##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


Form 10-K


|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934    
|          
|           |  | For the fiscal year ended December 31, 2004                                                 
|          
|or        
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934
|          
|           |  | For the transition period
    from           to                                             

Commission file number 001-15064


GB HOLDINGS, INC.


(Exact name of each Registrant as specified in its
charter)


|                                                                                          |  |                                         
|----------------------------------------------------------------------------------------- |  | ----------------------------------------
|Delaware                                                                                  |  | 75-2502293                              
|(State or other jurisdiction of
    incorporation or organization)                        |  | (I.R.S. Employer
    Identification No.)
|                                                                                         
|c/o Sands Hotel & Casino
    Indiana Avenue & Brighton Park
    Atlantic City, New Jersey |  | 08401(Zip Code)                         
|(Address of principal executive offices)                                                  |  |                                         

(609) 441-4633


(Registrants telephone number, including area code)


(Not Applicable)


(Former name, former address, and former fiscal year, if
changed since last report.)


Securities registered pursuant to Section 12(b) of the
Act:


None


Securities registered pursuant to Section 12(g) of the
Act:


GB Holdings, Inc. Common Stock, $.01 par value per
share.


þ o


þ o


þ


o þ






|                  |  |                              |  |                              
|----------------- |  | ---------------------------- |  | -----------------------------
|Registrant        |  | Class                        |  | Outstanding at March 30, 2005
|                  |  |                              |  |                              
|GB Holdings, Inc. |  | Common stock, $.01 par value |  | 10,000,000 shares            





---














GB HOLDINGS, INC. AND SUBSIDIARIES


ANNUAL REPORT ON FORM 10-K FOR THE FISCAL


YEAR ENDED DECEMBER 31, 2004


TABLE OF CONTENTS


|                                            |  |                                                                                           |  |      |    | 
|------------------------------------------- |  | ----------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                            |  |                                                                                           |  | Page |   
|                                            |  |                                                                                           |  |      |   
|PART I                                     
|Item 1.                                     |  | Business                                                                                  |  |      | 2  | 
|Item 2.                                     |  | Properties                                                                                |  |      | 10 | 
|Item 3.                                     |  | Legal Proceedings                                                                         |  |      | 11 | 
|Item 4.                                     |  | Submission of Matters to a Vote of Security
    Holders                                   |  |      | 11 | 
|                                           
|PART II                                    
|Item 5.                                     |  | Market for the Registrants Common
    Stock and Related Security Holder Matters          |  |      | 12 | 
|Item 6.                                     |  | Selected Financial Data                                                                   |  |      | 13 | 
|Item 7.                                     |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operations |  |      | 16 | 
|Item 7A.                                    |  | Quantitative and Qualitative Disclosures
    About Market Risk                            |  |      | 30 | 
|Item 8.                                     |  | Financial Statements and Supplementary
    Data                                           |  |      | 31 | 
|Item 9.                                     |  | Changes in and Disagreements With
    Accountants on Accounting and Financial Disclosure  |  |      | 53 | 
|Item 9A.                                    |  | Controls and Procedures                                                                   |  |      | 53 | 
|Item 9B.                                    |  | Other Information                                                                         |  |      | 53 | 
|                                           
|PART III                                   
|Item 10.                                    |  | Directors and Executive Officers of the
    Registrant                                    |  |      | 54 | 
|Item 11.                                    |  | Executive Compensation                                                                    |  |      | 58 | 
|Item 12.                                    |  | Security Ownership of Certain Beneficial
    Owners and Management                        |  |      | 61 | 
|Item 13.                                    |  | Certain Relationships and Related
    Transactions                                        |  |      | 62 | 
|Item 14.                                    |  | Principal Accounting Fees and Services                                                    |  |      | 63 | 
|                                           
|PART IV                                    
|Item 15.                                    |  | Exhibits and Financial Statements
    Schedules                                           |  |      | 63 | 
|EX-12.1: RATIO OF EARNINGS TO FIXED CHARGES
|EX-21.1: LIST OF SUBSIDIARIES              
|EX-31.1: CERTIFICATION                     
|EX-31.2: CERTIFICATION                     
|EX-32.1: CERTIFICATION                     
|EX-32.2: CERTIFICATION                     



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PART I







|        |         
|------- | --------
|Item 1. | Business





7 8




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The Sands








| |   |                                                                                                                                                                                   
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The Premium Segment  Those customers who have
    a high potential loss per trip. This segment has the lowest
    profit margin percentage per customer.                         
|
| |  | The Middle Segment  Those customers who have a
    high repeat trip frequency along with a potential loss per trip
    that equates to a high annual potential loss per customer.
|
| |  | The Mass Segment  Those customers who have a
    low casino loyalty and a low potential loss per trip. This
    category has the highest profit margin percentage per customer.  

Business Strategy.






4



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Competition.




5



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6



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Industry Developments.


7



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Casino Credit.


Seasonality.


Environmental Matters.


License Agreement.


8



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Employees and Labor Relations.


Available Information


http://www.sec.gov


Casino Regulation




Casino Licenses.








9



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|        |           
|------- | ----------
|Item 2. | Properties







10



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|        |                  
|------- | -----------------
|Item 3. | Legal Proceedings












|        |                                                    
|------- | ---------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security Holders



11



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PART II







|        |                                                                                 
|------- | --------------------------------------------------------------------------------
|Item 5. | Market for the Registrants Common Stock and Related
    Security Holder Matters















|                                       |  |      |      |  |     |   |      | 
|-------------------------------------- |  | ---- | ---- |  | --- | - | ---- | 
|Quarter Ended:                         |  | High |      |  | Low |  
|                                       |  |      |      |  |     |  
|March 31, 2003                         |  | $    | 2.98 |  |     | $ | 2.45 | 
|June 30, 2003                          |  | $    | 6.20 |  |     | $ | 2.66 | 
|September 30, 2003                     |  | $    | 6.00 |  |     | $ | 2.56 | 
|December 31, 2003                      |  | $    | 3.70 |  |     | $ | 2.41 | 
|March 31, 2004                         |  | $    | 3.10 |  |     | $ | 2.30 | 
|June 30, 2004                          |  | $    | 2.41 |  |     | $ | 1.87 | 
|July 1, 2004 through September 4, 2004 |  | $    | 3.09 |  |     | $ | 1.00 | 

|                                             |  |                |      |  |     |   |      | 
|-------------------------------------------- |  | -------------- | ---- |  | --- | - | ---- | 
|                                             |  | Bid Quotations |     
|                                             |  |                |     
|                                             |  | High           |      |  | Low |  
|                                             |  |                |      |  |     |  
|September 5, 2004 through September 30, 2004 |  | $              | 2.50 |  |     | $ | 1.05 | 
|December 31, 2004                            |  | $              | 3.85 |  |     | $ | 1.80 | 

12



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|        |                        
|------- | -----------------------
|Item 6. | Selected Financial Data







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GB HOLDINGS, INC. AND SUBSIDIARIES


(Dollars in thousands, except share data)


|                                              |                                            |                                  |         |            |            |                |         |            |         |   |            |            |         |          |         |            |         |          |        |            |        |   |   |         |            |         | 
|--------------------------------------------- | ------------------------------------------ | -------------------------------- | ------- | ---------- | ---------- | -------------- | ------- | ---------- | ------- | - | ---------- | ---------- | ------- | -------- | ------- | ---------- | ------- | -------- | ------ | ---------- | ------ | - | - | ------- | ---------- | ------- | 
|                                              |                                            |                                  |         |            | Pre-       |               
|                                              |                                            | Post-Reorganization              |         |            |            | Reorganization |        
|                                              |                                            |                                  |         |            |            |                |        
|                                              |                                            |                                  |         | 10/01/00   |            |                |         | 01/01/00   |        
|                                              |                                            | Year Ended                       |         |            | Year Ended |                |         | Year Ended |         |   | Year Ended |            |         | through  |         |            |         | through  |       
|                                              |                                            | 12/31/04                         |         |            | 12/31/03   |                |         | 12/31/02   |         |   | 12/31/01   |            |         | 12/31/00 |         |            |         | 09/30/00 |       
|                                              |                                            |                                  |         |            |            |                |         |            |         |   |            |            |         |          |         |            |         |          |       
|Statements of Operations Data:                |                                            |                                  |         |            |            |                |         |            |         |   |            |            |         |          |         |            |         |          |        |            |        |   |   |         |           
|Total Revenues                                |                                            | $                                | 194,389 |            |            | $              | 191,683 |            |         | $ | 213,273    |            |         | $        | 237,463 |            |         | $        | 47,910 |            |        |   | $ | 168,634 |           
|Promotional Allowances                        |                                            |                                  | (23,146 | )          |            |                | (23,934 | )          |         |   | (23,356    | )          |         |          | (29,298 | )          |         |          | (7,099 | )          |        |   |   | (20,922 | )         
|                                              |                                            |                                  |         |            |            |                |         |            |         |   |            |            |         |          |         |            |         |          |       
|Net revenues                                  |                                            |                                  | 171,243 |            |            |                | 167,749 |            |         |   | 189,917    |            |         |          | 208,165 |            |         |          | 40,811 |            |        |   |   | 147,712 |           
|                                              |                                            |                                  |         |            |            |                |         |            |         |   |            |            |         |          |         |            |         |          |       
|Expenses:                                     |                                            |                                  |         |            |            |                |         |            |         |   |            |            |         |          |         |            |         |          |        |            |        |   |   |         |           
|                                              | Departmental                               |                                  |         | 153,087    |            |                |         | 155,122    |         |   |            | 169,046    |         |          |         | 189,393    |         |          |        | 41,702     |        |   |   |         | 124,897    |        
|                                              | Depreciation and amortization              |                                  |         | 14,898     |            |                |         | 14,123     |         |   |            | 13,292     |         |          |         | 10,511     |         |          |        | 2,756      |        |   |   |         | 8,561      |        
|                                              | Provision for obligatory investments       |                                  |         | 1,165      |            |                |         | 1,434      |         |   |            | 1,521      |         |          |         | 1,238      |         |          |        | 1,068      |        |   |   |         | 853        |        
|                                              | Loss on impairment of assets               |                                  |         |           |            |                |         |           |         |   |            | 1,282      |         |          |         |           |         |          |        |           |        |   |   |         |           |        
|                                              | Loss on disposal of fixed assets           |                                  |         | 152        |            |                |         | 28         |         |   |            | 185        |         |          |         | 20         |         |          |        | 11         |        |   |   |         | 10         |        
|                                              |                                            |                                  |         |            |            |                |         |            |         |   |            |            |         |          |         |            |         |          |       
|                                              |                                            | Total Expenses                   |         |            | 169,302    |                |         |            | 170,707 |   |            |            | 185,326 |          |         |            | 201,162 |          |        |            | 45,537 |   |   |         |            | 134,321 | 
|                                              |                                            |                                  |         |            |            |                |         |            |         |   |            |            |         |          |         |            |         |          |       
|                                              |                                            | Income (loss) from operations    |         |            | 1,941      |                |         |            | (2,958  | ) |            |            | 4,591   |          |         |            | 7,003   |          |        |            | (4,726 | ) |   |         |            | 13,391  | 
|                                              |                                            |                                  |         |            |            |                |         |            |         |   |            |            |         |          |         |            |         |          |       
|Non-operating income (expense):               |                                            |                                  |         |            |            |                |         |            |         |   |            |            |         |          |         |            |         |          |        |            |        |   |   |         |           
|                                              | Interest income                            |                                  |         | 422        |            |                |         | 627        |         |   |            | 1,067      |         |          |         | 2,671      |         |          |        | 1,338      |        |   |   |         | 518        |        
|                                              | Interest expense                           |                                  |         | (11,115    | )          |                |         | (12,581    | )       |   |            | (12,195    | )       |          |         | (11,453    | )       |          |        | (3,143     | )      |   |   |         | (366       | )      
|                                              | Debt restructuring costs                   |                                  |         | (3,084     | )          |                |         | (1,843     | )       |   |            |           |         |          |         |           |         |          |        |           |        |   |   |         |           |        
|                                              | Reorganization costs                       |                                  |         |           |            |                |         |           |         |   |            |           |         |          |         |           |         |          |        | 34         |        |   |   |         | (2,807     | )      
|                                              | Gain on prepetition debt discharge         |                                  |         |           |            |                |         |           |         |   |            |           |         |          |         |           |         |          |        |           |        |   |   |         | 14,795     |        
|                                              |                                            |                                  |         |            |            |                |         |            |         |   |            |            |         |          |         |            |         |          |       
|                                              |                                            | Total non-operating expense, net |         |            | (13,777    | )              |         |            | (13,797 | ) |            |            | (11,128 | )        |         |            | (8,782  | )        |        |            | (1,771 | ) |   |         |            | 12,140  | 
|                                              |                                            |                                  |         |            |            |                |         |            |         |   |            |            |         |          |         |            |         |          |       
|(Loss) income before income taxes             |                                            |                                  | (11,836 | )          |            |                | (16,755 | )          |         |   | (6,537     | )          |         |          | (1,779  | )          |         |          | (6,497 | )          |        |   |   | 25,531  |           
|Income tax provision                          |                                            |                                  | (986    | )          |            |                | (958    | )          |         |   | (784       | )          |         |          | (55     | )          |         |          |       |            |        |   |   |        |           
|                                              |                                            |                                  |         |            |            |                |         |            |         |   |            |            |         |          |         |            |         |          |       
|Net (loss) income                             |                                            | $                                | (12,822 | )          |            | $              | (17,713 | )          |         | $ | (7,321     | )          |         | $        | (1,834  | )          |         | $        | (6,497 | )          |        |   | $ | 25,531  |           
|                                              |                                            |                                  |         |            |            |                |         |            |         |   |            |            |         |          |         |            |         |          |       
|Basic/diluted (loss) income per common share: |                                            | $                                | (1.28   | )          |            | $              | (1.77   | )          |         | $ | (0.73      | )          |         | $        | (0.18   | )          |         | $        | (0.65  | )          |        |   | $ | 2.55    | (1)       
|                                              |                                            |                                  |         |            |            |                |         |            |         |   |            |            |         |          |         |            |         |          |       
|                                              | Weighted average common shares outstanding |                                  |         | 10,000,000 |            |                |         | 10,000,000 |         |   |            | 10,000,000 |         |          |         | 10,000,000 |         |          |        | 10,000,000 |        |   |   |         | 10,000,000 |        
|Other Data:                                   |                                            |                                  |         |            |            |                |         |            |         |   |            |            |         |          |         |            |         |          |        |            |        |   |   |         |           
|Capital Expenditures                          |                                            | $                                | 17,378  |            |            | $              | 12,825  |            |         | $ | 14,058     |            |         | $        | 23,095  |            |         | $        | 2,934  |            |        |   | $ | 14,422  |           
|Ratio of earnings to fixed charges(3)         |                                            |                                  | 0.0     | x          |            |                | (0.2    | )x         |         |   | 0.5        | x          |         |          | 0.9     | x          |         |          | 5.9    | x(2)       |        |   |   |         |           
|Deficiency of less than one-to-one ratio      |                                            | $                                | 11,483  |            |            | $              | 16,452  |            |         | $ | 6,300      |            |         | $        | 1,779   |            |         | $        |       |            |        |   |   |         |           

