect our social gaming initiatives to generate significant revenues in the near future.

The concentration and evolution of the slot machine manufacturing industry could impose additional costs on us.

There are a limited number of slot machine manufacturers servicing the gaming industry and a large majority of our revenues are derived from slot machines at our casinos. It is important, for competitive reasons, we offer the most popular and up-to-date slot machine games, with the latest technology to our customers.

In recent years, slot machine manufacturers have frequently refused to sell slot machines featuring the most popular games, instead requiring participating lease arrangements. Generally, a participating lease is substantially more expensive over the long-term than the cost to purchase a new slot machine.

For competitive reasons, we may be forced to purchase new slot machines, slot machine systems, or enter into participating lease arrangements that are more expensive than our current costs associated with the continued operation of our existing slot machines. If the newer slot machines do not result in sufficient incremental revenues to offset the increased investment and participating lease costs, it could adversely affect our profitability.

We materially rely on a variety of hardware and software products to maximize revenue and efficiency in our operations. Technology in the gaming industry is developing rapidly, and we may need to invest substantial amounts to acquire the most current gaming and hotel technology and equipment in order to remain competitive in the markets in which we operate. Ensuring the successful implementation and maintenance of any new technology acquired is an additional risk.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Isle-Black Hawk

We own approximately 10 acres of land in Black Hawk, Colorado for use in connection with our Black Hawk operations. The property leases an additional parcel of land adjoining the Isle-Black Hawk to where the Lady Luck Hotel and parking are located. This lease is for an initial term of five years ending May 2019 with options to renew for 15 additional terms of five years each with the final option period concluding May 31, 2094. Annual rent is currently $2.57 million through May 31, 2019. The rental rate thereafter shall be adjusted annually to correspond to any rise or fall in the Consumer Price Index ("CPI") at one-year intervals.

Lady Luck-Black Hawk

We own or lease approximately seven acres of land in Black Hawk, Colorado for use in connection with the Lady Luck-Black Hawk. The property leases an additional parcel of land near the Lady Luck-Black Hawk for parking as described above.

Pompano

We own approximately 223 acres at Pompano.

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Lake Charles

We own approximately 2.7 acres and lease approximately 16.2 acres of land in Calcasieu Parish, Louisiana for use in connection with our Lake Charles operations. This lease automatically renewed in March 2015 for five years and we have the option to renew it for 13 additional terms of five years each, subject to increases based on the CPI with a minimum of 10% and construction of hotel facilities on the property. We own two hotels in Lake Charles with a total of 493 rooms. Annual rent payments under the Lake Charles lease are approximately $2.2 million.

Bettendorf

We own approximately 24.6 acres of land in Bettendorf, Iowa used in connection with the operations of our Bettendorf property. We also operate under a long-term lease with the City of Bettendorf, the QC Waterfront Convention Center that is adjacent to our northernmost hotel tower. We also lease approximately eight acres of land on a month-to-month basis from an entity owned by members of the Goldstein family, including Robert S. Goldstein, our Chairman of the Board and Jeffrey D. Goldstein and Richard A. Goldstein, directors of our company, which we utilize for parking. The initial term of the lease expires 60 days after written notice is given to either party and rent under the lease is currently $60,000 annually.

Marquette

We lease the dock site in Marquette, Iowa that is used in connection with our Marquette operations. In November 2015, we amended the lease and extended the expiration date to June 2044. Through June 10, 2019, annual rent under the lease is approximately $180,000, plus $1.00 per passenger, plus 2.5% of gaming revenues (less state wagering taxes) in excess of $20.0 million but less than $40.0 million; 5% of gaming revenues (less state wagering taxes) in excess of $40.0 million but less than $60.0 million; and 7.5% of gaming revenues (less state wagering taxes) in excess of $60.0 million. Subsequent to June 10, 2019, annual rent under the lease is 1.52% of gaming revenues, less state wagering taxes. We have an easement related to an overhead pedestrian bridge and driveway that is an annual payment of approximately $6,300. We also own approximately 25 acres of land for the pavilion, satellite offices, warehouse, lots by the marina and other property.

Waterloo

We own approximately 54 acres of land in Waterloo, Iowa used in connection with the operation of our Waterloo property. We also lease 17,517 square feet of warehouse space. Subsequent to year end, the lease was renewed until June 2018. Rent under this lease is currently $5,021 per month.

Lula

We lease approximately 1,000 acres of land in Coahoma County, Mississippi and utilize approximately 50 acres in connection with the operations in Lula, Mississippi. Unless terminated by us at an earlier date, the lease expires in 2033. Rent under the lease is currently 5.5% of gross gaming revenue as reported to the Mississippi Gaming Commission, plus $100,000 annually. We also own approximately 100 acres in Coahoma County, which may be utilized for future development.

Vicksburg

We own approximately 60 acres in Vicksburg, Mississippi which are used in connection with the operations of our Vicksburg property.

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Boonville

We lease our 27 acre casino site in Boonville pursuant to a lease agreement with the City of Boonville. Under the terms of the agreement, we lease the site for a period of ninety-nine years. In lieu of rent, we are assessed additional amounts by the City of Boonville based on a 3.5% tax on gaming revenue, up to $1.0 million, which we recognize as additional gaming taxes.

Cape Girardeau

We own approximately 22 acres in Cape Girardeau, Missouri which are used in connection with the operations of our Cape Girardeau property.

Caruthersville

We own approximately 37 acres, including our riverboat casino and 1,151 parking spaces in Caruthersville, Missouri.

Kansas City

We lease approximately 28 acres of land from the Kansas City Port Authority in connection with the operation of our Kansas City property. The term of the original lease was ten years and was renewed in October 2006 and October 2011 for additional five-year terms. The lease includes six additional five-year renewal options. The minimum lease payments correspond to any rise or fall in the CPI, initially after the ten-year term of the lease or October 18, 2006 and thereafter, at each five year renewal date. Rent under the lease currently is the greater of $2.9 million (minimum rent) per year, or 3.25% of gross revenues, less complimentaries.

Nemacolin

We operate under a long-term lease with the Nemacolin Woodlands Resort for 30 acres of land and building in which we operate our casino. The lease is for an initial term of 10 years which commenced with the opening of the casino, on July 1, 2013. The lease includes options to renew for four additional terms of five years each, with the final option period concluding June 2043. Lease payments associated with this space are $150,000 annually, plus 2.0% of gross gaming revenues in excess of $30 million.

Other

We own all of the riverboats and barges utilized at our facilities. We also own or lease all of our gaming and non-gaming equipment.

We lease our principal corporate office in Creve Coeur, Missouri.

We own additional property and have various property leases and options to either lease or purchase property that are not directly related to our existing operations and that may be utilized in the future in connection with expansion projects at our existing facilities or development of new projects.

All of our operating properties, except for our Nemacolin property and a portion of the excess land at our Pompano property, and most of our other owned and leased property interests collateralize our obligations under our senior secured credit facility.

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ITEM 3. LEGAL PROCEEDINGS

In October 2012, we opened our new casino in Cape Girardeau, Missouri. A subcontractor filed a mechanics' lien against our property resulting from a dispute between the subcontractor and our general contractor for the construction project. We demanded that the general contractor cause the lien to be bonded against or satisfied; however, the general contractor refused to do so and asserted that a portion of the subcontractor's claim resulted from additional work directly requested by us. In October 2013, the subcontractor filed suit against our wholly-owned subsidiary IOC-Cape Girardeau, LLC, the general contractor and two other defendants alleging various contract and equitable claims and were seeking damages of approximately $3.8 million. In August 2014, we filed a cross claim against the general contractor alleging breach of contract and various indemnity claims. In January 2016, all parties reached a settlement fully resolving all claims related to this matter and we paid and capitalized additional construction costs of $1.4 million.

We are subject to certain federal, state and local environmental protection, health and safety laws, regulations and ordinances that apply to businesses generally, and are subject to cleanup requirements at certain of our facilities as a result thereof. We have not made, and do not anticipate making material expenditures, nor do we anticipate incurring delays with respect to environmental remediation or protection. However, in part because our present and future development sites have, in some cases, been used as manufacturing facilities or other facilities that generate materials that are required to be remediated under environmental laws and regulations, there can be no guarantee that additional pre-existing conditions will not be discovered and we will not experience material liabilities or delays.

We are subject to various contingencies and litigation matters and have a number of unresolved claims. Although the ultimate liability of these contingencies, this litigation and these claims cannot be determined at this time, we believe they will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.

ITEM 4. MINE SAFETY DISCLOSURES

None.

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PART II

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

(a)

i.: Market Information. Our common stock is traded on the NASDAQ Global Select Market under the symbol "ISLE". The following table presents the high and low closing sales prices for our common stock as reported by the NASDAQ Global Select Market for the fiscal periods indicated.

	High		Low

First Quarter (through June 16, 2016)	$	17.32	$	14.54
Fiscal Year Ending April 24, 2016
Fourth Quarter	$	15.16	$	10.92
Third Quarter		20.99		12.27
Second Quarter		19.97		16.20
First Quarter		20.65		14.01
Fiscal Year Ending April 26, 2015
Fourth Quarter	$	14.97	$	10.04
Third Quarter		10.64		6.80
Second Quarter		8.60		6.42
First Quarter		10.24		6.39

ii.: Holders of Common Stock. As of June 17, 2016, there were approximately 1,252 holders of record of our common stock.
iii.: Dividends. We have never declared or paid any dividends with respect to our common stock and the current policy of our board of directors is to retain earnings to provide for the growth of our company. In addition, our senior secured credit facility and the indentures governing our 5.875% senior notes and our 8.875% senior subordinated notes limit our ability to pay dividends. See "Item 8—Financial Statements and Supplementary Data-Isle of Capri Casinos, Inc.—Notes to Consolidated Financial Statements—Note 7." Consequently, no cash dividends are expected to be paid on our common stock in the near future. Further, there can be no assurance that our current and proposed operations would generate the funds needed to declare a cash dividend or that we would have legally available funds to pay dividends. In addition, we may fund part of our operations in the future from indebtedness, the terms of which may further prohibit or restrict the payment of cash dividends. If a holder of common stock is disqualified by the regulatory authorities from owning such shares, such holder will not be permitted to receive any dividends with respect to such stock. See "Item 1—Business-Governmental Regulations."

(b): Issuance of Unregistered Securities

None.

(c): Purchases of our Common Stock

We have purchased our common stock under stock repurchase programs. These programs allow for the repurchase of up to 6,000,000 shares. To date we have purchased 4,895,792 shares of common stock under these programs. These programs have no approved dollar amount, nor expiration dates. No purchases were made during the fiscal year ended April 24, 2016.

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COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Isle of Capri Casinos, Inc., the NASDAQ Composite Index
and the Dow Jones US Gambling Index

*: $100 invested on 4/24/11 in stock or 4/30/11 in index, including reinvestment of dividends. Indexes calculated on month-end basis.

Copyright© 2016 Dow Jones & Co. All rights reserved.

ITEM 6. SELECTED FINANCIAL DATA.

The following table presents our selected consolidated financial data for the five most recent fiscal years, which is derived from our audited consolidated financial statements and the notes to those statements. Because the data in this table does not provide all of the data contained in our consolidated financial statements, including the related notes, you should read "Management's Discussion and Analysis of Financial Condition and Results of Operations," our consolidated financial

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statements, including the related notes, contained elsewhere in this document and other data we have filed with the U.S. Securities and Exchange Commission.

	Fiscal Year Ended(1)

	April 24, 2016			April 26, 2015			April 27, 2014			April 28, 2013			April 29, 2012
	(dollars in millions, except per share data)
Statement of Operations
Revenues:
Casino	$	1,028.0		$	1,032.2		$	981.1		$	938.8		$	927.1
Rooms		29.5			30.4			31.3			30.3			31.0
Food, beverage, pari-mutuel and other		132.4			137.2			132.4			125.1			119.6
Insurance recoveries		—			—			—			—			7.4

Gross revenues		1,189.9			1,199.8			1,144.8			1,094.2			1,085.1
Less promotional allowances		(211.3	)		(222.8	)		(210.4	)		(196.2	)		(180.7	)

Net revenues		978.6			977.0			934.4			898.0			904.4
Operating expenses:
Casino		152.7			156.5			152.9			144.5			142.2
Gaming taxes		261.9			263.3			249.6			235.4			231.4
Rooms		6.8			6.6			6.8			6.4			6.8
Food, beverage, pari-mutuel and other		48.5			48.9			46.2			43.5			42.2
Marine and facilities		54.1			56.0			55.3			51.9			53.1
Marketing and administrative		220.1			223.9			224.0			215.7			215.2
Corporate and development		29.0			29.1			28.5			33.9			40.3
Valuation charges		—			9.0			151.6			34.1			30.6
Litigation accrual reversals		—			—			(9.3	)		—			—
Preopening		0.2			—			3.9			5.8			0.6
Depreciation and amortization		82.1			77.8			79.6			69.7			72.3

Total operating expenses		855.4			871.1			989.1			840.9			834.7

Operating income (loss)		123.2			105.9			(54.7	)		57.1			69.7
Interest expense		(68.0	)		(84.1	)		(81.3	)		(89.4	)		(87.9	)
Interest income		0.3			0.4			0.3			0.5			0.8
Loss on early extinguishment of debt		(3.0	)		(13.8	)		—			—			—
Derivative income		—			—			0.4			0.7			0.4

Income (loss) from continuing operations before income taxes		52.5			8.4			(135.3	)		(31.1	)		(17.0	)
Income tax (provision) benefit		(4.2	)		(1.1	)		18.5			(6.7	)		(15.1	)

Income (loss) from continuing operations		48.3			7.3			(116.8	)		(37.8	)		(32.1	)
Loss from discontinued operations, net of income taxes		(2.1	)		(2.1	)		(10.9	)		(9.8	)		(97.6	)

Net income (loss) attributable to common stockholders	$	46.2		$	5.2		$	(127.7	)	$	(47.6	)	$	(129.7	)

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	Fiscal Year Ended(1)

	April 24, 2016			April 26, 2015			April 27, 2014			April 28, 2013			April 29, 2012
	(dollars in millions, except per share data)
Statement of Operations Data (continued):
Income (loss) per common share attributable to common stockholders
Basic
Income (loss) from continuing operations	$	1.19		$	0.18		$	(2.94	)	$	(0.96	)	$	(0.83	)
Loss from discontinued operations		(0.05	)		(0.05	)		(0.27	)		(0.25	)		(2.52	)

Net Income (loss)	$	1.14		$	0.13		$	(3.21	)	$	(1.21	)	$	(3.35	)



Diluted
Income (loss) from continuing operations	$	1.17		$	0.18		$	(2.94	)	$	(0.96	)	$	(0.83	)
Loss from discontinued operations		(0.05	)		(0.05	)		(0.27	)		(0.25	)		(2.52	)

Net Income (loss)	$	1.12		$	0.13		$	(3.21	)	$	(1.21	)	$	(3.35	)



Other Data:
Net cash provided by (used in):
Operating activities	$	135.9		$	125.6		$	86.8		$	116.0		$	118.1
Investing activities		(59.2	)		(41.3	)		6.1			(123.4	)		(60.0	)
Financing activities		(81.0	)		(87.7	)		(91.5	)		(18.6	)		(38.7	)
Capital expenditures		(70.3	)		(41.7	)		(38.1	)		(153.2	)		(75.3	)
Balance Sheet Data:
Cash and cash equivalents	$	62.1		$	66.4		$	69.8		$	68.5		$	94.5
Total assets		1,205.1			1,227.8			1,290.1			1,553.6			1,575.0
Long-term debt, including current portion		922.7			992.9			1,066.3			1,156.9			1,154.4
Stockholders' equity		75.6			23.5			19.4			142.4			183.6
Operating Data(2):
Number of slot machines		12,026			12,166			12,295			11,873			11,134
Number of table games		320			320			327			293			275
Number of hotel rooms		2,190			2,195			2,229			2,229			2,229
Number of parking spaces		20,751			20,968			20,894			20,118			19,787

(1): Our fiscal year ended April 29, 2012 includes 53 weeks while other fiscal years presented include 52 weeks. The results of our previously owned Natchez, Mississippi, Davenport, Iowa and Biloxi, Mississippi casinos are presented as discontinued operations. We opened new casino operations in Nemacolin, Pennsylvania in July 2013 and Cape Girardeau, Missouri in October 2012.
(2): Operating data excludes data for properties presented as discontinued operations for all periods presented.

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

You should read the following discussion together with the financial statements, including the related notes and the other financial information, contained in this Annual Report on Form 10-K.

Executive Overview

We are a developer, owner and operator of branded gaming facilities and related dining, lodging and entertainment facilities in regional markets in the United States. We have sought and established geographic diversity to limit the risks caused by weather, regional economic difficulties, gaming tax rates and regulations of local gaming authorities. We currently operate casinos in Colorado, Florida, Iowa, Louisiana, Mississippi, Missouri and Pennsylvania.

Operating Results—Our operating results for the periods presented have been affected, both positively and negatively, by current economic conditions and several other factors discussed in detail below. Our net revenues have increased by 0.2% and 4.6% for fiscal years 2016 over 2015, and 2015 over 2014, respectively, reflecting improved economic conditions and changes in our operations. Our historical operating results may not be indicative of our future results of operations because of these factors and the changing competitive landscape in each of our markets, as well as by factors discussed elsewhere herein. This Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with and giving consideration to the following:

Items Impacting Income (Loss) from Continuing Operations—Significant items impacting our income (loss) from continuing operations during the fiscal years ended April 24, 2016, April 26, 2015 and April 27, 2014 are as follows:

Long-term Debt Transactions— During April 2015, proceeds from an additional $150 million issuance of our 5.875% Senior Notes and borrowing under our Credit Facility were used to purchase $237.8 million of our 7.75% Senior Notes pursuant to a tender offer. In May 2015, we redeemed the remaining $62 million of our 7.75% Senior Notes. As a result of these transactions, we incurred a loss on early extinguishment of debt of $3.0 million and $13.8 million in fiscal 2016 and 2015, respectively.

Colorado Referendum Costs— During fiscal 2015, the Company incurred costs of $4.1 million in support of efforts to defeat the proposed November 2014 referendum that would have expanded gaming to racetracks in certain Colorado counties.

Property Tax Settlement— During fiscal 2015, we reduced property tax expense by $1.2 million as a result of the settlement of our property tax appeal at our Waterloo, Iowa property for calendar years 2011 through 2014.

Corporate Restructurings— During fiscal 2015, we eliminated executive positions in the corporate office to maximize efficiency and streamline reporting lines, resulting in severance expense of $2.3 million.

Impairment and Other Valuation Charges— As a result of less than expected operating performance and projected future operating results, it was determined that the value of our long-lived assets were impaired. In fiscal 2015 and fiscal 2014, we recorded impairment charges of $9.0 million and $26.4 million related to our Nemacolin property's long-lived assets. The fiscal 2014 impairment charge consisted of $12.2 million recorded to write-off our Nemacolin operating licenses and $14.2 million to reduce the carrying value of our fixed assets to their estimated fair value.

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As a result of market conditions and our annual impairment tests of goodwill and indefinite lived intangible assets, we recorded goodwill impairment charges of $125.2 million in fiscal 2014. These impairment charges were a result of economic conditions, deteriorating operating performance and the impact of new and forthcoming competition in certain of our markets.

Legal Recoveries— In 2014, we received favorable rulings in two legal matters in which we had previously recorded reserves. As a result, during fiscal 2014, we reversed previously recorded accruals totaling $16.9 million, of which $9.3 million was recorded as a reduction to operating expenses and $7.6 million was recorded as a reduction to interest expense.

Disruptions— We began renovation of one of our hotel towers at our Bettendorf property in February 2015, which was completed in July 2015. This resulted in the loss of approximately 4,800 and 6,800 room nights in fiscal 2016 and fiscal 2015, respectively. In addition, we commenced and completed the renovation of our hotel in Boonville in fiscal 2016 resulting in the loss of approximately 5,500 room nights. Our property in Lake Charles was negatively impacted by the closure of I-10 between Texas and Louisiana for four days in March 2016 due to flooding.

During fiscal 2014, several of our properties' operating results were impacted by disruptions. Severe winter weather negatively impacted visitation and revenues at several of our casinos in December 2013 through March 2014. Our Black Hawk property's attendance was negatively impacted by the severe weather and flooding in Colorado during September 2013. Our Boonville property was affected by power outages and was forced to close three times for a total of approximately 40 hours, of which two periods were over the key holidays of Father's Day weekend and the 4th of July 2013.

New Casinos— We opened our new casino at the Nemacolin Woodlands Resort on July 1, 2013. We incurred preopening expenses of $4.0 million in fiscal 2014, related to the property prior to its opening.

Income Tax (Provision) Benefit— Our income tax (provision) benefit from continuing operations was impacted by changes in the deferred tax liability attributable to the amortization of indefinite-lived intangibles and expenses for state jurisdictions where taxable income is generated. Our income tax (provision) benefit from continuing operations was ($4.2) million for fiscal 2016, ($1.1) million for fiscal 2015 and $18.5 million for fiscal 2014. Included in our fiscal 2015 provision was the benefit from reversing a Florida state income tax valuation allowance of $2.3 million. Included in our fiscal 2014 benefit was $12.0 million from reversing a valuation allowance as a result of our Davenport property sale as well as the reversal of a previously unrecognized tax benefit of $7.7 million as a result of a favorable ruling in a tax court matter.

Items Impacting Current and Future Operations— During the fiscal years ended April 24, 2016, April 26, 2015, and April 27, 2014, we have commenced construction or completed transactions as follows:

Construction Disruption and Preopening

Bettendorf Land-Based Construction— In May 2015, we began construction of a land-based facility in Bettendorf, Iowa, to replace our current riverboat casino. While the actual construction has not impacted the current casino operations, we experienced periodic disruption in accessibility to the property, which had an impact on operating results in fiscal 2016 and will impact results during the week between when we close the riverboat casino and open the land-based operations on June 24, 2016. We incurred preopening expenses of $0.2 million in fiscal 2016 related to Bettendorf and will incur additional preopening expenses in fiscal 2017.

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Discontinued Operations

Closure of Natchez Casino— On October 19, 2015, we closed our casino property in Natchez, Mississippi and completed the previously announced sale of the hotel and certain related non-gaming assets to Casino Holding Investment Partners, LLC for net cash proceeds of $11.4 million. As a result, we recorded a net gain of $2.0 million in discontinued operations in fiscal 2016. The net gain consisted of a gain on the sale of the hotel and related non-gaming assets of $6.4 million, offset by a non-cash pretax charge of $4.4 million related to the write-off of the Natchez gaming vessel and certain other assets. As such, the operations of our Natchez property have been classified as discontinued for all periods presented.

Sale of Davenport Casino— On December 4, 2013, we entered into a definitive asset purchase agreement to sell substantially all of the assets and for the assumption of certain liabilities related to our casino located in Davenport, Iowa. We completed the sale on February 3, 2014 for net cash proceeds of $48.7 million. As such, the operations of our Davenport property have been classified as discontinued for all periods presented.

Results of Operations

Our results of continuing operations for the fiscal years ended April 24, 2016, April 26, 2015 and April 27, 2014 reflect the consolidated operations of all of our subsidiaries. Our Natchez and Davenport entities are presented as discontinued operations.

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ISLE OF CAPRI CASINOS, INC.

	Net Revenues Fiscal Year Ended						Operating Income (Loss) Fiscal Year Ended

(in thousands)	April 24, 2016		April 26, 2015		April 27, 2014		April 24, 2016			April 26, 2015			April 27, 2014
Colorado
Black Hawk	$	129,565	$	127,722	$	121,313	$	27,825		$	20,614		$	20,067
Florida
Pompano		176,334		175,588		164,777		30,353			31,122			25,116
Iowa
Bettendorf		71,764		72,981		73,695		7,337			13,271			12,127
Marquette		25,557		25,793		25,014		4,116			4,060			3,472
Waterloo		88,741		87,762		85,361		22,977			23,901			21,074

Iowa Total		186,062		186,536		184,070		34,430			41,232			36,673
Louisiana
Lakes Charles		121,299		128,413		129,899		5,965			8,650			8,888
Mississippi
Lula		51,012		53,042		50,488		6,732			6,630			2,714
Vicksburg		31,206		29,876		29,947		4,470			2,719			1,718

Mississippi Total		82,218		82,918		80,435		11,202			9,349			4,432
Missouri
Boonville		78,287		76,934		74,531		24,591			23,778			22,583
Cape Girardeau		61,153		59,628		54,833		3,323			215			(2,359	)
Caruthersville		34,277		31,369		29,879		6,922			4,346			2,232
Kansas City		73,001		73,070		70,385		14,151			13,664			13,022

Missouri Total		246,718		241,001		229,628		48,987			42,003			35,478
Pennsylvania
Nemacolin(1)		36,319		34,755		23,575		(4,880	)		(7,079	)		(13,640	)
Valuation charges(2)		—		—		—		—			(9,000	)		(151,591	)
Corporate and other		77		112		712		(30,735	)		(30,971	)		(20,124	)

From continuing operations	$	978,592	$	977,045	$	934,409	$	123,147		$	105,920		$	(54,701	)

Note: This table excludes our Natchez and Davenport operations which have been classified as discontinued operations.

(1): Reflects results since opening on July 1, 2013.
(2): We recorded long-lived asset impairment charges of $9.0 million during fiscal 2015 and goodwill impairment charges of $125.2 million and long-lived asset impairment charges of $26.4 million during fiscal 2014.

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Fiscal 2016 Compared to Fiscal 2015

Revenues and operating expenses for the fiscal years 2016 and 2015 are as follows:

	Fiscal Year Ended

(in thousands)	April 24, 2016			April 26, 2015			Variance			Percentage Variance
Revenues:
Casino	$	1,028,047		$	1,032,241		$	(4,194	)		–0.4	%
Rooms		29,457			30,427			(970	)		–3.2	%
Food, beverage, pari-mutuel and other		132,436			137,215			(4,779	)		–3.5	%

Gross revenues		1,189,940			1,199,883			(9,943	)		–0.8	%
Less promotional allowances		(211,348	)		(222,838	)		11,490			–5.2	%

Net revenues		978,592			977,045			1,547			0.2	%
Operating expenses:
Casino		152,713			156,547			(3,834	)		–2.4	%
Gaming taxes		261,916			263,362			(1,446	)		–0.5	%
Rooms		6,820			6,576			244			3.7	%
Food, beverage, pari-mutuel and other		48,481			48,903			(422	)		–0.9	%
Marine and facilities		54,111			55,994			(1,883	)		–3.4	%
Marketing and administrative		220,079			223,857			(3,778	)		–1.7	%
Corporate and development		29,066			29,088			(22	)		–0.1	%
Valuation charges		—			9,000			(9,000	)		N/M
Preopening		153			—			153			N/M
Depreciation and amortization		82,105			77,798			4,307			5.5	%

Total operating expenses	$	855,444		$	871,125			(15,681	)		–1.8	%

Casino—Casino revenues decreased $4.2 million, or 0.4%, in fiscal 2016 compared to fiscal 2015. Our casino revenues were impacted by a strategic reduction in promotional allowances which commenced in mid-fiscal 2016. In addition, casino revenue decreased $7.0 million, or 5.1%, at our Lake Charles property which was impacted by a full year of new competition in the market.

The majority of our casino revenues are derived from slot machines (representing approximately 90.0% of our casino revenues in each fiscal 2016 and 2015) and, to a lesser extent, table games, which is highly dependent upon the volume and spending limits of customers at our properties.

Key performance indicators related to casino revenue are slot handle and table game drop (volume indicators) and "win" or "hold" percentage. Slot handle is the gross amount wagered for the period cited. The win or hold percentage is the net amount of gaming wins and losses, with liabilities recognized for accruals related to the anticipated payout of progressive jackpots. Our slot hold percentages have been relatively consistent over the past several years. The introduction of newer slot machines and changes in the denominational mix of our slot product may result in an increase in our slot hold percentage over time. We may also adjust our slot hold percentages to remain competitive within our markets.

Table game win is the amount of drop that is retained and recorded as casino gaming revenue, with liabilities recognized for funds deposited by customers before gaming play occurs, for unredeemed gaming chips, and for accruals related to the anticipated payout of progressive jackpots. As we are focused on regional gaming markets, our table hold percentages are fairly stable as the majority of these markets do not regularly experience high-end play which can lead to volatility in win percentages. Therefore, changes in table game win percentages do not typically have a material impact to our earnings.

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Our typical property slot hold percentage is in the range of 6% to 10% of slot handle, and our typical table game win percentage is in the range of 15% to 25% of table game drop.

Casino operating expenses decreased $3.8 million, or 2.4%, for fiscal 2016 compared to fiscal 2015. Our decreased casino operating expenses are reflective of our overall decrease in casino revenues and our continued efforts to manage our overall costs.

Gaming Taxes—State and local gaming taxes decreased $1.4 million, or 0.5%, for fiscal 2016 compared to fiscal 2015 commensurate with a 0.4% decrease in casino revenues with consideration to various state gaming tax rates across our casino properties.

Rooms—Rooms revenue decreased $1.0 million, or 3.2%, in fiscal 2016 compared to fiscal 2015, primarily a result of construction disruption at our Bettendorf and Boonville properties during hotel renovations completed in fiscal 2016.

Rooms expense increased $0.2 million, or 3.7%, in fiscal 2016 compared to fiscal 2015, primarily at our Black Hawk property due to the competitive labor market.

Food, Beverage, Pari-Mutuel and Other—Food, beverage, pari-mutuel and other revenues decreased $4.8 million, or 3.5%, in fiscal 2016 compared to fiscal 2015, primarily the result of a strategic reduction in food complimentaries in fiscal 2016. Pari-mutuel revenue at our Pompano property increased $0.8 million in fiscal 2016 compared to fiscal 2015.

Food, Beverage, Pari-Mutuel and Other operating expenses decreased $0.4 million, or 0.9%, in fiscal 2016 compared to fiscal 2015, which is reflective of our overall decrease in food, beverage, pari-mutuel and other revenues.

Promotional Allowances—Promotional allowances decreased $11.5 million, or 5.2%, in fiscal 2016 compared to fiscal 2015, reflecting a strategic reduction in our promotional allowances in fiscal 2016.

Marine and Facilities—Marine and facilities expenses decreased $1.9 million, or 3.4%, for fiscal 2016 compared to fiscal 2015, primarily on a reduction in utilities and repairs and maintenance expenses driven by increased capital spending.

Marketing and Administrative—Marketing and administrative expenses decreased $3.8 million, or 1.7%, for fiscal 2016 compared to fiscal 2015. Excluding fiscal 2015 costs incurred to defeat the Colorado referendum of $4.1 million and a credit related to the property tax settlement in Waterloo of $1.2 million, marketing and administrative expenses decreased $0.9 million, or 0.4%, reflecting changes in our marketing programs as well as savings from cost reduction initiatives.

Corporate and Development—During fiscal 2016, our corporate and development expenses were $29.1 million compared to $29.1 million for fiscal 2015. Fiscal 2016 includes $0.9 million of expense related to the former CEO's exit agreement. Fiscal 2015 includes $2.3 million in severance expenses related to the corporate office restructuring. Stock compensation expense was $4.6 million in fiscal 2016 and included a $0.7 million favorable forfeiture adjustment. Stock compensation expense was $3.1 million in fiscal 2015. Excluding the aforementioned items and stock compensation expense, corporate expenses decreased $0.1 million.

Preopening expense—The preopening expense of $0.2 million in fiscal 2016 represents costs incurred in Bettendorf in preparation for our land-based casino operations expected to open on June 24, 2016.

Depreciation and Amortization—Depreciation and amortization expense for fiscal 2016 compared to fiscal 2015 increased $4.3 million, primarily due to accelerated depreciation of approximately $4.0 million on certain assets at our Bettendorf property of which will be disposed pending the opening of our new land-based casino.

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Other Income (Expense), Income Taxes and Discontinued Operations

Interest expense, interest income, loss on early extinguishment of debt, income tax provision and loss from discontinued operations, net of income taxes for the fiscal years 2016 and 2015 are as follows:

	Fiscal Year Ended

(in thousands)	April 24, 2016			April 26, 2015			Variance			Percentage Variance
Interest expense	$	(68,025	)	$	(84,131	)	$	16,106			–19.1	%
Interest income		311			369			(58	)		–15.7	%
Loss on early extinguishment of debt		(2,966	)		(13,757	)		10,791			–78.4	%
Income tax provision		(4,178	)		(1,111	)		(3,067	)		276.1	%
Loss from discontinued operations, net of income taxes		(2,085	)		(2,113	)		28			–1.3	%

Interest Expense—Interest expense decreased $16.1 million, or 19.1%, in fiscal 2016 compared to fiscal 2015. The decrease is primarily a result of a decrease in our overall debt balance and the benefit of refinancing our 7.75% Senior Notes. We capitalized interest expense of $0.6 million in fiscal 2016, primarily related to our land-based casino construction in Bettendorf, Iowa.

Fiscal 2015 Compared to Fiscal 2014

Revenues and operating expenses for the fiscal years 2015 and 2014 are as follows:

	Fiscal Year Ended

(in thousands)	April 26, 2015			April 27, 2014			Variance			Percentage Variance
Revenues:
Casino	$	1,032,241		$	981,099		$	51,142			5.2	%
Rooms		30,427			31,252			(825	)		–2.6	%
Food, beverage, pari-mutuel and other		137,215			132,411			4,804			3.6	%

Gross revenues		1,199,883			1,144,762			55,121			4.8	%
Less promotional allowances		(222,838	)		(210,353	)		(12,485	)		5.9	%

Net revenues		977,045			934,409			42,636			4.6	%
Operating expenses:
Casino		156,547			152,914			3,633			2.4	%
Gaming taxes		263,362			249,638			13,724			5.5	%
Rooms		6,576			6,853			(277	)		–4.0	%
Food, beverage, pari-mutuel and other		48,903			46,184			2,719			5.9	%
Marine and facilities		55,994			55,318			676			1.2	%
Marketing and administrative		223,857			224,011			(154	)		–0.1	%
Corporate and development		29,088			28,455			633			2.2	%
Valuation charges		9,000			151,591			(142,591	)		N/M
Litigation accrual reversals		—			(9,330	)		9,330			N/M
Preopening		—			3,898			(3,898	)		N/M
Depreciation and amortization		77,798			79,579			(1,781	)		–2.2	%

Total operating expenses	$	871,125		$	989,111			(117,986	)		–11.9	%

Casino—Casino revenues increased $51.1 million, or 5.2%, in fiscal 2015 compared to fiscal 2014. Excluding a year-over-year revenue increase of $14.8 million at our Nemacolin property which opened in July of fiscal 2014, casino revenues increased across most of our operating properties by

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$36.3 million or 3.7%. Casino revenues decreased at our Bettendorf property by $1.7 million primarily due to market conditions.

The majority of our casino revenues are derived from slot machines (representing approximately 90.0% of our casino revenues in each fiscal 2015 and 2014) and, to a lesser extent, table games, which is highly dependent upon the volume and spending limits of customers at our properties.

Our typical property slot hold percentage is in the range of 6% to 10% of slot handle, and our typical table game win percentage is in the range of 15% to 25% of table game drop.

Casino operating expenses increased $3.6 million, or 2.4% for fiscal 2015 compared to fiscal 2014. Our increased casino operating expenses are reflective of our overall increase in casino revenues.

Gaming Taxes—State and local gaming taxes increased $13.7 million, or 5.5%, for fiscal 2015 compared to fiscal 2014 commensurate with a 5.2% increase in casino revenues with consideration to various state gaming tax rates across our casino properties.

Rooms—Rooms revenue decreased $0.8 million, or 2.6%, in fiscal 2015 compared to fiscal 2014, primarily a result of construction disruption at our Bettendorf property during hotel renovations begun in fiscal 2015.

Rooms expense decreased $0.3 million, or 4.0%, in fiscal 2015 compared to fiscal 2014, commensurate with the decrease in hotel revenues.

Food, Beverage, Pari-Mutuel and Other—Food, beverage, pari-mutuel and other revenues increased $4.8 million, or 3.6%, in fiscal 2015 compared to fiscal 2014. Excluding increased year-over-year food, beverage and other revenues of $1.0 million at our Nemacolin property, our food, beverage, pari-mutuel and other revenues increased $3.8 million, or 2.9%.

Food, Beverage, Pari-Mutuel and Other operating expenses increased $2.7 million, or 5.9%, in fiscal 2015 compared to fiscal 2014. Excluding increased year-over-year, food, beverage and other expenses of $0.2 million at our Nemacolin property, our food, beverage, pari-mutuel and other expenses increased $2.5 million, or 5.5%.

Promotional Allowances—Promotional allowances increased $12.5 million, or 5.9%, in fiscal 2015 compared to fiscal 2014. Excluding increased year-over-year promotional allowances of $4.6 million at our Nemacolin property, promotional allowances increased $7.9 million, or 3.8%.

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Marine and Facilities—Marine and facilities expenses increased $0.7 million, or 1.2%, for fiscal 2015 compared to fiscal 2014. Excluding increased year-over-year marine and facilities expenses of $0.1 million at our Nemacolin property, marine and facilities expenses increased $0.6 million.

Marketing and Administrative—Marketing and administrative expenses decreased $0.2 million, or 0.1%, for fiscal 2015 compared to fiscal 2014. Excluding increased year-over-year marketing and administrative expenses of $1.8 million at our Nemacolin property, the $4.1 million of costs incurred to defeat the Colorado referendum and the $1.2 million credit related to the property tax settlement in Waterloo, marketing and administrative expenses decreased $4.9 million, or 2.2%, reflecting changes in our marketing programs as well as savings from cost reduction initiatives.

Corporate and Development—During fiscal 2015, our corporate and development expenses were $29.1 million compared to $28.5 million for fiscal 2014. Fiscal 2015 includes $2.3 million in severance expenses. Fiscal 2014 includes a gain of $1.0 million from the sale of our corporate aircraft.

Depreciation and Amortization—Depreciation and amortization expense for fiscal 2015 compared to fiscal 2014 decreased $1.8 million, primarily related certain assets becoming fully depreciated.

Other Income (Expense), Income Taxes and Discontinued Operations

Interest expense, interest income, loss on early extinguishment of debt, derivative income, income tax benefit (provision) and loss from discontinued operations, net of income taxes for the fiscal years 2015 and 2014 are as follows:

	Fiscal Year Ended

(in thousands)	April 26, 2015			April 27, 2014			Variance			Percentage Variance
Interest expense	$	(84,131	)	$	(81,342	)	$	(2,789	)		3.4	%
Interest income		369			349			20			5.7	%
Loss on early extinguishment of debt		(13,757	)		—			(13,757	)		NM
Derivative income		—			398			(398	)		–100.0	%
Income tax (provision) benefit		(1,111	)		18,494			(19,605	)		NM
Loss from discontinued operations, net of income taxes		(2,113	)		(10,883	)		8,770			N/M

Interest Expense—Interest expense increased $2.8 million, or 3.4%, in fiscal 2015 compared to fiscal 2014. Without the reversal of $7.6 million of interest expense related to litigation included in fiscal 2014, interest expense would have decreased by $4.8 million primarily due to lower average outstanding borrowings under our credit facility.

Loss on early extinguishment of debt—In April 2015, we purchased $237.8 million of our 7.75% Senior Notes pursuant to a tender offer and recorded a $13.8 million loss on early extinguishment of debt primarily reflecting the tender fees and the non-cash write-off of related deferred financings costs.

Liquidity and Capital Resources

Cash Flows from Operating Activities—During fiscal 2016, we generated $135.9 million in cash flows from operating activities compared to generating $125.6 million during fiscal 2015. The year-over-year increase in cash flows from operating activities is the result of improved business volumes and working capital changes.

Cash Flows used in Investing Activities—During fiscal 2016 we used $59.2 million for investing activities including capital expenditures of $70.3 million, of which $19.4 million related to construction of our land-based casino in Bettendorf, offset by proceeds received from sales of assets held for sale of

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$11.4 million. In fiscal 2015, we used $41.3 million for investing activities primarily to fund purchases of property and equipment.

Cash Flows used in Financing Activities—During fiscal 2016, our financing activities utilized $81.0 million primarily to redeem the remaining 7.75% Senior Notes and pay related costs. Significant transactions during fiscal 2016 are summarized as follows:

•: On May 14, 2015, we redeemed the remaining $62.2 million of our 7.75% Senior Notes at a price of 103.875%, including accrued and unpaid interest.
•: Net borrowings under our Senior Secured Credit Facility ("Credit Facility") decreased by $7.5 million.
•: On May 4, 2015, we paid $9.4 million related to our obligation for certain bonds issued by the City of Bettendorf, Iowa.
•: We received $0.9 million in proceeds from the exercise of stock options.

During fiscal 2015, our financing activities utilized $87.7 million primarily to reduce our long-term debt balance by $73.4 million. We also incurred $13.0 million in costs to redeem and issue new long-term debt. Significant debt transactions during fiscal 2015 are summarized as follows:

•: On April 14, 2015, we issued $150 million of additional 5.875% Senior Notes due 2021, at a price of 102.0%, of which the proceeds and borrowings under our Credit Facility were utilized to purchase $237.8 million of our 7.75% Senior Notes pursuant to a tender offer.
•: Net borrowings under our Credit Facility increased by $10.3 million.

Our Credit Facility consists of a $300 million revolving line of credit and expires on April 19, 2018. Our 5.875% Senior Notes are redeemable, in whole or in part, at our option as of March 15, 2016. Our 8.875% Senior Subordinated Notes are redeemable, in whole or in part, at our option as of June 15, 2016. We are highly leveraged and may be unable to obtain additional debt or equity financing on acceptable terms if our current sources of liquidity are not sufficient or if we fail to stay in compliance with the covenants of our Credit Facility.

Availability of Cash and Additional Capital—At April 24, 2016, we had cash and cash equivalents of $62.1 million and marketable securities of $19.3 million. As of April 24, 2016, we had $67.5 million in outstanding revolving credit borrowings under our senior secured credit facility and our net line of credit availability was approximately $224 million, after consideration of $8.0 million in outstanding letters of credit.

Capital Expenditures and Development Activities—We will be opening our new land-based casino at our property in Bettendorf on June 24, 2016, which commenced construction in May 2015. We spent $19.4 million in fiscal 2016 and estimate the total construction cost to be approximately $60 million. To date, we have spent $21.6 million on this project. During December 2015, we completed renovation of the hotel at our Boonville, Missouri property. We spent $5.0 million in fiscal 2016 to refurbish 140 hotel rooms, meeting and convention space and public areas. In July 2015, we completed a $7.6 million renovation of the south tower hotel in Bettendorf, of which $4.6 million was spent in fiscal 2016. We plan to continue to fund capital projects with cash generated by our operations and borrowings under our Credit Facility.

Historically, as part of our business development activities, we have entered into agreements which have resulted in the acquisition or development of businesses or assets. These business development efforts and related agreements typically require the expenditure of cash, which may be significant. The amount and timing of our cash expenditures relating to development activities may vary based upon our evaluation of current and future development opportunities, our financial condition and the

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condition of the financing markets. Our development activities are subject to a variety of factors including but not limited to: obtaining permits, licenses and approvals from appropriate regulatory and other agencies, legislative changes and, in certain circumstances, negotiating acceptable leases.

Historically, we have made significant investments in property and equipment and expect that our operations will continue to demand ongoing investments to keep our properties competitive. The timing, completion and amount of additional capital projects will be subject to improvement of economic and local market conditions, cash flows from our continuing operations and borrowing availability under our Credit Facility.

Typically, we have funded our daily operations through net cash provided by operating activities and our significant capital expenditures through operating cash flow and debt financing. While we believe that cash on hand, cash flow from operations, and available borrowings under our Credit Facility will be sufficient to support our working capital needs, planned capital expenditures and debt service requirements for the foreseeable future, there is no assurance that these sources will in fact provide adequate funding for our planned and necessary expenditures or that the level of our capital investments will be sufficient to allow us to remain competitive in our existing markets. We will continue to evaluate our planned capital expenditures at each of our existing locations in light of the operating performance of the facilities at such locations.

Critical Accounting Estimates

Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles that require our management to make estimates and assumptions that affect reported amounts and related disclosures. Management identifies critical accounting estimates as:

•: those that require the use of assumptions about matters that are inherently and highly uncertain at the time the estimates are made;
•: those estimates where, had we chosen different estimates or assumptions, the resulting differences would have had a material impact on our financial condition, changes in financial condition or results of operations; and
•: those estimates that, if they were to change from period to period, likely would result in a material impact on our financial condition, changes in financial condition or results of operations.

Based upon management's discussion of the development and selection of these critical accounting estimates with the Audit Committee of our Board of Directors, we believe the following accounting estimates involve a higher degree of judgment and complexity.

Goodwill and Other Intangible Assets—At April 24, 2016, we had goodwill and other intangible assets of $162.2 million, representing 13.4% of total assets. In accordance with ASC Topic 350, Intangibles—Goodwill and Other, we perform an annual impairment test for goodwill and indefinite-lived intangible assets as of the first day of the fourth fiscal quarter of each year, or on an interim basis if indicators of impairment exist. We first assess the qualitative factors to determine whether the existence of events or circumstances leads to a determination that is more likely than not that the fair value of a reporting unit is less than its carrying amount. The qualitative factors include macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, among others. If, after assessing the totality of events or circumstances, we determine it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, then performing the two-step impairment test is not required. However, if we conclude otherwise, we are then required to perform the first step of the two-step quantitative impairment test. Impairment is determined by comparing the estimated fair value of a reporting unit with its respective carrying value.

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We must make various assumptions and estimates in performing our impairment testing. The fair value determination includes estimates of future cash flows that are based on reasonable and supportable assumptions which represent our best estimates of the cash flows expected to result from the use of the assets including their eventual disposition and by a market approach based upon valuation multiples for similar companies. Changes in estimates, increases in our cost of capital, reductions in transaction multiples, operating and capital expenditure assumptions or application of alternative assumptions and definitions, could produce significantly different results. Future cash flow estimates are, by their nature, subjective and actual results may differ materially from our estimates. If our ongoing estimates of future cash flows are not met, we may have to record additional impairment charges in future accounting periods. Our estimates of cash flows are based on the current regulatory, social and economic climates, recent operating information and budgets, assumptions regarding the impact of new competitors, and current operating plans of the various properties where we conduct operations. These estimates could be negatively impacted by changes in federal, state or local regulations, economic downturns, internal operating decisions, or other events affecting various forms of travel and access to our properties.

Based upon our fiscal 2016 and fiscal 2015 annual impairment testing, we recorded no goodwill impairment charges as a result of improved operating cash flows and lower discount rates. We noted that our reporting units with goodwill and/or other long-lived intangibles had fair values which exceeded their carrying values by at least 10%, except for our Vicksburg property, which the fair value of the goodwill exceeded carrying value by approximately 9%. In conjunction with our fiscal 2014 annual impairment testing, we recorded goodwill impairment charges of $125.2 million. These charges consisted of $60.0 million at our Bettendorf property, $24.2 million at our Lake Charles property, $36.0 million at our Lula property and $5.0 million at our Vicksburg property. Our fiscal 2014 impairment charges were a result of deteriorating operating performance and the impact of new and forthcoming competition. Three of our reporting units with fiscal 2014 impairment charges still have goodwill totaling $39.5 million. These reporting units could be subject to future impairment charges to the extent their future casino revenues deteriorate, discount rates or transaction multiples change significantly or we do not achieve our cash flow projections.

