**UNITEDSTATES  SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549**

 

**FORM10-Q/AAmendment No.1**
|  **(Mark One)** | ** **                                                                                         |
|----------------------|----------------------------------------------------------------------------------------------------|
| **x**                | **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE SECURITIES EXCHANGE ACT OF 1934.**      |
| ** **           | ** **                                                                                         |
| ** **           | **For the  quarterly period ended June 30, 2006**                                                  |
| ** **           | ** **                                                                                         |
| ** **           | ** **                                                                                         | **OR** |
| ** **           | ** **                                                                                         |
| **o**                | **TRANSITION REPORT PURSUANT TO SECTION 13 OR  15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.**     |
| ** **           | ** **                                                                                         |
| ** **           | **For the  transition period  from          to** |

 

**CommissionFile Number: 333-115186**

**RIVERROCK ENTERTAINMENT AUTHORITY** (Exact name ofregistrant as specified in its charter)

| **Not Applicable**               |   | **68-0490898**       |
|----------------------------------|--------|----------------------|
| (State or other  jurisdiction of |   | (I.R.S. Employer     |
| incorporation or  organization)  |   | Identification  No.) |

 

**3250Highway 128 East  Geyserville, California 95441  (707) 857-2777** (Address, includingzip code, and telephone number,  including area code, of registrant’sprincipal executive offices)

 

Indicate by check markwhether the registrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements for thepast 90 days.  Yes  x    No  o

 

Indicate by check markwhether the registrant is an accelerated filer (as defined in Rule 12b-2 of theExchange 

Act)  Yes  o

 

o  LargeAccelerated – Filer     o    Accelerated– Filer    x  NonAccelerated Filer

 

Indicate by checkmark whether the Registrant is a shell company (as defined in Rule 12b-2 of theExchange Act).  Yes  o     No  x

 

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**RIVERROCK ENTERTAINMENT AUTHORITY**

**INDEX TO FORM 10-Q/A**
|  Item     | ** ** | **Description**                                                                                                                                                                                                                          | ** ** | **Page**   |
|----------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------|
|           |       | Explanatory Note                                                                                                                                                                                                                         |       |       |
|           |       |                                                                                                                                                                                                                                     |       |       |
|           | ** ** | **PART I—FINANCIAL INFORMATION**                                                                                                                                                                                                    | ** ** | ** ** |
|           |       |                                                                                                                                                                                                                                     |       |       |
| 1.             |       | Financial Statements (unaudited)                                                                                                                                                                                                         |       |       |
|           |       | Balance Sheets—June 30, 2006 and December 31,  2005                                                                                                                                                                            |       | 1          |
|           |       | Statements of Revenues, Expenses and Changes in Fund  Deficit—Three-Months ended June 30, 2006 (as   restated) and 2005 (as restated)  and Six-Months ended June 30, 2006 (as restated) and 2005 (as  restated) |       | 2          |
|           |       |                                                                                                                                                                                                                                     |       |       |
|           |       | Statements  of Cash Flows—Six-Months ended June 30, 2006 (as restated) and 2005  (as restated)                                                                                                                            |       | 3          |
|           |       | Notes to unaudited Financial Statements                                                                                                                                                                                                  |       | 4          |
| 2.             |       | Management’s Discussion and Analysis of Financial  Condition and Results of Operations                                                                                                                                              |       | 12         |
|           |       |                                                                                                                                                                                                                                     |       |       |
| 4.             |       | Controls and Procedures                                                                                                                                                                                                                  |       | 19         |
|           |       |                                                                                                                                                                                                                                     |       |       |
|           | ** ** | **PART  II—OTHER INFORMATION**                                                                                                                                                                                                      |       |       |
|           |       |                                                                                                                                                                                                                                     |       |       |
| 6.             |       | Exhibits and Reports on Form 8-K                                                                                                                                                                                                    |       | 19         |
|           |       |                                                                                                                                                                                                                                     |       |       |
| Signatures     |       | 20                                                                                                                                                                                                                                       |
|           |       |                                                                                                                                                                                                                                     |       |       |
| Exhibit  Index |       |                                                                                                                                                                                                                                     |

 

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**EXPLANATORYNOTE**

River RockEntertainment Authority (the “Authority”) is filing this Amendment No. 1 to itsReport on Form 10Q/A to restate its previously issued financial statements forthe quarter ended June 30, 2006, initially filed with the Securities andExchange Commission (“SEC”) on August 14, 2006. See Note 14 to the financial statements for further information.

This Form 10Q/Aamends and restates only Items 1, 2, and 4 of Part I and Item 6 of Part II ofthe original filing solely to reflect the effects of the restatement of the Authority’sfinancial statements for the periods presented. The remaining Items of the original filing are not amended hereby andare therefore not included herein. Except for the forgoing amended information,this Form 10-Q/A continues to describe conditions as of the date of the originalfiling, and the Authority has not updated the disclosures contained herein toreflect events that occurred at a later date. Accordingly, this Form 10Q/Ashould be read in conjunction with Authority filings made with the SECsubsequent to the filing of the original Form 10Q, including any amendments ofthose filings. In addition, pursuant to the rules of the SEC, exhibits 31.1 and32 of the original filing have been amended to contain currently datedcertifications from our Chief Executive Officer and Principal FinancialOfficer, as required by Sections 302 of the Sarbanes-Oxley Act of 2002. Theupdated certifications are attached to this Form 10Q as exhibits 31.1 and 32.

**CAUTIONARYSTATEMENT**

*Exceptfor the historical financial information contained herein, the mattersdiscussed in this report on Form 10-Q/A Amendment No. 1 (as well asdocuments incorporated herein by reference) may be considered forward-lookingstatements within the meaning of Section 27A of the Securities Act of 1933,as amended, and Section 21E of the Securities Exchange Act of 1934, asamended. Such forward-looking statements are based upon current expectationsthat involve risks and uncertainties and include declarations regarding theintent, belief or current expectations of us and our management and may besignified by the words “believes,” “anticipates,” “plan,” “expects,” “intends”and similar expressions. Our actual results and the timing of certain eventsmay differ significantly from the results discussed in the forward-lookingstatements. All forward-looking statements in this document are based oninformation available to us as of the date hereof, and we assume no obligationto update any such forward-looking statements, whether as a result of newinformation, future events, or otherwise. All discussion in this report shouldbe read in conjunction with our financial statements and the accompanying notescontained in this report.*

*Referencesin this Form 10-Q/A to the “Authority” and the “Tribe” are to the River RockEntertainment Authority and the Dry Creek Rancheria Band of Pomo Indians,respectively. The terms “we,” “us” and “our” refer to the Authority.*

*Ourkey risks are described in our annual report on Form 10-K for the year endedDecember 31, 2005  filed with theSecurities and Exchange Commission.*

 

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**PART I.FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTS (UNAUDITED )**

**RIVERROCK ENTERTAINMENT AUTHORITY  (A Governmental Instrumentality of theDry Creek Rancheria Band of Pomo Indians)BALANCE SHEETS  (Unaudited )**
| ** **                                      | ** ** | **June 30, 2006** | ** **  | **December 31, 2005** | ** ** |
|-------------------------------------------------|------------|-----------------------------|-------------|---------------------------------|------------|
| **ASSETS**                                      |       |                        |        |                            |       |
| ** **                                      | ** ** | ** **                  | ** **  | ** **                      | ** ** |
| CURRENT ASSETS:                                 |       |                        |        |                            |       |
| Cash and cash  equivalents                      |       | $                           | 21,943,508  |                            | $          | 17,649,658 |   |
| Restricted  cash-current                        |       | 466,517                     |        | 666,517                         |       |
| Accounts  receivable                            |       | 165,392                     |        | 93,252                          |       |
| Inventories                                     |       | 153,095                     |        | 159,434                         |       |
| Prepaid expenses  and other current assets      |       | 1,222,524                   |        | 1,427,906                       |       |
|                                            |       |                        |        |                            |       |
| Total current  assets                           |       | 23,951,036                  |        | 19,996,767                      |       |
|                                            |       |                        |        |                            |       |
| RESTRICTED CASH—Net of  Current            |       | 6,737,963                   |        | 6,706,964                       |       |
|                                            |       |                        |        |                            |       |
| PROPERTY AND EQUIPMENT  :                       |       |                        |        |                            |       |
| Buildings and  building improvements            |       | 129,179,774                 |        | 128,858,771                     |       |
| Furniture, fixtures  and equipment              |       | 26,711,342                  |        | 26,015,944                      |       |
|                                            |       | 155,891,116                 |        | 154,874,715                     |       |
| Accumulated  depreciation                       |       | (27,412,578                 | )           | (21,801,767                     | )          |
| Construction in  progress                       |       | 3,563,265                   |        | 1,819,271                       |       |
|                                            |       |                        |        |                            |       |
| Property and  equipment—net                |       | 132,041,803                 |        | 134,892,219                     |       |
|                                            |       |                        |        |                            |       |
| DEPOSITS AND OTHER  ASSETS                      |       | 5,493,405                   |        | 6,081,955                       |       |
|                                            |       |                        |        |                            |       |
| TOTAL ASSETS                                    |       | $                           | 168,224,207 |                            | $          | 167,677,905 |   |
|                                            |       |                        |        |                            |       |
| **LIABILITIES AND FUND DEFICIT**                | ** ** | ** **                  | ** **  | ** **                      | ** ** |
|                                            |       |                        |        |                            |       |
| CURRENT LIABILITIES :                           |       |                        |        |                            |       |
| Accounts payable  :                             |       |                        |        |                            |       |
| Trade                                           |       | $                           | 1,607,306   |                            | $          | 2,178,031 |   |
| Construction                                    |       | 466,517                     |        | 1,114,618                       |       |
| Accrued liabilities                             |       | 6,687,779                   |        | 6,463,556                       |       |
| Current maturities of  long-term debt           |       | 123,855                     |        | 103,545                         |       |
|                                            |       |                        |        |                            |       |
| Total current  liabilities                      |       | 8,885,457                   |        | 9,859,750                       |       |
|                                            |       |                        |        |                            |       |
| Long-Term debt—net of  current maturities  |       | 198,525,121                 |        | 198,243,209                     |       |
|                                            |       |                        |        |                            |       |
| Total long-term  liabilities                    |       | 198,525,121                 |        | 198,243,209                     |       |
|                                            |       |                        |        |                            |       |
| FUND DEFICIT                                    |       |                        |        |                            |       |
| Invested in capital  assets-net of related debt |       | (66,607,173                 | )           | (63,454,535                     | )          |
| Restricted for capital  projects                |       | 7,204,480                   |        | 7,373,481                       |       |
| Unrestricted                                    |       | 20,216,322                  |        | 15,656,000                      |       |
|                                            |       |                        |        |                            |       |
| Total fund deficit                              |       | (39,186,371                 | )           | (40,425,054                     | )          |
|                                            |       |                        |        |                            |       |
| TOTAL LIABILITIES AND FUND DEFICIT              |       | $                           | 168,224,207 |                            | $          | 167,677,905 |   |

 

The accompanying notes are an integral part of these unaudited financialstatements.

