Exhibit 10.13

SETTLEMENT AGREEMENT

This Settlement Agreement (the “Agreement”) is made as of October 10, 2006, by
and among: (a) Pinnacle Entertainment, Inc., a Delaware corporation
(“Pinnacle”), (b) the Official Committee of Equity Security Holders of President
Casinos, Inc. (“Committee”), (c) President Casinos, Inc., a Delaware corporation
(“PCI”), (d) President Riverboat Casino-Missouri, Inc., a Missouri corporation
(“PRC-MO”), and Terrence L. Wirginis (“Wirginis”). As used in this Agreement,
“Debtors” refers collectively to PCI and PRC-MO, and “parties” refers
collectively to Pinnacle, the Committee, PCI, PRC-MO and Wirginis.

WHEREAS, PCI is a debtor and debtor-in-possession in Chapter 11 Bankruptcy Case
No. 02 53005 (the “PCI Case”) and PRC-MO is a debtor and debtor-in-possession in
Chapter 11 Bankruptcy Case No. 02 53006 (the “PRC-MO Case” and collectively with
the PCI Case, the “Case”), both pending in the United States Bankruptcy Court
for the Eastern District of Missouri (the “Bankruptcy Court”);

WHEREAS, PCI is the owner of all of the outstanding shares of common stock in
PRC-MO, and PRC-MO is the owner and operator of a riverboat casino, located on
the Mississippi River riverfront in St. Louis, Missouri and moored to a barge
known as Admiral Barge One;

WHEREAS, Pinnacle, as buyer, and PCI and PRC-MO, as sellers, entered into that
certain Riverboat Casino Sale and Purchase Agreement, dated as of February 24,
2006 (as the same may be subsequently amended or supplemented, the “Pinnacle
Purchase Agreement”), pursuant to which, subject to certain adjustments and
conditions, PCI agreed to sell to Pinnacle one hundred percent of the
outstanding shares of common stock in PRC-MO for $31,500,000.00; capitalized
terms used but not defined herein shall have the meanings set forth in the
Pinnacle Purchase Agreement;

WHEREAS, PRC-MO filed with the Bankruptcy Court the Third Amended Chapter 11
Plan of Reorganization Dated August 11, 2006 for Debtor PRC-MO (the “PRC-MO
Plan”) incorporating the Pinnacle Purchase Agreement;

WHEREAS, the Committee filed with the Bankruptcy Court a competing Chapter 11
plan of reorganization for PCI and PRC-MO, the First Amended Chapter 11 Plan of
Reorganization Proposed by the Committee (dated September 20, 2006) (the
“Committee Plan”), which is based on PCI retaining the stock of PRC-MO and
PRC-MO reorganizing its operations with funds from third-party lenders;

WHEREAS, the Debtors, Pinnacle, and the Committee met to discuss the
circumstances under which such parties would agree to support a single
Chapter 11 plan of reorganization for PRC-MO;

WHEREAS, PCI and PRC-MO provided certain information to Pinnacle and the
Committee to facilitate such discussions;

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WHEREAS, Pinnacle and the Committee proposed to PCI and PRC-MO that the PRC-MO
Plan should be amended to implement the terms of this Agreement, and the parties
have agreed that the Pinnacle Purchase Agreement should be amended as described
below.

WHEREAS, PCI and PRC-MO agreed to propose such amended PRC-MO Plan (the “Amended
PRC-MO Plan”); and

WHEREAS, the parties desire to resolve any and all outstanding issues between
them on the terms set forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing, and the covenants and
understandings set forth in this Agreement, and for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged by
the parties, the parties agree as follows:

1. The Recitals. The recitals set forth above are expressly incorporated in this
Agreement, and are made an equal part of, this Agreement.

2. The Committee Plan. Upon approval of this Agreement by the Bankruptcy Court,
the Committee will withdraw the Committee Plan.

