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                                                                    EXHIBIT 10.3

                                 THIRD AMENDMENT
                                       TO
                     ACQUISITION AND PARTICIPATION AGREEMENT

         THIS THIRD AMENDMENT TO ACQUISITION AND PARTICIPATION AGREEMENT
("Amendment") is entered into as of February 28, 2003 by and among, MRD Gaming,
LLC, a California limited liability company ("MRD"), Lakes Cloverdale, LLC, a
Minnesota limited liability company ("Lakes Cloverdale"), and Lakes Corning,
LLC, a Minnesota limited liability company ("Lakes Corning").

                                    RECITALS

     A.       MRD, Lakes Cloverdale and Lakes Corning are parties to that
              certain Acquisition and Participation Agreement, dated August 7,
              2000, originally entered into between MRD and Lakes Gaming and
              Resorts, LLC ("Lakes Resorts") as amended on October 12, 2000 and
              October 11, 2001 (as amended, the "Acquisition Agreement"). Lakes
              Resorts assigned its rights under the Acquisition Agreement to
              Lakes Corning and Lakes Cloverdale, pursuant to an Assignment and
              Assumption Agreement dated October 12, 2000.

     B.       Pursuant to the terms of the Acquisition Agreement, MRD and Lakes
              Cloverdale became the sole members of Pacific Coast Gaming --
              Santa Rosa, LLC, a Minnesota limited liability company
              ("Cloverdale JV"). MRD and Lakes Corning became the sole members
              of Pacific Coast Gaming -- Corning, LLC, a Minnesota limited
              liability company ("Corning JV"). Corning JV and Cloverdale JV
              were both formed for the purpose of financing casinos on Indian
              lands.

     C.       Corning JV entered into a series of agreements with the Paskenta
              Band of Nomlaki Indians of California (the "Tribe") relating to
              the financing and construction of a casino project near Corning,
              California. Corning JV then terminated its relationship with the
              Tribe pursuant to that certain Termination Agreement of Project
              Funding and Loan Agreement and Related Project Transaction
              Documents between the Corning JV and the Tribe dated October 11,
              2001 (the "Termination Agreement").

     D.       Due to the termination of the casino project in Corning,
              California, the parties intend to wind up the business of Corning
              JV, assign certain assets from Lakes Corning to Lakes Cloverdale,
              assign Corning JV's rights under the Termination Agreement to MRD
              and Lakes Cloverdale, and dissolve Corning JV and Lakes Corning.

     E.       Certain debt of Corning JV under the Corning Project Development
              Loan (as defined in the Acquisition Agreement) remains
              outstanding, and Cloverdale


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              JV shall assume liability for such debt pursuant to the terms of
              the Guaranty executed by Cloverdale JV in favor of Lakes Corning
              dated October 12, 2000, as assigned to Lakes Cloverdale and
              amended on February 28, 2003 (the "Guaranty").

     F.       To facilitate the assignment of such rights and the dissolution of
              Corning JV and Lakes Corning, the parties desire to enter into the
              following amendment of the Acquisition Agreement.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the mutual promises of the parties
hereto, and the mutual benefits to be gained by the performance hereof, the
parties hereto agree to amend the Acquisition Agreement as follows:

         1.       CAPITALIZED TERMS. Capitalized terms used herein and not
defined shall have the meaning set forth in the Acquisition Agreement. The
Acquisition Agreement, as amended by this Amendment, shall be referred to as the
"Agreement."

         2.       DEFINITION OF NET CASH FLOWS. Section 9 -- The first sentence
of the second paragraph of Section 9 of the Agreement is deleted and replaced
with the following:

         "Net Cash Flows" with respect to a Project Company shall mean the net
         sum of the following, as reasonably determined in good faith by the
         governing body of the Project Company: (a) gross variable and fixed
         lease fees (as defined in its Project Contracts) received by the
         Project Company; plus (b) loan payments and all other fees, amounts and
         payments received by the Project Company from the applicable Tribe
         under its Project Contract or otherwise with respect to its Project;
         plus (c) repayments received by the Project Company on any advances it
         made to the other Project Company in the form of payments to Lakes of
         amortized loan amounts due from the other Project Company to Lakes
         under the Project Companies Loan or a Project Development Loan; plus
         (d) any other cash revenues received by the Project Company without any
         obligation to repay; less (e) franchise fees, third party financing
         costs and other expenses paid to third parties; less (f) Overhead Fees
         paid as described in Section 10; less (g) Project Manager Costs paid as
         described in Section 11; less (h) payments of amortized amounts due
         Lakes on the Project Development Loan and that portion of the Project
         Companies Loan due Lakes from the Project Company; less (i) repayments
         made by the Project Company on any advances it received from the other
         Project Company in the form of payments to Lakes of amortized loan
         amounts due from the Project Company to Lakes under the Project
         Companies Loan or a Project Development Loan, and less (j) payments
         required to be made by Cloverdale Project Company to Lakes Corning, LLC
         (or its successors) under any guaranty with respect to any loans owing
         by the Paskenta Project Company to Lakes Corning, LLC."


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         3.       OVERHEAD FEES. Section 10 -- The final sentence of the third
paragraph of the Agreement shall be replaced with the following:

         "Notwithstanding the foregoing, upon the occurrence of any payment
default under any MRD Loans, Project Company Loans, or Project Development
Loans, or under the Guaranty by any Project Company of the other Project
Company's debt (except the default existing as of February 28, 2003 of Corning
JV with respect to its failure to pay the past due amounts under the Corning
Project Development Loan, but not including any future default by Cloverdale JV
in the repayment of such debt pursuant to the terms of the Guaranty), any
Overhead Fees or other amounts thereafter payable to MRD by the Project
Companies shall be paid to Lakes as payment on such loans until the payment
defaults have been cured."

         4.       PROJECT MANAGER COSTS. Section 11 -- Add the following new
paragraph at the end of Section 11 of the Agreement:

         "Notwithstanding the foregoing, upon the occurrence of any payment
         default under any Project Development Loans, Project Company Loans or
         MRD Loans, or under the Guaranty by any Project Company of the other
         Project Company's debt (except the default existing as of February 28,
         2003 of Corning JV with respect to its failure to pay the past due
         amounts under the Corning Project Development Loan, but not including
         any future default by Cloverdale JV in repayment of such debt pursuant
         to the terms of the Guaranty), and until such default is cured, Lakes
         shall have no further obligation to advance funds to either Project
         Company for Project Company Costs, and payments to Lakes of amounts due
         under any Project Development Loans and any Project Company Loans shall
         be made prior to any payment of Project Company Costs."

         5.       ACCELERATION OF DEBT UNDER GUARANTY. Section 13 -- Replace the
first sentence of the fourth paragraph of Section 13 of the Agreement with the
following:

         "With respect to either of the Projects, Lakes shall have the option,
         in its sole discretion, to cease further funding of that Project, cause
         the liquidation of the Project Company responsible for that Project,
         accelerate payment of the Project Companies Loans, the Project
         Development Loan and any of the MRD Loans applicable to that Project,
         and accelerate payment of any amounts owed by such Project Company
         pursuant to the Guaranty by such Project Company of the other Project
         Company's debts to Lakes, if any of the following events occurs with
         respect to that Project: (a) any Gaming Approval required by applicable
         law for the Paskenta Project shall not have been received by the
         Paskenta Tribe by May 1, 2001; (b) the Paskenta Trust Designation shall
         not have been completed by May 1, 2001, and Lakes shall have determined
         (in its sole discretion) that the Paskenta Trust Designation is not
         reasonably expected to be completed within a short time thereafter on
         terms reasonably acceptable to Lakes; (c) any Gaming Approval required
         by applicable law for the Cloverdale Project shall not have been
         received