1

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**RIVERROCK ENTERTAINMENT AUTHORITY**

**(AGovernmental Instrumentality of the Dry Creek Rancheria Band of Pomo Indians)**

**STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND DEFICIT**

** (Unaudited)**
| ** **                                  | ** ** | **Three-Month Period Ended June 30,** | ** **  | **Six-Month Period Ended June 30,** | ** ** |
|---------------------------------------------|------------|-----------------------------------------------------------|-------------|---------------------------------------------------------|------------|
| ** **                                  | ** ** | **2006**                                                  | ** **  | **2005**                                                | ** ** | **2006** | ** ** | **2005** | ** ** |
| REVENUES:                                   |       | (As  restated, see note   14)                             |        | (As  restated,see note   14)                            |       | (As  restated,see note   14) |   | (As  restated,see note   14) |   |
|                                        |       |                                                      |        |                                                    |       |   |   |   |   |
| Casino                                      |       | $                                                         | 32,351,668  |                                                    | $          | 34,157,696 |   | $ | 64,872,575 |   | $ | 65,184,651 |   |
| Food, beverage &  retail                |       | 1,504,620                                                 |        | 1,697,225                                               |       | 2,981,006 |   | 3,150,933 |   |
| Other                                       |       | 144,882                                                   |        | 167,812                                                 |       | 297,737 |   | 349,132 |   |
|                                        |       |                                                      |        |                                                    |       |   |   |   |   |
| Gross revenues                              |       | 34,001,170                                                |        | 36,022,733                                              |       | 68,134,504 |   | 68,684,716 |   |
|                                        |       |                                                      |        |                                                    |       |   |   |   |   |
| Promotional allowances                      |       | (2,940,273                                                | )           | (1,438,170                                              | )          | (5,466,161 | ) | (2,215,097 | ) |
|                                        |       |                                                      |        |                                                    |       |   |   |   |   |
| Net revenues                                |       | 31,060,897                                                |        | 34,584,563                                              |       | 62,668,343 |   | 66,469,619 |   |
|                                        |       |                                                      |        |                                                    |       |   |   |   |   |
| OPERATING EXPENSES:                         |       |                                                      |        |                                                    |       |   |   |   |   |
| Casino                                      |       | 4,970,006                                                 |        | 4,585,700                                               |       | 10,009,347 |   | 9,320,128 |   |
| Food, beverage &  retail                |       | 1,468,256                                                 |        | 1,504,816                                               |       | 2,968,124 |   | 2,868,419 |   |
| Selling, general and  administrative        |       | 9,608,317                                                 |        | 13,163,429                                              |       | 20,998,670 |   | 23,597,491 |   |
| Depreciation                                |       | 2,871,417                                                 |        | 2,757,551                                               |       | 5,731,950 |   | 5,391,509 |   |
| Credit enhancement fee                      |       | 1,859,210                                                 |        | 1,856,802                                               |       | 3,461,627 |   | 3,799,651 |   |
| Gaming commission and  surveillance expense |       | 725,991                                                   |        | 355,843                                                 |       | 1,448,732 |   | 892,456 |   |
| Compact revenue sharing  trust fund         |       | 333,750                                                   |        | 333,750                                                 |       | 667,500 |   | 667,500 |   |
|                                        |       |                                                      |        |                                                    |       |   |   |   |   |
| Total Operating  expenses                   |       | 21,836,947                                                |        | 24,557,891                                              |       | 45,285,950 |   | 46,537,154 |   |
|                                        |       |                                                      |        |                                                    |       |   |   |   |   |
| INCOME FROM OPERATIONS                      |       | 9,223,950                                                 |        | 10,026,672                                              |       | 17,382,393 |   | 19,932,465 |   |
|                                        |       |                                                      |        |                                                    |       |   |   |   |   |
| OTHER EXPENSE-Net                           |       |                                                      |        |                                                    |       |   |   |   |   |
| Interest expense                            |       | (5,220,851                                                | )           | (5,245,338                                              | )          | (10,445,483 | ) | (10,592,137 | ) |
| Interest income                             |       | 211,474                                                   |        | 51,530                                                  |       | 402,978 |   | 91,954 |   |
| Loss on sale of assets                      |       | (37,709                                                   | )           | —                                                  |       | (41,093 | ) | (33,977 | ) |
| Other income  (expense)—net            |       | (125                                                      | )           | (508                                                    | )          | (112 | ) | (949 | ) |
|                                        |       |                                                      |        |                                                    |       |   |   |   |   |
| Other expense—net                      |       | (5,047,211                                                | )           | (5,194,316                                              | )          | (10,083,710 | ) | (10,535,109 | ) |
|                                        |       |                                                      |        |                                                    |       |   |   |   |   |
| INCOME BEFORE  DISTRIBUTIONS TO TRIBE       |       | 4,176,739                                                 |        | 4,832,356                                               |       | 7,298,683 |   | 9,397,356 |   |
|                                        |       |                                                      |        |                                                    |       |   |   |   |   |
| DISTRIBUTIONS TO TRIBE                      |       | (3,060,000                                                | )           | (3,000,000                                              | )          | (6,060,000 | ) | (5,180,000 | ) |
|                                        |       |                                                      |        |                                                    |       |   |   |   |   |
| NET INCOME AFTER  DISTRIBUTIONS TO TRIBE    |       | 1,116,739                                                 |        | 1,832,356                                               |       | 1,238,683 |   | 4,217,356 |   |
|                                        |       |                                                      |        |                                                    |       |   |   |   |   |
| FUND DEFICIT—Beginning  of period      |       | (40,303,110                                               | )           | (45,136,242                                             | )          | (40,425,054 | ) | (47,521,242 | ) |
|                                        |       |                                                      |        |                                                    |       |   |   |   |   |
| FUND DEFICIT—End of  period            |       | $                                                         | (39,186,371 | )                                                       | $          | (43,303,886 | ) | $ | (39,186,371 | ) | $ | (43,303,886 | ) |
|                                        |       |                                                      |        |                                                    |       |   |   |   |   |

 

The accompanyingnotes are an integral part of these unaudited financial statements.

2

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**RIVER ROCK ENTERTAINMENT AUTHORITY  (A Governmental Instrumentality of theDry Creek Rancheria Band of Pomo Indians)STATEMENTS OF CASH FLOWS  (Unaudited)**
| ** **                                                                                             | ** ** | **Six Month Period Ended June 30 ,** | ** ** |
|--------------------------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------|------------|
| ** **                                                                                             | ** ** | **2006**                                                           | ** ** | **2005** | ** ** |
| **CASH FLOWS FROM OPERATING  ACTIVITIES:**                                                             |       | (As  restated,   see note 14)                                      |       | (As  restated,   see note 14) |   |
| Cash received  from gaming winnings and concessions                                                    |       | $                                                                  | 63,079,845 |   | $ | 66,389,281 |   |
| Cash paid for  salaries and benefits                                                                   |       | (14,139,101                                                        | )          | (14,887,467 | ) |
| Cash paid to  suppliers                                                                                |       | (22,372,724                                                        | )          | (22,545,477 | ) |
| Cash paid for  compact revenue sharing trust fund                                                      |       | (667,500                                                           | )          | (667,500 | ) |
|                                                                                                   |       |                                                               |       |   |   |
| Net cash  provided by operating activities                                                             |       | 25,900,520                                                         |       | 28,288,837 |   |
|                                                                                                   |       |                                                               |       |   |   |
| CASH FLOWS FROM CAPITAL  AND RELATED FINANCING ACTIVITIES:                                             |       |                                                               |       |   |   |
| Proceeds from  long-term financing                                                                     |       | 156,747                                                            |       | — |   |
| Payments of  long-term debt                                                                            |       | —                                                             |       | (10,269,712 | ) |
| Purchases of  property and equipment                                                                   |       | (2,928,227                                                         | )          | (15,715,958 | ) |
| Change in  restricted cash                                                                             |       | 169,001                                                            |       | 8,820,038 |   |
| Interest paid                                                                                          |       | (9,766,011                                                         | )          | (9,987,668 | ) |
| Credit  enhancement fee                                                                                |       | (3,664,461                                                         | )          | (3,762,668 | ) |
| Proceeds from  sale of assets                                                                          |       | 5,600                                                              |       | 2,000 |   |
| Other                                                                                                  |       | 77,703                                                             |       | 37,645 |   |
|                                                                                                   |       |                                                               |       |   |   |
| Net cash used in  capital and related financing activities                                             |       | (15,949,648                                                        | )          | (30,876,323 | ) |
| CASH FLOW FROM  INVESTING ACTIVITIES  Interest Income                                                  |       | 402,978                                                            |       | 91,954 |   |
| CASH FLOW FROM NON-CAPITAL  FINANCING ACTIVITIES:                                                      |       |                                                               |       |   |   |
| Distributions to  the Tribe                                                                            |       | (6,060,000                                                         | )          | (5,180,000 | ) |
|                                                                                                   |       |                                                               |       |   |   |
| CHANGE IN CASH AND CASH  EQUIVALENTS                                                                   |       | 4,293,850                                                          |       | (7,675,532 | ) |
|                                                                                                   |       |                                                               |       |   |   |
| CASH AND CASH  EQUIVALENTS, Beginning of the period                                                    |       | 17,649,658                                                         |       | 18,618,826 |   |
|                                                                                                   |       |                                                               |       |   |   |
| CASH AND CASH  EQUIVALENTS, End of the period                                                          |       | $                                                                  | 21,943,508 |   | $ | 10,943,294 |   |
|                                                                                                   |       |                                                               |       |   |   |
| RECONCILIATION OF  INCOME BEFORE DISTRIBUTIONS TO TRIBE TO NET CASH PROVIDED BY OPERATING  ACTIVITIES: |       |                                                               |       |   |   |
| Income before  Distributions to Tribe                                                                  |       | $                                                                  | 7,298,683  |   | $ | 9,397,356 |   |
|                                                                                                   |       |                                                               |       |   |   |
| Adjustments to  reconcile income before distribution to Tribe to net cash                              |       |                                                               |       |   |   |
| provided by  operating activities:                                                                     |       |                                                               |       |   |   |
| Depreciation                                                                                           |       | 5,731,950                                                          |       | 5,391,509 |   |
| Interest expense                                                                                       |       | 10,445,483                                                         |       | 10,592,137 |   |
| Interest Income                                                                                        |       | (402,978                                                           | )          | (91,954 | ) |
| Credit  enhancement fee                                                                                |       | 3,461,627                                                          |       | 3,799,651 |   |
| Loss on sale of  assets                                                                                |       | 41,093                                                             |       | 33,977 |   |
| Changes in  operating assets and liabilities:                                                          |       |                                                               |       |   |   |
| Accounts  receivable                                                                                   |       | (72,140                                                            | )          | 11,616 |   |
| Inventories                                                                                            |       | 6,339                                                              |       | (87,341 | ) |
| Prepaid expenses  and other current assets                                                             |       | 205,382                                                            |       | (247,745 | ) |
| Accounts payable                                                                                       |       | (1,218,900                                                         | )          | (227,803 | ) |
| Accrued  liabilities                                                                                   |       | 403,981                                                            |       | (282,566 | ) |
| Total  adjustments                                                                                     |       | 18,601,837                                                         |       | 18,891,481 |   |
|                                                                                                   |       |                                                               |       |   |   |
| NET CASH PROVIDED BY  OPERATING ACTIVITIES                                                             |       | $                                                                  | 25,900,520 |   | $ | 28,288,837 |   |
|                                                                                                   |       |                                                               |       |   |   |
| SUPPLEMENTARY SCHEDULE  OF NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES:                           |       |                                                               |       |   |   |
| Acquisition of property  and equipment through third party financing                                   |       | $                                                                  | —     |   | $ | 29,256 |   |
| Acquisition of property and equipment through accounts payable  construction                           |       | —                                                             |       | 450,720 |   |

 

The accompanyingnotes are an integral part of these unaudited financial statements.

3

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**RIVER ROCK ENTERTAINMENT AUTHORITY  (A Governmental Instrumentality of theDry Creek Rancheria Band of Pomo Indians)NOTES TO UNAUDITED FINANCIAL STATEMENTS**

**1.****                                      DESCRIPTIONOF BUSINESS**

River Rock Entertainment Authority (the “Authority”)is a governmental instrumentality of the Dry Creek Rancheria Band of PomoIndians (the “Tribe”), a federally recognized Indian tribe. River Rock Casino(the “Casino”) is a governmental development project of the Authority. TheCasino offers Class III gaming (as defined by the Indian Gaming Regulatory Act)on tribal land located in Geyserville, California. The legal authority for slotmachines and table games is provided by the Tribe’s gaming compact with theState of California (the “Compact”), which was entered into in September 1999and became effective upon approval by the Secretary of Interior on May 5,2000.  The Compact expires on December 31, 2020.

The Tribe opened a portion of the Casino onSeptember 14, 2002. Following completion of construction, the Casino wasfully opened on April 1, 2003.

The Authority was formed as an unincorporatedinstrumentality of the Tribe on November 5, 2003 pursuant to a reorganizationwhereby the Tribe’s gaming business became owned and operated by the Authority.This reorganization was accounted for as a reorganization of entities undercommon control. Accordingly, after the reorganization, the assets andliabilities of the Casino’s operating property were presented by the Authorityon a historical-cost basis.

The Authority operates as a separate, wholly ownedoperating unit of the Tribe and is not a separate legal entity. These financialstatements reflect the financial position and activity of only the Authorityand do not purport to represent the financial position and activity of the Tribe.

Income before distributions to the Tribe was$4,176,739 and $4,832,356 for the three months ended June 30, 2006 and 2005,respectively.   A fund deficit of $39,186,371 exists as of June 30,2006.   Income before distributions to the Tribe was $7,298,683 and$9,397,356 for the six months ended June 30, 2006 and 2005, respectively. The Authority’s current assets exceeded its current liabilities by $15,065,579as of June 30, 2006. On November 7, 2003, the Authority issued $200.0 millionin its 93⁄4% Senior Notes, due 2011 (the “Notes”), and used a portion of theproceeds to reduce its current payables, accruals and debt. The Authority’sability to fund future debt service payments is dependent upon the success ofthe Casino. Management believes that the Casino will attract sufficientpatronage levels to continue to provide sufficient cash flows and to repay itsindebtedness. The Authority reached its substantial completion of theconstruction of the enhanced parking structure on December 29, 2004.

