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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                           --------------------------

                                   FORM 10-K

(MARK ONE)

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<C>        <S>
   /X/     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934
</TABLE>

                  FOR THE FISCAL YEAR ENDED NOVEMBER 30, 1999
                                       OR

<TABLE>
<C>        <S>
   / /     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934
</TABLE>

      FOR THE TRANSITION PERIOD FROM ________________ TO ________________

                         COMMISSION FILE NUMBER 1-12802

                           --------------------------

                             HARVEYS CASINO RESORTS
             (Exact name of registrant as specified in its charter)

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<S>                                          <C>
              NEVADA                                     88-0066882
   (State or other jurisdiction                       (I.R.S. Employer
of incorporation or organization)                   Identification No.)

           HIGHWAY 50 &
         STATELINE AVENUE
 P.O. BOX 128 LAKE TAHOE, NEVADA
      (Address of principal                                89449
        executive offices)                               (Zip Code)
</TABLE>

       Registrant's telephone number, including area code: (775) 588-2411

                            ------------------------

        Securities registered pursuant to Section 12(b) of the Act: None

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

                Class A Common Stock; par value $0.01 per share

                           --------------------------

    Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes _X_  No ____

    Indicate by check mark if the disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ X ]

    As of February 22, 2000 all common equity of the registrant was held by
persons who may be deemed affiliates of the registrant.

    The number of shares outstanding of the registrant's Class A Common Stock,
$.01 par value was 39,520 and the number of shares outstanding of the
registrant's Class B Common Stock, $0.01 per value was 3,952,000, each as of
February 22, 2000.

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                                     PART I

ITEM 1. BUSINESS

    Harveys Casino Resorts is a Nevada corporation that has been engaged in the
gaming industry for over 55 years. Through wholly-owned subsidiaries, Harveys
Casino Resorts owns and operates gaming establishments in Nevada, Iowa and
Colorado. Harveys Casino Resorts may be referred to in this report as the
"Company," the "Registrant," "Harveys," "we," "us" or "our". Unless the context
requires otherwise, such references include our wholly-owned subsidiaries .

    On February 2, 1999, Harveys Acquisition Corporation merged with and into
Harveys. Harveys Acquisition Corporation was formed at the direction of Colony
Investors III, L. P., a Delaware limited partnership, solely for the purpose of
acquiring Harveys. Prior to the merger, Harveys was a publicly held company.
Following the merger, the capital stock of Harveys Acquisition Corporation
became the capital stock of Harveys. Consequently, Colony Investors III now owns
approximately 96% of our common equity interests. The remaining common equity
interests are owned by Colony HCR Voteco LLC, a Delaware limited liability
company, and by certain members of Harveys' management. Colony HCR Voteco is an
affiliate of Colony Investors III. Harveys was the surviving corporation in the
merger and is continuing business operations as conducted prior to the merger.

    Through our wholly-owned subsidiaries, we currently own and operate the
following:

    Harveys Resort & Casino - Owned and operated by Harveys Tahoe Management
Company, Inc., Harveys Resort is situated near the south shore of scenic Lake
Tahoe on the Nevada/California state line and U.S. Highway 50, the main route
through south Lake Tahoe. Originally founded by Harvey and Llewellyn Gross in
1944 as a one-room saloon, cafe and casino, the Company has developed the
property into the Lake Tahoe area's largest hotel/casino. The main structure is
a 17-story glass-faced tower completed in 1991, connected to a 12-story tower
which was completely rebuilt in 1982. The hotel provides panoramic views of the
lake and the surrounding mountains and is among Lake Tahoe's most modern
facilities. Harveys Resort features 740 rooms, 36 of which are luxury suites,
and an 82,000 square foot casino containing approximately 2,028 slot machines,
96 table games, a 13-table poker area, a race and sports book and a keno lounge.
Harveys Resort also offers a Platinum Players Club featuring VIP amenities
designed to reward and retain our loyal premium gaming customers. Other
amenities include 23,000 square feet of convention space, 2,989 parking spaces,
a substantial portion of which are included in a parking garage, the 280-seat
Cabaret, a wedding chapel, retail shops, a pool, a health club and a video game
arcade. Harveys Resort's eight restaurants offer a wide variety of high quality
food and consist of a newly remodeled coffee shop, a Mexican restaurant, a
seafood and pasta restaurant, a premier steakhouse, a buffet, a snack bar,
Llewellyn's, our upscale award-winning restaurant featuring top quality dining
and a spectacular view of Lake Tahoe, and a Hard Rock Cafe, located on the
casino floor, which is owned and operated by Hard Rock Cafe International (USA),
Inc. In recognition of the outstanding quality of the facility and our excellent
service, Harveys Resort has received the AAA Four Diamond Award every year for
the past 18 years.

    Harveys Casino Hotel - Owned and operated by Harveys Iowa Management
Company, Inc., Harveys Casino Hotel's facilities are located next to the
Missouri River directly across from Omaha, in Council Bluffs, Iowa. The
riverboat casino opened in January, 1996 and currently has 28,250 square feet of
casino space on three decks accommodating 2,352 passengers and housing 1,165
slot machines, 45 table games and a seven-table poker area. The land-based
amenities opened in May 1996 and include 251 hotel rooms in a 14-story tower,
Beverlee's, a rooftop fine dining restaurant offering a view of the Missouri
River and the Omaha skyline, a buffet and a casual restaurant, 21,000 square
feet of convention space, a parking garage, completed in October 1999, offering
1,630 parking spaces with climate-controlled access to the adjacent casino and
additional surface parking for 1,300 vehicles. The land-based facilities also
include a Platinum Players Club offering VIP amenities designed to reward and
retain our loyal premium gaming customers. Other attractions include an 18-hole
municipal golf

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course adjacent to our hotel and a nine-hole municipal golf course operated by
the city on land they lease from us at a nominal annual fee.

    Bluffs Run Casino - On October 6, 1999, our wholly-owned subsidiary, HBR
Realty Company, Inc., purchased the net assets (except the gaming equipment) of
the greyhound racetrack and land-based casino in Council Bluffs, Iowa. We
purchased these assets from Iowa West Racing Association, Nonprofit Corporation,
an Iowa nonprofit corporation. Immediately after closing of the transaction, we
leased the facilities known as Bluffs Run Casino back to Iowa West Racing
Association for an initial term of 25 years. At the same time, Iowa West Racing
Association retained our wholly-owned subsidiary, Harveys BR Management Company,
Inc., to manage Bluffs Run Casino for all periods during which the lease exists.
Iowa West Racing Association continues to hold the pari-mutuel and gaming
licenses under Iowa law and continues to own the gaming equipment located at
Bluffs Run Casino. We receive management fees and lease income generally equal
to the ongoing cash flow from the operations of Bluffs Run Casino. The
facilities offer patrons enclosed viewing of, and wagering on , the on-site
greyhound racing and simulcast greyhound and horse racing from various outside
racetracks. The casino also provides approximately 1,250 slot machines, live
entertainment events, restaurants and cocktail lounges. Iowa West Racing
Association, as licensee, and Harveys, as manager, recently received regulatory
approval to add 250 more slot machines. Additional amenities include surface
parking for 3,117 cars and a recreational vehicle park accommodating 115
vehicles.

    Harveys Wagon Wheel Hotel/Casino - Owned and operated by Harveys C.C.
Management Company, Inc., Harveys Wagon Wheel is located in Central City,
Colorado, a picturesque mountain town approximately 35 miles west of Denver.
Harveys Wagon Wheel opened in December, 1994 as the first major hotel/casino to
serve the greater Denver area. Harveys Wagon Wheel includes 118 hotel rooms, a
40,000 square foot casino housing 1,042 slot machines, 14 table games, a
nine-table poker area and a Platinum Players Club offering VIP amenities
designed to reward and retain our loyal premium gaming customers. Other
amenities include 730 on-site parking spaces, 530 of which are in a self-
parking garage, a Tony Roma's Famous for Ribs restaurant and a Pesto's Pasta
snack bar, an entertainment lounge and a video game arcade.

BUSINESS STRATEGY

    Our business strategy is to develop or acquire facilities in markets in
which we believe we can establish and maintain a prominent position or niche.
Each of our properties offers casino gaming and a full range of amenities in a
friendly atmosphere that caters to middle- and upper middle-income customers.
Our strategy emphasizes the following elements:

    HIGH-QUALITY FACILITIES AND SUPERIOR CUSTOMER SERVICE

    As part of our commitment to providing a quality entertainment experience
for our patrons, we are dedicated to ensuring a high level of customer
satisfaction and loyalty by providing distinctive and modern accommodations and
attentive customer service in a friendly atmosphere. We recognize that
consistent quality and a comfortable atmosphere can differentiate our facilities
from the competition in all of our markets. We strive to meet customer demand by
furnishing each of our properties with a variety of restaurants and non-gaming
amenities. To foster a high level of customer satisfaction through attentive
customer service, our management plays an active role in the training of all of
our employees at all levels. Harveys' goal of becoming a truly customer-focused
organization has been achieved at all of our properties through training
programs, role playing and simulations. We believe that these programs have
evolved to provide the Company's customers with a truly unique experience. We
have implemented attractive employee benefit programs at all of our facilities
to recruit and retain friendly, professional employees.