3. The Amended PRC-MO Plan. Promptly upon approval of this Agreement by the
Bankruptcy Court, PRC-MO will file the Amended PRC-MO Plan, incorporating the
terms of this Agreement. The Amended PRC-MO Plan will include the provisions of
the PRC-MO Plan that are not inconsistent with the terms of this Agreement and,
in addition, will include the following terms and provisions:

(a) The holders of record of Allowed Class 4 Unsecured Claims (as defined under
the PRC-MO Plan and determined as of September 22, 2006) will be paid in full
the amount equal to their Allowed Class 4 Unsecured Claims on the effective date
of the Amended PRC-MO Plan.

(b) The holders of the 12% Notes due 2001 and 13% Senior Exchange Notes due
2001, designated as the Class 5 Claims under the PRC-MO Plan (exclusive of any
amounts owed to J. Edward Connelly Associates, Inc. on account of the Assigned
Distribution Amount as defined in PRC-MO Plan, collectively, the “Bondholders”),
will receive on the effective date of the Amended PRC-MO Plan an amount equal to
the Allowed Class 5 Claims of the Bondholders (the “Total Bond Claims”) under
the PRC-MO Plan less $10 million. This payment will leave $10 million of allowed
claims held by the Bondholders unsatisfied (the “Unpaid Bond Amount”). The
Bondholders will (i) waive the payment of $5 million of the Unpaid Bond Amount
and (ii) defer, as provided in Section 3(c) below, payment of the remaining $5
million of the Unpaid Bond Amount (the “Deferred Bond Payment”).

(c) The Deferred Bond Payment will be paid to the Bondholders from one-half of
any gross aggregate amounts recovered by the Trustee of the Distribution Trust
(as defined in the PRC-MO Plan), PCI, or any affiliate (collectively, the
“President Companies”) in excess of $5 million from (i) any amounts received
from any source with respect to claims related to the failure by Columbia Sussex
Corporation (“Columbia Sussex”) to consummate an agreement to purchase PRC-MO’s
riverboat-casino and (ii) any amounts received as sales tax

 

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refunds due to PRC-MO. The recovery amount due to the Bondholders with respect
to the Deferred Bond Amount will be calculated without taking into account any
expenses or costs incurred by the Trustee of the Distribution Trust, PCI, or any
other party in pursuit of Columbia Sussex and such sales tax claims.

(d) Any settlement of PCI and PRC-MO claims against Columbia Sussex will be
subject to review and approval by the Bankruptcy Court. PCI and the Trustee of
the Distribution Trust will give to the Bondholders prior written notice of any
proposed settlement of the Columbia Sussex claims, and the Bondholders may
object to the fairness of any such proposed settlement in the proceedings for
approval thereof conducted by the Bankruptcy Court.

(e) The Bondholders will have no obligation to extend additional financing to
fund the operating costs or the litigation costs of the Distribution Trust, PCI,
or PCI’s bankruptcy estate.

(f) The substantial contribution claim pursuant to Section 503(b)(3)(D) or
503(b)(4) of the Bankruptcy Code of the Ad Hoc Committee of Equity Security
Holders of PCI (the “Ad Hoc Committee”) will be allowed in the amount of:
(i) $557,037.29 plus (ii) additional substantiated fees and expenses in the
amount not to exceed $17,962.71, and shall be paid on the effective date of the
Amended PRC-MO Plan.

(g) The professionals employed by the Committee shall be included in the
definitions of Professionals, Professional Fees, and Professional Fee Claims and
the fees and expenses thereof shall be paid pursuant to Section 2.3 of the
PRC-MO Plan.

(h) The amendment to the Pinnacle Purchase Agreement described in Section 4,
below, shall be reflected in the Amended PRC-MO Plan.

