GUARANTY AGREEMENT

EXHIBIT 10.3

GUARANTY AGREEMENT

GUARANTY made as of this 1st day of August, 2007, by PINNACLE ENTERTAINMENT, INC., a Delaware corporation with its chief executive offices in Las Vegas, Nevada, hereinafter referred to as “Guarantor”, to the LAKE XXXXXXX HARBOR & TERMINAL DISTRICT, a political subdivision and deep water public port of the State of Louisiana, located in Calcasieu Parish, Louisiana, hereinafter referred to as “Obligee”, in connection with the Ground Lease Agreement with Option to Purchase effective as of August 1, 2007, between Obligee as Lessor and PNK (LAKE XXXXXXX), L.L.C., a Louisiana limited liability company, a wholly-owned subsidiary of Guarantor, hereinafter referred to as “Obligor”, as Lessee thereunder; said Ground Lease Agreement with Option to Purchase hereinafter referred to as the “Lease”.

1. Statement of Guaranty. For value received, Guarantor guarantees performance of Obligor’s obligations under the Lease in accordance with its terms and conditions. Any default of Obligor in such performance shall oblige Guarantor to pay all damages, costs, and expenses that Obligee may recover from Obligor by reason of such default.

2. Duration. This Guaranty shall be effective until all obligations of Obligor under the Lease have been satisfied. Guarantor shall not be discharged from liability hereunder as long as any claim by Obligee against Obligor remains outstanding.

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3. Modification of Lease. Modification of the Lease shall not increase the obligation of Guarantor hereunder in any way unless Guarantor consents in writing to such modification. An extension in time for performance by Obligee shall not be construed as a modification that would increase the obligation of Guarantor for purposes of this Paragraph 3.

4. Notices.

(a) Notice of Acceptance. Guarantor waives notice of acceptance.

(b) Notice of Default. Notice of Obligor’s default is not waived.

(c) All notices provided for herein shall be in writing and shall be considered to have been given when delivered personally; five (5) days after being mailed by registered mail, postage prepaid, addressed to the respective parties at the following addresses:

TO OBLIGEE:
BY MAIL:		Lake Xxxxxxx Harbor & Terminal District
		Xxxx Xxxxxx Xxx 0000
		Xxxx Xxxxxxx, Xxxxxxxxx 00000
		ATTN: Port Director
TO GUARANTOR:
BY MAIL:		Pinnacle Entertainment, Inc.
		Xxxxx 0000
		0000 Xxxxxx Xxxxxx Xxxxxxx
		Xxx Xxxxx, Xxxxxx 00000
		ATTN: General Counsel

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5. Miscellaneous.

(a) Binding Effect. This Guaranty shall be binding on Guarantor and its legal representatives, successors and assigns.

(b) Applicable Law and Venue. This Guaranty shall be governed by and construed in accordance with the laws of the State of Louisiana.

IN WITNESS WHEREOF, Obligee has caused these presents to be signed in the presence of the undersigned competent witnesses as of this 29^th day of November, 2007.

WITNESSES:				LAKE XXXXXXX HARBOR & TERMINAL DISTRICT
/s/ Xxxxxx Xxxxxxx				BY:		/s/ R. XXXX XxXXXXX
(signature)						R. XXXX XxXXXXX,
XXXXXX XXXXXXX						Port Director
(print name)
/s/ Xxxxx Xxxxxx
(signature)
XXXXX XXXXXX
(print name)

IN WITNESS WHEREOF, Guarantor has caused these presents to be signed in the presence of the undersigned competent witnesses as of this 27^th day of November, 2007.

WITNESSES:				PINNACLE ENTERTAINMENT, INC.
/s/ Xxxx X. Xxxxxx				BY:		/s/ Xxxx X. Xxxxxxx
(signature)				NAME:		Xxxx X. Xxxxxxx
Xxxx X. Xxxxxx				TITLE:		Executive Vice President,
(print name)						Secretary and General Counsel
/s/ XXXXXX XXXXXX
(signature)
XXXXXX XXXXXX
(print name)

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