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    STRATEGIC LOCATIONS

    Harveys believes that location is the key to attracting customers. South
Lake Tahoe, which draws approximately 2 million visitors per year, is a unique
gaming location because of its natural surroundings and variety of outdoor
attractions and activities. Harveys Resort is strategically placed on a site
adjacent to the California border in proximity to more than 6,450 hotel and
motel rooms in non-gaming facilities. Harveys Casino Hotel and Bluffs Run Casino
are within a short drive of the Omaha/ Council Bluffs metropolitan regional
airport. Harveys Casino Hotel is located directly off of Interstates 29, 80 and
480. Bluffs Run Casino is located at the intersection of Interstates 80 and 29.
It has visibility and exit ramps from each Interstate. Harveys Wagon Wheel is
located on a highly visible site in Central City, Colorado, a picturesque
mountain town approximately 35 miles west of Denver.

    TARGETED CUSTOMER BASE

    Harveys targets middle- to upper middle-income customers who tend to have
disposable income for gaming and entertainment. We have established extensive
customer databases and use sophisticated player tracking systems to award cash
rebates or promotional allowances, such as complimentary rooms, food, beverage
and entertainment, when gaming play warrants. We attract our targeted market to
Harveys Resort by promoting our quality facilities in the scenic Lake Tahoe
area. We believe we are able to retain customers through development and
cultivation of our customer relationships. Harveys Casino Hotel targets
frequent, middle income players from Omaha, Council Bluffs and the surrounding
areas. We believe that the hotel and convention facilities, opened in May 1996,
attract new players by capturing overnight guests as well as meetings and small
conventions business. The greyhound facilities at Bluffs Run Casino have been in
existence since 1986 creating very high name recognition in the region. The
casino facilities opened one year prior to any other casino in the area. Since
opening, Bluffs Run Casino has maintained one of the highest slot machine
payback percentages in the nation. This has been publicized in industry
magazines and has generated strong customer loyalty. Harveys Wagon Wheel targets
middle- to upper middle-income customers from the greater Denver area who seek a
quality gaming experience, convenient parking and overnight accommodations. We
believe we have successfully built a loyal customer base at Harveys Wagon Wheel
by establishing ourselves as the first full-service casino with overnight
accommodations and full amenities in the Central City/Black Hawk market.

    EFFECTIVE MARKETING

    We aggressively promote all of our properties through television, radio,
billboard and print advertising. In February 1997, Bill Cosby agreed to become a
spokesperson for the Company. Under a contractual relationship, Mr. Cosby is
actively involved in promoting Harveys through entertainment appearances at our
properties and through advertising messages on television, radio and billboards
and in print media. We believe that this association has been and will continue
to be helpful in enhancing the national visibility of Harveys.

    Harveys Resort seeks to attract customers by offering well-appointed rooms
and a party atmosphere for those seeking nightlife and entertainment. In 1999
Harveys Resort introduced a new campaign, "Harveys Lake Tahoe Grand Adventure."
The campaign's successful launch ties Harveys Resort to Lake Tahoe as a
destination. We believe that by continuing to promote Harveys image, we will
increase our share of higher-income customers attracted to the south Lake Tahoe
market. Harveys Casino Hotel is marketed as "Harveys Casino Hotel, You Can Have
It All!" in the Omaha/Council Bluffs market through the extensive use of
television, radio and print advertisement, billboards, on-going promotions and
sweepstakes as well as point-of-sale materials located in local hotels,
restaurants and other visitor attractions. We use a price point positioning to
differentiate Bluffs Run Casino in the Omaha/Council Bluffs market. Its "Bigger
Value. Better Time." philosophy has helped the property consistently maintain
the highest share of annual slot gaming dollars and highest annual attendance in

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the market. We attract customers to Harveys Wagon Wheel by aggressively
promoting the facility's hotel rooms, on-site parking, quality dining facilities
and varied entertainment activities.

    EMPHASIS ON SLOT PLAY

    Responding to the increased popularity of slot machines over the past
several years, we have shifted our gaming mix toward slot machines. We match the
mix of slot machines to the demand of the customer base at each property.
Harveys Resort, for instance, now includes a greater percentage of $1 and higher
denominated machines to appeal to the higher-income gaming clientele of Harveys
Resort, including $5, $25 and $100 slot machines offered within a premium player
section. Harveys Casino Hotel offers 1,165 slot machines and Bluffs Run Casino
offers 1,250 slot machines, which in the aggregate comprise approximately 62% of
the Omaha/Council Bluffs slot machine availability. Iowa West Racing
Association, as licensee, and Harveys, as manager, recently received approval
from the Iowa gaming authority to add an additional 250 slot machines at Bluffs
Run Casino. Harveys Wagon Wheel offers 1,042 slot machines, the second largest
selection of slot machines currently offered by any gaming facility in the area.
Slot machines are less labor intensive and require less square footage than
table games, and generate higher profit margins compared to table games. We
monitor payout percentages closely and ensure that our slot product and machine
payouts remain competitive.

COMPETITION

    The gaming industry is highly competitive. Harveys competes for customers
primarily on the basis of location, variety and pricing of amenities and overall
atmosphere. Several of our competitors have substantially greater name
recognition, financial and marketing resources.

    LAKE TAHOE

    Harveys Resort competes with a number of other hotel/casinos at Lake Tahoe
and, to a lesser extent, with hotel/casino operations located in Reno, Las Vegas
and Laughlin, Nevada and casinos on Native American lands in California. In
south Lake Tahoe, Harveys Resort competes primarily with three other major
casino operations: Harrah's Lake Tahoe, Caesars Tahoe and the Horizon Casino
Resort.

    In 1987, the Tahoe Regional Planning Agency, an entity established under a
bi-state compact between the states of California and Nevada, and ratified by
Congress, placed restrictions on additional commercial, residential and tourist
accommodation construction at Lake Tahoe in an effort to curb development and to
preserve the local environment. Under the Tahoe Regional Planning Compact and
community plan constraints, future tourist accommodation units added to the
market will be required to mitigate environmental impacts. Such measures may
include replacing an imposed multiple of older tourist accommodation units. The
limited number of rooms available at Lake Tahoe, however, allows Lake Tahoe
hotel/casino operators to achieve much higher average room rates than those in
most other gaming jurisdictions. The occupancy rate for the 2,250 upscale rooms
in the four major south Lake Tahoe casinos has historically been between 75% and
80%, while the occupancy rate in the motels is typically between 40% and 50%.
The Tahoe Regional Planning Agency has imposed significant restrictions on
construction and the Tahoe Regional Planning Compact limits the expansion of
gaming facilities in the Lake Tahoe Basin. These restrictions prohibit existing
casinos from expanding cubic volume of structures housing gaming and limit
expansion of the gaming areas within such structures. We believe that because of
such restrictions, it is unlikely that any new hotel/casinos will commence
operations at Lake Tahoe or that any of the smaller existing casinos will expand
to a size that could make them competitive with the four major casinos; however,
we expect that the four major hotel/ casinos will continue to compete intensely.

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    In addition, as a result of the approval of state proposition 5, the
California Indian Self-Reliance Initiative, in California in November 1998,
additional competition could result from an increase in the number of casinos on
Native American lands in California, including on lands that are between Harveys
Resort and major population centers, such as the San Francisco Bay area, and
proximate to Highway 50, the primary road route to south Lake Tahoe.

    OMAHA/COUNCIL BLUFFS

    The target markets for our two operations in Council Bluffs are the
residential population base (approximately 760,000) of the greater Omaha/Council
Bluffs area, and the nearly 3 million residents within a three-hour drive of the
facilities. We compete with Ameristar Casino Inc.'s riverboat casino in Council
Bluffs and to a lesser extent, with other riverboat casinos located in Iowa and
Missouri. We also compete with slot machines installed at a dogtrack and at a
horsetrack in Iowa as well as casinos on Native American land in Iowa.

    In Iowa, gaming is subject to approval by county referendum at least every
eight years. While gaming is approved in Pottawattamie County, where Harveys
Casino Hotel and Bluffs Run Casino are located, referendums may be held at any
time upon satisfactory petition, and another referendum is required to be held
in 2002. There can be no assurance that gaming would be approved again in any
referendum in Pottawattamie County. In addition, should casino-style gaming be
permitted in Nebraska, or should gaming facilities be opened in Omaha, Harveys
Casino Hotel and Bluffs Run Casino could be materially adversely affected.

    CENTRAL CITY/BLACK HAWK

    Harveys Wagon Wheel competes primarily with the four major casinos with the
largest number of gaming devices in Black Hawk as well as the 26 smaller gaming
establishments in operation as of February 11, 2000, in Central City and Black
Hawk. The five largest casinos, including Harveys Wagon Wheel, as of February
11, 2000 had more than 45% of all gaming devices in the Central City/Black Hawk
area. The adjacent cities of Central City and Black Hawk form Colorado's primary
gaming market. In this market the establishments with on-site parking, overnight
accommodations and/or other non-gaming amenities fair better than those without
such amenities. Substantially all recent casino development in the Central
City/Black Hawk area has occurred in Black Hawk, which visitors from the Denver
area must drive through in order to reach Central City. The Lodge Casino,
offering 700 on-site parking spaces (including 300 spaces shared with the
adjacent Gilpin Hotel Casino) and overnight accommodations in 50 hotel rooms,
opened in Black Hawk in June 1998. The Isle of Capri opened in Black Hawk on
December 30, 1998, with 1,100 parking spaces and will most likely open their
hotel with 243 rooms in the summer of 2000. The Riviera opened in Black Hawk on
February 4, 2000 with 520 parking spaces. The Mardi Gras is expected to open in
March 2000 with approximately 700 slots, eight table games and 500 parking
spaces. In addition, from time to time, the towns of Central City and Black Hawk
undertake roadway and other infrastructure improvements. Because the towns are
generally accessible only by a single road, these infrastructure projects may
deter gaming customers from visiting the Central City/Black Hawk area or
traveling through Black Hawk to Central City. There can be no assurances that
the development or concentration of casinos or infrastructure improvements in
Black Hawk will not adversely affect the number of gaming customers visiting
Harveys Wagon Wheel in Central City. In addition, the municipal governments of
Central City and Black Hawk compete to attract gaming patrons and gaming
development to their respective towns, including by improving road access. Black
Hawk's financial resources are currently substantially greater that Central
City's and there can be no assurance that Black Hawk will not make improvements
or provide other inducements that would result in reduction of the number of
gaming patrons visiting Harveys Wagon Wheel in Central City. Any expansion of
gaming, whether it be through approval of video lottery terminals or approval of

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gaming in additional Colorado communities, would likely have a material adverse
impact on our operation in Central City.