4. Amendments to Pinnacle Purchase Agreement.

(a) Section 2(f) of the Pinnacle Purchase Agreement is hereby amended in its
entirety to read as follows:

Reduction of Base Purchase Price. If the Amended PRC-MO Plan (as such term is
defined in that certain Settlement Agreement dated as of October 10, 2006) is
not confirmed prior to January 1, 2007, the Base Purchase Price shall be reduced
by an amount equal to the adjusted EBITDA (the “Adjusted EBITDA”) attributable
to the period beginning January 1, 2007, and ending on the date such plan is
confirmed. The Adjusted EBITDA shall for any period mean (i) the earnings before
interest, taxes, depreciation and amortization (calculated to the extent
relevant in accordance with GAAP) of the operations of the Company, (ii) reduced
by the amount of distributions to the Seller for payment of parent level
administrative expenses attributable to such period in an amount not to exceed
$100,000 per month during such period (pro rated through the day the Amended
PRC-MO Plan is confirmed). Notwithstanding the foregoing, the Base Purchase
Price shall not be reduced during any period in which the failure of the Amended
PRC-MO Plan to be confirmed is attributable to Pinnacle’s action or failure to
act or to events otherwise within Pinnacle’s control.

 

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(b) Section 16 of the Pinnacle Purchase Agreement is hereby amended in its
entirety to read as follows:

Termination Events. This Agreement may be terminated prior to the Closing Date:

(a) by Buyer or Seller upon written notice to the other party at any time prior
to the Closing (I) if the Confirmation Order has not been entered on or before
June 30, 2007 (or such later date as mutually agreed to by the parties), or (II)
Closing shall not have occurred on or before December 31, 2007 (or such later
date as is mutually agreed to by the parties hereto) by reason of the failure of
any condition precedent under Section 4, provided that such failure did not
result primarily from the terminating party materially breaching any covenant
contained in this Agreement, or unless the terminating party shall have waived
such condition precedent in writing);

(b) by Buyer upon written notice to Seller if Buyer is in compliance in all
material respects with this Agreement and Seller or Company fails to perform any
material obligation required to be performed by Seller or Company, as
applicable, prior to or at the Closing, which failure continues for twenty
(20) Business Days after written notice from Buyer to Seller or the Company, as
applicable, of such failure;

(c) by Seller upon written notice to Buyer if Seller is in compliance in all
material respects with this Agreement and Buyer fails to perform any material
obligation required to be performed by Buyer prior to or at the Closing, which
failure continues for twenty (20) Business Days after written notice from Seller
to Buyer of such failure;

(d) by mutual written agreement of Buyer and Seller;

(e) [Omitted];

(f) by Buyer upon written notice to Seller if any of the conditions of Section 4
cannot be met and will not be waived by Buyer;

(g) by Seller upon written notice to Buyer if any of the conditions of Section 5
cannot be met and will not be waived by Seller; and

(h) [Omitted].

Upon a valid termination of this Agreement by Seller pursuant to subsection
(c) above, the Deposit (excluding interest accrued thereon, if any) shall be
forfeited to Seller, but without prejudice to any legal remedy for money damages
that Seller may have, if any, against Buyer as a result of such breach;
provided, however, that Seller’s legal remedies hereunder shall be limited
exclusively to money damages; provided, further, that in no event shall Seller
have the right to specific performance or any other equitable remedy against
Buyer in connection with this

 

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Agreement or the transactions contemplated hereby. Upon a valid termination of
this Agreement pursuant to subsections (a), (d), (f) or (g), the Deposit (with
interest accrued thereon, if any) shall be immediately returned to Buyer and
both parties shall execute mutual escrow instructions to Escrow Agent to that
effect. Upon a valid termination of this Agreement by Buyer pursuant to
subsection (b) above, the Deposit (with interest accrued thereon, if any) shall
be immediately returned to Buyer, without prejudice to any legal or equitable
remedy that Buyer may have, if any, against Seller as a result of such breach.