**2.****                                      SUMMARYOF SIGNIFICANT ACCOUNTING POLICIES**

Accounting*Standards*—The Authority prepares its financial statements inaccordance with accounting principles generally accepted in the United Statesof America (“generally accepted accounting principles”). The financialstatements presented are prepared on the accrual basis of accounting from theaccounts and financial transactions of the Authority. Generally acceptedaccounting principles require the Authority to apply all applicablepronouncements of the Governmental Accounting Standards Board (“GASB”). TheAuthority is also required to follow Financial Accounting Standards Board (“FASB”)Statements and Interpretations, Accounting Principles Board Opinions andAccounting Research Bulletins issued on or before November 30, 1989, unlessthose pronouncements conflict with or contradict GASB pronouncements.  TheAuthority is given the option whether to apply all FASB Statements andInterpretations issued after November 30, 1989, except for those that conflictwith or contradict GASB pronouncements. Accordingly, the Authority has electedto implement non conflicting FASB Statements and Interpretations issued afterNovember 30, 1989.

There are differences between financial statementsprepared in accordance with GASB pronouncements and those prepared inaccordance with FASB pronouncements. The statements of revenues, expenses andchanges in fund deficit is a combined statement under GASB pronouncements, FASBpronouncements allow a statement of income or operations and a separate statementof owners’ or shareholders’ (deficit) equity, which is where distributions toowners would be presented under FASB pronouncements.  The amount shown asincome before distributions to Tribe would not be different if the Authorityfollowed all FASB pronouncements to determine net income and would be the mostcomparable amount to net income computed under FASB pronouncements. TheAuthority is a separate fund of the Tribe, a governmental entity, and as suchthere is no owners’ or shareholders’ (deficit) equity as traditionallyrepresented under FASB pronouncements.  The most comparable measure ofowners’ (deficit) equity is presented on the Authority’s balance sheet as fund(deficit) equity.

*NewAccounting Pronouncements*—In March 2003, GASB issued StatementNo. 40,*Deposit and Investment RiskDisclosures* —an amendment of GASB Statement No. 3, which becameeffective for the Authority at January 1, 2005. This statement requires stateand local governments to communicate key information about deposit and investmentrisks. The adoption of this statement did not have a material impact on thefinancial statements of the Authority.

In November 2003, GASB issued Statement No. 42,*Accounting and Financial Reporting for Impairment ofCapital Assets and for Insurance Recoveries*, effective for periodsbeginning after December 15, 2004. This statement establishes accounting andfinancial reporting standards for impairment of capital assets. This statementalso clarifies and establishes accounting requirements for insurancerecoveries. The adoption of this statement did not have a material impact onthe financial statements of the Authority.

*Use of Estimates*—Thepreparation of financial statements in conformity with accounting principlesgenerally accepted in the United States of America requires management to makeestimates and assumptions that affect the reported amounts of revenues andexpenses during the reporting period. Actual results could differ from theseestimates.

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*Cashand Cash Equivalents*—The Authority considers all highlyliquid investments with a maturity of three months or less at date of purchaseas cash equivalents. The carrying amount of cash and cash equivalentsapproximates its fair value. Cash and cash equivalents include cash on hand,cash on deposit with banks and highly liquid investments.  The FederalDeposit Insurance Corporation (“FDIC”) has insured $100,000 of the cash ondeposit with the banks. The Authority believes that there is little risk ofloss regarding the uninsured amounts of cash and cash equivalents on depositwith the banks.

*Inventories*—Inventories,consisting principally of gaming supplies and concession items, are stated atthe lower of cost (first-in, first-out) or market.

*RestrictedCash*—Restricted cash consists of estimated constructionexpenses for three parking structures, related infrastructure improvements andconstruction contingencies. It also includes funds that are reserved foradditional construction contingencies and the funds necessary to develop anapproximately 18-acre parcel of land adjacent to the Tribe’s reservation. Thesefunds are held in escrow accounts which are restricted for authorizedconstruction disbursements. These escrow accounts are invested in CD markets,which generate interest on a monthly basis. The FDIC has insured $100,000 ofthis balance. The Authority believes that there is little risk of lossregarding the uninsured amounts of restricted cash held in the escrow account.Restricted cash was $7,204,480 and $7,373,481 at June 30, 2006 and December 31,2005, respectively.  As of June 30, 2006, restricted cash includes amountsavailable for construction of $2,702,238 and land development funds of$4,502,242.

*Property and*Equipment—Property andequipment are stated at cost. Depreciation and amortization are computed usingthe straight-line method over the estimated useful lives of the assets asfollows:

| Buildings and improvements         |   | 21 years |   |
|------------------------------------|--------|---------------|--------|
| Furniture,  fixtures and equipment |   | 5 years       |   |

 

The Authority evaluatesits property and equipment for impairment in accordance with the FASB’sStatement of Financial Accounting Standards (“SFAS”) No. 144,*Accounting for the Impairment or Disposal ofLong-Lived Assets*. When events or circumstances indicate that anasset should be reviewed for impairment, the Authority compares theundiscounted cash flows derived from the asset or asset group to the netcarrying value. If impairment is indicated, the impairment loss is measured by the amount inwhich the carrying value of the asset or asset group exceeds its fair value.Fair value is measured by comparable sales, solicited offers or discounted cashflow models.

*Depositsand*Other*Assets*—Asof June 30, 2006 and December 31, 2005, deposits and other assets include$5,451,379 and $5,962,226 in unamortized bond spread, legal fees and otherissuance costs related to the issuance of the Notes, $0 and $78,618 ofequipment deposits, $5,115 and $4,200 of performance deposits and $36,911 and$36,911 of rental deposits.  Deferred loan costs are amortized using theeffective interest method to interest expense over the term of the relatedfinancial arrangement.

*Accrued*Liabilities—Accrued liabilities consist of accrued interest,accrued payroll, accrued credit enhancement fee and other accrued liabilities.

*AccruedProgressive Slot Jackpots*—Accrued progressive slot jackpotsconsist of estimates for prizes relating to various games that have accumulatedjackpots. The Authority has recorded the cost of these anticipated payouts as areduction of casino revenues, and the cost is included as a component ofaccrued liabilities.

Accrued*Slot Players Club*—In accordance withEmerging Issues Task Force Issue No. 00-22,*Accounting for “Points” and Certain Other Time-Based or Volume-BasedSales Incentive Offers and Offers for Free Products or Services to be Deliveredin the Future*, the Authority has recorded a liability related toprizes and cash incentives earned by the members of our Players Club and haveadjusted the liability for the estimated future breakage. The Authority hasrecorded the cost of the estimated redemption of the liability related toprizes as an operating expense and the estimated redemption of the liabilityrelated to cash as promotional allowance in the accompanying statements ofrevenues, expenses and changes in fund deficit.

*Casino Revenues*—In accordancewith industry practice, the Authority recognizes as casino revenue the net winfrom gaming activities, which is the difference between gaming wins and losses.Casino revenues are net of accruals for anticipated payouts of progressive slotjackpots.

*Food, Beverage and Retail*—TheAuthority recognizes as food, beverage and retail revenues the proceeds fromits food, beverage and gift shop sales. The Authority continues to distributebeverages freely in the gaming area for playing guests.

*Other Revenues*—Other revenuesare comprised of commissions on ATM and vending machine transactions.

*PromotionalAllowances*—The retail value of food and beverages provided tocustomers without charge or at a discount is included in Food, beverage andretail revenues and then deducted as promotional allowances. Such amounts thatare included in Food, beverage and retail revenues for the three months endedJune 30, 2006 and 2005 are $497,198 and $527,493, respectively.  The amountsincluded in Food, beverage and retail revenues for the six months ended June30, 2006 and 2005 were $999,031 and $1,230,018, respectively.  Thedistribution of electronic coupons (e-coupons) to customers is included inCasino revenues and is also deducted as promotional allowances.  The totale-coupons for the three months ended June 30, 2006 and 2005 were $2,093,299 and$388,437, respectively.  The total e-coupons for the six months ended June30, 2006 and 2005 were $3,741,419 and $388,437, respectively.  Theredemption of cash incentives earned by the Players Club members is alsorecorded as promotional allowances. The cost of cash incentives for the threemonths ended June 30, 2006 and 2005 were $349,776 and $522,240, respectively,and for the six months ended June 30, 2006 and 2005 were $725,711 and $596,642,respectively.

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*Foodand Beverage Costs*—Food and beverage costs include costsassociated with food and beverage, excluding amounts reclassified as Casinoexpenses.  The estimated costs of providing complimentary services arereclassified from food and beverage to Casino expenses.  The costs of suchservices were $963,699 and $835,332 for the three months ended June 30, 2006and 2005, respectively.  The costs of such services were $2,029,444 and$1,774,481 for the six months ended June 30, 2006 and 2005, respectively.

*Advertising Costs*—Advertising costsare expensed the first time advertising takes place. Advertising costs includedin selling, general and administrative expenses were $1,191,438 and $2,687,294for the three months ended June 30, 2006 and 2005, respectively. Advertising costs for the six months ended June 30, 2006 and 2005,respectively, were $3,423,414 and $3,768,738, respectively.

*GamingCommission & surveillance expenses*—The Authority pays forvarious expenses for the Tribal Gaming Commission and surveillance. Tribal Gaming Commission expenses were reported as Gaming Commission expensesand surveillance costs were reported in selling, general and administrativeexpenses on the Statement of Revenues, Expenses and Change in Fund Balanceprior to July 1, 2005. Effective July 1, 2005, the Tribal GamingCommission adopted a regulation on payments of regulatory fees from theAuthority.  For fiscal year 2006, Tribal Gaming Commission andsurveillance expenses are being recorded in Gaming Commission and surveillanceexpenses on the Statement of Revenues, Expenses and Changes in FundBalance.  Gaming Commission and surveillance expenses for the three monthsended June 30, 2006 and 2005 were $725,991 and $670,500, respectively. Gaming Commission and surveillance expenses for the six months ended June 30,2006 and 2005 were $1,448,732 and $1,368,150. Surveillance costs are includedin the above amounts for the three and six months ended June 30, 2005 were$314,657 and $475,694, respectively and prior to July 1, 2005 were recorded inSelling, General and Administrative Expenses on the Statement of Revenues,Expenses and Change in Fund Deficit.

*IncomeTaxes*—As a governmental instrumentality of the Dry CreekRancheria Band of Pomo Indians, a federally recognized Indian tribe, theAuthority is a nontaxable entity for purposes of federal and state incometaxes.

*Distributionsto Tribe*—Distributions to Tribe are made up of a stated drawamount and permitted payments.  They are included in the Statement ofRevenues, Expenses and Changes in Fund Deficit as distributions to Tribe.Permitted payments increased by $20,000 from $1,000,000 to $1,020,000 per monthfor the three months ended June 30, 2006.  In 2005, the Tribal draw was$1,000,000 per month for the three months ended June 30, 2005.  Totaldistributions to the Tribe for the three months ended June 30, 2006 and 2005were $3,060,000 and $3,000,000, respectively.   Total distributionsto the Tribe for the six months ended June 30, 2006 and 2005 were $6,060,000and $4,500,000, respectively, plus in 2005, another $680,000 in distributionsas part of reimbursements for construction costs incurred by the Tribe prior tothe formation of the Authority.  As of June 30, 2006, the remainingbalance to be reimbursed to the Tribe for construction costs incurred beforethe formation of the Authority was $1,960,000.

**3.****                                      CERTAINRISKS AND UNCERTAINTIES**

The Authority’soperations are dependent on the continued licensing and qualification of theAuthority by the Tribal Gaming Commission. Such licensing and qualification arereviewed periodically by the Tribal Gaming Commission and regulatory agenciesof the State of California. The Authority believes that no events orcircumstances have arisen that would have an adverse effect on the Casino’sability to continue its licensing and qualification by the Tribal GamingCommission or regulatory agencies of the State of California to operate theAuthority.

**4.****                                      RELATEDPARTIES**

The Authority has beenconstructed on federal land beneficially owned by the Tribe. The Authority doesnot pay the Tribe for the use of the land.

Starting January 1, 2004, the Authority paid for various expenses forthe following departments operated by the Tribe: Tribal Gaming Commission,surveillance, plant operations, human resources, purchasing andwarehousing.  On January 1, 2005, the Authority started to operatepurchasing and warehousing but continued to pay for expenses for the otherdepartments operated by the Tribe.  These departmental expenses includebut are not limited to payroll and related expenses, legal and otheroperational expenses.  Under direction of the River Rock EntertainmentAuthority Board and the Tribal Council, the Tribe assumed responsibility of thePurchasing and Warehousing departments on May 8, 2006.  The expensesassociated with the Purchasing and Warehouse departments incurred by the Tribeare included in these amounts and will be reimbursed to the Tribe by theAuthority as with other Tribal departments.