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|                                     |  |          |         |  |          |   |         |          |  |   |          |  |  |          |         |  |  |   |         |  |  |  |  | 
|------------------------------------ |  | -------- | ------- |  | -------- | - | ------- | -------- |  | - | -------- |  |  | -------- | ------- |  |  | - | ------- |  |  |  |  | 
|                                     |  | As of    |         |  | As of    |   |         | As of    |  |   | As of    |  |  | As of    |         |  | 
|                                     |  | 12/31/04 |         |  | 12/31/03 |   |         | 12/31/02 |  |   | 12/31/01 |  |  | 12/31/00 |         |  | 
|                                     |  |          |         |  |          |   |         |          |  |   |          |  |  |          |         |  | 
|Balance Sheet Data:                  |  |          |         |  |          |   |         |          |  |   |          |  |  |          |         |  |  |   |         |  |  |  |  | 
|Total assets                         |  | $        | 216,958 |  |          | $ | 227,563 |          |  | $ | 244,712  |  |  | $        | 255,922 |  |  | $ | 264,247 |  |  |  |  | 
|Total current capital leases         |  |          | 248     |  |          |   |        |          |  |   |         |  |  |          |        |  |  |   |        |  |  |  |  | 
|Total current portion long-term debt |  |          | 43,741  |  |          |   |        |          |  |   |         |  |  |          |        |  |  |   |        |  |  |  |  | 
|Total non-current capital leases     |  |          | 432     |  |          |   |        |          |  |   |         |  |  |          |        |  |  |   |        |  |  |  |  | 
|Total long-term debt                 |  |          | 66,259  |  |          |   | 110,000 |          |  |   | 110,000  |  |  |          | 110,371 |  |  |   | 110,838 |  |  |  |  | 
|Shareholders equity                 |  |          | 35,226  |  |          |   | 91,635  |          |  |   | 109,348  |  |  |          | 116,669 |  |  |   | 118,503 |  |  |  |  | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Income (loss) per share information is presented on a pro forma
    basis for periods presented prior to the September 30, 2000.                                                                                                                                                                                                                                                                                                            
|   
|(2) | Includes $14,795 of gain on pre-petition debt discharge and is
    presented for combined full year 2000.                                                                                                                                                                                                                                                                                                                                   
|   
|(3) | For purposes of calculating this ratio, earnings consist of the
    sum of (a) pretax income, (b) fixed charges and
    (c) amortization of capitalized interest, less the sum of
    interest capitalized. Fixed charges consists of
    (a) interest expensed and capitalized, (b) amortized
    premiums, discounts and capitalized expenses related to
    indebtedness, and (c) our estimate of the interest within
    rental expense.

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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations



Overview




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Liquidity and Capital Resources




| |        
| | -------
| | Summary









| |                     
| | --------------------
| | Operating Activities





| |                     
| | --------------------
| | Investing Activities





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| |                     
| | --------------------
| | Financing Activities

















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| |                                           
| | ------------------------------------------
| | Critical Accounting Policies and Estimates





Allowance for Doubtful Accounts


Commitments and Contingencies


Long-Lived Assets


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Self-Insurance


Income Taxes


Allowance for Obligatory Investments


Results of Operations




| |                  
| | -----------------
| | Gaming Operations



| |                     
| | --------------------
| | Patron Gaming Volume







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| |         
| | --------
| | Revenues











| |                       
| | ----------------------
| | Promotional Allowances



22



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| |         
| | --------
| | Expenses













23



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| |                            
| | ---------------------------
| | Interest Income and Expense







| |                     
| | --------------------
| | Income Tax Provision



Contractual Obligations




|                          |                               |                        |             |             |        |   |            |            |  |     |         |           |           |         |            |            |  |   |   |           | 
|------------------------- | ----------------------------- | ---------------------- | ----------- | ----------- | ------ | - | ---------- | ---------- |  | --- | ------- | --------- | --------- | ------- | ---------- | ---------- |  | - | - | --------- | 
|                          |                               | Payments Due By Period |            
|                          |                               |                        |            
|                          |                               |                        |             | Less Than   |        |   | 1-3        |            |  | 3-5 |         |           | More Than |        
|Contractual Obligations   |                               | Total                  |             |             | 1 Year |   |            | Years      |  |     | Years   |           |           | 5 Years |           
|                          |                               |                        |             |             |        |   |            |            |  |     |         |           |           |         |           
|Long-Term Debt            |                               | $                      | 110,000,000 |             |        | $ | 43,741,000 |            |  | $   |        |           |           | $       | 66,259,000 |            |  | $ |  |          
|Capital Lease Obligations |                               |                        | 760,000     |             |        |   | 286,000    |            |  |     | 474,000 |           |           |         |           |            |  |   |  |          
|Obligatory Contributions: |                               |                        |             |             |        |   |            |            |  |     |         |           |           |         |            |            |  |   |   |          
|                          | CRDA Obligation               |                        |             | 4,736,000   |        |   |            | 74,000     |  |     |         | 154,000   |           |         |            | 2,244,000  |  |   |   | 2,264,000 | 
|                          | VLT Agreement                 |                        |             | 2,860,000   |        |   |            | 953,000    |  |     |         | 1,907,000 |           |         |            |           |  |   |   |          | 
|Operating Leases:         |                               |                        |             |             |        |   |            |            |  |     |         |           |           |         |            |            |  |   |   |          
|                          | Madison House                 |                        |             | 16,226,000  |        |   |            | 1,800,000  |  |     |         | 3,996,000 |           |         |            | 3,996,000  |  |   |   | 6,434,000 | 
|                          | Equipment                     |                        |             | 167,000     |        |   |            | 167,000    |  |     |         |          |           |         |            |           |  |   |   |          | 
|                          |                               |                        |             |             |        |   |            |            |  |     |         |           |           |         |           
|                          | Total Contractual Obligations |                        | $           | 134,749,000 |        |   | $          | 47,021,000 |  |     | $       | 6,531,000 |           |         | $          | 72,499,000 |  |   | $ | 8,698,000 | 
|                          |                               |                        |             |             |        |   |            |            |  |     |         |           |           |         |           

Private Securities Litigation Reform Act




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Risk Factors Related to the Business of The Company




| |                                                                                                                                                             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------
| | GB Holdings may be unable to pay the interest or principal
    on the 11% Notes at maturity which may impact our ability
    to continue as a going concern.





| |                                                                    
| | -------------------------------------------------------------------
| | The Sands must maintain its casino license in order to
    operate.





| |                             
| | ----------------------------
| | Going Concern Consideration.





| |                                                                                  
| | ---------------------------------------------------------------------------------
| | The Company may need to increase capital expenditures to
    compete effectively.





| |                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If the Company fails to offer competitive products and
    services or maintain the loyalty of The Sands patrons, its
    business will be adversely affected.



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| |                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Companys quarterly operating results are subject
    to fluctuations and seasonality, and if the Company fails to
    meet the expectations of securities analysts or investors, the
    Companys share price may decrease significantly.





| |                                                                       
| | ----------------------------------------------------------------------
| | GB Holdings may seek to de-register the GB Holdings
    Common Stock.





| |                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------
| | Increased state taxation of gaming and hospitality
    revenues could adversely affect the Companys results of
    operations.





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| |                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------
| | Energy price increases may adversely affect the
    Companys costs of operations and revenues of The
    Sands.





| |                                                                                                        
| | -------------------------------------------------------------------------------------------------------
| | A downturn in general economic conditions may adversely
    affect the Companys results of operations.







| |                                                                                                                                                                                                                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Acts of terrorism and the uncertainty of the outcome and
    duration of the activity in Iraq and elsewhere, as well as other
    factors affecting discretionary consumer spending, have impacted
    the gaming industry and may harm the Companys operating
    results and the Companys ability to insure against certain
    risks.





| |                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------
| | The Company may incur losses that would not be covered by
    insurance and the cost of insurance will increase.



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| |                                                                               
| | ------------------------------------------------------------------------------
| | There are risks related to the creditworthiness of patrons
    of the casinos.





| |                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Companys success depends in part on the
    availability of qualified management and personnel and on the
    Companys ability to retain such employees.



Risk Factors Related to the Gaming Industry




| |                                           
| | ------------------------------------------
| | The gaming industry is highly competitive.





| |                                                                                                      
| | -----------------------------------------------------------------------------------------------------
| | Pending and enacted gaming legislation from neighboring
    States and New Jersey may harm The Sands.





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| |                                                                              
| | -----------------------------------------------------------------------------
| | Holders of the Companys securities are subject to
    the CCC and the NJCCA.



29



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|         |                                                               
|-------- | --------------------------------------------------------------
|Item 7a. | Quantitative and Qualitative Disclosures About Market
    Risk





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|        |                                            
|------- | -------------------------------------------
|Item 8. | Financial Statements and Supplementary Data

Index to Consolidated Financial Statements


|                                                                                                             |  |      |    | 
|------------------------------------------------------------------------------------------------------------ |  | ---- | -- | 
|                                                                                                             |  | Page |   
|                                                                                                             |  |      |   
|Report of Independent Registered Public
    Accounting Firm                                                  |  |      | 32 | 
|Consolidated Balance Sheets as of
    December 31, 2004 and 2003                                             |  |      | 33 | 
|Consolidated Statements of Operations for
    the Years Ended December 31, 2004, 2003 and 2002               |  |      | 34 | 
|Consolidated Statements of
    Shareholders Equity for the Years Ended December 31,
    2004, 2003 and 2002 |  |      | 35 | 
|Consolidated Statements of Cash Flows for
    the Years Ended December 31, 2004, 2003 and 2002               |  |      | 36 | 
|Notes to Consolidated Financial
    Statements                                                               |  |      | 37 | 

31



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM














| |             
| | ------------
| | /s/ KPMG LLP





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GB HOLDINGS, INC. AND SUBSIDIARIES