5. Wirginis. Wirginis will (i) support the approval of this Agreement, the
consummation of the Pinnacle Purchase Agreement, and the confirmation of the
Amended PRC-MO Plan, (ii) not support and, to the extent applicable, vote
against any bankruptcy plan inconsistent with the Amended PRC-MO Plan, and
(iii) pay to Pinnacle any amounts Wirginis receives (including the fair market
value of any property received or any securities or other interests of PRC-MO or
PCI retained) pursuant to any bankruptcy plan that is inconsistent with (x) the
Amended PRC-MO Plan or (y) the Pinnacle Purchase Agreement, in each case, to the
extent such amounts are in excess of the amounts Wirginis would be entitled to
receive had the Amended PRC-MO Plan been confirmed and the Pinnacle Purchase
Agreement been consummated in accordance with their terms.

6. Support. So long as Pinnacle is not in breach of its obligations under the
Pinnacle Purchase Agreement or hereunder, and provided that the Pinnacle
Purchase Agreement and this Agreement are still in full force and effect, the
signatories to this Agreement will support the approval of this Agreement, the
consummation of the Pinnacle Purchase Agreement, and the confirmation of the
Amended PRC-MO Plan. No signatory to this Agreement may propose or support a
Chapter 11 plan of reorganization for PRC-MO or PCI that is inconsistent with
the terms of this Agreement or the Amended PRC-MO Plan. No signatory to this
Agreement may take any action that will cause a delay in the commencement or
continuation of the November 14, 2006 hearing to consider confirmation of the
Amended PRC-MO Plan.

7. Parties’ Mutual Releases. The term “Release Date” means the date by which
both of the following have occurred: (a) the closing of the transaction under
the Pinnacle Purchase Agreement and (b) the payment to Pinnacle of all amounts
set forth in Section 3(a) of this Agreement and the Total Bond Claims minus the
Unpaid Bond Amount. On the Release Date, each of the parties, on behalf of
itself and all others who could claim by or through such party, hereby fully and
forever releases and discharges all of the other parties and each of their
respective predecessors (including, without limitation the Ad Hoc Committee),
members of the Ad Hoc Committee and the Committee (but only with respect to
those members who sign this Agreement agreeing to be bound by the provisions of
Section 6 and Section 7 hereof) (such members, the Ad Hoc Committee and the
Committee, collectively, the “Equity Releasees”), and their respective
successors and assigns, from any and all claims, actions, rights, agreements, or
liabilities, known or unknown, asserted or unasserted, suspected to exist or not
suspected to exist, whether arising under federal statute, state statute,
federal or state common law or otherwise, which now or in the future may exist,
including, without limitation, any and all known or unknown claims based upon or
arising out of any events, facts, or circumstances alleged or that could have
been alleged, by amendment or otherwise. This release covers all known and
unknown claims arising out of all known and unknown facts from the beginning of
time through

 

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the Release Date. The sole exceptions to this release are (i) claims that
Pinnacle will have for the Deferred Bond Payments, (ii) any claims that any
party may have against any other party under this Agreement, and (iii) any
rights, obligations or claims of any party under the Pinnacle Purchase Agreement
or the Amended PRC-MO Plan; provided that, for the avoidance of doubt, the
forgoing exception shall not include any claim of Pinnacle against the Equity
Releasees arising out of or related to the actions of the Equity Releasees in
connection with (x) arranging for financing to acquire the claims of the
Bondholders and/or unsecured creditors, and (y) the formulation, financing and
pursuit of a plan of reorganization in the Case. The terms of the release in
this Section 7 will be included in the Amended PRC-MO Plan and any order of the
Bankruptcy Court confirming the Amended PRC-MO Plan.

8. Assumption of Risk. The parties expressly understand that the facts with
respect to this Agreement may turn out to be different from the facts now known
or believed by the parties to be true. Each of the parties expressly assumes the
risk of the facts turning out to be different, and this Agreement will be in all
respects effective and not subject to termination or rescission by reason of any
such differences. Each of the parties understands and acknowledges the
significance and the consequences of this specific waiver of unknown claims and
hereby assumes full responsibility for any injuries, damages, losses, or
liabilities that the party may incur from the waiver of any unknown claims.