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         by the Cloverdale Tribe by December 31, 2002; (d) a Trust Designation
         shall not have been completed by December 31, 2002, for any additional
         land that is to be acquired by the Cloverdale Tribe, is necessary for
         the Cloverdale Project and is required by applicable law to be subject
         to a Trust Designation; (e) a legally binding commitment for Outside
         Financing, subject only to conditions mutually acceptable to Lakes and
         MRD (as provided above), is not obtained on the terms specified above
         for the Project within six (6) months after the later of (i) the
         completion of all Trust Designations required by applicable law for
         land necessary for the Project, and (ii) the Tribe's receipt of all
         Gaming Approvals required by applicable law for the Project; (f) any
         such commitment for Outside Financing has been obtained, but is
         terminated for any reason other than a Lakes Default (as defined in
         Section 19), before the permanent Project casino is substantially
         completed and equipped, unless substitute Outside Financing is obtained
         before any material Project Company default occurs under the Project
         Contracts and is not waived by the Tribe; (g) the Tribe terminates any
         of its Project Contracts, or fails or refuses to perform any material
         obligation thereunder, for any reason other than a Lakes Default (as
         defined in Section 19), with the result that the Project is no longer
         commercially feasible for the applicable Project Company; or (h) the
         Project's temporary casino is not opened for public gaming by December
         31, 2001."

         6.       CAPITALIZED INTEREST. Notwithstanding any contrary terms set
forth in the Acquisition Agreement or any related documents, interest which
accrues on the Cloverdale Project Development Loan and Cloverdale Project
Company Loans prior to the date when the Cloverdale Project is first open for
gaming to the general public shall be capitalized and added to the principal
balance outstanding.

         7.       DISSOLUTION OF CORNING JV. Pursuant to Section 13 of the
Acquisition Agreement, the parties hereby desire, acknowledge and agree that the
Corning JV shall be terminated and its assets, if any, shall be distributed to
MRD and Lakes Corning, as members, in accordance with the terms of the
Acquisition Agreement and the organizational documents of Corning JV, including,
without limitation, an assignment of rights by Corning JV to each have MRD and
Lakes Corning of Corning JV's rights under the Termination Agreement. In
addition, MRD acknowledges that Lakes Corning intends to dissolve and in
connection therewith consents to such dissolution and the assignment of any of
its rights and assets to Lakes Cloverdale, including, without limitation, the
assignment of Lakes Corning's rights under the Guaranty and the Paskenta Project
Development Loan.

         8.       RELEASE. MRD and Cloverdale JV hereby release each of Corning
JV and Lakes Corning, and Corning JV and Lakes Corning hereby release MRD, from
any obligation or claim arising from or relating to the Acquisition Agreement
and related documents, or the transactions contemplated thereby or related
thereto, including without limitation, any indemnification or contribution
rights and claims that Cloverdale JV may now or hereafter have against Corning
JV with respect to the Guaranty.


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         9.       NO WAIVER. Except for the event of default expressly
referenced in Sections 3 and 4 hereof, neither Lakes Resorts, Lakes Corning nor
Lakes Cloverdale waive any rights under the Agreement or any related documents
with respect to any past, continuing or future default by MRD, Corning JV or
Cloverdale JV.

         10.      FURTHER ASSURANCES. Each of the parties hereto agree to take
any further actions and execute any additional documents reasonably necessary to
effectuate the intents and purposes of this Amendment, including, without
limitation, any actions necessary to cause Cloverdale JV to execute and deliver
the Guaranty to Lakes Cloverdale, written action of the members of Corning JV
approving the dissolution of such company, the assignment by Corning JV to MRD
and Lakes Corning of its rights under the Termination Agreement, and any related
documents.

         11.      RATIFICATION. Except as expressly modified in this Amendment,
the Acquisition Agreement is hereby ratified and confirmed in all respects.

         12.      COUNTERPART SIGNATURES / FACSIMILES. This Amendment may be
executed in any number of counterparts, each of which shall be deemed an
original, but all of which, taken together, shall constitute one document. Faxed
signatures shall be deemed originals.



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         IN WITNESS WHEREOF, the parties hereto have entered into this Amendment
as of the date first set forth above.

MRD GAMING, LLC


By:   /s/ Matthew R. Daly
    ----------------------------------------
Name: Matthew R. Daly
Its:  Chief Manager


LAKES CORNING, LLC

By:   /s/ Timothy J. Cope
    ----------------------------------------
Name: Timothy J. Cope
Its:  Chief Financial Manager


LAKES CLOVERDALE, LLC

By:   /s/ Timothy J. Cope
    ----------------------------------------
Name: Timothy J. Cope
Its:  Chief Financial Manager




(Signature page for Third Amendment to Acquisition and Participation Agreement.)