CONSOLIDATED BALANCE SHEETS


|                                                        |                                                                                                                        |                            |             |             |            |   |             |             |            | 
|------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------- | -------------------------- | ----------- | ----------- | ---------- | - | ----------- | ----------- | ---------- | 
|                                                        |                                                                                                                        | As of December 31,         |            
|                                                        |                                                                                                                        |                            |            
|                                                        |                                                                                                                        | 2004                       |             |             | 2003       |  
|                                                        |                                                                                                                        |                            |             |             |            |  
|ASSETS                                                 
|Current Assets:                                         |                                                                                                                        |                            |             |             |            |   |             |            
|                                                        | Cash and cash equivalents                                                                                              |                            | $           | 12,756,000  |            |   | $           | 33,454,000  |           
|                                                        | Accounts receivable, net of allowances of $3,862,000 and
    $5,918,000, respectively                                  |                            |             | 5,223,000   |            |   |             | 5,247,000   |           
|                                                        | Inventories                                                                                                            |                            |             | 2,499,000   |            |   |             | 2,222,000   |           
|                                                        | Deferred financing costs                                                                                               |                            |             | 2,260,000   |            |   |             | 762,000     |           
|                                                        | Insurance deposits                                                                                                     |                            |             | 3,017,000   |            |   |             |            |           
|                                                        | Prepaid expenses and other current assets                                                                              |                            |             | 1,689,000   |            |   |             | 3,946,000   |           
|                                                        |                                                                                                                        |                            |             |             |            |  
|                                                        |                                                                                                                        | Total current assets       |             |             | 27,444,000 |   |             |             | 45,631,000 | 
|                                                        |                                                                                                                        |                            |             |             |            |  
|Property and Equipment:                                 |                                                                                                                        |                            |             |             |            |   |             |            
|                                                        | Land                                                                                                                   |                            |             | 54,344,000  |            |   |             | 54,344,000  |           
|                                                        | Buildings and improvements                                                                                             |                            |             | 88,147,000  |            |   |             | 88,249,000  |           
|                                                        | Equipment                                                                                                              |                            |             | 73,675,000  |            |   |             | 64,722,000  |           
|                                                        | Construction in progress                                                                                               |                            |             | 2,040,000   |            |   |             | 2,111,000   |           
|                                                        |                                                                                                                        |                            |             |             |            |  
|                                                        |                                                                                                                        |                            | 218,206,000 |             |            |   | 209,426,000 |            
|                                                        | Less  accumulated depreciation and amortization                                                                       |                            |             | (46,566,000 | )          |   |             | (40,013,000 | )         
|                                                        |                                                                                                                        |                            |             |             |            |  
|                                                        | Property and equipment, net                                                                                            |                            |             | 171,640,000 |            |   |             | 169,413,000 |           
|                                                        |                                                                                                                        |                            |             |             |            |  
|Other Assets:                                           |                                                                                                                        |                            |             |             |            |   |             |            
|                                                        | Obligatory investments, net of allowances of $12,500,000 and
    $11,340,000, respectively                             |                            |             | 11,647,000  |            |   |             | 10,705,000  |           
|                                                        | Other assets                                                                                                           |                            |             | 6,227,000   |            |   |             | 1,814,000   |           
|                                                        |                                                                                                                        |                            |             |             |            |  
|                                                        |                                                                                                                        | Total other assets         |             |             | 17,874,000 |   |             |             | 12,519,000 | 
|                                                        |                                                                                                                        |                            |             |             |            |  
|                                                        |                                                                                                                        | $                          | 216,958,000 |             |            | $ | 227,563,000 |            
|                                                        |                                                                                                                        |                            |             |             |            |  
|LIABILITIES AND SHAREHOLDERS EQUITY                   
|Current Liabilities:                                    |                                                                                                                        |                            |             |             |            |   |             |            
|                                                        | Current portion debt                                                                                                   |                            | $           | 43,741,000  |            |   | $           |            |           
|                                                        | Current portion capital leases                                                                                         |                            |             | 248,000     |            |   |             |            |           
|                                                        | Accounts payable                                                                                                       |                            |             | 7,082,000   |            |   |             | 6,815,000   |           
|                                                        | Accrued liabilities 
    Payroll and related expenses                                                                 |                            |             | 4,379,000   |            |   |             | 4,241,000   |           
|                                                        |                                                                                                                        | Interest                   |             |             | 1,216,000  |   |             |             | 3,092,000  | 
|                                                        |                                                                                                                        | Gaming obligations         |             |             | 3,363,000  |   |             |             | 2,725,000  | 
|                                                        |                                                                                                                        | Insurance                  |             |             | 4,330,000  |   |             |             | 2,505,000  | 
|                                                        |                                                                                                                        | Other                      |             |             | 2,175,000  |   |             |             | 2,821,000  | 
|                                                        |                                                                                                                        |                            |             |             |            |  
|                                                        |                                                                                                                        | Total current liabilities  |             |             | 66,534,000 |   |             |             | 22,199,000 | 
|Long-Term Debt, net of current maturities               |                                                                                                                        |                            | 66,259,000  |             |            |   | 110,000,000 |            
|Non-current capital leases                              |                                                                                                                        |                            | 432,000     |             |            |   |            |            
|Other Noncurrent Liabilities                            |                                                                                                                        |                            | 4,920,000   |             |            |   | 3,729,000   |            
|Commitments and Contingencies                           |                                                                                                                        |                            |            |             |            |   |            |            
|Warrants in Atlantic Coast Entertainment Holdings, Inc. |                                                                                                                        |                            | 43,587,000  |             |            |   |            |            
|Shareholders Equity:                                   |                                                                                                                        |                            |             |             |            |   |             |            
|                                                        | Preferred stock, $.01 par value per share;
    5,000,000 shares authorized;
    0 shares outstanding                   |                            |             |            |            |   |             |            |           
|                                                        | Common Stock, $.01 par value per share;
    20,000,000 shares authorized; 10,000,000 shares issued
    and outstanding |                            |             | 100,000     |            |   |             | 100,000     |           
|                                                        | Additional paid-in capital                                                                                             |                            |             | 81,313,000  |            |   |             | 124,900,000 |           
|                                                        | Accumulated deficit                                                                                                    |                            |             | (46,187,000 | )          |   |             | (33,365,000 | )         
|                                                        |                                                                                                                        |                            |             |             |            |  
|                                                        |                                                                                                                        | Total shareholders equity |             |             | 35,226,000 |   |             |             | 91,635,000 | 
|                                                        |                                                                                                                        |                            |             |             |            |  
|                                                        |                                                                                                                        | $                          | 216,958,000 |             |            | $ | 227,563,000 |            
|                                                        |                                                                                                                        |                            |             |             |            |  



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GB HOLDINGS, INC. AND SUBSIDIARIES





CONSOLIDATED STATEMENTS OF OPERATIONS


|                                                         |                                      |                         |             |             |             |   |             |             |             |   |             |             |             | 
|-------------------------------------------------------- | ------------------------------------ | ----------------------- | ----------- | ----------- | ----------- | - | ----------- | ----------- | ----------- | - | ----------- | ----------- | ----------- | 
|                                                         |                                      | Year Ended December 31, |            
|                                                         |                                      |                         |            
|                                                         |                                      | 2004                    |             |             | 2003        |   |             | 2002        |            
|                                                         |                                      |                         |             |             |             |   |             |             |            
|Revenues:                                                |                                      |                         |             |             |             |   |             |             |             |   |             |            
|                                                         | Casino                               |                         | $           | 157,643,000 |             |   | $           | 154,813,000 |             |   | $           | 175,065,000 |            
|                                                         | Rooms                                |                         |             | 10,908,000  |             |   |             | 10,994,000  |             |   |             | 11,143,000  |            
|                                                         | Food and beverage                    |                         |             | 21,898,000  |             |   |             | 21,962,000  |             |   |             | 23,330,000  |            
|                                                         | Other                                |                         |             | 3,940,000   |             |   |             | 3,914,000   |             |   |             | 3,735,000   |            
|                                                         |                                      |                         |             |             |             |   |             |             |            
|                                                         |                                      |                         | 194,389,000 |             |             |   | 191,683,000 |             |             |   | 213,273,000 |            
|                                                         | Less  promotional allowances        |                         |             | (23,146,000 | )           |   |             | (23,934,000 | )           |   |             | (23,356,000 | )          
|                                                         |                                      |                         |             |             |             |   |             |             |            
|                                                         |                                      | Net revenues            |             |             | 171,243,000 |   |             |             | 167,749,000 |   |             |             | 189,917,000 | 
|                                                         |                                      |                         |             |             |             |   |             |             |            
|Expenses:                                                |                                      |                         |             |             |             |   |             |             |             |   |             |            
|                                                         | Casino                               |                         |             | 50,467,000  |             |   |             | 52,657,000  |             |   |             | 59,971,000  |            
|                                                         | Rooms                                |                         |             | 3,397,000   |             |   |             | 2,677,000   |             |   |             | 3,639,000   |            
|                                                         | Food and beverage                    |                         |             | 7,930,000   |             |   |             | 8,481,000   |             |   |             | 10,343,000  |            
|                                                         | Other                                |                         |             | 870,000     |             |   |             | 1,297,000   |             |   |             | 1,222,000   |            
|                                                         | Selling, general and administrative  |                         |             | 90,423,000  |             |   |             | 90,010,000  |             |   |             | 93,871,000  |            
|                                                         | Depreciation and amortization        |                         |             | 14,898,000  |             |   |             | 14,123,000  |             |   |             | 13,292,000  |            
|                                                         | Provision for obligatory investments |                         |             | 1,165,000   |             |   |             | 1,434,000   |             |   |             | 1,521,000   |            
|                                                         | Loss on impairment of fixed assets   |                         |             |            |             |   |             |            |             |   |             | 1,282,000   |            
|                                                         | Loss on disposal of assets           |                         |             | 152,000     |             |   |             | 28,000      |             |   |             | 185,000     |            
|                                                         |                                      |                         |             |             |             |   |             |             |            
|                                                         |                                      | Total expenses          |             |             | 169,302,000 |   |             |             | 170,707,000 |   |             |             | 185,326,000 | 
|                                                         |                                      |                         |             |             |             |   |             |             |            
|Income (loss) from operations                            |                                      |                         | 1,941,000   |             |             |   | (2,958,000  | )           |             |   | 4,591,000   |            
|                                                         |                                      |                         |             |             |             |   |             |             |            
|Non-operating income (expense):                          |                                      |                         |             |             |             |   |             |             |             |   |             |            
|                                                         | Interest income                      |                         |             | 422,000     |             |   |             | 627,000     |             |   |             | 1,067,000   |            
|                                                         | Interest expense                     |                         |             | (11,115,000 | )           |   |             | (12,581,000 | )           |   |             | (12,195,000 | )          
|                                                         | Debt restructuring costs             |                         |             | (3,084,000  | )           |   |             | (1,843,000  | )           |   |             |            |            
|                                                         |                                      |                         |             |             |             |   |             |             |            
|                                                         | Total non-operating expense, net     |                         |             | (13,777,000 | )           |   |             | (13,797,000 | )           |   |             | (11,128,000 | )          
|                                                         |                                      |                         |             |             |             |   |             |             |            
|Loss before income taxes                                 |                                      |                         | (11,836,000 | )           |             |   | (16,755,000 | )           |             |   | (6,537,000  | )          
|                                                         | Income tax provision                 |                         |             | (986,000    | )           |   |             | (958,000    | )           |   |             | (784,000    | )          
|                                                         |                                      |                         |             |             |             |   |             |             |            
|Net loss                                                 |                                      | $                       | (12,822,000 | )           |             | $ | (17,713,000 | )           |             | $ | (7,321,000  | )          
|                                                         |                                      |                         |             |             |             |   |             |             |            
|Basic/diluted loss per common share                      |                                      | $                       | (1.28       | )           |             | $ | (1.77       | )           |             | $ | (0.73       | )          
|                                                         |                                      |                         |             |             |             |   |             |             |            
|Basic/diluted weighted average common shares outstanding |                                      |                         | 10,000,000  |             |             |   | 10,000,000  |             |             |   | 10,000,000  |            
|                                                         |                                      |                         |             |             |             |   |             |             |            



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GB HOLDINGS, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY


|                           |                                                                                                                                                         |              |            |   |            |   |         |                 |  |   |             |             |   |       |             |             |   |   |             |             |  
|-------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------ | ---------- | - | ---------- | - | ------- | --------------- |  | - | ----------- | ----------- | - | ----- | ----------- | ----------- | - | - | ----------- | ----------- | -
|                           |                                                                                                                                                         | Common Stock |            |   |            |   |         |                 | 
|                           |                                                                                                                                                         |              |            |   | Additional |   |         | Accumulated     |  |   |            
|                           |                                                                                                                                                         | Shares       |            |   | Amount     |   |         | Paid-in Capital |  |   | Deficit     |             |   | Total |            
|                           |                                                                                                                                                         |              |            |   |            |   |         |                 |  |   |             |             |   |       |            
|BALANCE, December 31, 2001 |                                                                                                                                                         |              | 10,000,000 |   |            | $ | 100,000 |                 |  | $ | 124,900,000 |             |   | $     | (8,331,000  | )           |   | $ | 116,669,000 |            
|                           | Net Loss                                                                                                                                                |              |            |  |            |   |         |                |  |   |             |            |   |       |             | (7,321,000  | ) |   |             | (7,321,000  | )
|                           |                                                                                                                                                         |              |            |   |            |   |         |                 |  |   |             |             |   |       |            
|BALANCE, December 31, 2002 |                                                                                                                                                         |              | 10,000,000 |   |            | $ | 100,000 |                 |  | $ | 124,900,000 |             |   | $     | (15,652,000 | )           |   | $ | 109,348,000 |            
|                           | Net Loss                                                                                                                                                |              |            |  |            |   |         |                |  |   |             |            |   |       |             | (17,713,000 | ) |   |             | (17,713,000 | )
|                           |                                                                                                                                                         |              |            |   |            |   |         |                 |  |   |             |             |   |       |            
|BALANCE, December 31, 2003 |                                                                                                                                                         |              | 10,000,000 |   |            | $ | 100,000 |                 |  | $ | 124,900,000 |             |   | $     | (33,365,000 | )           |   | $ | 91,635,000  |            
|                           | Net Loss                                                                                                                                                |              |            |  |            |   |         |                |  |   |             |            |   |       |             | (12,822,000 | ) |   |             | (12,822,000 | )
|                           | Dividend to common shareholders in the form of warrants,
    exercisable for 2,750,000 common shares of Atlantic Coast
    Entertainment Holdings, Inc. |              |            |  |            |   |         |                |  |   |             | (43,587,000 | ) |       |             |            |   |   |             | (43,587,000 | )
|                           |                                                                                                                                                         |              |            |   |            |   |         |                 |  |   |             |             |   |       |            
|BALANCE, December 31, 2004 |                                                                                                                                                         |              | 10,000,000 |   |            | $ | 100,000 |                 |  | $ | 81,313,000  |             |   | $     | (46,187,000 | )           |   | $ | 35,226,000  |            
|                           |                                                                                                                                                         |              |            |   |            |   |         |                 |  |   |             |             |   |       |            