EMPLOYEES

    As of February 14, 2000 the Company had approximately 5,050 employees. We
believe that employee relations are good. The Company has entered into
collective bargaining agreements that cover approximately 27 employees. These
agreements relate to stage-hand employees who provide support to entertainment
facilities at Harveys Resort and security officers at Bluffs Run Casino. None of
our other employees are represented by labor unions.

REGULATORY MATTERS

    NEVADA GAMING LAWS AND REGULATIONS

    The ownership and operation of casino gaming facilities in Nevada are
subject to the Nevada Gaming Control Act and the regulations promulgated
thereunder (collectively, the "Nevada Act") and various local regulations. Our
gaming operations in Nevada are subject to the licensing and regulatory control
of the Nevada State Gaming Control Board (the "Nevada Board"), and the Nevada
Gaming Commission (the "Nevada Commission"). In this report, we collectively
refer to the Nevada Board, and the Nevada Commission as the "Nevada Gaming
Authorities".

    The laws, regulations and supervisory procedures of the Nevada Gaming
Authorities are based upon declarations of public policy which are concerned
with, among other things: (i) the prevention of unsavory or unsuitable persons
from having a direct or indirect involvement with gaming at any time or in any
capacity; (ii) the establishment and maintenance of responsible accounting
practices and procedures; (iii) the maintenance of effective controls over the
financial practices of licensees, including the establishment of minimum
procedures for internal fiscal affairs and the safeguarding of assets and
revenues, providing reliable record keeping and requiring the filing of periodic
reports with the Nevada Gaming Authorities; (iv) the prevention of cheating and
fraudulent practices; and (v) to provide a source of state and local revenues
through taxation and licensing fees. Change in these laws, regulations and
procedures could have an adverse effect on our gaming operations.

    As is any company that operates a Nevada gaming casino we are required to be
licensed by the Nevada Gaming Authorities. The gaming license requires the
periodic payment of fees and taxes and is not transferable. We are also
registered by the Nevada Commission as a publicly traded corporation
("Registered Corporation"). As a Registered Corporation, we are required
periodically to submit detailed financial and operating reports to the Nevada
Commission and furnish any other information which the Nevada Commission may
require. We have obtained from the Nevada Gaming Authorities the various
registrations, approvals, permits and licenses required in order to engage in
gaming activities in Nevada. The Nevada Gaming Authorities may investigate any
individual who has a material relationship to, or material involvement with, the
Company in order to determine whether such individual is suitable or should be
licensed as a business associate of a gaming licensee. Officers, directors and
certain key employees of the Company must file applications with the Nevada
Gaming Authorities and may be required to be licensed or found suitable by the
Nevada Gaming Authorities. The Nevada Gaming Authorities may deny an application
for licensing for any cause which they deem reasonable. A finding of suitability
is comparable to licensing, and both require submission of detailed personal and
financial information followed by a thorough investigation. The applicant for
licensing or a finding of suitability must pay all the costs of the
investigation. Changes in licensed positions must be reported to the Nevada
Gaming Authorities and in addition to their authority to deny an application for
a finding of suitability or licensure, the Nevada Gaming Authorities have
jurisdiction to disapprove a change in a corporate position.

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    If the Nevada Gaming Authorities were to find an officer, director or key
employee unsuitable for licensing or unsuitable to continue having a
relationship with the Company, we would have to sever all relationships with
that person. In addition, the Nevada Commission may require us to terminate the
employment of any person who refuses to file appropriate applications.
Determinations of suitability or of questions pertaining to licensing are not
subject to judicial review in Nevada.

    We are required to submit detailed financial and operating reports to the
Nevada Commission. Substantially all material loans, leases, sales of securities
and similar financing transactions that we enter into must be reported to, or
approved by, the Nevada Commission.

    If it were determined that the Nevada Act was violated by the Company, the
gaming licenses we hold could be limited, conditioned, suspended or revoked,
subject to compliance with certain statutory and regulatory procedures. In
addition, the Company, and the persons involved, could be subject to substantial
fines for each separate violation of the Nevada Act at the discretion of the
Nevada Commission. Further, a supervisor could be appointed by the Nevada
Commission to operate Harveys Resort and, under certain circumstances, earnings
generated during the supervisor's appointment (except for the reasonable rental
value of Harveys Resort) could be forfeited to the State of Nevada. Limitation,
conditioning or suspension of our gaming license or the appointment of a
supervisor could (and revocation of our gaming license would) materially
adversely affect our gaming operations.

    Any beneficial holder of the Company's voting securities, regardless of the
number of shares owned, may be required to file an application, be investigated,
and have his or her suitability as a beneficial holder of the Company's voting
securities determined if the Nevada Commission has reason to believe that the
ownership would otherwise be inconsistent with the declared policies of the
State of Nevada. The applicant must pay all costs of investigation incurred by
the Nevada Gaming Authorities in conducting any such investigation.

    The Nevada Act requires any person who acquires more than 5% of a Registered
Corporation's voting securities to report the acquisition to the Nevada
Commission. The Nevada Act requires that beneficial owners of more than 10% of a
Registered Corporation's voting securities apply to the Nevada Commission for a
finding of suitability within thirty days after the Chairman of the Nevada Board
mails a written notice requiring the filing. Under certain circumstances, an
"institutional investor," as defined in the Nevada Act, which acquires more than
10%, but not more than 15%, of a Registered Corporation's voting securities may
apply to the Nevada Commission for a waiver of the finding of suitability if the
institutional investor holds the voting securities for investment purposes only.
An institutional investor will not be deemed to hold voting securities for
investment purposes unless the voting securities were acquired and are held in
the ordinary course of business as an institutional investor and not for the
purpose of causing, directly or indirectly, the election of a majority of the
members of the board of directors of the Registered Corporation, any change in
the corporate charter, bylaws, management, policies or operations of the
Registered Corporation, or any of its gaming affiliates, or any other action
which the Nevada Commission finds to be inconsistent with holding the Registered
Corporation's voting securities for investment purposes only. Activities which
are not deemed to be inconsistent with holding voting securities for investment
purposes only include: (i) voting on all matters voted on by stockholders;
(ii) making financial and other inquiries of management of the type normally
made by securities analysts for informational purposes and not to cause a change
in its management, policies or operations; and (iii) such other activities as
the Nevada Commission may determine to be consistent with such investment
intent. If the beneficial holder of voting securities who must be found suitable
is a corporation, partnership or trust, it must submit detailed business and
financial information including a list of beneficial owners. The applicant is
required to pay all costs of investigation.

    Any person who fails or refuses to apply for a finding of suitability or a
license within thirty days after being ordered to do so by the Nevada Commission
or the Chairman of the Nevada Board, may be

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found unsuitable. The same restrictions apply to a record owner if the record
owner, after request, fails to identify the beneficial owner. Any stockholder
found unsuitable and who holds, directly or indirectly, any beneficial ownership
of the common stock of a Registered Corporation beyond such period of time as
may be prescribed by the Nevada Commission may be guilty of a criminal offense.
We are subject to disciplinary action if, after we receive notice that a person
is unsuitable to be a stockholder or to have any other relationship with the
Company, we (i) pay that person any dividend or interest on our voting
securities, (ii) allow that person to exercise, directly or indirectly, any
voting right conferred through securities held by that person, (iii) pay
remuneration in any form to that person for services rendered or otherwise, or
(iv) fail to pursue all lawful efforts to require the person to relinquish his
or her voting securities for cash at fair market value.

    The Nevada Commission may, in its discretion, require the holder of any debt
security of a Registered Corporation to file applications, be investigated and
be found suitable to own the debt security if it has reason to believe that the
ownership would be inconsistent with the declared policies of the State of
Nevada. If the Nevada Commission determines that a person is unsuitable to own a
debt security, then pursuant to the Nevada Act, the Registered Corporation can
be sanctioned, including the loss of its approvals, if without the prior
approval of the Nevada Commission, it: (i) pays to the unsuitable person any
dividend, interest, or any distribution whatsoever; (ii) recognizes any voting
right by the unsuitable person in connection with those securities; (iii) pays
the unsuitable person remuneration in any form; or (iv) makes any payment to the
unsuitable person by way of principal, redemption, conversion, exchange,
liquidation, or similar transaction.

    We are required to maintain a current stock ledger in Nevada which may be
examined by the Nevada Gaming Authorities at any time. If any securities are
held in trust by an agent or by a nominee, the record holder may be required to
disclose the identity of the beneficial owner to the Nevada Gaming Authorities.
A failure to make that disclosure may be grounds for finding the record holder
unsuitable. We are also required to render maximum assistance in determining the
identity of the beneficial owner. The Nevada Commission has the power to require
our stock certificates to bear a legend indicating that the securities are
subject to the Nevada Act. However, to date, the Nevada Commission has not
imposed that requirement on the Company.

