It's been a while since we've talked about Lakes Entertainment (NASDAQ:LACO). Lakes owns 64% of World Poker Tour Entertainment (NASDAQ:WPTE), though its core business is, or, technically speaking, was, the development and management of Native American-owned casinos, none of which currently exist. As the WPT is Lakes' only real current source of revenue -- also accounting for the majority of the company's market value -- Lakes is still showing a net loss on a quarterly basis.

While Lakes has added a few more prospects to its Native American casino development pipeline, those projects have proved to be anything but sure things. But the company did take what looks to be a big step forward early this week: Monday morning, Lakes announced that the Mississippi Gaming Commission had granted approval for a new casino in Vicksburg, Miss., a town fewer than 50 miles from Jackson, the state's capital.

Lakes will own and operate the new casino, which is expected to open by early 2007. The property will eventually feature a golf course but will open with a 250-room hotel and a casino with 1,500 slot machines and 45 table games.

Lakes isn't without a track record in this business: The company is being run by the same people that ran Grand Casinos before its sale to what is now Caesars Entertainment (NYSE:CZR). Lakes was spun off from Grand Casinos in 1999, before the merger.

We've talked a little bit about the Vicksburg market in the past. Ameristar Casinos (NASDAQ:ASCA) currently has a stronghold over its three other riverboat competitors in the market by virtue of its dominating location. Ameristar's property sits right on top of the highway; you have to drive past Ameristar to get to both Isle of Capri (NASDAQ:ISLE) and Horizon, a property that Harrah's Entertainment (NYSE:HET) sold a couple of years ago. AllianceGaming (NYSE:AGI) owns the Rainbow Casino off the same highway in the other direction along the river, but as a down-market property, it isn't a competitive threat.

Lakes' operation will stand a much better chance of success. It will be a standalone, resort-style casino. It will also be the biggest property in the market. Ameristar currently has 1,300 slot machines and 34 table games on 42,000 square feet of gaming space, as well as 150 hotel rooms; the company also has plans to add 200 slot machines and a new poker room to the property.

The announcement isn't a total surprise, as Lakes acquired options on approximately 500 acres of land in the Vicksburg market for this precise purpose in January 2003. However, it is a big step toward fulfilling the company's promise and supporting the stock's valuation.

For more on Lakes Entertainment, check out:

Fool contributor Jeff Hwang owns shares of Ameristar Casinos.