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GB HOLDINGS, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS


|                                    |                                                                                                             |                                                                         |                                                     |             |             |            |   |             |             |            |   |             |             |            | 
|----------------------------------- | ----------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------- | --------------------------------------------------- | ----------- | ----------- | ---------- | - | ----------- | ----------- | ---------- | - | ----------- | ----------- | ---------- | 
|                                    |                                                                                                             | Year Ended December 31,                                                 |                                                    
|                                    |                                                                                                             |                                                                         |                                                    
|                                    |                                                                                                             | 2004                                                                    |                                                     |             | 2003        |            |   | 2002        |            
|                                    |                                                                                                             |                                                                         |                                                     |             |             |            |   |             |            
|OPERATING ACTIVITIES:               |                                                                                                             |                                                                         |                                                     |             |             |            |   |             |             |            |   |            
|                                    | Net loss                                                                                                    |                                                                         | $                                                   | (12,822,000 | )           |            | $ | (17,713,000 | )           |            | $ | (7,321,000  | )          
|                                    | Adjustments to reconcile net loss to net cash provided by (used
    in) operating activities:               |                                                                         |                                                     |             |             |            |   |             |             |            |   |             |            
|                                    |                                                                                                             | Depreciation and amortization                                           |                                                     |             | 14,898,000  |            |   |             | 14,123,000  |            |   |             | 13,292,000  |           
|                                    |                                                                                                             | Provision for obligatory investments                                    |                                                     |             | 1,165,000   |            |   |             | 1,434,000   |            |   |             | 1,521,000   |           
|                                    |                                                                                                             | Loss on impairment of fixed assets                                      |                                                     |             |            |            |   |             |            |            |   |             | 1,282,000   |           
|                                    |                                                                                                             | Loss on disposal of assets                                              |                                                     |             | 152,000     |            |   |             | 28,000      |            |   |             | 185,000     |           
|                                    |                                                                                                             | Provision for doubtful accounts                                         |                                                     |             | 416,000     |            |   |             | 1,040,000   |            |   |             | 1,586,000   |           
|                                    |                                                                                                             | Decrease in deferred financing costs                                    |                                                     |             | 1,229,000   |            |   |             |            |            |   |             |            |           
|                                    |                                                                                                             | Increase in insurance deposits                                          |                                                     |             | (3,017,000  | )          |   |             |            |            |   |             |            |           
|                                    |                                                                                                             | (Increase) decrease in accounts receivable                              |                                                     |             | (392,000    | )          |   |             | (1,312,000  | )          |   |             | 2,349,000   |           
|                                    |                                                                                                             | Increase (decrease) in accounts payable and and accrued
    liabilities |                                                     |             | 360,000     |            |   |             | (130,000    | )          |   |             | (3,080,000  | )         
|                                    |                                                                                                             | Decrease (increase) in prepaid expenses and other current assets        |                                                     |             | 2,187,000   |            |   |             | (98,000     | )          |   |             | (426,000    | )         
|                                    |                                                                                                             | Increase in other noncurrent assets                                     |                                                     |             | (929,000    | )          |   |             | (11,000     | )          |   |             |            |           
|                                    |                                                                                                             | Increase in other noncurrent liabilities                                |                                                     |             | 1,178,000   |            |   |             | 369,000     |            |   |             | 285,000     |           
|                                    |                                                                                                             |                                                                         |                                                     |             |             |            |   |             |            
|                                    |                                                                                                             |                                                                         | Net cash provided by (used in) operating activities |             |             | 4,425,000  |   |             |             | (2,270,000 | ) |             |             | 9,673,000  | 
|                                    |                                                                                                             |                                                                         |                                                     |             |             |            |   |             |            
|INVESTING ACTIVITIES:               |                                                                                                             |                                                                         |                                                     |             |             |            |   |             |             |            |   |            
|                                    | Purchase of property and equipment                                                                          |                                                                         |                                                     | (17,378,000 | )           |            |   | (12,825,000 | )           |            |   | (14,058,000 | )          
|                                    | Proceeds from disposition of assets                                                                         |                                                                         |                                                     | 308,000     |             |            |   | 110,000     |             |            |   | 320,000     |            
|                                    | Proceeds from sale of obligatory investments                                                                |                                                                         |                                                     | 202,000     |             |            |   | 130,000     |             |            |   | 208,000     |            
|                                    | Purchase of obligatory investments                                                                          |                                                                         |                                                     | (2,308,000  | )           |            |   | (2,336,000  | )           |            |   | (2,496,000  | )          
|                                    |                                                                                                             |                                                                         |                                                     |             |             |            |   |             |            
|                                    |                                                                                                             | Net cash used in investing activities                                   |                                                     |             | (19,176,000 | )          |   |             | (14,921,000 | )          |   |             | (16,026,000 | )         
|                                    |                                                                                                             |                                                                         |                                                     |             |             |            |   |             |            
|FINANCING ACTIVITIES:               |                                                                                                             |                                                                         |                                                     |             |             |            |   |             |             |            |   |            
|                                    | Proceeds from long-term debt                                                                                |                                                                         |                                                     | 758,000     |             |            |   |            |             |            |   |            |            
|                                    | Repayments of long-term debt                                                                                |                                                                         |                                                     | (79,000     | )           |            |   |            |             |            |   | (371,000    | )          
|                                    | Cost of issuing long-term debt                                                                              |                                                                         |                                                     | (6,626,000  | )           |            |   |            |             |            |   |            |            
|                                    |                                                                                                             |                                                                         |                                                     |             |             |            |   |             |            
|                                    |                                                                                                             | Net cash used in financing activities                                   |                                                     |             | (5,947,000  | )          |   |             |            |            |   |             | (371,000    | )         
|                                    |                                                                                                             |                                                                         |                                                     |             |             |            |   |             |            
|                                    |                                                                                                             | Net decrease in cash and cash equivalents                               |                                                     |             | (20,698,000 | )          |   |             | (17,191,000 | )          |   |             | (6,724,000  | )         
|                                    |                                                                                                             |                                                                         | Cash and cash equivalents at beginning of period    |             |             | 33,454,000 |   |             |             | 50,645,000 |   |             |             | 57,369,000 | 
|                                    |                                                                                                             |                                                                         |                                                     |             |             |            |   |             |            
|                                    |                                                                                                             |                                                                         | Cash and cash equivalents at end of period          |             | $           | 12,756,000 |   |             | $           | 33,454,000 |   |             | $           | 50,645,000 | 
|                                    |                                                                                                             |                                                                         |                                                     |             |             |            |   |             |            
|SUPPLEMENTAL CASH FLOW INFORMATION: |                                                                                                             |                                                                         |                                                     |             |             |            |   |             |             |            |   |            
|                                    | Interest paid                                                                                               |                                                                         | $                                                   | 10,744,000  |             |            | $ | 12,100,000  |             |            | $ | 12,128,000  |            
|                                    |                                                                                                             |                                                                         |                                                     |             |             |            |   |             |            
|                                    | Interest Capitalized                                                                                        |                                                                         | $                                                   | 86,000      |             |            | $ | 300,000     |             |            | $ | 766,000     |            
|                                    |                                                                                                             |                                                                         |                                                     |             |             |            |   |             |            
|                                    | Income Taxes paid                                                                                           |                                                                         | $                                                   | 1,051,000   |             |            | $ | 899,000     |             |            | $ | 1,764,000   |            
|                                    |                                                                                                             |                                                                         |                                                     |             |             |            |   |             |            
|                                    | Dividends to Common Shareholders in the form of Warrants in
    Atlantic Coast Entertainment Holdings, Inc. |                                                                         | $                                                   | 43,587,000  |             |            | $ |            |             |            | $ |            |            
|                                    |                                                                                                             |                                                                         |                                                     |             |             |            |   |             |            
|                                    | Issuance of 3% Notes in exchange for 11% Notes                                                              |                                                                         | $                                                   | 66,259,000  |             |            | $ |            |             |            | $ |            |            
|                                    |                                                                                                             |                                                                         |                                                     |             |             |            |   |             |            



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##### Table of Contents



GB HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS







|    |                                                 
|--- | ------------------------------------------------
|(1) | Organization, Business and Basis of Presentation







37



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##### Table of Contents



GB HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)












38



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##### Table of Contents



GB HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                  
|--- | -----------------
|(2) | Liquidity Matters









|    |                                           
|--- | ------------------------------------------
|(3) | Summary of Significant Accounting Policies





| |                                                                        
| | -----------------------------------------------------------------------
| | Casino revenues, promotional allowances and departmental
    expenses 





39



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##### Table of Contents



GB HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                    |  |                         |            |  |      |   |            |      |  |   |            | 
|----------------------------------- |  | ----------------------- | ---------- |  | ---- | - | ---------- | ---- |  | - | ---------- | 
|                                    |  | Year Ended December 31, |           
|                                    |  |                         |           
|                                    |  | 2004                    |            |  | 2003 |   |            | 2002 | 
|                                    |  |                         |            |  |      |   |            |      | 
|Allocation From:                    |  |                         |            |  |      |   |            |      |  |   |            | 
|Rooms                               |  | $                       | 6,511,000  |  |      | $ | 7,360,000  |      |  | $ | 8,274,000  | 
|Food and Beverage                   |  |                         | 16,116,000 |  |      |   | 16,482,000 |      |  |   | 17,399,000 | 
|Other Operating                     |  |                         | 2,294,000  |  |      |   | 2,070,000  |      |  |   | 1,324,000  | 
|                                    |  |                         |            |  |      |   |            |      | 
|                                    |  | $                       | 24,921,000 |  |      | $ | 25,912,000 |      |  | $ | 26,997,000 | 
|                                    |  |                         |            |  |      |   |            |      | 
|Allocation To:                      |  |                         |            |  |      |   |            |      |  |   |            | 
|Casino                              |  | $                       | 3,846,000  |  |      | $ | 3,815,000  |      |  | $ | 4,186,000  | 
|Selling, General and Administrative |  |                         | 21,075,000 |  |      |   | 22,097,000 |      |  |   | 22,811,000 | 
|                                    |  |                         |            |  |      |   |            |      | 
|                                    |  | $                       | 24,921,000 |  |      | $ | 25,912,000 |      |  | $ | 26,997,000 | 
|                                    |  |                         |            |  |      |   |            |      | 



| |                            
| | ---------------------------
| | Cash and cash equivalents 





| |                                  
| | ---------------------------------
| | Allowance for doubtful accounts 





| |              
| | -------------
| | Inventories 





| |                         
| | ------------------------
| | Property and equipment 



|                           |  |            
|-------------------------- |  | -----------
|Buildings and improvements |  | 25-40 years
|Operating equipment        |  | 3-7 years  



40



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##### Table of Contents



GB HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                           
| | --------------------------
| | Deferred financing costs 





| |                    
| | -------------------
| | Long-lived assets 







| |                    
| | -------------------
| | Accrued insurance 



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##### Table of Contents



GB HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |               
| | --------------
| | Income taxes 







| |                 
| | ----------------
| | Loss per share 






| |                    
| | -------------------
| | Reclassifications 





|    |               
|--- | --------------
|(4) | Long-Term Debt



|                                     |                      |              |             |             |      |   |             |             | 
|------------------------------------ | -------------------- | ------------ | ----------- | ----------- | ---- | - | ----------- | ----------- | 
|                                     |                      | December 31, |            
|                                     |                      |              |            
|                                     |                      | 2004         |             |             | 2003 |  
|                                     |                      |              |             |             |      |  
|11% notes, due September 29, 2005(a) |                      | $            | 43,741,000  |             |      | $ | 110,000,000 |            
|3% Notes due July 22, 2008(b)        |                      |              | 66,259,000  |             |      |   |            |            
|                                     |                      |              |             |             |      |  
|                                     | Total indebtedness   |              |             | 110,000,000 |      |   |             | 110,000,000 | 
|Less  current maturities            |                      |              | (43,741,000 | )           |      |   |            |            
|                                     |                      |              |             |             |      |  
|                                     | Total long-term debt |              | $           | 66,259,000  |      |   | $           | 110,000,000 | 
|                                     |                      |              |             |             |      |  






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | In accordance with its approved plan of reorganization, GB
    Holdings through its then wholly-owned subsidiaries issued
    $110 million at 11% interest payable September 29,
    2005 (11% Notes). Interest on the
    11% Notes is payable on March 29 and September 29,
    beginning March 29, 2001. The outstanding principal is due
    on September 29, 2005.                                                                                                                                            
|   
|    |  | The original indenture for the 11% Notes contained various
    provisions, which, among other things, restricted the ability of
    GB Holdings, and GBHC to incur certain senior secured
    indebtedness beyond certain limitations, and contained certain
    other limitations on the ability to merge, consolidate, or sell
    substantially all of their assets, to make certain restricted
    payments, to incur certain additional senior liens, and to enter
    into certain sale-leaseback transactions.