    We may not make a public offering of our securities without the prior
approval of the Nevada Commission if the securities or the proceeds from their
sale are intended to be used to construct, acquire or finance gaming facilities
in Nevada, or to retire or extend obligations incurred for those purposes. The
approval, if given, does not constitute a finding, recommendation or approval by
the Nevada Commission or the Nevada Board as to the accuracy or adequacy of the
prospectus or the investment merits of the securities. Any representation to the
contrary is unlawful.

    Changes in control of the Company through merger, consolidation, stock or
asset acquisitions, management or consulting agreements, or any act or conduct
by a person by which he or she obtains control, may not occur without the prior
approval of the Nevada Gaming Authorities. Entities seeking to acquire control
of a Registered Corporation must satisfy the Nevada Board and Nevada Commission
in a variety of stringent standards prior to assuming control of the Registered
Corporation. The Nevada Commission may also require controlling stockholders,
officers, directors and other persons having a material relationship or
involvement with the entity proposing to acquire control to be investigated and
licensed as part of the approval process relating to the transaction.

    The Nevada legislature has declared that some corporate acquisitions opposed
by management, repurchases of voting securities and corporate defense tactics
affecting Nevada corporate gaming licensees, and Registered Corporations that
are affiliated with those operations, may be injurious to stable and productive
corporate gaming. The Nevada Commission has established a regulatory scheme to
ameliorate the potentially adverse effects of these business practices upon
Nevada's gaming industry and to further Nevada's policy to: (i) assure the
financial stability of corporate gaming operators and

                                       9
<PAGE>
their affiliates; (ii) preserve the beneficial aspects of conducting business in
the corporate form; and (iii) promote a neutral environment for the orderly
governance of corporate affairs. Approvals are, in certain circumstances,
required from the Nevada Commission before the Registered Corporation can make
exceptional repurchases of voting securities above the current market price and
before a corporate acquisition opposed by management can be consummated. The
Nevada Act also requires prior approval of a plan of recapitalization proposed
by the Registered Corporation's Board of Directors in response to a tender offer
made directly to the Registered Corporation's stockholders for the purposes of
acquiring control of the Registered Corporation.

    License fees and taxes, computed in various ways depending on the type of
gaming or activity involved, are payable to the State of Nevada and to the
counties and cities in which the Nevada licensee's respective operations are
conducted. Depending upon the particular fee or tax involved, these fees and
taxes are payable either monthly, quarterly or annually and are based upon
either: (i) a percentage of the gross revenues received; (ii) the number of
gaming devices operated; or (iii) the number of table games operated. A casino
entertainment tax is also paid by casino operations where entertainment is
furnished in connection with the selling of food or refreshments or the selling
of merchandise. Nevada licensees that hold a license as an operator of a slot
route, or a manufacturer's or distributor's license, also pay certain fees and
taxes to the State of Nevada.

    Any person who is licensed, required to be licensed, registered, required to
be registered, or is under common control with such persons (collectively,
"Licensees"), and who proposes to become involved in a gaming venture outside of
Nevada is required to deposit with the Nevada Board, and thereafter maintain, a
revolving fund in the amount of $ 10,000 to pay the expenses of investigation by
the Nevada Board of their participation in such foreign gaming. The revolving
fund is subject to increase or decrease in the discretion of the Nevada
Commission. Thereafter, Licensees are required to comply with certain reporting
requirements imposed by the Nevada Act. Licensees are also subject to
disciplinary action by the Nevada Commission if they knowingly violate any laws
of the foreign jurisdiction pertaining to the foreign gaming operation, fail to
conduct the foreign gaming operation in accordance with the standards of honesty
and integrity required of Nevada gaming operations, engage in activities that
are harmful to the State of Nevada or its ability to collect gaming taxes and
fees, or employ a person in the foreign operation who has been denied a license
or finding of suitability in Nevada on the ground of personal unsuitability.

    IOWA GAMING LAWS AND REGULATIONS

    The State of Iowa first authorized excursion gambling boat activities in
1989 and authorized slot machines at racetrack enclosures in 1994. The Iowa
Racing and Gaming Commission (the "Iowa Commission") has the authority to grant
and review licenses to owners and operators of excursion gambling boats and
pari-mutuel racetracks, and has the further authority to adopt and enforce rules
governing a broad range of subjects dealing with excursion gambling boat
facilities and racetrack enclosures and operations thereof. The Iowa Commission
consists of five members who are appointed by the governor and confirmed by the
state senate. Members serve a term not to exceed three years at the pleasure of
the governor.

    Under Iowa law relating to excursion gambling boats, a non-profit
organization and a for-profit organization may receive a joint license to
operate an excursion gambling boat. The Company, together with Iowa West Racing
Association, a qualified non-profit organization, have been granted the
necessary licenses to own and operate the current gambling facilities and
activities on the riverboat casino at Harveys Casino Hotel each year since 1995.
Our excursion boat gambling license, which is up for renewal, currently expires
March 31, 2000.

    Under Iowa law relating to racetracks, only a non-profit organization, an
operator of fairs or a state agency or political subdivision may hold a track
license and only a licensee which held a license to

                                       10
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operate a pari-mutuel dog racing operation on January 1, 1994, could obtain a
racetrack slot casino license when they became available in 1994. Iowa West
Racing Association, a qualified non-profit organization, holds the pari-mutuel
license to operate the dog track and the gaming racetrack enclosure license to
operate the slot machine casino all at Bluffs Run Greyhound Racetrack and
Casino. The Bluffs Run pari-mutuel dogtrack license and the Bluffs Run gambling
license for a racetrack enclosure expire December 31, 2000.

    All licenses are granted upon the condition that the license holders accept,
observe and enforce all applicable laws, regulations, ordinances, rules and
orders applicable to them, and any violation by a license holder including
employees or agents, may result in disciplinary action, including the suspension
or revocation of any license heretofore granted.

    On October 6, 1999, Harveys Iowa Management Company, Inc. and Iowa West
Racing Association entered into an amended and restated excursion gambling boat
sponsorship and operating agreement relating to Harveys operation of its
excursion gambling boat casino. The operating agreement's term continues through
December 31, 2010, and during the agreement, Harveys is to pay Iowa West Racing
Association a fee equal to a percentage of the adjusted gross gaming receipts
generated from the boat operation and further agreed to pay and hold Iowa West
Racing Association harmless from the admissions fee payable to the Iowa
Commission and the local municipality and state wagering tax imposed by Iowa
law. Following the expiration of the term of the operating agreement, such
agreement may be extended for five successive three-year periods.

    Also, on October 6, 1999, Harveys BR Management Company and Iowa West Racing
Association entered into a management agreement whereby Harveys BR Management
Company is to manage the pari-mutuel racetrack facility and casino operations
including simulcast of greyhound or horse racing and the slot machines for a
minimum of twenty-five (25) years during which Harveys is to receive management
fee equal to a percentage of the cash flow as that term is defined in the
management agreement. On the same day, October 6, 1999, HBR Realty Company
purchased the Bluffs Run Casino assets, except for the slot machines, from Iowa
West Racing Association and leased the same back to Iowa West Racing Association
for a term ending October 5, 2024, which lease is renewable for additional terms
by the mutual agreement of the parties. Harveys is to receive rent payments
equal to a percentage of cash flow as that term is defined in the lease
agreement, except that Iowa West Racing Association is entitled to $1,350,000 of
cash flow payable every six months in arrears following the acquisition until
the fifth business day following the date that the results of a required
referendum on the continuation of gaming at pari-mutuel racetracks, to be
decided by the voters of Pottawattamie County, Iowa, in 2002 are certified to
the County Auditor of Pottawattamine County. Under the terms of the agreements,
Harvey receives management fees and lease income generally equal to the ongoing
cash flow from the operations of Bluffs Run Casino. All of the agreements
outlined here were approved by the Iowa Commission in September 1999.

    Under Iowa law, gambling licenses may only be granted by the Iowa Commission
in those counties that have approved the conduct of gambling games in a
county-wide referendum. Gambling games, both at a racetrack enclosure and on
riverboats, have been approved by the county electorate in Pottawattamie County,
Iowa, the location of both Harveys Casino Hotel and Bluffs Run Casino.

    However, a referendum can be requested at any time by a petition of the
voters and must be reapproved for both types of gambling activities via the
general election ballot eight years after the initial approval and each eight
years thereafter. There can be no assurance that either type of gambling
activities will be approved at the next referendum to be held in November 2002,
in subsequent referendums held every eight years thereafter or in the event of a
petition referendum.

    If the gambling referendums do not pass in the county where the licenses are
held, the excursion boat licenses may remain valid at the discretion of the Iowa
Commission for a total of nine years from the date of original issue which, in
the case of Harveys, would be nine years from January 27, 1995, or

                                       11
<PAGE>
January 27, 2004. Racetracks do not have a similar original license concept
allowing them to operate via renewals by the Iowa Commission until the
expiration of nine years from the date they were first licensed. In the event a
negative referendum vote occurred in 2002, Bluffs Run Casino would have to cease
casino gaming operations in a relatively short time following the referendum
defeat, probably pursuant to an Order of the Iowa Commission.

    Following the issuance of a gaming license, the Iowa Commission monitors and
supervises the activities of the licensees. Material contracts to be entered
into by the licensee, changes in ownership of the licensee, management
contracts, and acquisition of interest in other gambling activities by the
licensee or its owners must all be reported to, and approved by the Iowa
Commission. Further, the Iowa Commission has the authority to determine the
payouts from the gambling games, the race schedules, to set the payout rate for
all slot machines, to establish minimum charges for admission to excursion
gambling boats, impose an admission fee or a head tax, as well as define the
excursion season and the duration of an excursion, as well as define the race
season and total number of races to be held.