Total amounts billed bythe Tribe for these departments, excluding Tribal Gaming Commission andsurveillance, were $693,575 and $554,040 for the three months ended June 30,2006 and 2005, respectively. They are recorded as a component of selling,general and administrative expenses. Total amounts billed by the Tribe forthese departments were $1,291,749 and $1,078,880 for the six months ended June30, 2006 and 2005, respectively.

The Authority paid for various expenses for the TribalGaming Commission and surveillance in 2006 and 2005.  Prior to July 1,2005, Tribal Gaming Commission expenses were reported as Gaming Commissionexpenses and surveillance costs were reported in selling, general andadministrative expenses on the Statement of Revenues, Expenses and Change inFund Balance. Effective July 1, 2005, the Tribal Gaming Commission adopteda regulation on payments of regulatory fees from the Authority.  GamingCommission and surveillance expenses for the three months ended June 30, 2006and 2005 were $725,991 and $670,500, respectively.  Gaming Commission andsurveillance expenses for the six months ended June 30, 2006 and 2005 were$1,448,732 and $1,368,150, respectively.   Surveillance costsincluded in the above amounts for the three and six months ended June 30, 2005were $314,657 and $475,694, respectively and prior to July 1, 2005 wererecorded in Selling, General and Administrative Expenses on the Statement ofRevenues, Expenses and Change in Fund Deficit.

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**5.****                                      DEVELOPMENTAND LOAN AGREEMENT**

The Tribe entered into aDevelopment and Loan Agreement with Dry Creek Casino, LLC (“DCC”) onAugust 26, 2001, which has been amended from time to time (as amended, the“Development Agreement”). In consideration of DCC providing credit enhancementand other services under the Development Agreement, the Tribe is obligated topay DCC the Credit Enhancement Fee. The Credit Enhancement Fee is defined as20% of the Authority’s net income before distributions to the Tribe plusdepreciation and amortization plus annual interest on $25.0 million principalamount of the Notes less revenues from sales of alcoholic beverages. The CreditEnhancement Fee is required to be paid monthly for a period of five yearscommencing on June 1, 2003. The Credit Enhancement Fee was $1,859,210 and$1,856,802 for the three months ended June 30, 2006 and 2005,respectively.  The Credit Enhancement Fee was $3,461,627 and $3,799,651for the six months ended June 30, 2006 and 2005, respectively.

The Authority has the right to terminate theDevelopment Agreement by exercising a buy-out option (the “Buy-Out Option”). Ifexercised, the Authority is obligated to pay all amounts outstanding withrespect to financing, including outstanding development advances and accrued interestplus an amount determined by multiplying the average monthly credit enhancementfee earned during the 12-month period immediately preceding the month thebuy-out option is exercised, by the number of months remaining in the five-yearterm. The buy-out fee is required to be paid in equal monthly installments ofprincipal plus interest at the rate of 12% per annum, on the 15th day of eachmonth over a period equal to the remaining term of the Development Agreement.

**6.****                                      CASHAND CASH EQUIVALENTS AND RESTRICTED CASH**

 

Cash and cash equivalentsand restricted cash consisted of the following as of June 30, 2006 and December31, 2005:

|                                                      | ** ** | **June 30, 2006** | ** ** | **December 31, 2005** | ** ** |
|------------------------------------------------------|------------|-----------------------------|------------|---------------------------------|------------|
| Operating  accounts                                  |       | $                           | 6,773,618  |                            | $          | 5,241,644 |   |
| Money market  accounts                               |       | 37,671                      |       | 62,420                          |       |
| Short-term  investments                              |       | 11,788,466                  |       | 8,988,622                       |       |
| Cash on hand                                         |       | 3,343,753                   |       | 3,356,972                       |       |
|                                                 |       |                        |       |                            |       |
| Cash and cash  equivalents                           |       | 21,943,508                  |       | 17,649,658                      |       |
| Restricted cash                                      |       | 7,204,480                   |       | 7,373,481                       |       |
|                                                 |       |                        |       |                            |       |
| Total cash and cash  equivalents and restricted cash |       | $                           | 29,147,988 |                            | $          | 25,023,139 |   |

 

The Authority’scash in banks and cash equivalents (the “Investments”) are categorized by levelof credit risk assumed by the Authority. Category 1 includes investmentsthat are insured or registered or for which the investments are held by theAuthority or its agent in the Authority’s name. Category 2 includesuninsured and unregistered investments for which the investments are held bythe counterparty’s trust department or agent in the Authority’s name.Category 3 includes uninsured and unregistered investments for which theinvestments are held by the counterparty’s agent but not in the Authority’sname. At June 30, 2006, the Authority had $200,000 in Category 1investments, $6,573,618 cash in banks, $37,671 in money market accounts and$11,788,466 in short-term investments, which are Category 2 investments, and$7,204,480 restricted cash in bank over the FDIC insurance limits, which areCategory 3 investments.  Amounts in Category 2 and Category 3 investmentsare invested in short-term, highly liquid cash equivalents andinvestments.  As of June 30, 2006 and December 31, 2005, these amounts arecomposed of money market accounts in the amount of $37,671 and $62,420,respectively, and A1/P1 bonds in the amount of $11,788,466 and $8,988,622,respectively.

**7.****                                      PROPERTY ANDEQUIPMENT**

Property and equipment atDecember 31, 2005 and June 30, 2006 consisted of the following:

|                                    | ** ** | **Balance,**          | ** **  | ** **    | ** ** | ** **       | ** ** | **Balance**       | ** ** |
|------------------------------------|------------|-----------------------|-------------|---------------|------------|------------------|------------|-------------------|------------|
| ** **                         | ** ** | **December 31,** | ** **  | ** **    | ** ** | ** **       | ** ** | **June 30,** | ** ** |
| ** **                         | ** ** | **2005**              | ** **  | **Additions** | ** ** | **Dispositions** | ** ** | **2006**          | ** ** |
|                               |       |                  |        |          |       |             |       |              |       |
| Buildings and  improvements        |       | $                     | 128,858,771 |          | $          | 321,002          |       | $                 | —     |   | $ | 129,179,773 |   |
| Furniture,  fixtures and equipment |       | 26,015,944            |        | 871,984       |       | (169,858         | )          | 26,718,070        |       |
| Less accumulated  depreciation     |       | (21,801,767           | )           | (5,731,976    | )          | 121,165          |       | (27,412,578       | )          |
|                               |       | 133,072,948           |        | (4,538,990    | )          | (48,693          | )          | 128,485,265       |       |
|                               |       |                  |        |          |       |             |       |              |       |
| Construction in  progress          |       | 1,819,271             |        | 1,737,267     |       | —           |       | 3,556,538         |       |
|                               |       |                  |        |          |       |             |       |              |       |
| Property and  equipment—net   |       | $                     | 134,892,219 |          | $          | (2,801,723       | )          | $                 | (48,693    | ) | $ | 132,041,803 |   |

 

Construction inprogress consists of payments to various vendors related to the Authority’smaster plan development and land improvements. Substantially all of theAuthority’s personal property is pledged as collateral to secure itsdebt.  At June 30, 2006 and 2005, the Authority had $279,022 and $670,000in capital lease assets with related accumulated depreciation of $81,776 and$111,667, respectively.

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**8.****                                      ACCRUEDLIABILITIES**

Accruedliabilities consisted of the following as of June 30, 2006 and December 31,2005:
| ** **                                  | ** ** | **June 30,** | ** ** | **December 31,** | ** ** |
|---------------------------------------------|------------|-------------------|------------|-----------------------|------------|
| ** **                                  | ** ** | **2006**          | ** ** | **2005**              | ** ** |
|                                        |       |              |       |                  |       |
| Accrued in-house  progressive slot jackpots |       | $                 | 688,922    |                  | $          | 495,588 |   |
| Accrued payroll  and related benefits       |       | 2,098,653         |       | 1,677,290             |       |
| Accrued interest                            |       | 3,250,000         |       | 3,250,000             |       |
| Accrued credit  enhancement fees            |       | 482,825           |       | 685,659               |       |
| Accrued other  expenses                     |       | 167,379           |       | 355,019               |       |
| Total accrued  liabilities                  |       | $                 | 6,687,779  |                  | $          | 6,463,556 |   |

 

**9.****                                      LONG-TERM DEBT**

Long-term debt consistedof the following as of June 30, 2006 and December 31, 2005:
| ** **                                              | ** ** | **June 30,** | ** **  | **December 31,** | ** ** |
|---------------------------------------------------------|------------|-------------------|-------------|-----------------------|------------|
| ** **                                              | ** ** | **2006**          | ** **  | **2005**              | ** ** |
|                                                    |       |              |        |                  |       |
| 9 3/4% Senior  Notes, net of unamortized issue discount |       | $                 | 198,201,336 |                  | $          | 198,032,711 |   |
| of $1,798,664  and $1,967,289 due 2011                  |       |              |        |                  |       |
| Vehicle and Slot  Notes                                 |       | 168,618           |        | 51,937                |       |
| Capital lease  obligations                              |       | 279,022           |        | 262,106               |       |
| Total Long-Term  Debt                                   |       | 198,648,976       |        | 198,346,754           |       |
| Less: current  portion                                  |       | (123,855          | )           | (103,545              | )          |
| Total long-term debt -  net of current maturities       |       | $                 | 198,525,121 |                  | $          | 198,243,209 |   |

 

On November 7, 2003, theAuthority issued the Notes. The proceeds were utilized to fund an expansionproject, which includes three parking structures and related infrastructureimprovements, repayment of various debt and advances and fund payment ofvarious accruals and payables, as well as to increase cash on hand. Theproceeds were also utilized to fund a land purchase and settlelitigation.  The Notes are secured by a first priority pledge of theAuthority’s revenue and substantially all of the existing and future tangibleand intangible personal property. Before November 1, 2007, the Authority mayredeem the Notes, in whole or in part, at a redemption price equal to 100% oftheir principal amount plus a make-whole premium and accrued and unpaidinterest. On or after November 1, 2007, the Authority may redeem the Notes, inwhole or in part, at a redemption price that is at a premium to the principalamount of the Notes (expressed as percentages of principal amount), plusaccrued and unpaid interest.

**10.****                               LEASES**

The Authority leases aSprung structure, which is accounted for as an operating lease. Such leaseexpense was $108,690 and $127,869 for the three months ended June 30, 2006 and2005, respectively.   This lease expense was $237,910 and $279,112for the six months ended June 30, 2006 and 2005, respectively.  TheAuthority renewed the lease agreement on August 17, 2005 for twenty four monthsending August 17, 2007.

On October 1, 2003,the Tribe entered into a five year operating lease agreement for office andwarehouse space to replace existing facilities.  The Authority uses aportion of the space and reimburses the Tribe lease fees allocated based on thesquare footage utilized.  The Authority reimbursed the Tribe for suchlease fees in the amount of $128,718 and $131,753 for the three months endedJune 30, 2006 and 2005, respectively, and $256,681 and $263,507 for the sixmonths ended June 30, 2006 and 2005, respectively.

On September 1, 2004, theAuthority entered into a five year capital lease to purchase two licenses tooperate three-card poker tables in the amount of $120,000.  The capitallease is at 7.25% interest with monthly lease fees of $2,390 and a $1 buyout atthe end of the lease term.

On July 31, 2005, theAuthority entered into a thirty six month capital lease to purchase 13Multi-deck shufflers in the amount of $88,307.  The capital lease is at7.09% interest with monthly lease fees of $2,730 and a $1 buyout at the end ofthe lease term.

On July 31, 2005, theAuthority entered into a thirty six month capital lease to purchase 6 Kingshufflers in the amount of $61,422.  The capital lease is at 7.09% interestwith monthly lease fees of $1,899 and a $1 buyout at the end of the lease term.

On July 31, 2005, theAuthority entered into a thirty six month capital lease to purchase 4 Aceshufflers in the amount of $45,283.  The capital lease is at 7.09%interest with monthly lease fees of $1,400 and a $1 buyout at the end of thelease term.

On April 27, 2006 theAuthority entered into a thirty six month capital lease to purchase 5 Deckmateshufflers in the amount of $67,828.  The capital lease is at 7.92%interest with monthly lease fees of $2,387 and a $1 buyout at the end of thelease term.