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GB HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  | In a Consent Solicitation Statement and Consent Form dated
    September 14, 2001, Property sought the consent of holders
    of the 11% Notes to make certain changes to the original
    indenture (the Modifications). The Modifications
    included, but were not limited to, a deletion of, or changes to,
    certain provisions the result of which would be (i) to
    permit GB Holdings and its subsidiaries to incur any additional
    indebtedness without restriction, to issue preferred stock
    without restriction, to make distributions in respect of
    preferred stock and to prepay indebtedness without restriction,
    to incur liens without restriction and to enter into
    sale-leaseback transactions without restriction, (ii) to
    add additional exclusions to the definition of asset
    sales to exclude from the restrictions on asset
    sales sale-leaseback transactions, conveyances or
    contributions to any entity in which GB Holdings or its
    subsidiaries has or obtains equity or debt interests, and
    transactions (including the granting of liens) made in
    accordance with another provision of the Modifications relating
    to collateral release and subordination or any documents entered
    into in connection with an approved project (a new
    definition included as part of the Modifications which includes,
    if approved by the Board of Directors of GB Holdings, incurrence
    of indebtedness or the transfer of assets to any person if GB
    Holdings or any of its subsidiaries has or obtain debt or equity
    interests in the transferee or any similar, related or
    associated event, transaction or activity) in which a release or
    subordination of collateral has occurred including, without
    limitation, any sale or other disposition resulting from any
    default or foreclosure, (iii) to exclude from the operation
    of covenants related to certain losses to collateral, any assets
    and any proceeds thereof, which have been subject to the release
    or subordination provisions of the Modifications, (iv) to
    permit the sale or other conveyances of Casino Reinvestment
    Development Authority (the CRDA) investments in
    accordance with the terms of a permitted security interest
    whether or not such sale was made at fair value, (v) to
    exclude from the operation of covenants related to the deposit
    into a collateral account of certain proceeds of asset
    sales or losses to collateral any assets and any proceeds
    thereof, which have been subject to the release or subordination
    provisions of the Modifications, (vi) to add new provisions
    authorizing the release or subordination of the collateral
    securing the 11% Notes in connection with, in anticipation
    of, as a result of, or in relation to, an approved
    project, and (vii) various provisions conforming the
    text of the original indenture to the intent of the preceding
    summary of the Modifications.
|   
|(b) |  | On July 22, 2004, Atlantic Holdings consummated the Consent
    Solicitation and Offer to Exchange which it commenced and in
    which Atlantic Holdings offered to exchange its 3% Notes
    due July 22, 2008 for 11% Notes due September 29,
    2005, issued by Property. Pursuant to the Consent Solicitation
    and Offer to Exchange, an aggregate principal amount of
    $66,258,970 of 11% Notes, representing 60.2% of the
    outstanding 11% Notes, were tendered to Atlantic Holdings,
    on a dollar for dollar basis, in exchange for an aggregate
    principal amount of $66,258,970 of 3% Notes. At the
    election of the holders of a majority in principal amount of the
    outstanding 3% Notes, each $1,000 principal amount of
    3% Notes is payable in or convertible into
    65.909 shares of Atlantic Holdings Common Stock, subject to
    adjustments for stock dividends, stock splits, recapitalizations
    and the like. As a result of the Transaction, the
    $43.7 million in 11% Notes are no longer secured by
    any property or equipment of the Company. Holders of the
    11% Notes that tendered in the Consent Solicitation and
    Offer to Exchange also received their pro rata share of the
    aggregate consent fees ($6.6 million) at the rate of
    $100 per $1000 principal amount of the 11% Notes
    tendered, plus accrued interest ($2.3 million) on the
    11% Notes tendered, which amounts were paid at the
    consummation of the Transaction. The exchange is being accounted
    for as a modification of debt. The consent fees paid are being
    amortized over the term of the 3% Notes using the effective
    yield method. All external costs associated with the issuance of
    the 3% Notes have been expensed. As indicated in the
    Consent Solicitation and Offer to Exchange, an aggregate of
    10,000,000 warrants, issued by Atlantic Holdings, were
    distributed on a pro rata basis to the shareholders of GB
    Holdings upon the consummation of the Transaction. Such Warrants
    allow the holders to purchase, from Atlantic Holdings, at an
    exercise price of $.01 per share, an aggregate of
    2,750,000 shares of Atlantic Holdings Common Stock and are
    only exercisable following the earlier of (a) either the
    3% Notes being paid in cash or upon conversion, in whole or
    in part, into Atlantic Holdings Common Stock, (b) payment
    in full of the                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

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GB HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | outstanding principal of the 11% Notes which have not been
    exchanged, or (c) a determination by a majority of the
    board of directors of Atlantic Holdings (including at least one
    independent director of Atlantic Holdings) that the Warrants may
    be exercised. The fair value of the warrants as of July 22,
    2004 (date of issuance) was $43,587,000 (as determined by a
    third party valuation). An additional $4.9 million in
    legal, accounting, professionals and state transfer fees were
    expended related to the Transaction, of which $3.1 million
    and $1.8 million were charged to debt restructuring costs
    during 2004 and 2003, respectively.















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##### Table of Contents



GB HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|    |             
|--- | ------------
|(5) | Income Taxes



|                             |          |                         |          |          |      |   |          |          |   |   |          |          |  
|---------------------------- | -------- | ----------------------- | -------- | -------- | ---- | - | -------- | -------- | - | - | -------- | -------- | -
|                             |          | Year Ended December 31, |         
|                             |          |                         |         
|                             |          | 2004                    |          |          | 2003 |   |          | 2002     |  
|                             |          |                         |          |          |      |   |          |          |  
|Federal income tax provision |          | $                       |          |          |      | $ |          |          |   | $ |          |         
|                             | Current  |                         |          |         |      |   |          |         |   |   |          |         |  
|                             | Deferred |                         |          |         |      |   |          |         |   |   |          |         |  
|State income tax provision   |          |                         |          |          |      |   |          |          |   |   |          |         
|                             | Current  |                         |          | (986,000 | )    |   |          | (958,000 | ) |   |          | (784,000 | )
|                             | Deferred |                         |          |         |      |   |          |         |   |   |          |         |  
|                             |          |                         |          |          |      |   |          |          |  
|                             |          | $                       | (986,000 | )        |      | $ | (958,000 | )        |   | $ | (784,000 | )       
|                             |          |                         |          |          |      |   |          |          |  

45



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##### Table of Contents



GB HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                          |             |                                                   |                                |                                                     |             |             |             |   |             |             |             |  
|------------------------- | ----------- | ------------------------------------------------- | ------------------------------ | --------------------------------------------------- | ----------- | ----------- | ----------- | - | ----------- | ----------- | ----------- | -
|                          |             | 2004                                              |                                |                                                     | 2003        |            
|                          |             |                                                   |                                |                                                     |             |            
|Deferred tax assets:      |             |                                                   |                                |                                                     |             |             |             |  
|                          |             | Bad debt reserve                                  |                                | $                                                   | 1,578,000   |             |             | $ | 2,418,000   |            
|                          |             | Deferred financing costs                          |                                |                                                     |            |             |             |   | 234,000     |            
|                          |             | Group insurance                                   |                                |                                                     | 904,000     |             |             |   | 747,000     |            
|                          |             | Accrued vacation                                  |                                |                                                     | 603,000     |             |             |   | 613,000     |            
|                          |             | Action cash awards accrual                        |                                |                                                     | 191,000     |             |             |   | 123,000     |            
|                          |             | Jackpot accrual                                   |                                |                                                     | 407,000     |             |             |   | 298,000     |            
|                          |             | Medical reserve                                   |                                |                                                     | 534,000     |             |             |   | 408,000     |            
|                          |             | Debt restructuring costs                          |                                |                                                     |            |             |             |   | 754,000     |            
|                          |             | CRDA                                              |                                |                                                     | 6,293,000   |             |             |   | 5,724,000   |            
|                          |             | Federal and state net operating loss carryforward |                                |                                                     | 21,962,000  |             |             |   | 17,004,000  |            
|                          |             | Workers Compensation                              |                                |                                                     | 462,000     |             |             |   |            |            
|                          |             | Grantors trust income                             |                                |                                                     | 3,713,000   |             |             |   | 3,616,000   |            
|                          |             | Credit carryforwards                              |                                |                                                     | 3,345,000   |             |             |   | 3,385,000   |            
|                          |             | Other                                             |                                |                                                     | 770,000     |             |             |   | 297,000     |            
|                          |             |                                                   |                                |                                                     |             |            
|                          |             |                                                   |                                | Total deferred tax assets                           |             |             | 40,762,000  |   |             |             | 35,621,000  |  
|                          |             |                                                   |                                | Less valuation allowance                            |             |             | (24,209,000 | ) |             |             | (17,685,000 | )
|                          |             |                                                   |                                |                                                     |             |            
|                          |             |                                                   |                                | Total deferred tax assets after valuation allowance |             |             | 16,553,000  |   |             |             | 17,936,000  |  
|                          |             |                                                   |                                |                                                     |             |            
|Deferred tax liabilities: |             |                                                   |                                |                                                     |             |             |             |  
|                          | Noncurrent: |                                                   |                                |                                                     |             |             |             |   |            
|                          |             | Depreciation of plant and equipment               |                                |                                                     | (16,336,000 | )           |             |   | (17,812,000 | )          
|                          |             | Deferred financing costs                          |                                |                                                     | (81,000     | )           |             |   |            |            
|                          |             | Other                                             |                                |                                                     | (11,000     | )           |             |   |            |            
|                          |             | Chips and tokens                                  |                                |                                                     | (125,000    | )           |             |   | (124,000    | )          
|                          |             |                                                   |                                |                                                     |             |            
|                          |             |                                                   | Total deferred tax liabilities |                                                     |             | (16,553,000 | )           |   |             | (17,936,000 | )          
|                          |             |                                                   |                                |                                                     |             |            
|                          |             |                                                   |                                | Net deferred tax assets (liabilities)               |             | $           |            |   |             | $           |            |  
|                          |             |                                                   |                                |                                                     |             |            





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GB HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|                                   |  |                          |       |    |      |  |       |      |  |  |       |   
|---------------------------------- |  | ------------------------ | ----- | -- | ---- |  | ----- | ---- |  |  | ----- | --
|                                   |  | Years Ended December 31, |      
|                                   |  |                          |      
|                                   |  | 2004                     |       |    | 2003 |  |       | 2002 | 
|                                   |  |                          |       |    |      |  |       |      | 
|Expected federal benefit           |  |                          | (35.0 | )% |      |  | (35.0 | )%   |  |  | (35.0 | )%
|State taxes net of federal benefit |  |                          | (0.4  | )% |      |  | (2.2  | )%   |  |  | (1.6  | )%
|State tax rate correction          |  |                          | 0.0   | %  |      |  | 3.9   | %    |  |  | 0.0   | % 
|Expired tax credit                 |  |                          | 2.7   | %  |      |  | 0.7   | %    |  |  | 0.0   | % 
|Permanent differences              |  |                          | 0.4   | %  |      |  | 0.2   | %    |  |  | 0.9   | % 
|Tax credits                        |  |                          | (6.2  | )% |      |  | (5.2  | )%   |  |  | (13.2 | )%
|Deferred tax valuation allowance   |  |                          | 55.2  | %  |      |  | 43.3  | %    |  |  | 57.8  | % 
|Other                              |  |                          | (8.4  | )% |      |  | 0.0   | %    |  |  | 3.1   | % 
|                                   |  |                          |       |    |      |  |       |      | 
|                                   |  |                          | 8.3   | %  |      |  | 5.7   | %    |  |  | 12.0  | % 
|                                   |  |                          |       |    |      |  |       |      | 



|    |                                  
|--- | ---------------------------------
|(6) | Transactions with Related Parties







47



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##### Table of Contents



GB HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|    |                                                  
|--- | -------------------------------------------------
|(7) | New Jersey Regulations and Obligatory Investments













48



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##### Table of Contents



GB HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










|    |                              
|--- | -----------------------------
|(8) | Commitments and Contingencies



| |                  
| | -----------------
| | Legal Proceedings







49



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GB HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                
| | ---------------
| | Labor Relations





|    |                                 
|--- | --------------------------------
|(9) | Employee Retirement Savings Plan











|     |                                                      
|---- | -----------------------------------------------------
|(10) | Disclosures about Fair Value of Financial Instruments











50



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GB HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                       |                             |                   |   |            |                   |  |          |            |  |  |            |             |  |  |   |            | 
|---------------------- | --------------------------- | ----------------- | - | ---------- | ----------------- |  | -------- | ---------- |  |  | ---------- | ----------- |  |  | - | ---------- | 
|                       |                             | December 31, 2004 |   |            | December 31, 2003 | 
|                       |                             |                   |   |            |                   | 
|                       |                             | Carrying          |   |            |                   |  | Carrying |            |  | 
|                       |                             | Amount            |   |            | Fair Value        |  |          | Amount     |  |  | Fair Value |            
|                       |                             |                   |   |            |                   |  |          |            |  |  |            |            
|Financial Assets:      |                             |                   |   |            |                   |  |          |            |  |  |            |             |  |  |   |           
|                       | Cash and cash equivalents   |                   | $ | 12,756,000 |                   |  | $        | 12,756,000 |  |  | $          | 33,454,000  |  |  | $ | 33,454,000 | 
|                       | Obligatory investments, net |                   |   | 11,647,000 |                   |  |          | 11,647,000 |  |  |            | 10,705,000  |  |  |   | 10,705,000 | 
|Financial Liabilities: |                             |                   |   |            |                   |  |          |            |  |  |            |             |  |  |   |           
|                       | Interest payable            |                   |   | 2,099,000  |                   |  |          | 2,099,000  |  |  |            | 3,092,000   |  |  |   | 3,092,000  | 
|                       | 11% Notes                   |                   |   | 43,741,000 |                   |  |          | 35,430,000 |  |  |            | 110,000,000 |  |  |   | 91,300,000 | 
|                       | 3% Notes                    |                   |   | 66,259,000 |                   |  |          | 64,452,000 |  |  |            |            |  |  |   |           | 