9. No Admission of Liability. The parties acknowledge that this Agreement
represents a settlement of disputed claims and that, by entering into this
Agreement, none of the parties admits or acknowledges the existence of any
liability or wrongdoing.

10. Amendment of Plan or Purchase Agreement. The Amended PRC-MO Plan may not be
amended, supplemented, or modified, nor may its terms or conditions be waived
(or otherwise deemed satisfied), to the extent that any such amendment,
supplement, modification, or waiver contravenes, or otherwise negates the terms
and conditions of, this Agreement or adversely affects any party, without the
written consent of all of the parties. The Pinnacle Purchase Agreement may not
be amended, supplemented, or modified, nor may its terms or conditions be waived
(or otherwise deemed satisfied), to the extent that any such amendment,
supplement, modification, or waiver (i) results in a material reduction in the
purchase price that is not already contemplated in the Pinnacle Purchase
Agreement, or (ii) results in a change in the Excluded Assets (as that term is
defined in the Pinnacle Purchase Agreement), without the written consent of all
of the parties.

11. Expedited Approval. The parties immediately will seek the Bankruptcy Court’s
approval of this Agreement on an expedited basis pursuant to Rule 9019 of the
Federal Rules of Bankruptcy Procedure.

12. Bankruptcy Court Approval. This Agreement will be of no force and effect
unless and until it is approved pursuant to a final order of the Bankruptcy
Court. The Bankruptcy Court’s approval is a condition precedent to
enforceability of this Agreement.

13. Representations, Warranties and Covenants. The parties represent and warrant
that they have read and thoroughly understand the terms and conditions of this
Agreement. This Agreement represents a final and complete expression of the
understandings between the parties

 

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and this Agreement may not be contradicted by evidence of any prior oral
agreement or of a contemporaneous oral agreement or understanding between the
parties. There are no promises, terms, conditions or obligations other than
those contained in this Agreement. Each party hereby represents and warrants
that it has full and complete authority to sign this Agreement and that, in
signing this Agreement, it is binding itself and its predecessors, successors,
and assigns to this Agreement. Each party will use commercially reasonable
efforts to seek and obtain approval of this Agreement and confirmation of the
Amended PRC-MO Plan by the Bankruptcy Court.

14. Neutral Construction of the Agreement. This Agreement is a product of arms
length negotiations between the parties and represents the jointly conceived,
bargained for, and agreed upon language mutually determined by the parties to
express their intentions in entering into this Agreement. Any ambiguity or
uncertainty in this Agreement will be deemed to be caused by or attributable to
the parties collectively. In any action to enforce or interpret this Agreement,
the Agreement will be construed in a neutral manner, and no term or provision of
this Agreement, or the Agreement as a whole, may be construed more or less
favorably to any one party to this Agreement.

15. Agreement Binding on Successors. The terms and conditions of this Agreement
will be binding on the parties and their successors and assigns.

16. Choice of Law. The validity, construction, and enforcement of this Agreement
will be governed by the laws of the State of Missouri without regard to its
choice of law principles. If legal action is initiated relative to this
Agreement or rights or obligations of the parties under this Agreement, the
action must be initiated, maintained, and continued in the Bankruptcy Court.

17. Headings. The headings in this Agreement are inserted for the convenience of
the parties only and may not be used to interpret, construe, or in any way
affect the meaning of the terms and provisions of this Agreement.

18. Attorneys Fees. If any party to this Agreement employs an attorney to
remedy, prevent or obtain relief from a breach or default of this Agreement, or
arising out of a breach or default of this Agreement, or in connection with
asserting or contesting the validity of this Agreement, any of the terms,
covenants, provisions, and all conditions hereof, or of any of the matters
referred to herein, and such party is the prevailing party in any action brought
with respect thereto, such party will be entitled to be reimbursed for all of
its reasonable attorneys’ fees, including without limitation, those attorneys’
fees incurred in each and every action, suit, or proceeding, including any and
all appeals and petitions therefrom, and all costs and expenses incurred in
connection therewith, from the party against whom such action was brought
against.