Lease expenses were$251,620 and $266,576 for the three months ended June 30, 2006 and 2005,respectively, and $499,186 and $532,813 for the six months ended June 30, 2006and 2005, respectively.  Lease expenses are included in general andadministrative expenses in the accompanying statement of revenues, expenses andchanges in fund deficit.

Expected remainingpayments under operating leases are $231,057, $267,666, $7,215, $2,910 and$1,213 for the years ending December 31, 2006, 2007, 2008, 2009 and 2010,respectively. Expected remaining payments under capital leases are $52,873,$111,141, $88,762, $26,246 and $0 for the years ending December 31, 2006, 2007,2008, 2009 and 2010, respectively.

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**11.****                               LEGALMATTERS**

*Sonoma County Fire Marshal Inspection Case*

On October 7,2002, the Sonoma County Fire Chief (the “County Fire Chief”) filed an*ex parte* application for an inspectionwarrant in the Superior Court of the State of California for the County ofSonoma, seeking to inspect the casino. The Tribe believes that there is nobasis for the County’s Fire Chief to assert jurisdiction over the Tribe’slands, which are governed by tribal and federal law and the Compact. On October9, 2002, the Tribe removed the case to the United States District Court for theNorthern District of California. The County Fire Chief moved to remand, whichsuch motion was denied by the court and subsequently moved for summaryjudgment. The Tribe moved to dismiss under Federal Rules of Civil procedure12(b)(6) and 12(b)(7). On December 9, 2004, the Court issued an order grantingin part and denying in part the Tribe’s 12(b)(6) motion and denying the CountyFire Chief’s summary judgment motion. The order reaffirmed the Court’s priorruling denying the remand of that Public Law 280 does not authorize the CountyFire Chief to inspect the casino. On March 1, 2005, the Court issued an ordergranting in part and denying in part the Tribe’s 12(b)(7) motion. On March 4,2005, the Tribe moved for summary judgment, and on April 29, 2005, the Courtgranted the Tribe’s motion. The County Fire Chief filed a Notice of Appeal onMay 26, 2005, at the Ninth Circuit Court of Appeals. Briefing was completed atthe Ninth Circuit on November 8, 2005. The case has not yet been set for oralargument.

*CaliforniaDepartment of Alcoholic Beverage*Control

On September 13, 2004,the Department of Alcoholic Beverage Control (“ABC”) denied the Tribe’sapplication for a liquor license based on the State Fire Marshal’sinterpretation of the Uniform Building Code. In May 2005, an Administrative LawJudge (“ALJ”) heard the Tribe’s appeal of the ABC’s denial and recommended thatthe ABC reverse itself and approve the license. On August 25, 2005, the ABCannounced effective October 11, 2005, it would adopt the ALJ decision toapprove the license transfer pending a hearing on protests filed by citizensand government officials. The ABC has received over 65 protests against thelicense from citizens and government officials. The ABC held a hearing on theprotests on March 9, 2006. Following the close of the hearing, a new Californiacourt decision, Coffin v. Alcoholic Beverage Control Appeals Board, 139 Cal.App. 4 th 471, 43 Cal. Rptr. 3d 420 (2006), changed the burden of proof in ABClicense protest hearings from the protestors to the applicant.  As aresult of that decision, the ALJ suspended post-hearing briefing.  On July20, 2006, the ALJ wrote the parties indicating his tentative decision to conducta de novo hearing on the protests to the Tribe’s license application under thenew burden of proof allocation.  The parties have until approximatelyAugust 20, 2006, to inform the ALJ of their views in response to his tentativedecision to re-hear the protests.  The decision to approve or deny thelicense transfer application may be appealed by any parties to the proceedingso long as the appeal is filed within forty  days of the ABC’s decision.The first appeal is to the ABC Appeals Board, and its decision may be appealedto the California State court system.

The Authority isinvolved in other litigation and disputes from time to time in the ordinarycourse of business with vendors and patrons. The Authority believes that theaggregate liability, if any, arising from such litigation or disputes will nothave a material adverse effect on its results of operations, financialcondition or cash flows.

**12.****                               COMPACTREVENUE SHARING TRUST FUND**

The Compactrequires the Authority to pay a quarterly fee to the State of California’srevenue sharing trust fund, based on the number of licensed gaming devicesoperated by the Tribe. Revenue sharing trust fund fees assessed were $333,750for the three months ended June 30, 2006 and 2005 and $667,500 for the sixmonths ended June 30, 2006 and 2005.

**13.****                               COMMITMENTSAND CONTINGENCIES**

The Authority is anunincorporated instrumentality of the Tribe formed pursuant to a law of theTribe. While the Authority is not a separate corporation or other legal entitydistinct from the Tribe, this tribal law allows the Authority to own andoperate its business. This tribal law also provides that the Authority’sobligations and other liabilities are not those of the Tribe and that theobligations and liabilities of the Tribe are not the Authority’s. This law isuntested and generally has no direct counterpart in other areas of the law. Ifthis law should prove to be ineffective at limiting the Authority’s liability,the Authority’s business and assets could become subject to claims asserted againstthe Tribe or its assets. Similarly, the Authority would be liable for suchclaims if the Tribe waived its sovereign immunity to an extent that allowedenforcement of such claims against the Authority’s business or assets.

The Authority renewed anemployment agreement with Mr. Norman Runyan on November 8, 2005 to continue toserve as the Chief Operations Officer of the Authority. This three yearemployment agreement commenced on October 14, 2005 and provides Mr. Runyan anannual salary of $250,000 and a discretionary bonus, as determined by theTribal Board, of not less than 7% and not more than 25% of his annual salarybased on various criteria.  If Mr. Runyan’s employment is terminated forother reasons set forth in the employment agreement including death ordisability, Mr. Runyan will be entitled to his salary for three months. Either party may terminate the agreement with a 90 day written notice.

The Authority enteredinto an employment agreement with Mr. Shawn Smyth on April 13, 2006 to serve asthe Chief Executive Officer of the Authority. This three year employmentagreement commenced as of April 13, 2006, and provides Mr. Smyth an annualsalary of $250,000 and a discretionary bonus, as determined by the TribalBoard, of not more than 25% of his annual salary based on variouscriteria.  If Mr. Smyth’s employment is terminated for other reasons setforth in the employment agreement including death or disability, Mr. Smyth willbe entitled to his salary for three months.  Either party may terminatethe agreement with a 90 day written notice.

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**14.   RESTATEMENTOF PRIOR PERIOD FINANCIAL STATEMENTS:**

** **

Subsequent to thefiling of the Authority’s quarterly report on Form 10-Q for the quarter endedJune 30, 2006, the Authority identified certain classification errors in itsrecording of promotional allowances and gaming revenues and losses.  As aresult, the Authority has restated the accompanying financial statements forthe three and six month periods ended June 30, 2006 and 2005 from amountspreviously reported.  The restatement has no impact on Income fromOperations, Net Income Before or After Distributions to the Tribe, the BalanceSheet, or net cash flows.  The following table shows the effect of ourrestatement:
| ** **                                          | ** ** | **Three-Month Period Ended  June 30, 2005** | ** ** | **Six-Month Period Ended  June 30, 2005** |       |             |
|-----------------------------------------------------|------------|-----------------------------------------------------------------|------------|---------------------------------------------------------------|------------|------------------|
| ** **                                          | ** ** | **As   previously   reported**                        | ** ** | **Adjustment**                                                | ** ** | **As  Restated** | ** ** | **As   previously   reported** | ** ** | **Adjustment** | ** ** | **As  Restated** |   |
| REVENUE                                             |       |                                                            |       |                                                          |       |             |   |   |   |   |   |   |   |   |
| Casino                                              |       | $                                                               | 34,841,866 |                                                          | $          | (684,170         | ) | $ | 34,157,696 |   | $ | 66,568,491 |   | $ | (1,383,840 | ) | $ | 65,184,651 |   |   |
| Food, beverage &  retail                        |       | 1,838,121                                                       |       | (140,896                                                      | )          | 1,697,225        |   | 3,404,361 |   | (253,428 | ) | 3,150,933 |   |   |
| Other                                               |       | 167,812                                                         |       |                                                          |       |             |   | 167,812 |   | 349,132 |   | 349,132 |   |   |
| Gross Revenues                                      |       | $                                                               | 36,847,799 |                                                          | $          | (825,066         | ) | $ | 36,022,733 |   | $ | 70,321,984 |   | $ | (1,637,268 | ) | $ | 68,684,716 |   |   |
|                                                |       |                                                            |       |                                                          |       |             |   |   |   |   |   |   |   |   |
| Promotional Allowances                              |       | (1,055,708                                                      | )          | (382,462                                                      | )          | (1,438,170       | ) | (1,848,184 | ) | (366,913 | ) | (2,215,097 | ) |   |
|                                                |       |                                                            |       |                                                          |       |             |   |   |   |   |   |   |   |   |
| Net Revenues                                        |       | $                                                               | 35,792,091 |                                                          | $          | (1,207,528       | ) | $ | 34,584,563 |   | $ | 68,473,800 |   | $ | (2,004,181 | ) | $ | 66,469,619 |   |   |
|                                                |       |                                                            |       |                                                          |       |             |   |   |   |   |   |   |   |   |
| OPERATING EXPENSES                                  |       |                                                            |       |                                                          |       |             |   |   |   |   |   |   |   |   |
| Casino                                              |       | $                                                               | 5,220,805  |                                                          | $          | (635,105         | ) | $ | 4,585,700 |   | $ | 10,593,073 |   | $ | (1,272,945 | ) | $ | 9,320,128 |   |   |
| Food, beverage &  retail                        |       | 1,617,370                                                       |       | (112,554                                                      | )          | 1,504,816        |   | 3,063,980 |   | (195,561 | ) | 2,868,419 |   |   |
| Selling, general and  administrative                |       | 13,623,298                                                      |       | (459,869                                                      | )          | 13,163,429       |   | 24,133,166 |   | (535,675 | ) | 23,597,491 |   |   |
|                                                |       |                                                            |       |                                                          |       |             |   |   |   |   |   |   |   |   |
| Total Operating Expenses                            |       | $                                                               | 25,765,419 |                                                          | $          | (1,207,528       | ) | $ | 24,557,891 |   | $ | 48,541,335 |   | $ | (2,004,181 | ) | $ | 46,537,154 |   |   |
|                                                |       |                                                            |       |                                                          |       |             |   |   |   |   |   |   |   |   |
| Cash received from  gaming winnings and concessions |       |                                                            |       |                                                          |       |             |   | $ | 68,485,416 |   | $ | (2,096,135 | ) | $ | 66,389,281 |   |   |
|                                                |       |                                                            |       |                                                          |       |             |   |   |   |   |   |   |   |   |
| Cash paid to suppliers                              |       |                                                            |       |                                                          |       |             |   | $ | (24,549,658 | ) | $ | 2,004,181 |   | $ | (22,545,477 | ) |   |
| Interest Income                                     |       |                                                            |       |                                                          |       |             |   | $ | — |   | $ | 91,954 |   | $ | 91,954 |   |   |
|                                                |       |                                                            |       |                                                          |       |             |   |   |   |   |   |   |   |   |
|                                                     |            |                                                                 |            |                                                               |            |                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