|     |       
|---- | ------
|(11) | Leases



|     |                             |                                                     |           |           |                |   |         |         |         | 
|---- | --------------------------- | --------------------------------------------------- | --------- | --------- | -------------- | - | ------- | ------- | ------- | 
|     |                             | Operating Leases                                    |           |           | Capital Leases |  
|     |                             |                                                     |           |           |                |  
|2005 |                             | $                                                   | 1,967,000 |           |                | $ | 286,000 |        
|2006 |                             |                                                     | 1,998,000 |           |                |   | 286,000 |        
|2007 |                             |                                                     | 1,998,000 |           |                |   | 188,000 |        
|2008 |                             |                                                     | 1,998,000 |           |                |   |        |        
|2009 |                             |                                                     | 1,998,000 |           |                |   |        |        
|     | Thereafter                  |                                                     |           | 6,434,000 |                |   |         |        |        
|     |                             |                                                     |           |           |                |  
|     |                             | Total Minimum Lease Payments                        |           | $         | 16,393,000     |   |         |         | 760,000 | 
|     |                             |                                                     |           |           |                |  
|     | Less imputed interest costs |                                                     |           |           |                |   |         | (80,000 | )      
|     |                             |                                                     |           |           |                |  
|     |                             | Present value of Net Minimum Capital Lease Payments |           |           |                |   |         | $       | 680,000 | 
|     |                             |                                                     |           |           |                |  



|     |                  
|---- | -----------------
|(12) | Subsequent Events



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GB HOLDINGS, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|     |                                              
|---- | ---------------------------------------------
|(13) | Selected Quarterly Financial Data (Unaudited)

|                             |                               |         |   |            |        |  |   |            |   |  |        |            |   |  |   |            |  
|---------------------------- | ----------------------------- | ------- | - | ---------- | ------ |  | - | ---------- | - |  | ------ | ---------- | - |  | - | ---------- | -
|                             |                               | Quarter |  
|                             |                               |         |  
|                             |                               | First   |   |            | Second |  |   | Third      |   |  | Fourth |           
|                             |                               |         |   |            |        |  |   |            |   |  |        |           
|Year Ended December 31, 2004 |                               |         |   |            |        |  |   |            |   |  |        |            |   |  |   |           
|                             | Net revenues                  |         | $ | 40,990,000 |        |  | $ | 44,570,000 |   |  | $      | 44,160,000 |   |  | $ | 41,523,000 |  
|                             |                               |         |   |            |        |  |   |            |   |  |        |           
|                             | Income (loss) from operations |         | $ | 915,000    |        |  | $ | 1,911,000  |   |  | $      | 719,000    |   |  | $ | (1,604,000 | )
|                             |                               |         |   |            |        |  |   |            |   |  |        |           
|                             | Net loss                      |         | $ | (3,140,000 | )      |  | $ | (2,493,000 | ) |  | $      | (3,124,000 | ) |  | $ | (4,065,000 | )
|                             |                               |         |   |            |        |  |   |            |   |  |        |           
|                             | Net loss per share            |         | $ | (0.31      | )      |  | $ | (0.25      | ) |  | $      | (0.31      | ) |  | $ | (0.41      | )
|                             |                               |         |   |            |        |  |   |            |   |  |        |           
|Year Ended December 31, 2003 |                               |         |   |            |        |  |   |            |   |  |        |            |   |  |   |           
|                             | Net revenues                  |         | $ | 39,303,000 |        |  | $ | 45,464,000 |   |  | $      | 45,211,000 |   |  | $ | 37,771,000 |  
|                             |                               |         |   |            |        |  |   |            |   |  |        |           
|                             | Income (loss) from operations |         | $ | (1,298,000 | )      |  | $ | 2,607,000  |   |  | $      | (144,000   | ) |  | $ | (4,123,000 | )
|                             |                               |         |   |            |        |  |   |            |   |  |        |           
|                             | Net loss                      |         | $ | (4,401,000 | )      |  | $ | (507,000   | ) |  | $      | (3,456,000 | ) |  | $ | (9,349,000 | )
|                             |                               |         |   |            |        |  |   |            |   |  |        |           
|                             | Net loss per share            |         | $ | (0.44      | )      |  | $ | (0.05      | ) |  | $      | (0.35      | ) |  | $ | (0.93      | )
|                             |                               |         |   |            |        |  |   |            |   |  |        |           

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|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure








|         |                        
|-------- | -----------------------
|Item 9A. | Controls and Procedures










|         |                  
|-------- | -----------------
|Item 9B. | Other Information



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PART III







|         |                                                   
|-------- | --------------------------------------------------
|Item 10. | Directors and Executive Officers of the Registrant





Directors and Officers




|                          |  |     |    |  |          |                                                          |                                    | 
|------------------------- |  | --- | -- |  | -------- | -------------------------------------------------------- | ---------------------------------- | 
|Name                      |  | Age |    |  | Position |                                                         
|                          |  |     |    |  |          |                                                         
|Carl C. Icahn(1)          |  |     | 69 |  |          |                                                          | Chairman of the Board of Directors | 
|Martin Hirsch(2)          |  |     | 50 |  |          |                                                          | Director                           | 
|John P. Saldarelli(3)     |  |     | 63 |  |          |                                                          | Director                           | 
|Michael L. Ashner(4)      |  |     | 52 |  |          |                                                          | Director                           | 
|Harold First(5)           |  |     | 68 |  |          |                                                          | Director                           | 
|Auguste E. Rimpel, Jr.(6) |  |     | 65 |  |          |                                                          | Director                           | 
|Richard P. Brown(7)       |  |     | 57 |  |          |                                                          | Chief Executive Officer            | 
|Denise Barton(8)          |  |     | 47 |  |          | Chief Financial Officer and Principal Accounting Officer
|Thomas Davis(9)           |  |     | 55 |  |          |                                                          | Former President                   | 
|George Toth(10)           |  |     | 58 |  |          |                                                          | President, ACE Gaming, LLC         | 
|Patricia M. Wild(11)      |  |     | 53 |  |          | Vice President, General Counsel and Secretary           






| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Carl C. Icahn has served as Chairman of the Board and a director
    of Starfire Holding Corporation (Starfire) (formerly
    Icahn Holding Corporation), a privately-held holding company,
    and Chairman of the Board and a director of various subsidiaries
    of Starfire, since 1984. Mr. Icahn is and has been since
    1994 a majority shareholder, the Chairman of the Board and a
    Director of American Railcar Industries, Inc. (ARI),
    a Missouri corporation. ARI is primarily engaged in the business
    of manufacturing, managing, leasing and selling of railroad
    freight and tank cars. Mr. Icahn has also been Chairman of
    the Board and President of Icahn & Co., Inc., a
    registered broker-dealer and a member of the National
    Association of Securities Dealers, since 1968. Since November
    1990, Mr. Icahn has been Chairman of the Board of American
    Property Investors, Inc., the general partner of American Real
    Estate Partners, L.P., a public limited partnership that invests
    in real estate and holds various other interests, including the
    interests in its subsidiaries that are engaged, among other
    things, in the oil and gas business and casino entertainment
    business. Mr. Icahn has been a director of Cadus
    Pharmaceutical Corporation, a firm that holds various
    biotechnology patents, since 1993. From August 1998 to August
    2002, Mr. Icahn served as Chairman of the Board of
    Maupintour Holding LLC (f/k/a/ Lowestfare.com, LLC),
    an internet travel reservations company. From October 1998
    through May, 2004, Mr. Icahn was the President and a
    director of Stratosphere Corporation, which operates the
    Stratosphere Hotel and Casino. Since September 29, 2000,
    Mr. Icahn has served as the Chairman of the Board of
    GB Holdings which owns all of the outstanding stock of
    Atlantic Holdings, which through its wholly-owned subsidiary
    owns and operates The Sands. Mr. Icahn also serves in the
    same capacity with Atlantic Holdings. In January 2003,
    Mr. Icahn became Chairman of the Board and a director of
    XO Communications, Inc., a telecommunications company.
    Mr. Icahn received his B.A. from Princeton University in
    1957.

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| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | Martin Hirsch has served as a Vice President of API since 1991
    and AREP since inception. Mr. Hirsch focuses on investment,
    management and disposition of real estate properties and other
    assets. On March 23, 2000, Mr. Hirsch was elected to
    serve as Executive Vice President and Director of Acquisitions
    and Development of API. From January 1986 to January 1991,
    Mr. Hirsch was a Vice President of Integrated Resources,
    Inc. where he was involved in the acquisition of commercial real
    estate properties and asset management. In 1985 and 1986,
    Mr. Hirsch was a Vice President of Hall Financial Group
    where he was involved in acquiring and financing commercial and
    residential properties. Mr. Hirsch has been a director of
    National Energy Group, Inc. since 1998. Since September 29,
    2000 Mr. Hirsch served as a director of GB Property
    Funding Inc. from September 29, 2000 until July 22,
    2004 and of Greate Bay Hotel and Casino, Inc. from
    February 28, 2001 until July 22, 2004. Mr. Hirsch
    has served as a Director of GB Holdings, Inc. which owns
    all of the outstanding stock of Atlantic Coast Entertainment
    Holdings, Inc., which through its wholly-owned subsidiary owns
    and operates The Sands Hotel and Casino in Atlantic City, New
    Jersey and GB Property Funding, Inc. Since July 22,
    2004, Mr. Hirsch also serves in the same capacity with
    Atlantic Coast Entertainment Holdings, Inc.
|
| | (3) | John P. Saldarelli has served as Vice President, Secretary and
    Treasurer of API since March 18, 1991 and as Chief
    Financial Officer since June 2000 and of AREP Finance since
    inception. Mr. Saldarelli was President of Bayswater Realty
    Brokerage Corp. from June 1987 until November 19, 1993, and
    Vice President of Bayswater Realty & Capital Corp. from
    September 1979 until April 15, 1993. Mr. Saldarelli
    served as a director of Stratosphere from October, 1998 until
    May 2004. Mr. Saldarelli has served as a director of
    GB Property Funding, Inc. and Greate Bay Hotel and Casino,
    Inc. from February 28, 2001 until July 22, 2004. Since
    February 28, 2001, Mr. Saldarelli has served as a
    Director of GB Holdings, Inc. which owns all of the
    outstanding stock of Atlantic Coast Entertainment Holdings,
    Inc., which through its wholly-owned subsidiary owns and
    operates The Sands Hotel and Casino in Atlantic City, New
    Jersey. Since July 22, 2004, Mr. Saldarelli also
    serves in the same capacity with Atlantic Coast Entertainment
    Holdings, Inc.                                                                                                                                                                                                                                                                                                                                                                            
|
| | (4) | Michael L. Ashner serves as the Chief Executive Officer of
    Newkirk MLP Corp., a position he has held since January 2002 as
    well as the Chief Executive Officer of Winthrop Financial
    Associates, a Limited Partnership and its affiliates, a position
    he has held since January 1996. Mr. Ashner has been the
    Chief Executive Officer of First Union Real Estate Equity and
    Mortgage Investments, a publicly traded real estate investment
    trust which we refer to as First Union, since December 31,
    2003 and Chairman since April 2004. Mr. Ashner has also
    served as the Chief Executive Officer of Shelbourne
    Properties I, Inc., Shelbourne Properties II, Inc. and
    Shelbourne Properties III, Inc., three separate publicly
    traded real estate investment trusts listed on the American
    Stock Exchange that were recently liquidated. Since 1981,
    Mr. Ashner has been Chairman of Exeter Capital Corporation,
    a firm that has organized and administered real estate limited
    partnerships. Mr. Ashner also currently serves on the Board
    of Directors of NBTY Inc., a publicly traded company that
    is a manufacturer, marketer and retailer of nutritional
    supplements. Mr. Ashner has been a member of the Audit
    Committee of GB Holdings since October 3, 2000. Since
    October 31, 2003, Mr. Ashner has served as a member of
    Atlantic Holdings Board of Directors.                                                          
|
| | (5) | Harold First has been a self-employed independent financial
    consultant since 1993. He is a certified public accountant.
    Within the past five years, Mr. First served as a director
    and chairman of the Audit Committee of Philip Services
    Corporation, a leading integrated provider of industrial and
    metals services that at the time was a public company in which
    Carl C. Icahn held an interest through ownership of securities
    and debt, and as a director of Panaco Inc., an oil and gas
    drilling company that at the time was a public company in which
    Mr. Icahn held an interest through securities or debt.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   



| |  |                                                                                                                                                                                                                                                                                                                                                             
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Mr. First serves as a director and chairman of the Audit
    Committee of GB Holdings, which owns all of the outstanding
    stock of Atlantic Coast Entertainment Holdings, Inc., which
    through its wholly-owned subsidiary owns and operates The Sands.
    Mr. First is also a director and chairman of the Audit
    Committee of Atlantic Holdings.
|
| |  | Mr. First holds a B.S. from Brooklyn College.                                                                                                                                                                                                                                                                                                               

55



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| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (6) | Auguste E. Rimpel, Jr. has been a retired partner of
    PricewaterhouseCoopers LLP (PwC) since 2000. He
    was with PwC and its predecessor firm, Price Waterhouse, since
    1983, most recently as Managing Partner of International
    Consulting services for the Washington Consulting Practice of
    the firm. Prior to his tenure at PwC, Dr. Rimpel served as
    a Partner with Booz Allen & Hamilton, Inc., a
    management consulting firm and as a Vice President of Arthur D.
    Little International, Inc., a management consulting firm.



| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Dr. Rimpel currently serves as Chairman of the Board of
    Trustees of the University of the Virgin Islands. Since
    April 25, 2001, he has served as a member of the Audit
    Committee and Board of Directors of GB Holdings, which owns
    all of the outstanding stock of Atlantic Holdings, which through
    its wholly-owned subsidiary owns and operates The Sands.
    Dr. Rimpel also serves as a member of the Board of
    Directors and the Audit Committee of Atlantic Holdings.
|
| |  | Dr. Rimpel received a Ph.D. in chemical engineering from
    Carnegie Institute of Technology and was an International Fellow
    at Columbia University Graduate School of Business.                                                                                                                                                                                                                                                                                                              