Property and Equipment—At April 24, 2016, we had property and equipment, net of accumulated depreciation of $899.2 million, representing 74.5% of our total assets. We capitalize the cost of property and equipment. Maintenance and repairs that neither materially add to the value of the property or equipment nor appreciably prolong its life are charged to expense as incurred. We depreciate property and equipment on a straight-line basis over their estimated useful lives. The estimated useful lives are based on the nature of the assets as well as our current operating strategy. Future events such as property expansions, new competition, changes in technology and new regulations could result in a change in the manner in which we are using certain assets requiring a change in the estimated useful lives of such assets.

Impairment of Long-lived Assets—We evaluate long-lived assets for impairment in accordance with the guidance in the Impairment or Disposal of Long Lived Assets subsection of ASC Topic 360, Property, Plant and Equipment ("ASC Topic 360"). For a long-lived asset to be held and used, we review the asset for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. In assessing the recoverability of the carrying value of such property, equipment and other long-lived assets, we make assumptions regarding future cash flows and residual values. If these estimates or the related assumptions are not achieved or change in the future, we may be required to record an impairment loss for these assets. In evaluating impairment of long-lived assets for newly opened operations, estimates of future cash flows and residual values may require some period of actual results to provide the basis for an opinion of future cash flows and residual values used in the determination of an impairment loss for these assets. For assets held for disposal, we recognize the asset at the lower of carrying value or fair market value, less cost of disposal based upon

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appraisals, discounted cash flows or other methods as appropriate. An impairment loss would be recognized as a non-cash component of operating income.

As a result of operating performance and projected future operating results, it was determined that the value of our long-lived assets at our Nemacolin property were impaired. During fiscal 2015, we recorded an impairment charge related to our Nemacolin property's long-lived assets of $9.0 million to reduce the carrying value of our fixed assets to their estimated fair value. During fiscal 2014, we recorded an impairment charge related to our Nemacolin property of $26.4 million, consisting of $12.2 million recorded to write-off our gaming licenses and $14.2 million to reduce the carrying value of our fixed assets to their estimated fair value. A change in the way we operate our Nemacolin property could result in future impairment charges.

Fan Club Liability—At April 24, 2016 and April 26, 2015, our accrual was $4.2 million and $4.8 million, respectively, for the estimated cost of providing benefits under our Fan Club. This liability is included in progressive jackpots and slot club awards in our consolidated balance sheets. We accrue a liability for the estimated cost of providing Fan Club benefits as our customer earns Fan Club points. Estimates and assumptions are made regarding the cost of redeeming Fan Club points for benefits, breakage rates and the mix of goods or services our customers may choose. A guest's point balance under Fan Club will be forfeited if the customer does not earn any points during a period defined by each of our properties, typically up to thirteen months. We use historical redemption data to assist in the determination of our estimated accrual for this liability. Changes in our estimates or changes in customer visitation and redemption patterns could impact the overall accrual and our financial results.

Self-Insurance Liabilities—We are self-funded up to a maximum amount per claim for our employee-related health care benefits program, workers' compensation and general liabilities. Claims in excess of this maximum are fully insured through a stop-loss insurance policy. We accrue a discounted estimate for workers' compensation and general liabilities based on claims filed and estimates of claims incurred but not reported. We rely on independent consultants to assist in the determination of estimated accruals. While the ultimate cost of claims incurred depends on future developments, such as increases in health care costs, in our opinion, recorded reserves are adequate to cover future claims payments. Based upon our current accrued insurance liabilities, a 1% change in our discount factor would cause a $0.6 million change in our accrued self-insurance liability.

Income Tax Assets and Liabilities—We account for income taxes in accordance with the guidance in ASC Topic 740, Income Taxes ("ASC Topic 740"). We are subject to income taxes in the United States and in several states in which we operate. We recognize a current tax asset or liability for the estimated taxes refundable or payable based upon application of the enacted tax rates to taxable income in the current year. Additionally, we are required to recognize a deferred tax liability or asset for the estimated future tax effects attributable to temporary differences. Temporary differences occur when differences arise between: (a) the amount of taxable income and pretax financial income for a year and (b) the tax basis of assets or liabilities and their reported amounts in financial statements. Deferred tax assets recognized must be reduced by a valuation allowance for any tax benefits that, in our judgment and based upon available evidence, may not be realizable. At April 24, 2016, we have reduced our deferred tax assets by a valuation allowance of $57.2 million. Continued cumulative book income may result in a reversal of our remaining federal and certain state valuation allowances.

We assess our tax positions using a two-step process. A tax position is recognized if it meets a "more likely than not" threshold, and is measured at the largest amount of benefit that has a greater than 50% likelihood of being realized. Uncertain tax positions must be reviewed at each balance sheet date. Liabilities recorded as a result of this analysis must generally be recorded separately from any current or deferred income tax accounts, and are classified as current or long-term in the balance sheet accounts accrued liabilities-other or other long-term liabilities, respectively, based on the time until

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expected payment. We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense.

Stock Based Compensation—We apply the guidance of ASC Topic 718, Compensation—Stock Compensation ("ASC Topic 718") in accounting for stock compensation. Generally, we are required to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The estimate of the fair value of the stock options was calculated using the Black-Scholes-Merton option-pricing model. This model requires the use of various assumptions, including the historical volatility of our stock price, the risk free interest rate, estimated expected life of the grants, the estimated dividend yield and estimated rate of forfeitures.

During fiscal 2013, we granted restricted stock units ("RSUs") that contained market performance conditions which determined the amount of shares to vest, if any. The fair value of these RSUs was determined utilizing a lattice pricing model which considers a range of assumptions including volatility and risk-free interest rates. Subsequent RSU awards do not contain market performance conditions.

Stock based compensation expense is included in the expense category corresponding to the employees' regular compensation in the accompanying consolidated statements of operations.

Contingencies—We are involved in various legal proceedings and have identified certain loss contingencies. We record liabilities related to these contingencies when it is determined that a loss is probable and reasonably estimable in accordance with the guidance of ASC Topic 450, Contingencies ("ASC Topic 450"). These assessments are based on our knowledge and experience as well as the advice of legal counsel regarding current and past events. Any such estimates are also subject to future events, court rulings, negotiations between the parties and other uncertainties. If an actual loss differs from our estimate, or the actual outcome of any of the legal proceedings differs from expectations, future operating results could be impacted.

Contractual Obligations and Commercial Commitments

The following table provides information as of the end of fiscal 2016, about our contractual obligations and commercial commitments. The table presents contractual obligations by due dates and related contractual commitments by expiration dates (in millions).

	Payments Due by Period

Contractual Obligations	Total		Less Than 1 Year		1 - 3 Years		4 - 5 Years		After 5 Years
Long-Term Debt	$	920.2	$	0.1	$	67.7	$	850.2	$	2.2
Estimated interest payments on
long-term debt(1)		280.1		62.5		123.3		93.3		1.0
Operating Leases		165.6		10.3		19.1		13.6		122.6
Construction Contractual Obligations(2)		36.4		36.4		—		—		—
Long-Term Obligations and Other(3)		46.3		17.0		21.2		7.9		0.2
Total Contractual Cash Obligations	$	1,448.6	$	126.3	$	231.3	$	965.0	$	126.0

(1): Estimated interest payment on long-term debt are based on principal amounts outstanding at our fiscal year end and forecasted LIBOR rates for our senior secured credit facility.
(2): Construction contractual obligations represent the estimated remaining capital expenditures on the construction of our new land-based operations at our casino in Bettendorf, Iowa.
(3): Long-term obligations and other include future purchase commitments.

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Recently Issued Accounting Standards

In March 2016, the Financial Accounting Standards Board ("FASB") issued Update No. 2016-09, "Compensation—Stock Compensation," which simplifies the accounting for share-based compensation, including the income tax consequences. This Update amends treatment of excess tax benefits and deficiencies as a component of income tax expense rather than equity, the presentation of excess tax benefits as an operating activity on the statement of cash flows and allows an entity to make an accounting policy election to account for forfeitures. The amendments are effective for reporting periods beginning after December 15, 2016, with early adoption permitted. We are evaluating the impact of adopting this accounting standard update on our consolidated financial statements and disclosures.

In February 2016, the FASB issued Update No. 2016-02, "Leases." Under this guidance, lessees will be required to recognize operating and finance leases with lease terms greater than 12 months as liabilities and corresponding right-of-use assets on the balance sheet. The amendments in this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, on a modified retrospective basis and early adoption is permitted. We are evaluating the impact of adopting this accounting standard update on our consolidated financial statements and disclosures.

In November 2015, the FASB issued Update No. 2015-17, "Balance Sheet Classification of Deferred Taxes." This update requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The standard is effective for annual periods beginning after December 31, 2016 and for interim periods within those annual periods with early adoption permitted for any interim or annual financial statements not yet issued. The amendment may be applied either prospectively or retrospectively. The Company has elected to early adopt this update to simplify the presentation of deferred taxes on the consolidated financial statements and disclosures for the annual period ending April 24, 2016. The Company is applying this amendment on a prospective basis and prior periods were not retrospectively adjusted.

In August 2015, the FASB issued Update No. 2015-15, "Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements," which further clarifies the presentation and subsequent measurement of debt issuance costs related to line-of-credit arrangements. This update allows for debt issuance costs related to line-of-credit arrangements to be presented as an asset and subsequent amortization of the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit. The standard is effective for financial statements issued for fiscal years beginning after December 31, 2015, for interim periods within those fiscal years and early adoption is permitted. Management plans to adopt this standard beginning in the first quarter of fiscal 2017.

In April 2015, the FASB issued Update No. 2015-03, "Interest-Imputation of Interest." This update requires debt issuance costs to be presented as a direct deduction from the carrying amount of the related debt liability. The standard is effective for annual periods beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. The standard requires application of the new guidance on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. Adoption of this update will reduce total assets and total liabilities in our consolidated balance sheet and will not have any impact on our statement of operations or retained earnings. Management plans to adopt this standard beginning in the first quarter of fiscal 2017.

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effective date for the standard was for annual and interim periods beginning after December 15, 2016. In April 2105, FASB proposed a deferral of the effective date for one year. Early adoption is not permitted. The standard permits companies to either apply the adoption to all periods presented, or apply the requirements in the year of adoption through a cumulative adjustment. We are currently evaluating the impact of adopting this accounting standard update on our consolidated financial statements and disclosures.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of loss arising from adverse changes in market rates and prices, including interest rates, foreign currency exchange rates, commodity prices and equity prices. Our primary exposure to market risk is interest rate risk associated with our senior secured credit facility.

The following table provides information at April 24, 2016 about our financial instruments that are sensitive to changes in interest rates. The table presents principal cash flows and related weighted average interest rates by expected maturity dates.

Interest Rate Sensitivity
Principal (Notional) Amount by Expected Maturity

Fiscal year (dollars in millions)	2017			2018			2019			2020			2021			Thereafter			Total		Fair Value 4/24/2016

Liabilities
Long-term debt, including current portion
Fixed rate	$	0.1		$	0.1		$	0.1		$	0.1		$	850.1		$	2.2		$	852.7	$	889.8
Average interest rate		7.11	%		7.11	%		7.11	%		7.11	%		6.23	%		7.38	%
Variable rate	$	—		$	67.5		$	—		$	—		$	—		$	—		$	67.5	$	66.2
Average interest rate(1)		2.78	%		2.95	%		—			—			—			—

(1): Represents the annual average LIBOR from the forward yield curve at April 24, 2016 plus the weighted average margin above LIBOR on all consolidated variable rate debt.

As of April 24, 2016, our Credit Facility consisted of a revolving line of credit with variable rate interest based on LIBOR. Based on current debt levels, a one percent change in our interest rate increases annual interest expense by $0.7 million.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The following consolidated financial statements are included in this report:


Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting			48
Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements			49
Consolidated Balance Sheets—April 24, 2016 and April 26, 2015			50
Fiscal Years Ended April 24, 2016, April 26, 2015 and April 27, 2014
Consolidated Statements of Operations			51
Consolidated Statements of Comprehensive Income (Loss)			52
Consolidated Statements of Stockholders' Equity			53
Consolidated Statements of Cash Flows			54
Notes to Consolidated Financial Statements			55
Schedule II—Valuation and Qualifying Accounts—Fiscal Years Ended April 24, 2016, April 26, 2015 and April 27, 2014			91

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Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
Isle of Capri Casinos, Inc.

We have audited Isle of Capri Casinos, Inc.'s internal control over financial reporting as of April 24, 2016, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). Isle of Capri Casinos, Inc.'s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the company's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the 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 effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's 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 financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the 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.

In our opinion, Isle of Capri Casinos, Inc. maintained, in all material respects, effective internal control over financial reporting as of April 24, 2016, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Isle of Capri Casinos, Inc. as of April 24, 2016 and April 26, 2015, and the related consolidated statements of operations, comprehensive income (loss), stockholders' equity, and cash flows for the fiscal years ended April 24, 2016, April 26, 2015 and April 27, 2014, and our report dated June 21, 2016, expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

St. Louis, Missouri
June 21, 2016

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Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
Isle of Capri Casinos, Inc.

We have audited the accompanying consolidated balance sheets of Isle of Capri Casinos, Inc. (the Company) as of April 24, 2016 and April 26, 2015, and the related consolidated statements of operations, comprehensive income (loss), stockholders' equity, and cash flows for the fiscal years ended April 24, 2016, April 26, 2015 and April 27, 2014. Our audits also included the financial statement schedule listed in the Index at Item 15(a). These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the 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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes 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, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Isle of Capri Casinos, Inc. at April 24, 2016 and April 26, 2015, and the consolidated results of its operations and its cash flows for the years ended April 24, 2016, April 26, 2015 and April 27, 2014, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Isle of Capri Casinos, Inc.'s internal control over financial reporting as of April 24, 2016, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission "(2013 framework)" and our report dated June 21, 2016 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

St. Louis, Missouri
June 21, 2016

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ISLE OF CAPRI CASINOS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

	April 24, 2016			April 26, 2015

ASSETS
Current assets:
Cash and cash equivalents	$	62,126		$	66,437
Marketable securities		19,338			19,517
Accounts receivable, net of allowance for doubtful accounts of $1,389 and $1,595, respectively		13,252			11,171
Inventory		6,305			6,509
Deferred income taxes		—			4,626
Prepaid expenses and other assets		11,874			11,274
Assets held for sale		—			138

Total current assets		112,895			119,672
Property and equipment, net		899,167			902,226
Other assets:
Goodwill		108,970			108,970
Other intangible assets, net		53,236			54,073
Deferred financing costs, net		14,702			19,075
Restricted cash and investments		9,819			9,193
Prepaid deposits and other		5,216			4,743
Deferred income taxes		1,144			—
Long-term assets held for sale		—			9,810

Total assets	$	1,205,149		$	1,227,762



LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt	$	80		$	170
Accounts payable		29,723			19,690
Accrued liabilities:
Payroll and related		36,915			43,371
Property and other taxes		19,428			20,456
Income tax payable		123			125
Interest		14,678			15,350
Progressive jackpots and slot club awards		15,564			16,123
Other		21,036			18,326

Total current liabilities		137,547			133,611
Long-term debt, less current maturities		922,613			992,712
Deferred income taxes		37,902			37,334
Other accrued liabilities		17,557			18,432
Other long-term liabilities		13,912			22,211
Stockholders' equity:
Preferred stock, $.01 par value; 2,000,000 shares authorized; none issued		—			—
Common stock, $.01 par value; 60,000,000 shares authorized; shares issued:
42,066,148 at April 24, 2016 and April 26, 2015		421			421
Class B common stock, $.01 par value; 3,000,000 shares authorized; none issued		—			—
Additional paid-in capital		244,472			241,899
Retained earnings (deficit)		(152,868	)		(199,072	)

		92,025			43,248
Treasury stock, 1,300,955 shares at April 24, 2016 and 1,568,875 shares at April 26, 2015		(16,407	)		(19,786	)

Total stockholders' equity		75,618			23,462

Total liabilities and stockholders' equity	$	1,205,149		$	1,227,762

See accompanying notes to consolidated financial statements.

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ISLE OF CAPRI CASINOS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share amounts)

	Fiscal Year Ended

	April 24, 2016			April 26, 2015			April 27, 2014
Revenues:
Casino	$	1,028,047		$	1,032,241		$	981,099
Rooms		29,457			30,427			31,252
Food, beverage, pari-mutuel and other		132,436			137,215			132,411

Gross revenues		1,189,940			1,199,883			1,144,762
Less promotional allowances		(211,348	)		(222,838	)		(210,353	)

Net revenues		978,592			977,045			934,409
Operating expenses:
Casino		152,713			156,547			152,914
Gaming taxes		261,916			263,362			249,638
Rooms		6,820			6,576			6,853
Food, beverage, pari-mutuel and other		48,481			48,903			46,184
Marine and facilities		54,111			55,994			55,318
Marketing and administrative		220,079			223,857			224,011
Corporate and development		29,067			29,088			28,455
Valuation charges		—			9,000			151,591
Litigation accrual reversals		—			—			(9,330	)
Preopening expense		153			—			3,898
Depreciation and amortization		82,105			77,798			79,579

Total operating expenses		855,445			871,125			989,111

Operating income (loss)		123,147			105,920			(54,702	)
Interest expense		(68,025	)		(84,131	)		(81,342	)
Interest income		311			369			349
Loss on early extinguishment of debt		(2,966	)		(13,757	)		—
Derivative income		—			—			398

Income (loss) from continuing operations before income taxes		52,467			8,401			(135,297	)
Income tax (provision) benefit		(4,178	)		(1,111	)		18,494

Income (loss) from continuing operations		48,289			7,290			(116,803	)
Loss from discontinued operations, including loss on sale, net of income tax provision of $0, $0 and $(1,226) for the fiscal years ended 2016, 2015 and 2014, respectively		(2,085	)		(2,113	)		(10,883	)

Net income (loss) attributable to common stockholders	$	46,204		$	5,177		$	(127,686	)



Earnings (loss) per common share attributable to common stockholders—basic:
Income (loss) from continuing operations	$	1.19		$	0.18		$	(2.94	)
Loss from discontinued operations including gain on sale, net of income taxes		(0.05	)		(0.05	)		(0.27	)

Net income (loss) attributable to common stockholders	$	1.14		$	0.13		$	(3.21	)



Earnings (loss) per common share attributable to common stockholders—diluted
Income (loss) from continuing operations	$	1.17		$	0.18		$	(2.94	)
Loss from discontinued operations including gain on sale, net of income taxes		(0.05	)		(0.05	)		(0.27	)

Net income (loss) attributable common stockholders	$	1.12		$	0.13		$	(3.21	)



Weighted average basic shares		40,690,929			39,955,735			39,731,766
Weighted average diluted shares		41,323,473			40,320,267			39,731,766

See accompanying notes to consolidated financial statements.

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ISLE OF CAPRI CASINOS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

	Fiscal Year Ended

	April 24, 2016		April 26, 2015		April 27, 2014
Net income (loss)	$	46,204	$	5,177	$	(127,686	)
Other comprehensive income, net of tax:
Deferred hedge adjustment, net of income tax provision of $149 for 2014		—		—		247

Other comprehensive income		—		—		247

Comprehensive income (loss)	$	46,204	$	5,177	$	(127,439	)

See accompanying notes to the consolidated financial statements.

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ISLE OF CAPRI CASINOS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands, except share amounts)

		Common Stock		Additional Paid-in Capital			Retained Earnings (Deficit)			Accum. Other Comprehensive Income (Loss)			Treasury Stock			Total Stockholders' Equity

Balance, April 28, 2013	42,066,148		421		246,214			(74,227	)		(247	)		(29,751	)		142,410
Net loss	—		—		—			(127,686	)		—			—			(127,686	)
Other comprehensive income, net of tax	—		—		—			—			247			—			247
Issuance of restricted stock, net of forfeitures	—		—		(2,808	)		—			—			2,808			—
Stock compensation expense	—		—		4,413			—			—			—			4,413

Balance, April 27, 2014	42,066,148		421		247,819			(201,913	)		—			(26,943	)		19,384
Net income	—		—		—			5,177			—			—			5,177
Other comprehensive income, net of tax	—		—		—			—			—			—			—
Exercise of stock options	—		—		(47	)		—			—			121			74
Issuance of restricted stock, net of forfeitures	—		—		(2,392	)		—			—			2,392			—
Issuance of stock under compensation plans	—		—		(6,894	)		(2,336	)		—			4,644			(4,586	)
Stock compensation expense	—		—		3,413			—			—			—			3,413

Balance, April 26, 2015	42,066,148		421		241,899			(199,072	)		—			(19,786	)		23,462
Net income	—		—		—			46,204			—			—			46,204
Other comprehensive income, net of tax	—		—		—			—			—			—			—
Exercise of stock options	—		—		(821	)		—			—			1,690			869
Issuance of restricted stock, net of forfeitures	—		—		(1,689	)		—			—			1,689			—
Stock compensation expense	—		—		5,083			—			—			—			5,083

Balance, April 24, 2016	42,066,148	$	421	$	244,472		$	(152,868	)	$	—		$	(16,407	)	$	75,618

See accompanying notes to consolidated financial statements.

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ISLE OF CAPRI CASINOS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Fiscal Year Ended

	April 24, 2016			April 26, 2015			April 27, 2014
Operating activities:
Net income (loss)	$	46,204		$	5,177		$	(127,686	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		82,451			78,875			82,245
Amortization and write-off of deferred financing costs		4,237			4,700			4,464
Amortization of debt (premium) discount, net		(446	)		344			242
Loss on early extinguishment of debt		2,966			13,757			—
Litigation accrual reversals		—			—			(16,953	)
Valuation charges		4,424			9,000			162,100
Deferred income taxes		4,050			943			(9,913	)
Stock compensation expense		5,083			3,413			4,413
Gain on sale of discontinued operations		(6,424	)		—			—
Gain on derivative instruments		—			—			(398	)
Loss (gain) on disposal of assets		143			102			(535	)
Changes in operating assets and liabilities:
Marketable securites		179			7,772			(1,769	)
Accounts receivable		(1,539	)		1,444			(1,537	)
Income taxes payable/receivable		(2	)		198			4,716
Prepaid expenses and other assets		(529	)		1,041			4,120
Accounts payable and accrued liabilities		(4,885	)		(1,198	)		(16,760	)

Net cash provided by operating activities		135,912			125,568			86,749

Investing activities:
Purchase of property and equipment		(70,262	)		(41,686	)		(38,149	)
Proceeds from asset sales		11,496			73			49,881
Payments towards gaming license		—			—			(7,500	)
Restricted cash and investments		(425	)		340			1,879

Net cash (used in) provided by investing activities		(59,191	)		(41,273	)		6,111

Financing activities:
Proceeds from long-term debt borrowings		—			153,000			—
Net (repayments) borrowings on line of credit		(7,500	)		10,300			(90,200	)
Principal repayments on long-term debt		(62,399	)		(238,061	)		(626	)
Premiums payments on retirement of long-term debt		(2,409	)		(10,465	)		—
Payment of deferred financing costs		(209	)		(2,536	)		(673	)
Payment of other long-term obligation		(9,384	)		—			—
Proceeds from exercise of stock options		869			74			—

Net cash used in financing activities		(81,032	)		(87,688	)		(91,499	)

Net decrease (increase) in cash and cash equivalents		(4,311	)		(3,393	)		1,361
Cash and cash equivalents at beginning of year		66,437			69,830			68,469

Cash and cash equivalents at end of year	$	62,126		$	66,437		$	69,830

See accompanying notes to consolidated financial statements.

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ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(amounts in thousands, except share and per share amounts)

1. Organization

Organization—Isle of Capri Casinos, Inc., a Delaware corporation, was incorporated in February 1990. Except where otherwise noted, the words "we," "us," "our" and similar terms, as well as "Company," refer to Isle of Capri Casinos, Inc. and all of its subsidiaries. We are a developer, owner and operator of branded gaming facilities and related lodging and entertainment facilities in markets throughout the United States. Our wholly owned subsidiaries own or operate fourteen casino gaming facilities in the United States located in Black Hawk, Colorado; Pompano Beach, Florida; Bettendorf, Marquette and Waterloo, Iowa; Lake Charles, Louisiana; Lula and Vicksburg, Mississippi; Boonville, Cape Girardeau, Caruthersville and Kansas City, Missouri; and Nemacolin, Pennsylvania.

2. Summary of Significant Accounting Policies

Basis of Presentation—The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated. We view each property as an operating segment and all operating segments have been aggregated into one reporting segment.

Discontinued operations include our Natchez, Mississippi property sold in October 2015 and our Davenport, Iowa property sold in February 2014.

Fiscal Year-End—Our fiscal year ends on the last Sunday in April. Periodically, this system necessitates a 53-week year. Fiscal years 2016, 2015 and 2014 were 52-week years, which commenced on April 27, 2015, April 28, 2014 and April 29, 2013, respectively.

Reclassifications—Certain reclassifications of prior year presentations have been made to conform to the fiscal 2016 presentation.

Use of Estimates—The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Cash and Cash Equivalents—We consider all highly liquid investments purchased with an original maturity of three months or less as cash equivalents. Cash also includes the minimum operating cash balances required by state regulatory bodies, which totaled $23,071 and $25,099 at April 24, 2016 and April 26, 2015, respectively.

Marketable Securities—Marketable securities consist primarily of trading securities held by our captive insurance subsidiary. The trading securities are primarily debt and equity securities that are purchased with the intention to resell in the near term. The trading securities are carried at fair value with changes in fair value recognized in current period income in the accompanying statements of operations.

Inventories—Inventories are stated at the lower of weighted average cost or market value.

Property and Equipment—Property and equipment are stated at cost or if purchased through a business acquisition, the value determined under purchase accounting. We capitalize the cost of purchased property and equipment and capitalize the cost of improvements to property and equipment

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ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

2. Summary of Significant Accounting Policies (Continued)

that increases the value or extends the useful lives of the assets. Costs of normal repairs and maintenance are charged to expense as incurred.

Depreciation is computed using the straight-line method over the following estimated useful lives of the assets:

		Years

Slot machines, software and computers		3 - 5
Furniture, fixtures and equipment		5 - 10
Leasehold improvements		Lesser of life of lease or estimated useful life
Buildings and improvements		7 - 39.5

Certain property currently leased in Bettendorf, Iowa and at our Nemacolin, Pennsylvania casino is accounted for in accordance with Accounting Standards Codification ("ASC") Topic 840, Leases ("ASC 840").

We periodically evaluate the carrying value of long-lived assets to be held and used in accordance with ASC Topic 360, Property, Plant and Equipment ("ASC 360") which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amounts. In assessing the recoverability of the carrying value of such property, equipment and other long-lived assets, we make assumptions regarding future cash flows and residual values. In estimating expected future cash flows, assets are grouped at the lowest level of identifiable cash flows, which is usually the individual property. If the assets are determined to be impaired, a loss is recognized based on the amount by which the carrying amount exceeds the estimated fair market value of the long-lived assets.

Capitalized Interest—The interest cost associated with major development and construction projects is capitalized and included in the cost of the project. When no debt is incurred specifically for a project, interest is capitalized on amounts expended on the project using the weighted-average cost of our borrowings. Capitalization of interest ceases when the project is substantially complete or development activity is suspended. Capitalized interest was $600, $23 and $185 for fiscal years 2016, 2015 and 2014, respectively.

Restricted Cash and Investments—We classify cash and investments which are either statutorily or contractually restricted as to withdrawal or usage as restricted cash short-term, included in prepaid expenses and other assets, or restricted cash and investments long-term based on the duration of the underlying restriction. Restricted cash primarily includes amounts related to state tax bonds and other gaming-related bonds, and amounts held in escrow related to leases. Restricted investments relate to trading securities pledged as collateral by our captive insurance company.

Goodwill and Other Intangible Assets—Goodwill represents the excess of cost over the net identifiable tangible and intangible assets of acquired businesses and is stated at cost, net of impairments, if any. Other intangible assets include values attributable to acquired gaming licenses, customer lists, and trademarks. ASC Topic 350, Intangibles—Goodwill and Other ("ASC 350") requires

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ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

2. Summary of Significant Accounting Policies (Continued)

these assets be reviewed for impairment at least annually or on an interim basis if indicators of impairment exist. We perform our annual impairment test as of the first day of the fourth fiscal quarter. We first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than it carrying amount. If, after assessing the totality of events or circumstances, we determine it is more likely than not that the fair value of an indefinite-lived intangible or reporting unit is greater than its carrying amount, then performing further testing is not required. However, if we conclude otherwise, we are required to perform the first step of a two-step quantitative impairment test using; 1) a discounted cash flow analysis based on forecasted future results discounted at the weighted average cost of capital and, 2) by using a market approach based upon public trading and recent transaction valuation multiples for similar companies. Intangible assets with indefinite lives not subject to amortization are reviewed by comparing the fair value of the recoded assets to their carrying amount. We review, at least annually, the continued use of an indefinite useful life. If these intangible assets are determined to have a finite useful life, they are amortized over their estimated remaining useful lives.

Deferred Financing Costs—The costs of issuing long-term debt are capitalized and amortized using the effective interest method over the term of the related debt.

Self-Insurance—We are self-funded up to a maximum amount per claim for employee-related health care benefits, workers' compensation and general liabilities. Claims in excess of this maximum are fully insured through stop-loss insurance policies. We accrue for workers' compensation and general liabilities on a discounted basis based on claims filed and estimates of claims incurred but not reported. The estimates have been discounted at 1.0% and 0.9% at April 24, 2016 and April 26, 2015, respectively, or a discount of $645 and $618, respectively. We utilize independent consultants to assist management in its determination of estimated insurance liabilities. While the total cost of claims incurred depends on future developments, in managements' opinion, recorded reserves are adequate to cover future claims payments. Workers' compensation and general liability claims expense is included in corporate and development expense in our consolidated statements of operations. Employee related health care benefits expenses are included in the consolidated statement of operations lines that include the respective employee compensation costs. Reserves for workers' compensation and employee related health care are included in accrued liabilities—payroll and related in the consolidated balance sheets.

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ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

2. Summary of Significant Accounting Policies (Continued)

Reserves for general liability claims are included in accrued liabilities—other in the consolidated balance sheets. Total self-insurance reserves are as follows:

	Fiscal Year Ended

	April 24, 2016			April 26, 2015
Beginning balance	$	26,253		$	27,785
Additions:
Charged to expenses		31,031			27,841
Employee contributions		9,353			8,550
Payments		(40,830	)		(38,101	)
Change in discount		(27	)		178

Ending Balance	$	25,780		$	26,253

Revenue Recognition—In accordance with gaming industry practice, we recognize casino revenues as the net win from gaming activities. Casino revenues are net of accruals for anticipated payouts of progressive slot and table game jackpots. Revenues from rooms, food, beverage, entertainment and the gift shops are recognized at the time the related service or sale is performed or realized.

Promotional Allowances—The actual retail value of rooms, food and beverage and other services furnished to guests without charge or at a discount is included in gross revenues and then deducted as promotional allowances to arrive at net revenues included in the accompanying consolidated statements of operations at the time such good or services are provided to our guests. The cost of providing such complimentary services from continuing operations are included in casino expense in the accompanying statement of operations.

	Fiscal Year Ended

	April 24, 2016		April 26, 2015		April 27, 2014
Rooms	$	8,457	$	8,916	$	8,504
Food and beverage		63,555		66,745		62,958
Other		493		527		520

Total cost of complimentary services	$	72,505	$	76,188	$	71,982

Fan Club—Our guests are eligible to participate in our Fan Club, our customer loyalty program, which offers certain sales incentives accounted for under ASC 605-50 "Revenue Recognition Customer Payments and Incentives." We accrue a liability for the estimated cost of providing Fan Club benefits as our guest earns Fan Club points. Such sales incentives are recorded as a reduction of revenues in our promotional allowances in our statements of operations. The points earned under Fan Club may be redeemed for free slot play, cash, or other goods or services depending upon the property.

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ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

2. Summary of Significant Accounting Policies (Continued)

At April 24, 2016 and April 26, 2015, our accrual was $4,213 and $4,787, respectively, for estimated cost of providing benefits under our Fan Club and included in progressive jackpots and slot club awards in our consolidated balance sheets.

	Fiscal Year Ended

	April 24, 2016			April 26, 2015
Beginning balance	$	4,787		$	5,197
Earned		19,544			25,886
Redeemed		(18,832	)		(22,360	)
Expirations		(1,651	)		(3,133	)
Other		365			(803	)

Ending Balance	$	4,213		$	4,787

Advertising—Advertising costs are expensed the first time the related advertisement appears. Total advertising costs from continuing operations were $33,913, $33,799 and $34,312 in fiscal years 2016, 2015 and 2014, respectively.

Operating Leases—We recognize rent expense for each lease on the straight-line basis, aggregating all future minimum rent payments including any predetermined fixed escalations of the minimum rentals. Our liabilities include the aggregate difference between rent expense recorded on the straight-line basis and amounts paid under the leases.

Development Costs—We pursue development opportunities for new gaming facilities in an ongoing effort to expand our business. In accordance with ASC Topic 720, Other Expenses ("ASC 720"), costs related to projects in the development stage are recorded as a development expense, except for those costs capitalized in accordance with the guidance of ASC 720. Previously capitalized development costs are expensed when the development is deemed less than probable. Total development costs expensed from continuing operations were recorded in the consolidated statements of operations in corporate and development expenses.

Pre-Opening Costs—We expense pre-opening costs as incurred. Pre-opening costs include payroll, outside services, advertising, insurance, utilities, travel and various other expenses related to new operations prior to opening. Pre-opening costs from continuing operations were $153 in fiscal year 2016 related to preparing for our new land-based operations in Bettendorf and $3,898 in fiscal 2014 related to our new casino at the Nemacolin Woodlands Resort, which opened in July 2013.

Income Taxes—We account for income taxes in accordance with ASC Topic 740, Income Taxes ("ASC 740"). ASC 740 requires the recognition of deferred income tax liabilities and deferred income tax assets for the difference between the book basis and tax basis of assets and liabilities. We have recorded valuation allowances related to net operating loss carry forwards and certain temporary differences. Recognizable future tax benefits are subject to a valuation allowance, unless such tax benefits are determined to be more likely than not realizable. We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense.

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ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

2. Summary of Significant Accounting Policies (Continued)

Earnings (Loss) Per Common Share—In accordance with the guidance of ASC 260, Earnings Per Share ("ASC 260"), basic earnings (loss) per share ("EPS") is computed by dividing net income (loss) applicable to common stockholders by the weighted average common shares outstanding during the period. Diluted EPS reflects the additional dilution related to all potentially dilutive securities such as restricted stock units and stock options. Any potentially dilutive securities with an exercise price in excess of the average market price of our common stock during the periods presented are not considered when calculating diluted earnings per share calculations as they would be anti-dilutive.

Stock Compensation—Our stock based compensation is accounted for in accordance with ASC Topic 718, Compensation—Stock Compensation ("ASC 718"). Stock compensation cost is measured at the grant date, based on the estimated fair value of the award and is recognized as expense on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in-substance, multiple awards.

Allowance for Doubtful Accounts—We reserve for receivables that may not be collected. Methodologies for estimating the allowance for doubtful accounts range from specific reserves to various percentages applied to aged receivables. Historical collection rates are considered, as are customer relationships, in determining specific reserves.

Recently Announced Accounting Standards—

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ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

2. Summary of Significant Accounting Policies (Continued)

the annual period ending April 24, 2016. The Company is applying this amendment on a prospective basis and prior periods were not retrospectively adjusted.

In April 2015, the FASB issued Update No. 2015-03, "Interest-Imputation of Interest". This update requires debt issuance costs to be presented as a direct deduction from the carrying amount of the related debt liability. The standard is effective for annual periods beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. The standard requires application of the new guidance on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. Adoption of this update will reduce total assets and total liabilities in our consolidated balance sheet and will not have any impact on our statement of operations or retained earnings. Management plans to adopt this standard beginning in the first quarter of fiscal 2017.

In May 2014, the FASB issued Update No. 2014-09, "Revenue from Contracts with Customers," which converges the FASB's and the International Accounting Standards Board's current standards on revenue recognition. The standard provides companies with a single model to use in accounting for revenue arising from contracts with customers and supersedes current revenue guidance. The proposed effective date for the standard was for annual and interim periods beginning after December 15, 2016. In April 2105, FASB proposed a deferral of the effective date for one year. Early adoption is not permitted. The standard permits companies to either apply the adoption to all periods presented, or apply the requirements in the year of adoption through a cumulative adjustment. We are currently evaluating the impact of adopting this accounting standard update on our consolidated financial statements and disclosures.

3. Discontinued Operations

Natchez, Mississippi—On October 19, 2015, we closed our casino property in Natchez, Mississippi and completed the previously announced sale of the hotel and certain related non-gaming assets to Casino Holding Investment Partners, LLC for net cash proceeds of $11,448. As a result, we recorded a net gain of $2,000 in discontinued operations in fiscal 2016. The net gain consisted of a gain on the sale of the hotel and related non-gaming assets of $6,424, offset by a non-cash pretax charge of $4,424 related to the write-off of the Natchez gaming vessel and certain other assets. The results of our Natchez casino operations are presented as discontinued operations for all periods presented.

Davenport, Iowa—On December 4, 2013, we entered into a definitive asset purchase agreement to sell substantially all of the assets and for the assumption of certain liabilities related to our casino

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ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

3. Discontinued Operations (Continued)

located in Davenport, Iowa, ("Davenport"). We completed the sale on February 3, 2014 for net cash proceeds of $48,727. Including closing costs, we recorded a loss of $459 in discontinued operations. The results of our Davenport casino operations are presented as discontinued operations for all periods presented.

We adopted Accounting Standards Update No. 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity" ("ASU 2014-08") on April 27, 2015. The disposition of our Natchez reporting unit qualifies for discontinued accounting treatment under ASU 2014-08 and as such, the operations of our Natchez property has been classified as discontinued operations and as assets held for sale for all periods presented.

The Company incurred $258 and $1,215 for capital expenditures at our Natchez property during the fiscal year ending April 24, 2016 and April 26, 2015, respectively.

The results of our discontinued operations are summarized as follows:

	Discontinued Operations Fiscal Year Ended

	April 24, 2016			April 26, 2015			April 27, 2014
Net revenues	$	7,992		$	19,233		$	49,349
Valuation charges		(4,424	)		—			(10,509	)
Depreciation expense		(346	)		(1,076	)		(2,668	)
Pretax loss from discontinued operations		(2,085	)		(2,113	)		(9,657	)
Income tax provision from discontinued operations		—			—			(1,226	)
Loss from discontinued operations		(2,085	)		(2,113	)		(10,883	)

Interest expense of $6 for the fiscal year 2014 has been allocated to discontinued operations related to third-party debt at our former Davenport property.

4. Property and Equipment, Net

Property and equipment, net consists of the following:

	April 24, 2016			April 26, 2015

Property and equipment:
Land and land improvements	$	195,020		$	195,367
Leasehold improvements		144,343			144,927
Buildings and improvements		720,167			711,956
Riverboats and floating pavilions		101,660			101,535
Furniture, fixtures and equipment		515,287			507,794
Construction in progress		39,824			12,139

Total property and equipment		1,716,301			1,673,718
Less accumulated depreciation and amortization		(817,134	)		(771,492	)

Property and equipment, net	$	899,167		$	902,226

We recorded depreciation expense of $81,267, $76,961 and $78,394 for our continuing operations for the fiscal years ended 2016, 2015, and 2014, respectively.

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ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

5. Goodwill and Other Intangible Assets

We have recorded goodwill, net of impairment, of $108,970 at April 24, 2016, April 26, 2015 and April 27, 2014, respectively. Goodwill includes accumulated impairment losses of $213,125.

Other intangible assets consist of the following:

	April 24, 2016										April 26, 2015

	Historical Cost		Accumulated Amortization			Accumulated Impairment			Net Carrying Amount		Historical Cost		Accumulated Amortization			Accumulated Impairment			Net Carrying Amount
Indefinite-lived assets
Gaming licenses	$	44,342	$	—		$	—		$	44,342	$	44,342	$	—		$	—		$	44,342
Trademarks		7,149		—			—			7,149		7,149		—			—			7,149
Intangible assets—subject to amortization
Gaming licenses		12,500		(347	)		(12,153	)		—		12,500		(347	)		(12,153	)		—
Customer relationships		6,700		(4,955	)		—			1,745		6,700		(4,118	)		—			2,582
Customer lists		15,393		(15,393	)		—			—		15,393		(15,393	)		—			—
Tradename		544		(544	)		—			—		544		(544	)		—			—

Total	$	86,628	$	(21,239	)	$	(12,153	)	$	53,236	$	86,628	$	(20,402	)	$	(12,153	)	$	54,073

Our indefinite-lived intangible assets consist primarily of gaming licenses and trademarks for which it is reasonably assured that we will continue to renew indefinitely. Our other finite-lived intangible assets consist of customer relationships amortized over 8 years, customer lists amortized over 2 to 4 years, and a trade name amortized over 1.5 years. The weighted average remaining life of our customer relationships is approximately 2.1 years.

We recorded amortization expense of $838, $838 and $1,185, for our intangible assets subject to amortization related to our continuing operations for the fiscal years ended 2016, 2015, and 2014, respectively.

Future amortization expense of our amortizable intangible assets is as follows:


2017		838
2018		838
2019		69
Thereafter		—

Total	$	1,745

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ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

6. Valuation Charges

We recorded valuation charges as follows:

	Fiscal Year Ended

	April 24, 2016		April 26, 2015		April 27, 2014
Property and equipment, net impairment charges	$	—	$	9,000	$	14,200
Intangible asset impairment charge		—		—		12,153
Goodwill impairment charges:
Bettendorf		—		—		60,000
Lake Charles		—		—		24,238
Lula		—		—		36,000
Vicksburg		—		—		5,000

Total goodwill impairment charges		—		—		125,238

Total impairment valuation charges	$	—	$	9,000	$	151,591

Other Long-Lived Assets—During fiscal 2015, we recorded a $9,000 impairment charge related to our Nemacolin property and equipment, net as a result of our impairment testing under ASC 360. The non-recurring fair value of $15,848 used in our determination of the impairment charge considered level 3 inputs, including market valuation, estimated replacement cost values, estimates for economic obsolescence and estimated risk premiums and was the result of our current and future expected cash flows at the property.

During fiscal 2014, we recorded impairment charges related to property and equipment, net of $14,200 at our Nemacolin property and $12,153 related to intangible assets at our Nemacolin property as a result of our impairment testing under ASC 360. The non-recurring fair values used in our determination of the impairment charges considered level 2 and 3 inputs, including the cost replacement value of the assets adjusted for an associated risk premium or economic obsolescence, and a market based valuation multiple method. The impairments were the result of our current and future expected cash flows at our properties.

Goodwill—Our goodwill impairment charges in fiscal 2014 were a result of expected decreases in future cash flows as a result of unfavorable economic conditions and the impact of changes by our competitors. Competitive changes included a proposed land-based casino replacing an existing riverboat casino competing with our Bettendorf property, a new casino competing with our Lake Charles property and expansions by casinos competing with our Lula property.

The non-recurring fair values used in our determination of the goodwill impairment charges considered level 2 and 3 inputs, including discounted cash flows and market based multiple valuation methods.

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ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

6. Valuation Charges (Continued)

The remaining goodwill balance by property as of April 24, 2016 is as follows:

	April 24, 2016

Bettendorf	$	5,713
Black Hawk		30,533
Boonville		2,599
Kansas City		7,182
Lula		6,581
Marquette		29,195
Vicksburg		27,167

Total	$	108,970

7. Long-Term Debt

Long-term debt consists of the following:

	April 24, 2016		April 26, 2015

Senior Secured Credit Facility:
Revolving line of credit, expires April 19, 2018, interest payable at least quarterly at either LIBOR and/or prime plus a margin	$	67,500	$	75,000
5.875% Senior Notes, interest payable semi-annually March 15 and September 15, net		502,541		502,987
7.75% Senior Notes, interest payable semi-annually March 15 and September 15, net		—		62,012
8.875% Senior Subordinated Notes, interest payable semi-annually June 15 and December 15		350,000		350,000
Other		2,652		2,883

		922,693		992,882
Less current maturities		80		170

Long-term debt	$	922,613	$	992,712

Senior Secured Credit Facility, as amended and restated—Our Senior Secured Credit Facility as amended and restated ("Credit Facility") consists of a $300,000 revolving line of credit. The Credit Facility is secured on a first priority basis by substantially all of our assets and guaranteed by all of our restricted subsidiaries.

Our net revolving line of credit availability at April 24, 2016, as limited by our outstanding borrowings, was approximately $224,000, after consideration of $8,000 in outstanding letters of credit. We have an annual commitment fee related to the unused portion of the Credit Facility of up to 0.55% which is included in interest expense in the accompanying consolidated statements of operations. The weighted average effective interest rates of the Credit Facility for fiscal years 2016 and 2015 were 2.63% and 3.54%, respectively.

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ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

7. Long-Term Debt (Continued)

The Credit Facility includes a number of affirmative and negative covenants, as well as certain financial covenants including maintenance of a total leverage ratio, senior secured leverage ratio and minimum interest coverage ratio. The Credit Facility also restricts our ability to make certain investments or distributions. We were in compliance with the covenants as of April 24, 2016.

In fiscal 2015, we amended our Credit Facility to revise the definition of consolidated EBITDA to exclude the costs associated with the Colorado Referendum and certain severance expenses related to the corporate restructuring.

In fiscal 2014, we amended our Credit Facility to modify our maximum allowed leverage and minimum interest coverage ratio covenants. This was accounted for in accordance with ASC 470-50, Debt Modifications and Extinguishments and we capitalized new deferred financing costs of $673.

5.875% Senior Notes—In March 2013, we issued $350,000 of 5.875% Senior Notes due 2021 ("5.875% Senior Notes"). The net proceeds were used to repay term loan borrowings under our Credit Facility. On April 14, 2015, we issued an additional $150,000 of 5.875% Senior Notes at a price of 102.0%, which have the same terms and are treated as the same class as the outstanding 5.875% Senior Notes (the "April 2015 issuance"). After deducting underwriting fees, the net proceeds of $151,500 from the April 2015 issuance were used to purchase a portion of the 7.75% Senior Notes validly tendered pursuant to the Tender Offer (as defined below). As a result of the April 2015 issuance, we capitalized deferred financing costs of $209 in fiscal 2016 and $2,536 in fiscal 2015, respectively.

The 5.875% Senior Notes are guaranteed, on a joint and several basis, by substantially all of our significant subsidiaries and certain other subsidiaries as described in Note 16. All of the guarantor subsidiaries are wholly owned by us. The 5.875% Senior Notes are general unsecured obligations and rank junior to all of our senior secured indebtedness and senior to our senior subordinated indebtedness. The 5.875% Senior Notes are redeemable, in whole or in part, at our option as of March 15, 2016, with call premiums as defined in the indenture governing the 5.875% Senior Notes.

7.75% Senior Notes—In March 2011, we issued $300,000 of 7.75% Senior Notes due 2019 at a price of 99.264% ("7.75% Senior Notes"). On April 7, 2015, we launched a cash tender offer for any and all of our outstanding 7.75% Senior Notes (the "Tender Offer"). The Tender Offer expired on April 13, 2015. We accepted for purchase $237,832 of the outstanding 7.75% Senior Notes validly tendered pursuant to the Tender Offer and we funded the payments utilizing the net proceeds from the 5.875% Senior Notes April 2015 issuance, additional borrowings under our Credit Facility and cash on hand. The aggregate amount paid of approximately $250,000, included tender offer consideration of $1.043 per $1.000 principal amount tendered, as well as accrued and unpaid interest on the 7.75% Senior Notes. As a result of the completed Tender Offer, we incurred expenses related to the write-off of deferred financing costs and the discount, tender fees and other related costs of $13,757, recorded as a loss on early extinguishment of debt in the fiscal 2015 consolidated statement of operations.