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| ** **                                          | ** ** | **Three-Month Period Ended  June 30, 2006** | ** ** | **Six-Month Period Ended  June 30, 2006** | ** ** |
|-----------------------------------------------------|------------|-----------------------------------------------------------------|------------|---------------------------------------------------------------|------------|
| ** **                                          | ** ** | **As  previously  reported**                                    | ** ** | **Adjustment**                                                | ** ** | **As Restated** | ** ** | **As  previously  reported** | ** ** | **Adjustment** | ** ** | **As Restated** | ** ** |
| REVENUE                                             |       |                                                            |       |                                                          |       |   |   |   |   |   |   |   |   |
| Casino                                              |       | $                                                               | 32,958,603 |                                                          | $          | (606,935 | ) | $ | 32,351,668 |   | $ | 66,095,028 |   | $ | (1,222,453 | ) | $ | 64,872,575 |   |
| Food, beverage  & retail                        |       | 1,634,022                                                       |       | (146,216                                                      | )          | 1,487,806 |   | 3,237,232 |   | (273,040 | ) | 2,964,192 |   |
| Other                                               |       | 144,882                                                         |       |                                                          |       |   |   | 144,882 |   | 297,737 |   | 297,737 |   |
| Gross Revenues                                      |       | $                                                               | 34,737,507 |                                                          | (753,151   | ) | $ | 33,984,356 |   | $ | 69,629,997 |   | (1,495,493 | ) | $ | 68,134,504 |   |
|                                                |       |                                                            |       |                                                          |       |   |   |   |   |   |   |   |   |
| Promotional  Allowances                             |       | (717,822                                                        | )          | (2,222,451                                                    | )          | (2,940,273 | ) | (1,634,122 | ) | (3,832,039 | ) | (5,466,161 | ) |
|                                                |       |                                                            |       |                                                          |       |   |   |   |   |   |   |   |   |
| Net Revenues                                        |       | $                                                               | 34,019,685 |                                                          | $          | (2,975,602 | ) | $ | 31,044,083 |   | $ | 67,995,875 |   | $ | (5,327,532 | ) | $ | 62,668,343 |   |
|                                                |       |                                                            |       |                                                          |       |   |   |   |   |   |   |   |   |
| OPERATING  EXPENSES                                 |       |                                                            |       |                                                          |       |   |   |   |   |   |   |   |   |
| Casino                                              |       | $                                                               | 5,518,357  |                                                          | $          | (548,351 | ) | $ | 4,970,006 |   | $ | 11,098,589 |   | $ | (1,089,242 | ) | $ | 10,009,347 |   |
| Food, beverage  & retail                        |       | 1,689,064                                                       |       | (237,622                                                      | )          | 1,451,442 |   | 3,278,954 |   | (310,830 | ) | 2,968,124 |   |
| Selling, general  and administrative                |       | 11,797,946                                                      |       | (2,189,629                                                    | )          | 9,608,317 |   | 24,926,130 |   | (3,927,460 | ) | 20,998,670 |   |
|                                                |       |                                                            |       |                                                          |       |   |   |   |   |   |   |   |   |
| Total Operating  Expenses                           |       | $                                                               | 24,795,735 |                                                          | $          | (2,975,602 | ) | $ | 21,820,133 |   | $ | 50,613,482 |   | $ | (5,327,532 | ) | $ | 45,285,950 |   |
|                                                |       |                                                            |       |                                                          |       |   |   |   |   |   |   |   |   |
| Cash received  from gaming winnings and concessions |       |                                                            |       |                                                          |       |   |   | $ | 68,810,355 |   | $ | (5,730,510 | ) | $ | 63,079,845 |   |
| Cash paid to suppliers                              |       |                                                            |       |                                                          |       |   |   | $ | (27,700,256 | ) | $ | 5,327,532 |   | $ | (22,372,724 | ) |
| Interest Income                                     |       |                                                            |       |                                                          |       |   |   | $ | — |   | $ | 402,978 |   | $ | 402,978 |   |

 

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**ITEM2.  MANAGEMENT’S DISCUSSION AND ANALYSISOF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.**

The following discussionand analysis of our financial condition and results of operations should beread in conjunction with the accompanying financial statements and relatednotes included in Item 1 of this report.

**Overview**

*General*

We have historically operated as a separate wholly-ownedoperating property of the Tribe. We were formed as an unincorporatedgovernmental instrumentality of the Tribe to own and operate the River RockCasino. Upon the issuance of our Notes, the Tribe reorganized so that itsgaming business became owned and operated by us. This reorganization wasaccounted for as a reorganization of entities under common control. Inaccordance with Statement of Financial Accounting Standards “141, BusinessCombinations,” the assets and liabilities of the Casino are presented by us ona historical cost basis.

We offer Class III slot and video poker gamingmachines, house banked table games (including Blackjack, Three card poker,Mini-baccarat and Pai Gow poker), Poker, featuring Texas Hold’em, comprehensivefood and non-alcoholic beverage offerings, and goods for sale in our gift shop.

Our business has increased since we commencedoperations on September 14, 2002, primarily due to increases in the number ofgaming positions, as we opened additional portions of our facility. On April 1,2003, we opened our food and beverage facilities and on June 18, 2003, wereached full operation with 1,600 slot machines. The history of our operationsis as follows:

·                    OnSeptember 14, 2002, we commenced operations with approximately 66 gaming deviceslocated in a portion of our current gaming facility.

·                    BetweenSeptember 14, 2002 and June 30, 2003, we periodically installed and removed anumber of our gaming devices in preparation for the opening of our entiregaming facility. During such period, the number of gaming devices operatedincreased to 242.

·                    OnApril 1, 2003, we opened the remainder of our 62,000 square-foot gamingfacility, including our food and beverage facilities, our Players Club, 16table games and an additional 302 gaming devices.

·                    BetweenApril 1, 2003 and June 18, 2003, we gradually increased the number of gamingdevices from 544 to our current total of 1,600.

·                    InFebruary 2005, we increased the number of our table games from 16 to 24.

·                    On December 2,2005, we removed 3 table games and added 5 Poker tables featuring Texas Hold’em.

We commenced operations with one parking lot locateddirectly adjacent to our gaming facility, designed to accommodate 225 customervehicles or up to approximately 325 customer vehicles when operated by a valetservice during peak demand periods. On March 23, 2003, we completed theconstruction of our second parking lot, designed to accommodate 80 customervehicles or up to approximately 100 customer vehicles when operated by a valetservice. On April 20, 2003, we completed the construction of our third parkinglot, designed to accommodate 70 customer vehicles or up to approximately 75customer vehicles when operated by a valet service.

On November 7, 2003, we issued the Notes. A portion ofthe net proceeds from the sale of the Notes was used to fund our expansionproject, which includes three new parking structures and related infrastructureimprovements, to repay various debts and accrued expenses of the Tribe, as wellas to increase our cash on hand. The balance of the net proceeds was used tofund a land purchase by the Tribe and settle litigation of the Tribe. The Notesare secured by a first priority pledge of our revenues and substantially all ofour existing and future tangible and intangible personal property.

At the beginning of 2003, we started ourinfrastructure projects, including the excavation of a hillside and theconstruction of retaining walls. In April 2003, we began the design process forthe three new parking structures. The parking structure portion of theexpansion project was completed in two phases and our existing gaming facilityremained open during construction. On October 29, 2004, we obtained a temporarycertificate of occupancy to open the entire first parking structure for selfand valet parking. On December 1, 2004, we received a certificate ofsubstantial completion on the first parking structure. The second phase, whichincluded our second and third parking structures with approximately 445 andapproximately 470 spaces, respectively, opened on December 29, 2004. As of June30, 2006, we have parking spaces available to accommodate a total ofapproximately 1,642 (decreasing from 1,735 due to construction of a retentionbasin in lot B) customer parked vehicles and 2,100 vehicles when operated by avalet service.

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**CriticalAccounting Policies and Estimates**

We have identified certain critical accountingpolicies and estimates that affect our more significant judgments and estimatesused in the preparation of our financial statements. The preparation of ourfinancial statements in conformity with accounting principles generallyaccepted in the United States of America requires that we make estimates andjudgments that affect the reported amounts of assets and liabilities, revenuesand expenses, and related disclosures of contingent assets and liabilities. Onan on-going basis, we evaluate those estimates, including those related toasset impairment, accruals for our promotional slot club, compensation andrelated benefits, revenue recognition, allowance for doubtful accounts,contingencies and litigation. These estimates are based on the information thatis currently available to us and on various other assumptions that we believeto be reasonable under the circumstances. Actual results could vary from thoseestimates under different assumptions or conditions. We believe that thefollowing critical accounting policies affect significant judgments andestimates used in the preparation of our financial statements:

·                  Casino Revenues— In accordance with industry practice, casino revenue is recognized as the netwin from gaming activities, which is the difference between gaming wins andlosses. Casino revenues are net of accruals for anticipated payouts ofprogressive slot jackpots.

·                    Property andEquipment — Property and equipment are stated at cost. Depreciation andamortization are computed using the straight-line method over the estimateduseful lives of the assets as follows:
|   | Buildings and improvements        | 21 years |
|--------|-----------------------------------|----------|
|   | Furniture, fixtures and equipment | 5 years  |

 

·                    We evaluateour property and equipment for impairment in accordance with the FinancialAccounting Standards Board’s Statement of Financial Accounting Standards No.144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” When events or circumstances indicate that an asset should be reviewed forimpairment, we compare the undiscounted cash flow derived from the asset orasset group to the net carrying value. If an impairment is indicated, theimpairment loss is measured by the amount in which the carrying value of theasset or asset group exceeds its fair value. Fair value is measured bycomparable sales, solicited offers or discounted cash flow models.

·                    AccruedProgressive Slot Jackpots — Accrued progressive slot jackpots consist ofestimates for prizes relating to various games that have accumulated jackpots.We have recorded the cost of these anticipated payouts as a reduction of casinorevenues and the cost is included as a component of accrued liabilities.

·                    Contingencies— We assess our exposure to loss contingencies, including legal matters, andprovide for an exposure if it is judged to be probable and estimable. If theactual loss from a contingency differs from management’s estimate, operatingresults could be materially impacted. As of June 30, 2006, we have determinedthat no accruals for claims and legal actions are required. If circumstancessurrounding claims and legal actions change, the addition of accruals for suchitems in future periods may be required, which accruals may be material.

There aredifferences between financial statements prepared in accordance withGovernmental Accounting Standards Board (“GASB”) pronouncements and thoseprepared in accordance with Financial Accounting Standards Board (“FASB”)pronouncements. The statement of revenues, expenses and fund deficit is acombined statement under GASB pronouncements. FASB pronouncements allow astatement of income or operations and a statement of owners’ or shareholders’(deficit) equity, which is where distributions to owners would be presentedunder FASB pronouncements. The amount shown on our statement of revenues,expenses and fund deficit as income before distributions to the Tribe would notbe different if we followed all FASB pronouncements to determine net income andwould be the most comparable amount to net income computed under FASBpronouncements. We are an unincorporated instrumentality created by tribal lawand accounted for as a separate fund of the Tribe; as such there is no owners’or shareholders’ (deficit) equity as traditionally represented under FASBpronouncements. The most comparable measure of owners’ (deficit) equitypresented on our balance sheet would be Fund Deficit.

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**Resultsof Operations**

The followingdiscussion and analysis should be read together with the Company’s financialstatements and related notes thereto included in Item 1 in this Form10-Q/A and gives effect to the restatement discussed in Note 14 of the Notes toFinancial Statements.

**Comparisonof the three months ended June 30, 2006 and 2005**

*Netrevenues.*   Our net revenues for the three monthsended June 30, 2006 decreased by $3.6 million to $31.0 million from $34.6million for the three months ended June 30, 2005.  The decrease isattributed to the lack of accessibility to our Casino due to the damage and resultingclosure of the Geyserville Bridge in Geyserville, California.  The Geyserville Bridge approach is one of theprimary routes to our Casino.  The new Geyserville Bridge is expected tobetter withstand significantly more rainfall and flooding than the previousbridge.  Approximately 96.5% of our netrevenues were from our gaming activities, net of promotional allowances, in thesecond quarter 2006. We generated $26.4 million, or 85.2% of our net revenuesfrom gaming devices, net of respective promotional allowances of $2.4 million,and $3.5 million, or 11.3% of our net revenues from table games, net ofrespective promotional allowances of $51,000 for the three months ended June30, 2006 compared to $29.5 million from gaming devices, or 85.3% of our netrevenues, net of respective promotional allowances of $0.9 million, and $3.8million from table games, or 10.9% of our net revenues, net of promotionalallowances of $0 for three months ended June 30, 2005. Our win per slot machineper day was $185 in the second quarter 2006, which decreased by $18 from $203in the second quarter 2005.  The change in win per slot machine per day isattributed to reduced volume of play and the timing of transitioning from oldergaming devices to newer and more popular games.

We generated $1.0 million, net of promotionalallowance of $0.5 and $1.2 million, net of promotional allowance of $0.5, infood, beverage and retail sales for the three months ended June 30, 2006 and2005, respectively.  The retail value of our food and beverage provided tocustomers without charge is included in gross revenues and then deducted aspromotional allowances.  The decreases are attributable to the lowervolume of guests resulting from the interruptions caused by the flooding inGeyserville, California and the subsequent closure of the Geyserville Bridge.

*PromotionalAllowances.*   Promotional allowances for the threemonths ended June 30, 2006 were $2.9 million, or 9.4% of net revenues, comparedto $1.4 million, or 4.2% of net revenues, for the second quarter 2005. Theincrease in promotional allowances is attributable to the expanded use ofe-coupons.  E-coupons cannot be cashed out and requires the patron to usetheir Players Club card.  This technology was not available until late2005.

*Operatingexpenses.*   Operating expenses for the threemonths ended June 30, 2006 were $22.0 million, or 70.9% of net revenues,compared to $24.6 million, or 71.0% of net revenues, for the second quarter of2005. The decrease in operating expenses is attributable to increased effortsin the area of operational efficiencies, largely due to a hiring freeze andchanging from cash incentives, recorded as operating expense in 2005, toE-coupons in 2006, which are reflected in promotional allowances. The reasonfor the change from cash incentives to E-coupons in 2006 versus 2005 wasbecause E-coupon technology was not generally available until late 2005. Operating expenses as a percentage of net revenues decreased due to thereduction in operating expenses during the third quarter 2006.