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (7) | Richard P. Brown serves as President and Chief Executive Officer
    of GB Holdings, Inc. and Atlantic Coast Entertainment
    Holdings, Inc., and also serves as the President and Chief
    Executive Officer of American Entertainment
    Properties Corp., American Casino & Entertainment
    Properties Finance Corp. and American Casino &
    Entertainment Properties LLC (ACEP); and
    President, Chief Executive Officer and a director of American
    Entertainment Properties Corp. and ACEP Finance since
    inception. Mr. Brown has over 12 years experience in
    the gaming industry. Mr. Brown has been the President and
    Chief Executive Officer of each of the Stratosphere, Arizona
    Charlies Decatur and Arizona Charlies Boulder since
    June 2002. From January 2001 to June 2002, he served as Chief
    Operating Officer for all three properties. Prior to joining
    Stratosphere Gaming Corp. in March 2000 as Executive Vice
    President of Marketing, Mr. Brown held executive positions
    with Harrahs Entertainment and Hilton Hotels Corporation.       
|
| | (8) | Denise Barton serves as Vice President, Chief Financial Officer
    and Principal Accounting Officer of GB Holdings, Inc. and
    Atlantic Coast Entertainment Holdings, Inc., and also serves as
    the Senior Vice President, Chief Financial Officer, Treasurer
    and Secretary of American Entertainment Properties Corp.,
    American Casino & Entertainment Properties Finance
    Corp. and American Casino & Entertainment
    Properties LLC since inception. Ms. Barton has been
    Senior Vice President and Chief Financial Officer of each of the
    Stratosphere, Arizona Charlies Decatur and Arizona
    Charlies Boulder since February 2003. Ms. Barton
    joined the Stratosphere as Vice President of Finance and Chief
    Financial Officer in August 2002. From February 1999 to June
    2002, she served as Chief Financial Officer for Lowestfare.com,
    a travel company controlled by affiliates of Mr. Icahn.
    Ms. Barton was employed by KPMG LLP, certified public
    accountants, from January 1990 to February 1999. Ms. Barton
    is a certified public accountant.
|
| | (9) | Thomas Davis, served as President of GB Holdings, Property,
    GBHC and Atlantic Holdings from February 2003 until February
    2004. Previously, Mr. Davis served as Vice President of
    Business Development at Stratosphere Corporation from November
    2002 until February 2003. Prior to joining the Stratosphere
    Corporation, Mr. Davis served as General Manager of Little
    River Casino Resort from 1999, General Manager at Chinook Winds
    Resort-Casino from 1998 to 1999 and General Manager of Pioneer
    Gambling Hall & Hotel from 1996 to 1998.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       



|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | George Toth was appointed Interim President of the GBHC in
    February 2004 and appointed President of ACE in June 2004. Prior
    to that, Mr. Toth was Vice President of Hotel Operations
    and Security for GBHC and has held various positions in the
    company since 1994, including Vice President of Construction and
    Operations and Executive Director of Support Services.                                                                                                                                                                                                                                              
|    
|(11) | Patricia M. Wild has served as Vice President, General Counsel
    and Secretary of GB Holdings, Atlantic Holdings and ACE
    Gaming since June 2004. Prior to her appointment, Ms. Wild
    served as Vice President, Corporate Counsel and Vice President
    of Claims Administration for Park Place Entertainment
    Corporation from 1998 to 2003. From 1989 to 1998, Ms. Wild
    served in various legal capacities for the Trump casino hotel
    properties in Atlantic City, including Vice President of Legal
    Affairs for Trumps Castle Associates and Vice President,
    General Counsel and Secretary for Trump Plaza

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| |                                                                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Associates. From 1986 to 1989, Ms. Wild served as a Deputy
    Attorney General with the Environmental Prosecutions Task Force
    of the NJ Division of Criminal Justice. Ms. Wild was a
    Deputy Attorney General with the New Jersey Division of Gaming
    Enforcement from 1983 to 1986.





Code of Ethics




Section 16(a) Beneficial Ownership Reporting
Compliance




57



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|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation

Summary of Cash and Certain Other Compensation




|                            |                                  |                     |      |      |           |   |         |         |     |   |                 |       |  |   |       |       | 
|--------------------------- | -------------------------------- | ------------------- | ---- | ---- | --------- | - | ------- | ------- | --- | - | --------------- | ----- |  | - | ----- | ----- | 
|                            |                                  | Annual Compensation |      |      |          
|                            |                                  |                     |      |      | All Other |  
|Name and Principal Position |                                  | Year                |      |      | Salary    |   |         | Bonus   |     |   | Compensation(1) |      
|                            |                                  |                     |      |      |           |   |         |         |     |   |                 |      
|Richard P. Brown(2)         |                                  |                     | 2004 |      |           | $ |        |         |     | $ |                |       |  | $ |      |      
|                            | Chief Executive Officer          |                     |      | 2003 |           |   |         |        |     |   |                 |      |  |   |       |      | 
|                            |                                  |                     |      | 2002 |           |   |         |        |     |   |                 |      |  |   |       |      | 
|George Toth                 |                                  |                     | 2004 |      |           |   | 218,529 |         |     |   |                |       |  |   | 3,267 |      
|                            | President, ACE                   |                     |      | 2003 |           |   |         | 144,685 |     |   |                 |      |  |   |       | 3,477 | 
|                            |                                  |                     |      | 2002 |           |   |         | 109,756 |     |   |                 |      |  |   |       | 2,639 | 
|Thomas Davis                |                                  |                     | 2004 |      |           |   | 64,211  | (5)     |     |   |                |       |  |   |      |      
|                            | Former President, GBH            |                     |      | 2003 |           |   |         | 247,067 |     |   |                 |      |  |   |       |      | 
|                            |                                  |                     |      | 2002 |           |   |         |        |     |   |                 |      |  |   |       |      | 
|William Cooney(3)           |                                  |                     | 2004 |      |           |   | 214,538 |         |     |   | 10,000          |       |  |   | 4,604 |      
|                            | Senior Vice President            |                     |      | 2003 |           |   |         | 159,374 |     |   |                 | 2,000 |  |   |       | 2,721 | 
|                            | Customer Development             |                     |      | 2002 |           |   |         | 180,654 | (5) |   |                 |      |  |   |       |      | 
|Stephanie Wheeler(4)        |                                  |                     | 2004 |      |           |   | 149,203 |         |     |   |                |       |  |   | 3,792 |      
|                            | Vice President  Human Resources |                     |      | 2003 |           |   |         | 145,999 |     |   |                 |      |  |   |       | 901   | 
|                            |                                  |                     |      | 2002 |           |   |         | 88,038  |     |   |                 |      |  |   |       |      | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes matching contributions by ACE to The Sands
    Retirement Savings Plan on behalf of the named executive officer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|(2) | Mr. Brown has served as Chief Executive Officer of Atlantic
    Holdings since November 2003. Mr. Brown has been Chief
    Executive Officer of GB Holdings since September 2002. He also
    serves as President and Chief Executive Officer of ACEP, which
    provides services to us and receives fees for those services
    from us. Mr. Brown does not receive any compensation from
    us. He is compensated by ACEP. See Related Party
    Transactions.                                                                                                                                                                                                                               
|   
|(3) | William Cooney has served ACE as Senior Vice President, Customer
    Development since July 2004 and he served in the same capacity
    at GBHC from February 2003 through July 2004. Prior to that,
    Mr. Cooney was Vice President, Player Development at
    Tropicana Casino from May 2002 until February 2003.
    Mr. Cooney had previously served GBHC as Executive Vice
    President, Marketing Operations from February 2001 until May
    2002 and Vice President Marketing from March 2000 until February
    2001 and Vice President, Player Development from September 1999
    until March 2000. Prior to that, Mr. Cooney served as
    Executive Director of Player Development.
|   
|(4) | Stephanie Wheeler has served ACE as Vice President, Human
    Resources & Hotel Services since March 2005. Prior to
    that, Ms. Wheeler served ACE as Vice President, Human
    Resources from July 22, 2004 until March 2005. Prior to
    that, Ms. Wheeler served GBHC as Vice President, Human
    Resources from May 2002 until July 22, 2004. Prior to that,
    Ms. Wheeler was Program Director, Human Capital Strategies
    at William J. Hughes Technical Center/ Federal Aviation
    Administration from March 2002 to                                                                                                                                                              

58



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|    |                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | May 2002. Prior to that, Ms. Wheeler was Vice President,
    Human Resources at Harrahs Casino Hotel Atlantic City from
    January 2000 through August 2001.
|   
|(5) | Includes severance compensation.                                                                                                                              

Option Grants in Last Fiscal Year




Employment Contracts




Equity Compensation Plan Information




Employee Retirement Savings Plan










Compensation of Directors






Compensation Committee Interlocks and Insider
Participation






59



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##### Table of Contents





Audit and Special Committees






60



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##### Table of Contents








|         |                                                                   
|-------- | ------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial Owners and
    Management



|                                |  |           |           |  |         |  |      |  
|------------------------------- |  | --------- | --------- |  | ------- |  | ---- | -
|                                |  | Number of |           |  |        
|Name                            |  | Shares    |           |  | Percent | 
|                                |  |           |           |  |         | 
|Robino Stortini Holdings LLC(1) |  |           | 1,607,416 |  |         |  | 16.1 | %
|Carl C. Icahn(2)                |  |           | 7,748,744 |  |         |  | 77.5 | %
|Martin Hirsch                   |  |           |          |  |         |  |     |  
|John P. Saldarelli              |  |           |          |  |         |  |     |  
|Michael L. Ashner               |  |           |          |  |         |  |     |  
|Harold First                    |  |           |          |  |         |  |     |  
|Auguste E. Rimpel, Jr.          |  |           |          |  |         |  |     |  
|Richard P. Brown                |  |           |          |  |         |  |     |  
|George Toth                     |  |           |          |  |         |  |     |  
|Denise Barton                   |  |           |          |  |         |  |     |  
|William Cooney                  |  |           |          |  |         |  |     |  
|Stephanie Wheeler               |  |           |          |  |         |  |     |  
|All Directors and officers      |  |           | 7,748,744 |  |         |  | 77.5 | %






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Pursuant to a Schedule 13D, dated March 21, 2005,
    filed by Robino Stortini Holdings LLC, or RSH, Michael Stortini
    and Charles J. Robino, RSH and Messrs. Stortini and Robino
    may be deemed to beneficially own 1,607,416 shares of the
    GB Holdings Common Stock. The shares are held in street
    name for the accounts of RSH, SSI Fund, LLC or
    Mr. Stortini. SSI Fund was merged into RSH effective
    July 1, 2004, and the shares previously held by SSI Fund
    became assets of RSH. Messrs. Stortini and Robino are the
    manager of RSH. RSH and Mr. Robino disclaim beneficial
    ownership to any and all shares of GB Holdings Common
    Stock in Mr. Stortinis name or held in street name
    for his account. Each of RSH and Messrs. Stortini and
    Robino may be deemed to share the power to vote or to direct the
    vote of, and may be deemed to share the power to dispose of or
    to direct the disposition of, 1,607,416 shares of GB
    Holdings Common Stock. The principal business address of
    RSH and Messrs. Stortini and Robino is 6 Larch Avenue,
    Wilmington, DE 19808.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|(2) | Pursuant to a Schedule 13D, dated January 21, 2005,
    filed by Carl C. Icahn and certain of his affiliates,
    Mr. Icahn and affiliates beneficially own
    7,748,744 shares of GB Holdings Common Stock. The
    Schedule 13D provides that on January 21, 2005,
    American Real Estate Partners, L.P., or AREP, and Cyprus, LLC
    entered into a purchase agreement, pursuant to which
    (1) Cyprus agreed to sell to AREP 4,121,033 shares of
    GB Holdings Common Stock and warrants to
    purchase 1,133,284 shares of common stock of Atlantic
    Holdings, in consideration for which (2) AREP agreed to
    issue 413,793 Depositary Units to Cyprus. In addition, following
    the end of fiscal year 2006 of AREP, provided that certain
    conditions are met, Cyprus will have the right to receive up to
    an additional 206,897 Depositary Units. In connection with the
    transactions contemplated by the purchase agreement:
    (1) AREP will contribute to American Real Estate Holdings
    Limited partnership or AREH, of which AREP owns a 99% limited
    partnership interest, the purchased shares and the purchased
    warrants; and (2) AREH will contribute to AREP Sands
    Holding LLC, a wholly-owned subsidiary of AREH,
    (a) 7,748,744 shares of GB Holdings Common Stock
    (including the purchased shares), (b) warrants to
    purchase 2,130,904 shares of common stock of Atlantic
    Holdings (including the purchased warrants), and
    (c) $26,914,500 principal amount of 3% promissory notes of
    Atlantic Holdings (which are convertible into an aggregate of
    1,773,907 shares of common stock of Atlantic Holdings).
    AREP Sands currently owns approximately $37.0 million
    principal amount of 3% promissory notes of Atlantic Holdings
    (which are convertible into an aggregate of approximately
    2.4 million shares of common stock of Atlantic Holdings).