    For excursion gambling boats, Iowa law authorizes the imposition of an
admission fee, set by and payable to the Iowa State Treasurer, on each person
embarking on an excursion gambling boat. An additional admission fee may be
imposed by the municipality in which the gambling operation is located. In
practice, the Iowa Commission has not imposed a per-person admission fee, but
rather imposed a fee on each excursion gambling boat based upon the estimated
costs of supervision and enforcement to be incurred by the Iowa Commission for
the ensuing fiscal year. For the fiscal year beginning July 1, 1999, the fee is
$314,080, payable in weekly installments of $6,040. A $0.50 per person admission
fee is also payable to the City of Council Bluffs, Iowa. Further, Iowa law
imposes an annual wagering tax ranging from five percent on the first million of
adjusted gross receipts from gambling games to 20 percent on adjusted gross
receipts in excess of $3 million.

    For dog tracks, Iowa law requires the payment of a licensing fee of $250 for
each racing day. In addition, a licensee is required to pay the Iowa Commission
the sum of $.50 for each person entering the racetrack grounds or enclosure
under a ticket of admission. There is also a wagering tax imposed on the gross
sum wagered at the dog track at the following rate: (i) 6% if the gross sum
wagered in the racing season is $55,000,000 or more; (ii) 5% if the gross sum
wagered in the racing season is $30,000,000 or more, but less that $55,000,000;
(iii) 4% if the gross sum wagered in the racing season is less than $30,000,000.

    For pari-mutuel slot casinos there is an escalating wagering tax which is
currently 28% of the gross receipts from the slot machine casino which rate goes
up two percent per year every January 1st until it reaches a maximum of 36% on
January 1, 2004.

    The Racing Association of Central Iowa which operates the horse track in
Altoona (Des Moines) Iowa, brought an action on June 25, 1998, in the Iowa
District Court, In and For Polk County alleging that the escalating racetrack
casino tax is violative of the United States and Iowa Constitutions. The Dubuque
dog track, Bluffs Run Casino, and the Iowa Greyhound Association have intervened
in the case, but it is still in the preliminary stages so that no outcome is
predictable at the present time.

    Excursion gambling boat activities are also subject to safety and inspection
requirements of the State of Iowa and the U.S. Coast Guard. These requirements
set limits on the operation of the vessel; mandate that it must be operated by a
minimum complement of licensed personnel; establish periodic inspections,
includng the physical inspection of the outside hull; and establish other
mechanical and operations rules.

                                       12
<PAGE>
    COLORADO GAMING LAWS AND REGULATIONS

    The State of Colorado created the Division of Gaming (the "Division") within
the Department of Revenue to license, implement, regulate and supervise the
conduct of limited gaming under the Colorado Limited Gaming Act. The Director of
the Division, under the supervision of a five-member Colorado Limited Gaming
Control Commission (the "Colorado Commission"), has been granted broad power to
ensure compliance with the Colorado gaming regulations (the "Colorado
Regulations"). The Director may inspect, without notice, impound or remove any
gaming device. The Director may examine and copy any licensee's records, may
investigate the background and conduct of licensees and their employees, and may
bring disciplinary actions against licensees and their employees. The Director
may also conduct detailed background investigations of persons who loan money to
a licensee.

    The Colorado Commission is empowered to issue five types of gaming and
gaming-related licenses. The licenses are revocable and non-transferable. Our
failure or inability, or the failure or inability of others associated with our
Colorado gaming operations, to maintain necessary gaming licenses would have a
material adverse effect on our operations. All persons employed by us and
involved, directly or indirectly, in gaming operations in Colorado also are
required to obtain a Colorado gaming license. All licenses must be renewed
annually.

    As a general rule, under the Colorado Regulations, it is a criminal
violation for any person to have a legal, beneficial, voting or equitable
interest, or right to receive profits, in more than three retail gaming licenses
in Colorado. The Colorado Commission has ruled that a person does not have an
interest in a licensee for purposes of the multiple license prohibition if:
(i) that person has less than a five percent (5%) interest in an institutional
investor which has an interest in a publicly traded licensee or publicly traded
company affiliated with a licensee; (ii) a person has a five percent (5%) or
more financial interest in an institutional investor, but the institutional
investor has less than a five percent (5%) interest in a publicly traded
licensee or publicly traded company affiliated with a licensee; (iii) an
institutional investor has less than a five percent (5%) financial interest in a
publicly traded licensee or publicly traded company affiliated with a licensee;
(iv) an institutional investor possesses securities in a fiduciary capacity for
another person, and does not exercise voting control over five percent (5%) or
more of the outstanding voting securities of a publicly traded licensee or of a
publicly traded company affiliated with a licensee; (v) a registered broker or
dealer retains possession of securities of a publicly traded licensee or of a
publicly traded company affiliated with a licensee for its customers in street
name or otherwise, and exercises voting rights for less than five percent (5%)
of the publicly traded licensee's voting securities or of a publicly traded
company affiliated with a licensee; (vi) a registered broker or dealer acts as a
market maker for the stock of a publicly traded licensee or of a publicly traded
company affiliated with a licensee and possesses a voting interest in less than
five percent (5%) of the stock of the publicly traded licensee or of a publicly
traded company affiliated with a licensee; (vii) an underwriter is holding
securities of a publicly traded licensee or of a publicly traded company
affiliated with a licensee as part of an underwriting for no more than 90 days
if it exercises voting rights of less than five percent (5%) of the outstanding
securities of a publicly traded licensee or of a publicly traded company
affiliated with a licensee; (viii) a stock clearinghouse holds voting securities
for third parties, if it exercises voting rights with respect to less than five
percent (5%) of the outstanding securities of a publicly traded licensee or of a
publicly traded company affiliated with a licensee; or (ix) a person owns less
than five percent (5%) of the voting securities of the publicly traded licensee
or publicly traded company affiliated with a licensee. Hence, the Company's and
its stockholders' business opportunities in Colorado are limited to interests
that comply with the statute and the Colorado Commission's rule.

    Although attorneys for the Colorado legislature initially expressed concern
that the promulgation of the above-described regulation was beyond the Colorado
Commission's statutory delegated authority, they appear to have retreated from
this position. Therefore, unless the Colorado legislature repeals the
regulation, it is likely that it will continue in effect.

                                       13
<PAGE>
    In addition, pursuant to the Colorado Regulations, no manufacturer or
distributor of slot machines may have an interest in any casino operator, allow
any of its officers to have such an interest, employ any person if that person
is employed by a casino operator, or allow any casino operator or person with a
substantial interest therein to have an interest in a manufacturer's or
distributor's business. The Colorado Commission has ruled that a person does not
have a "substantial interest" if it directly or indirectly has less than five
percent (5%) of the voting securities of a licensee.

    Under the Colorado Regulations, any person or entity having any direct or
indirect interest in a gaming licensee or an applicant for a gaming license,
including, but not limited to, the Company and our stockholders, may be required
to supply the Colorado Commission with substantial information, including, but
not limited to, background information, source of funding information, a sworn
statement that the person or entity is not holding his or her interest for any
other party, and fingerprints. Consequently, information, investigation and
licensing as an "associated person" automatically will be required of all
persons (other than certain institutional investors discussed below) which
directly or indirectly own ten percent (10%) or more of a direct or indirect
legal, beneficial or voting interest in Harveys Wagon Wheel, through their
ownership in the Company. Those persons must report their interest and file
appropriate applications within 45 days after acquiring that interest. Persons
directly or indirectly having a five percent (5%) or more interest (but less
than 10%) in Harveys Wagon Wheel, through their ownership in the Company, must
report their interest to the Colorado Commission within ten (10) days after
acquiring that interest and may be required to provide additional information
and to be found suitable. If certain institutional investors provide certain
information to the Colorado Commission, those investors, at the Colorado
Commission's discretion, may be permitted to own up to 14.99% of Harveys Wagon
Wheel, through their ownership in the Company, before being required to be found
suitable. All licensing and investigation fees will have to be paid by the
person in question. The associated person investigation fee currently is $53 per
hour.

    The Colorado Commission also has the right to request information from any
person directly or indirectly interested in, or employed by, a licensee, and to
investigate the moral character, honesty, integrity, prior activities, criminal
record, reputation, habits and associations of (i) all persons licensed pursuant
to the Colorado Limited Gaming Act, (ii) all officers, directors and
stockholders of a licensed privately held corporation, (iii) all officers,
directors and stockholders holding either a five percent (5%) or greater
interest or a controlling interest in a licensed publicly traded corporation,
(iv) all general partners and all limited partners of a licensed partnership,
(v) all persons which have a relationship similar to that of an officer,
director or stockholder of a corporation (such as members and managers of a
limited liability company), (vi) all persons supplying financing or loaning
money to any licensee connected with the establishment or operation of limited
gaming, and (vii) all persons having a contract, lease or ongoing financial or
business arrangement with any licensee, where a contract, lease or arrangement
relates to limited gaming operations, equipment, devices or premises.

    In addition, under the Colorado Regulations, every person who is a party to
a "gaming contract" with an applicant for a license, or with a licensee, upon
the request of the Colorado Commission or the Director, must promptly provide to
the Colorado Commission or Director all information which may be requested
concerning financial history, financial holdings, real and personal property
ownership, interests in other companies, criminal history, personal history and
associations, character, reputation in the community, and all other information
which might be relevant to a determination whether a person would be suitable to
be licensed by the Colorado Commission. Failure to provide all information
requested constitutes sufficient grounds for the Director or the Colorado
Commission to require a licensee or applicant to terminate its "gaming contract"
(as defined below) with any person who failed to provide the information
requested. In addition, the Director or the Colorado Commission may require
changes in "gaming contracts" before an application is approved or participation
in the contract is allowed. A "gaming contract" is defined as an agreement in
which a person does business with or on the premises of a licensed entity.