On April 14, 2015 we issued an irrevocable notice of redemption of the remaining $62,168 of outstanding 7.75% Senior Notes at a redemption price of 103.875% of the principal amount, plus accrued and unpaid interest at the redemption date in accordance with the terms of the indenture governing the 7.75% Senior Notes. On May 14, 2015, we completed the redemption for approximately $65,000, utilizing additional borrowings under our Credit Facility and cash on hand. As a result of the

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ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

7. Long-Term Debt (Continued)

redemption, we recorded a loss of $2,966 on early extinguishment of debt in the fiscal 2016 consolidated statement of operations.

8.875% Senior Subordinated Notes—On August 7, 2012, we completed the issuance and sale of $350,000 of 8.875% Senior Subordinated Notes due 2020 ("8.875% Senior Subordinated Notes"). We received net proceeds of $343,000 for this issuance after deducting underwriting fees. As a result of the issuance, we capitalized deferred financing costs of $8,137.

The 8.875% Senior Subordinated Notes are guaranteed, on a joint and several basis, by substantially all of our significant subsidiaries and certain other subsidiaries as described in Note 16. All of the guarantor subsidiaries are wholly owned by us. The 8.875% Senior Subordinated Notes are general unsecured obligations and rank junior to all of our senior indebtedness. The 8.875% Senior Subordinated Notes are redeemable, in whole or in part, at our option at any time as of June 15, 2016, with call premiums as defined in the indenture governing the 8.875% Senior Subordinated Notes.

The indentures governing the 5.875% Senior Notes and the 8.875% Senior Subordinated Notes limit, among other things, our ability and our restricted subsidiaries' ability to borrow money, make restricted payments, use assets as security in other transactions, enter into transactions with affiliates, pay dividends, or repurchase stock. The indentures also limit our ability to issue and sell capital stock of subsidiaries, sell assets in excess of specified amounts or merge with or into other companies.

Future Principal Payments of Long-term Debt—The aggregate principal payments due on long-term debt as of April 24, 2016 over the next five years and thereafter, are as follows:


Fiscal Years Ending:
2017	$	80
2018		67,587
2019		94
2020		102
2021		850,111
Thereafter		2,178

		920,152
Debt premium		2,541

	$	922,693

8. Other Long-Term Obligations

Nemacolin Woodlands Resort—We entered into agreements with Nemacolin Woodland Resort ("Resort") in Pennsylvania to construct and manage a casino, which we opened in July 2013. Under terms of the agreements, the Resort provided land, land improvements and a building for the casino property. The Company was deemed, for accounting purposes only, to be the owner of these assets provided by the Resort during the construction and casino operating periods due to our continuing involvement. Therefore, we are accounting for the transaction using the direct financing method. As of April 24, 2016, in accordance with ASC 840, we have recorded property and equipment, net of

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ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

8. Other Long-Term Obligations (Continued)

accumulated depreciation, of $5,626, and a liability of $6,100 in other long-term obligations related to the agreement.

The other long-term obligations will be reflected in our consolidated balance sheets until completion of the management agreement, at which time the related fixed assets, net of accumulated depreciation, will be removed from our consolidated financial statements and the net remaining obligation over the net carrying value of the associated fixed asset will be recognized as a gain (loss) on the sale of the facility.

Quad-Cities Waterfront Convention Center—We entered into agreements with the City of Bettendorf, Iowa under which the City constructed a convention center which opened in January 2009, adjacent to our hotel. We lease, manage, and provide financial and operating support for the convention center. The Company was deemed, for accounting purposes only, to be the owner of the convention center during the construction period. Upon completion of the convention center we were precluded from accounting for the transaction as a sale and leaseback due to our continuing involvement. Therefore, we are accounting for the transaction using the direct financing method. Under the terms of our agreements for the convention center, we have guaranteed certain obligations related to notes issued by the City of Bettendorf, Iowa for the convention center.

On May 4, 2015, we made a payment of approximately $9,400 related to the notes issued by the City per the terms of our agreement with borrowings from our Credit Facility. With this prepayment, we have fulfilled our financial obligation related to the Convention Center and have no future payments under this long-term obligation. The remaining balance of the long-term obligation will remain on our consolidated balance sheet until completion of the lease agreement, at which time the related fixed assets, net of accumulated depreciation, and the net remaining obligation over the net carrying value of the associated fixed assets will be recognized as a gain on sale of the facility. As of April 24, 2016, we have recorded in other long-term obligations $7,812 related to our liability under ASC 840 related to the convention center.

9. Income Taxes

Income tax (provision) benefit from continuing operations consists of the following:

	Fiscal Year Ended

	April 24, 2016			April 26, 2015			April 27, 2014
Current:
Federal	$	—		$	—		$	—
State		(128	)		(167	)		7,352

		(128	)		(167	)		7,352
Deferred:
Federal		(2,623	)		(3,219	)		10,116
State		(1,427	)		2,275			1,026

		(4,050	)		(944	)		11,142

Income tax (provision) benefit	$	(4,178	)	$	(1,111	)	$	18,494

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ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

9. Income Taxes (Continued)

A reconciliation of income taxes from continuing operations at the statutory corporate federal tax rate of 35% to the income tax (provision) benefit reported in the accompanying consolidated statements of operations is as follows:

	Fiscal Year Ended

	April 24, 2016			April 26, 2015			April 27, 2014
Statutory tax (provision) benefit	$	(18,364	)	$	(2,940	)	$	47,354
Effects of :
State taxes, net of federal effect		930			3,542			10,337
Reduction of unrecognized tax benefits		—			—			5,010
Other
Lobbying & Referendum costs		(671	)		(2,018	)		(607	)
Employment tax credits		767			932			1,027
Fines & Penalties		(35	)		(17	)		(25	)
Meals & Entertainment		(55	)		(46	)		(60	)
Various permanent differences		(421	)		(14	)		(15	)
Interest		—			—			(446	)
Goodwill impairment		—			—			(42,083	)
Valuation allowance		12,615			(109	)		(1,031	)
Expiration of stock awards		—			(611	)		—
Other		1,056			170			(967	)

Income tax (provision) benefit	$	(4,178	)	$	(1,111	)	$	18,494

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ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

9. Income Taxes (Continued)

Significant components of our domestic net deferred income tax asset (liability) are as follows:

	Fiscal Year Ended

	April 24, 2016			April 26, 2015
Deferred tax liabilities:
Property and equipment	$	(40,709	)	$	(37,421	)
Goodwill and intangibles		(22,727	)		(21,527	)
Gain on early extinguishment of debt		(9,751	)		(14,613	)
Other		(382	)		(347	)

Total deferred tax liabilities		(73,569	)		(73,908	)

Deferred tax assets:
Net operating losses		40,061			62,672
Employment tax credits		21,973			22,378
Accrued expenses		13,564			8,383
Alternative minimum tax credit		4,103			2,481
Other		14,355			14,503

Total deferred tax assets		94,056			110,417
Valuation allowance on deferred tax assets		(57,245	)		(69,217	)

Net deferred tax asset		36,811			41,200

Net deferred tax liability	$	(36,758	)	$	(32,708	)

Deferred income tax assets represent amounts available to reduce income taxes payable on taxable income in future years. Such assets arise from net operating loss and tax credit carryforwards, as well as from temporary basis differences in assets and liabilities between financial reporting and tax.

At April 24, 2016, we have federal net operating loss carryforwards of $45,432 for income tax purposes, with expiration dates from fiscal 2031 to 2036. Approximately $10,967 of these net operating losses are attributable to our Colorado subsidiaries and can only be used to offset income earned by these entities. The remaining federal net operating losses are subject to limitations under the internal revenue code and underlying treasury regulations, which may limit the amount ultimately utilized. We also have various state income tax net operating loss carryforwards totaling $390,804 with expiration dates from fiscal 2018 to 2036. This includes both consolidated and separate company net operating loss carryforwards. Our federal and state net operating loss carryforwards include adjustments of $15,740 and $16,733, respectively, for excess tax benefits from stock compensation deductions that have not yet been recognized for financial statement purposes. Equity will be increased if and when these deferred tax assets are realized. We also have federal general business and alternative minimum tax credit carryforwards of $26,075 for income tax purposes, with expiration dates from fiscal 2022 to 2036. For the current period, all deferred income taxes, including those related to NOL carryforwards, have been classified as noncurrent in the consolidated balance sheet in accordance with FASB Update No. 2015-17. We have applied this amendment on a prospective basis and prior period amounts have not been retrospectively adjusted.

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ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

9. Income Taxes (Continued)

We periodically evaluate the realizability of our deferred tax assets and perform an analysis in light of all available evidence, both positive and negative, consistent with the provisions of ASC 740. As of April 24, 2016, we remain in a three-year cumulative loss, which is a significant piece of negative evidence. While it is primarily the result of intangible and fixed asset impairments, and not an indication of continuing operations, we are required to give objective historical evidence significantly more weight than subjective evidence, such as forecasts of future income. Based on this evidence, we concluded that a valuation allowance should continue to be booked against our federal and most of our state deferred tax assets as of April 24, 2016.

During fiscal 2015, our Florida operations experienced their third consecutive year of substantive pretax income. After considering all of the positive and negative evidence, we concluded that our deferred income tax assets related to our Florida state operations are more likely than not to be realized. Accordingly, as of April 26, 2015, we released all of our valuation allowance against our net Florida deferred income tax assets, resulting in the $2,301 benefit in our provision for income taxes.

A reconciliation of the beginning and ending amounts of valuation allowance is as follows:

	Federal			State			Total

Balance, April 27, 2014	$	40,885		$	26,177		$	67,062
(Benefit) Provision		(1,377	)		5,833			4,456
Release of Valuation Allowance		—			(2,301	)		(2,301	)

Balance, April 26, 2015	$	39,508		$	29,709		$	69,217
(Benefit) Provision		(13,956	)		1,984			(11,972	)

Balance, April 24, 2016	$	25,552		$	31,693		$	57,245

We allocated the income tax provision and valuation allowance between continuing operations and discontinued operations consistent with the provisions of ASC 740.

During fiscal 2016, a decrease to the valuation allowance of $11,972 was recorded as an income tax benefit due to current year earnings. The ending valuation allowance balance does not preclude us from utilizing the deferred tax assets in the future, nor does it reflect a change in our long-term outlook. If or when recognized, the tax benefits relating to any reversal of the valuation allowance on deferred tax assets as of April 24, 2016 will be accounted for as a reduction of income tax expense.

We account for unrecognized tax benefits in accordance with ASC 740. A reconciliation of the beginning and ending amounts of unrecognized tax benefits as follows:

	April 24, 2016		April 26, 2015		April 27, 2014

Beginning balance	$	—	$	—	$	4,072
Impact of favorable court ruling		—		—		(4,072	)

Ending balance	$	—	$	—	$	—

On February 13, 2014, the Supreme Court of Mississippi ruled in our favor with regard to positions taken on Mississippi income tax returns for fiscal years ending April 2002 through April 2008.

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ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

9. Income Taxes (Continued)

As a result, we recognized a benefit of $4,072 related to principle and $4,025 related to interest. As of April 24, 2016, we do not have any uncertain tax positions.

We recorded interest expense of $0, $0 and $390 in fiscal 2016, 2015 and 2014, respectively, prior to the favorable ruling. We accrued no penalties during fiscal 2016, 2015 or 2014.

As of April 24, 2016, we were subject to U.S. federal income tax examination for fiscal years 2009 to 2015. We are also subject to state and local income tax examinations for various tax years in jurisdictions where we operate.

10. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings (loss) per share (in thousands, except share and per share amounts):

	Fiscal Year Ended

	April 24, 2016			April 26, 2015			April 27, 2014
Numerator:
Income (loss) applicable to common shares:
Income (loss) from continuing operations attributable to common stockholders	$	48,289		$	7,290		$	(116,803	)
Loss from discontinued operations		(2,085	)		(2,113	)		(10,883	)

Net income (loss) attributable to the common stockholders	$	46,204		$	5,177		$	(127,686	)



Denominator:
Denominator for basic income (loss) per share—weighted average shares		40,690,929			39,955,735			39,731,766
Effect of dilutive securities
Employee stock options		109,244			84,938			—
Restricted stock units		523,300			279,594			—

Denominator for diluted income (loss) per share—adjusted weighted average shares and assumed conversions		41,323,473			40,320,267			39,731,766



Basic income (loss) per share attributable to common stockholders
Income (loss) from continuing operations	$	1.19		$	0.18		$	(2.94	)
Loss from discontinued operations		(0.05	)		(0.05	)		(0.27	)

Net loss attributable to common stockholders	$	1.14		$	0.13		$	(3.21	)



Diluted income (loss) per share attributable to common stockholders
Income (loss) from continuing operations	$	1.17		$	0.18		$	(2.94	)
Loss from discontinued operations		(0.05	)		(0.05	)		(0.27	)

Net income (loss) attributable to common stockholders	$	1.12		$	0.13		$	(3.21	)

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ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

10. Earnings Per Share (Continued)

Our basic earnings (loss) per share are computed by dividing net income (loss) by the weighted average number of shares outstanding for the period. Stock options representing 444,365 shares, which were anti-dilutive, were excluded from the calculation of common shares for diluted earnings per share for fiscal 2016.

Stock options representing 205,060 shares, which were anti-dilutive, were excluded from the calculation of common shares for diluted earnings per share for fiscal 2015.

Due to the loss from continuing operations, stock options representing 52,501 shares, which were potentially dilutive and 753,860 stock options, which were anti-dilutive, were excluded from the calculation of common shares for diluted earnings per share for fiscal 2014. Restricted stock units representing 48,362 shares, which were potentially dilutive, and 1,254,413 restricted stock units whose minimum market performance conditions had not been achieved, were also excluded from the calculation of diluted earnings per share for fiscal 2014.

11. Stock Based Compensation

Under our amended and restated Long Term Incentive Plan, we have issued restricted stock units, performance-based restricted stock units, restricted stock and stock options.

Restricted Stock Units—During fiscal 2016, we granted 104,982 restricted stock units ("RSUs") to employees with a fair market value of $14.89 per unit on the date of grant. The RSUs will vest and be converted to stock ratably over three years commencing on the one-year anniversary of the grant date. The aggregate compensation cost related to these RSUs was $1,563 to be recognized over the vesting periods. Our aggregate estimate of forfeitures for these RSUs is 25%. Per the terms of the agreement, the awards are issued net of shares necessary to pay minimum withholding taxes. Subsequent to year-end, 21,022 shares were issued for the first tranche vesting on April 27, 2016.

A summary of restricted stock unit activity for fiscal 2016 is presented below:

	Restricted Stock Units		Weighted Average Grant-Date Fair Value

Outstanding at April 26, 2015		—	$	—
Granted		104,982		14.89
Vested		—		—
Forfeited and expired		—		—

Outstanding at April 24, 2016		104,982	$	14.89



As of April 24, 2016:
Weighted average remaining contractual term		1.5 years
Aggregate intrinsic value:
Outstanding	$	1,572
Nonvested:
Unrecognized compensation cost	$	381
Weighted average remaining vesting period		1.5 years

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

11. Stock Based Compensation (Continued)

During fiscal 2013, we granted RSUs containing market performance conditions which determined the ultimate amount of RSUs to be awarded. The market condition period ended on April 26, 2015 and a gross award of 1,532,417 shares was achieved. Per the terms of the agreement, the awards are issued net of shares necessary to pay minimum withholding taxes with 50% of the RSUs vesting on April 26, 2015 and the remaining 50% vesting on April 26, 2016. On April 26, 2015, 459,473 net shares were issued for the first vested tranche. Subsequent to year-end, 467,073 net shares were issued for the second vested tranche on April 26, 2016. The fair value of these RSUs was initially determined utilizing a lattice pricing model which considers a range of assumptions including volatility and risk-free interest rates. The aggregate compensation cost related to these RSUs was $4,637 recognized over the vesting periods.

Performance-based Restricted Stock Units—During fiscal 2016, we granted performance-based restricted stock units ("PRSUs"), with a company performance condition which will determine the number of shares which will ultimately vest, if any, up to 251,964 shares with a fair market value of $14.89 per unit on the date of grant. Any shares earned will vest at the end of three years from the date of grant. Probability of meeting the performance condition is assessed on a regular basis and compensation cost is adjusted accordingly. As of April 24, 2016, our estimated unrecognized compensation cost remaining on the PRSUs was $1,338 with an estimated aggregate forfeiture of 37%.

Restricted Stock—We have issued shares of restricted common stock to employees and directors under our Long Term Incentive Plan. Restricted stock awarded to employees primarily vests one-third on each of the first three anniversaries of the grant date and for directors' vests one-half on the grant date and one-half on the first anniversary of the grant date. Our aggregate estimate of forfeitures for restricted stock for employees is 9%.

A summary of restricted stock activity for fiscal 2016 is presented below:

	Restricted Stock			Weighted Average Grant-Date Fair Value

Outstanding at April 26, 2015		325,074		$	7.28
Granted		141,353			19.80
Vested		(238,669	)		7.88
Forfeited and expired		(7,433	)		12.72

Outstanding at April 24, 2016		220,325		$	14.33



As of April 24, 2016:
Weighted average remaining contractual term		0.8 years
Aggregate intrinsic value:
Outstanding	$	3,299
Nonvested:
Unrecognized compensation cost	$	1,093
Weighted average remaining vesting period		0.8 years

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

11. Stock Based Compensation (Continued)

Stock Options—We have issued incentive stock options and nonqualified stock options which have a maximum term of 10 years and are, generally, exercisable in yearly installments of 20% commencing one year after the date of grant. During fiscal 2016, we issued 378,905 stock options which have a maximum term of seven years and are exercisable in yearly installments of 20% commencing one year after the grant date. The options have a per share grant date fair value of $5.764 utilizing the Black-Scholes-Merton option pricing model. Our aggregate estimate of forfeitures for stock options is 30%. There were no stock options granted in fiscal 2015 or 2014.

A summary of stock option activity for fiscal 2016 is presented below:

	Options			Weighted Average Exercise Price

Outstanding at April 26, 2015		405,060		$	11.18
Granted		378,905			14.86
Exercised		(134,000	)		6.48
Forfeited and expired		(39,600	)		21.35

Outstanding at April 24, 2016		610,365		$	13.84



As of April 24, 2016:
Outstanding exercisable options		610,365		$	13.84
Weighted average remaining contractual term		4.7 years
Aggregate intrinsic value:
Outstanding exercisable	$	1,056
Outstanding	$	1,100
Nonvested:
Unrecognized compensation cost	$	743

Subsequent Event—Subsequent to our fiscal year ended April 24, 2016, we granted restricted stock units and stock options to certain employees under the Long-Term Incentive Plan. We issued 145,516 restricted stock units with a weighted average fair market value of $15.16 per unit on the date of grant. The restricted stock units will vest and be converted to stock ratably over three years commencing on the one year anniversary of the grant date. We also issued 310,735 stock options which have a maximum term of seven years and are exercisable in yearly installments of 20% commencing one year after the grant date. The options have a per share grant date fair value of $5.968 utilizing the Black-Scholes-Merton option pricing model. In addition, we granted performance-based restricted stock units ("PRSUs"), with a company performance condition which will determine the number of shares which will ultimately vest, if any, up to 216,699 shares. Any shares earned will vest at the end of three years from the date of grant. Probability of meeting the performance condition will be assessed on a regular basis and compensation cost will be adjusted accordingly.

Stock Compensation Expense—Total stock compensation expense from continuing operations in the accompanying consolidated statements of operations was $5,069, $3,396 and $4,383 for the fiscal years 2016, 2015, and 2014, respectively. We recognize compensation expense for our stock-based awards on a straight-line basis over the requisite service period for each separately vesting portion of the award.

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ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

11. Stock Based Compensation (Continued)

Share Based Plans—Information relating to our share based plans is as follows:

	April 24, 2016		April 26, 2015		April 27, 2014

Restricted Stock Units:
Fair value of restricted stock units vested during the year	$	—	$	11,451	$	—
Restricted Stock:
Fair value of restricted stock vested during the year		1,881		3,238		3,660
Stock Options:
Intrinsic value of stock options exercised		1,436		57		—
Proceeds from stock option exercises		869		74		—

We have 2,949,054, shares available for future issuance under our equity compensation plan as of April 24, 2016. After consideration of activity subsequent to year-end, we have 2,522,355 shares available for future issuance in the plan. During fiscal 2016, we added 2,000,000 shares to the plan. Upon issuance of restricted shares, vesting of RSUs or exercise of stock options, shares may be issued from available treasury or common shares.

Tax effect of Stock Based Compensation—Upon the exercise of stock options, vested restricted stock and vested RSUs, the tax benefit (provision) related to stock compensation, subject to certain limitations, is recognized as an addition to or deduction from additional paid-in capital. During fiscal year 2016, there was no impact to additional paid-in capital related to the vesting of restricted stock and exercise of stock options. At April 24, 2016, we have $6,422 of unrecognized tax benefits associated with stock exercises and restricted stock vesting due to our net operating loss position.

Stock Repurchase—Our Board of Directors has approved a stock repurchase program, as amended, allowing up to 6,000,000 shares of our common stock to be repurchased. As of April 24, 2016, we have repurchased 4,895,792 shares of common stock, and retired 553,800 shares of common stock under this stock repurchase program. No shares were repurchased in fiscal years 2016, 2015 or 2014.

12. Supplemental Disclosure of Cash Flow Information

For the fiscal years 2016, 2015 and 2014, we made cash payments for interest, net of capitalized interest, of $65,061, $81,023 and $85,472, respectively. We made income tax payments, net of refunds, of $134 in fiscal 2016 and received income tax refunds, net of payments, of $29 and $4,354 in fiscal 2015 and 2014, respectively.

For fiscal 2016 and 2015, the change in accrued purchases of property and equipment in accounts payable increased by $7,923 and $1,959, respectively, and decreased by $7,149 in fiscal 2014.

For fiscal 2016 and 2015, we capitalized interest of $600 and $23, primarily related to the land-based and hotel renovations at our Bettendorf property. For fiscal 2014, we capitalized interest of $185 primarily related to construction of our casino at the Nemacolin Woodland Resort in Pennsylvania.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

13. Employee Benefit Plans

401(k) Plan—We have a 401(k) plan covering substantially all of our employees who have completed 90 days of service. Expense for our contributions from continuing operations related to the 401(k) plan was $1,731, $1,454 and $1,412 in fiscal years 2016, 2015, and 2014, respectively. Our contribution is based on a percentage of employee contributions and may include an additional discretionary amount.

2005 Deferred Compensation Plan—Our 2005 Deferred Compensation Plan (the "Plan"), as amended and restated, is an unfunded deferred compensation arrangement for the benefit of key management officers and employees of the Company and its subsidiaries. The terms of the Plan include the ability of the participants to defer, on a pre-tax basis, salary, and bonus payments in excess of the amount permitted under IRS Code Section 401(k). The terms also allow for a discretionary annual matching contribution by the Company. The Plan allows for the aggregation and investment of deferred amounts in notional investment alternatives, including units representing shares of our common stock. The liability related to the Plan as of April 24, 2016 and April 26, 2015 was $3,564 and $3,953, respectively, and is included in long-term other accrued liabilities in the consolidated balance sheets. For fiscal 2016 and fiscal 2015, there were no discretionary matching contributions by the Company. For fiscal 2014, expense from continuing operations for the Company's discretionary matching contribution related to the Plan was $79.

14. Interest Rate Derivatives

We previously had interest rate derivative agreements in order to manage market risk on variable rate loans outstanding. We had an interest rate swap agreement with an aggregate notional value of $50,000 that matured in September 2013. During fiscal 2010, our interest rate swaps no longer met the criteria for hedge effectiveness and changes in the fair value of the swaps since that date were recorded in derivative income in the consolidated statements of operations. The cumulative loss recorded in other comprehensive income (loss), through the date of ineffectiveness, was amortized into derivative expense over the remaining term of the individual interest rate swap agreements.

The loss recorded in accumulated other comprehensive income (loss) of our interest rate swap contracts is recorded net of deferred income tax benefits of $149 as of April 27, 2014.

Derivative income related to the change in fair value of interest rate swap contracts was $794 in fiscal 2014.

Derivative expense realized associated with the amortization of cumulative loss recorded in other comprehensive income (loss) for the interest rate swaps through the date of ineffectiveness is as follows:

	Fiscal Year Ended

	April 27, 2014
Accumulated OCI amortization	$	247
Change in deferred taxes		149
Derivative expense		(396	)

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ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

15. Fair Value

ASC Topic 820, Fair Value Measurements and Disclosures ("ASC 820") establishes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques (market approach, income approach, and cost approach). The levels of hierarchy are described below:

Level 1: Inputs such as quoted prices in active markets for identical assets or liabilities that can be accessed at the measurement date.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets in active markets, quoted prices from identical or similar assets in inactive markets and observable inputs such as interest rate and yield curves.

Level 3: Inputs that are not observable in the market and that include management's judgments about assumptions market participants would use.

Items Measured at Fair Value on a Recurring Basis—The following table sets forth the assets measured at fair value on a recurring basis, by input level, in the consolidated balance sheets at April 24, 2016 and April 26, 2015:

	April 24, 2016

	Level 1		Level 2		Total
Assets:
Marketable securities	$	8,950	$	10,388	$	19,338
Restricted cash and investments		6,362		3,457		9,819

	April 26, 2015

	Level 1		Level 2		Total
Assets:
Marketable securities	$	6,809	$	12,708	$	19,517
Restricted cash and investments		5,553		3,640		9,193

Marketable securities— The estimated fair values of our marketable securities are determined on an individual asset basis based upon quoted prices of identical assets available in active markets (Level 1), quoted prices of identical assets in inactive markets, or quoted prices for similar assets in active and inactive markets (Level 2), and represent the amounts we would expect to receive if we sold these marketable securities.

Restricted cash and investments— The estimated fair values of our restricted cash and investments are based upon quoted prices available in active markets (Level 1), or quoted prices for similar assets in active and inactive markets (Level 2), and represent the amounts we would expect to receive if we sold our restricted cash and investments.

There were no transfers between level 1 and level 2 investments.

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ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

15. Fair Value (Continued)

Other Financial Instruments—The estimated carrying amounts and fair values of our other financial instruments are as follows:

	April 24, 2016				April 26, 2015

	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial liabilities:
Revolving line of credit	$	67,500	$	66,150	$	75,000	$	73,875
5.875% Senior notes		502,541		520,000		502,987		515,055
7.75% Senior notes		—		—		62,012		64,593
8.875% Senior subordinated notes		350,000		367,206		350,000		383,915
Other long-term debt		2,652		2,652		2,883		2,883
Other long-term obligations		13,912		13,912		22,211		22,211

The fair value of our long-term debt or other long-term obligations is estimated based on the quoted market price of the underlying debt issue (Level 1) or, when a quoted market price is not available, the discounted cash flow of future payments utilizing current rates available to us for debt of similar remaining maturities (Level 3). Debt obligations with a short remaining maturity have a carrying amount that approximates fair value.

16. Consolidating Condensed Financial Information

Certain of our wholly owned subsidiaries have fully and unconditionally guaranteed on a joint and several basis, the payment of all obligations under our 5.875% Senior Notes and 8.875% Senior Subordinated Notes.

The following wholly owned subsidiaries of the Company are guarantors, on a joint and several basis, under the 5.875% Senior Notes and 8.875% Senior Subordinated Notes: Black Hawk Holdings, L.L.C.; CCSC/Blackhawk, Inc.; IC Holdings Colorado, Inc.; IOC-Black Hawk Distribution Company, L.L.C.; IOC-Boonville, Inc.; IOC-Caruthersville, L.L.C.; IOC-Kansas City, Inc.; IOC-Lula, Inc.; IOC-Natchez, Inc.; IOC-Black Hawk County, Inc.; IOC Holdings, L.L.C.; IOC-Vicksburg, Inc.; IOC-Vicksburg, LLC; Rainbow Casino- Vicksburg Partnership, L.P.; IOC Cape Girardeau, LLC; Isle of Capri Bettendorf, L.C; Isle of Capri Black Hawk, L.L.C.; Isle of Capri Marquette, Inc.; PPI, Inc.; and St. Charles Gaming Company, L.L.C. Each of the subsidiaries' guarantees is joint and several with the guarantees of the other subsidiaries.

During fiscal 2015, our wholly owned subsidiary, IOC-Davenport, Inc., changed designations from a Guarantor Subsidiary to a Non-Guarantor Subsidiary. All periods presented below reflect the operations of IOC-Davenport, Inc. as a Non-Guarantor Subsidiary.

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ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

16. Consolidating Condensed Financial Information (Continued)

Consolidating condensed balance sheets as of April 24, 2016 and April 26, 2015 are as follows:

	As of April 24, 2016

	Isle of Capri Casinos, Inc. (Parent Obligor)		Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Consolidating and Eliminating Entries			Isle of Capri Casinos, Inc. Consolidated
Balance Sheet
Current assets	$	10,575	$	76,646	$	25,804		$	(130	)	$	112,895
Intercompany receivables		424,693		—		—			(424,693	)		—
Investments in subsidiaries		586,569		3,358		—			(589,927	)		—
Property and equipment, net		3,650		871,353		24,164			—			899,167
Other assets		15,130		169,487		26,974			(18,504	)		193,087

Total assets	$	1,040,617	$	1,120,844	$	76,942		$	(1,033,254	)	$	1,205,149



Current liabilities	$	35,862	$	77,128	$	24,687		$	(130	)	$	137,547
Intercompany payables		—		371,104		53,589			(424,693	)		—
Long-term debt, less current maturities		922,613		—		—			—			922,613
Other accrued liabilities		6,524		74,267		7,084			(18,504	)		69,371
Stockholders' equity		75,618		598,345		(8,418	)		(589,927	)		75,618

Total liabilities and stockholders' equity	$	1,040,617	$	1,120,844	$	76,942		$	(1,033,254	)	$	1,205,149

	As of April 26, 2015

	Isle of Capri Casinos, Inc. (Parent Obligor)		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Consolidating and Eliminating Entries			Isle of Capri Casinos, Inc. Consolidated
Balance Sheet
Current assets	$	14,582	$	79,118	$	26,157	$	(185	)	$	119,672
Intercompany receivables		433,527		—		—		(433,527	)		—
Investments in subsidiaries		573,258		3,358		—		(576,616	)		—
Property and equipment, net		4,844		869,486		27,896		—			902,226
Other assets		32,217		160,727		22,123		(9,203	)		205,864

Total assets	$	1,058,428	$	1,112,689	$	76,176	$	(1,019,531	)	$	1,227,762



Current liabilities	$	36,304	$	71,723	$	25,769	$	(185	)	$	133,611
Intercompany payables		—		425,267		8,260		(433,527	)		—
Long-term debt, less current maturities		992,650		—		62		—			992,712
Other accrued liabilities		6,012		73,982		7,186		(9,203	)		77,977
Stockholders' equity		23,462		541,717		34,899		(576,616	)		23,462

Total liabilities and stockholders' equity	$	1,058,428	$	1,112,689	$	76,176	$	(1,019,531	)	$	1,227,762

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ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

16. Consolidating Condensed Financial Information (Continued)

Consolidating condensed statements of operations for the fiscal years ended April 24, 2016, April 26, 2015 and April 27, 2014 are as follows:

	For the Fiscal Year Ended April 24, 2016

	Isle of Capri Casinos, Inc. (Parent Obligor)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating and Eliminating Entries			Isle of Capri Casinos, Inc. Consolidated
Statement of Operations
Revenues:
Casino	$	—		$	986,968		$	41,079		$	—		$	1,028,047
Rooms, food, beverage, pari-mutuel and other		77			157,665			12,039			(7,888	)		161,893
Management fee revenue		35,280			—			—			(35,280	)		—

Gross revenues		35,357			1,144,633			53,118			(43,168	)		1,189,940
Less promotional allowances		—			(202,437	)		(8,911	)		—			(211,348	)

Net revenues		35,357			942,196			44,207			(43,168	)		978,592
Operating expenses:
Casino		—			145,763			6,950			—			152,713
Gaming taxes		—			245,405			16,511			—			261,916
Rooms, food, beverage, pari-mutuel and other		30,811			316,192			19,596			(7,888	)		358,711
Management fee expense		—			34,080			1,200			(35,280	)		—
Depreciation and amortization		1,742			76,073			4,290			—			82,105

Total operating expenses		32,553			817,513			48,547			(43,168	)		855,445

Operating income (loss)		2,804			124,683			(4,340	)		—			123,147
Interest expense, net		(30,499	)		(35,281	)		(1,934	)		—			(67,714	)
Loss on early extinguishment of debt		(2,966	)		—			—			—			(2,966	)
Equity in income (loss) of subsidiaries		55,433			—			—			(55,433	)		—

Income (loss) from continuing operations before income taxes		24,772			89,402			(6,274	)		(55,433	)		52,467
Income tax (provision) benefit		23,517			(31,028	)		3,333			—			(4,178	)

Income (loss) from continuining operations		48,289			58,374			(2,941	)		(55,433	)		48,289
Income (loss) of discontinued operations		(2,085	)		(2,151	)		—			2,151			(2,085	)

Net income (loss)	$	46,204		$	56,223		$	(2,941	)	$	(53,282	)	$	46,204

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ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

16. Consolidating Condensed Financial Information (Continued)

	For the Fiscal Year Ended April 26, 2015

	Isle of Capri Casinos, Inc. (Parent Obligor)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating and Eliminating Entries			Isle of Capri Casinos, Inc. Consolidated
Statement of Operations
Revenues:
Casino	$	—		$	990,785		$	41,456		$	—		$	1,032,241
Rooms, food, beverage, pari-mutuel and other		91			163,494			12,942			(8,885	)		167,642
Management fee revenue		34,869			—			—			(34,869	)		—

Gross revenues		34,960			1,154,279			54,398			(43,754	)		1,199,883
Less promotional allowances		—			(212,101	)		(10,737	)		—			(222,838	)

Net revenues		34,960			942,178			43,661			(43,754	)		977,045
Operating expenses:
Casino		—			149,778			6,769			—			156,547
Gaming taxes		—			247,395			15,967			—			263,362
Rooms, food, beverage, pari-mutuel and other		33,520			321,692			18,091			(8,885	)		364,418
Valuation charges		—			—			9,000			—			9,000
Management fee expense		—			33,669			1,200			(34,869	)		—
Depreciation and amortization		1,990			70,344			5,464			—			77,798

Total operating expenses		35,510			822,878			56,491			(43,754	)		871,125

Operating income (loss)		(550	)		119,300			(12,830	)		—			105,920
Interest expense, net		(43,775	)		(37,865	)		(2,122	)		—			(83,762	)
Loss on early extinguishment of debt		(13,757	)		—			—			—			(13,757	)
Equity in income (loss) of subsidiaries		43,319			—			—			(43,319	)		—

Income (loss) from continuing operations before income taxes		(14,763	)		81,435			(14,952	)		(43,319	)		8,401
Income tax (provision) benefit		22,053			(29,417	)		6,253			—			(1,111	)

Income (loss) from continuining operations		7,290			52,018			(8,699	)		(43,319	)		7,290
Income (loss) of discontinued operations		(2,113	)		(2,504	)		—			2,504			(2,113	)

Net income (loss)	$	5,177		$	49,514		$	(8,699	)	$	(40,815	)	$	5,177

Table of Contents

ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

16. Consolidating Condensed Financial Information (Continued)

	For the Fiscal Year Ended April 27, 2014

	Isle of Capri Casinos, Inc. (Parent Obligor)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating and Eliminating Entries			Isle of Capri Casinos, Inc. Consolidated
Statement of Operations
Revenues:
Casino	$	—		$	954,395		$	26,704		$	—		$	981,099
Rooms, food, beverage, pari-mutuel and other		688			159,923			12,237			(9,185	)		163,663
Management fee revenue		32,911			—			—			(32,911	)		—

Gross revenues		33,599			1,114,318			38,941			(42,096	)		1,144,762
Less promotional allowances		—			(204,197	)		(6,156	)		—			(210,353	)

Net revenues		33,599			910,121			32,785			(42,096	)		934,409
Operating expenses:
Casino		—			147,166			5,748			—			152,914
Gaming taxes		—			238,970			10,668			—			249,638
Rooms, food, beverage, pari-mutuel and other		31,737			320,904			21,263			(9,185	)		364,719
Valuation charges		—			125,238			26,353			—			151,591
Litigation accrual reversals		(1,979	)		—			(7,351	)		—			(9,330	)
Management fee expense		—			32,103			808			(32,911	)		—
Depreciation and amortization		1,709			72,427			5,443			—			79,579

Total operating expenses		31,467			936,808			62,932			(42,096	)		989,111

Operating income (loss)		2,132			(26,687	)		(30,147	)		—			(54,702	)
Interest expense, net		(45,829	)		(38,780	)		3,616			—			(80,993	)
Derivative income		398			—			—			—			398
Equity in income (loss) of subsidiaries		(105,831	)		—			—			105,831			—

Income (loss) from continuing operations before income taxes		(149,130	)		(65,467	)		(26,531	)		105,831			(135,297	)
Income tax (provision) benefit		32,327			(22,018	)		8,185			—			18,494

Income (loss) from continuining operations		(116,803	)		(87,485	)		(18,346	)		105,831			(116,803	)
Income (loss) of discontinued operations		(10,883	)		(13,259	)		916			12,343			(10,883	)

Net income (loss)	$	(127,686	)	$	(100,744	)	$	(17,430	)	$	118,174		$	(127,686	)

Table of Contents

ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

16. Consolidating Condensed Financial Information (Continued)

Consolidating condensed statements of cash flows for the fiscal years ended April 24, 2016, April 26, 2015 and April 27, 2014, are as follows:

	For the Fiscal Year Ended April 24, 2016

Statement of Cash Flows	Isle of Capri Casinos, Inc. (Parent Obligor)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating and Eliminating Entries			Isle of Capri Casinos, Inc. Consolidated
Net cash provided by (used in) operating activities	$	22,702		$	116,648		$	(3,438	)	$	—		$	135,912
Investing Activities:
Purchase of property and equipment		(376	)		(69,247	)		(639	)		—			(70,262	)
Proceeds from sales of assets		—			11,496			—			—			11,496
Restricted cash and investments		—			—			(425	)		—			(425	)
Parent company investment in subsidiaries		49,242			—			—			(49,242	)		—

Net cash provided by (used in) investing activities		48,866			(57,751	)		(1,064	)		(49,242	)		(59,191	)
Financing Activities:
Net repayments on line of credit		(7,500	)		—			—			—			(7,500	)
Principal repayments on long-term debt		(62,241	)		—			(158	)		—			(62,399	)
Premium payments on long-term debt		(2,409	)		—			—			—			(2,409	)
Payment of deferred financing costs		(209	)		—			—			—			(209	)
Proceeds from exercise of stock options		869			—			—			—			869
Net proceeds from (payments to) related parties		—			(54,164	)		4,922			49,242			—
Payment of other long-term obligation		—			(9,384	)		—			—			(9,384	)

Net cash provided by (used in) financing activities		(71,490	)		(63,548	)		4,764			49,242			(81,032	)
Net decrease in cash and cash equivalents		78			(4,651	)		262			—			(4,311	)
Cash and cash equivalents at beginning of period		5,077			53,033			8,327			—			66,437

Cash and cash equivalents at end of the period	$	5,155		$	48,382		$	8,589		$	—		$	62,126

Table of Contents

ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

16. Consolidating Condensed Financial Information (Continued)

	For the Fiscal Year Ended April 26, 2015

Statement of Cash Flows	Isle of Capri Casinos, Inc. (Parent Obligor)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating and Eliminating Entries			Isle of Capri Casinos, Inc. Consolidated
Net cash provided by (used in) operating activities	$	(14,187	)	$	128,904		$	10,851		$	—		$	125,568
Investing Activities:
Purchase of property and equipment		(105	)		(41,017	)		(564	)		—			(41,686	)
Proceeds from sales of assets		—			73			—			—			73
Payments towards gaming license		—			—			—			—			—
Restricted cash and investments		—			—			340			—			340
Parent company investment in subsidiaries		100,844			—			—			(100,844	)		—

Net cash provided by (used in) investing activities		100,739			(40,944	)		(224	)		(100,844	)		(41,273	)
Financing Activities:
Proceeds from long-term debt borrowings		153,000			—			—			—			153,000
Net borrowings on line of credit		10,300			—			—			—			10,300
Principal repayments on long-term debt		(237,899	)		—			(162	)		—			(238,061	)
Premium payments on long-term debt		(10,465	)		—			—			—			(10,465	)
Payment of deferred financing costs		(2,536	)		—			—			—			(2,536	)
Proceeds from exercise of stock options		74			—			—			—			74
Net proceeds from (payments to) related parties		—			(88,714	)		(12,130	)		100,844			—

Net cash provided by (used in) financing activities		(87,526	)		(88,714	)		(12,292	)		100,844			(87,688	)
Net decrease in cash and cash equivalents		(974	)		(754	)		(1,665	)		—			(3,393	)
Cash and cash equivalents at beginning of period		6,051			53,787			9,992			—			69,830

Cash and cash equivalents at end of the period	$	5,077		$	53,033		$	8,327		$	—		$	66,437

Table of Contents

ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

16. Consolidating Condensed Financial Information (Continued)

	For the Fiscal Year Ended April 27, 2014

Statement of Cash Flows	Isle of Capri Casinos, Inc. (Parent Obligor)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating and Eliminating Entries			Isle of Capri Casinos, Inc. Consolidated
Net cash provided by (used in) operating activities	$	5,431		$	103,025		$	(21,707	)	$	—		$	86,749
Investing Activities:
Purchase of property and equipment		(580	)		(19,063	)		(18,506	)		—			(38,149	)
Proceeds from sales of assets		—			32			49,849			—			49,881
Payments towards gaming license		—			—			(7,500	)		—			(7,500	)
Restricted cash and investments		—			—			1,879			—			1,879
Parent company investment in subsidiaries		85,222			—			—			(85,222	)		—

Net cash provided by (used in) investing activities		84,642			(19,031	)		25,722			(85,222	)		6,111
Financing Activities:
Net repayments on line of credit		(90,200	)		—			—			—			(90,200	)
Principal payments on debt		(63	)		—			(563	)		—			(626	)
Payments of deferred financing costs		(673	)		—			—			—			(673	)
Net proceeds from (payments to) related parties		—			(84,819	)		(403	)		85,222			—

Net cash provided by (used in) financing activities		(90,936	)		(84,819	)		(966	)		85,222			(91,499	)
Net increase (decrease) in cash and cash equivalents		(863	)		(825	)		3,049			—			1,361
Cash and cash equivalents at beginning of period		6,914			54,612			6,943			—			68,469

Cash and cash equivalents at end of the period	$	6,051		$	53,787		$	9,992		$	—		$	69,830

17. Selected Quarterly Financial Information (unaudited)

Our selected quarterly financial information includes new casino operations in Nemacolin opening July 1, 2013 and includes reclassifications for amounts shown in our previously filed reports on

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ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

17. Selected Quarterly Financial Information (unaudited) (Continued)

Forms 10-Q to reflect the discontinued operations presentation for our Natchez, Mississippi property which was classified as discontinued operations during the quarter ended July 26, 2015.

	Fiscal Quarters Ended

	July 26, 2015			October 25, 2015		January 24, 2016			April 24, 2016
Net revenues	$	246,924		$	236,261	$	230,540		$	264,867
Operating income		29,647			25,627		24,679			43,194
Income from continuing operations		8,468			7,811		7,015			24,995
Loss from discontinued operations, net of income taxes		(5,324	)		3,639		(400	)		—
Net income		3,144			11,450		6,615			24,995
Earnings (loss) per common share basic:
Income from continuing operations	$	0.21		$	0.19	$	0.17		$	0.61
Income (loss) from discontinued operations, net of income taxes		(0.13	)		0.09		(0.01	)		—

Net income	$	0.08		$	0.28	$	0.16		$	0.61



Earnings (loss) per common share diluted:
Income from continuing operations	$	0.21		$	0.19	$	0.17		$	0.60
Income (loss) from discontinued operations, net of income taxes		(0.13	)		0.09		(0.01	)		—

Net income	$	0.08		$	0.28	$	0.16		$	0.60



Weighted average basic shares		40,580,806			40,697,797		40,730,065			40,755,048
Weighted average dilutive shares		41,205,520			41,353,544		41,378,792			41,351,978

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ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

17. Selected Quarterly Financial Information (unaudited) (Continued)

	Fiscal Quarters Ended

	July 27, 2014			October 26, 2014			January 25, 2015			April 26, 2015
Net revenues	$	236,896		$	234,458		$	236,404		$	269,287
Operating income		20,500			21,975			27,545			35,900
Income (loss) from continuing operations		(1,725	)		(71	)		5,926			3,160
Loss from discontinued operations, net of income taxes		(592	)		(950	)		(503	)		(68	)
Net income (loss)		(2,317	)		(1,021	)		5,423			3,092
Earnings (loss) per common share basic:
Income (loss) from continuing operations	$	(0.04	)	$	—		$	0.15		$	0.08
Loss from discontinued operations, net of income taxes		(0.02	)		(0.03	)		(0.01	)		—

Net income (loss)	$	(0.06	)	$	(0.03	)	$	0.14		$	0.08



Earnings (loss) per common share diluted:
Income (loss) from continuing operations	$	(0.04	)	$	—		$	0.15		$	0.08
Income (loss) from discontinued operations, net of income taxes		(0.02	)		(0.03	)		(0.02	)		—

Net income (loss)	$	(0.06	)	$	(0.03	)	$	0.13		$	0.08



Weighted average basic shares		39,827,889			39,932,856			40,028,776			40,033,404
Weighted average dilutive shares		39,827,889			39,932,856			40,336,663			41,020,503

A summary of certain revenues and expenses from our continuing operations impacting our quarterly financial results is as follows:

(1): During the first quarter of fiscal 2016, we incurred a loss on extinguishment of debt of $2,966 related to the redemption of our 7.75% Senior Notes in May 2016.
(2): During the fourth quarter of fiscal 2016, we incurred $153 of expense related to the preopening of our Bettendorf property and $770 of expense related to an executive's exit agreement.
(3): During the first quarter of fiscal 2015, we incurred $1,013 of expense related to opposing the proposed Colorado gaming expansion referendum and $2,259 of severance expense related to restructuring at the corporate office.
(4): During the second quarter of fiscal 2015, we incurred $3,044 of expense related to opposing the proposed Colorado gaming expansion referendum and recorded a favorable property tax settlement related to our Waterloo property of $1,225.
(5): During the fourth quarter of fiscal 2015, we recorded impairment charges of $9,000 related to our long-lived assets at Nemacolin and $13,757 of loss on early extinguishment of debt.

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ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

18. Commitments and Contingencies

Operating Leases—The Company leases real estate and various equipment under operating lease agreements. Future minimum payments over the lease term of non-cancelable operating leases with initial terms of one year or more consisted of the following at April 24, 2016:

Fiscal Years Ending:

2017		10,293
2018		9,887
2019		9,196
2020		6,982
2021		6,663
Therafter		122,621

Total minimum lease payments	$	165,642

Rent expense related to continuing operations was $24,585, $24,731 and $25,895 in fiscal years 2016, 2015 and 2014, respectively. Such amounts include contingent rentals of $2,942, $3,012 and $2,926 in fiscal years 2016, 2015 and 2014, respectively. Contingent rent is based upon casino revenues or other metrics as defined in our lease agreements. Certain of our leases are subject to renewals and may contain escalation clauses.