Casino expense includes costs associated with ourgaming operations and the allocation of food and beverage expense related tothe cost of complimentary activities. Casino expense for three months ended June 30, 2006 increased to $5.0million, or 16.3% of Casino revenues, net of promotional allowances, from $4.6million, or 13.6% of Casino revenues, net of promotional allowances, for thesecond quarter 2005. The increase in Casino expense is attributable toincreased operational costs from the formation of the Poker room, which led toincreases in labor costs in gaming operations, and also increases inparticipation fees on slot machines from increasing the number of machines onparticipatory fee arrangements.

Food, beverage and retail expense for three monthsended June 30, 2006 was $1.5 million, or 146.5% of food, beverage and retailrevenue, net of promotional allowances, from $1.5 million, or 128.6% of food, beverage and retail revenue, netof promotional allowances for the second quarter of 2005. We have increased ouruse of promotional food and beverage as part of our marketing forinitiatives.  Our food, beverage and retail expense ratio is significantlyhigher than the industry average because we have utilized these amenities as anopportunity to build customer loyalty rather than as a source of income.

Selling, general and administrative expense for threemonths ended June 30, 2006 decreased by $3.6 million to $9.6 million, or 30.9%of net revenues, from $13.2 million, or 38.1% of net revenues, for the secondquarter of 2005. The decrease in selling, general and administrative expense isattributable to reductions in payroll from a hiring freeze during an evaluationof vacant positions from attrition, higher legal fees in 2005 due to the timingdifferences in liquor licensing hearings, reduction in advertising costs as wellas restructuring the marketing department and other operational changes.

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Depreciation expense forthree months ended June 30, 2006 was $2.9 million, compared to $2.8 million,for the second quarter of 2005. Depreciation expense was computed using thestraight-line method over the useful lives of property, plant and equipment.The increase in depreciation expense is due to the addition of depreciableassets.

We have been paying the credit enhancement fee sinceJune 2003. The credit enhancement fee was $1.9 million, or 6.1% of netrevenues, for three months ended June 30, 2006, equal to $1.9 million, or 5.4%of net revenues, for the second quarter of 2005.

Prior to July 1, 2005, TGA and surveillance costs werereimbursed by the Authority as incurred. Tribal Gaming Commission expenses werereported as Gaming Commission expenses and surveillance costs were reported inselling, general and administrative expenses on the Statement of Revenues,Expenses and Change in Fund Balance.  Effective July 1, 2005, the TGAadopted a regulation on payments of regulatory fees from the Authority.Pursuant to the regulation, the TGA charges us a flat monthly fee of $235,000for the first quarter 2006 and April and May of second quarter 2006.  Theflat monthly fee increased to $344,000 in June of 2006 to cover any operatingexpenses incurred by the TGA and surveillance, which are directly related andnecessary to the regulation of the Casino. Following the end of each calendarquarter, the TGA must reconcile the monthly regulatory fee and actual operatingexpenses and make necessary adjustments.  As of July 1, 2005, TGA andsurveillance expenses are being recorded in Gaming Commission and surveillanceexpenses on the Statement of Revenues, Expenses and Changes in Fund Balance. Gaming Commission and surveillance expense for three months ended June 30, 2006increased by $0.3 million to $0.7 million, from $0.4 million, for the secondquarter 2005. This is attributable to increases in regulatory staffing.

The Compact requires the Authority to pay a quarterlyfee to the State of California’s revenue sharing trust fund, based on thenumber of licensed gaming devices operated by the Tribe. Revenue sharing trustfund fees assessed were $333,750 for the three months ended June 30, 2006 and2005; and $667,500 for the six months ended June 30, 2006 and 2005.

*Incomefrom operations.*   Income from operations forthree months ended June 30, 2006 was $9.2 million, or 29.7% of net revenues,compared to $10.0 million, or 29.0% of net revenues, for the second quarter of2005.  The decrease in income from operations is attributable to the decreasein volume of play due to the Geyserville bridge closure and the increasedCasino, Gaming Commission and surveillance operating expense.

*Otherexpense, net.*   Other expense, net for threemonths ended June 30, 2006 decreased to $5.0 million, or 16.1% of net revenues,from $5.2 million, or 15.0% of net revenues, for second quarter of 2005. Other expense, net included $0.2 million of interest income for the threemonths ended June 30, 2006, compared to $0.1 million of interest income for thesecond quarter of 2005.

*Incomebefore distributions to the Tribe.*   Income beforedistributions to the Tribe for three months ended June 30, 2006 decreased by$0.6 million to $4.2 million, or 13.5% of net revenues, from $4.8 million, or14.0% of net revenues, in the second quarter of 2005.

**Comparisonof the six months ended June 30, 2006 and 2005**

*Netrevenues.*   Our net revenues for the six monthsended June 30, 2006 decreased by $3.8 million to $62.7 million from $66.5million for the six months ended June 30, 2005.  The decrease isattributed to the lack of accessibility to our Casino due to the damage andresulting closure of the Geyserville Bridge in Geyserville, California. The bridge closure has resulted in the redirection of our marketing effortsthat are still in transition.  Approximately 96.3% of our net revenues werefrom our gaming activities in the first six months of 2006. We generated $53.2million, or 84.8% of our net revenues, from gaming devices, net of respectivepromotional allowances of $4.4 million, and $7.2 million, or 11.5% of our netrevenues from table games, net of respective promotional allowances of$0.1million for the six months ended June 30, 2006, compared to $57.0 millionfrom gaming devices, or 85.7% of our net revenues, net of respectivepromotional allowances of  $1.0 million,and $7.2 million from table games, or 10.8% of our net revenues, net ofrespective promotional allowances of $0 for six months ended June 30, 2005. Ourwin per slot machine per day was $187 in the first six months of 2006, whichdecreased by $10 from $197, in the first six months of 2005.  The changein win per slot machine per day is attributed to reduced volume of play and thetiming of transitioning from older gaming devices to newer and more populargames.

We generated $2.0 million, net of promotionalallowance of $1.0 and $2.0 million, net of promotional allowance of $1.2, infood, beverage and retail sales for the six months ended June 30, 2006 and2005, respectively.  The retail value of our food and beverage provided tocustomers without charge is included in gross revenues and then deducted aspromotional allowances.

*PromotionalAllowances.*   Promotional allowances for the sixmonths ended June 30, 2006 were $5.5 million, or 8.8% of net revenues, comparedto $2.2 million, or 3.3% of net revenues, for the six months ended June 30,2005. The increase in promotional allowances is attributable to the expandeduse of e-coupons.  E-coupons cannot be cashed out and requires the patronto use their Players Club card.  This technology was not available untillate 2005.

*Operatingexpenses.*   Operating expenses for the six monthsended June 30, 2006 were $45.3 million, or 72.2% of net revenues, compared to$46.5 million, or 70.0% of net revenues, for the six months ended June 30,2005. The increase in operating expenses is attributable to the Casino’sincreased operating activities commencing the first quarter of 2006 from theaddition of Poker as a gaming amenity.  Operating expense as a percentageof net revenues increased due to an increased marketing effort to promote theCasino following the closure of the Casino on New Year’s Eve due to flooding inthe Geyserville, California area and the traffic interruptions caused by theclosure of the Geyserville Bridge since the first quarter of 2006.

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    Casinoexpense includes costs associated with our gaming operations and the allocationof food and beverage expense related to the costs of complimentary activities.Casino expense for six months ended June 30, 2006 increased to $10.0 million,or 16.3% of Casino revenues from $9.3 million, or 14.4% of Casino revenues forthe first six months of 2005.  The increase in Casino expense isattributable to increased operational costs from the formation of the Pokerroom, increase in labor costs in gaming operations and increase inparticipation fees on slot machines.

Food, beverage and retail expense for six months endedJune 30, 2006 was $3.0 million, or 151.0% of food, beverage and retail revenue,net of promotional allowances, increasing from $2.9 million, or 149.3% of food,beverage and retail revenue, net of promotional allowances, for the first sixmonths of 2005.  We have increased our use of promotional food andbeverage as part of our marketing for repeat customers.  Our food,beverage and retail expense ratio is significantly higher than the industryaverage because we have utilized these amenities as an opportunity to buildcustomer loyalty rather than as a source of income.

Selling, general and administrative expense for sixmonths ended June 30, 2006 decreased by $2.6 million to $21.0 million, or 33.5%of net revenues, from $23.6 million, or 35.5% of net revenues, for the firstsix months of 2005. The decrease in selling, general and administrative expenseis attributable to reductions in payroll from a hiring freeze, during anevaluation of vacant positions from attrition, higher legal fees in 2005, dueto the continued legal process involved in our liquor licensing hearings, areduction in advertising costs from restructuring the marketing department’sapproach to focus more on direct marketing as well as other operationalchanges.

Depreciation expense for six months ended June 30,2006 was $5.7 million, compared to $5.4 million, for the first six months of2005. Depreciation expense was computed using the straight-line method over theuseful lives of property, plant and equipment. The increase in depreciationexpense is due to the addition of depreciable assets.

The credit enhancement fee was $3.5 million, or 5.6%of net revenues, for six months ended June 30, 2006, compared to $3.8 million,or 5.7% of net revenues, for the first six months of 2005. The decrease incredit enhancement fee is directly attributable to lower net income.

Prior to July 1, 2005, TGA and surveillance costs werereimbursed by the Authority as incurred. Tribal Gaming Commission expenses werereported as Gaming Commission expense and surveillance costs were reported inselling, general and administrative expense on the Statement of Revenues,Expenses and Changes in Fund Balance.  Effective July 1, 2005, the TGAadopted a regulation on payments of regulatory fees from the Authority.Pursuant to the regulation, the TGA charged us a flat monthly fee of $235,000for the first quarter 2006 and April and May of second quarter 2006.  Theflat monthly fee increased to $344,000 in June of 2006 to cover any operatingexpenses incurred by the TGA and surveillance, which are directly related andnecessary to the regulation of the Casino. Following the end of each calendarquarter, the TGA must reconcile the monthly regulatory fee and actual operatingexpenses and make necessary adjustments.  As of September 30, 2005, TGAand surveillance expenses are being recorded in Gaming Commission andsurveillance expense on the Statement of Revenues, Expenses and Changes in FundBalance.  Gaming Commission and surveillance expense for six months endedJune 30, 2006 increased by $0.5 million to $1.4 million, from $0.9 million, forthe second quarter 2005. This is attributable to increases in regulatorystaffing. Gaming Commission and surveillance costs for the six months endedJune 30, 2006 and 2005 were $1,448,732 and $892,456, respectively.

Compact revenue sharing trust fund expense remainedthe same at $0.7 million for six months ended June 30, 2006 and 2005.

*Incomefrom operations.*   Income from operations for sixmonths ended June 30, 2006 was $17.4 million, or 27.8% of net revenues,compared to $19.9 million, or 30.0% of net revenues, for the first six monthsof 2005.  The decrease in income from operations is attributable to the decreasein volume of play due to the Geyserville Bridge closure and the increasein Casino, Gaming Commission and Surveillance operating expense.

*Otherexpense, net.*   Other expense, net for six monthsended June 30, 2006 decreased to $10.1 million, or 16.1% of net revenues, from$10.5 million, or 15.9% of net revenues, for the first six months of2005.  Other expense, net included $0.4 million of interest income for thesix months ended June 30, 2006, compared to $0.1 million of interest income,for the six months ended June 30, 2005.

*Incomebefore distributions to the Tribe.*   Income beforedistributions to the Tribe for six months ended June 30, 2006 decreased by $2.1million to $7.3 million, or 11.6% of net revenues, from $9.4 million, or 14.1%of net revenues, in the first six months of 2005.

**Liquidityand Capital Resources**

Since our inception, we have funded our capitalexpenditures and working capital requirements primarily through debt financing,gaming equipment supplier financing, and other financing and operating cashflow.

Construction of our Casino and infrastructure improvementscommenced on April 1, 2002. The first portion of our gaming facility wascompleted in September 2002. As of June 30, 2006, we had spent approximately$155.9 million on the planning, development and construction of our gamingfacility, infrastructure, furniture, fixtures and equipment, excluding theexpansion project. We financed the development with borrowings and developmentadvances.