                                       14
<PAGE>
    An application for licensure or suitability may be denied for any cause
deemed reasonable by the Colorado Commission or the Director, as appropriate.
Specifically, the Colorado Commission and the Director must deny a license to
any applicant who (i) fails to prove by clear and convincing evidence that the
applicant is qualified; (ii) fails to provide information and documentation
requested; (iii) fails to reveal any fact material to qualification, or supplies
information which is untrue or misleading as to a material fact pertaining to
qualification; (iv) has been, or is any director, officer, general partner,
stockholder, limited partner or other person who has a financial or equity
interest in the applicant who has been, convicted of certain crimes, including
the service of a sentence upon conviction of a felony in a correctional
facility, city or county jail, or community correctional facility or under the
state board of parole or any probation department within ten years prior to the
date of the application, gambling-related offenses, theft by deception or crimes
involving fraud or misrepresentation, is under current prosecution for such
crimes (during the pendency of which license determination may be deferred), is
a career offender or a member or associate of a career offender cartel, or is a
professional gambler; or (v) has refused to cooperate with any state or federal
body investigating organized crime, official corruption or gaming offenses.

    If the Colorado Commission determines that a person or entity is unsuitable
to own interests in the Company, then we may be sanctioned, which may include
the loss of our approvals and licenses.

    The Colorado Commission does not need to approve in advance a public
offering of securities but rather requires a filing of notice and additional
documents with regard to such public offering prior to such public offering.
Under the regulations, the Colorado Commission may, in its discretion, require
additional information and prior approval of such public offering.

    In addition, the Colorado Regulations prohibit a licensee or affiliated
company thereof, such as the Company, from paying dividends, interest or other
remuneration to any unsuitable person, or recognizing the exercise of any voting
rights by any unsuitable person. Further, the Company may repurchase the shares
of anyone found unsuitable at the lesser of the cash equivalent to the original
investment in the Company or the current market price. Further, the regulations
require anyone with a material involvement with a licensee, including a director
or officer of a holding company, such as the Company, to file for a finding of
suitability if required by the Colorado Commission.

    In addition to its authority to deny an application for a license or
suitability, the Colorado Commission has jurisdiction to disapprove a change in
corporate position of a licensee and may have such authority with respect to any
entity which is required to be found suitable by the Colorado Commission. The
Colorado Commission has the power to require us to suspend or dismiss managers,
officers, directors and other key employees or sever relationships with other
persons who refuse to file appropriate applications or whom the authorities find
unsuitable to act in such capacities; and may have the power with respect to any
entity which is required to be found suitable.

    A person or entity may not sell, lease, purchase, convey or acquire a
controlling interest in the Company without the prior approval of the Colorado
Commission. We may not sell any interest in our Colorado gaming operations
without the prior approval of the Colorado Commission.

    Harveys Wagon Wheel must meet certain architectural requirements, fire
safety standards and standards for access for disabled persons. Harveys Wagon
Wheel also must not exceed certain gaming square footage limits as a total of
each floor and the full building. The casino at Harveys Wagon Wheel may operate
only between 8:00 a.m. and 2:00 a.m., and may permit only individuals 21 years
or older to gamble in the casino. It may permit slot machines, blackjack and
poker, with a maximum single bet of $5.00. Harveys Wagon Wheel may not provide
credit to its gaming patrons.

    The Colorado Regulations permit gaming only in a limited number of cities
and certain commercial districts.

                                       15
<PAGE>
    The Colorado Constitution permits a gaming tax of up to 40% on adjusted
gross gaming proceeds. The Colorado Commission has set a gaming tax rate of 2%
on adjusted gross gaming proceeds of up to and including $2 million, 4% over $2
million up to and including $4 million, 14% over $4 million up to and including
$5 million, 18% over $5 million up to and including $10 million and 20% on
adjusted gross gaming proceeds in excess of $10 million. The Colorado Commission
also has imposed an annual device fee of $75 per gaming device. The Colorado
Commission may revise the gaming tax rate and device fee from time to time.
Central City has imposed an annual device fee of $1,265 per gaming device and
may revise the same from time to time.

    The sale of alcoholic beverages is subject to licensing, control and
regulation by the Colorado Liquor Agencies. All persons who directly or
indirectly own 10% or more of Harveys Wagon Wheel, through their ownership of
the Company, must file applications and possibly be investigated by the Colorado
Liquor Agencies. The Colorado Liquor Agencies also may investigate those persons
who, directly or indirectly, loan money to or have any financial interest in
liquor licensees. All licenses are revocable and not transferable. The Colorado
Liquor Agencies have the full power to limit, condition, suspend or revoke any
liquor license and any disciplinary action could (and revocation would) have a
material adverse effect upon the operations of the Company. Harveys Wagon Wheel
holds a hotel and restaurant liquor license for its casino, hotel and restaurant
operations, rather than a gaming tavern license. Accordingly, no person with an
interest in the Company can have an interest in a liquor licensee which holds
anything other than a hotel and restaurant liquor license, and specifically
cannot have an interest in an entity which holds a gaming tavern license.

ENVIRONMENTAL MATTERS

    We are subject to various Federal, state and local laws, ordinances and
regulations which (i) govern activities or operations that may have adverse
environmental effects, such as discharges to air and water, as well as handling
and disposal of solid and hazardous toxic wastes, or (ii) may impose liability
on property owners and operators for the costs of removal or remediation of
certain hazardous substances released on their property. We believe we are in
material compliance with these laws.

    Harveys Wagon Wheel is in the vicinity of the Central City/Clear Creek
Superfund Site as designated by the Environmental Protection Agency (the "EPA")
pursuant to the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended ("CERCLA" or "Superfund"). The Central
City/Clear Creek Superfund Site, the overall boundaries of which have not been
explicitly defined, includes numerous specifically identified areas of mine
tailings and other waste piles from former gold mine operations that are the
subject of ongoing investigation and cleanup by the EPA and the State of
Colorado. CERCLA requires cleanup of sites from which there has been a release
or threatened release of hazardous substances and authorizes the EPA to take any
necessary response actions at Superfund sites, including ordering potentially
responsible parties to clean up or contribute to the cleanup of a Superfund
site. Potentially responsible parties are broadly defined under CERCLA, and
include past and present owners and operators of a site. Courts have interpreted
CERCLA to impose strict, joint and several liability upon all persons liable for
response costs.

    In the course of developing Harveys Wagon Wheel, investigations at the site
were conducted in accordance with requirements of governmental authorities as a
prerequisite to obtaining necessary development permits. The investigations were
completed and the requisite permits issued. Currently, the EPA has not
identified any mine tailings or other waste piles at Harveys Wagon Wheel.
Nonetheless, there is the potential that the EPA or other governmental
authorities could broaden their investigations and identify additional areas,
including the Harveys Wagon Wheel site, for cleanup as part of the Central
City/Clear Creek Superfund Site. If the Harveys Wagon Wheel site were included
in the EPA's investigation and designated as an additional area within the
Central City/Clear Creek Superfund Site, we may be identified as potentially
responsible party and any liability we may have

                                       16
<PAGE>
related to the Central City/Clear Creek Superfund Site could have a material
adverse effect on the Company.

ITEM 2. PROPERTIES

    Harveys Resort comprises approximately 1,020,000 square feet on
approximately 19.8 acres, of which we own approximately 5.4 acres and lease
approximately 14.4 acres pursuant to several ground leases that expire in 2045.
A 973,000-square foot parking garage and certain other amenities are located on
leased property.

    Harveys Casino Hotel is located on approximately 36 acres of land owned by
the Company. The land-based amenities, including a covered "skywalk" to the
riverboat casino, are comprised of a hotel, convention center, and passenger
staging area, totaling nearly 300,000 square feet. Contiguous thereto is a
24-acre leasehold parcel which contains the boat docking facility and the 1,630
space parking structure. This parcel is subject to a long term lease with the
City of Council Bluffs for a nominal annual sum. Additionally, we own an
adjacent 44-acre parcel suitable for expansion or support facilities.

    Bluffs Run Casino is located on approximately 72.5 acres of land owned by
the Company. The racetrack grandstand, casino and food and beverage operations
are in a three story building encompassing approximately 109,000 square feet.
There is also a recreation vehicle park capable of accommodating 115 vehicles
and surface parking for 3,117 vehicles on the site. All of the facilities have
been leased back to Iowa West Racing Association.

    The Harveys Wagon Wheel hotel and casino facility encompasses approximately
200,000 square feet on approximately 1.1 acres and a 530-space self-parking
garage on a contiguous 8-acre parcel. Additionally, we own approximately 40
acres of undeveloped land adjacent to the Harveys Wagon Wheel facility.

    All of the real property described above, as well as the Company's personal
property at these operations, is pledged as security for our reducing, revolving
credit facility with a consortium of banks. See footnote 5 to our consolidated
financial statements appearing elsewhere in this report.

ITEM 3. LEGAL PROCEEDINGS

    We are a defendant in various lawsuits relating to routine matters
incidental to our business. We do not believe that the outcome of any
litigation, individually or in the aggregate, will have a material adverse
effect on the Company.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

    There were no matters submitted to a vote of security holders during the
fourth quarter of fiscal 1999.

                                       17
<PAGE>
                                    PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

    Prior to the merger Harveys was a publicly held company and the $0.01 par
value per share common stock of the Company was traded on the New York Stock
Exchange under the symbol "HVY." Following the merger, there is no public market
for our common equity securities.

    As of February 22, 2000, there were nine holders of the Company's Class A
Common Stock and nine holders of the Company's Class B Common Stock.