Legal and Regulatory Proceedings—In October 2012, we opened our new casino in Cape Girardeau, Missouri. A subcontractor filed a mechanics' lien against our property resulting from a dispute between the subcontractor and our general contractor for the construction project. We demanded that the general contractor cause the lien to be bonded against or satisfied; however, the general contractor refused to do so and asserted that a portion of the subcontractor's claim resulted from additional work directly requested by us. In October 2013, the subcontractor filed suit against our wholly-owned subsidiary IOC-Cape Girardeau, LLC, the general contractor and two other defendants alleging various contract and equitable claims and were seeking damages of approximately $3.8 million. In August 2014, we filed a cross claim against the general contractor alleging breach of contract and various indemnity claims. In January 2016, all parties reached a settlement fully resolving all claims related to this matter and we paid and capitalized additional construction costs of $1.4 million.

We and our wholly-owned subsidiary, Riverboat Corporation of Mississippi—Vicksburg, were defendants in a lawsuit filed in the Circuit Court of Adams County, Mississippi by Silver Land, Inc., alleging breach of contract in connection with our 2006 sale of casino operations in Vicksburg, Mississippi. The court originally ruled in favor of Silver Land and awarded damages of $1,979, which we accrued. We appealed the decision and in June 2013 the court of appeals reversed the trial court and ruled in our favor. Silver Land filed a Petition for Writ of Certiorari in November 2013 requesting review by the Mississippi Supreme Court. On February 20, 2014, the Mississippi Supreme Court denied Silver Land's request, which effectively disposed of the matter in its entirety. As a result, during fiscal 2014, we reversed a litigation accrual of $2,223, of which $1,979 was recorded as a reduction to operating expenses and $244 was recorded as a reduction to interest expense.

Our wholly owned subsidiary, Lady Luck Gaming Corporation, and several joint venture partners were defendants in the Greek Civil Courts and the Greek Administrative Courts in similar lawsuits brought by the country of Greece. The actions alleged that the defendants failed to make specified

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ISLE OF CAPRI CASINOS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(amounts in thousands, except share and per share amounts)

18. Commitments and Contingencies (Continued)

payments in connection with the gaming license bid process for Patras, Greece. In the Civil Court lawsuit, the Civil Court of First Instance ruled in our favor and dismissed the lawsuit in 2001. The lawsuits continued through the appeals process and in October 2013, the Supreme Administrative Court rejected both lawsuits in a final and irrevocable decision which disposed of this matter completely. As a result, during fiscal 2014, we reversed a litigation accrual of $14,730, of which $7,351 was recorded as a reduction to operating expenses and $7,379 was recorded as a reduction to interest expense.

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ISLE OF CAPRI CASINOS, INC.

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
(In thousands)

	Accounts Receivable Reserve

Period	Balance at Beginning of Year		Charged to Costs and Expenses		Deductions from Reserves			Balance at End of Year
Year Ended April 24, 2016	$	1,595	$	—	$	(206	)	$	1,389
Year Ended April 26, 2015		2,120		79		(604	)		1,595
Year Ended April 27, 2014		2,086		388		(354	)		2,120

	Other Receivables Reserve

Period	Balance at Beginning of Year		Charged to Costs and Expenses		Deductions from Reserves			Balance at End of Year
Year Ended April 24, 2016	$	1,882	$	—	$	(1,882	)	$	—
Year Ended April 26, 2015		1,882		—		—			1,882
Year Ended April 27, 2014		1,882		—		—			1,882

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

None.

ITEM 9A. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures—Based on their evaluation as of April 24, 2016, our Chief Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective to ensure that the information required to be disclosed by us in this Annual Report was recorded, processed, summarized and reported within the time periods specified in the SEC's rules and instructions for Form 10-K.

Management's Report on Internal Control over Financial Reporting—Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our management, including our Chief Executive Officer and Principal Financial Officer, assessed the effectiveness of our internal control over financial reporting as of April 24, 2016. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013 Framework). Our management has concluded that, as of April 24, 2016, our internal control over financial reporting is effective based on these criteria. Ernst & Young LLP, an independent registered public accounting firm, who audited and reported on the consolidated financial statements included in this Annual Report on Form 10-K, has issued an attestation report on the effectiveness of the Company's internal control over financial reporting as stated in their report which is included in Item 8.

Changes in Internal Controls over Financial Reporting—There have been no changes in our internal controls over financial reporting during the quarter ended April 24, 2016 that have materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.

Inherent Limitations on Effectiveness of Controls—Our management, including our Chief Executive Officer and Principal Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

This item has been omitted from this report and is incorporated by reference to Isle of Capri's definitive proxy statement to be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this report.

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ITEM 11. EXECUTIVE COMPENSATION

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

The information required by this item relating to security ownership of management has been omitted from this report and is incorporated by reference to Isle of Capri's definitive proxy statement to be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this report.

Equity Compensation Plans. The following table provides information about securities authorized for issuance under our 2009 Long-Term Stock Incentive Plan for fiscal 2016.

Plan category		(b) Weighted-average exercise price of outstanding options, warrants and rights

Equity compensation plans approved by security holders(1)	1,434,384	$	13.84	2,949,054
Equity compensation plans not approved by security holders	—		—	—

Total	1,434,384	$	13.84	2,949,054

(1): The securities outstanding above includes 251,964 performance-based restricted stock units with a company performance condition that assumes the maximum award will be achieved. In addition, the securities outstanding above includes 467,073 performance-based restricted stock units with a market condition, net of taxes withheld, of which the amount of the award was known on April 26, 2015, but the second tranche of the award vested subsequent to April 24, 2016. The performance-based restricted stock units outstanding do not have an exercise price; therefore the weighted average per share exercise price only relates to outstanding stock options.

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

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

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PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

The following documents are filed as part of this Form 10-K.

(a): Consolidated financial statements filed as part of this report are listed under Part II, Item 8.
(b): The exhibits listed on the "Index to Exhibits" are filed with this report or incorporated by reference as set forth below.

All other schedules are omitted because they are not applicable or not required, or because the required information is included in the consolidated financial statement or notes thereto.

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SIGNATURES

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


		ISLE OF CAPRI CASINOS, INC.
Dated: June 21, 2016		/s/ ERIC L. HAUSLER Eric L. Hausler, 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 the registrant and in the capacities and on the dates indicated.


Dated: June 21, 2016		/s/ ERIC L. HAUSLER Eric L. Hausler, Chief Executive Officer (Principal Executive Officer)
Dated: June 21, 2016		/s/ MICHAEL A. HART Michael A. Hart, Sr. Vice President, Accounting and Treasurer (Principal Financial and Accounting Officer)
Dated: June 21, 2016		/s/ ROBERT S. GOLDSTEIN Robert S. Goldstein, Chairman of the Board
Dated: June 21, 2016		/s/ ALAN J. GLAZER Alan J. Glazer, Lead Director
Dated: June 21, 2016		/s/ BONNIE BIUMI Bonnie Biumi, Director
Dated: June 21, 2016		/s/ JEFFREY D. GOLDSTEIN Jeffrey D. Goldstein, Director

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Dated: June 21, 2016		/s/ RICHARD A. GOLDSTEIN Richard A. Goldstein, Director
Dated: June 21, 2016		/s/ GREGORY J. KOZICZ Gregory J. Kozicz, Director
Dated: June 21, 2016		/s/ LEE S. WIELANSKY Lee S. Wielansky, Director

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INDEX TO EXHIBITS

EXHIBIT NUMBER			DESCRIPTION

	2.1		Securities Purchase Agreement, dated August 11, 2015, by and among Isle of Capri Casinos, Inc., IOC- Natchez, Inc, IOC-Natchez Sub, LLC, Casino Holding Investment Partners, LLC and Natchez Casino Opco, LLC. Corporation Plan (Incorporated by reference to Exhibit 2.1 to the Quarterly Report on Form 10-Q filed on September 4, 2015)

	2.2		Asset Purchase Agreement, dated December 4, 2013, by and among Isle of Capri Casinos, Inc., IOC Davenport, Inc., Scott County Casino, LLC and Kehl Development Corporation (Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed on December 4, 2013)

	3.1		Amended and Restated Certificate of Incorporation of Isle of Capri Casinos, Inc. (Incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10-K filed on June 16, 2011)

	3.2		Bylaws, as amended (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on June 25, 2010)

	4.1		Indenture, dated as of March 7, 2011, among the Company, the guarantors named therein and U.S. Bank National Association, as trustee (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on March 8, 2011)

	4.2		Indenture, dated as of August 7, 2012, among the Company, the guarantors named therein and U.S. Bank National Association, as trustee (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on August 9, 2012)

	4.3		Indenture, dated as of March 5, 2013, among the Company, the guarantors named therein and U.S. Bank National Association, as trustee (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on March 6, 2013)

	4.4		Supplemental Indenture, dated as of April 19, 2013, among the Company, the guarantors named therein and U.S. Bank National Association, as trustee (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on April 24, 2013)

	4.5		Supplemental Indenture, dated as of April 19, 2013, among the Company, the guarantors named therein and U.S. Bank National Association, as trustee (Incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed on April 24, 2013)

	4.6		Supplemental Indenture, dated as of April 19, 2013, among the Company, the guarantors named therein and U.S. Bank National Association, as trustee (Incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed on April 24, 2013)

	4.7		Second Supplemental Indenture, dated as of April 14, 2015, among the Company, the guarantors named therein and U.S. Bank National Association, as trustee (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on April 14, 2015)

	4.8		Registration Rights Agreement, dated April 14, 2015, among the Company, certain subsidiaries of the Company, Wells Fargo Securities, LLC, Credit Suisse Securities (USA) LLC and Deutsche Bank Securities, Inc. (Incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed on April 14, 2015)

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		DESCRIPTION

10.1		Agreement, dated January 19, 2011, by and among Isle of Capri Casinos, Inc., and Mr. Jeffrey D. Goldstein, Mr. Robert S. Goldstein, Richard A. Goldstein and GFIL Holdings, LLC (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-k filed on January 19, 2011)

10.2		Amendment Number One to Governance Agreement, dated February 23, 2011, by and among Isle of Capri Casinos, Inc., GFIL Holdings, LLC, Jeffrey D. Goldstein, Robert S. Goldstein and Richard A. Goldstein (Incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed on February 28, 2011)

10.3	†	Isle of Capri Casinos, Inc. Second Amended and Restated 2009 Long-Term Stock Incentive Plan (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on October 9, 2015)

10.4	†	Isle of Capri Casinos, Inc. Corporate Level Incentive Compensation Plan (Incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed on December 3, 2010)

10.5	†*	Isle of Capri Casinos, Inc.'s Executive Nonqualified Excess Plan

10.6	†*	Isle of Capri Casino, Inc. Executive Nonqualified Excess Plan Adoption Agreement

10.7	†*	Amended and Restated Employment Agreement, dated April 6, 2016, between Eric L. Hausler and Isle of Capri Casinos, Inc.

10.8	†*	Amended and Restated Employment Agreement, dated April 8, 2016, between Arnold L. Block and Isle of Capri Casinos, Inc.

10.9	†*	Amended and Restated Employment Agreement dated as of April 11, 2016, between Michael A. Hart and Isle of Capri Casinos, Inc.

10.10	†	Amended and Restated Employment Agreement, dated January 18, 2011, between Virginia M. McDowell and Isle of Capri Casinos, Inc. (Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on January 18, 2011)

10.11	†	Employment Agreement, dated as of July 1, 2008, between Isle of Capri Casinos, Inc. and Edmund L. Quatmann, Jr. (Incorporated by reference to Exhibit 10.18 to the Annual Report on Form 10-K filed on July 11, 2008)

10.12	†	First Amendment to Employment Agreement, dated as of January 9, 2014, between Isle of Capri Casinos, Inc. and Edmund L. Quatmann, Jr. (Incorporated by reference to Exhibit 10.6 to the Annual Report on Form 10-K filed on June 23, 2014)

10.13	†	Isle of Capri Casinos, Inc. Employment Agreement Compliance Addendum—Edmund L. Quatmann, Jr. (Incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q filed on March 6, 2009)

10.14	†	Employment Agreement, dated as of January 7, 2013, between Isle of Capri Casinos, Inc. and John Wilson (Incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed on February 20, 2013)

10.15	†	Form Employment Agreement for Senior Vice Presidents of Isle of Capri Casinos, Inc. (Incorporated by reference to Exhibit 10.21 to the Annual Report on Form 10-K filed on July 2, 2013)

10.16	†	Form Stock Option Award Agreement (Incorporated by reference to Exhibit 10.20 to the Annual Report on Form 10-K filed on July 11, 2008)

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		DESCRIPTION

10.17	†	Form of Restricted Stock Award Agreement (Incorporated by reference to Exhibit 10.22 to the Annual Report on Form 10-K filed on June 25, 2009)

10.18	†	Form of Performance Based Restricted Stock Unit Agreement (Incorporated by reference to Exhibit 10.24 to the Annual Report on Form 10-K filed on June 14, 2012)

10.19	†	Form of Non-Qualified Stock Option Agreement (Incorporated by reference to Exhibit 10.27 to the Annual Report on Form 10-K filed on June 17, 2015)

10.20	†	Form of Performance Stock Unit Agreement (Incorporated by reference to Exhibit 10.28 to the Annual Report on Form 10-K filed on June 17, 2015)

10.21	†	Form of Restricted Stock Unit Agreement (Incorporated by reference to Exhibit 10.29 to the Annual Report on Form 10-K filed on June 17, 2015)

10.22		Credit Agreement, dated as of July 26, 2007 among Isle of Capri Casinos, Inc., the Lenders listed herein, Credit Suisse, Cayman Island Branch, as administrative agent, issuing bank and swing line lender, Credit Suisse Securities (USA) LLC, as lead arranger and bookrunner, Deutsche Bank Securities Inc. and CIBC World Markets Corp., as co-syndication agents and U.S. Bank, N.A. and Wachovia Bank, National Association, as co-documentation agents (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on July 31, 2007)

10.23		Security Agreement, dated as of July 26, 2007, among Isle of Capri Casinos, Inc., its material subsidiaries party thereto, and Credit Suisse, Cayman Islands Branch, as Administrative Agent for and representative of the financial institutions party to the Credit Agreement and any Hedge Providers (as defined therein) (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on July 31, 2007)

10.24		First Amendment to Credit Agreement, dated as of February 17, 2010, among the Company, as borrower, the financial institutions listed therein, as lenders, Credit Suisse AG, Cayman Islands Branch, as administrative agent and the other agents referred to therein among Isle of Capri Casinos, Inc., the Lenders listed therein (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on February 29, 2010)

10.25		Second Amendment to Credit Agreement, dated as of March, 25, 2011, among Isle of Capri Casinos, Inc., as borrower, certain subsidiaries of Isle of Capri Casinos, Inc., the financial institutions listed therein, as lenders, Wells Fargo Bank, National Association, as administrative agent (as successor to Credit Suisse AG, Cayman Islands Branch (f/k/a Credit Suisse, Cayman Islands Branch)), and the other agents referred to therein (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on March 31, 2011)

10.26		Third Amendment to Credit Agreement, dated as of November 21, 2012, among Isle of Capri Casinos, Inc., as borrower, certain subsidiaries of isle of Capri casinos, Inc., the financial institutions listed therein, as lenders, Wells Fargo Bank, National Association, as administrative agent (as successor to Credit Suisse AG, Cayman Islands Branch (f/k/a Credit Suisse, Cayman Islands Branch)), and the other agents referred to therein (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on November 27, 2012)

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EXHIBIT NUMBER			DESCRIPTION

	10.27		Fourth Amendment Documents to Credit Agreement and Amendments to Loan Documents, dated as of April 19, 2013 among the Company, the financial institutions listed therein as Lenders and Wells Fargo Bank, National Association (as successor to Credit Suisse AG, Cayman Islands Branch (f/k/a Credit Suisse, Cayman Islands Branch)), as administrative agent to the Lenders, Issuing Bank and Swing Line Lender (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on April 24, 2013)

	10.28		Fifth Amendment to Credit Agreement, dated as of July 2, 2013, among Isle of Capri Casinos, Inc., as borrower, certain subsidiaries of Isle of Capri Casinos, Inc., the financial institutions listed therein, as lenders, Wells Fargo Bank, National Association, as administrative agent, and the other agents referred to therein (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on July 2, 2013)

	10.29		Sixth Amendment to Credit Agreement, dated as of October 29, 2014, among Isle of Capri Casinos, Inc., as borrower, certain subsidiaries of Isle of Capri Casinos, Inc., the financial institutions listed therein, as Lenders, and Wells Fargo Bank, National Association, as one of the Requisite Lenders, Issuing Bank, Swing Line Lender and as the administrative agent. (Incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed on December 4, 2014)

	10.30		Amended and Restated Lease, dated as of April 19, 1999, among Port Resources, Inc. and CRU, Inc., as landlords and St. Charles Gaming Company, Inc., as tenant (St. Charles) (Incorporated by reference to Exhibit 10.28 to the Annual Report on Form 10-K filed on July 02, 1999)

	10.31		Lease of property in Coahoma, Mississippi dated as of November 16, 1993 by and among Roger Allen Johnson, Jr., Charles Bryant Johnson and Magnolia Lady, Inc. (Incorporated by reference to the Registration Statement on Form S-4/A filed June 19, 2002)

	10.32		Addendum to Lease dated as of June 22, 1994 by and among Roger Allen Johnson, Jr., Charles Bryant Johnson and Magnolia Lady, Inc. (Incorporated by reference to Exhibit 10.46 to the Annual Report on Form 10-K filed on July 28, 2000)

	10.33		Second addendum to Lease dated as of October 17, 1995 by and among Roger Allen Johnson, Jr., Charles Bryant Johnson and Magnolia Lady, Inc. (Incorporated by reference to Exhibit 10.47 to the Annual Report on Form 10-K filed on July 28, 2000)

	10.34		Master Lease between The City of Boonville, Missouri and IOC-Boonville, Inc. formally known as Davis Gaming Boonville, Inc. dated as of July 18, 1997. (Incorporated by reference to Exhibit 10.40 to the Annual Report on Form 10-K filed on July 11, 2008)

	10.35		Amendment to Master Lease between The City of Boonville, Missouri and IOC-Boonville, Inc. formally known as Davis Gaming Boonville, Inc. dated as of April 19, 1999. (Incorporated by reference to Exhibit 10.41 to the Annual Report on Form 10-K filed on July 11, 2008)

	10.36		Second Amendment to Master Lease between The City of Boonville, Missouri and IOC-Boonville, Inc. formerly known as Davis Gaming Boonville, Inc. dated as of September 17, 2001. (Incorporated by reference to Exhibit 10.42 to the Annual Report on Form 10-K filed on July 11, 2008)

100

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EXHIBIT NUMBER			DESCRIPTION

	10.37		Third Amendment to Master Lease between The City of Boonville, Missouri and IOC-Boonville, Inc. formerly known as Gold River's Boonville Resort, Inc. and Davis Gaming Boonville, Inc. dated as of November 19, 2001. (Incorporated by reference to Exhibit 10.43 to the Annual Report on Form 10-K filed on July 11, 2008)

	10.38		Amended and Restated Lease Agreement by and between the Port Authority of Kansas City, Missouri and Tenant dated as of August 21, 1995 (Incorporated by reference to Exhibit 10.44 to the Annual Report on Form 10-K filed June 25, 2009)

	10.39		First Amendment to Amended and Restated Lease Agreement by and between the Port Authority of Kansas City, Missouri and Tenant dated as of October 31, 1995 (Incorporated by reference to Exhibit 10.45 to the Annual Report on Form 10-K filed June 25, 2009)

	10.40		Second Amendment to Amended and Restated Lease Agreement by and between the Port Authority of Kansas City, Missouri and Tenant dated as of June 10, 1996. (Incorporated by reference to Exhibit 10.46 to the Annual Report on Form 10-K filed June 25, 2009)

	10.41		Assignment and Assumption Agreement (Lease Agreement) between Flamingo Hilton Riverboat Casino, LP, Isle of Capri Casinos, Inc. and IOC-Kansas City, Inc. dated as of June 6, 2000. (Incorporated by reference to Exhibit 10.44 to the Annual Report on Form 10-K filed on July 11, 2008)

	10.42		Lease and Agreement-Spring 1995 between Andrianakos Limited Liability Company and Isle of Capri Black Hawk, LLC. dated as of August 15, 1995. (Incorporated by reference to Exhibit 10.45 to the Annual Report on Form 10-K filed on July 11, 2008)

	10.43		Addendum to the Lease and Agreement-Spring 1995 between Andrianakos Limited Liability Company and Isle of Capri Black Hawk, LLC. dated as of April 4, 1996. (Incorporated by reference to Exhibit 10.46 to the Annual Report on Form 10-K filed on July 11, 2008)

	10.44		Second Addendum to the Lease and Agreement-Spring 1995 between Andrianakos Limited Liability Company and Isle of Capri Black Hawk, LLC. dated as of March 21, 2003.(Incorporated by reference to Exhibit 10.47 to the Annual Report on Form 10-K filed on July 11, 2008)

	10.45		Third Addendum to the Lease and Agreement-Spring 1995 between Andrianakos Limited Liability Company and Isle of Capri Black Hawk, LLC. dated as of April 22, 2003. (Incorporated by reference to Exhibit 10.48 to the Annual Report on Form 10-K filed on July 11, 2008)

	10.46		Fourth Addendum to the Lease and Agreement-Spring 1995 between Andrinakos Limited Liability Company and Isle of Capri Black Hawk, LLC. Dated as of December 11, 2013. (Incorporated by reference to Exhibit 10.49 to the Annual Report on Form 10-K filed on June 23, 2014)

	10.47		Development Agreement by and between IOC-Cape Girardeau, LLC and the City of Cape Girardeau, Missouri dated as of October 4, 2010. (Incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q filed on December 3, 2010)

	10.48		Amended and Restated Operator's Contract by and between Black Hawk County Gaming Association and IOC Black Hawk County, Inc. dated as of November 9, 2004. (Incorporated by reference to Exhibit 10.51 to the Annual Report on Form 10-K filed on June 23, 2014)

101

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		DESCRIPTION

10.49		Management Agreement by and between Gamblers Supply Management Company and the Marquette Gaming Corporation dated as of June 10, 1994. (Incorporated by reference to Exhibit 10.52 to the Annual Report on Form 10-K filed on June 23, 2014)

10.50		First Amendment to the Management Agreement by and between Isle of Capri Marquette, Inc., successor in interest to Gamblers Supply Management Company, and Upper Mississippi Gaming Corporation (formerly known as Marquette Gaming Corporation), dated as of November 10, 2015. (Incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed on December 4, 2015)

10.51		Operator's Contract by and between the Riverbend Regional Authority, Green Bridge Company, Bettendorf Riverfront Development Company, L.C., Lady Luck Gaming Corporation and Lady Luck Bettendorf, L.C., dated as of August 11, 1994. (Incorporated by reference to Exhibit 10.53 to the Annual Report on Form 10-K filed on June 23, 2014)

10.52		Amendment to Operator's Contract by and among Green Bridge Company, Bettendorf Riverfront Development Company, L.C., Lady Luck Gaming Corporation, Lady Luck Bettendorf, L.C. and Riverbend Regional Authority, dated as of August 27, 1998. (Incorporated by reference to Exhibit 10.54 to the Annual Report on Form 10-K filed on June 23, 2014)

10.53		Second Amendment to Operator's Contract by and between Isle of Capri Bettendorf, L.C. and Scott County Regional Authority dated as of June 30, 2004. (Incorporated by reference to Exhibit 10.55 to the Annual Report on Form 10-K filed on June 23, 2014)

10.54		Third Amendment to Operator's Contract by and between Isle of Capri Bettendorf, L.C. and Scott County Regional Authority dated as of October 30, 2007. (Incorporated by reference to Exhibit 10.56 to the Annual Report on Form 10-K filed on June 23, 2014)

10.55		Fourth Amendment to Operator's Contract by and between Isle of Capri Bettendorf, L.C. and Scott County Regional Authority dated as of March 11, 2015. (Incorporated by reference to Exhibit 10.62 to the Annual Report on Form 10-K filed on June 17, 2015)

21.1	*	Significant Subsidiaries of Isle of Capri Casinos, Inc.

23.1	*	Consent of Ernst & Young LLP

31.1	*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934

31.2	*	Certification of Principal Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934

32.1	*	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350

32.2	*	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350

99.1	*	Description of Governmental Regulation.

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EXHIBIT NUMBER			DESCRIPTION

	101	*	The following financial statements and notes from the Isle of Capri Casinos, Inc. Annual Report on Form 10-K for the year ended April 24, 2016, filed on June 21, 2016, formatted in XBRL: (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations; (iii) Consolidated Statement of Comprehensive Income (Loss); (iv) Consolidated Statements of Stockholders' Equity; (v) Consolidated Statements of Cash Flows; and (vi) Notes to Consolidated Financial Statements.

*: Filed herewith.
†: Management contract or compensatory plan or arrangement.

103

Exhibit 10.5

THE EXECUTIVE NONQUALIFIED EXCESS PLAN

PLAN DOCUMENT

THE EXECUTIVE NONQUALIFIED EXCESS PLAN

Section 1. Purpose:

By execution of the Adoption Agreement, the Employer has adopted the Plan set forth herein, and in the Adoption Agreement, to provide a means by which certain management Employees or Independent Contractors of the Employer may elect to defer receipt of current Compensation from the Employer in order to provide retirement and other benefits on behalf of such Employees or Independent Contractors of the Employer, as selected in the Adoption Agreement. The Plan is intended to be a nonqualified deferred compensation plan that complies with the provisions of Section 409A of the Internal Revenue Code (the “Code”). The Plan is also intended to be an unfunded plan maintained primarily for the purpose of providing deferred compensation benefits for a select group of management or highly compensated employees under Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act of 1974 (“ERISA”) and independent contractors. Notwithstanding any other provision of this Plan, this Plan shall be interpreted, operated and administered in a manner consistent with these intentions.

Section 2. Definitions:

As used in the Plan, including this Section 2, references to one gender shall include the other, unless otherwise indicated by the context:

2.1 “Active Participant” means, with respect to any day or date, a Participant who is in Service on such day or date; provided, that a Participant shall cease to be an Active Participant (i) immediately upon a determination by the Committee that the Participant has ceased to be an Employee or Independent Contractor, or (ii) at the end

of the Plan Year that the Committee determines the Participant no longer meets the eligibility requirements of the Plan.

2.2 “Adoption Agreement” means the written agreement pursuant to which the Employer adopts the Plan. The Adoption Agreement is a part of the Plan as applied to the Employer.

2.3 “Beneficiary” means the person, persons, entity or entities designated or determined pursuant to the provisions of Section 13 of the Plan.

2.4 “Board” means the Board of Directors of the Company, if the Company is a corporation. If the Company is not a corporation, “Board” shall mean the Company.

2.5 “Change in Control Event” means an event described in Section 409A(a)(2)(A)(v) of the Code (or any successor provision thereto) and the regulations thereunder.

2.6 “Committee” means the persons or entity designated in the Adoption Agreement to administer the Plan. If the Committee designated in the Adoption Agreement is unable to serve, the Employer shall satisfy the duties of the Committee provided for in Section 9.

2.7 “Company” means the company designated in the Adoption Agreement as such.

2.8 “Compensation” shall have the meaning designated in the Adoption Agreement.

2.9 “Crediting Date” means the date designated in the Adoption Agreement for crediting the amount of any Participant Deferral Credits or Employer Credits to the Deferred Compensation Account of a Participant.

2.10 “Deferred Compensation Account” means the account maintained with respect to each Participant under the Plan. The Deferred Compensation Account shall be credited with Participant Deferral Credits and Employer Credits, credited or debited for deemed investment gains or losses, and adjusted for payments in accordance with the rules and elections in effect under Section 8. The Deferred Compensation Account of a Participant shall include any In-Service or Education Account of the Participant, if applicable.

2.11 “Disabled” means Disabled within the meaning of Section 409A of the Code and the regulations thereunder. Generally, this means that the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering Employees of the Employer.

2.12 “Education Account” is an In-Service Account which will be used by the Participant for educational purposes.

2.13 “Effective Date” shall be the date designated in the Adoption Agreement.

2.14 “Employee” means an individual in the Service of the Employer if the relationship between the individual and the Employer is the legal relationship of employer and employee. An individual shall cease to be an Employee upon the Employee’s Separation from Service.

2.15 “Employer” means the Company, as identified in the Adoption Agreement, and any Participating Employer which adopts this Plan. An Employer may be a corporation, a limited liability company, a partnership or sole proprietorship.

2.16 “Employer Credits” means the amounts credited to the Participant’s Deferred Compensation Account by the Employer pursuant to the provisions of Section 4.2.

2.17 “Grandfathered Amounts” means, if applicable, the amounts that were deferred under the Plan and were earned and vested within the meaning of Section 409A of the Code and regulations thereunder as of December 31, 2004. Grandfathered Amounts shall be subject to the terms designated in the Adoption Agreement.

2.18 “Independent Contractor” means an individual in the Service of the Employer if the relationship between the individual and the Employer is not the legal relationship of employer and employee. An individual shall cease to be an Independent Contractor upon the termination of the Independent Contractor’s Service. An Independent Contractor shall include a director of the Employer who is not an Employee.

2.19 “In-Service Account” means a separate account to be kept for each Participant that has elected to take in-service distributions as described in Section 5.4. The In-Service Account shall be adjusted in the same manner and at the same time as the Deferred Compensation Account under Section 8 and in accordance with the rules and elections in effect under Section 8.

2.20 “Normal Retirement Age” of a Participant means the age designated in the Adoption Agreement.

2.21 “Participant” means with respect to any Plan Year an Employee or Independent Contractor who has been designated by the Committee as a Participant and who has entered the Plan or who has a Deferred Compensation Account under the Plan; provided that if the Participant is an Employee, the individual must be a highly compensated or management employee of the Employer within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.

2.22 “Participant Deferral Credits” means the amounts credited to the Participant’s Deferred Compensation Account by the Employer pursuant to the provisions of Section 4.1.

2.23 “Participating Employer” means any trade or business (whether or not incorporated) which adopts this Plan with the consent of the Company identified in the Adoption Agreement.

2.24 “Participation Agreement” means a written agreement entered into between a Participant and the Employer pursuant to the provisions of Section 4.1

2.25 “Performance-Based Compensation” means compensation where the amount of, or entitlement to, the compensation is contingent on the satisfaction of preestablished organizational or individual performance criteria relating to a performance period of at least twelve months. Organizational or individual performance criteria are considered preestablished if established in writing within 90 days after the commencement of the period of service to which the criteria relates, provided that the outcome is substantially uncertain at the time the criteria are established. Performance-based compensation may include payments based upon subjective performance criteria as

provided in regulations and administrative guidance promulgated under Section 409A of the Code.

2.26 “Plan” means The Executive Nonqualified Excess Plan, as herein set out and as set out in the Adoption Agreement, or as duly amended. The name of the Plan as applied to the Employer shall be designated in the Adoption Agreement.

2.27 “Plan-Approved Domestic Relations Order” shall mean a judgment, decree, or order (including the approval of a settlement agreement) which is:

2.27.1 Issued pursuant to a State’s domestic relations law;

2.27.2 Relates to the provision of child support, alimony payments or marital property rights to a Spouse, former Spouse, child or other dependent of the Participant;

2.27.3 Creates or recognizes the right of a Spouse, former Spouse, child or other dependent of the Participant to receive all or a portion of the Participant’s benefits under the Plan;

2.27.4 Requires payment to such person of their interest in the Participant’s benefits in a lump sum payment at a specific time; and

2.27.5 Meets such other requirements established by the Committee.

2.28 “Plan Year” means the twelve-month period ending on the last day of the month designated in the Adoption Agreement; provided that the initial Plan Year may have fewer than twelve months.

2.29 “Qualifying Distribution Event” means (i) the Separation from Service of the Participant, (ii) the date the Participant becomes Disabled, (iii) the death of the Participant, (iv) the time specified by the Participant for an In-Service or Education Distribution, (v) a Change in Control Event, or (vi) an Unforeseeable Emergency, each to the extent provided in Section 5.

2.30 “Seniority Date” shall have the meaning designated in the Adoption Agreement.

2.31 “Separation from Service” or “Separates from Service” means a “separation from service” within the meaning of Section 409A of the Code.

2.32 “Service” means employment by the Employer as an Employee. For purposes of the Plan, the employment relationship is treated as continuing intact while the Employee is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six months, or if longer, so long as the Employee’s right to reemployment is provided either by statute or contract. If the Participant is an Independent Contractor, “Service” shall mean the period during which the contractual relationship exists between the Employer and the Participant. The contractual relationship is not terminated if the Participant anticipates a renewal of the contract or becomes an Employee.

2.33 “Service Bonus” means any bonus paid to a Participant by the Employer which is not Performance-Based Compensation.

2.34 “Specified Employee” means an Employee who meets the requirements for key employee treatment under Section 416(i)(1)(A)(i), (ii) or (iii) of the Code (applied in accordance with the regulations thereunder and without regard to Section 416(i)(5) of the Code) at any time during the twelve month period ending on December 31 of each year (the “identification date”). Unless binding corporate action is taken to establish different rules for determining Specified Employees for all plans of the Company and its controlled group members that are subject to Section 409A of the Code, the foregoing rules and the other default rules under the regulations of Section 409A of the Code shall

apply. If the person is a key employee as of any identification date, the person is treated as a Specified Employee for the twelve-month period beginning on the first day of the fourth month following the identification date.

2.35 “Spouse” or “Surviving Spouse” means, except as otherwise provided in the Plan, a person who is the legally married spouse or surviving spouse of a Participant.

2.36 “Unforeseeable Emergency” means an “unforeseeable emergency” within the meaning of Section 409A of the Code.

2.37 “Years of Service” means each Plan Year of Service completed by the Participant. For vesting purposes, Years of Service shall be calculated from the date designated in the Adoption Agreement and Service shall be based on service with the Company and all Participating Employers.

Section 3. Participation:

The Committee in its discretion shall designate each Employee or Independent Contractor who is eligible to participate in the Plan. A Participant who Separates from Service with the Employer and who later returns to Service will not be an Active Participant under the Plan except upon satisfaction of such terms and conditions as the Committee shall establish upon the Participant’s return to Service, whether or not the Participant shall have a balance remaining in the Deferred Compensation Account under the Plan on the date of the return to Service.

Section 4. Credits to Deferred Compensation Account:

4.1 Participant Deferral Credits. To the extent provided in the Adoption Agreement, each Active Participant may elect, by entering into a Participation Agreement with the Employer, to defer the receipt of Compensation from the Employer by a dollar

amount or percentage specified in the Participation Agreement. The amount of Compensation the Participant elects to defer, the Participant Deferral Credit, shall be credited by the Employer to the Deferred Compensation Account maintained for the Participant pursuant to Section 8. The following special provisions shall apply with respect to the Participant Deferral Credits of a Participant:

4.1.1 The Employer shall credit to the Participant’s Deferred Compensation Account on each Crediting Date an amount equal to the total Participant Deferral Credit for the period ending on such Crediting Date.

4.1.2 An election pursuant to this Section 4.1 shall be made by the Participant by executing and delivering a Participation Agreement to the Committee. Except as otherwise provided in this Section 4.1, the Participation Agreement shall become effective with respect to such Participant as of the first day of January following the date such Participation Agreement is received by the Committee. A Participant’s election may be changed at any time prior to the last permissible date for making the election as permitted in this Section 4.1, and shall thereafter be irrevocable. The election of a Participant shall continue in effect for subsequent years until modified by the Participant as permitted in this Section 4.1.

4.1.3 A Participant may execute and deliver a Participation Agreement to the Committee within 30 days after the date the Participant first becomes eligible to participate in the Plan to be effective as of the first payroll period next following the date the Participation Agreement is fully executed by the Participant. Whether a Participant is treated as newly eligible for participation under this Section shall be determined in accordance with Section 409A of the Code and the regulations thereunder, including (i) rules that treat all elective deferral account balance plans as one plan, and (ii) rules that treat a previously eligible Employee as newly eligible if his benefits had been previously distributed or if he has been ineligible for 24 months. For Compensation that is earned based upon a specified performance period (for example, an annual bonus), where a deferral election is made under this Section but after the beginning of the performance period, the election will only apply to the portion of the Compensation equal to the total amount of the Compensation for the service period multiplied by the ratio of the number of days remaining in the performance period after the election over the total number of days in the performance period.

4.1.4 A Participant may unilaterally modify a Participation Agreement (either to terminate, increase or decrease the portion of his future Compensation which is subject to deferral within the percentage limits set forth in Section 4.1 of the Adoption Agreement) by providing a written modification of the Participation Agreement to the Committee. The modification shall become effective as of the first day of January following the date such written modification is received by the Committee.

4.1.5 If the Participant performed services continuously from the later of the beginning of the performance period or the date upon which the performance criteria are established through the date upon which the Participant makes an initial deferral election, a Participation Agreement relating to the deferral of Performance-Based Compensation may be executed and delivered to the Committee no later than the date which is 6 months prior to the end of the performance period, provided that in no event may an election to defer Performance-Based Compensation be made after such Compensation has become readily ascertainable.

4.1.6 If the Employer has a fiscal year other than the calendar year, Compensation relating to Service in the fiscal year of the Employer (such as a bonus based on the fiscal year of the Employer), of which no amount is paid or payable during the fiscal year, may be deferred at the Participant’s election if the election to defer is made not later than the close of the Employer’s fiscal year next preceding the first fiscal year in which the Participant performs any services for which such Compensation is payable.

4.1.7 Compensation payable after the last day of the Participant’s taxable year solely for services provided during the final payroll period containing the last day of the Participant’s taxable year (i.e., December 31) is treated for purposes of this Section 4.1 as Compensation for services performed in the subsequent taxable year.

4.1.8 The Committee may from time to time establish policies or rules consistent with the requirements of Section 409A of the Code to govern the manner in which Participant Deferral Credits may be made.

4.1.9 If a Participant becomes Disabled all currently effective deferral elections for such Participant shall be cancelled. At the time the participant is no longer Disabled, subsequent elections to defer future compensation will be permitted under this Section 4.

4.1.10 If a Participant applies for and receives a distribution on account of an Unforeseeable Emergency, all currently effective deferral elections for such Participant shall be cancelled. Subsequent elections to defer future compensation will be permitted under this Section 4.

4.1.11 If a Participant receives a hardship distribution under Section 1.401(k)-1(d)(3) of the Code or any other similar provision, all currently effective deferral elections shall be cancelled. Subsequent elections to defer future compensation under this Section 4 will not be effective until the later of the beginning of the next calendar year or six months after the date of the hardship distribution.

4.2 Employer Credits. If designated by the Employer in the Adoption Agreement, the Employer shall cause the Committee to credit to the Deferred

Compensation Account of each Active Participant an Employer Credit as determined in accordance with the Adoption Agreement. A Participant must make distribution elections with respect to any Employer Credits credited to his Deferred Compensation Account by the deadline that would apply under Section 4.1 for distribution elections with respect to Participant Deferral Credits credited at the same time, on a Participation Agreement that is timely executed and delivered to the Committee pursuant to Section 4.1.

4.3 Deferred Compensation Account. All Participant Deferral Credits and Employer Credits shall be credited to the Deferred Compensation Account of the Participant as provided in Section 8.

Section 5. Qualifying Distribution Events:

5.1 Separation from Service. If the Participant Separates from Service with the Employer, the vested balance in the Deferred Compensation Account shall be paid to the Participant by the Employer as provided in Section 7. Notwithstanding the foregoing, no distribution shall be made earlier than six months after the date of Separation from Service (or, if earlier, the date of death) with respect to a Participant who as of the date of Separation from Service is a Specified Employee of a corporation the stock in which is traded on an established securities market or otherwise. Any payments to which such Specified Employee would be entitled during the first six months following the date of Separation from Service shall be accumulated and paid on the first day of the seventh month following the date of Separation from Service, and shall be adjusted for deemed investment gain and loss incurred during the six month period.

5.2 Disability. If the Employer designates in the Adoption Agreement that distributions are permitted under the Plan when a Participant becomes Disabled, and the Participant becomes Disabled while in Service, the vested balance in the Deferred Compensation Account shall be paid to the Participant by the Employer as provided in Section 7.

5.3 Death. If the Participant dies while in Service, the Employer shall pay a benefit to the Participant’s Beneficiary in the amount designated in the Adoption Agreement. Payment of such benefit shall be made by the Employer as provided in Section 7.

5.4 In-Service or Education Distributions. If the Employer designates in the Adoption Agreement that in-service or education distributions are permitted under the Plan, a Participant may designate in the Participation Agreement to have a specified amount credited to the Participant’s In-Service or Education Account for in-service or education distributions at the date specified by the Participant. In no event may an in-service or education distribution of an amount be made before the date that is two years after the first day of the year in which any deferral election to such In-Service or Education Account became effective. Notwithstanding the foregoing, if a Participant incurs a Qualifying Distribution Event prior to the date on which the entire balance in the In-Service or Education Account has been distributed, then the balance in the In-Service or Education Account on the date of the Qualifying Distribution Event shall be paid as provided under Section 7.1 for payments on such Qualifying Distribution Event.

5.5 Change in Control Event. If the Employer designates in the Adoption

Agreement that distributions are permitted under the Plan upon the occurrence of a Change in Control Event, the Participant may designate in the Participation Agreement to have the vested balance in the Deferred Compensation Account paid to the Participant upon a Change in Control Event by the Employer as provided in Section 7.

5.6 Unforeseeable Emergency. If the Employer designates in the Adoption Agreement that distributions are permitted under the Plan upon the occurrence of an Unforeseeable Emergency event, a distribution from the Deferred Compensation Account may be made to a Participant in the event of an Unforeseeable Emergency, subject to the following provisions:

5.6.1 A Participant may, at any time prior to his Separation from Service for any reason, make application to the Committee to receive a distribution in a lump sum of all or a portion of the vested balance in the Deferred Compensation Account (determined as of the date the distribution, if any, is made under this Section 5.6) because of an Unforeseeable Emergency. A distribution because of an Unforeseeable Emergency shall not exceed the amount required to satisfy the Unforeseeable Emergency plus amounts necessary to pay taxes reasonably anticipated as a result of such distribution, after taking into account the extent to which the Unforeseeable Emergency may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship) or by stopping current deferrals under the Plan pursuant to Section 4.1.10.

5.6.2 The Participant’s request for a distribution on account of Unforeseeable Emergency must be made in writing to the Committee. The request must specify the nature of the financial hardship, the total amount requested to be distributed from the Deferred Compensation Account, and the total amount of the actual expense incurred or to be incurred on account of the Unforeseeable Emergency.

5.6.3 If a distribution under this Section 5.6 is approved by the Committee, such distribution will be made as soon as practicable following the date it is approved. The processing of the request shall be completed as soon as practicable from the date on which the Committee receives the properly completed written request for a distribution on account of an Unforeseeable Emergency. If a Participant’s Separation from Service occurs after a request is approved in accordance with this Section 5.6.3, but prior to distribution of the full amount approved, the approval of the request shall be automatically null and void and the benefits which the Participant is entitled to receive

under the Plan shall be distributed in accordance with the applicable distribution provisions of the Plan.

5.6.4 The Committee may from time to time adopt additional policies or rules consistent with the requirements of Section 409A of the Code to govern the manner in which such distributions may be made so that the Plan may be conveniently administered.

Section 6. Vesting:

A Participant shall be fully vested in the portion of his Deferred Compensation Account attributable to Participant Deferral Credits, and all income, gains and losses attributable thereto. A Participant shall become fully vested in the portion of his Deferred Compensation Account attributable to Employer Credits, and income, gains and losses attributable thereto, in accordance with the vesting schedule and provisions designated by the Employer in the Adoption Agreement. If a Participant’s Deferred Compensation Account is not fully vested upon Separation from Service, the portion of the Deferred Compensation Account that is not fully vested shall thereupon be forfeited.

Section 7. Distribution Rules:

7.1 Payment Options. The Employer shall designate in the Adoption Agreement the payment options which may be elected by the Participant (lump sum, annual installments, or a combination of both). Different payment options may be made available for each Qualifying Distribution Event, and different payment options may be available for different types of Separations from Service, all as designated in the Adoption Agreement. The Participant shall elect in the Participation Agreement the method under which the vested balance in the Deferred Compensation Account will be distributed from among the designated payment options. The Participant may at such time elect a different method of payment for each Qualifying Distribution Event as specified in the Adoption Agreement. If the Participant is permitted by the Employer in

the Adoption Agreement to elect different payment options and does not make a valid election, the vested balance in the Deferred Compensation Account will be distributed as a lump sum.

Notwithstanding the foregoing, if certain Qualifying Distribution Events occur prior to the date on which the vested balance of a Participant’s Deferred Compensation Account is completely paid pursuant to this Section 7.1 following the occurrence of certain initial Qualifying Distribution Events, the following rules apply:

7.1.1 If the initial Qualifying Distribution Event is a Separation from Service or Disability, and the Participant subsequently dies, the remaining unpaid vested balance of a Participant’s Deferred Compensation Account shall be paid as a lump sum.

7.1.2 If the initial Qualifying Distribution Event is a Change in Control Event, and any subsequent Qualifying Distribution Event occurs (except an In-Service or Education Distribution described in Section 2.29(iv)), the remaining unpaid vested balance of a Participant’s Deferred Compensation Account shall be paid as provided under Section 7.1 for payments on such subsequent Qualifying Distribution Event.

7.2 Timing of Payments. Payment shall be made in the manner elected by the Participant and shall commence as soon as practicable after (but no later than 60 days after) the distribution date elected for the Qualifying Distribution Event. In the event the Participant fails to make a valid election of the payment method, the distribution will be made in a single lump sum payment as soon as practicable after (but no later than 60 days after) the Qualifying Distribution Event. A payment may be further delayed to the extent permitted in accordance with regulations and guidance under Section 409A of the Code.

7.3 Installment Payments. If the Participant elects to receive installment payments upon a Qualifying Distribution Event, the payment of each installment shall be made on the anniversary of the date of the first installment payment, and the amount of the installment shall be adjusted on such anniversary for credits or debits to the

Participant’s account pursuant to Section 8 of the Plan. Such adjustment shall be made by dividing the balance in the Deferred Compensation Account on such date by the number of installments remaining to be paid hereunder; provided that the last installment due under the Plan shall be the entire amount credited to the Participant’s account on the date of payment.

7.4 De Minimis Amounts. Notwithstanding any payment election made by the Participant, if the Employer designates a pre-determined de minimis amount in the Adoption Agreement, the vested balance in the Deferred Compensation Account of the Participant will be distributed in a single lump sum payment if at the time of a permitted Qualifying Distribution Event the vested balance does not exceed such pre-determined de minimis amount; provided, however, that such distribution will be made only where the Qualifying Distribution Event is a Separation from Service, death, Disability (if applicable) or Change in Control Event (if applicable). Such payment shall be made on or before the later of (i) December 31 of the calendar year in which the Qualifying Distribution Event occurs, or (ii) the date that is 2-1/2 months after the Qualifying Distribution Event occurs. In addition, the Employer may distribute a Participant’s vested balance at any time if the balance does not exceed the limit in Section 402(g)(1)(B) of the Code and results in the termination of the Participant’s entire interest in the Plan as provided under Section 409A of the Code.

7.5 Subsequent Elections. With the consent of the Committee, a Participant may delay or change the method of payment of the Deferred Compensation Account subject to the following requirements:

7.5.1 The new election may not take effect until at least 12 months after the date on which the new election is made.

7.5.2 If the new election relates to a payment for a Qualifying Distribution Event other than the death of the Participant, the Participant becoming Disabled, or an Unforeseeable Emergency, the new election must provide for the deferral of the payment for a period of at least five years from the date such payment would otherwise have been made.