61



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|         |                                               
|-------- | ----------------------------------------------
|Item 13. | Certain Relationships and Related Transactions









62



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##### Table of Contents














|         |                                       
|-------- | --------------------------------------
|Item 14. | Principal Accountant Fees and Services

Summary of KPMG LLP Fees For Professional Services
Rendered


|                      |            |              |         |         |      |   |         |         | 
|--------------------- | ---------- | ------------ | ------- | ------- | ---- | - | ------- | ------- | 
|                      |            | Years Ended  |        
|                      |            | December 31, |        
|                      |            |              |        
|                      |            | 2004         |         |         | 2003 |  
|                      |            |              |         |         |      |  
|Audit fees(1)         |            | $            | 524,000 |         |      | $ | 410,000 |        
|Audit related fees(2) |            |              | 16,000  |         |      |   | 18,000  |        
|Tax fees(3)           |            |              | 37,920  |         |      |   | 14,300  |        
|                      |            |              |         |         |      |  
|                      | Total fees |              | $       | 577,920 |      |   | $       | 442,300 | 
|                      |            |              |         |         |      |  






|    |                                                                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Services relating to audit of GB Holdings, Inc.s
    consolidated financial statements and review of condensed
    consolidated financial statements included in the Companys
    Forms 10-Q, and public offerings.
|   
|(2) | Services relating to employee benefit plan audits and
    coordination of workpaper review by the Division of Gaming
    Enforcement.                                                                                
|   
|(3) | Tax fees include work performed for tax compliance.                                                                                                                                                                  






PART IV







|         |                                                                    
|-------- | -------------------------------------------------------------------
|Item 15. | Exhibits, Financial Statement Schedules and Reports on
    Form 8-K





|   |                     
|-- | --------------------
|1. | Financial Statements



63



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##### Table of Contents





|   |                             
|-- | ----------------------------
|2. | Financial Statement Schedule







|   |         
|-- | --------
|3. | Exhibits

|            |  |   |  |                                                                                                                                                                                                                                                                                                                                                                                              
|----------- |  | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1       |  |  |  | Order Confirming Modified Fifth Amended Joint Plan of
    Reorganization under Chapter 11 of The Bankruptcy Code
    Proposed by The Official Committee of Unsecured Creditors and
    High River                                                                                                                                                                                            
|2.2     |  |  |  | Plan of Merger between Greate Bay Hotel and Casino, Inc.
    (GBHC), Atlantic Coast Depository, LLC, and GB Holdings,
    Inc. (GB Holdings)                                                                                                                                                                                                                                              
|3.1      |  |  |  | Restated Certificate of Incorporation of GB Holdings.                                                                                                                                                                                                                                                                                                                                        
|3.2    |  |  |  | Certificate of Incorporation of Atlantic Coast Entertainment
    Holdings Inc. (Atlantic Holdings)                                                                                                                                                                                                                                                                                         
|3.3    |  |  |  | Certificate of Formation of ACE Gaming LLC (ACE)                                                                                                                                                                                                                                                                                                                                           
|3.4      |  |  |  | Amended and Restated By-laws of GB Holdings                                                                                                                                                                                                                                                                                                                                                  
|3.5    |  |  |  | By-laws of Atlantic Holdings                                                                                                                                                                                                                                                                                                                                                                 
|4.1    |  |  |  | Operating Agreement of ACE, as amended, by Atlantic Holdings                                                                                                                                                                                                                                                                                                                                 
|4.2     |  |  |  | Amended and Restated Indenture, dated as of October 12,
    2001, among GB Property Funding Corp. (Property), as
    issuer, GB Holdings and GBHC, as guarantors, and Wells Fargo
    Bank Minnesota, National Association, as trustee                                                                                                                                                     
|4.3     |  |  |  | Amendment No. 1 to Amended and Restated Indenture, dated as
    of July 22, 2004, among Property, as issuer, GB Holdings
    and GBHC, as guarantors, and Wells Fargo Bank, National
    Association, as trustee, and Form of Second Amended and Restated
    Indenture, dated as of July 22, 2004, among GB Holdings, as
    obligor, and Wells Fargo Bank, National Association, as trustee
|4.4     |  |  |  | Second Amended and Restated Indenture, dated as of July 22,
    2004, among GB Holdings, as obligor, and Wells Fargo Bank,
    National Association, as trustee                                                                                                                                                                                                                              
|4.5    |  |  |  | Indenture, dated as of July 22, 2004, among Atlantic
    Holdings, as issuer, ACE, as guarantor, and Wells Fargo Bank,
    National Association, as trustee                                                                                                                                                                                                                                  
|4.7    |  |  |  | Warrant Agreement, dated as of July 22, 2004, between
    Atlantic Holdings and American Stock Transfer and Trust Company                                                                                                                                                                                                                                                                    
|4.8    |  |  |  | Registration Rights Agreement, dated as of July 22, 2004,
    between Atlantic Holdings and the Signatories listed therein                                                                                                                                                                                                                                                                   
|10.1    |  |  |  | Contribution Agreement, dated as of July 22, 2004, among GB
    Holdings, GBHC, Atlantic Holdings and ACE                                                                                                                                                                                                                                                                                    
|10.2   |  |  |  | Pledge and Security Agreement, dated as of July 22, 2004,
    among Atlantic Holdings, ACE and certain subsidiaries of
    Atlantic Holdings, as Guarantor, and Wells Fargo Bank, National
    Association, as trustee                                                                                                                                                                       
|10.3   |  |  |  | Assignment of Leases, dated as of July 22, 2004, between
    ACE and Wells Fargo Bank, National Association                                                                                                                                                                                                                                                                                  
|10.4   |  |  |  | Mortgage, Fixture Filing and Security Agreement, dated as of
    July 22, 2004, between ACE and Wells Fargo Bank, National
    Association                                                                                                                                                                                                                                                   
|10.5 |  |  |  | Loan and Security Agreement, dated November 12, 2004, by
    and among Atlantic Holdings, as borrower, ACE, as guarantor, and
    Fortress Credit Corp., as lender                                                                                                                                                                                                                           
|10.6 |  |  |  | Guaranty to Fortress Credit Corp, dated as of November 12,
    2004, among ACE, as guarantor, and Fortress Credit Corp. as
    lender                                                                                                                                                                                                                                                        
|10.7 |  |  |  | First Mortgage and Security Agreement, dated November 12,
    2004, by and among ACE, as mortgagor, and Fortress Credit Corp.,
    as mortgagee.                                                                                                                                                                                                                                             

64



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##### Table of Contents



|         |  |   |  |                                                                                                            
|-------- |  | - |  | -----------------------------------------------------------------------------------------------------------
|12.1     |  |   |  | Ratio of Earnings to Fixed Charges                                                                         
|14.1 |  |  |  | Code of Ethics                                                                                             
|21.1     |  |  |  | List of Subsidiaries of GB Holdings                                                                        
|31.1     |  |  |  | Certification of Principal Executive Officer, pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002
|31.2     |  |  |  | Certification of Principal Financial Officer, pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002
|32.1     |  |  |  | Certification of Chief Executive Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002     
|32.2     |  |  |  | Certification of Chief Financial Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002     






|      |                                                                                                                                                               
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | Filed as an exhibit to GB Holdings Current Report on
    Form 8-K, filed with the SEC on August 21, 2000, and
    incorporated herein by reference.          
|     
|   | Filed as an exhibit to GB Holdings Registration Statement
    on Form 8-A filed with the SEC on September 29, 2000, and
    incorporated herein by reference.
|     
|  | Filed as an exhibit to GB Holdings Annual Report on
    Form 10K for the year ended December 31, 2003, and
    incorporated herein by reference.             
|     
| | Filed as an exhibit to GB Holdings Annual Report on
    Form 10K for the year ended December 31, 2004, and
    incorporated herein by reference.             



| |        |                                                                                                                                                                
| | ------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Filed as an exhibit to Atlantic Holdings Registration Statement
    on Form S-4 filed with the SEC on August 3, 2004, and
    incorporated herein by reference.



|        |                                                                                                                                                            
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------
| | Filed as an exhibit to Atlantic Holdings Current Report on
    Form 8-K filed with the SEC on November 11, 2004, and
    incorporated herein by reference.

(b) Reports on Form 8-K




65



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##### Table of Contents



SIGNATURES






| |                      
| | ---------------------
| | GB Holdings,
    Inc.



| |     |                  
| | --- | -----------------
| | By: | /s/ Denise Barton

| |                        
| | -----------------------
| |                        
| | Denise Barton          
| | Chief Financial Officer



|                                                         |  |                                                                                                   |  |                |  | 
|-------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------- |  | -------------- |  | 
|Signature                                                |  | Title                                                                                             |  | Date          
|                                                         |  |                                                                                                   |  |               
|                                                        
|/s/ Carl C. IcahnCarl
    C. Icahn                       |  | Chairman of the Board of, GB Holdings, Inc.                                                       |  | April 14, 2005
|                                                        
|/s/ Martin HirschMartin
    Hirsch                       |  | Director of GB Holdings, Inc.                                                                     |  | April 14, 2005
|                                                        
|/s/ John P. SaldarelliJohn
    P. Saldarelli             |  | Director of GB Holdings, Inc.                                                                     |  | April 14, 2005
|                                                        
|Michael
    L. Ashner                                    |  | Director of GB Holdings, Inc.                                                                     |  | April 14, 2005
|                                                        
|/s/ Harold FirstHarold
    First                         |  | Director of GB Holdings, Inc.                                                                     |  | April 14, 2005
|                                                        
|/s/ Auguste E.
    Rimpel, Jr.Auguste
    E. Rimpel, Jr. |  | Director of GB Holdings, Inc.                                                                     |  | April 14, 2005
|                                                        
|/s/ Richard P. BrownRichard
    P. Brown                 |  | Chief Executive Officer of GB Holdings, Inc.                                                      |  | April 14, 2005
|                                                        
|/s/ Denise BartonDenise
    Barton                       |  | Chief Financial Officer of
    GB Holdings, Inc.
    (Principal Financial and Accounting Officer) |  | April 14, 2005

66



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##### Table of Contents



INDEX TO FINANCIAL STATEMENT SCHEDULE


GB Holdings, Inc. And Subsidiaries




| |   |                                               
| | - | ----------------------------------------------
| |  | Schedule II; Valuation and Qualifying Accounts

67



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##### Table of Contents



SCHEDULE II


GB HOLDINGS, INC. AND SUBSIDIARIES


VALUATION AND QUALIFYING ACCOUNTS


|                              |                                            |              |            |            |            |   |           |            |  |            |               |            |      |   |            |            | 
|----------------------------- | ------------------------------------------ | ------------ | ---------- | ---------- | ---------- | - | --------- | ---------- |  | ---------- | ------------- | ---------- | ---- | - | ---------- | ---------- | 
|                              |                                            |              |            | Additions  |            |   |           |            | 
|                              |                                            |              |            |            |            |   |           |            | 
|                              |                                            |              |            | Amounts    |            |   |           |            | 
|                              |                                            | Balance of   |            |            | Charged to |   |           |            |  |           
|                              |                                            | Beginning of |            |            | Costs and  |   |           |            |  | Balance at |              
|                              |                                            | Period       |            |            | Expenses   |   |           | Deductions |  |            | End of Period |           
|                              |                                            |              |            |            |            |   |           |            |  |            |               |           
|Year Ended December 31, 2004: |                                            |              |            |            |            |   |           |            |  |            |               |            |      |   |            |           
|                              | Allowance for doubtful accounts receivable |              | $          | 5,918,000  |            |   | $         | 416,000    |  |            | $             | (2,472,000 | )(1) |   | $          | 3,862,000  | 
|                              | Allowance for obligatory investments       |              |            | 11,340,000 |            |   |           | 1,165,000  |  |            |               | (5,000     | )(2) |   |            | 12,500,000 | 
|                              |                                            |              |            |            |            |   |           |            |  |            |               |           
|                              |                                            | $            | 17,258,000 |            |            | $ | 1,581,000 |            |  | $          | (2,477,000    | )          |      | $ | 16,362,000 |           
|                              |                                            |              |            |            |            |   |           |            |  |            |               |           
|Year Ended December 31, 2003: |                                            |              |            |            |            |   |           |            |  |            |               |            |      |   |            |           
|                              | Allowance for doubtful accounts receivable |              | $          | 11,301,000 |            |   | $         | 1,040,000  |  |            | $             | (6,423,000 | )(1) |   | $          | 5,918,000  | 
|                              | Allowance for obligatory investments       |              |            | 10,028,000 |            |   |           | 1,434,000  |  |            |               | (122,000   | )(2) |   |            | 11,340,000 | 
|                              |                                            |              |            |            |            |   |           |            |  |            |               |           
|                              |                                            | $            | 21,329,000 |            |            | $ | 2,474,000 |            |  | $          | (6,545,000    | )          |      | $ | 17,258,000 |           
|                              |                                            |              |            |            |            |   |           |            |  |            |               |           
|Year Ended December 31, 2002: |                                            |              |            |            |            |   |           |            |  |            |               |            |      |   |            |           
|                              | Allowance for doubtful accounts receivable |              | $          | 14,406,000 |            |   | $         | 1,586,000  |  |            | $             | (4,691,000 | )(1) |   | $          | 11,301,000 | 
|                              | Allowance for obligatory investments       |              |            | 9,290,000  |            |   |           | 1,521,000  |  |            |               | (783,000   | )(2) |   |            | 10,028,000 | 
|                              |                                            |              |            |            |            |   |           |            |  |            |               |           
|                              |                                            | $            | 23,696,000 |            |            | $ | 3,107,000 |            |  | $          | (5,474,000    | )          |      | $ | 21,329,000 |           
|                              |                                            |              |            |            |            |   |           |            |  |            |               |           






|    |                                                                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Represents net write offs of uncollectible accounts.                                                                                                    
|   
|(2) | Represents write offs of obligatory investments in connection
    with the contribution of certain obligatory investments to CRDA
    approved projects.

68