    For the fiscal year prior to the merger Harveys paid regular quarterly
dividends of $0.05 per share of common stock. Following the merger, our leverage
and fixed charge obligations were substantially increased. In addition, the
certificate of designation of the Company's 13 1/2% Series A Senior Redeemable
Convertible Cumulative Preferred Stock and 13 1/2% Series B Senior Redeemable
Convertible Cumulative Preferred Stock prohibit us from paying cash dividends on
our common stock unless full cumulative dividends on all outstanding preferred
stock due for past periods have been declared and paid in cash, or a sufficient
sum for the payment thereof irrevocably set apart in trust. Consequently, it is
unlikely that we will pay any cash dividends on our common stock before 2011,
the mandatory redemption date for the preferred stock. See "ITEM 7. MANAGEMENT'S
DISCUSSION AND ANALYSIS OF THE COMPANY'S FINANCIAL CONDITION AND RESULTS OF
OPERATIONS--Liquidity and Capital Resources".

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

    The following table presents selected consolidated financial data of the
Company for the years ended November 30, 1995 through 1999. For comparative
purposes, we have presented results for fiscal 1999 on a combined twelve month
basis by aggregating our results for the period December 1, 1998 through
February 1, 1999 with our results for the period from the merger acquisition
date, February 2, 1999, through November 30, 1999. Our results for periods after
the merger are presented on a different basis of accounting from those for
periods before the merger, due to the application of purchase method accounting.
However, we believe that comparisons of the financial results for the fiscal
years can still provide a meaningful discussion of our financial performance.
The items of comparability most affected by the merger are depreciation and
amortization, the one-time consent fee and transaction costs incurred in
connection with the merger, interest expense and income taxes. The selected
consolidated financial data is not necessarily indicative of our future results
of operations or financial condition, and should be read in conjunction with
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE COMPANY'S FINANCIAL
CONDITION AND RESULTS OF OPERATIONS and with our consolidated financial
statements, including the footnotes, appearing elsewhere in this report.

                                       18
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA

<TABLE>
<CAPTION>
                                                                            YEARS ENDED NOVEMBER 30,
                                                              ----------------------------------------------------
                                                                1995       1996       1997       1998       1999
                                                              --------   --------   --------   --------   --------
                                                                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                           <C>        <C>        <C>        <C>        <C>
CONSOLIDATED STATEMENT OF INCOME DATA
Revenues
  Casino....................................................  $121,369   $186,369   $216,564   $244,784   $270,470
  Racing....................................................        --         --         --         --        932
  Lodging...................................................    25,499     28,746     32,175     34,273     36,960
  Food and beverage.........................................    33,970     39,852     44,406     47,079     51,097
  Other.....................................................     6,287      6,402      7,277      7,111      7,908
  Management fees and joint venture.........................     1,669      5,023      4,507         --         --
  Less casino promotional allowances........................   (15,594)   (18,643)   (21,366)   (23,738)   (27,416)
                                                              --------   --------   --------   --------   --------
    Total net revenues......................................   173,200    247,749    283,563    309,509    339,951
                                                              --------   --------   --------   --------   --------
Costs and expenses
  Casino....................................................    57,520     86,732    100,500    115,837    127,303
  Racing....................................................        --         --         --         --      1,859
  Lodging...................................................     9,458     11,677     13,374     13,710     13,046
  Food and beverage.........................................    20,280     24,797     29,886     30,143     31,918
  Other operating...........................................     2,838      2,813      2,811      2,885      3,296
  Selling, general and administrative.......................    50,270     67,128     73,945     78,987     82,338
  Depreciation and amortization.............................    12,333     16,482     19,077     20,796     26,164
  Business development costs................................        --         --      2,690         96      2,182
  Pre-opening expenses......................................     2,147      4,099         --         --         --
  Merger-related costs......................................        --         --         --      1,218     19,879
                                                              --------   --------   --------   --------   --------
    Total costs and expenses................................   154,846    213,728    242,283    263,672    307,985
                                                              --------   --------   --------   --------   --------
Operating income............................................    18,354     34,021     41,280     45,837     31,966
Interest expense, net(1)....................................     7,960     14,195     18,892     15,576     26,827
Gain on sale of interests in unconsolidated affiliate.......        --         --     27,422         --         --
Life insurance benefits.....................................     2,246         --         --         --         --
Other income (expense), net.................................       605       (221)      (137)      (142)      (473)
                                                              --------   --------   --------   --------   --------
Income before income taxes and extraordinary item...........    13,245     19,605     49,673     30,119      4,666
Income tax provision........................................    (3,900)    (7,791)   (18,898)   (11,417)    (4,230)
                                                              --------   --------   --------   --------   --------
Income before extraordinary item............................    9 ,345     11,814     30,775     18,702        436
Loss on early retirement of debt, net of taxes..............        --        522         --         --       (869)
                                                              --------   --------   --------   --------   --------
Net income..................................................  $  9,345   $ 11,292   $ 30,775   $ 18,702   $   (433)
                                                              ========   ========   ========   ========   ========
OTHER OPERATING DATA
  EBITDA(2).................................................  $ 35,080   $ 54,602   $ 63,047   $ 67,947   $ 81,359
  Net cash provided by operating activities.................    19,594     39,768     44,637     38,388     42,063
  Net cash provided by (used in) investing activities.......   (70,433)   (55,502)    24,428    (27,590)  (123,440)
  Net cash provided by (used in) financing activities.......    53,886     26,363    (35,151)     1,467     46,575
  Capital expenditures(3)...................................    74,418     72,395     22,532     17,681     30,556
CONSOLIDATED BALANCE SHEET DATA:
  Cash and cash equivalents.................................  $ 10,493   $ 21,121   $ 55,035   $ 67,299   $ 32,497
  Total assets..............................................   313,244    393,768    403,465    424,158    673,920
  Long-term debt, net.......................................   126,676    181,354    150,220    150,000    400,578
  Redeemable preferred stock................................        --         --         --         --     61,442
  Stockholders' equity......................................   132,301    149,763    179,358    200,454     81,355
</TABLE>

------------------------------

Notes to Selected Consolidated Financial Data:

(1) Net of amounts capitalized and interest income.

(2) EBITDA (operating income plus depreciation and amortization and adjusted for
    certain non-recurring items) should not be construed as an indicator of the
    Company's operating performance, or as an alternative to cash flows from
    operating activities as a measure of liquidity. We have presented EBITDA
    solely as supplemental disclosure because we believe that it allows for a
    more complete analysis of results of operations. Because companies do not
    calculate EBITDA identically, the

                                       19
<PAGE>
    presentation of EBITDA herein is not necessarily comparable to similarly
    entitled measures of other companies. EBITDA is not intended to represent
    and should not be considered more meaningful than, or an alternative to,
    measures of operating performance as determined in accordance with generally
    accepted accounting principles. For fiscal 1999, EBITDA has been adjusted to
    exclude approximately $2.2 million of business development costs and $19.9
    million of expended merger related costs. For fiscal 1998, EBITDA has been
    adjusted to exclude approximately $1.3 million of expensed merger related
    and business development costs; for fiscal 1997, EBITDA has been adjusted to
    exclude approximately $2.7 million of business development costs; for fiscal
    1996 and fiscal 1995, EBITDA has been adjusted to exclude approximately $4.1
    million and $2.1 million of pre-opening expenses, respectively; for fiscal
    1995 EBITDA has been adjusted to include approximately $2.2 million of life
    insurance benefits.

(3) Of amounts shown, approximately $15.3 million for fiscal 1999, approximately
    $8.1 million for fiscal 1998, $11.6 million in fiscal 1997, $7.2 million in
    fiscal 1996 and $4.6 million in fiscal 1995 related to recurring capital
    expenditures for maintenance of the current facilities.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE COMPANY'S FINANCIAL
  CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

    We currently own and operate Harveys Resort, Harveys Wagon Wheel, Harveys
Casino Hotel and Bluffs Run Casino. Until October 24, 1997, through our
wholly-owned subsidiary, Harveys L. V. Management Company, Inc., we owned 40% of
the equity interest in Hard Rock Hotel, Inc. which owns the Hard Rock Hotel and
Casino in Las Vegas, Nevada. We managed the Las Vegas hotel and casino pursuant
to a contract with Hard Rock Hotel, Inc. On October 24, 1997, we sold our 40%
equity interest and our interest in the management contract to Hard Rock Hotel,
Inc..

    The following table presents certain operating results for our properties.
The operating results for Harveys Resort, which, since June 1, 1997, has been
owned and operated by Harveys Tahoe Management Company, Inc. are presented, for
all periods, excluding the effects of corporate and future business development
expenses. Those expenses are presented under the caption "Corporate and
Development." The operating results of Harveys L.V. Management Company, Inc.,
include the fees earned for managing the operations of Hard Rock Hotel and
Casino and the 40% equity interest in the income of the Hard Rock Hotel and
Casino through the date of the sale, October 24, 1997.