7.5.3 If the new election relates to a payment from the In-Service or Education Account, the new election must be made at least 12 months prior to the date of the first scheduled payment from such account.

For purposes of this Section 7.5 and Section 7.6, a payment is each separately identified amount to which the Participant is entitled under the Plan; provided, that entitlement to a series of installment payments is treated as the entitlement to a single payment.

7.6 Acceleration Prohibited. The acceleration of the time or schedule of any payment due under the Plan is prohibited except as expressly provided in regulations and administrative guidance promulgated under Section 409A of the Code (such as accelerations for domestic relations orders and employment taxes). It is not an acceleration of the time or schedule of payment if the Employer waives or accelerates the vesting requirements applicable to a benefit under the Plan.

Section 8. Accounts; Deemed Investment; Adjustments to Account:

8.1 Accounts. The Committee shall establish a book reserve account, entitled the “Deferred Compensation Account,” on behalf of each Participant. The Committee shall also establish an In-Service or Education Account as a part of the Deferred Compensation Account of each Participant, if applicable. The amount credited to the Deferred Compensation Account shall be adjusted pursuant to the provisions of Section 8.3.

8.2 Deemed Investments. The Deferred Compensation Account of a

Participant shall be credited with an investment return determined as if the account were invested in one or more investment funds made available by the Committee. The Participant shall elect the investment funds in which his Deferred Compensation Account shall be deemed to be invested. Such election shall be made in the manner prescribed by the Committee and shall take effect upon the entry of the Participant into the Plan. The investment election of the Participant shall remain in effect until a new election is made by the Participant. In the event the Participant fails for any reason to make an effective election of the investment return to be credited to his account, the investment return shall be determined by the Committee.

8.3 Adjustments to Deferred Compensation Account. With respect to each Participant who has a Deferred Compensation Account under the Plan, the amount credited to such account shall be adjusted by the following debits and credits, at the times and in the order stated:

8.3.1 The Deferred Compensation Account shall be debited each business day with the total amount of any payments made from such account since the last preceding business day to him or for his benefit. Unless otherwise specified by the Employer, each deemed investment fund will be debited pro-rata based on the value of the investment funds as of the end of the preceding business day.

8.3.2 The Deferred Compensation Account shall be credited on each Crediting Date with the total amount of any Participant Deferral Credits and Employer Credits to such account since the last preceding Crediting Date.

8.3.3 The Deferred Compensation Account shall be credited or debited on each day securities are traded on a national stock exchange with the amount of deemed investment gain or loss resulting from the performance of the deemed investment funds elected by the Participant in accordance with Section 8.2. The amount of such deemed investment gain or loss shall be determined by the Committee and such determination shall be final and conclusive upon all concerned.

Section 9. Administration by Committee:

9.1 Membership of Committee. If the Committee consists of individuals appointed by the Board, they will serve at the pleasure of the Board. Any member of the Committee may resign, and his successor, if any, shall be appointed by the Board.

9.2 General Administration. The Committee shall be responsible for the operation and administration of the Plan and for carrying out its provisions. The Committee shall have the full authority and discretion to make, amend, interpret, and enforce all appropriate rules and regulations for the administration of this Plan and decide or resolve any and all questions, including interpretations of this Plan, as may arise in connection with this Plan. Any such action taken by the Committee shall be final and conclusive on any party. To the extent the Committee has been granted discretionary authority under the Plan, the Committee’s prior exercise of such authority shall not obligate it to exercise its authority in a like fashion thereafter. The Committee shall be entitled to rely conclusively upon all tables, valuations, certificates, opinions and reports furnished by any actuary, accountant, controller, counsel or other person employed or engaged by the Employer with respect to the Plan. The Committee may, from time to time, employ agents and delegate to such agents, including Employees of the Employer, such administrative or other duties as it sees fit.

9.3 Indemnification. To the extent not covered by insurance, the Employer shall indemnify the Committee, each Employee, officer, director, and agent of the Employer, and all persons formerly serving in such capacities, against any and all liabilities or expenses, including all legal fees relating thereto, arising in connection with the exercise of their duties and responsibilities with respect to the Plan, provided however

that the Employer shall not indemnify any person for liabilities or expenses due to that person’s own gross negligence or willful misconduct.

Section 10. Contractual Liability, Trust:

10.1 Contractual Liability. Unless otherwise elected in the Adoption Agreement, the Company shall be obligated to make all payments hereunder. This obligation shall constitute a contractual liability of the Company to the Participants, and such payments shall be made from the general funds of the Company. The Company shall not be required to establish or maintain any special or separate fund, or otherwise to segregate assets to assure that such payments shall be made, and the Participants shall not have any interest in any particular assets of the Company by reason of its obligations hereunder. To the extent that any person acquires a right to receive payment from the Company, such right shall be no greater than the right of an unsecured creditor of the Company.

10.2 Trust. The Employer may establish a trust to assist it in meeting its obligations under the Plan. Any such trust shall conform to the requirements of a grantor trust under Revenue Procedures 92-64 and 92-65 and at all times during the continuance of the trust the principal and income of the trust shall be subject to claims of general creditors of the Employer under federal and state law. The establishment of such a trust would not be intended to cause Participants to realize current income on amounts contributed thereto, and the trust would be so interpreted and administered.

Section 11. Allocation of Responsibilities:

The persons responsible for the Plan and the duties and responsibilities allocated to each are as follows:

11.1 Board.

(i) To amend the Plan;

(ii) To appoint and remove members of the Committee; and

(iii) To terminate the Plan as permitted in Section 14.

11.2 Committee.

(i) To designate Participants;

(ii) To interpret the provisions of the Plan and to determine the rights of the Participants under the Plan, except to the extent otherwise provided in Section 16 relating to claims procedure;

(iii) To administer the Plan in accordance with its terms, except to the extent powers to administer the Plan are specifically delegated to another person or persons as provided in the Plan;

(iv) To account for the amount credited to the Deferred Compensation Account of a Participant;

(v) To direct the Employer in the payment of benefits;

(vi) To file such reports as may be required with the United States Department of Labor, the Internal Revenue Service and any other government agency to which reports may be required to be submitted from time to time; and

(vii) To administer the claims procedure to the extent provided in Section 16.

Section 12. Benefits Not Assignable; Facility of Payments:

12.1 Benefits Not Assignable. No portion of any benefit credited or paid under the Plan with respect to any Participant shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any attempt so to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge the same shall be void, nor shall any portion of such benefit be in any manner payable to any assignee, receiver or any one trustee, or be liable for his debts, contracts, liabilities, engagements or torts.

12.2 Plan-Approved Domestic Relations Orders. The Committee shall establish procedures for determining whether an order directed to the Plan is a Plan-Approved Domestic Relations Order. If the Committee determines that an order is a Plan-Approved Domestic Relations Order, the Committee shall cause the payment of amounts pursuant to or segregate a separate account as provided by (and to prevent any payment or act which might be inconsistent with) the Plan-Approved Domestic Relations Order.

12.3 Payments to Minors and Others. If any individual entitled to receive a payment under the Plan shall be physically, mentally or legally incapable of receiving or acknowledging receipt of such payment, the Committee, upon the receipt of satisfactory evidence of his incapacity and satisfactory evidence that another person or institution is maintaining him and that no guardian or committee has been appointed for him, may cause any payment otherwise payable to him to be made to such person or institution so maintaining him. Payment to such person or institution shall be in full satisfaction of all claims by or through the Participant to the extent of the amount thereof.

Section 13. Beneficiary:

The Participant’s beneficiary shall be the person, persons, entity or entities designated by the Participant on the beneficiary designation form provided by and filed with the Committee or its designee. If the Participant does not designate a beneficiary, the beneficiary shall be his Surviving Spouse. If the Participant does not designate a beneficiary and has no Surviving Spouse, the beneficiary shall be the Participant’s estate. The designation of a beneficiary may be changed or revoked only by filing a new beneficiary designation form with the Committee or its designee. If a beneficiary (the

“primary beneficiary”) is receiving or is entitled to receive payments under the Plan and dies before receiving all of the payments due him, the balance to which he is entitled shall be paid to the contingent beneficiary, if any, named in the Participant’s current beneficiary designation form. If there is no contingent beneficiary, the balance shall be paid to the estate of the primary beneficiary. Any beneficiary may disclaim all or any part of any benefit to which such beneficiary shall be entitled hereunder by filing a written disclaimer with the Committee before payment of such benefit is to be made. Such a disclaimer shall be made in a form satisfactory to the Committee and shall be irrevocable when filed. Any benefit disclaimed shall be payable from the Plan in the same manner as if the beneficiary who filed the disclaimer had predeceased the Participant.

Section 14. Amendment and Termination of Plan:

The Company may amend any provision of the Plan or terminate the Plan at any time; provided, that in no event shall such amendment or termination reduce the balance in any Participant’s Deferred Compensation Account as of the date of such amendment or termination, nor shall any such amendment affect the terms of the Plan relating to the payment of such Deferred Compensation Account. Notwithstanding the foregoing, the following special provisions shall apply:

14.1 Termination in the Discretion of the Employer. Except as otherwise provided in Sections 14.2, the Company in its discretion may terminate the Plan and distribute benefits to Participants subject to the following requirements and any others specified under Section 409A of the Code:

14.1.1 All arrangements sponsored by the Employer that would be aggregated with the Plan under Section 1.409A-l(c) of the Treasury Regulations are terminated.

14.1.2 No payments other than payments that would be payable under the terms of the Plan if the termination had not occurred are made within 12 months of the termination date.

14.1.3 All benefits under the Plan are paid within 24 months of the termination date.

14.1.4 The Employer does not adopt a new arrangement that would be aggregated with the Plan under Section 1.409A-1(c) of the Treasury Regulations providing for the deferral of compensation at any time within 3 years following the date of termination of the Plan.

14.1.5 The termination does not occur proximate to a downturn in the financial health of the Employer.

14.2 Termination Upon Change in Control Event. If the Company terminates the Plan within thirty days preceding or twelve months following a Change in Control Event, the Deferred Compensation Account of each Participant shall become fully vested and payable to the Participant in a lump sum within twelve months following the date of termination, subject to the requirements of Section 409A of the Code.

Section 15. Communication to Participants:

The Employer shall make a copy of the Plan available for inspection by Participants and their beneficiaries during reasonable hours at the principal office of the Employer.

Section 16. Claims Procedure:

The following claims procedure shall apply with respect to the Plan:

16.1 Filing of a Claim for Benefits. If a Participant or Beneficiary (the “claimant”) believes that he is entitled to benefits under the Plan which are not being paid to him or which are not being accrued for his benefit, he shall file a written claim therefore with the Committee.

16.2 Notification to Claimant of Decision. Within 90 days after receipt of a claim by the Committee (or within 180 days if special circumstances require an extension of time), the Committee shall notify the claimant of the decision with regard to the claim. In the event of such special circumstances requiring an extension of time, there shall be furnished to the claimant prior to expiration of the initial 90-day period written notice of the extension, which notice shall set forth the special circumstances and the date by which the decision shall be furnished. If such claim shall be wholly or partially denied, notice thereof shall be in writing and worded in a manner calculated to be understood by the claimant, and shall set forth: (i) the specific reason or reasons for the denial; (ii) specific reference to pertinent provisions of the Plan on which the denial is based; (iii) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and (iv) an explanation of the procedure for review of the denial and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action under ERISA following an adverse benefit determination on review. Notwithstanding the foregoing, if the claim relates to a disability determination, the Committee shall notify the claimant of the decision within 45 days (which may be extended for an additional 30 days if required by special circumstances).

16.3 Procedure for Review. Within 60 days following receipt by the claimant of notice denying his claim, in whole or in part, or, if such notice shall not be given, within 60 days following the latest date on which such notice could have been timely given, the claimant may appeal denial of the claim by filing a written application for review with the Committee. Following such request for review, the Committee shall fully

and fairly review the decision denying the claim. Prior to the decision of the Committee, the claimant shall be given an opportunity to review pertinent documents and to submit issues and comments in writing.

16.4 Decision on Review. The decision on review of a claim denied in whole or in part by the Committee shall be made in the following manner:

16.4.1 Within 60 days following receipt by the Committee of the request for review (or within 120 days if special circumstances require an extension of time), the Committee shall notify the claimant in writing of its decision with regard to the claim. In the event of such special circumstances requiring an extension of time, written notice of the extension shall be furnished to the claimant prior to the commencement of the extension. Notwithstanding the foregoing, if the claim relates to a disability determination, the Committee shall notify the claimant of the decision within 45 days (which may be extended for an additional 45 days if required by special circumstances).

16.4.2 With respect to a claim that is denied in whole or in part, the decision on review shall set forth specific reasons for the decision, shall be written in a manner calculated to be understood by the claimant, and shall set forth:

(i) the specific reason or reasons for the adverse determination;

(ii) specific reference to pertinent Plan provisions on which the adverse determination is based;

(iii) a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant’s claim for benefits; and

(iv) a statement describing any voluntary appeal procedures offered by the Plan and the claimant’s right to obtain the information about such procedures, as well as a statement of the claimant’s right to bring an action under ERISA section 502(a).

16.4.3 The decision of the Committee shall be final and conclusive.

16.5 Action by Authorized Representative of Claimant. All actions set forth in this Section 16 to be taken by the claimant may likewise be taken by a representative of the claimant duly authorized by him to act in his behalf on such matters. The

Committee may require such evidence as either may reasonably deem necessary or advisable of the authority to act of any such representative.

Section 17. Miscellaneous Provisions:

17.1 Set off. The Employer may at any time offset a Participant’s Deferral Compensation Account by an amount up to $5,000 to collect the amount of any loan, cash advance, extension of other credit or other obligation of the Participant to the Employer that is then due and payable in accordance with the requirements of Section 409A of the Code.

17.2 Notices. Each Participant who is not in Service and each Beneficiary shall be responsible for furnishing the Committee or its designee with his current address for the mailing of notices and benefit payments. Any notice required or permitted to be given to such Participant or Beneficiary shall be deemed given if directed to such address and mailed by regular United States mail, first class, postage prepaid. If any check mailed to such address is returned as undeliverable to the addressee, mailing of checks will be suspended until the Participant or Beneficiary furnishes the proper address. This provision shall not be construed as requiring the mailing of any notice or notification otherwise permitted to be given by posting or by other publication.

17.3 Lost Distributees. A benefit shall be deemed forfeited if the Committee is unable to locate the Participant or Beneficiary to whom payment is due by the fifth anniversary of the date payment is to be made or commence; provided, that the deemed investment rate of return pursuant to Section 8.2 shall cease to be applied to the Participant’s account following the first anniversary of such date; provided further,

however, that such benefit shall be reinstated if a valid claim is made by or on behalf of the Participant or Beneficiary for all or part of the forfeited benefit.

17.4 Reliance on Data. The Employer and the Committee shall have the right to rely on any data provided by the Participant or by any Beneficiary. Representations of such data shall be binding upon any party seeking to claim a benefit through a Participant, and the Employer and the Committee shall have no obligation to inquire into the accuracy of any representation made at any time by a Participant or Beneficiary.

17.5 Headings. The headings and subheadings of the Plan have been inserted for convenience of reference and are to be ignored in any construction of the provisions hereof.

17.6 Continuation of Employment. The establishment of the Plan shall not be construed as conferring any legal or other rights upon any Employee or any persons for continuation of employment, nor shall it interfere with the right of the Employer to discharge any Employee or to deal with him without regard to the effect thereof under the Plan.

17.7 Merger or Consolidation; Assumption of Plan. No Employer shall consolidate or merge into or with another corporation or entity, or transfer all or substantially all of its assets to another corporation, partnership, trust or other entity (a “Successor Entity”) unless such Successor Entity shall assume the rights, obligations and liabilities of the Employer under the Plan and upon such assumption, the Successor Entity shall become obligated to perform the terms and conditions of the Plan. Nothing herein shall prohibit the assumption of the obligations and liabilities of the Employer under the Plan by any Successor Entity.

17.8 Construction. The Employer shall designate in the Adoption Agreement the state according to whose laws the provisions of the Plan shall be construed and enforced, except to the extent that such laws are superseded by ERISA and the applicable requirements of the Code.

17.9 Taxes. The Employer or other payor may withhold a benefit payment under the Plan or a Participant’s wages, or the Employer may reduce a Participant’s Account balance, in order to meet any federal, state, or local or employment tax withholding obligations with respect to Plan benefits, as permitted under Section 409A of the Code. The Employer or other payor shall report Plan payments and other Plan-related information to the appropriate governmental agencies as required under applicable laws.

Section 18. Transition Rules:

This Section 18 does not apply to plans newly established on or after January 1, 2009.

18.1 2005 Election Termination. Notwithstanding Section 4.1.4, at any time during 2005, a Participant may terminate a Participation Agreement, or modify a Participation Agreement to reduce the amount of Compensation subject to the deferral election, so long as the Compensation subject to the terminated or modified Participation Agreement is includible in the income of the Participant in 2005 or, if later, in the taxable year in which the amounts are earned and vested.

18.2 2005 Deferral Election. The requirements of Section 4.1.2 relating to the timing of the Participation Agreement shall not apply to any deferral elections made on or before March 15, 2005, provided that (a) the amounts to which the deferral election relate have not been paid or become payable at the time of the election, (b) the Plan was in existence on or before December 31, 2004, (c) the election to defer compensation is made in accordance with the terms of the Plan as in effect on December 31, 2005 (other than a

requirement to make a deferral election after March 15, 2005), and (d) the Plan is otherwise operated in accordance with the requirements of Section 409A of the Code.

18.3 2005 Termination of Participation; Distribution. Notwithstanding anything in this Plan to the contrary, at any time during 2005, a Participant may terminate his or her participation in the Plan and receive a distribution of his Deferred Compensation Account balance on account of that termination, so long as the full amount of such distribution is includible in the Participant’s income in 2005 or, if later, in the taxable year of the Participant in which the amount is earned and vested.

18.4 Payment Elections. Notwithstanding the provisions of Sections 7.1 or 7.5 of the Plan, a Participant may elect on or before December 31, 2008, the time or form of payment of amounts subject to Section 409A of the Code provided that such election applies only to amounts that would not otherwise be payable in the year of the election and does not cause an amount to paid in the year of the election that would not otherwise be payable in such year.

Exhibit 10.6

NOTE: Execution of this Adoption Agreement creates a legal liability of the Employer with significant tax consequences to the Employer and Participants. Principal Life Insurance Company disclaims all liability for the legal and tax consequences which result from the elections made by the Employer in this Adoption Agreement.

Principal Life Insurance Company, Raleigh, NC 27612

A member of the Principal Financial Group®

THE EXECUTIVE NONQUALIFIED “EXCESS” PLAN

ADOPTION AGREEMENT

THIS AGREEMENT is the adoption by Isle of Capri Casinos, Inc. (the “Company”) of the Executive Nonqualified Excess Plan (“Plan”).

WITNESSETH:

WHEREAS, the Company desires to adopt the Plan as an unfunded, nonqualified deferred compensation plan; and

WHEREAS, the provisions of the Plan are intended to comply with the requirements of Section 409A of the Code and the regulations thereunder and shall apply to amounts subject to section 409A; and

WHEREAS, the Company has been advised by Principal Life Insurance Company to obtain legal and tax advice from its professional advisors before adopting the Plan,

NOW, THEREFORE, the Company hereby adopts the Plan in accordance with the terms and conditions set forth in this Adoption Agreement:

ARTICLE I

Terms used in this Adoption Agreement shall have the same meaning as in the Plan, unless some other meaning is expressly herein set forth. The Employer hereby represents and warrants that the Plan has been adopted by the Employer upon proper authorization and the Employer hereby elects to adopt the Plan for the benefit of its Participants as referred to in the Plan. By the execution of this Adoption Agreement, the Employer hereby agrees to be bound by the terms of the Plan.

ARTICLE II

The Employer hereby makes the following designations or elections for the purpose of the Plan:

2.6	Committee:		The duties of the Committee set forth in the Plan shall be satisfied by:

	o	(a)	Company

	o	(b)	The administrative committee appointed by the Board to serve at the pleasure of the Board.

	o	(c)	Board.

	x	(d)	Other (specify): The Compensation Committee of the Board, which shall act as administrator of this plan.

2.8	Compensation:		The “Compensation” of a Participant shall mean all of a Participant’s:

	x	(a)	Base salary.

	x	(b)	Service Bonus.

	x	(c)	Performance-Based Compensation earned in a period of 12 months or more.

	o	(d)	Commissions.

	o	(e)	Compensation received as an Independent Contractor reportable on Form 1099.

	o	(f)	Other:

2.9	Crediting Date:		The Deferred Compensation Account of a Participant shall be credited as follows:

Participant Deferral Credits at the time designated below:

	o	(a)	The last business day of each Plan Year.

	o	(b)	The last business day of each calendar quarter during the Plan Year.

	o	(c)	The last business day of each month during the Plan Year.

	o	(d)	The last business day of each payroll period during the Plan Year.

	o	(e)	Each pay day as reported by the Employer.

	x	(f)	On any business day as specified by the Employer.

Employer Credits at the time designated below:

	x	(a)	On any business day as specified by the Employer.

2.13	Effective Date:

	o	(a)	This is a newly-established Plan, and the Effective Date of the Plan is .

	x	(b)	This is an amendment and restatement of a plan named Isle of Capri Casinos, Inc. 2005 Deferred Compensation Plan with an effective date of June 1, 1995 and January 1, 2005. The Effective Date of this amended and restated Plan is March 31, 2014.

			x	(i)	All amounts in Deferred Compensation Accounts shall be subject to the provisions of this amended and restated Plan.

			o	(ii)	Any Grandfathered Amounts shall be subject to the Plan rules in effect on October 3, 2004.

2.20	Normal Retirement Age: The Normal Retirement Age of a Participant shall be:

	o	(a)	Age .

	o	(b)	The later of age or the anniversary of the participation commencement date. The participation commencement date is the first day of the first Plan Year in which the Participant commenced participation in the Plan.

	x	(c)	Other: N/A

2.23	Participating Employer(s): As of the Effective Date, the following Participating Employer(s) are parties to the Plan:

	Name of Employer		EIN

	Isle of Capri Casinos, Inc.		41-1659606

2.26	Plan: The name of the Plan is

	Isle of Capri Casinos, Inc. Amended and Restated Deferred Compensation Plan

2.28	Plan Year: The Plan Year shall end each year on the last day of the month of December.

2.30	Seniority Date: The date on which a Participant has:

	o	(a)	Attained age .

	o	(b)	Completed Years of Service from First Date of Service.

	o	(c)	Attained age and completed Years of Service from First Date of Service.

	x	(d)	Not applicable distribution elections for Separation from Service are not based on Seniority Date

4.1 Participant Deferral Credits: Subject to the limitations in Section 4.1 of the Plan, a Participant may elect to have his Compensation (as selected in Section 2.8 of this Adoption Agreement) deferred within the annual limits below by the following percentage or amount as designated in writing to the Committee:

x	(a)	Base salary:

			minimum deferral:		%

			maximum deferral:	100	%

x	(b)	Service Bonus:

			minimum deferral:		%

			maximum deferral:	100	%

x	(c)	Performance-Based Compensation:

			minimum deferral:		%

			maximum deferral:	100	%

o	(d)	Commissions:

			minimum deferral:		%

			maximum deferral:		%

o	(e)	Form 1099 Compensation:

			minimum deferral:		%

			maximum deferral:		%

o	(f)	Other:

			minimum deferral:		%

			maximum deferral:		%

o	(g)	Participant deferrals not allowed.

4.2	Employer Credits: Employer Credits will be made in the following manner:

	x	(a)	Employer Discretionary Credits: The Employer may make discretionary credits to the Deferred Compensation Account of each Active Participant in an amount determined as follows:

			x	(i)	An amount determined each Plan Year by the Employer.

			o	(ii)	Other: .

	o	(b)	Other Employer Credits: The Employer may make other credits to the Deferred Compensation Account of each Active Participant in an amount determined as follows:

			o	(i)	An amount determined each Plan Year by the Employer.

			o	(ii)	Other: .

	o	(c)	Employer Credits not allowed.

5.2	Disability of a Participant:

	x	(a)	A Participant’s becoming Disabled shall be a Qualifying Distribution Event and the Deferred Compensation Account shall be paid by the Employer as provided in Section 7.1.

	o	(b)	A Participant becoming Disabled shall not be a Qualifying Distribution Event.

5.3 Death of a Participant: If the Participant dies while in Service, the Employer shall pay a benefit to the Beneficiary in an amount equal to the vested balance in the Deferred Compensation Account of the Participant determined as of the date payments to the Beneficiary commence, plus:

	o	(a)	An amount to be determined by the Committee.

	x	(b)	No additional benefits.

5.4	In-Service or Education Distributions: In-Service and Education Accounts are permitted under the Plan:

	x	(a)	In-Service Accounts are allowed with respect to:

			o	Participant Deferral Credits only.

			o	Employer Credits only.

			x	Participant Deferral and Employer Credits.

			In-service distributions may be made in the following manner:

			x	Single lump sum payment.

			x	Annual installments over a term certain not to exceed 5 years.

			Education Accounts are allowed with respect to:

			o	Participant Deferral Credits only.

			o	Employer Credits only.

			o	Participant Deferral and Employer Credits.

			Education Accounts distributions may be made in the following manner:

			o	Single lump sum payment.

			o	Annual installments over a term certain not to exceed years.

			If applicable, amounts not vested at the time payments due under this Section cease will be:

			o	Forfeited

			x	Distributed at Separation from Service if vested at that time

	o	(b)	No In-Service or Education Distributions permitted.

5.5	Change in Control Event:

	o	(a)	Participants may elect upon initial enrollment to have accounts distributed upon a Change in Control Event.

	x	(b)	A Change in Control shall not be a Qualifying Distribution Event.

5.6	Unforeseeable Emergency Event:

	x	(a)	Participants may apply to have accounts distributed upon an Unforeseeable Emergency event.

	o	(b)	An Unforeseeable Emergency shall not be a Qualifying Distribution Event

6. Vesting: An Active Participant shall be fully vested in the Employer Credits made to the Deferred Compensation Account upon the first to occur of the following events:

	o	(a)	Normal Retirement Age.

	o	(b)	Death.

	o	(c)	Disability.

	o	(d)	Change in Control Event

	x	(e)	Satisfaction of the vesting requirement as specified below:

		x	Employer Discretionary Credits:

			o	(i)	Immediate 100% vesting.

			o	(ii)	100% vesting after Years of Service.

			o	(iii)	100% vesting at age .

			x	(iv)	Other: Immediate 100% vesting unless otherwise specified by the employer at the time of credit.

			o	(v)	Number of Years	Vested
					of Service	Percentage

					Less than 1	%
					1	%
					2	%
					3	%
					4	%
					5	%
					6	%
					7	%
					8	%
					9	%
					10 or more	%

			For this purpose, Years of Service of a Participant shall be calculated from the date designated below:

			o	(1)	First Day of Service.

			o	(2)	Effective Date of Plan Participation.

			o	(3)	Each Crediting Date. Under this option (3), each Employer Credit shall vest based on the Years of Service of a Participant from the Crediting Date on which each Employer Discretionary Credit is made to his or her Deferred Compensation Account.

o	Other Employer Credits:

	o	(i)	Immediate 100% vesting.

	o	(ii)	100% vesting after Years of Service.

	o	(iii)	100% vesting at age .

	o	(iv)	Number of Years	Vested
			of Service	Percentage

			Less than 1	%
			1	%
			2	%
			3	%
			4	%
			5	%
			6	%
			7	%
			8	%
			9	%
			10 or more	%

	For this purpose, Years of Service of a Participant shall be calculated from the date designated below:

	o	(1)	First Day of Service.

	o	(2)	Effective Date of Plan Participation.

	o	(3)	Each Crediting Date. Under this option (3), each Employer Credit shall vest based on the Years of Service of a Participant from the Crediting Date on which each Employer Discretionary Credit is made to his or her Deferred Compensation Account.

7.1 Payment Options: Any benefit payable under the Plan upon a permitted Qualifying Distribution Event may be made to the Participant or his Beneficiary (as applicable) in any of the following payment forms, as selected by the Participant in the Participation Agreement:

	(a)	Separation from Service (Seniority Date is Not Applicable)

		o	(i)	A lump sum.

		o	(ii)	Annual installments over a term certain as elected by the Participant not to exceed years.

	(b)	Separation from Service prior to Seniority Date (If Applicable)

		x	(i)		A lump sum.

		x	(ii)		Annual installments over a term certain as elected by the Participant not to exceed 10 years.

		o	(iii)		Not Applicable

	(c)	Separation from Service on or After Seniority Date (If Applicable)

		x	(i)		A lump sum.

		x	(ii)		Annual installments over a term certain as elected by the Participant not to exceed 10 years.

		o	(iii)		Not Applicable

	(d)	Separation from Service Upon a Change in Control Event

		o	(i)		A lump sum.

	(e)	Death

		o	(i)		A lump sum.

		x	(ii)		Annual installments over a term certain as elected by the Participant not to exceed 5 years.

	(f)	Disability

		o	(i)		A lump sum.

		x	(ii)		Annual installments over a term certain as elected by the Participant not to exceed 5 years.

		o	(iii)		Not applicable.

		If applicable, amounts not vested at the time payments due under this Section cease will be:

		o	Forfeited

		o	Distributed at Separation from Service if vested at that time

	(g)	Change in Control Event

		o	(i)	A lump sum.

		x	(ii)	Not applicable.

		If applicable, amounts not vested at the time payments due under this Section cease will be:

		o	Forfeited

		o	Distributed at Separation from Service if vested at that time

7.4		De Minimis Amounts.

		x	(a)	Notwithstanding any payment election made by the Participant, the vested balance in the Deferred Compensation Account of the Participant will be distributed in a single lump sum payment at the time designated under the Plan if at the time of a permitted Qualifying Distribution Event that is either a Separation from Service, death, Disability (if applicable) or Change in Control Event (if applicable) the vested balance does not exceed $ 10,000. In addition, the Employer may distribute a Participant’s vested balance at any time if the balance does not exceed the limit in Section 402(g)(1)(B) of the Code and results in the termination of the Participant’s entire interest in the Plan

		o	(b)	There shall be no pre-determined de minimis amount under the Plan; however, the Employer may distribute a Participant’s vested balance at any time if the balance does not exceed the limit in Section 402(g)(1)(B) of the Code and results in the termination of the Participant’s entire interest in the Plan.

10.1	Contractual Liability: Liability for payments under the Plan shall be the responsibility of the:

		x	(a)	Company.

		o	(b)	Employer or Participating Employer who employed the Participant when amounts were deferred.

14. Amendment and Termination of Plan: Notwithstanding any provision in this Adoption Agreement or the Plan to the contrary, Section 12.2 of the Plan shall be amended to read as provided in attached Exhibit .

		o	There are no amendments to the Plan.

17.9 Construction: The provisions of the Plan shall be construed and enforced according to the laws of the State of Missouri, except to the extent that such laws are superseded by ERISA and the applicable provisions of the Code.

IN WITNESS WHEREOF, this Agreement has been executed as of the day and year stated below.

Isle of Capri Casinos, Inc.
Name of Employer

By:	/s/ Sarah Jackson
Authorized Person
Date:		9/8/14

The Plan is adopted by the following Participating Employers:

St. Charles Gaming Company, Inc.
Name of Employer

By:	/s/ Sarah Jackson
Authorized Person
Date:		9/8/14

IOC-Kansas Cit, Inc.
Name of Employer

By:	/s/ Sarah Jackson
Authorized Person
Date:		9/8/14

IOC-Boonville, Inc.
Name of Employer

By:	/s/ Sarah Jackson
Authorized Person
Date:		9/8/14

IOC Lula, Inc.
Name of Employer

By:	/s/ Sarah Jackson
Authorized Person
Date:			9/8/14

IOC-Natchez, Inc.
Name of Employer

By:	/s/ Sarah Jackson
Authorized Person
Date:		9/8/14

Isle of Capri Marquette, Inc.
Name of Employer

By:		/s/ Sarah Jackson
Authorized Person
Date:					9/8/14

Isle of Capri Bettendorf, LLC
Name of Employer

By:		/s/ Sarah Jackson
Authorized Person
Date:				9/8/14

PPI, Inc.
Name of Employer

By:		/s/ Sarah Jackson
Authorized Person
Date:			9/8/14

CCSC/Blackhawk, Inc.
Name of Employer

By:	/s/ Sarah Jackson
Authorized Person
Date:					9/8/14

IOC-PA, LLC
Name of Employer

By:		/s/ Sarah Jackson
Authorized Person
Date:					9/8/14

Cape Girardeau LLC
Name of Employer

By:		/s/ Sarah Jackson
Authorized Person
Date:						9/8/14

IOC Caruthersville, LLC
Name of Employer

By:		/s/ Sarah Jackson
Authorized Person
Date:						9/8/14

IOC Black Hawk County, Inc.
Name of Employer

By:	/s/ Sarah Jackson
Authorized Person
Date:		9/8/14

Rainbow Casino-Vicksburg Partnership LP
Name of Employer

By:	/s/ Sarah Jackson
Authorized Person
Date:		9/8/14

ISLE OF CAPRI CASINOS, INC.

EXECUTIVE NONQUALIFIED EXCESS PLAN

AMENDMENT

(Domestic Relations Order)

Whereas, Isle of Capri Casinos, Inc. maintains the Executive Nonqualified Excess Plan, most recently amended and restated in the form of an adoption agreement and related plan document, each sponsored and provided by the Principal Financial Group (the “Plan”), which plan is intended to be a nonqualified deferred compensation plan subject to the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (the “Plan”);

Whereas, Section 9.2 of the Plan permits amendment by the Compensation Committee of the Company at any time (the “Committee”)

Now, Therefore, Section 12.2 of the Plan shall be replaced, to read in its entirety as follows:

“Domestic Relations Orders. Notwithstanding any provision of the Plan to the contrary, the Committee is authorized to comply with any court order purporting to be a “domestic relations order” within the meaning of Code Section 414(p)(1)(B) in any action in which the Plan or the Committee has been named as a party, including any action involving a determination of the rights or interests in a Participant’s benefits under the Plan. In accordance with the foregoing, the Committee shall interpret this provision in a manner that is consistent with Code Section 409A law and shall interpret any court order to determine if it meets the requirements of Code Section 414(p)(1)(B). To the extent the Committee deems a court order to be a “domestic relations order,” payment pursuant to the order shall be made at the time directed therein and in the form of a single-sum payment. Nothing herein shall prohibit the Committee from establishing procedures for determining whether an order is an approved domestic relations order.”

This Amendment to the Plan was executed by the Company’s Senior Vice President, Human Resources pursuant to the authority delegated to him by the Committee, to be effective as of the date set forth below.

	/s/ Sarah Jackson
	Senior Vice President, Human Resources
	Date: March 31, 2014

Exhibit 10.7

Execution Copy

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (“Agreement”), which expressly includes and references non-competition, non-solicitation and confidentiality provisions, is made and entered into on the 6th day of April 2016 (the “Agreement Date”) and effective as of the Effective Date (as defined below), by and between Isle of Capri Casinos, Inc., a Delaware corporation (“Isle”, together with its subsidiary and affiliated companies, the “Company”), and Eric L. Hausler (“Employee”).

WHEREAS, Employee and Isle are currently parties to that certain employment agreement, dated as of August 6, 2009, and amended on August 11, 2014 (as amended, the “Prior Agreement”), pursuant to which Employee is employed as Isle’s Chief Financial Officer;

WHEREAS, the parties desire that (i) Employee continue to serve as Isle’s Chief Financial Officer through April 27, 2016, and (ii) beginning on April 28, 2016 (the “Effective Date”), Employee serve as Isle’s Chief Executive Officer;

WHEREAS, Isle desires to continue to employ Employee from and after the Effective Date in the position of its Chief Executive Officer, and Employee desires to continue to perform services for, and to continue to be employed by, Isle in such capacity, all on the terms and conditions set forth herein;

WHEREAS, as a condition of Employee’s continuing employment, the Company desires to retain certain covenants from Employee including, but not limited to, the following: (a) to refrain from carrying on or engaging in a business similar to that of the Company; (b) to refrain from soliciting Employees of the Company for employment elsewhere; and (c) to protect and maintain the confidentiality of the Company’s trade secrets and any proprietary information, which the parties expressly acknowledge are a condition of Employee’s continued employment;

WHEREAS, Isle and Employee desire to set forth in writing the terms and conditions of their agreements and understandings with respect to Employee’s continued employment at Isle, as well as the covenants referenced above, and the parties expressly acknowledge that these covenants are a condition of Employee’s continued employment; and

WHEREAS, this Agreement shall become effective as of the Effective Date only if Employee is employed by Isle on the Effective Date and the Prior Agreement shall remain in effect until the Effective Date, subject to the terms and conditions thereof, whereupon the Prior Agreement shall be superseded by this Agreement.

NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions set forth in this Agreement, Isle and Employee agree as follows:

1. Term of Employment; Duties; Compensation.

(a) Term. Isle hereby continues to employ Employee, and Employee accepts such continued employment and agrees to continue to perform services for the Company for an

initial period beginning on the Effective Date and expiring on the first anniversary thereof (the “Initial Term”) and for successive one (1)-year periods thereafter (the “Renewal Term(s)”), unless either: (i) the Company provides ninety (90) days’ written notice of non-renewal to Employee prior to the expiration of the Initial Term or applicable Renewal Term, or (ii) the Agreement is terminated at an earlier date in accordance with Section 2 or Section 3 of this Agreement (the Initial Term and the Renewal Terms together referred to as the “Term of Employment”).

(b) Service with Company. During the Term of Employment, Employee shall serve as the Company’s Chief Executive Officer reporting to the board of directors of Isle (the “Board”). During the Term of Employment, Employee agrees to perform reasonable employment duties as the Board shall assign to Employee from time to time, which duties and responsibilities as are customarily the duties and responsibilities of chief executive officers of companies such as Isle. In addition, Employee agrees to serve for any period for which Employee is duly and properly elected as a member of the Board; provided, however, that Employee shall not be entitled to any additional compensation for serving as a member of the Board.

(c) Performance of Duties. During the Term of Employment, Employee agrees to serve the Company faithfully and to the best of Employee’s ability and to devote substantially all of Employee’s business time, attention, skill and efforts to the business and affairs of the Company. The foregoing shall not preclude Employee from engaging in other civic endeavors and, with the approval of the Board, serving on charitable boards and other boards of directors so long as, in any case, the same do not interfere with the performance of Employee’s duties under this Agreement.

(d) Compensation. From and after the Effective Date and during the remaining Term of Employment, Isle shall pay to Employee as compensation for services to be rendered hereunder an aggregate base salary at an annual rate which is not less than $635,000 (the “Annual Base Salary”) payable in substantially equal monthly, or more frequent, payments, subject to increases, if any, as may be determined by the Compensation Committee of the Board (the “Compensation Committee”). For each fiscal year during the Term of Employment, Employee shall be eligible to receive an annual cash bonus (the “Annual Bonus”) based upon the achievement of reasonable, objective performance targets that have been established by the Compensation Committee; provided that Employee’s Annual Bonus for each fiscal year (beginning with fiscal 2017) at the target level shall be equal to at least 100% of Employee’s Annual Base Salary if Employee meets the target levels set by the Compensation Committee. Employee shall be involved as a senior management executive in the establishment of reasonable, objective performance targets. Employee shall also be entitled to participate in Isle’s long-term stock incentive plan, as in effect from time to time (the “Equity Plan”), to the extent that similarly-situated executives of Isle participate therein. In addition to the Annual Base Salary, Annual Bonus and participation in the Equity Plan as set forth above, Employee shall be entitled to participate in any employee benefit plans or programs of the Company as are or may be made generally available to similarly-situated employees of Isle and those made available to similarly-situated officers of Isle. Employee shall be entitled to vacation in accordance with Isle’s policies for similarly-situated employees.

(e) No Violation. Employee represents and warrants to the Company that the execution and delivery of this Agreement by Employee, and the carrying out of Employee’s duties on behalf of the Company as contemplated hereby, do not violate or conflict with the terms of any other agreements to which Employee is or was a party.

(f) Expense Reimbursement. The Company will pay or reimburse Employee for all reasonable and necessary out-of-pocket expenses incurred by Employee in the performance of Employee’s duties under this Agreement, subject to the presentment of appropriate vouchers in accordance with the Company’s policies for expense verification. To the extent that any such reimbursements are taxable to Employee, such reimbursements shall be paid to Employee only if (i) the expenses are incurred and reimbursable pursuant to a reimbursement plan that provides an objectively determinable nondiscretionary definition of the expenses that are eligible for reimbursement and (ii) the expenses are incurred during the Term of Employment and are submitted for reimbursement no later than ninety (90) days after the end of the calendar year in which the expense giving rise to the claim for reimbursement is incurred. With respect to any expenses that are reimbursable pursuant to the preceding sentence, the amount of the expenses that are eligible for reimbursement during one calendar year may not affect the amount of reimbursements to be provided in any subsequent calendar year, the reimbursement of an eligible expense shall be made promptly upon the Company’s receipt of such information and supporting documentation as it may reasonably request but no later than the last day of the calendar year following the calendar year in which the expense was incurred, and the right to reimbursement of the expenses shall not be subject to liquidation or exchange for any other benefit.

2. Termination.

(a) The Term of Employment shall terminate prior to its expiration, and Employee’s employment shall terminate, in the event that at any time during the Term of Employment:

(i) Isle terminates the Term of Employment and Employee’s employment for “Cause” by a written notice of termination delivered to Employee. For purposes of this Agreement, “Cause” shall mean any (A) dishonesty, disloyalty or breach of corporate policies, in each case that is material to the ability of Employee to continue to function as an effective executive given the strict regulatory standards of the industry in which the Company does business; (B) gross misconduct on the part of Employee in the performance of Employee’s duties hereunder (as determined by the Board); (C) Employee’s violation of Section 4 of this Agreement; or (D) Employee’s failure to be licensed as a “key person” or similar role under the laws of any jurisdiction where the Company does business, or the loss of any such license for any reason. If Employee’s employment is terminated for Cause (after the Board has given Employee ten (10) days’ advance written notice in the case of an event or circumstances giving rise to Isle’s ability to terminate Employee’s employment for Cause, which event or circumstance is described in reasonable detail in such written notice and is capable of being cured during such ten (10) day cure period and if such event or circumstance is not cured to the reasonable satisfaction of the Board within such ten (10) day period), there shall be no severance paid to Employee and Employee’s benefits shall terminate as of Employee’s

termination date, except as may be required by law or the express terms of any employee benefit plan or arrangement.

(ii) Isle terminates the Term of Employment and Employee’s employment for any reason without Cause (other than as a result of Employee’s death or Disability (as defined in Section 2(a)(iv)) (including through non-renewal of the Agreement) by a written notice of termination delivered to Employee. In this case, within seven (7) business days following Employee’s termination date, Isle shall provide Employee with a mutual and general release in reasonable and customary form that is acceptable to Isle (a “Release”), which Release shall provide for a release of the Company from any and all claims that Employee may have and pursuant to which Employee affirmatively agrees not to violate any of the provisions of Section 4 hereof (which shall not be expanded beyond what is set forth in Section 4 as of the Effective Date). Employee shall be entitled to receive the severance payments and continued benefits described in this Section 2(a)(ii) only if, no later than the Release Date (as defined below), (A) the Release has been executed by Employee, (B) the Release is effective, and (C) the applicable revocation period has expired (collectively, the “Release Requirements”). The “Release Date” means the sixtieth (60th) day following Employee’s termination date.

Subject to the foregoing, if Isle terminates the Term of Employment and Employee’s employment without Cause, then Employee shall be entitled to (A) continue to receive Employee’s Annual Base Salary (and shall receive Employee’s earned but unpaid Annual Bonus) payable in twelve (12) substantially equal monthly installments, the first six of which shall be payable in a lump sum on the first day following the six (6)-month anniversary of Employee’s termination date; (B) the amount of the Annual Bonus with respect to the Company’s most recently completed fiscal year, if any, to the extent that such Annual Bonus has not yet been paid as of the termination date, which amount shall be paid in a lump sum on the payment date generally applicable to such bonus (but no earlier than the Release Date); and (C) Medical Continuation Benefits (as defined below). Notwithstanding the foregoing, provided that the Release Requirements are satisfied as of an earlier payment date designated by the Board, the Board may authorize (I) that portion of the Annual Base Salary and Employee’s earned but unpaid Annual Bonus payable in accordance with the provisions of Section 2(a)(ii)(A) that is not subject to section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) (a “409A Exempt Payment”) to be paid in a lump sum to Employee on any date following the termination date and prior to the six (6)-month anniversary of Employee’s termination date and the remaining Annual Base Salary and Annual Bonus (that is, the Annual Base Salary and Annual Bonus minus the 409A Exempt Payment) paid to Employee in six (6) substantially equal monthly installments beginning on the six (6) month anniversary of Employee’s termination date and ending on the one (1) year anniversary of Employee’s termination date and (II) the amount of the unpaid Annual Bonus with respect to the Company’s most recently completed fiscal year payable in accordance with Section 2(a)(ii)(B) that is not subject to section 409A of the Code to be paid in a lump sum on any date after following Employee’s termination date and prior to the Release Date.

For purposes of this Agreement, “Medical Continuation Benefits” means continuation coverage under the Company’s major medical, dental and vision plans (collectively, the

“Medical Plan”) for Employee and Employee’s spouse and dependents consistent with the level of coverage otherwise in effect as of Employee’s termination date for the period beginning on Employee’s termination date and ending on the earlier of (I) twelve (12) months after Employee’s termination date or (II) the date on which Employee, Employee’s spouse or Employee’s dependents obtains comparable alternative group coverage during the twelve (12) months after Employee’s termination (such period being referred to as the “Continuation Period”), at Employee’s sole expense, and for each year (or portion thereof) during the Continuation Period, the Company shall pay to Employee an amount such that, after the payment of all income and employment taxes due with respect to such amount, there remains an amount equal to the Company’s premium contribution paid with respect to its similarly-situated active employees for the level of coverage provided to Employee and Employee’s spouse and Employee’s dependents under the Medical Plan during the portion of the Continuation Period within such year. Any payments to be made to Employee pursuant to the preceding sentence shall be made no earlier than the Release Date (and only if the Release Requirements are satisfied as of the Release Date) and no later than March 15 of the year following the year to which they relate. The Medical Continuation Benefits shall not be deemed to offset or otherwise limit the period of continuation coverage otherwise available to Employee and Employee’s spouse or Employee’s dependents under section 4980B of the Code which shall be deemed to commence following the end of the Continuation Period and shall be provided at Employee’s sole expense.

As used in this Agreement, the term “earned but unpaid Annual Bonus” shall refer to the non-discretionary portion of the Annual Bonus to which Employee would have been entitled had Employee remained employed in Employee’s position for the remainder of the fiscal year of termination and through the payment date for such Annual Bonus, prorated for the number of days during such year that Employee was employed by the Company.

In no event shall Employee be permitted to elect the year of payment of any amount under this Section 2(a)(ii).