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   We originallyexpected completion of our expansion project to cost approximately$64.6 million, which we planned to fund with $61.4 million from the netproceeds of the offering of our Notes (the “Notes Offering”) and $3.2 millionfrom an advance from the Tribe. From the proceeds from the Notes Offering, wehad also placed an additional $10.0 million in a construction escrow account tobe available to fund additional construction contingencies. The originalexpansion budget included $35.4 million for the three parking structures,$24.1 million for infrastructure improvements and a $5.1 millionconstruction contingency.

During the spring of 2004, we revised our budget forthe expansion project to approximately $73.7 million.  We have spent $75.8million as of June 30, 2006 on design and construction, which was fundedthrough our restricted cash and cash from operations.  The excessexpenditure of $2.1 million is due to the out of scope work related to ourinfrastructure portion of the project, which was funded by our operating cashflow.  Our final budget estimate is comprised of $39.4 million for the threeparking structures, which is $0.5 million more than our original budget, and$34.3 million for infrastructure improvements, which is $8.6 million more thanour original estimate.  The total cost of the expansion project wasgreater than original estimates because in an effort to expedite construction,we commenced construction before all design documents were finalized, whichresulted in inefficiencies and modifications that caused actual constructioncosts to exceed budgeted amounts.  In addition, the infrastructureimprovements portion of our expansion project resulted in higher than expectedcosts due to weather delays and to unforeseeable soil conditions, whichrequired us to substantially increase the scope of the work and quantity of theconstruction material.

As of June 30, 2006, we spent $0.8 million on thedevelopment of an approximately 18-acre parcel of land adjacent to the Tribe’sreservation (referred to as the “Dugan Property”) which is expected to includean additional access road to our Casino. We have $4.5 million remaining in arestricted account funded from the proceeds of our Notes Offering for thedevelopment of the Dugan Property.

Our capital expenditures for six months ended June 30,2006 and 2005 were $2.9 million and $31.3 million, respectively. The decreasein 2006 is attributable to the completion of our expansion project in 2005along with infrastructure improvements in the first quarter of 2005.

As of June 30, 2006, we had cash and cash equivalentsnet of restricted cash of $21.9 million, as compared to $17.6 million, as ofDecember 31, 2005. As of June 30, 2006, we had restricted cash of $7.2 million,as compared to $7.4 million, as of December 31, 2005. Our principal source ofliquidity during the six months ended June 30, 2006 consisted of cash flow fromoperating activities. Net cash provided by operating activities for six monthsended June 30, 2006 was $26.3 million, a decrease of $2.1 million from $28.4 millionin 2005. The decrease in our net cash provided by operations is a result ofdecreased operating activities and lower casino revenues in 2006.

Restricted cash consists of net proceeds from theNotes Offering and investment earnings thereon set aside in constructionfinancing accounts for construction costs for the three parking structures,related infrastructure improvements and construction contingencies. It alsoincludes funds that are reserved for additional construction contingencies andthe funds for the development of the Dugan Property. Our restricted cash isheld in escrow accounts that can only be used for authorized constructiondisbursements until the related projects are completed.

Net cash used for capital and related financingactivities for the six months ended June 30, 2006 was $15.9 million, comparedto $30.9 million, for six months ended June 30, 2005.  Cash flow used incapital and related financing activities was primarily for payment of thecredit enhancement fee and interest payments.  Cash flow from investingactivities for the six months ended June 30, 2006 was $0.4 million, compared to$0.1 million, for the six months ended June 30, 2005.  Cash flow from investing activities consistedof interest income from investing excess cash. Cash flow used in non-capital financing activities for the six monthsended June 30, 2006 was $6.1 million, an increase of $0.9 million from $5.2million, for six months ended June 30, 2005.  Cash flow used innon-capital financing activities consisted of distributions to the Tribe. The increase is due to permitted increase in distributions when comparing thefirst quarter of 2005 and 2006.  In the first quarter 2005, the Tribaldistribution consisted of $500,000 per month, plus $680,000 for constructioncosts for a total of $2,180,000, as compared to $3,000,000 for the first quarterof 2005.  As permitted, on April 1, 2006, our payments to the Tribeincreased from $1.0 million per month to $1.02 million under the Indenture.

We believe that existing cash balances, cash fromoperations, as well as permitted disbursements from our restricted cash escrowaccounts will provide adequate funds for our working capital needs, plannedcapital expenditures and debt service requirements for the foreseeable future.However, our ability to fund our operations, make planned capital expenditures,make scheduled debt payments and refinance our indebtedness depends on ourfuture operating performance and cash flow, which in turn, are subject toprevailing economic conditions and to financial, business and other factors,some of which are beyond our control. Additionally, the Indenture limits ourability to incur additional indebtedness.

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**ContractualObligations as of June 30, 2006**

The following table summarizes our contractualobligations and commitments as of June 30, 2006:
| ** **                      | ** ** | **Total** | ** **  | **1 year** | ** ** | **1-3 years** | ** ** | **3-5 years** | ** ** | **Thereafter** | ** ** |
|---------------------------------|------------|-----------|-------------|-----------------|------------|--------------------|------------|--------------------|------------|----------------|------------|
| Long-term debt  obligations (a) |       | $         | 200,077,641 |            | $          | 16,332             |       | $                  | 49,606     |           | $          | 11,703 |   | $ | 200,000,000 |   |
| Operating lease  obligations    |       | 510,060   |        | 457,481         |       | 49,911             |       | 2,668              |       | —         |       |
| Capital lease  obligations      |       | 279,021   |        | 107,523         |       | 166,758            |       | 4,740              |       | —         |       |
| Total obligations (b)           |       | $         | 200,866,722 |            | $          | 581,336            |       | $                  | 266,275    |           | $          | 19,111 |   | $ | 200,000,000 |   |

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(a)     Excluded from long-term debt obligations above are interest payments of $19.5million in 1 year; $39.0 million in 2-3 years; $39.0 million in 4-5 years and$16.4 million in more than 5 years.

(b)     The Compact requires us to pay a quarterly fee of $0.4million to the RSTF based on the number of our licensed gaming devices. Totalobligations do not include the RSTF  payments.

**Regulationand Taxes**

We are subject to extensive regulation by the TGA, theCGCC and the National Indian Gaming Commission. Changes in applicable laws orregulations could have a significant impact on our operations.

We had initially applied for a liquor license for ourCasino in 2002. On September 13, 2004, the Department of Alcoholic BeverageControl (“ABC”) denied the Tribe’s application for a liquor license based onthe State Fire Marshal’s interpretation of the Uniform Building Code. In May2005, an Administrative Law Judge (“ALJ”) heard the Tribe’s appeal of the ABC’sdenial and recommended that the ABC reverse itself and approve the license. OnAugust 25, 2005, the ABC announced effective October 11, 2005, it would adoptthe ALJ’s decision to approve the license transfer pending a hearing onprotests filed by citizens and government officials. The ABC has received over65 protests against the license from citizens and government officials. The ABCheld a hearing on the protests on March 9, 2006. Following the close of thehearing, a new California court decision, Coffin v. Alcoholic Beverage ControlAppeals Board, 139 Cal. App. 4 th  471, 43 Cal. Rptr. 3d 420 (2006), changed the burden ofproof in ABC license protest hearings from the protestors to theapplicant.  As a result of that decision, the ALJ suspended post-hearingbriefing.  On July 20, 2006, the ALJ wrote the parties indicating histentative decision to conduct a de novo hearing on the protests to the Tribe’slicense application under the new burden of proof allocation.  The partieshave until approximately August 20, 2006, to inform the ALJ of their views inresponse to his tentative decision to re-hear the protests.  The decisionto approve or deny the license transfer application may be appealed by anyparties to the proceeding so long as the appeal is filed within forty days ofthe ABC’s decision. The first appeal is to the ABC Appeals Board, and itsdecision may be appealed to the California State court system.

Since we are an unincorporated governmentalinstrumentality of the Tribe located on reservation land held in trust by theUnited States of America, we are not subject to federal or state income taxes.Various efforts have been made in Congress over the past several years to enactlegislation that would subject the income of tribal governmental businessentities, such as us, to federal income tax. Although no such legislation hasbeen enacted, similar legislation could be passed in the future. It is notpossible to determine with certainty the likelihood of possible changes in taxlaw or in the administration of such law. Such changes, if adopted, could havea material adverse effect on our operating results and cash flow fromoperations.

**Impactof Inflation**

Absent changes in competitive and economic conditionsor in specific prices affecting the casino industry, we do not expect thatinflation will have a significant impact on our gaming facility operations.Changes in specific prices, such as fuel and transportation prices, relative tothe general rate of inflation may have a material adverse effect on the casinoindustry in general.

**Seasonality**

Activity at our gaming facility is modestly seasonalwith stronger results expected during the summer due in part to the relativelyhigher levels of tourism during such times of the year. In addition, ouroperations may be impacted by adverse weather conditions and fluctuations inthe tourism business. Accordingly, our results may fluctuate from quarter toquarter and the results of one quarter may not be indicative of results expectedfrom future quarters.

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**ITEM 4.  CONTROLS AND PROCEDURES**

**Evaluation of Disclosure Controls and Procedures**

We maintain disclosure controls and procedures thatare designed to ensure that the information required to be disclosed in ourreports filed with, or furnished to, the SEC, pursuant to the SecuritiesExchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed,summarized and reported within the time periods specified in the SEC’s rules,regulations and forms, and that such information is accumulated andcommunicated to our management, including our Chief Executive Officer, PrincipalFinancial Officer and Chief Operations Officer, as appropriate, to allow timelydecisions regarding required disclosure based on the definition of “disclosurecontrols and procedures” in Rule 13a-15(e) and 15d-15(e) of the Exchange Act.

Our current Chief Executive Officer and AssistantFinancial Controller (Principal Financial Officer) have reviewed and evaluatedthe effectiveness of our disclosure controls and procedures (as defined inExchange Act Rules 240.13a — 15(e) and 15d — 15(e)) as of the end of thequarterly period ended June 30, 2006 and have concluded that our “disclosurecontrols and procedures” as of the end of the period covered by this report,which had previously been concluded to be effective, were not effective for theperiod covered by this report as a result of the restatement described in Note14 to the financial statements. Since the end of the period covered bythis report, there have been personnel changes that have impacted ourdisclosure controls and procedures. Our disclosure controls and procedures aredesigned to provide reasonable assurances of achieving its objectives.

**PARTII.   OTHER INFORMATION**

**ITEM6.   EXHIBITS**

(a)                          Exhibits

The Exhibit Index filed herewith is incorporatedherein by reference.

(b)                         Reportson Form 8-K

None

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**SIGNATURE**

Pursuant to therequirements of the Securities Exchange Act of 1934, the Registrant has dulycaused this report to be signed on its behalf by the undersigned thereunto dulyauthorized.
| Dated: April 17, 2007 |   |   | RIVER ROCK ENTERTAINMENT AUTHORITY |
|-----------------------|--------|--------|------------------------------------|
|                  |   |   | (Registrant)                       |
|                  |   |   |                               |   |
|                  |   |   |                               |   |
|                  |   |   | By:                                | /s/ Shawn S.  Smyth |   |
|                  |   |   |                               | Shawn S. Smyth, |   |
|                  |   |   |                               | Chief Executi6ve  Officer |   |
|                  |   |   |                               |   |   |
|                  |   |   |                               |   |   |
|                  |   |   | By:                                | /s/ Jacob A.  Coughlin |   |
|                  |   |   |                               | Jacob A.  Coughlin, |   |
|                  |   |   |                               | Assistant  Financial Controller (Principal Accounting Officer) |   |

 

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**EXHIBIT INDEX**
| Exhibit No. | ** ** | **Exhibit**                                                                                                                                                                                                                                                                       |
|-------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 31.1        |       | Certification by Shawn S. Smyth, Chief Executive  Officer, pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a) (filed  herewith)                                                                                                                                               |
|        |       |                                                                                                                                                                                                                                                                              |
| 31.2        |       | Certification by Jacob A. Coughlin, Assistant Financial  Controller (Principal Financial Officer), pursuant to Exchange Act Rules  13a-14(a) and 15d-14(a) (filed herewith)                                                                                                       |
|        |       |                                                                                                                                                                                                                                                                              |
| 32*         |       | Certification by Shawn S. Smyth, Chief Executive  Officer and by Jacob A. Coughlin, Assistant Financial Controller (Principal  Financial Officer), pursuant to 18 U.S.C. Section 1350, as adopted pursuant  to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith) |

 

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| * | This certification is being furnished solely to  accompany this annual report pursuant to 18 U.S.C. Section 1350, and is not  being filed for purposes of Section 18 of the Securities Exchange Act of 1934  and is not to be incorporated by reference into any filing of River Rock  Entertainment Authority whether made before or after the date hereof,  regardless of any general incorporation language in such filing. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

 

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