19. Power of Representatives. Any party executing this Agreement in a
representative capacity is duly authorized and empowered to do so.

20. Counterpart Signatures. This Agreement may be signed in counterparts, each
of which taken together shall constitute an original. Delivery of an executed
counterpart of the signature page to this Agreement by facsimile or electronic
mail shall be as effective as delivery of a manually executed counterpart of
this Agreement.

 

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21. Entire Agreement and Integration. Except as expressly provided in this
Agreement, this Agreement is the final written expression and complete and
exclusive statement of all the agreements, conditions, promises, and covenants
among the parties with respect to the specific subject matter hereof, and
supersedes all prior or contemporaneous agreements, negotiations,
representations, understandings, and discussions among the parties or their
respective counsel with respect the subject matter covered in this Agreement.
Any amendment or modification of this Agreement, to be legally binding, must: be
in writing, specifically refer to this Agreement, and be signed by the duly
authorized representative of all parties hereto.

22. Notices. Notices shall be sent as follows:

If to Pinnacle:

address specified for “Buyer” in Section 20

of the Pinnacle Purchase Agreement

with a copy to:

Randall F. Scherck

Lathrop & Gage L.C.

The Equitable Building, Suite 1300

10 South Broadway

St. Louis, MO 63102

Facsimile: (314) 613-2550

If to the Committee:

Thomas E. Patterson

Klee, Tuchin, Bogdanoff & Stern LLP

2121 Avenue of the Stars, 33rd Floor

Los Angeles, CA 90067

Facsimile: (310) 407-9090

If to PCI or PRC-MO:

address specified for “Seller” in Section 20

of the Pinnacle Purchase Agreement

Any party may change its address or fax numbers for purposes of this paragraph
upon delivery to the other parties of a written notice of change of address.

23. Further Assurances. Each party will do and perform, or cause to be done and
performed, all such further acts and things, and will execute and deliver all
such other agreements, certificates, instruments and documents that any other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement.

24. Termination. If the Court has not entered an order approving this Agreement
by October 23, 2006, then (a) this Agreement shall be void ab initio,
(b) nothing herein shall be deemed an admission by any party, (c) this Agreement
shall not be admissible in the Bankruptcy Court or in any other court or
proceeding, and (d) each party shall retain all of its rights which existed
immediately prior to the parties’ agreement to settle their disputes as provided
in this Agreement.

 

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IN WITNESS WHEREOF, the parties hereto execute this Agreement as of the date set
forth opposite their respective signatures.

 

PINNACLE ENTERTAINMENT, INC.     PRESIDENT CASINOS, INC. By:   /s/ Wade Hundley
    By:   /s/ Ralph J. Vaclavik   Name:   Wade Hundley       Name:   Ralph J.
Vaclavik   Its:   President       Its:   Sr. Vp & CFO

THE OFFICIAL COMMITTEE OF

EQUITY SECURITY HOLDERS OF

PRESIDENT CASINOS, INC.

    PRESIDENT RIVERBOAT CASINO-MISSOURI, INC. By:   /s/ Terrence L. Wirginis    
By:   /s/ Ralph J. Vaclavik   Name:   Terrence L. Wirginis       Name:   Ralph
J. Vaclavik   Its:   Chairman       Its:   Sr. Vp & CFO /s/ Terrence L. Wirginis
        Terrence L. Wirginis, in his individual capacity         Solely with
respect to Section 6 and Section 7 hereof:                   Gregory A. Carlin,
as a member of the Committee     Gregory A. Carlin, as a member of the Ad Hoc
Committee           Dale B. Chappell, as a member of the Committee     Terrence
L. Wirginis, as a member of the Ad Hoc Committee           Ches. E. Latham, as a
member of the Committee     M. Scott Zegeer, as a member of the Ad Hoc Committee
       James P. Napoli, as a member of the Committee     /s/ Terrence L.
Wirginis         Terrence L. Wirginis, as a member of the Committee        

 

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