(iii) Employee for any reason voluntarily terminates the Term of Employment and Employee’s employment. In that case, there shall be no severance paid to Employee and Employee’s benefits shall terminate as of Employee’s termination date, except as may be required by law or the express terms of any employee benefit plan or arrangement. Notwithstanding the foregoing, if Employee voluntarily terminates the Term of Employment and Employee’s employment due to Retirement (as defined below) all of Employee’s outstanding equity-based awards shall become fully vested and, if applicable, exercisable as of Employee’s termination date. The term “Retirement” shall mean the termination of Employee’s employment with Isle (other than for Cause) after Employee has (i) attained at least age sixty-five (65) and (ii) completed at least ten (10) years of service with the Company.

due to Employee’s death or Disability, Employee, or, in the event of death, Employee’s estate or dependents, as applicable, shall receive (A) payment of Employee’s earned but unpaid Annual Bonus and continuing payment of Employee’s Annual Base Salary payable in twelve (12) substantially equal monthly installments beginning on the first day following the six (6) month anniversary of Employee’s termination date; (B) continuation coverage under the Medical Plan for the Continuation Period; and (C) a lump sum payment to be paid on the first payroll date following Employee’s termination date equal to the average of the last three (3) years’ Annual Bonus payments, if any, inclusive of deferred amounts.

For purposes of this Agreement, Employee shall be deemed to have a “Disability” if, by reason of a medically-determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of at least twelve (12) months, (I) Employee is unable to engage in any substantial gainful employment, or (II) has been receiving benefits under the Company’s separate long-term disability plan for a period of at least three (3) months. In the event of any dispute regarding the existence of Employee’s Disability hereunder, Isle may refer the same to a licensed practicing physician of the Company’s choice who is reasonably acceptable to Executive, and Executive agrees to submit to such tests and examination as such physician shall deem appropriate and the determination by such physician shall be binding on the Company and Executive.

(b) The vesting of equity-based awards shall be governed by the provisions of the Equity Plan.

(c) If Executive is a member of the Board (and/or the board of directors or board of managers of any of Isle’s affiliates) and Employee’s employment hereunder terminates for any reason other than death, Employee shall, as a condition to receiving any severance payments and continued benefits described herein, immediately tender Employee’s resignation as a member of the Board (and/or the board of directors or board of managers of any of Isle’s affiliates).

3. Change In Control of Isle. If (i) there is a sale, acquisition, merger, or buyout of Isle to an unaffiliated person, or any person that is not an “affiliate” (as such term is defined under the Securities Exchange Act of 1934) of Isle or any of its shareholders on the Effective Date becomes the legal and beneficial owner of more than 50% of Isle’s common stock (a “Change in Control”), and (ii) Employee has a Qualifying Termination (as defined below), then in lieu of the severance payments and benefits, if any, otherwise payable to Employee under Section 2 of the Agreement, Employee will vest in the following severance payments and benefits as of the date of the Change in Control (in the event the Qualifying Termination occurs prior to the Change in Control) or Employee’s termination date (in the event the Qualifying Termination occurs upon or following the Change in Control) and Employee shall be entitled to the following severance payments and benefits, subject to the terms and conditions of this Section 3; provided, however, that, Employee shall be entitled to such payments and benefits only if the Release Requirements are satisfied by the Release Date:

(a) (i) Two (2) times Employee’s Annual Base Salary payable in twenty-four (24) substantially equal monthly installments, the first six (6) of which shall be made on the first day following the six (6)-month anniversary of Employee’s termination date with the eighteen (18) remaining installments being made monthly thereafter; (ii) the amount of the Annual Bonus with respect to the Company’s most recently completed fiscal year, if any, to the extent that such Annual Bonus has not yet been paid as of the termination date, which amount shall be paid in a lump sum on the payment date generally applicable to such bonus (but no earlier than the Release Date); and (iii) an amount equal to the average of the previous three (3) years’ Annual Bonus payment, if any, inclusive of deferred amounts, if any, payable in a lump sum, which lump sum shall be paid to Employee on the first day following the six (6)-month anniversary of Employee’s termination date. Notwithstanding the foregoing, provided that the Release Requirements are satisfied as of an earlier payment date designated by the Board, the Board may authorize (I) that portion of the payments described in Sections 3(a)(i) and (iii) that qualify as a 409A Exempt Payment (as defined in Section 2(a)(ii)) to be paid in a lump sum to Employee on any date following the termination date and prior to the six (6)-month anniversary of Employee’s termination date and the remaining such payments (that is, the payments described in Sections 3(a)(i) and (iii) minus the 409A Exempt Payment) paid to Employee in accordance with this Section 3(a), and (II) the amount of the unpaid Annual Bonus with respect to the Company’s most recently completed fiscal year payable in accordance with Section 3(a)(ii) that is not subject to section 409A of the Code to be paid in a lump sum on any date after following Employee’s termination date and prior to the Release Date.

(b) The Medical Continuation Benefits; provided, however, that for purposes of this Section 3(b), the “Continuation Period” shall be based on twenty four (24) months rather than twelve (12) months.

(c) Upon the occurrence of a change in control (as defined in the Equity Plan), all of Employee’s outstanding equity-based awards shall governed by the provisions of the Equity Plan.

For purposes of this Agreement, a “Qualifying Termination” means a termination of Employee’s employment with the Company by the Company without Cause by a written notice of termination delivered to Employee or a termination by Employee for Good Reason (as defined below), in either case within thirty (30) days prior to the occurrence of a Change in Control or upon or within twelve (12) months after a Change in Control. For purposes of this Agreement, Employee’s termination shall be considered to be for “Good Reason” if Employee terminates Employee’s employment with the Company within the time period described above following (I) a significant reduction in Employee’s authority, responsibilities, position or compensation or (II) a material relocation of the principal place at which Employee performs services hereunder, but in no event less than thirty-five (35) miles from the principal place at which Employee performs such services immediately prior to the Change in Control, in either case which the Company has failed to remedy within thirty (30) days after receipt of Employee’s written notice thereof.

In no event shall Employee be permitted to elect the year of payment of any amount under this Section 3. Further, notwithstanding the foregoing provisions of this Section 3, if the definition of a Change in Control does not constitute a change in control event within the meaning of section 409A of the Code, payments pursuant to this Section 3 shall, to the extent required to comply

with section 409A of the Code, be paid at the same time and in the same form as corresponding payments and benefits otherwise payable under Section 2(a)(ii).

Notwithstanding the foregoing provisions of this Section 3, if (1) during the period beginning on the first anniversary of Employee’s termination date and ending on the second anniversary thereof (the “Second Year Period”), Employee is or becomes employed by a new employer, and (2) such new employment would be prohibited by the provisions of Section 4(c) if the post-termination restrictions of Section 4(c) applied during the Second Year Period (which they do not), then, Employee shall forfeit all future payments and benefits under this Section 3 and all future payments and benefits shall thereupon cease. Nothing in this paragraph is intended to relieve Employee of the restrictions of Section 4(c) for the first year following Employee’s termination date or to result in a forfeiture of payments and benefits during the Second Year Period if Employee is or becomes employed by a new Employer if such new employment would not be prohibited by the provisions of Section 4(c) if the post-termination restrictions of Section 4(c) applied during the Second Year Period.

4. Confidentiality, Non-Competition and Non-Solicitation.

(a) The Company’s Business. It is expressly agreed by the parties that, as of the Effective Date, the Company is (i) engaged in the business of owning, managing and operating gaming and casino facilities in the states of Missouri, Mississippi, Iowa, Louisiana, Colorado, Pennsylvania and Florida, (ii) is licensed to own, manage and operate gaming and casino facilities in the state of Nevada, (iii) is in the business of seeking new gaming properties in additional jurisdictions and (iv) is engaged in all aspects of such gaming and casino operations. Employee desires to continue to be employed by the Company from and after the Effective Date and acknowledges and agrees that the Company would be adversely affected if Employee competes with the Company during, and subsequent to, Employee’s employment with the Company.

(b) Trade Secrets and Confidential Information. The Company and Employee acknowledge the existence of trade secrets and other confidential information as defined below (collectively referred to as “Confidential Information”), all of which are owned by the Company, regardless of whether such Confidential Information was conceived, originated, devised or supplemented by Employee, the Company, or any other person or entity. Employee acknowledges that Employee has had and will continue to have access to Confidential Information during Employee’s employment with the Company.

Except as required by law, during the term of this Agreement and thereafter, Employee shall not, without the prior written consent of the Company, directly or indirectly disclose or disseminate to any other person, firm or organization, any Confidential Information other than on behalf of the Company. The foregoing obligation shall not apply to any Confidential Information that shall have become known to competitors of the Company or to the public other than through an act or omission by Employee or that shall have been disclosed to Employee by a person or entity unaffiliated with the Company who has legitimate possession thereof in its entirety and possesses the unrestricted right to make such disclosure. Further, nothing in this Section 4 prohibits Employee from reporting violations of law to a governmental agency or entity. Employee agrees to indemnify, defend and hold harmless the Company from and against

any damages (including attorneys’ fees, court costs, investigative costs and amounts paid in settlement) suffered by the Company or any of its affiliates arising out of the unauthorized disclosure or use of Confidential Information by Employee.

“Confidential Information” shall mean any data or information and documentation, whether in tangible form, electronic form or verbally disclosed, that is of material value to the Company and not known to the public or the Company’s competitors, and which the Company has kept confidential. To the fullest extent consistent with the foregoing and as otherwise lawful, Confidential Information shall include, without limitation, the Company’s trade secrets, computer programs, sales techniques and reports, formulas, data processes, methods, articles of manufacture, machines, apparatus, designs, compositions of matter, products, improvements, inventions, discoveries, developmental or experimental work, corporate strategy, marketing techniques, pricing lists and data and other pricing information, business plans, ideas and opportunities, accounting and financial information including financial statements and projections, personnel records, specialized customer information, proprietary agreements with vendors, special products and services the Company may offer or provide to its customers/guests from time to time, pending acquisitions, negotiations and transactions, or the terms of existing proposed business arrangements. Confidential Information shall also include all customer lists, accounts and specifications, and contacts of the Company, and shall further include work in progress, plans or any other matter belonging to or relating to the technical or business activities of the Company.

Employee, at the time of the effective date of the termination of the employment relationship with the Company, shall turn over to the Company all “Confidential Information” and any and all copies thereof in Employee’s possession regardless of who provided Employee with such information. Should Employee be legally served with a lawfully issued subpoena expressly directing Employee to turn over the Company’s Confidential Information, Employee shall immediately, and certainly no later than five (5) days after notice, advise the Company in writing of the subpoena and also provide a copy of the subpoena to the Company, at its lawful address as stated in this Agreement, thereby providing the Company with adequate time to lawfully object to the disclosure of its Confidential Information. Employee’s failure to immediately advise the Company of the subpoena shall subject Employee to any and all remedies afforded to the Company, including, but not limited to, damages resulting to the Company for breach of contract.

Employee agrees that all such Confidential Information is, and shall remain, the sole and exclusive property of the Company and Employee further agrees that during and after the Term of Employment, Employee will not publish, disclose, communicate or otherwise disseminate to any entity and/or person any Confidential Information. Employee acknowledges and agrees that such Confidential Information is of critical importance to the Company and its business, and any unauthorized dissemination of such information would cause great harm to the Company, thereby entitling the Company to any and all rights and remedies as provided by law, and as specifically provided in Section 5 of this Agreement.

Employee hereby assigns and agrees to assign to the Company any invention, improvement, or discovery made by Employee, alone or jointly with others, during the Term of

Employment, including any period of authorized leave of absence, or as a result of Employee’s employment, and which in any way relates to, or may be useful in, the business of the Company, together with each patent that may be obtained thereon in any country. Employee will promptly and fully disclose to the Company any such invention, improvement or discovery and, without further consideration, will upon request by the Company execute all proper papers for use in applying for, obtaining and maintaining any United States or foreign patent and all proper assignments thereof, at the Company’s expense and through its Patent Counsel. Each such invention, improvement or discovery, whether or not patented, shall be the exclusive property of the Company.

(c) Restrictions on Competition. In exchange for consideration of employment, and in consideration for Employee receiving and being given access to confidential business information, including, but not limited to trade secrets, customer and supplier contacts and relationships, goodwill, loyalty and other information, and as a condition of employment of Employee by the Company, during the term of Employee’s employment with the Company, and for a period of one (1) year after the voluntary or involuntary termination of Employee’s employment with the Company for any reason whatsoever, Employee will refrain from carrying on or engaging in the casino or gaming business (as defined in Section 4(a)), or, without the written consent of the Company (which shall not be unreasonably withheld), the hotel or restaurant business, or any other business in which the Company may be engaged on Employee’s termination date, in any case either directly or indirectly, either individually or jointly or on behalf of or in concert with any other person, as a proprietor, partner, shareholder, investor (other than in less than 5% of any class of securities of any publicly traded company), lender, financial backer, director, officer, employee, agent, advisor, consultant or manager, or in any other capacity or manner whatsoever. The provisions of this Section 4(c) apply to any gaming operation or gaming facility within a 75-mile radius of (A) any gaming operation or gaming facility owned (in whole or in part) by the Company or with respect to which the Company renders or proposes to render consulting or management services, in each case on the Effective Date or, for periods after Employee’s termination date, on such termination date, or (B) any of the foregoing as to which the Company has taken any substantive step toward owning (in whole or in part) or managing such facility in the future.

(d) Non-Solicitation of Employees. In exchange for and in consideration of continuing employment, and in consideration for Employee receiving and being given access to confidential business information, including, but not limited to trade secrets, customer and supplier contacts and relationships, goodwill, loyalty and other information, and as a condition of continuing employment of Employee by the Company, during the term of Employee’s employment with the Company and for one (1) year after Employee’s termination date for any reason, Employee shall not, without the prior written consent of the Company, either directly or indirectly, either individually or jointly or on behalf of or in concert with any other person, as a proprietor, partner, shareholder, investor (other than in less than 5% of any class of securities of any publicly traded company), lender, financial backer, director, officer, employee, agent, advisor, consultant or manager, or in any other capacity or manner whatsoever, solicit for hire, enter into any contract or other arrangement with, or interfere with, disrupt or attempt to interfere with or disrupt the Company’s relationships with, any person, who is employed by the Company; provided that for periods after Employee’s termination date the foregoing shall apply only to a person who, as of Employee’s termination date is employed by the Company.

(e) Reasonable Terms. Employee agrees that the geographic areas, duration and scope of activities outlined in this Agreement are reasonable under the circumstances. Employee further agrees that such terms are no broader than necessary to protect the Company’s business and maintain the confidentiality of the Confidential Information. Employee further agrees that the terms of this Agreement are not oppressive and will not impose an unreasonable burden or restraint on Employee.

5. Miscellaneous.

(a) Successors and Assigns. This Agreement is binding on and inures to the benefit of the Company’s successors and assigns. Isle may assign this Agreement in connection with a merger, consolidation, assignment, sale or other disposition of substantially all of its assets or business (subject to the provisions of Section 4). This Agreement may not be assigned by Employee.

(b) Modification, Waivers. This Agreement may be modified or amended only by a writing signed by an authorized representative of Isle and Employee. To the extent that the provision of Medical Continuation Benefits under this Agreement would subject the Company to a material tax or penalty, the Company shall have the authority to amend the Agreement to the limited extent reasonably necessary to avoid such tax or penalty and shall use all reasonable efforts to provide Employee with a comparable benefit that does not subject the Company to such tax or penalty. The Company’s failure, or delay in exercising any right, or partial exercise of any right, will not waive any provision of this Agreement or preclude the Company from otherwise or further exercising any rights or remedies hereunder, or any other rights or remedies granted by any law or any related document.

(c) Governing Law, Arbitration. The laws of Missouri will govern the validity, construction, and performance of this Agreement without regard to the location of execution or performance of this Agreement. Except as provided in paragraph (d) below, any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. Both Isle and Employee hereby consent to this binding arbitration provision.

prevent or restrain a breach of any provisions of this Agreement. The parties expressly agree that the Company has these specific and express rights to injunctive relief without posting any bond that might be requested or required, and without the necessity of proving irreparable injury, and that Employee expressly agrees not to claim in any such equitable proceedings that a remedy at law is available to the Company. The existence of any claim or cause of action by Employee, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company or any of its affiliates of any provision hereof. The parties to this Agreement also expressly agree that the Company is entitled to recover any and all damages for any losses sustained, and rights of which it has been deprived, as well as any damages allowed by law.

(e) If any proceeding is brought for the enforcement of this Agreement, or because of an alleged dispute, breach or default in connection with any of the provisions of this Agreement, the successful or prevailing party or parties shall be entitled to recover reasonable attorney’s fees and other costs incurred in that proceeding, in addition to any other relief to which it may be entitled. All of the remedies for breach of this Agreement available to a party shall be cumulative and the pursuit of one remedy shall not be deemed to exclude any other remedies.

(f) Captions. The headings in this Agreement are for convenience only and do not affect the interpretation of this Agreement.

(g) Severability. To the extent any provision of this Agreement shall be invalid or enforceable with respect to Employee, it shall be considered deleted herefrom with respect to Employee and the remainder of such provision and this Agreement shall be unaffected and shall continue in full force and effect. In furtherance to and not in limitation of the foregoing, should the duration or geographical extent of, or business activities covered by, any provision of this Agreement be in excess of that which is valid and enforceable under applicable law with respect to Employee, then such provision shall be construed to cover only that duration, extent or activities which are validly and enforceably covered with respect to Employee. Employee acknowledges the uncertainty of the law in this respect and expressly stipulates that this Agreement be given the construction which renders its provisions valid and enforceable to the maximum extent (not exceeding its expressed terms) possible under applicable laws.

(h) Entire Agreement. This Agreement contains the entire agreement and understanding by and between the Company and Employee, and, as of the Effective Date, supersedes all previous and contemporaneous oral negotiations, commitments, writings and understandings between the parties concerning the matters herein or therein, including without limitation, the Prior Agreement and any policy or personnel manuals of the Company to the extent any provisions herein are inconsistent therewith. No change to this Agreement shall be valid or binding unless it is in writing and signed by the parties.

subject to the exceptions set forth in the Delaware General Corporation Law. The agreement of the Company set forth in this Section 5(i) shall survive the termination of this Agreement.

(j) Notices. All notices and all other communications provided for in this Agreement shall be in writing and shall be delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid, or sent by facsimile or prepaid overnight courier to the parties at the addresses set forth below (or such other addresses as shall be specified by the parties by like notice). Such notices and other communications shall be deemed given:

(i) in the case of delivery by overnight service with guaranteed next day delivery, the next day or the day designated for delivery;

(ii) in the case of certified or registered U.S. mail, five days after deposit in the U.S. mail; or

(iii) in the case of facsimile, the date upon which the transmitting party received confirmation of receipt by facsimile, telephone or otherwise;

provided, however, that in no event shall any such communications be deemed to be given later than the date they are actually received. Communications that are to be delivered by the U.S. mail or by overnight service are to be delivered to the addresses set forth below:

If to the Company, to:

Isle of Capri Casinos, Inc.
600 Emerson Road

Suite 300

St. Louis, MO 63141

Attention: General Counsel

With a copy to:

Paul W. Theiss

Mayer Brown LLP
71 S. Wacker Drive

Chicago, IL 60606

If to Employee, to:

Eric L. Hausler

At the most recent address on the Company’s records

With a copy to:

Lynn A. Hinrichs

Lewis Rice

600 Washington Avenue

Suite 2500

St. Louis, MO 63101

(k) Independent Review and Advice. Employee represents and warrants that Employee has carefully read this Agreement; that Employee executes this Agreement with full knowledge of the contents of this Agreement, the legal consequences thereof, and any and all rights which each party may have with respect to each other; that Employee has had the opportunity to receive independent legal advice with respect to the matters set forth in this Agreement and with respect to the rights and asserted rights arising out of such matters, and that Employee is entering into this Agreement of Employee’s own free will. Employee expressly agrees that there are no expectations contrary to the Agreement and no usage of trade or regular practice in the industry shall be used to modify the Agreement.

(l) Special 409A Provisions. Notwithstanding any other provision of this Agreement to the contrary, if any payment hereunder is subject to section 409A of the Code and if such payment is to be paid on account of Employee’s separation from service (within the meaning of section 409A of the Code), if Employee is a specified employee (within the meaning of section 409A(a)(2)(B) of the Code), and if any such payment is required to be made prior to the first day of the seventh month following Employee’s separation from service, such payment shall be delayed until the first day of the seventh month following Employee’s separation from service. To the extent that any payments or benefits under this Agreement are subject to section 409A of the Code and are paid or provided on account of Employee’s termination of employment or the Term of Employment, the determination as to whether Employee has had a termination of employment (or separation from service) shall be made in accordance with section 409A of the Code and the guidance issued thereunder without application of any alternative levels of reductions of bona fide services permitted thereunder. Any delayed payment shall be made without liability for interest or other loss of investment opportunity. Any installment payment hereunder is treated as a separate payment for purposes of section 409A of the Code.

(m) No Mitigation or Offset. Employee shall not be required to mitigate the amount of any payment provide for herein by seeking other employment or otherwise, and any such payment will not be reduced in the event such other employment is obtained.

IN WITNESS HEREOF, each party has caused this Amended and Restated Employment Agreement to be executed in a manner appropriate for such party as of the date first above written.

	ISLE OF CAPRI CASINOS, INC.

	By:	/s/ Edmund L. Quatmann, Jr.
	Name:	Edmund L. Quatmann, Jr.
	Its:	Chief Legal Officer


	EMPLOYEE

	/s/ Eric Hausler
	Eric. L. Hausler

Exhibit 10.8

Execution Copy

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (“Agreement”), which expressly includes and references non-competition, non-solicitation and confidentiality provisions, is made and entered into on the 8th day of April 2016 (the “Agreement Date”) and effective as of the Effective Date (as defined below), by and between Isle of Capri Casinos, Inc., a Delaware corporation (“Isle”, together with its subsidiary and affiliated companies, the “Company”), and Arnold L. Block (“Employee”).

WHEREAS, Employee and Isle are currently parties to that certain employment agreement, dated as of January 14, 2009, and amended on June 28, 2011 (as amended, the “Prior Agreement”), pursuant to which Employee is employed as Isle’s Chief Operating Officer;

WHEREAS, the parties desire that (i) Employee continue to serve as Isle’s Chief Operating Officer through April 27, 2016, and (ii) beginning on April 28, 2016 (the “Effective Date”), Employee serve as Isle’s President and Chief Operating Officer;

WHEREAS, Isle desires to continue to employ Employee from and after the Effective Date in the position of its President and Chief Operating Officer, and Employee desires to continue to perform services for, and to continue to be employed by, Isle in such capacity, all on the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions set forth in this Agreement, Isle and Employee agree as follows:

1. Term of Employment; Duties; Compensation.

(a) Term. Isle hereby continues to employ Employee, and Employee accepts such continued employment and agrees to continue to perform services for the Company for an

(b) Service with Company. During the Term of Employment, Employee shall serve as the Company’s President and Chief Operating Officer reporting to Isle’s Chief Executive Officer. During the Term of Employment, Employee agrees to perform reasonable employment duties as the Chief Executive Officer shall assign to Employee from time to time, which duties and responsibilities as are customarily the duties and responsibilities of presidents and chief operating officers of companies such as Isle. In addition, Employee agrees to serve for any period for which Employee is duly and properly elected as a member of the board of directors of Isle (the “Board”); provided, however, that Employee shall not be entitled to any additional compensation for serving as a member of the Board.

(d) Compensation. From and after the Effective Date and during the remaining Term of Employment, Isle shall pay to Employee as compensation for services to be rendered hereunder an aggregate base salary at an annual rate which is not less than $550,000 (the “Annual Base Salary”) payable in substantially equal monthly, or more frequent, payments, subject to increases, if any, as may be determined by the Compensation Committee of the Board (the “Compensation Committee”). For each fiscal year during the Term of Employment, Employee shall be eligible to receive an annual cash bonus (the “Annual Bonus”) based upon the achievement of reasonable, objective performance targets that have been established by the Compensation Committee; provided that Employee’s Annual Bonus for each fiscal year (beginning with fiscal 2017) at the target level shall be equal to at least 100% of Employee’s Annual Base Salary if Employee meets the target levels set by the Compensation Committee. Employee shall be involved as a senior management executive in the establishment of reasonable, objective performance targets. Employee shall also be entitled to participate in Isle’s long-term stock incentive plan, as in effect from time to time (the “Equity Plan”), to the extent that similarly-situated executives of Isle participate therein. In addition to the Annual Base Salary, Annual Bonus and participation in the Equity Plan as set forth above, Employee shall be entitled to participate in any employee benefit plans or programs of the Company as are or may be made generally available to similarly-situated employees of Isle and those made available to similarly-situated officers of Isle. Employee shall be entitled to vacation in accordance with Isle’s policies for similarly-situated employees.

2. Termination.

(a) The Term of Employment shall terminate prior to its expiration, and Employee’s employment shall terminate, in the event that at any time during the Term of Employment:

termination date, except as may be required by law or the express terms of any employee benefit plan or arrangement.

For purposes of this Agreement, “Medical Continuation Benefits” means continuation coverage under the Company’s major medical, dental and vision plans (collectively, the

In no event shall Employee be permitted to elect the year of payment of any amount under this Section 2(a)(ii).

Notwithstanding the foregoing, if Employee voluntarily terminates the Term of Employment and Employee’s employment due to Retirement (as defined below), then Employee shall receive the following amounts and benefits, in addition to any amount or benefit payable under a separate plan, policy or program maintained by the Company: (x) the amount of the Annual Bonus with respect to the Company’s most recently completed fiscal year, if any, to the extent that such Annual Bonus has not yet been paid as of such date, which amount shall be paid in the form of a lump sum on the payment date generally applicable to such bonus; (y) a monthly amount equal to the Company’s portion of Employee’s premium or similar contribution under the Company’s group medical

plan, such amount to be (I) based upon Employee’s level of enrollment in the Company’s group medical plan as of his or her termination date, (II) paid during the 12-month period following Employee’s termination date or until the date on which Employee’s continuation coverage ceases in accordance with Code Section 4980B, if earlier, and (III) contingent upon Employee’s timely election to continue his or her coverage under the Company’s group medical plan in accordance with Code Section 4980B; and (z) an amount equal to Employee’s average Annual Bonus paid during the Company’s three most recently completed fiscal years, determined net of any deferral under the Deferred Bonus Plan, prorated for the number of days of Employee’s service during the fiscal year in which Employee’s terminate date occurs, payable in a lump sum within ninety (90) days following Employee’s termination date.

The term “Retirement” shall mean the termination of Employee’s employment with Isle (other than for Cause) after Employee has (A) attained at least age sixty-five (65) and (B) completed at least three (3) years of service with the Company.

(iv) Employee dies or Isle terminates the Term of Employment and Employee’s employment as a result of Employee’s Disability by a written notice of termination delivered to Employee. In the event Employee’s employment is terminated due to Employee’s death or Disability, Employee, or, in the event of death, Employee’s estate or dependents, as applicable, shall receive (A) payment of Employee’s earned but unpaid Annual Bonus and continuing payment of Employee’s Annual Base Salary payable in twelve (12) substantially equal monthly installments beginning on the first day following the six (6) month anniversary of Employee’s termination date; (B) continuation coverage under the Medical Plan for the Continuation Period; and (C) a lump sum payment to be paid on the first payroll date following Employee’s termination date equal to the average of the last three (3) years’ Annual Bonus payments, if any, inclusive of deferred amounts.

For purposes of this Agreement, Employee shall be deemed to have a “Disability” if, by reason of a medically-determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of at least twelve (12) months, (I) Employee is unable to engage in any substantial gainful employment, or (II) has been receiving benefits under the Company’s separate long-term disability plan for a period of at least three (3) months. In the event of any dispute regarding the existence of Employee’s Disability hereunder, Isle may refer the same to a licensed practicing physician of the Company’s choice who is reasonably acceptable to Employee, and Employee agrees to submit to such tests and examination as such physician shall deem appropriate and the determination by such physician shall be binding on the Company and Employee.

(b) The vesting of equity-based awards shall be governed by the provisions of the Equity Plan.

(c) If Employee is a member of the Board (and/or the board of directors or board of managers of any of Isle’s affiliates) and Employee’s employment hereunder terminates for any reason other than death, Employee shall, as a condition to receiving any severance

payments and continued benefits described herein, immediately tender Employee’s resignation as a member of the Board (and/or the board of directors or board of managers of any of Isle’s affiliates).

(c) Upon the occurrence of a change in control (as defined in the Equity Plan), all of Employee’s outstanding equity-based awards shall governed by the provisions of the Equity Plan.

4. Confidentiality, Non-Competition and Non-Solicitation.

address as stated in this Agreement, thereby providing the Company with adequate time to lawfully object to the disclosure of its Confidential Information. Employee’s failure to immediately advise the Company of the subpoena shall subject Employee to any and all remedies afforded to the Company, including, but not limited to, damages resulting to the Company for breach of contract.

Employee hereby assigns and agrees to assign to the Company any invention, improvement, or discovery made by Employee, alone or jointly with others, during the Term of Employment, including any period of authorized leave of absence, or as a result of Employee’s employment, and which in any way relates to, or may be useful in, the business of the Company, together with each patent that may be obtained thereon in any country. Employee will promptly and fully disclose to the Company any such invention, improvement or discovery and, without further consideration, will upon request by the Company execute all proper papers for use in applying for, obtaining and maintaining any United States or foreign patent and all proper assignments thereof, at the Company’s expense and through its Patent Counsel. Each such invention, improvement or discovery, whether or not patented, shall be the exclusive property of the Company.

the foregoing as to which the Company has taken any substantive step toward owning (in whole or in part) or managing such facility in the future.

5. Miscellaneous.

(c) Governing Law, Arbitration. The laws of Missouri will govern the validity, construction, and performance of this Agreement without regard to the location of

execution or performance of this Agreement. Except as provided in paragraph (d) below, any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. Both Isle and Employee hereby consent to this binding arbitration provision.

(d) Remedies. Employee expressly acknowledges and the parties recognize that the restrictions contained in Section 4 herein are reasonable and necessary to protect the business and interests of the Company, and that any violation of these restrictions will cause substantial irreparable injury and damage to the Company, and the extent of such damage would be difficult if not impossible to calculate. Accordingly, the parties to this Agreement expressly agree that (i) if Employee breaches any provision of Section 4 of this Agreement, the damage to the Company may be substantial, although difficult to ascertain, and monetary damages may not afford an adequate remedy, and (ii) if Employee is in breach of any provision of this Agreement, or threatens a breach of this Agreement, the Company shall be entitled, in addition to all other rights and remedies as may be provided by law, to seek specific performance and injunctive and other equitable relief, including, but not limited to, restraining orders and preliminary and permanent injunctions, to enforce the provisions of Section 4 of this Agreement, as well as to prevent or restrain a breach of any provisions of this Agreement. The parties expressly agree that the Company has these specific and express rights to injunctive relief without posting any bond that might be requested or required, and without the necessity of proving irreparable injury, and that Employee expressly agrees not to claim in any such equitable proceedings that a remedy at law is available to the Company. The existence of any claim or cause of action by Employee, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company or any of its affiliates of any provision hereof. The parties to this Agreement also expressly agree that the Company is entitled to recover any and all damages for any losses sustained, and rights of which it has been deprived, as well as any damages allowed by law.

(f) Captions. The headings in this Agreement are for convenience only and do not affect the interpretation of this Agreement.

law with respect to Employee, then such provision shall be construed to cover only that duration, extent or activities which are validly and enforceably covered with respect to Employee. Employee acknowledges the uncertainty of the law in this respect and expressly stipulates that this Agreement be given the construction which renders its provisions valid and enforceable to the maximum extent (not exceeding its expressed terms) possible under applicable laws.

(i) Indemnification. Isle shall indemnify Employee and hold Employee harmless to the full extent permitted by Section 145 of the Delaware General Corporation Law from and against any and all claims, liabilities and losses Employee may suffer arising in connection with Employee’s employment as an officer of the Company as set forth herein, subject to the exceptions set forth in the Delaware General Corporation Law. The agreement of the Company set forth in this Section 5(i) shall survive the termination of this Agreement.

(i) in the case of delivery by overnight service with guaranteed next day delivery, the next day or the day designated for delivery;

(ii) in the case of certified or registered U.S. mail, five days after deposit in the U.S. mail; or

(iii) in the case of facsimile, the date upon which the transmitting party received confirmation of receipt by facsimile, telephone or otherwise;

If to the Company, to:

Isle of Capri Casinos, Inc.
600 Emerson Road

Suite 300

St. Louis, MO 63141

Attention: General Counsel

With a copy to:

Paul W. Theiss

Mayer Brown LLP
71 S. Wacker Drive

Chicago, IL 60606

If to Employee, to:

Arnold L. Block

At the most recent address on the Company’s records

IN WITNESS HEREOF, each party has caused this Amended and Restated Employment Agreement to be executed in a manner appropriate for such party as of the date first above written.

	ISLE OF CAPRI CASINOS, INC.

	By:	/s/ Edmund L. Quatmann, Jr.
	Name:	Edmund L. Quatmann, Jr.
	Its:	Chief Legal Officer


	EMPLOYEE

	/s/ Arnold L. Block
	Arnold L. Block

Exhibit 10.9

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into by and between Isle of Capri Casinos, Inc., a Delaware corporation (the “Company”), and Michael A. Hart (“Employee”) and is intended to be effective as of the date set forth below.

WHEREAS, Employee and the Company are currently parties to that certain employment agreement, dated as of December 11, 2008 (the “Prior Agreement”), pursuant to which Employee is currently employed as the Company’s Vice President, Treasury and Risk Management;

WHEREAS, the parties desire that (i) Employee continue to serve as the Company’s Vice President, Treasury and Risk Management through April 27, 2016, and (ii) beginning on April 28, 2016 (the “Effective Date”), Employee serve as the Company’s Senior Vice President of Accounting, Treasurer and Assistant Secretary;

WHEREAS, the Company desires to continue to employ Employee from and after the Effective Date in the position of its Senior Vice President of Accounting, Treasurer and Assistant Secretary, and Employee desires to continue to perform services for, and to continue to be employed by, the Company in such capacity, all on the terms and conditions set forth herein; and

WHEREAS, this Agreement shall become effective as of the Effective Date only if Employee is employed by the Company on the Effective Date and the Prior Agreement shall remain in effect until the Effective Date, subject to the terms and conditions thereof, whereupon the Prior Agreement shall be superseded by this Agreement.

NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions set forth in this Agreement, Isle and Employee agree as follows:

1. Employment and Term.

1.1 Position. The Company and/or an affiliated employer of the Company shall employ and retain Employee as its Senior Vice President of Accounting, Treasurer and Assistant Secretary or in such other capacity or capacities as may be mutually agreed upon from time to time, and Employee agrees to be so employed, subject to the terms and conditions set forth herein. Employee’s duties and responsibilities shall be those assigned to him or her by the Company’s Chief Executive Officer, to whom Employee shall initially report. Employee agrees to discharge such duties in a reasonable and customary manner.

1.2 Affiliated Employer. Employee acknowledges that he or she may perform services for the benefit of or be employed by an affiliate of the Company and a transfer of employment between the Company or any affiliate or among or between affiliates of the Company shall not constitute a termination of Employee’s employment unless otherwise specified herein. Employee agrees that, except as otherwise provided herein or where the context clearly indicates the contrary, any reference to the Company herein shall be deemed to

include any such affiliate and that, to the maximum extent permitted by law, the protections described in Section 5 hereof shall be deemed to apply to the Company, any such affiliate and any other affiliate of the Company.

1.3 Full Time and Attention. Employee agrees that he or she will devote his or her full time and attention to the performance of his or her duties hereunder. Employee will not, without the prior written consent of the Company be engaged, whether or not during normal business hours, in any other business or professional activity, whether or not such activity is pursued for gain, profit or other pecuniary advantage.

1.4 Term. Employee’s employment shall commence as of the Effective Date and shall continue for a series of successive one-year terms, unless earlier terminated as provided in Sections 3 or 4 hereof (the period during which Employee is employed hereunder referred to as the “Employment Term”).

2. Compensation and Benefits. As of the Effective Date, the Company shall pay to Employee the annual base compensation set forth on Exhibit A hereto (Employee’s “Base Compensation”) and such other bonus, equity incentive, fringe and employee benefits, as may be set forth on such exhibit, the terms of which are incorporated herein by this reference. Such benefits and amounts may be adjusted, from time to time, on Exhibit A hereto or may be evidenced by a separate plan, policy or program sponsored by the Company or in the form of an agreement by and between the Company and Employee.

3. Termination and Nonrenewal.

3.1 Special Definition. As used herein, the term “Basic Severance” shall mean the aggregate of the following amounts and benefits:

a. The continuation of Employee’s annualized Base Compensation in effect as of the date on which his or her employment ceases (Employee’s “Termination Date”), which amount shall be divided and paid in substantially equal installments during the 12-month period following such date, in accordance with the Company’s regular pay date practices;

b. The bonus due under the Company’s annual incentive plan in which Employee participates as of his or her Termination Date (“Annual Incentive Plan”) with respect to the Company’s most recently completed fiscal year, if any, to the extent that such bonus has not yet been paid as of Employee’s Termination Date, which amount shall be paid on the payment date generally applicable to such bonus; and

c. A monthly amount equal to the Company’s portion of Employee’s premium or similar contribution required under the Company’s group medical plan as an active employee, such amount to be (i) based upon Employee’s level of enrollment in such plan as of his or her Termination Date, (ii) paid monthly during the 12-month period following Employee’s Termination Date or until Employee’s coverage ceases in accordance with Section 4980B of the Internal Revenue Code of 1986, as amended (the “Code”), if earlier, and (iii) contingent

upon Employee’s timely election to continue his or her coverage under the Company’s group medical plan in accordance with Code Section 4980B.

Notwithstanding the foregoing, if Basic Severance is payable to Employee pursuant to Section 3.4, payments of the Basic Severance will commence as of the 60th day following Employee’s Termination Date (the “Payment Start Date”) if, as of the Payment Start Date, the release requirements described in Section 3.4 are satisfied and any payments that would otherwise have been made after Employee’s Termination Date and prior to the Payment Start Date shall be paid in a lump sum on the Payment Start Date; provided, however, that if and to the extent that the Basic Severance is not subject to Code Section 409A, then the Company, in its sole discretion, may commence payment of the Basic Severance prior to the Payment Start Date and after the release requirements are satisfied.

3.2 Termination on Account of Death or Disability. If Employee dies or becomes Disabled during the Employment Term, this Agreement and Employee’s employment hereunder shall terminate. In such event, the Company shall pay or provide to Employee (or to his or her estate) (a) the amount of any accrued but unpaid Base Compensation, (b) Basic Severance, and (c) any other amount or benefit to which Employee may be entitled under a separate plan, policy or program maintained by the Company. Employee shall be deemed “Disabled” hereunder if he or she is (a) unable to engage in any substantial gainful activity due to a medically-determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of at least 12 months, or (b) receiving benefits under the Company’s separate long-term disability plan for a period of at least three months as a result of a medically-determinable physical or mental impairment. The Company shall certify whether Employee is Disabled as defined herein.

3.3 Termination on Account of Employee’s Voluntary Resignation. Employee may terminate this Agreement and his or her employment hereunder, upon 30 days prior written notice to the Company or such shorter period as may be agreed upon by the parties hereto. In such event, the Company shall pay to Employee the amount of his or her accrued but unpaid Base Compensation. No additional payments or benefits shall be due hereunder, except as may be required under a separate plan, policy or program maintained by the Company or as may be required by law to be provided.

If Employee voluntarily terminates this Agreement and his or her employment hereunder on or after the date on which he or she attains age 65 and has completed at least ten (10) years of service with the Company, then notwithstanding any provision of any plan, policy, contract or arrangement to the contrary, he or she shall receive the following amounts and benefits, in addition to any amount or benefit payable under a separate plan, policy or program maintained by the Company:

a. Treatment of any and all equity awards will be determined by the applicable award agreement and the terms of the Equity Plan (as defined in Section 4).

b. The amount of any bonus due under the Annual Incentive Plan with respect to the Company’s most recently completed fiscal year, if any, to the extent that such

bonus has not yet been paid as of such date, which amount shall be paid in the form of a single-sum on the payment date generally applicable to such bonus;

c. A monthly amount equal to the Company’s portion of Employee’s premium or similar contribution under the Company’s group medical plan, such amount to be (i) based upon Employee’s level of enrollment in the Company’s group medical plan as of his or her Termination Date, (ii) paid monthly during the 12-month period following Employee’s Termination Date or until the date on which Employee’s continuation coverage ceases in accordance with Code Section 4980B, if earlier, and (iii) contingent upon Employee’s timely election to continue his or her coverage under the Company’s group medical plan in accordance with Code Section 4980B; and

d. An amount equal to Employee’s average bonus paid under the Annual Incentive Plan during the Company’s three most recently completed fiscal years, multiplied by a fraction (i) the numerator of which is the number of days of Employee’s service during the fiscal year in which Employee’s Termination Date occurs, and (ii) the denominator of which is 365.

3.4 Termination by the Company Without Cause. The Company may terminate this Agreement and Employee’s employment hereunder at any time, without Cause (as defined below), with not less than 30 days prior written notice to Employee, unless a shorter period is agreed upon by the parties hereto. In such event, the Company shall pay to Employee his or her accrued but unpaid Base Compensation, provide any benefits otherwise required by law to be provided, and pay any amount or benefit otherwise required under a separate plan, policy or program maintained by the Company. In the event that Employee executes a general release in form and substance reasonably satisfactory to the Company and if the revocation period has expired prior to the Payment Start Date, the Company shall further provide to Employee Basic Severance in accordance with Section 3.1.

3.5 Company’s Termination for Cause. The Company may terminate this Agreement and Employee’s employment hereunder at any time for Cause. In such event, the Company shall pay to Employee the amount of his or her accrued but unpaid Base Compensation. No additional payments or benefits shall be due hereunder, except as may be required under a separate plan, policy or program maintained by the Company or as may be required by law to be provided. For purposes of this Agreement, the term “Cause” shall mean that Employee has:

a. Committed an intentional act of fraud, embezzlement or theft in the course of his or her employment or otherwise engaged in any intentional misconduct which is materially injurious to the Company’s financial condition or business reputation;

b. Committed intentional damage to the property of the Company or committed intentional wrongful disclosure of Confidential Information (as defined below) which is materially injurious to the Company’s financial condition or business reputation;

c. Been indicted for the commission of a felony or a crime involving moral turpitude;

d. Willfully and substantially refused to perform the essential duties of his or her position, which has not been cured within 30 days following written notice by the Company;

e. Committed a material breach of this Agreement, which has not been cured within 30 days following receipt of written notice of the breach from the Company, which shall include but not be limited to, the failure to timely obtain or to maintain in good standing applicable licensure or registration requirements;

f. Intentionally, recklessly or negligently violated any material provision of the Sarbanes-Oxley Act of 2002 or any of the rules adopted by the Securities and Exchange Commission implementing any such provision; or

g. Committed a material breach of the Company’s policies, which breach has not been cured within 30 days following written notice by the Company.

No act or failure to act on the part of Employee will be deemed “intentional” if it was due primarily to an error in judgment or negligence, but will be deemed “intentional” only if done or omitted to be done by Employee not in good faith and without reasonable belief that his or her action or omission was in the best interest of the Company. In connection with any termination for Cause hereunder, the Company shall provide to Employee written notice of the event or actions deemed to constitute such Cause.

4. Change of Control.

4.1 Special Definitions. As used herein, the terms “Change of Control” and “Qualifying Termination” shall have the meanings ascribed to them in the Company’s Second Amended and Restated 2009 Long-Term Stock Incentive Plan, as the same may be further amended, restated or otherwise replaced from time to time (the “Equity Plan”).

4.2 Termination of Employment in Connection with Change of Control. In the event that Employee’s employment hereunder terminates in a Qualifying Termination upon or within the 12-month period following the occurrence of a Change of Control, then in lieu of any benefit provided in Section 3 hereof, and in the event that Employee executes a general release in form and substance reasonably satisfactory to the Company and if the revocation period has expired prior to the Payment Start Date, the Company shall pay or provide to or for the benefit of Employee:

a. An amount equal to 200% of his or her annualized Base Compensation then in effect, which amount shall be paid in the form of a single-sum 30 days following Employee’s Termination Date or the first business day thereafter.

b. An amount equal to the average of his or her annual bonus paid under the Annual Incentive Plan during the Company’s three most recently completed fiscal years or such shorter period as Employee has been employed by the Company; such

amount shall be paid in the form of a single-sum 30 days following Employee’s Termination Date or the first business day thereafter.

c. The amount of any bonus due with respect to the Company’s most recently completed fiscal year, if any, to the extent that such bonus has not yet been paid as of such date, which amount shall be paid on the payment date generally applicable to such bonus.

d. A monthly amount equal to the premium required to continue Employee’s coverage under the Company’s group medical plan during the 18-month period following Employee’s Termination Date, such amount to be (i) based upon Employee’s level of enrollment in the Company’s group medical plan as of the date of his or her Termination Date, (ii) paid monthly during the 18-month period following Employee’s Termination Date, and (ii) contingent upon Employee’s timely election to continue his or her coverage under the Company’s group medical plan in accordance with Code Section 4980B.

e. Treatment of any and all equity awards will be determined by the applicable award agreement and the Equity Plan.

If the Change in Control does not constitute a change in control event within the meaning of Code Section 409A, payments pursuant to this Section 4.2 shall, to the extent required to comply with Code Section 409A, be paid at the same time and in the same form as payments of Basic Severance in the case of covered terminations prior to the Change in Control.

4.3 Excise Tax. If the aggregate present value of all payments and benefits due to Employee under this Agreement and any other payment or benefit due from the Company or any successor thereto (the “Aggregate Payments”) would be subject to the excise tax imposed by Code Section 4999, such payments or benefits shall be reduced by the minimum amount necessary to result in no portion of the Aggregate Payments, so reduced, being subject to the excise tax under Code Section 4999. The determination of whether a reduction is required hereunder shall be made by the Company’s registered independent public accounting firm and shall be binding upon the parties hereto. To the extent practicable, Employee shall be entitled to select the payments or benefits subject to reduction hereunder; provided, however, that no such selection shall be permitted with respect to any payments or benefits which are subject to Code Section 409A.

5. Business Protection.

5.1 Consideration. Employee acknowledges that the execution of this Agreement and his or her access to Confidential Information (as defined herein) shall constitute adequate consideration for each of the limitations and restrictions set forth in this Section 5, the sufficiency of which is hereby acknowledged.

5.2 Protection of Confidential Information. The Company and Employee acknowledge the existence of Confidential Information, which is owned by the Company, regardless of whether such Confidential Information was conceived, originated, devised,

supplemented, discovered or developed by Employee, the Company, or any other person or entity. Employee acknowledges that he or she will have access to Confidential Information during the Employment Term and agrees that all such Confidential Information is, and shall remain, the sole and exclusive property of the Company. Except as required by law, during the Employment Term and at all times thereafter, Employee agrees that he or she shall not, without the prior written consent of the Company, directly or indirectly use, disclose or disseminate to any person or otherwise use any Confidential Information, other than on behalf of the Company. If Employee is legally served with a lawfully issued subpoena directing Employee to disclose Confidential Information, Employee shall immediately, but no later than five days after receipt of such subpoena, provide written notice to the Company, including a copy thereof. Nothing in this Section 5.2 prohibits Employee from reporting violations of the law to a governmental agency or entity.

As used herein, the term “Confidential Information” shall mean, in addition to the Company’s trade secrets as defined under applicable law, any data or information and documentation, whether in tangible form, electronic form or verbally disclosed, that is valuable to the Company and not generally known to the public. To the fullest extent consistent with the foregoing and applicable law, Confidential Information shall further include, without limitation, the Company’s computer programs, sales techniques and reports, formulas, data processes, methods, articles of manufacture, machines, apparatus, designs, compositions of matter, products, ideas, improvements, inventions, discoveries, developmental or experimental work, corporate strategy, marketing techniques, pricing lists and data and other pricing information, business plans, ideas and opportunities, accounting and financial information including financial statements and projections, personnel records, specialized customer information, proprietary agreement with vendors, supplier information, special products and services the Company may offer or provide to its customers/guests from time to time, pending acquisitions, negotiations and transactions, or the terms of existing proposed business arrangements. Confidential Information shall also include all customer/guest lists, accounts and specifications, and contacts of the Company, and shall further include work in progress, plans or any other matter belonging to or relating to the technical or business activities of the Company.

5.3 Patents; Intellectual Property. Employee hereby assigns and agrees to assign to the Company any invention, improvement, or discovery made by Employee, alone or jointly with others, during the Employment Term, including any period of authorized leave of absence, or as a result of his or her employment, and which in any way relates to, or may be useful in, the business of the Company, together with each patent that may be obtained thereon in any country. Employee shall promptly and fully disclose to the Company any such invention, improvement or discovery and, without further consideration, will upon request by the Company execute all proper papers for use in applying for, obtaining and maintaining any United States or foreign patent and all proper assignments thereof, at the Company’s expense and through its patent counsel. Each such invention, improvement or discovery, whether or not patented, shall be the exclusive property of the Company.

5.4 Noncompetition. The parties agree that, as of the Effective Date, the Company is engaged in: (a) the business of owning, managing and operating gaming and casino facilities in the States of Missouri, Mississippi, Iowa, Louisiana, Colorado and Florida, Nevada and Pennsylvania, (b) seeking new gaming properties in additional jurisdictions, and (c) all aspects of

such gaming and casino operations (collectively, the “Company’s Business”). Employee acknowledges that the Company would be adversely affected if he or she competes with the Company, and, accordingly, Employee agrees that, during the Employment Term and the one-year period thereafter, Employee shall refrain from carrying on or engaging in a business similar to the Company’s Business, either individually or jointly or on behalf of or in concert with any other person, as a proprietor, partner, shareholder, investor, lender, financial backer, director, officer, employee, agent, advisor, consultant or manager. The provisions of this Section 5.4 shall apply to (a) any operation or facility located within a 75-mile radius of any gaming operation or gaming facility owned by the Company, whether in whole or in part, (b) any such operation or facility, which is not owned by the Company but with respect to which the Company renders or proposes to render consulting or management services, and (c) any of the foregoing as to which the Company has taken any substantive step toward owning, in whole or in part, or managing. In each case, such determination shall be made as of the date hereof and Employee’s Termination Date.

5.5 Nonsolicitation. During the Employment Term and the six-month period thereafter, Employee shall not, without the prior written consent of the Company, either directly or indirectly, whether individually or jointly or on behalf of or in concert with any other person, as a proprietor, partner, shareholder, investor, lender, financial backer, director, officer, employee, agent, advisor, consultant or manager, or in any other capacity or manner whatsoever, solicit, hire or attempt to hire, enter into any contract or other arrangement with, or interfere with, disrupt or attempt to interfere with or disrupt the Company’s relationships with any person who is employed by the Company.

5.6 Reasonable Terms. By execution below, Employee agrees that the geographic areas, duration and scope of activities outlined in this Section 5 are reasonable. Employee further agrees that (a) such terms are no broader than necessary to protect the Company’s business, (b) such terms are necessary to protect and maintain the Company’s interest in Confidential Information with respect to which Employee has or shall have access, and (c) such terms are not oppressive and will not impose an unreasonable burden or restraint on Employee.

The Company agrees that the provisions of this Section 5 shall not be construed to prohibit the acquisition by Employee of less than 5% of any class of securities issued by a publicly traded company.

5.7 Return of Company’s Property. Upon termination or expiration of this Agreement and the employment of Employee hereunder, for any reason, Employee or his or her estate shall promptly return to the Company all of the property of the Company, including, without limitation, access cards, keys and similar items, automobiles, equipment, computers, fax machines, portable telephones, printers, software, credit cards, manuals, customer lists, financial data, letters, notes, notebooks, reports and copies of any of the above and any Confidential Information that is in the possession or under the control of Employee, without regard to the form thereof. Employee, or his or her estate, shall provide to the Company written certification that he or she has complied with the provisions of this Section 5.7 not later than five days after his or her Termination Date or, in the event of Employee’s death or Disability, such later time as the parties may mutually agree.

5.8 Indemnification. The Company shall indemnify and hold harmless Employee to the extent provided under the Company’s organizational documents, from time to time, whether during the Employment Term or after Employee’s Termination Date.

5.9 Survival. Notwithstanding any provision of this Agreement to the contrary, Employee and the Company acknowledge that the restrictions and limitations set forth in this Section 5 shall survive the termination of this Agreement and Employee’s employment hereunder for any reason.

6. General.

6.1 Specified Employee Delay and Code Section 409A. Notwithstanding any other provision of this Agreement to the contrary, if any payment hereunder is subject to Code Section 409A and if such payment is to be paid on account of Employee’s separation from service (within the meaning of Code Section 409A), if Employee is a specified employee (within the meaning of Code Section 409A(a)(2)(B)), and if any such payment is required to be made prior to the first day of the seventh month following Employee’s separation from service, such payment shall be delayed until the first day of the seventh month following Employee’s separation from service. To the extent that any payments or benefits under this Agreement are subject to Code Section 409A and are paid or provided on account of Employee’s termination of employment, the determination as to whether Employee has had a termination of employment (or separation from service) shall be made in accordance with Code Section 409A and the guidance issued thereunder without application of any alternative levels of reductions of bona fide services permitted thereunder. Any delayed payment shall be made without liability for interest or other loss of investment opportunity. Any installment payment hereunder is treated as a separate payment for purposes of Code Section 409A. It is the intent of the parties that all provisions of this Agreement comply with the requirements of Code Section 409A.

6.2 Successors and Assigns. This Agreement is binding upon and shall inure to the benefit of the Company’s successors and assigns. The Company may assign this Agreement in connection with a merger, consolidation, assignment, sale or other disposition of substantially all of its assets or business, without the consent of Employee. This Agreement may not be assigned by Employee.

6.3 Modification and Waiver. This Agreement may be amended by written agreement signed by the parties hereto. The Company’s failure, or delay in exercising any right, or partial exercise of any right will not waive any provision of this Agreement or preclude the Company from otherwise or further exercising any rights or remedies hereunder, including any other rights or remedies granted by any law or any related document.

6.4 Governing Law. This Agreement shall be governed by the internal laws of the State of Missouri, without regard to the conflicts of law provisions thereof.

6.5 Arbitration, Remedies and Attorneys’ Fees. Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules,

and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. Both the Company and Employee hereby consent to this binding arbitration provision.

The parties agree that (a) if Employee breaches any provision of this Agreement, the damage to the Company may be substantial, although difficult to ascertain, and monetary damages may not afford an adequate remedy, and (b) notwithstanding the provisions of this Section 6.5, if Employee is in breach of any provision of this Agreement, or threatens a breach of this Agreement, the Company shall be entitled, in addition to all other rights and remedies as may be provided by law, to seek specific performance and injunctive and other equitable relief, including, but not limited to, restraining orders and preliminary and permanent injunctions, to enforce the provision of this Agreement. The parties expressly agree that the Company has these specific and express rights to injunctive relief without posting bond, and without the necessity of proving irreparable injury, and that Employee expressly agrees not to claim in any such equitable proceedings that a remedy at law is available to the Company. The existence of any claim or cause of action by Employee, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company or any of its Affiliates of any provision hereof. The Company’s remedies for breach of this Agreement shall be cumulative and the pursuit of one remedy shall not be deemed to exclude any other remedies. The parties hereto expressly agree that the Company shall be entitled to recover damages for any loss sustained or right to which it has been deprived, including any damages provided by law.

If any proceeding is brought for the enforcement of this Agreement, or because of an alleged dispute, breach or default in connection with any of the provisions of this Agreement, the successful or prevailing party or parties shall be entitled to recover reasonable attorneys’ fees and other costs incurred in that proceeding, in addition to any other relief to which it may be entitled.

6.6 Severability and Reformation. To the extent any provision of this Agreement shall be invalid or unenforceable, it shall be considered deleted and the remainder of such provision and this Agreement shall continue in full force and effect. In furtherance of the foregoing, should the duration or geographical extent of, or business activities covered by, any provision of this Agreement be in excess of that which is valid and enforceable under applicable law, such provision shall be construed to cover only the duration, extent or activities that is valid and enforceable. Employee acknowledges the uncertainty of the law in this respect, and expressly stipulates that this Agreement is to be given the construction which renders its provisions valid and enforceable to the maximum extent permitted under applicable law.

6.7 Entire Agreement. This Agreement contains the entire agreement and understanding by and between the parties and supersedes and replaces any previous and contemporaneous oral negotiations, commitments, writings and understandings concerning the matters herein, including without limitation, the Prior Agreement.

6.8 Notices. All notices and other communications required or permitted under this Agreement shall be in writing and sent by certified or first class mail, postage prepaid, and shall be deemed delivered upon hand delivery or upon mailing to the following address (or such other address as may be furnished by a party hereto):

If to the Company:

Isle of Capri Casinos, Inc.

600 Emerson Drive, Suite 300

St. Louis, MO 63141

Attn: Senior Vice President, Human Resources

If to Employee:

Employee’s last address in Company’s personnel files

6.9 Employee’s Representation. Employee represents and warrants to the Company that the execution and delivery of this Agreement and the performance of his or her duties and obligations hereunder shall not constitute a violation of any other agreement to which Employee is a party.

6.10 Taxes. The Company shall be entitled to withhold as a condition of any payment or benefit described herein, any Federal, state or local taxes required by law to be withheld.

6.11 Review and Advice. By execution below, Employee represents and warrants that he or she has read this Agreement and obtained independent advice concerning the terms and conditions thereof. Employee voluntarily executes this Agreement with full knowledge of its terms and conditions and the rights and obligations of the parties set forth herein.

THIS EMPLOYMENT AGREEMENT is executed in multiple counterparts, each of which shall be deemed an original, as of the dates set forth below, to be effective as provided above.

Employee:		Isle of Capri Casinos, Inc.:


By:	/s/ Michael Hart	By:	/s/ Edmund L. Quatmann, Jr.


Date:	4/11/16	Date	4/11/16

EXHIBIT A

COMPENSATION AND BENEFITS

The terms of this Exhibit A, as it may be amended from time to time, are intended to form a part of that certain employment agreement by and between Isle of Capri Casinos, Inc. and the employee named below (the “Agreement”).

Name of Employee:		Michael A. Hart

Date of this Exhibit:		Effective Date (as defined in the Agreement)

Base Compensation:		$270,000 annually

Bonus Opportunity:		50% of base compensation

Long-Term Incentive:		Eligible to participate in the Equity Plan

Benefits:		During the Employment Term, Employee shall be eligible to participate in the pension, medical, dental, disability and life insurance plans applicable to similarly-situated senior executives of the Company generally in accordance with the terms of such plans as in effect from time to time.

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Exhibit 21.1

SIGNIFICANT SUBSIDIARIES OF ISLE OF CAPRI CASINOS, INC.

WHOLLY-OWNED SUBSIDIARIES		STATE OF INCORPORATION

Black Hawk Holdings, L.L.C.		Colorado
Capri Insurance Company		Hawaii
CCSC Blackhawk, Inc.		Colorado
IC Holdings Colorado, Inc.		Colorado
IOC-Black Hawk Distribution Company, LLC		Colorado
IOC-Boonville, Inc.		Nevada
IOC-Caruthersville, L.L.C		Missouri
IOC-Kansas City, Inc.		Missouri
IOC-Lula, Inc.		Mississippi
IOC-Vicksburg, Inc.		Delaware
IOC-Vicksburg, L.L.C.		Delaware
IOC Black Hawk County, Inc.		Iowa
IOC Cape Girardeau, LLC		Missouri
IOC Holdings, L.L.C.		Louisiana
IOC-PA, L.L.C.		Pennsylvania
Isle of Capri Bettendorf, L.C.		Iowa
Isle of Capri Black Hawk, L.L.C.		Colorado
Isle of Capri Marquette, Inc.		Iowa
PPI, Inc.		Florida
Rainbow Casino—Vicksburg Partnership, L.P.		Mississippi
St. Charles Gaming Company, LLC		Louisiana

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Exhibit 21.1

SIGNIFICANT SUBSIDIARIES OF ISLE OF CAPRI CASINOS, INC.

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Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements:

(1): Registration Statement (Form S-8 Nos. 333-50774, 333-50776, 333-111498, 333-123233, 333-153337, 333-163543, 333-184576 and 333-208273) of Isle of Capri Casinos, Inc.

of our reports dated June 21, 2016, with respect to the consolidated financial statements and schedule of Isle of Capri Casinos, Inc. and the effectiveness of internal control over financial reporting of Isle of Capri Casinos, Inc. included in this Annual Report (Form 10-K) of Isle of Capri Casinos, Inc. for the year ended April 24, 2016.

/s/ Ernst & Young LLP

St. Louis, Missouri
June 21, 2016

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Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

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Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13A-14(A)
UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, Eric L. Hausler, Chief Executive Officer of Isle of Capri Casinos, Inc., certify that:

1. I have reviewed this annual report on Form 10-K of Isle of Capri Casinos, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's first fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Date: June 21, 2016		/s/ ERIC L. HAUSLER Eric L. Hausler Chief Executive Officer

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Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13A-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934

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Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO RULE 13A-14(A)
UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, Michael Hart, Sr. Vice President, Accounting and Treasurer of Isle of Capri Casinos, Inc., certify that:

1. I have reviewed this annual report on Form 10-K of Isle of Capri Casinos, Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Date: June 21, 2016		/s/ MICHAEL A. HART Michael A. Hart Sr. Vice President, Accounting and Treasurer (Principal Financial Officer)

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Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO RULE 13A-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934

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Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. SECTION 1350)

In connection with the Annual Report of Isle of Capri Casinos, Inc. (the "Company") on Form 10-K for the period ended April 24, 2016, as filed with the Securities and Exchange Commission on the date hereof (the "Annual Report"), I, Eric. L. Hausler, Chief Executive Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that:

(1) The Annual Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

(2) The information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operation of the Company.


Date: June 21, 2016		/s/ ERIC L. HAUSLER Eric L. Hausler Chief Executive Officer

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Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. SECTION 1350)

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Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. SECTION 1350)

In connection with the Annual Report of Isle of Capri Casinos, Inc. (the "Company") on Form 10-K for the period ended April 24, 2016 as filed with the Securities and Exchange Commission on the date hereof (the "Annual Report"), I, Michael A. Hart, Principal Financial Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that:

(1) The Annual Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

(2) The information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operation of the Company.


Date: June 21, 2016		/s/ MICHAEL A. HART Michael A. Hart Sr. Vice President, Accounting and Treasurer (Principal Financial Officer)

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Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. SECTION 1350)

Exhibit 99.1

DESCRIPTION OF GOVERNMENT REGULATIONS

The ownership and operation of casino gaming facilities are subject to extensive state and local regulations. We are required to obtain and maintain gaming licenses in each of the jurisdictions in which we conduct gaming. The limitation, conditioning or suspension of gaming licenses could (and the revocation or non-renewal of gaming licenses, or the failure to reauthorize gaming in certain jurisdictions, would) materially adversely affect our operation in that jurisdiction. In addition, changes in law that restrict or prohibit our gaming operations in any jurisdiction could have a material adverse effect on us.

Colorado

The State of Colorado created the Division of Gaming (“Colorado Division”) within the Department of Revenue to license, implement, regulate and supervise the conduct of limited gaming under the Colorado Limited Gaming Act. The Director of the Colorado Division (“Colorado Director”), pursuant to regulations promulgated by, and subject to the review of, a five-member Colorado Limited Gaming Control Commission (“Colorado Commission”), has been granted broad power to ensure compliance with the Colorado gaming laws and regulations (collectively, the “Colorado Regulations”). The Colorado Director may inspect without notice, impound or remove any gaming device. The Colorado Director may examine and copy any licensee’s records, may investigate the background and conduct of licensees and their employees, and may bring disciplinary actions against licensees and their employees. The Colorado Director may also conduct detailed background investigations of persons who loan money to, or otherwise provide financing to, a licensee.

The Colorado Commission is empowered to issue five types of gaming and gaming-related licenses, and has delegated authority to the Colorado Director to issue certain types of licenses and approve certain changes in ownership. The licenses are revocable and non-transferable. The failure or inability of the Isle of Capri Black Hawk, LLC or CCSC/Blackhawk, Inc. (each, a “Colorado Casino” or collectively, the “Colorado Casinos”), or the failure or inability of others associated with any of the Colorado Casinos, including us, to maintain necessary gaming licenses or approvals would have a material adverse effect on our operations. All persons employed by any of the Colorado Casinos, and involved, directly or indirectly, in gaming operations in Colorado also are required to obtain a Colorado gaming license. All licenses must be renewed every two years. As a general rule, under the Colorado Regulations, no person may have an “ownership interest” in more than three retail gaming licenses in Colorado. The Colorado Commission has ruled that a person does not have an ownership interest in a retail gaming licensee for purposes of the multiple license prohibition if:

· that person has less than a 5% ownership interest in an institutional investor that has an ownership interest in a publicly traded licensee or publicly traded company affiliated with a licensee;

· a person has a 5% or more ownership interest in an institutional investor, but the institutional investor has less than a 5% ownership interest in a publicly traded licensee or publicly traded company affiliated with a licensee;

· an institutional investor has less than a 5% ownership interest in a publicly traded licensee or publicly traded company affiliated with a licensee;

· an institutional investor possesses voting securities in a fiduciary capacity for another person, and does not exercise voting control over 5% or more of the outstanding voting securities of a publicly traded licensee or of a publicly traded company affiliated with a licensee;

· a registered broker or dealer retains possession of voting securities of a publicly traded licensee or of a publicly traded company affiliated with a licensee for its customers and not for its own account, and exercises voting rights for less than 5% of the outstanding voting securities of a publicly traded licensee or publicly traded company affiliated with a licensee;

· a registered broker or dealer acts as a market maker for the stock of a publicly traded licensee or of a publicly traded company affiliated with a licensee and exercises voting rights in less than 5% of the outstanding voting securities of the publicly traded licensee or publicly traded company affiliated with a licensee;

· an underwriter is holding securities of a publicly traded licensee or publicly traded company affiliated with a licensee as part of an underwriting for no more than 90 days after the beginning of such underwriting if it exercises voting rights of less than 5% of the outstanding voting securities of a publicly traded licensee or publicly traded company affiliated with a licensee;

· a book entry transfer facility holds voting securities for third parties, if it exercises voting rights with respect to less than 5% of the outstanding voting securities of a publicly traded licensee or publicly traded company affiliated with a licensee; or

· a person’s sole ownership interest is less than 5% of the outstanding voting securities of the publicly traded licensee or publicly traded company affiliated with a licensee.

Because we own the Colorado Casinos, our business opportunities, and those of persons with an “ownership interest” in us, or any of the Colorado Casinos, are limited to interests that comply with the Colorado Regulations and the Colorado Commission’s rule.

In addition, pursuant to the Colorado Regulations, no manufacturer or distributor of slot machines or associated equipment may, without notification being provided to the Colorado Division within ten days, knowingly have an interest in any casino operator, allow any of its officers or any other person with a substantial interest in such business to have such an interest, employ any person if that person is employed by a casino operator, or allow any casino operator or person with a substantial interest therein to have an interest in a manufacturer’s or distributor’s business. A “substantial interest” means the lesser of (i) as large an interest in an entity as any other person or (ii) any financial or equity interest equal to or greater than 5%. The Colorado Commission has ruled that a person does not have a “substantial interest” if such person’s sole ownership interest in such licensee is through the ownership of less than 5% of the outstanding voting securities of a publicly traded licensee or publicly traded affiliated company of a licensee.

We are a “publicly traded corporation” under the Colorado Regulations.

Under the Colorado Regulations, any person or entity having any direct or indirect interest in a gaming licensee or an applicant for a gaming license, including, but not limited to, us, Black Hawk Holdings, LLC, IC Holdings Colorado, Inc., IOC Black Hawk Distribution Company, LLC or either of the two Colorado Casinos and their security holders, may be required to supply the Colorado Commission with substantial information, including, but not limited to, background information, source of funding information, a sworn statement that such person or entity is not holding his or her interest for any other party, and fingerprints. Such information, investigation and licensing (or finding of suitability) as an “associated person” automatically will be required of all persons (other than certain institutional investors discussed below) which directly or indirectly beneficially own 10% or more of a direct or indirect beneficial ownership or interest in either of the two Colorado Casinos, through their beneficial ownership of any class of voting securities of us, Black Hawk Holdings, LLC, IC Holdings Colorado, Inc., IOC Black Hawk Distribution Company, LLC or either of the two Colorado Casinos. Those persons must report their interest within 10 days (including institutional investors) and file appropriate applications within 45 days after acquiring that interest (other than certain institutional investors discussed below). Persons (including institutional investors) who directly or indirectly beneficially own 5% or more (but less than 10%) of a direct or indirect beneficial ownership or interest in either of the two Colorado Casinos, through their beneficial ownership of any class of voting securities of us, Black Hawk Holdings, LLC, IC Holdings Colorado, Inc., IOC Black Hawk Distribution Company, LLC or either of the two Colorado Casinos, must report their interest to the Colorado Commission within 10 days after acquiring that interest and may be required to provide additional information and to be found suitable. (It is the current practice of the gaming regulators to require findings of suitability for persons beneficially owning 5% or more of a direct or indirect beneficial ownership or interest, other than certain institutional investors discussed below.) If

certain institutional investors provide specified information to the Colorado Commission within 45 days after acquiring their interest (which, under the current practice of the gaming regulators is an interest of 5% or more, directly or indirectly) and are holding for investment purposes only, those investors, in the Colorado Commission’s discretion, may be permitted to own up to 14.99% of the Colorado Casinos through their beneficial ownership in any class of voting of securities of us, Black Hawk Holdings, LLC, IC Holdings Colorado, Inc., IOC Black Hawk Distribution Company, LLC or either of the two Colorado Casinos, before being required to be found suitable. All licensing and investigation fees will have to be paid by the person in question.

The Colorado Regulations define a “voting security” to be a security the holder of which is entitled to vote generally for the election of a member or members of the board of directors or board of trustees of a corporation or a comparable person or persons of another form of business organization.

The Colorado Commission also has the right to request information from any person directly or indirectly interested in, or employed by, a licensee, and to investigate the moral character, honesty, integrity, prior activities, criminal record, reputation, habits and associations of: (1) all persons licensed pursuant to the Colorado Limited Gaming Act; (2) all officers, directors and stockholders of a licensed privately held corporation; (3) all officers, directors and stockholders holding either a 5% or greater interest or a controlling interest in a licensed publicly traded corporation; (4) all general partners and all limited partners of a licensed partnership; (5) all persons that have a relationship similar to that of an officer, director or stockholder of a corporation (such as members and managers of a limited liability company); (6) all persons supplying financing or loaning money to any licensee connected with the establishment or operation of limited gaming; (7) all persons having a contract, lease or ongoing financial or business arrangement with any licensee, where such contract, lease or arrangement relates to limited gaming operations, equipment devices or premises; and (8) all persons contracting with or supplying any goods and services to the gaming regulators.

Certain public officials and employees are prohibited from having any direct or indirect interest in a license or limited gaming.

In addition, under the Colorado Regulations, every person who is a party to a “gaming contract” (as defined below) or lease with an applicant for a license, or with a licensee, upon the request of the Colorado Commission or the Colorado Director, must promptly provide the Colorado Commission or Colorado Director all information that may be requested concerning financial history, financial holdings, real and personal property ownership, interests in other companies, criminal history, personal history and associations, character, reputation in the community and all other information that might be relevant to a determination of whether a person would be suitable to be licensed by the Colorado Commission. Failure to provide all information requested constitutes sufficient grounds for the Colorado Director or the Colorado Commission to require a licensee or applicant to terminate its “gaming contract” or lease with any person who failed to provide the information requested. In addition, the Colorado Director or the Colorado Commission may require changes in “gaming contracts” before an application is approved or participation in the contract is allowed. A “gaming contract” is defined as an agreement in which a person does business with or on the premises of a licensed entity.

The Colorado Commission and the Colorado Division have interpreted the Colorado Regulations to permit the Colorado Commission to investigate and find suitable persons or entities providing financing to or acquiring securities from us, Black Hawk Holdings, LLC, IC Holdings Colorado, Inc., IOC Black Hawk Distribution Company, LLC or either of the two Colorado Casinos. As noted above, any person or entity required to file information, be licensed or found suitable would be required to pay the costs thereof and of any investigation. Although the Colorado Regulations do not require the prior approval for the execution of credit facilities or issuance of debt securities, the Colorado regulators reserve the right to approve, require changes to or require the termination of any financing, including if a person or entity is required to be found suitable and is not found suitable. In any event, lenders, note holders, and others providing financing will not be able to exercise certain rights and remedies without the prior approval of the Colorado gaming authorities. Information regarding lenders and holders of securities will be periodically reported to the Colorado gaming authorities.

Except under certain limited circumstances relating to slot machine manufacturers and distributors, every person supplying goods, equipment, devices or services to any licensee in return for payment of a percentage, or calculated

upon a percentage, of limited gaming activity or income must obtain an operator license or be listed on the retailer’s license where such gaming will take place.

An application for licensure or suitability may be denied for any cause deemed reasonable by the Colorado Commission or the Colorado Director, as appropriate. Specifically, the Colorado Commission and the Colorado Director must deny a license to any applicant who, among other things: (1) fails to prove by clear and convincing evidence that the applicant is qualified; (2) fails to provide information and documentation requested; (3) fails to reveal any fact material to qualification, or supplies information which is untrue or misleading as to a material fact pertaining to qualification; (4) has been convicted of, or has a director, officer, general partner, stockholder, limited partner or other person who has a financial or equity interest in the applicant who has been convicted of, specified crimes, including the service of a sentence upon conviction of a felony in a correctional facility, city or county jail, or community correctional facility or under the state board of parole or any probation department within ten years prior to the date of the application, gambling-related offenses, theft by deception or crimes involving fraud or misrepresentation, is under current prosecution for such crimes (during the pendency of which license determination may be deferred), is a career offender or a member or associate of a career offender cartel, or is a professional gambler; or (5) has refused to cooperate with any state or federal body investigating organized crime, official corruption or gaming offenses. If the Colorado Commission determines that a person or entity is unsuitable to directly or indirectly own interests in us, Black Hawk Holdings, LLC, IC Holdings Colorado, Inc., or either of the two Colorado Casinos, one or more of the Colorado Casinos may be sanctioned, which may include the loss of our approvals and licenses.

The Colorado Commission does not need to approve in advance a public offering of securities but rather requires the filing of notice and additional documents prior to a public offering of (i) voting securities, and (ii) non-voting securities if any of the proceeds will be used to pay for the construction of gaming facilities in Colorado, to directly or indirectly acquire an interest in a gaming facility in Colorado, to finance the operation of a gaming facility in Colorado or to retire or extend obligations for any of the foregoing. The Colorado Commission may, in its discretion, require additional information and prior approval of such public offering.

In addition, the Colorado Regulations prohibit a licensee or affiliated company thereof, such as us Black Hawk Holdings, LLC, IC Holdings Colorado, Inc., IOC Black Hawk Distribution Company, LLC or either of the two Colorado Casinos, from paying any unsuitable person any dividends or interest upon any voting securities or any payments or distributions of any kind (except as set forth below), or paying any unsuitable person any remuneration for services or recognizing the exercise of any voting rights by any unsuitable person. Further, under the Colorado Regulations, each of the Colorado Casinos and IOC Black Hawk Distribution Company, LLC may repurchase its voting securities from anyone found unsuitable at the lesser of the cash equivalent to the original investment in the applicable Colorado Casino or IOC Black Hawk Distribution Company, LLC or the current market price as of the date of the finding of unsuitability unless such voting securities are transferred to a suitable person (as determined by the Colorado Commission) within sixty (60) days after the finding of unsuitability. A licensee or affiliated company must pursue all lawful efforts to require an unsuitable person to relinquish all voting securities, including purchasing such voting securities. The staff of Colorado Division has taken the position that a licensee or affiliated company may not pay any unsuitable person any interest, dividends or other payments with respect to non-voting securities, other than with respect to pursuing all lawful efforts to require an unsuitable person to relinquish non-voting securities, including by purchasing or redeeming such securities. Further, the regulations require anyone with a material involvement with a licensee, including a director or officer of a holding company, such as us, Black Hawk Holdings, LLC, IC Holdings Colorado, Inc., IOC Black Hawk Distribution Company, LLC or either of the two Colorado Casinos, to file for a finding of suitability if required by the Colorado Commission.

Because of their authority to deny an application for a license or suitability, the Colorado Commission and the Colorado Director effectively can disapprove a change in corporate position of a licensee and with respect to any entity which is required to be found suitable, or indirectly can cause us, Black Hawk Holdings, LLC, IC Holdings Colorado, Inc., IOC Black Hawk Distribution Company, LLC or the applicable Colorado Casino to suspend or dismiss managers, officers, directors and other key employees or sever relationships with other persons who refuse to file appropriate applications or who the authorities find unsuitable to act in such capacities.

Generally, a sale, lease, purchase, conveyance or acquisition of any interest in a licensee is prohibited without the Colorado Commission’s prior approval. However, because we are a publicly traded corporation, persons may

acquire an interest in us (even, under current staff interpretations, a controlling interest) without the Colorado Commission’s prior approval, but such persons may be required to file notices with the Colorado Commission and applications for suitability (as discussed above) and the Colorado Commission may, after such acquisition, find such person unsuitable and require them to dispose of their interest. Under some circumstances, we may not sell any interest in our Colorado gaming businesses without the prior approval of the Colorado Commission.

Each Colorado Casino must meet specified architectural requirements, fire safety standards and standards for access for disabled persons. Each Colorado Casino also must not exceed specified gaming square footage limits as a total of each floor and the full building. Each Colorado Casino may permit only individuals 21 or older to gamble in the casino. No Colorado Casino may provide credit to its gaming patrons. Each Colorado Casino must comply with Colorado’s Gambling Payment Intercept Act, which governs the collection of unpaid child support costs on certain cash winnings from limited gaming. Each casino in Colorado also must take measures to prevent the use of Electronic Benefits Transfer cards at automated teller machines located on its premises. Further, on November 3, 2015, the Colorado Division issued an industry bulletin explaining that legal and illegal Colorado marijuana operations may be using casinos in Colorado to launder money, and reminding casinos to be diligent in complying with federal anti-money laundering reporting requirements so that unusual financial transactions or suspected incidents of money laundering, particularly by legal and illegal Colorado marijuana operations, may be promptly and sufficiently investigated.

As originally enacted by amendment to the Colorado Constitution, limited stakes gaming in Colorado was limited to slot machines, blackjack and poker, with a maximum single bet of $5.00, and casinos could operate only between 8 a.m. and 2 a.m. On November 4, 2008, however, Colorado voters approved a subsequent amendment to the Colorado Constitution that allowed the towns of Cripple Creek, Black Hawk, and Central City to add table games of craps and roulette, increase the maximum single bet to $100.00, and increase the permitted hours of operation to 24 hours per day effective July 2, 2009. In 2006, a statewide indoor smoking ban went into effect in the State of Colorado, but casinos were exempted from the original legislation. Effective January 1, 2008, the Colorado legislature repealed the exemption and extended the indoor smoking ban to casinos.

A licensee is required to provide information and file periodic reports with the Colorado Division, including identifying those who have a 5% or greater ownership, financial or equity interest in the licensee, or who have the ability to control the licensee, or who have the ability to exercise significant influence over the licensee, or who loan money or other things of value to a licensee, or who have the right to share in revenues of limited gaming, or to whom any interest or share in profits of limited gaming has been pledged as security for a debt or performance of an act. A licensee, and any parent company or subsidiary of a licensee, who has applied to a foreign jurisdiction for licensure or permission to conduct gaming, or who possesses a license to conduct foreign gaming, is required to notify the Colorado Division. Any person licensed by the Colorado Commission and any associated person of a licensee must report criminal convictions and criminal charges to the Colorado Division.

The Colorado Commission has broad authority to sanction, fine, suspend and revoke a license for violations of the Colorado Regulations. Violations of many provisions of the Colorado Regulations also can result in criminal penalties.

The Colorado Constitution currently permits gaming only in a limited number of cities and certain commercial districts in such cities.

The Colorado Constitution permits a gaming tax of up to 40% on adjusted gross gaming proceeds, and authorizes the Colorado Commission to change the rate annually. The current gaming tax rate is 0.25% on adjusted gross gaming proceeds of up to and including $2.0 million, 2% over $2.0 million up to and including $5.0 million, 9% over $5.0 million up to and including $8.0 million, 11% over $8.0 million up to and including $10.0 million, 16% over $10.0 million up to and including $13.0 million and 20% on adjusted gross gaming proceeds in excess of $13.0 million. The City of Black Hawk imposes an annual device fee of $945 per gaming device, which may be revised from time to time and which was increased to the current fee amount in 2014. The City of Black Hawk also has imposed other fees, including a business improvement district fee and transportation fee, calculated based on the number of devices and may revise the same or impose additional such fees.

Colorado participates in multi-state lotteries.

The sale of alcoholic beverages is subject to licensing, control and regulation by the Colorado liquor agencies. All persons who directly or indirectly hold a 10% or more interest in, or 10% or more of the issued and outstanding capital stock of, any of the Colorado Casinos, through their ownership of us, Black Hawk Holdings, LLC, IC Holdings Colorado, Inc., or either of the two Colorado Casinos, must file applications and possibly be investigated by the Colorado liquor agencies. The Colorado liquor agencies also may investigate those persons who, directly or indirectly, loan money to or have any financial interest in liquor licensees. In addition, there are restrictions on stockholders, directors and officers of liquor licensees preventing such persons from being a stockholder, director, officer or otherwise interested in some persons lending money to liquor licensees and from making loans to other liquor licensees. All licenses are revocable and transferable only in accordance with all applicable laws. The Colorado liquor agencies have the full power to limit, condition, suspend or revoke any liquor license and any disciplinary action could (and revocation would) have a material adverse effect upon the operations of us, Black Hawk Holdings, LLC, IC Holdings Colorado, Inc., or the applicable Colorado Casino. Each Colorado Casino holds a retail gaming tavern liquor license for its casino, hotel and restaurant operations.

Persons directly or indirectly interested in either of the two Colorado Casinos may be limited in certain other types of liquor licenses in which they may have an interest, and specifically cannot have an interest in a retail liquor license (but may have an interest in a hotel and restaurant liquor license and several other types of liquor licenses). No person can hold more than three retail gaming tavern liquor licenses. The remedies of certain lenders may be limited by applicable liquor laws and regulations.

Florida

In June 1995, the Florida Department of Business and Professional Regulation, Division of Pari-Mutuel Wagering (the “Division”), issued its final order approving the transfer to the company’s wholly owned subsidiary, PPI, Inc. (“PPI”), the pari-mutuel wagering permits which authorize the acceptance of pari-mutuel wagers on harness horse and quarter horse races conducted at the Pompano Park Racetrack (“Pompano Park”) located in Pompano Beach, Florida. Harness horse racing at Pompano Park has been continuously conducted by PPI since the time it acquired the foregoing described harness horse racing permit through the present. The license to conduct live evening harness racing performances at Pompano Park must be renewed annually and was most recently renewed in March 2016 for the State of Florida’s fiscal year of July 1, 2016 to June 30, 2017. PPI also has a quarterhorse racing permit that is not currently active.

The Florida statutes and the applicable rules and regulations of the Division set forth in the Florida Administrative Code (the “Florida Law”) establish a regulatory framework for pari-mutuel wagering activities in the State of Florida, including licensing requirements, a taxing structure on pari-mutuel permitholders and requirements for payments to the horsemen, including owners and breeders. Florida Law grants to the Division full regulatory power over all permitholders and licensees, including the power to revoke or suspend any permit or license upon the willful violation of Florida Law by a permitholder or a licensee. The Division must approve any transfer of five percent (5%) or more of the stock or other evidence of ownership or equity in all pari-mutuel racing permitholders such as PPI. In addition to the power to suspend or revoke a permit or license for a willful violation of Florida Law, the Division also is granted the power to impose various civil penalties on the permitholder or licensee. Penalties may not exceed $1,000 for each count or separate offense.

PPI races 126 live performances annually, down from 140 live performances annually due to a one-time statutory reduction recently implemented. PPI also is authorized to conduct full-card pari-mutuel wagering on: (1) simulcast harness races from outside of Florida throughout the racing season; and (2) night-time (after 6 p.m.) thoroughbred races conducted outside of Florida. Such races may be simulcast only to a Florida thoroughbred track. If the Florida thoroughbred track accepts wagers on those races, it is required by law to rebroadcast the signal to PPI which will accept pari-mutuel wagers on the races. PPI also has the right under Florida Law to conduct full-card simulcasting of harness racing on days during which no live racing is held at Pompano Park; however, on non-race days, Pompano Park must rebroadcast the simulcast signals to other pari-mutuel facilities that are eligible to conduct intertrack wagering. In addition, Pompano Park may transmit its live harness races into any dog racing or jai alai facility in Florida, including facilities in Miami-Dade and Broward Counties, for intertrack wagering. Pompano Park also receives live races from other Florida pari-mutuel facilities for intertrack wagering. Florida Law establishes the allocation of contributions to the pari-mutuel pools between Pompano Park and the other facilities sharing such signals.

Florida Law authorizes pari-mutuel facilities, including Pompano Park, to operate card rooms in those counties in which card rooms have been approved by a majority vote of the County Commission and a local ordinance adopted. The County Commission of Broward County, where Pompano Park is located, has approved the operation of card rooms in Broward County. Although the provisions of Florida Law regarding card room operations have been amended frequently by the Florida Legislature, the amendments generally have resulted in the regulatory scheme becoming more liberal as opposed to becoming more restrictive. Under amendments which became effective on July 1, 2007, the beneficial changes included permitting daily operations for any twelve (12) hour period without the requirement for live racing, raising the limit on the maximum bet amount from $2.00 to $5.00 with up to three (3) raises allowed per round, providing less restrictive regulations for tournaments and allowing the operator to award prizes and create jackpots not tied to the amount bet.

In November 2004, the voters in the State of Florida amended the Florida State Constitution to allow the voters of Miami-Dade and Broward Counties to decide whether to approve slot machines at existing racetracks and jai alai frontons which had conducted live racing or games in the calendar years 2002 and 2003, in their respective counties. Broward County voters approved that county’s local referendum in 2005 and Miami-Dade voters approved that county’s local referendum in 2008. Legislation enacted by the Florida Legislature in 2005, and amended in 2007, (the “Florida Slot Law”) implemented the constitutional amendment by authorizing Pompano Park and three (3) other pari-mutuel facilities in Broward and the pari-mutuel facilities in Miami-Dade County to offer slot machine gaming to patrons at those facilities. Although there are pari-mutuel facilities in numerous other counties, slot machine gaming presently is authorized only in Broward and Miami-Dade Counties. In April 2007, PPI opened a new casino facility at Pompano Park adjacent to the harness race facility.

Florida slot machine gaming laws require the slot licensee to continue to be in compliance with the pari-mutuel laws and maintain the pari-mutuel license in good standing by, among other things, conducting a full schedule of live racing. The following regulatory provisions also are applicable to slot machine gaming at Pompano Park:

· The facility may be operated 365 days per year, eighteen (18) hours per weekday and twenty-four (24) hours on weekends.

· The maximum number of machines is 2,000 Vegas-style (Class III) slot machines per facility, with a payout percentage of at least eighty-five percent (85%).

· The annual license fee is $2,000,000.00.

· Effective July 1, 2010, the tax payable to the State of Florida is thirty-five percent (35%) of net slot machine revenue.

· The machines will not accept coins or currency, but are ticket in/ticket out.

· The minimum age to play the machines is twenty-one (21) years.

· ATMs are permitted in the facility but not on the gaming floor.

· The Division is the regulatory agency charged with the duty of enforcing the provisions of the Florida Law.

PPI also pays combined county and city taxes of approximately three and one-half percent (3.5%) on the first $250 million of net slot machine revenue and five percent (5%) on net slot machine revenue over $250 million.

In April 2009, legislation was passed which set forth and granted the parameters under which the Governor has authority to enter into an Indian Gaming Compact (“Compact”) with the Seminole Indian Tribe of Florida on behalf of the State of Florida for the purpose of authorizing Class III gaming. Additionally, the legislation provided for a reduction of the tax rate on slot machines operated by pari-mutuel facilities from fifty percent (50%) to thirty-five percent (35%) with a guarantee of tax revenue to the state, from all slot facilities, of no less than the amount that was collected in the fiscal year ended June 30, 2009, from all slot facilities. The tax guarantee was easily met. After the proposed effective date of the legislation, two (2) new slot facilities opened in Miami-Dade County. These facilities created enough new tax revenue to ensure that total revenues exceeded revenue collected in the base year. The legislation also reduced the annual license fee from $3 million to $2.5 million for the State of Florida’s 2010 Fiscal Year and to $2 million each fiscal year thereafter. It allowed slot machines to be linked using a progressive system and expanded poker operations to allow operation for eighteen (18) hours per day on week days and twenty-four (24) hours per day on weekends. In addition, it authorized no-limit poker games and tournaments.

The legislation was subject to certain conditions, all of which were met, rendering the above referenced provisions effective as of July 1, 2010. The same act expanded the number of slot facilities in Miami-Dade County by authorizing a new slot license for Hialeah race track, which was not an eligible slot facility under the 2004 constitutional amendment. The act also set forth a method for further expansion of slots at other pari-mutuel facilities throughout the state by authorizing, under certain conditions, a countywide referendum on slots. After several counties attempted to authorize slots by referendum, the Attorney General officially opined that further legislative or constitutional authorization was necessary before any expansion could proceed. The Division has adopted the same position.

The position of the Division was appealed to the 1st District Court of Appeal in 2015, which upheld the Division’s position. The 1st District’s opinion was certified to the Florida Supreme Court and Oral argument was held June 7, 2016.

Iowa

In 1989, the State of Iowa legalized riverboat gaming on the Mississippi River and other navigable waterways located in Iowa. The legislation authorized the granting of licenses to “qualified sponsoring organizations.” A “qualified sponsoring organization” is defined as a nonprofit corporation organized under the laws of the State of Iowa, or a person or association that can show to the satisfaction of the Iowa Racing and Gaming Commission (the “Iowa Racing and Gaming Commission”) that the person or association is eligible for exemption from federal income taxation under Section 501(c)(3), (4), (5), (6), (7), (8), (10) or (19) of the Internal Revenue Code (hereinafter “not-for-profit corporation”). The not-for-profit corporations can, in turn, enter into operating agreements with qualified persons who actually conduct riverboat gaming operations. Such operators must likewise be approved and licensed by the Iowa Racing and Gaming Commission.

The Isle-Bettendorf’s operator’s contract with the Scott County Regional Authority, a non-profit corporation organized for the purpose of facilitating riverboat gaming in Bettendorf, Iowa, was amended in March 2015. The amendment extends the term for a period of ten years and provides for automatic renewals for succeeding five-year periods as long as gaming remains approved in Scott County. Under the amended operator’s contract, the Isle-Bettendorf continues to pay the Scott County Regional Authority a fee equal to 4.1% of the adjusted gross receipts; however, once the land-based gaming facility opens to the public, the revenue share will convert from a fixed rate to a variable rate based on the level of adjusted gross receipts (as defined in Section 99F.1(1) of the Iowa Code). Further, the Isle-Bettendorf pays a fee to the City of Bettendorf equal to 1.65% of adjusted gross receipts.

In June 1994, Upper Mississippi Gaming Corporation, a not-for-profit corporation organized for the purpose of facilitating riverboat gaming in Marquette, Iowa, entered into an operator’s agreement for the Isle-Marquette for a period of twenty-five years. Under the operator’s agreement, the not-for-profit corporation is to be paid a fee of $0.50 per passenger. The operator’s agreement between Upper Mississippi Gaming Corporation and the Isle-Marquette was amended on November 10, 2015 (the “First Amendment — Marquette”) to extend the term of the operator’s agreement until June 10, 2044. The First Amendment — Marquette also amends the payments from the Isle-Marquette to the not-for-profit corporation to include a $50,000 lump sum payment due July 31, 2016; a $100,000 lump sum payment due July 31, 2017; a $100,000 lump sum payment due July 31, 2018; a $200,000 lump sum payment due July 31, 2019; and beginning on July 1, 2019 and continuing through the end of the term of the First Amendment — Marquette a monthly payment shall be made from the Isle-Marquette to the not-for-profit corporation equal to 3.25% of the adjusted gross receipts of the Isle-Marquette’s gaming operation.

Further, pursuant to a dock site agreement dated June 10, 1994 (which also has a term of twenty-five years), the Isle-Marquette is required to pay a fee to the City of Marquette in the amount of $1.00 per passenger, plus a fixed amount of $15,000 per month and 2.5% of gaming revenues (less state wagering taxes) in excess of $20.0 million but less than $40.0 million; 5% of gaming revenues (less state wagering taxes) in excess of $40.0 million but less than $60.0 million; and 7.5% of gaming revenues (less state wagering taxes) in excess of $60.0 million. The dock site agreement with the City of Marquette was amended on November 19, 2015 to extend its term until June 10, 2044 (matching that of the operator’s contract with Upper Mississippi Gaming Corporation). The amendment to the dock site agreement also changes the terms of the rental payments to the City of Marquette. Beginning June 10, 2019, the Isle-Marquette will pay the city 1.52% of net gambling receipts. Such payments will be made in lieu of any per passenger admission fees.

In November 2004, the Black Hawk County Gaming Association, a not-for-profit corporation organized for the purpose of facilitating riverboat gaming in Waterloo, Iowa entered into an operator’s agreement with the Isle-Waterloo to conduct riverboat gaming in Waterloo, Iowa. The operating agreement requires that Isle-Waterloo make weekly payments to the qualified sponsoring organization equal to 4.1% of each week’s adjusted gross receipts and an additional fee of 1.65% of each week’s adjusted gross receipts in lieu of any admission or docking fee which might otherwise be charged by the county or any city (as defined in Section 99F.1(1) of the Iowa Code). This agreement will remain in effect through March 31, 2018 and may be extended by the Isle-Waterloo for three-year periods so long as it has substantially complied with gaming laws and regulations and holds a license to conduct gaming. In addition, the Isle-Waterloo has agreed to pay a development fee to the City. Pursuant to an admission fee administration and development agreement with the City and Black Hawk County Gaming Association the Isle-Waterloo shall pay a development fee equal to 1% of each week’s adjusted gross receipts.

Iowa law permits gaming licensees to offer unlimited stakes gaming on games approved by the Iowa Racing and Gaming Commission on a 24-hour basis. Land-based casino gaming was authorized on July 1, 2007 and the Iowa Racing and Gaming Commission now permits licensees the option to operate on permanently moored vessels, moored barges, or approved gambling structures. The legal age for gaming is 21.

All Iowa licenses were approved for renewal at the March 3, 2016 Iowa Racing and Gaming Commission meeting. These licenses are not transferable and will need to be renewed in March 2017 and prior to the commencement of each subsequent annual renewal period.

The ownership and operation of gaming facilities in Iowa are subject to extensive state laws, regulations of the Iowa Racing and Gaming Commission and various county and municipal ordinances (collectively, the “Iowa Gaming Laws”), concerning the responsibility, financial stability and character of gaming operators and persons financially interested or involved in gaming operations. Iowa Gaming Laws seek to: (1) prevent unsavory or unsuitable persons from having direct or indirect involvement with gaming at any time or in any capacity; (2) establish and maintain responsible accounting practices and procedures; (3) maintain effective control over the financial practices of licensees (including the establishment of minimum procedures for internal fiscal affairs, the safeguarding of assets and revenues, the provision of reliable record keeping and the filing of periodic reports with the Iowa Gaming Commission); (4) prevent cheating and fraudulent practices; and (5) provide a source of state and local revenues through taxation and licensing fees. Changes in Iowa Gaming Laws could have a material adverse effect on the Iowa gaming operations.

The Iowa gaming operations must submit detailed financial and operating reports to the Iowa Racing and Gaming Commission. Certain contracts of licensees in excess of $100,000 must be submitted to and approved by the Iowa Racing and Gaming Commission. Certain officers, directors, managers and key employees of the Iowa gaming operations are required to be licensed by the Iowa Racing and Gaming Commission. Gaming licenses granted to individuals must be renewed every three years, and licensing authorities have broad discretion with regard to such renewals. Licenses are not transferable. Employees associated with gaming must obtain occupational licenses that are subject to immediate suspension under specific circumstances. In addition, anyone having a material relationship or involvement with the Iowa gaming operations may be required to be found suitable or to be licensed, in which case those persons would be required to pay the costs and fees of the Iowa Racing and Gaming Commission and Division of Criminal Investigation in connection with the investigation. The Iowa Racing and Gaming Commission may require any person who acquires 5% or more of a licensee’s equity securities to submit to a background investigation and be found suitable. The applicant stockholder is required to pay all costs of this investigation. The Iowa Racing and Gaming Commission may deny an application for a license for any cause deemed reasonable. In addition to its authority to deny an application for license, the Iowa Racing and Gaming Commission has jurisdiction to disapprove a change in position by officers or key employees and the power to require the Iowa gaming operations to suspend or dismiss officers, directors or other key employees or sever relationships with other persons who refuse to file appropriate applications or whom the Iowa Racing and Gaming Commission finds unsuitable to act in such capacities.

The Iowa Racing and Gaming Commission may revoke a gaming license if the licensee:

· has been suspended from operating a gaming operation in another jurisdiction by a board or

commission of that jurisdiction;

· has failed to demonstrate financial responsibility sufficient to meet adequately the requirements of the gaming enterprise;

· is not the true owner of the enterprise;

· has failed to disclose ownership of other persons in the enterprise;

· is a corporation 10% of the stock of which is subject to a contract or option to purchase at any time during the period for which the license was issued, unless the contract or option was disclosed to the Iowa Racing and Gaming Commission and the Iowa Racing and Gaming Commission approved the sale or transfer during the period of the license;

· knowingly makes a false statement of a material fact to the Iowa Racing and Gaming Commission;

· fails to meet a monetary obligation in connection with an excursion gaming boat;

· pleads guilty to, or is convicted of a felony;

· loans to any person, money or other thing of value for the purpose of permitting that person to wager on any game of chance;

· is delinquent in the payment of property taxes or other taxes or fees or a payment of any other contractual obligation or debt due or owed to a city or county; or

· assigns, grants or turns over to another person the operation of a licensed excursion boat (this provision does not prohibit assignment of a management contract approved by the Iowa Racing and Gaming Commission) or permits another person to have a share of the money received for admission to the excursion boat.

If it were determined that the Iowa Gaming Laws were violated by a licensee, the gaming licenses held by a licensee could be limited, made conditional, suspended or revoked. In addition, the licensee and the persons involved could be subject to substantial fines for each separate violation of the Iowa Gaming Laws in the discretion of the Iowa Racing and Gaming Commission. Limitations, conditioning or suspension of any gaming license could (and revocation of any gaming license would) have a material adverse effect on operations.

Gaming taxes approximating 22% of the adjusted gross receipts will be payable by each licensee on its operations to the State of Iowa. The state of Iowa is also reimbursed by the licensees for all costs associated with monitoring and enforcement by the Iowa Racing and Gaming Commission and the Iowa Department of Criminal Investigation. The Iowa Racing and Gaming Commission may approve a qualifying licensee’s debt transactions via a shelf application process. Licensees are eligible to make a shelf application where the parent company of the licensee has (1) a class of securities listed on the New York Stock Exchange, the American Stock Exchange or the National Association of Securities Dealers Automatic Quotation System (NASDAQ) or has stockholders’ equity in the amount of $15 million or more as reported in the parent company’s most recent report on Form 10-K or Form 10-Q filed with the Securities and Exchange Commission (SEC) immediately preceding application; and (2) filed all reports required by the SEC. The Iowa Racing and Gaming Commission may grant approval of a shelf application for a period not to exceed three years. The Iowa Racing and Gaming Commission representative may rescind a shelf approval without prior written notice, and may lift the rescission upon the satisfaction of any such terms and conditions as required by the Iowa Racing and Gaming Commission.

Louisiana

In July 1991, Louisiana enacted legislation permitting certain types of gaming activity on certain rivers and waterways in Louisiana. The legislation granted authority to supervise riverboat gaming activities to the Louisiana Riverboat Gaming Commission and the Riverboat Gaming Enforcement Division of the Louisiana State Police. The Louisiana Riverboat Gaming Commission was authorized to hear and determine all appeals relative to the granting, suspension, revocation, condition or renewal of all licenses, permits and applications. In addition, the Louisiana Riverboat Gaming Commission established regulations concerning authorized routes, duration of excursions, minimum levels of insurance, construction of riverboats and periodic inspections. The Riverboat Gaming

Enforcement Division of the Louisiana State Police was authorized to investigate applicants and issue licenses, investigate violations of the statute and conduct continuing reviews of gaming activities.

In May 1996, regulatory oversight of riverboat gaming was transferred to the Louisiana Gaming Control Board, which is comprised of nine voting members appointed by the governor. The Louisiana Gaming Control Board now oversees all licensing matters for riverboat casinos, land-based casinos, racinos, video poker and certain aspects of Native American gaming other than those responsibilities reserved to the Louisiana State Police.

The Louisiana Gaming Control Board is empowered to issue up to 15 licenses to conduct gaming activities on a riverboat in accordance with applicable law. However, no more than six licenses may be granted to riverboats operating from any one designated waterway.

The Louisiana State Police continues to be involved broadly in gaming enforcement and reports to the Louisiana Gaming Control Board. Louisiana law permits the Louisiana State Police, among other things, to continue to (1) conduct suitability investigations, (2) audit, investigate and enforce compliance with standing regulations, (3) initiate enforcement and administrative actions and (4) perform “all other duties and functions necessary for the efficient, efficacious, and thorough regulation and control of gaming activities and operations” under the Louisiana Gaming Control Board’s jurisdiction.

Louisiana gaming law specifies certain restrictions relating to the operation of riverboat gaming, including the following:

· agents of the Louisiana State Police are permitted on board at any time during gaming operations;

· gaming devices, equipment and supplies may only be purchased or leased from permitted suppliers and, with respect to gaming equipment, from permitted manufacturers;

· gaming may only take place in the designated gaming area while the riverboat is docked on a designated river or waterway;

· gaming equipment may not be possessed, maintained or exhibited by any person on a riverboat except in the specifically designated gaming area or in a secure area used for inspection, repair or storage of such equipment;

· wagers may be received only from a person present on a licensed riverboat;

· persons under 21 are not permitted in designated gaming areas;

· except for slot machine play, wagers may be made only with tokens, chips or electronic cards purchased from the licensee aboard a riverboat;

· licensees may only use docking facilities and routes for which they are licensed and may only board and discharge passengers at the riverboat’s licensed berth;

· licensees must have adequate protection and indemnity insurance;

· licensees must have all necessary federal and state licenses, certificates and other regulatory approvals prior to operating a riverboat; and

· gaming may only be conducted in accordance with the terms of the license and Louisiana law.

To receive a gaming license in Louisiana, an applicant must be found to be a person of good character, honesty and integrity and a person whose prior activities, criminal record, if any, reputation, habits and associations do not (1) pose a threat to the public interest of the State of Louisiana or to the effective regulation and control of gaming or (2) create or enhance the dangers of unsuitable, unfair or illegal practices, methods and activities in the conduct of

gaming or the carrying on of business and financial arrangements of gaming activities. In addition, the Louisiana Gaming Control Board will not grant a license unless it finds that, among other things:

· the applicant can demonstrate the capability, either through training, education, business experience or a combination of the preceding, to operate a gaming operation;

· the proposed financing of the riverboat and the gaming operations is adequate for the nature of the proposed operation and is from a suitable and acceptable source;

· the applicant demonstrates a proven ability to operate a vessel of comparable size, capacity and complexity to a riverboat so as to ensure the safety of its passengers;

· the applicant submits with its application for a license a detailed plan of design of the riverboat;

· the applicant designates the docking facilities to be used by the riverboat;

· the applicant shows adequate financial ability to construct and maintain a riverboat; and

· the applicant has a good faith plan to recruit, train and upgrade minorities in all employment classifications.

An initial license to conduct riverboat gaming operations is valid for a term of five years and legislation passed in the 1999 legislative session provides for renewals every five years thereafter. Louisiana gaming law provides that a renewal application for the period succeeding the initial five-year term of an operator’s license must be made to the Louisiana Gaming Control Board and must include a statement under oath of any and all changes in information, including financial information, provided in the previous application. The transfer of a license or an interest in a license is prohibited. A gaming license is deemed to be a privilege under Louisiana law and, as such, may be denied, revoked, suspended, conditioned or limited at any time by the Louisiana Gaming Control Board.

St. Charles Gaming Company, L.L.C. (“St. Charles Gaming”) is the sole Isle licensee in Louisiana operating its gaming operations on the riverboat known as Grand Palais in Calcasieu Parish. St. Charles Gaming received its initial approval in March 1993. Isle received approval in July 1995 to acquire its interest in St. Charles Gaming. St. Charles Gaming has been awarded four (4) five-year renewals on July 20, 1999, March 29, 2005, February 23, 2010 and March 29, 2015.

Certain persons affiliated with a riverboat gaming licensee, including directors and officers of the licensee, directors and officers of any holding company of the licensee involved in gaming operations, persons holding 5% or greater interests in the licensee and persons exercising influence over a licensee, are subject to the application and suitability requirements of Louisiana gaming law.

The sale, purchase, assignment, transfer, pledge or other hypothecation, lease, disposition or acquisition by any person of securities that represent 5% or more of the total outstanding shares issued by a licensee is subject to the approval of the Louisiana Gaming Control Board. A security issued by a licensee must generally disclose these restrictions. Prior approval from the Louisiana Gaming Control Board is required for the sale, purchase, assignment, transfer, pledge or other hypothecation, lease, disposition or acquisition of any ownership interest of 5% or more of any non-corporate licensee or for the transfer of any “economic interest” of 5% or more of any licensee or affiliated gaming person. An “economic interest” is defined as any interest whereby a person receives or is entitled to receive, by agreement or otherwise, a profit, gain, thing of value, loan, credit, security interest, ownership interest or other benefit.

Fees payable to the state for conducting gaming activities on a riverboat include (1) $50,000 per riverboat for the first year of operation and $100,000 per year per riverboat thereafter, plus (2) 21.5% of net gaming proceeds. Legislation was passed during the 2001 legislative session that allowed those riverboats that had been required to conduct cruises, including the riverboat at the Isle-Lake Charles, to remain permanently dockside beginning April 1, 2001. The legislation also increased the gaming tax for operators from 18.5% to 21.5%. A statute also authorizes

local governing authorities to levy boarding fees. We currently have a development agreement with the Calcasieu Parish Police Jury pursuant to which we make payments in lieu of boarding fees.

A licensee must notify and/or seek approval from the Louisiana Gaming Control Board in connection with any withdrawals of capital, loans, advances or distributions in excess of 5% of retained earnings for a corporate licensee, or of capital accounts for a partnership or limited liability company licensee, upon completion of any such transaction. The Louisiana Gaming Control Board may issue an emergency order for not more than ten days prohibiting payment of profits, income or accruals by, or investments in, a licensee., Riverboat gaming licensees and their affiliates must notify the Louisiana Gaming Control Board of all debt, credit, financing and loan transactions, including the identity of debt holders, no less than 20 days prior to the proposed transaction. The Louisiana Gaming Control Board is required to investigate the reported loan, extension of credit or modification thereof to determine whether an exemption exists or, if such exemption is not applicable, to either approve or disapprove the transaction. If the Louisiana Gaming Control Board disapproves of a transaction, the transaction cannot be entered into by the licensee or affiliate. We are an affiliate of our subsidiary that holds the license to conduct riverboat gaming at the Isle-Lake Charles. An affiliate of a licensee which is a publicly traded company may apply to the Louisiana Gaming Control Board for shelf approval of debt transactions. An affiliate of a licensee is eligible to file a shelf application if it has a class of securities listed on either the New York Stock Exchange (NYSE), the American Stock Exchange (ASE) or the National Association of Securities Dealers Automatic Quotation System (NASDAQ), or has stockholders’ equity in the amount of $15 million or more as reported in its most recent report on Form 10-K or Form 10-Q filed with the Securities Exchange Commission (SEC) immediately preceding application and 2.) has filed all reports required to be filed by section 13, or section 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months, or for such a shorter period that the affiliate has been required to file such reports. Approvals for shelf applications may be granted for a period not to exceed 3 years under such terms and conditions determined by the Louisiana Gaming Control Board including a limitation on the maximum amount of total debt permitted to be borrowed. We have received a shelf approval for debt transactions.

The failure of a licensee to comply with the requirements set forth above may result in the suspension or revocation of that licensee’s gaming license. Additionally, if the Louisiana Gaming Control Board finds that the individual owner or holder of a security of a corporate license or intermediary company or any person with an economic interest in a licensee is not qualified under Louisiana law, the Louisiana Gaming Control Board may require, under penalty of suspension or revocation of the license, that the person not:

· receive dividends or interest on securities of the corporation;

· exercise directly or indirectly a right conferred by securities of the corporation;

· receive remuneration or economic benefit from the licensee;

· exercise significant influence over activities of the licensee; or

· continue its ownership or economic interest in the licensee.

A licensee must periodically report the following information to the Louisiana Gaming Control Board, which is not confidential and is available for public inspection: (1) the licensee’s net gaming proceeds from all authorized games, (2) the amount of net gaming proceeds tax paid and (3) all quarterly and annual financial statements presenting historical data, including annual financial statements that have been audited by an independent certified public auditor.

During the 1996 special session of the Louisiana legislature, legislation was enacted placing on the ballot for a statewide election a constitutional amendment limiting the expansion of gaming, which was subsequently passed by the voters. As a result, local option elections are required before new or additional forms of gaming can be brought into a parish.

Proposals to amend or supplement Louisiana’s riverboat gaming statute are frequently introduced in the Louisiana State Legislature. There is no assurance that changes in Louisiana gaming law will not occur or that such changes will not have a material adverse effect on our business in Louisiana.

Mississippi

In June 1990, Mississippi enacted legislation legalizing dockside casino gaming for counties along the Mississippi River, which is the western border for most of the state, and the Gulf Coast, which is the southern border for most of the state. The legislation gave each of those counties the opportunity to hold a referendum on whether to allow dockside casino gaming within its boundaries.

In its 2005 regular session, the legislature amended Mississippi law to allow gaming to be conducted on vessels or cruise vessels placed upon permanent structures located on, in or above the Mississippi River, on, in or above navigable waters in eligible counties along the Mississippi River or on, in or above the waters lying south of the counties along the Mississippi Gulf Coast. Later, after Hurricane Katrina, the Mississippi legislature again amended the law to allow land-based gaming along the Gulf Coast in very limited circumstances. Mississippi law permits unlimited stakes gaming on a 24-hour basis and does not restrict the percentage of space that may be utilized for gaming. There are no limitations on the number of gaming licenses that may be issued in Mississippi.

The ownership and operation of gaming facilities in Mississippi are subject to extensive state and local regulation intended to:

· prevent unsavory or unsuitable persons from having any direct or indirect involvement with gaming at any time or in any capacity;

· establish and maintain responsible accounting practices and procedures for gaming operations;

· maintain effective control over the financial practices of licensees, including establishing minimum procedures for internal fiscal affairs and safeguarding of assets and revenues, providing reliable record keeping and making periodic reports;

· provide a source of state and local revenues through taxation and licensing fees;

· prevent cheating and fraudulent practices; and

· ensure that gaming licensees, to the extent practicable, employ Mississippi residents.

State gaming regulations are subject to amendment and interpretation by the Mississippi Gaming Commission. Changes in Mississippi laws or regulations may limit or otherwise materially affect the types of gaming that may be conducted in Mississippi and such changes, if enacted, could have an adverse effect on us and our Mississippi gaming operations.

We are registered as a publicly traded corporation under the Mississippi Gaming Control Act. Our gaming operations in Mississippi are subject to regulatory control by the Mississippi Gaming Commission, the Mississippi Department of Revenue and various other local, city and county regulatory agencies (collectively referred to as the “Mississippi Gaming Authorities”). Our subsidiaries have obtained gaming licenses from the Mississippi Gaming Authorities. We must obtain a waiver from the Mississippi Gaming Commission before beginning certain proposed gaming operations outside of Mississippi, and we must notify the Mississippi Gaming Commission in writing within 30 days after commencing certain gaming operations outside the state. The licenses held by our Mississippi gaming operations have terms of three years and are not transferable. The Isle-Lula and the Lady Luck Casino Vicksburg property hold licenses effective from May 23, 2015, through May 22, 2018. In addition, our wholly-owned subsidiary, IOC Manufacturing, Inc., holds a manufacturer and distributor’s license, so that we may perform certain upgrades to our Mississippi player tracking system. This license has a term of three years effective June 16, 2014 through June 15, 2017. The license is not transferable. There is no assurance that new licenses can be obtained at the end of each three-year period of a license. Moreover, the Mississippi Gaming Commission may, at any time, and for any cause it deems reasonable, revoke, suspend, condition, limit or restrict a license or approval to own shares of stock in our subsidiaries that operate in Mississippi.

Substantial fines for each violation of Mississippi’s gaming laws or regulations may be levied against us, our subsidiaries and the persons involved. Disciplinary action against us or one of our subsidiary gaming licensees in any jurisdiction may lead to disciplinary action against us or any of our subsidiary licensees in Mississippi, including, but not limited to, the revocation or suspension of any such subsidiary gaming license.

We, along with each of our Mississippi gaming subsidiaries, must periodically submit detailed financial, operating and other reports to the Mississippi Gaming Commission and/or the Mississippi Department of Revenue. Numerous transactions, including but not limited to substantially all loans, leases, sales of securities and similar financing transactions entered into by any of our Mississippi gaming subsidiaries must be reported to or approved by the Mississippi Gaming Commission. In addition, the Mississippi Gaming Commission may, at its discretion, require additional information about our operations.

Certain of our officers and employees and the officers, directors and certain key employees of our Mississippi gaming subsidiaries must be found suitable or be licensed by the Mississippi Gaming Commission. We believe that all required findings of suitability related to all of our Mississippi properties have been applied for or obtained, although the Mississippi Gaming Commission at its discretion may require additional persons to file applications for findings of suitability. In addition, any person having a material relationship or involvement with us may be required to be found suitable or licensed, in which case those persons must pay the costs and fees associated with such investigation. The Mississippi Gaming Commission may deny an application for a finding of suitability for any cause that it deems reasonable. Changes in certain licensed positions must be reported to the Mississippi Gaming Commission. In addition to its authority to deny an application for a finding of suitability, the Mississippi Gaming Commission has jurisdiction to disapprove a change in a licensed position. The Mississippi Gaming Commission has the power to require us and any of our Mississippi gaming subsidiaries to suspend or dismiss officers, directors and other key employees or to sever relationships with other persons who refuse to file appropriate applications or who the authorities find unsuitable to act in such capacities.

Employees associated with gaming must obtain work permits that are subject to immediate suspension under certain circumstances. The Mississippi Gaming Commission will refuse to issue a work permit to a person who has been convicted of a felony, committed certain misdemeanors or knowingly violated the Mississippi Gaming Control Act, and it may refuse to issue a work permit to a gaming employee for any other reasonable cause.

At any time, the Mississippi Gaming Commission has the power to investigate and require the finding of suitability of any record or beneficial stockholder of ours. The Mississippi Gaming Control Act requires any person who individually or in association with others acquires, directly or indirectly, beneficial ownership of more than 5% of our common stock to report the acquisition to the Mississippi Gaming Commission, and such person may be required to be found suitable. In addition, the Mississippi Gaming Control Act requires any person who, individually or in association with others, becomes, directly or indirectly, a beneficial owner of more than 10% of our common stock, as reported to the U.S. Securities and Exchange Commission, to apply for a finding of suitability by the Mississippi Gaming Commission and pay the costs and fees that the Mississippi Gaming Commission incurs in conducting the investigation.

The Mississippi Gaming Commission has generally exercised its discretion to require a finding of suitability of any beneficial owner of 5% or more of a registered publicly traded corporation’s stock. However, the Mississippi Gaming Commission has adopted a regulation that may permit certain “institutional” investors to obtain waivers that allow them to beneficially own, directly or indirectly, up to 15% (19% in certain specific instances) of the voting securities of a registered publicly traded corporation without a finding of suitability. If a stockholder who must be found suitable is a corporation, partnership or trust, it must submit detailed business and financial information, including a list of beneficial owners.

Any person who fails or refuses to apply for a finding of suitability or a license within 30 days after being ordered to do so by the Mississippi Gaming Commission may be found unsuitable. We believe that compliance by us with the licensing procedures and regulatory requirements of the Mississippi Gaming Commission will not affect the marketability of our securities. Any person found unsuitable who holds, directly or indirectly, any beneficial ownership of our securities beyond such time as the Mississippi Gaming Commission prescribes may be guilty of a misdemeanor. We are subject to disciplinary action if, after receiving notice that a person is unsuitable to be a stockholder or to have any other relationship with us or our subsidiaries operating casinos in Mississippi, we:

· pay the unsuitable person any dividend or other distribution upon its voting securities;

· recognize the exercise, directly or indirectly, of any voting rights conferred by its securities;

· pay the unsuitable person any remuneration in any form for services rendered or otherwise, except in certain limited and specific circumstances; or

· fail to pursue all lawful efforts to require the unsuitable person to divest itself of the securities, including, if necessary, our immediate purchase of the securities for cash at a fair market value.

We may be required to disclose to the Mississippi Gaming Commission upon request the identities of the holders of any of our debt securities. In addition, under the Mississippi Gaming Control Act, the Mississippi Gaming Commission may, in its discretion, (1) require holders of our securities, including our notes, to file applications, (2) investigate such holders and (3) require such holders to be found suitable to own such securities. Although the Mississippi Gaming Commission generally does not require the individual holders of obligations such as our notes to be investigated and found suitable, the Mississippi Gaming Commission retains the discretion to do so for any reason, including but not limited to a default, or where the holder of the debt instrument exercises a material influence over the gaming operations of the entity in question. Any holder of debt securities required to apply for a finding of suitability must pay all investigative fees and costs of the Mississippi Gaming Commission in connection with such an investigation.

The Mississippi regulations provide that a change in control of us may not occur without the prior approval of the Mississippi Gaming Commission. Mississippi law prohibits us from making a public offering of our securities without the approval of the Mississippi Gaming Commission if any part of the proceeds of the offering is to be used to finance the construction, acquisition or operation of gaming facilities in Mississippi, or to retire or extend obligations incurred for one or more such purposes. The Mississippi Gaming Commission has the authority to grant a continuous approval of securities offerings and has granted such approval to us, subject to renewal every three years.

Regulations of the Mississippi Gaming Commission prohibit certain repurchases of securities of publicly traded corporations registered with the Mississippi Gaming Commission, including holding companies such as ours, without prior approval of the Mississippi Gaming Commission. Transactions covered by these regulations are generally aimed at discouraging repurchases of securities at a premium over market price from certain holders of greater than 3% of the outstanding securities of the registered publicly traded corporation. The regulations of the Mississippi Gaming Commission also require prior approval for a “plan of recapitalization” as defined in such regulations.

We must maintain in the State of Mississippi current stock ledgers, which may be examined by the Mississippi Gaming Authorities at any time. If any securities are held in trust by an agent or by a nominee, the record holder may be required to disclose the identity of the beneficial owner to the Mississippi Gaming Authorities. A failure to make such disclosure may be grounds for finding the record holder unsuitable. We must render maximum assistance in determining the identity of the beneficial owner.

Mississippi law requires that certificates representing shares of our common stock bear a legend to the general effect that the securities are subject to the Mississippi Gaming Control Act and regulations of the Mississippi Gaming Commission. The Mississippi Gaming Commission has the authority to grant a waiver from the legend requirement, which we have obtained. The Mississippi Gaming Commission, through the power to regulate licenses, has the power to impose additional restrictions on the holders of our securities at any time.

The Mississippi Gaming Commission enacted a regulation in 1994 requiring that, as a condition to licensure, an applicant must provide a plan to develop “infrastructure” amounting to 25% of the cost of the casino and a parking facility capable of accommodating 500 cars. The regulation was amended in 1999 to increase the infrastructure requirement from 25% to 100% for new casinos (or upon acquisition of a closed casino) but grandfathered existing licensees and development plans approved prior to the effective date of the new regulation. In 2003, 2006, 2007, and 2013, the Mississippi Gaming Commission made additional changes to this regulation.

The 2013 amendment removed the 100% reference and, among other things, specifies that a proposed gaming development must include the following:

· A 500-car or larger parking facility in close proximity to the casino complex;

· A 300-room or larger hotel of at least a three diamond rating as defined by an acceptable travel publication to be determined by the Mississippi Gaming Commission;

· A 200-seat or larger restaurant;

· A 75-seat or larger fine dining facility; and

· A 40,000-square foot or larger casino floor.

The proposed gaming development must also have or support an amenity that is unique to the market and encourages economic development and promotes tourism. The Mississippi Gaming Commission may, in its discretion, reduce these requirements or allow an amenity of high value to the overall tourism market to supplant the requisite hotel and dining facilities. This 2013 amendment applies only to new applicants for gaming licenses and to acquisitions / purchases of existing licensees or gaming facilities that have ceased gaming operations prior to the acquisition / purchase; it does not apply to licensees licensed by the Mississippi Gaming Commission, or to persons receiving Approval to Proceed with Development from the Mississippi Gaming Commission, before December 31, 2013.

License fees and taxes are payable to the State of Mississippi and to the counties and cities in which a Mississippi gaming subsidiary’s respective operations will be conducted. The license fee payable to the state of Mississippi is based upon gross revenue of the licensee (generally defined as gaming receipts less payout to customers as winnings) and equals 4% of gross revenue of $50,000 or less per month, 6% of gross revenue in excess of $50,000 but less than $134,000 per calendar month, and 8% of gross revenue in excess of $134,000 per calendar month. The foregoing license fees are allowed as a credit against the licensee’s Mississippi income tax liability for the year paid. Additionally, a licensee must pay a $5,000 annual license fee and an annual fee based upon the number of games it operates. The gross revenue tax imposed by the Mississippi communities and counties in which our casino operations are located equals 0.4% of gross revenue of $50,000 or less per calendar month, 0.6% of gross revenue over $50,000 and less than $134,000 per calendar month and 0.8% of gross revenue greater than $134,000 per calendar month. These fees have been imposed in, among other cities and counties, Biloxi and Coahoma County. Certain local and private laws of the state of Mississippi may impose fees or taxes on the Mississippi gaming subsidiaries in addition to the fees described above.

In April 2010, the Mississippi Gaming Commission adopted a regulation amendment that imposes a flat annual fee on each casino operator licensee, covering all investigative fees for that year associated with an operator licensee, any entity registered as a holding company or publicly traded corporation of that licensee, and any person required to be found suitable in connection with that licensee or any holding company or publicly traded corporation of that licensee. The particular fee is based on the average number of gaming devices operated by the licensee during a twelve (12) month period, as reported to the Mississippi Gaming Commission. The investigative fee is $325,000 for licensees with 1500 or more gaming devices, $250,000 for licensees with 1000 to 1499 gaming devices, and $150,000 for licensees with less than 1000 gaming devices. The fee is payable in four (4) equal quarterly installments. The amendment provides that should such total investigative fees collected by the Mississippi Gaming Commission exceed the amount allowed by Mississippi statute, then the excess fees will be credited to the licensees for the following year. The amended regulation also provides a schedule of various fees applicable to licensees and persons not covered by the annual investigative fee.

The sale of food or alcoholic beverages at our Mississippi gaming locations is subject to licensing, control and regulation by the applicable state and local authorities. The agencies involved have full power to limit, condition, suspend or revoke any such license, and any such disciplinary action could (and revocation would) have a material adverse effect upon the operations of the affected casino or casinos. Certain of our officers and managers and our Mississippi gaming subsidiaries must be investigated by the Alcoholic Beverage Control Division of the Mississippi Department of Revenue in connection with liquor permits that have been issued. The Alcoholic Beverage Control Division of the Mississippi Department of Revenue must approve all changes in licensed positions.

On three separate occasions since 1998, certain anti-gaming groups have proposed referenda that, if adopted, would have banned gaming in Mississippi and required that gaming entities cease operations within two years after the ban. All three referenda were declared invalid by Mississippi courts because each lacked a required government revenue impact statement.

Missouri

Conducting gambling activities and operating a riverboat gaming facility in Missouri are subject to extensive regulation under Missouri’s Riverboat Gambling Act and the rules and regulations promulgated thereunder. The Missouri Gaming Commission (the “Commission”) was created by the Missouri Riverboat Gambling Act and is charged with regulatory authority over riverboat gaming operations in Missouri, including the issuance of gaming licenses to owners, operators, suppliers and certain affiliates of riverboat gaming facilities. In June 2000, IOC-Kansas City, Inc., a subsidiary of ours, was issued a riverboat gaming license in connection with our Kansas City operation. In December 2001, IOC-Boonville, Inc., a subsidiary of ours, was issued a riverboat gaming license for our Boonville operation. In June of 2007, IOC-Caruthersville, LLC f/k/a Aztar Missouri Riverboat Gaming Company, L.L.C. was acquired by us and began operations as a subsidiary of ours under a Missouri riverboat gaming license. In October 2012, IOC-Cape Girardeau LLC, a subsidiary of ours, was issued a riverboat gaming license for our Cape Girardeau operation.

In order to obtain a license to operate a riverboat gaming facility, the proposed operating business entity must complete a Riverboat Gaming Application form requesting a Class B License. In order to obtain a license to own and/or control a Class B Licensee as its ultimate holding company, a company must complete a Riverboat Gaming Application form requesting a Class A License. The Riverboat Gaming Application form is comprised of comprehensive questions regarding the nature and suitability of the applicant. Applicants who submit the Riverboat Gaming Application form requesting either a Class A or Class B License undergo an extensive background investigation by the Commission. In addition, each key person associated with the applicant (including directors, officers, managers and owners of a significant direct or indirect interest in the Class A or Class B License applicant) must complete a Key Person and Level 1 Application (Personal Disclosure Form 1) and undergo a substantial background investigation. Certain key business entities closely related to the applicant must undergo a similar application process and background check. An applicant for a Class A or Class B License will not receive a license if the applicant and its key persons, including key business entities, have not established good repute and moral character, and no licensee shall either employ or contract with any person who has pled guilty to, or been convicted of, a felony, to perform any duties directly connected with the licensee’s privileges under a license granted by the Commission.

Each Class B License granted entitles a licensee to conduct gambling activities at a specific riverboat gaming operation. Each Class A License granted entitles the licensee to develop and operate a Class B licensee or, if authorized, multiple Class B licensees. The duration of both the Class A and Class B License initially runs for two one-year terms; thereafter, for four-year terms. In conjunction with the renewal of each license, the Commission requires the filing of a Riverboat Gaming Renewal Application form and renewal fees. In conjunction with each renewal, the Commission may conduct an additional investigation of the licensee with specific emphasis on new information provided in the Riverboat Gaming Renewal Application form. The Commission also possesses the right to periodically conduct a comprehensive investigation on any Class A, Class B, supplier or key person licensee since the date on which the last comprehensive investigation was conducted. The Commission also licenses the serving of alcoholic beverages on riverboats and related facilities operated by the Class A or Class B.

In determining whether to grant and allow the continued possession of a gaming license, the Commission considers the following factors, among others: (i) the integrity of the applicant; (ii) the types and variety of games the applicant may offer; (iii) the quality of the physical facility, together with improvements and equipment; (iv) the financial ability of the applicant to develop and operate the facility successfully; (v) the status of governmental actions required by the facility; (vi) the management ability of the applicant; (vii) compliance with applicable statutes, rules, charters and ordinances; (viii) the economic, ecological and social impact of the facility as well as the cost of public improvements; (ix) the extent of public support or opposition; (x) the plan adopted by the home dock city or county; and (xi) effects on competition.

A licensee is subject to the imposition of penalties, suspension or revocation of its license for any act that is injurious to the public health, safety, morals, good order and general welfare of the people of the State of Missouri, or that would discredit or tend to discredit the Missouri gaming industry or the State of Missouri, including without limitation: (i) failing to comply with or make provision for compliance with the legislation, the rules promulgated thereunder or any federal, state or local law or regulation; (ii) failing to comply with any rules, order or ruling of the Commission or its agents pertaining to gaming; (iii) receiving goods or services from a person or business entity who does not hold a supplier’s license but who is required to hold such license by the legislation or the rules; (iv) being suspended or ruled ineligible or having a license revoked or suspended in any state or gaming jurisdiction; (v) associating with, either socially or in business affairs, or employing persons of notorious or unsavory reputation or who have extensive police records, or who have failed to cooperate with any officially constituted investigatory or administrative body and would adversely affect public confidence and trust in gaming; (vi) employing in any Missouri gaming operation any person known to have been found guilty of cheating or using any improper device in connection with any gambling game; (vii) use of fraud, deception, misrepresentation or bribery in securing any license or permit issued pursuant to the legislation; (viii) obtaining any fee, charge or other compensation by fraud, deception or misrepresentation; and (ix) incompetence, misconduct, gross negligence, fraud, misrepresentation or dishonesty in the performance of the functions or duties regulated by the Missouri Riverboat Gambling Act.

Any transfer or issuance of ownership interests in a publicly held gaming licensee or its holding company that results in an entity or group of entities acting in concert owning, directly or indirectly, an aggregate ownership interest of 5% or more in the gaming licensee must be reported to the Commission within seven days. Further, any pledge or hypothecation of, or grant of a security interest in, 5% or more of the ownership interest in a publicly held gaming licensee or its holding company must be reported to the Commission within seven days. The Commission will impose certain licensing requirements upon a holder of an aggregate ownership interest of 5% or more in a publicly-traded Missouri Class A or Class B licensee, unless such holder applies for and obtains an institutional investor exemption in accordance with the Missouri gaming regulations. The Executive Director of the Commission may grant a waiver to an institutional investor that holds up to 10% of the outstanding equity of the Missouri licensee. The Commission itself may grant a waiver to an institutional investor that holds up to 20% of the outstanding equity of the Missouri licensee. No investor may increase holdings above 25% without triggering a change in control that requires prior approval by the Commission. The Commission may grant a petition to approve a change in control if the petitioner proves that (i) the transfer is in the best interest of the state of Missouri and would have no potential to affect suitability of the gaming operation; (ii) the transfer is not injurious to the public health, safety, morals, good order, or general welfare of the state; (iii) it would have no material negative competitive impact; and (iv) it would not potentially result in any significant negative changes in the financial condition of the licensee. In addition, any sale, transfer or lease of the Class B’s real estate (outside of the normal course of business) shall trigger a change in control that requires prior approval by the Commission. The petition to approve a change in control in such an instance will be considered by the Commission using the same criteria set forth above for an ownership interest change in control.

Every employee participating in a riverboat gaming operation must hold an occupational license. In addition, the Commission issues supplier’s licenses, which authorize the supplier licensee to sell or lease gaming equipment and supplies to any licensee involved in the operation of gaming activities. Class A and Class B licensees may not be licensed as suppliers.

Riverboat gaming activities may only be conducted on, or within 1,000 feet of the main channel of, the Missouri River or Mississippi River. Minimum and maximum wagers on games are set by the licensee, and wagering may be conducted only with a cashless wagering system, whereby money is converted to tokens, electronic cards or chips that can only be used for wagering. No person under the age of 21 is permitted to wager, and wagers may only be taken from a person present on a licensed excursion gambling boat.

The Missouri Riverboat Gambling Act imposes a 21% wagering tax on adjusted gross receipts (generally defined as gross receipts less winnings paid to wagerers) from gambling games. The tax imposed is to be paid by the licensee to the Commission on the day after the day when the wagers were made. Of the proceeds of the wagering tax, 10% of such proceeds go to the local government where the home dock is located, and the remainder goes to the State of Missouri.

The Missouri Riverboat Gambling Act also requires that licensees pay a two dollar admission tax to the Commission for each person admitted to a gaming cruise. One dollar of the admission fee goes to the State of Missouri, and one dollar goes to the home dock city in which the licensee operates. The licensee is required to maintain public books and records clearly showing amounts received from admission fees, the total amount of gross receipts and the total amount of adjusted gross receipts. In addition, all local income, earnings, use, property and sales taxes are applicable to licensees. From time to time, there have been several proposed bills pending before the Missouri General Assembly which, individually or in combination, if adopted, would (1) allow gaming credits to be used in food and beverage purchases, (2) adjust the amount of wagering tax imposed on adjusted gross receipts of licensees and/or (3) adjust the amount of admission tax paid by the licensee for each person admitted for a gaming cruise.

After many failed attempts in prior legislative sessions, a new law to become effective August 28, 2014 authorizes casino operators to provide lines of credit to persons they deem creditworthy. Each patron must be approved for credit in an amount of at least $10,000, and the underlying credit instruments shall not be due more than 30 days from issuance, are to be unsecured and shall not bear interest.

Pennsylvania

In 2004, the Commonwealth of Pennsylvania established the Pennsylvania Gaming Control Board (“PGCB”) to oversee the creation of the new casino industry. Initially, only slot machines were permitted, but in 2010, the law was revised to authorize table games as well (collectively, the “PA Gaming Law”). The law created three categories of licenses — Category 1 slot machine licenses for up to seven licensed racetrack facilities, five Category 2 licenses (two in Philadelphia, one in Pittsburgh and two “at large”), and three Category 3 licenses to well-established resort hotels having no fewer than 275 guest rooms under common ownership and having substantial year-around recreational guest amenities, one of which Category 3 licenses cannot be issued before July, 2017. Holders of Category 1 and Category 2 licenses are entitled to up to 5,000 slot machines and 250 table games. Holders of Category 3 licenses are entitled to up to 600 slot machines and 50 table games.

The license fee for a Category 1 and 2 slot machine license is $50 million and for a Category 3 slot machine license is $5 million. The license fee for a Category 1 and 2 table game operation certificate is $16.5 million for a petition submitted on or before June 1, 2010 and $24.75 million thereafter, and for a Category 3 table game operation certificate is $7.5 million for a petition submitted on or before June 1, 2010 and $11.25 million thereafter. The licenses to be issued to slot machine licensees and managers are valid for three years from the date the license or renewal is approved by the PGCB.

Unlike the Category 1 and 2 licensed facilities which are open to the general public, the holder of a Category 3 license may only permit entry into the gaming area of the facility by the following:

(1) A registered overnight guest of the resort.

(2) A patron of one or more of the amenities of the resort. A patron of an amenity is any individual who is a registered attendee of a convention, meeting or banquet event or participant in a sport or recreational event or any other social, cultural or business event held at a resort hotel or who participates in one or more of the amenities provided to registered guests of the hotel in return for non-de minimis consideration, currently defined by the PGCB as $10.00. A patron of an amenity at the resort may be permitted unlimited access to the gaming floor for one 24 hour period within 72 hours of use of the amenity.

(3) An authorized employee of the licensee or gaming service provider, of the PGCB or any regulatory, emergency response or law enforcement agency while engaged in the performance of the employee’s duties.

(4) An individual holding a valid membership approved by the PGCB or a guest of such individual. The PGCB may approve seasonal or year-round memberships that allow an individual to use one or more of the amenities provided by the resort, based upon the duration of the membership, the amenity covered by the membership and whether the fee charged represents the fair market value for the use of the amenity.

The Category 2 licensed facilities located in Philadelphia are not to be within 10 linear miles of a Category 1 licensed facility and, other than the two Philadelphia licenses, no Category 2 licensed facility is to be located within 20 linear miles of another Category 2 licensed facility. The first two Category 3 licenses are not to be located within 15 linear miles of another licensed facility. The third Category 3 license to be issued on or after July 20, 2017 is not to be located within 30 linear miles of another licensed facility.

IOC-PA, LLC (“IOC-PA”), a wholly-owned subsidiary of Isle, teamed up with Nemacolin Woodlands Resort (“Nemacolin”) and Woodlands Fayette, LLC (“Woodlands Fayette”) to develop and manage a proposed Category 3 casino at Nemacolin in Fayette County, Pennsylvania. The casino is called “Lady Luck Casino — Nemacolin”. In April 2011, Woodlands Fayette was awarded the Category 3 license after a competitive process and on August 20, 2012, the Pennsylvania Supreme Court affirmed the award. On January 9, 2013, the PGCB approved IOC-PA as the manager of Lady Luck Casino — Nemacolin, and approved the Management Agreement with Nemacolin and Woodlands Fayette. In addition, a table game operation certificate was awarded on February 20, 2013. All final regulatory approvals were received and the casino opened on July 1, 2013.

Any amendments to the management agreement must be submitted to the PGCB 30 days prior to the effective date of the proposed amendment and shall not become effective until the PGCB has reviewed and approved the terms and conditions thereof. As the management company, IOC-PA, may be jointly and severally liable for any act or omission by Woodlands Fayette as the slot machine licensee for any violation of the Act or the regulations, regardless of actual knowledge by IOC-PA of the act or omission.

Certain persons affiliated with IOC-PA, including our directors, key employees, and any person who acquires a 5% or greater beneficial interest of our voting securities, will be required to apply to the PGCB for licensure, obtain licensure and remain licensed. Licensure requires, among other things, that the applicant establish by clear and convincing evidence the applicant’s good character, honesty and integrity. In addition, any trust that holds 5% percent or more of our voting securities is required to be licensed by the PGCB and each individual who is a grantor, trustee or beneficiary of the trust is also required to be licensed by the PGCB. Under certain circumstances and under the regulations of the PGCB, an “institutional investor,” as defined under the regulations, which acquires ownership of 5% or more, but less than 10% of our voting securities, may not be required to be licensed by the PGCB provided that a notice of ownership form is filed with the PGCB. In addition, any beneficial owner of our voting securities, regardless of the number of shares beneficially owned, may be required at the discretion of the PGCB to file an application for licensure. The PGCB also licenses or registers various categories of individuals employed by the casino in gaming and non-gaming capacities.

Non-renewal, suspension or revocation of a license, permit, certification or registration may occur for sufficient cause consistent with the PA Gaming Law and public interest. A person whose application has been denied or whose license, permit, certification or registration has been revoked may not apply for a license, permit, certification or registration for five years from the date of denial or revocation, except under certain circumstances. In the event any of our security holders is required to be licensed and is not found qualified, the security holder may be required by the PGCB to divest its interest at a price not exceeding the cost of the interest.

It is the continuing duty of all holders of licenses, permits, certifications or registrations to fully cooperate with the PGCB in the conduct of any inquiry or investigation and to provide supplementary information requested by the PGCB.

IOC-PA is required to notify the PGCB of any proposed appointment, appointment, proposed nomination, nomination, election, hiring, tender of resignation, resignation, removal, firing, incapacitation or death of any person required to be licensed as a principal or key employee under the PA Gaming Law or the regulations promulgated thereunder. In addition, IOC-PA is also required to notify the PGCB as soon as it becomes aware that it intends to enter into a transaction which may result in any new financial backers.

The PGCB has broad authority to sanction, fine, suspend and revoke a license for violations of the PA Gaming Law.

IOC-PA is required to submit to the PGCB with respect to its project: (1) fully signed copies of all written agreements with manufacturers, suppliers and vendors; (2) a description of any oral agreements with any manufacturers, suppliers and vendors; (3) copies of all agreements relating to land and real estate; and (4) copies of

all written agreements or a description of any oral agreements with a person which involves or may involve payments of $500,000 or more per year to a Pennsylvania slot machine licensee; together with any changes or amendments thereto and any other agreements as requested by the PGCB.

We must notify the PGCB immediately upon becoming aware of any proposed or contemplated change in the ownership of Isle or IOC-PA by a person or a group of persons acting in concert which involves any of the following:

(1) more than 5% percent of our securities or other ownership interest;

(2) more than 5% of the securities or other ownership interests of a corporation or other form of business entity that owns, directly or indirectly, at least 20% of our voting or other securities or ownership interests;

(3) the sale, other than the normal course of business, of Isle’s or IOC-PA’s assets; and

(4) other transactions or occurrences deemed by the PGCB to be relevant to license qualification.

PGCB approval is required prior to the completion of any proposed change of ownership that meets the above criteria.

Upon a change of control of Woodlands Fayette, the acquirer of the ownership interest would be required to qualify for licensure and pay a new license fee of $5 million. The PGCB retains the discretion to eliminate the need for qualification and/or reduce the license fee required upon a change of control.

Pennsylvania imposes up to a 55% tax on slot machine revenues, consisting of 34% of slot machine revenues to the State Gaming Fund, 2% to the host county and 2% to the host township or city (provided that for a licensed facility located in Philadelphia, the entire 4% goes to Philadelphia County), up to 12% to the Pennsylvania Race Horse Development Fund and 5% to the Pennsylvania Gaming Economic Development and Tourism Fund. In addition, during the initial two years of table game operations, Pennsylvania imposes a table game tax of 14% of table game revenues to the Commonwealth, plus a 2% local share to each of host county and host township, provided that for a licensed facility located in Philadelphia, the entire 4% local share goes to Philadelphia County. Following the initial two years of operation, the table game tax to the Commonwealth is reduced to 12% of table game revenues, plus 2% local share to each of host county and host township, provided that for a licensed facility located in Philadelphia, the entire 4% local share goes to Philadelphia County. In addition, the table game tax to the Commonwealth is 34% of table games revenues from fully automated electronic gaming tables.

Slot machine operators in Pennsylvania are also required to reimburse the PGCB, Pennsylvania State Police, the Department of Revenue of the Commonwealth and the Office of the Attorney General for the costs and expenses as well as for the repayment of loans associated with carrying out its responsibilities under the PA Gaming Law. This amount may vary from time to time. We recently received notice of a .5% increase from 1.5% to 2% of gross gaming revenue for the Commonwealth’s fiscal 16/17 year. In addition, in order to fund operations of the PGCB, an initial loan of approximately $36.1 million was granted to the PGCB from gaming tax funds received by the Commonwealth of Pennsylvania, followed by additional loans in the aggregate amount of approximately $63.8 million, all of which was to fund the PGCB’s operational costs.

On July 11, 2011, the PGCB adopted a schedule governing the repayment of the approximately $63.8 million in loans by licensed gaming entities. The schedule provides that the loans will be repaid in quarterly installments over ten years, with one-tenth of the total initial loan balance as it existed on July 1, 2011 repaid each year by the operating gaming facilities, commencing on January 1, 2012. Each operating facility’s portion of the payment for each year is calculated on a pro rata basis in relation to an average of the facility’s annual and cumulative gross terminal revenue. The repayment of the initial $36.1 million in appropriation continues to be deferred until all licensees have commenced operations. Currently there are twelve licensed facilities operational in Pennsylvania.

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