                                       20
<PAGE>
RESULTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                1997       1998       1999
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Net Revenues
  Harveys Resort............................................  $129,970   $133,454   $140,546
  Harveys Casino Hotel......................................    99,641    113,541    124,128
  Bluffs Run Casino.........................................        --         --     18,802
  Harveys Wagon Wheel.......................................    49,445     62,514     56,475
  Harveys Las Vegas Management Co...........................     4,507         --         --
                                                              --------   --------   --------
      Total Net Revenues....................................  $283,563   $309,509   $339,951
                                                              ========   ========   ========
Operating Income (Loss)
  Harveys Resort............................................  $ 23,674   $ 23,768   $ 26,542
  Harveys Casino Hotel......................................    17,630     21,824     25,663
  Bluffs Run Casino.........................................        --         --      3,852
  Harveys Wagon Wheel.......................................     9,848     14,107     10,116
  Harveys Las Vegas Management Co...........................     4,308         --         --
  Corporate and Development.................................   (11,490)   (12,548)   (12,146)
                                                              --------   --------   --------
                                                                43,970     47,151     54,027
  Business Development, Consent Fee and Merger Costs........    (2,690)    (1,314)   (22,061)
                                                              --------   --------   --------
      Total Operating Income................................  $ 41,280   $ 45,837   $ 31,966
                                                              ========   ========   ========
EBITDA (1)
  Harveys Resort............................................  $ 32,125   $ 33,160   $ 36,433
  Harveys Casino Hotel......................................    24,285     29,065     33,869
  Bluffs Run Casino.........................................        --         --      5,619
  Harveys Wagon Wheel.......................................    13,114     17,731     14,113
  Harveys Las Vegas Management Co...........................     4,507         --         --
  Corporate and Development.................................   (10,984)   (12,009)    (8,675)
                                                              --------   --------   --------
      Total EBITDA..........................................  $ 63,047   $ 67,947   $ 81,359
                                                              ========   ========   ========
</TABLE>

--------------------------

(1) EBITDA (operating income plus depreciation and amortization and adjusted for
    certain non-recurring items) should not be construed as an indicator of the
    Company's operating performance, or as an alternative to cash flows from
    operating activities as a measure of liquidity. We have presented EBITDA
    solely as supplemental disclosure because we believe that it allows for a
    more complete analysis of results of operations. Because companies do not
    calculate EBITDA identically, the presentation of EBITDA herein is not
    necessarily comparable to similarly entitled measures of other companies.
    EBITDA is not intended to represent and should not be considered more
    meaningful than, or an alternative to, measures of operating performance as
    determined in accordance with generally accepted accounting principles.

FISCAL YEAR ENDED NOVEMBER 30, 1999 COMPARED TO FISCAL YEAR ENDED NOVEMBER 30,
  1998

    Meaningful comparisons of our overall financial results for fiscal 1999 and
1998 can be difficult because of the recognition of business development
write-offs, the consent fee and merger-related costs and the extraordinary loss
on the early retirement of debt. The following summary discussion of our
consolidated financial results excludes the effects of those charges from all
periods. Our fiscal 1999 results are also affected by our October 6, 1999
acquisition of the net assets of Bluffs Run Casino and our subsequent management
of that facililty.

    Our consolidated net revenues for fiscal year 1999 were $340.0 million, a
$30.4 million , or 9.8% improvement over the prior year. Bluffs Run Casino
provided $18.8 million of the net revenue growth. On a same-store comparison,
net revenues improved by $11.6 million, or 3.8%, over net revenues for fiscal
1998. Substantial growth in net revenues from our Lake Tahoe property in the
first quarter of fiscal 1999, along with moderate growth for the balance of the
year and the continuing strong revenues from our Council Bluffs operations more
than offset declines from our Central City property. Our operating income,
excluding our business development write-offs, the consent fee and
merger-related costs, was $54.0 million for fiscal 1999. Excluding the
contribution from Bluffs Run Casino, operating

                                       21
<PAGE>
income amounted to $50.2 million. This was an improvement of $3.0 million, or
6.4%, over the prior year.

    LAKE TAHOE, NEVADA.  Our net revenues from Lake Tahoe for the year ended
November 30, 1999 amounted to $140.5 million, an increase of $7.1 million, or
5.3%, over our net revenues recorded for fiscal 1998. All operating areas
experienced revenue improvements, primarily as a result of strong first quarter
wagering volume and hotel occupancy. Our Lake Tahoe operating profit of $26.5
million for fiscal 1999 improved by $2.8 million, or 11.7 %, as a result of our
improved first and fourth quarters.

    COUNCIL BLUFFS, IOWA.  Our net revenues from Council Bluffs for the year
ended November 30, 1999 amounted to $124.1 million, an increase of $10.6
million, or 9.3%, over our net revenues recorded in fiscal 1998. Revenue
improvements were the result of increased wagering volume, hotel occupancy and
food covers. Our Council Bluffs operating profit of $25.7 million improved by
$3.8 million, or 17.5%, driven primarily by casino revenues and profits.

    We have constructed a new parking facility at our Council Bluffs property
that offers 1,630 parking spaces and features climate-controlled access to the
adjacent casino. We opened the new parking facility ahead of schedule in early
October.

    BLUFFS RUN CASINO.  Our purchase of the net assets of Bluffs Run Casino on
October 6, 1999 and the subsequent management of the operations of that
property, provided net revenues for the 56 days ended November 30, 1999 of $18.8
million and operating profit of $3.9 million.

    CENTRAL CITY, COLORADO.  Our net revenues from Central City for the year
ended November 30, 1999 amounted to $56.5 million, a decrease of $6.0 million,
or 9.7%, from our net revenues recorded in fiscal 1998. Approximately $5.8
million of revenue decline was in our casino revenues and is principally the
result of the opening of new competition in Black Hawk in mid to late 1998.
Another new casino opened in Black Hawk in early 2000 and still another is
expected to open in the spring. Our Central City operating profit of $10.1
million declined $4.0 million, or 28.3%, principally as a result of the decline
in our casino revenues and profits and an increase in marketing and advertising
expenditures in response to the new competition.

    OTHER FACTORS AFFECTING RESULTS OF OPERATIONS--  Our results for the year
ended November 30, 1999 were affected by several other factors, including: the
write-off of certain business development costs, increases in depreciation and
amortization, decreases in corporate expenses, increases in interest expense,
the expense of a consent fee and merger-related costs, an extraordinary loss on
the early retirement of debt, and changes in our effective tax rate.

    In the second quarter of fiscal 1999, we decided not to pursue our current
business development plans in Las Vegas, Nevada and wrote off approximately $2.0
million of costs we had previously deferred. This write-off and other minor
business development charges amounted to approximately $2.2 million for fiscal
1999.

    Depreciation and amortization expense for fiscal 1999 increased
approximately $5.4 million to $26.2 million. Approximately $3.0 million of this
increase was attributable to the write-off of the cost in excess of net assets
acquired as a result of the February merger and the October acquisition of the
net assets of Bluffs Run Casino. The balance of the increase for fiscal 1999 was
primarily the result of the change in the accounting basis for property and
equipment brought on by the merger and the acquisition.

    Our corporate expense for fiscal 1999 amounted to approximately $8.7
million, excluding depreciation and amortization, compared to approximately
$12.0 million for the fiscal 1998 period. The savings were principally the
result of the elimination of our long-term incentive plan, the elimination of
compensation paid to non-employee members of our board of directors and the
reduction in the

                                       22
<PAGE>
amount of expense we recognize in relation to our pension and postretirement
benefit plans. These eliminations and reductions were a result of the merger.

    As a result of the merger financing and the financing of the Bluffs Run
Casino acquisition, our debt and fixed charge obligations increased. In February
1999, we assumed $172 million that Harveys Acquisition Corporation had borrowed
to partially finance the merger. Subsequently, we used our available short-term
cash equivalent investments to repay a portion of the borrowings. In October
1999, we financed 100% of the Bluffs Run Casino acquisition and related closing
and transaction costs. Consequently we have experienced a decrease in our
interest income and an increase in our interest expense. For fiscal 1999, our
net interest expense was approximately $26.8 million versus approximately $15.6
million for the prior year.

    Our results for fiscal 1999 were also diminished by the effects of the
consent fee and merger-related costs of approximately $19.9 million incurred at
the time of the merger.

    In connection with the merger, our existing credit agreement was retired.
Upon retirement, we expensed all unamortized loan fees and other financing costs
related to the prior credit agreement. That expense of approximately $869,000,
net of tax of $275,000, was included as an extraordinary item in our results for
fiscal 1999.

    We believe some portion of the merger-related expenses are not tax
deductible. This reduced the effective tax rate applied to our loss for the
period prior to the merger (December 1, 1998 through February 1, 1999) to
approximately 24%. The reduced tax rate applied to our loss had the effect of
reducing the tax benefit we expect from the pre-merger period loss by
approximately $2.4 million.

FISCAL YEAR ENDED NOVEMBER 30, 1998 COMPARED TO FISCAL YEAR ENDED NOVEMBER 30,
  1997

    Our consolidated net revenues for fiscal year 1998 were $309.5 million, an
increase of $25.9 million, or 9.2%, from the $283.6 million recorded in fiscal
1997. The 1997 net revenues included $4.5 million resulting from our equity
interest and management fees related to the Hard Rock Hotel and Casino. We sold
our equity interest in and our rights under the management contract relative to
the Hard Rock Hotel and Casino in October 1997. On a same-store comparison, net
revenues for fiscal 1998 improved by $30.5 million, or 10.9%, over fiscal 1997.
The increase was attributable to growth in net revenues at all our other
operations. Consolidated operating income, excluding business development
write-offs from both fiscal years and merger related costs from fiscal 1998,
improved by $3.2 million.

    LAKE TAHOE, NEVADA.  Our net revenues from Lake Tahoe for the fiscal year
ended November 30, 1998 amounted to $133.5 million, an increase of $3.5 million,
or 2.7%, over our net revenues recorded for fiscal 1997. All operating areas
experienced revenue improvements due, in part to a decrease in weather-related
road closures or controls in the first quarter of 1998 compared to 1997. Our
Lake Tahoe operating profits of $23.8 million for fiscal 1998 improved by $0.1
million, or 0.4%.

    COUNCIL BLUFFS, IOWA.  Our net revenues for the year ended November 30, 1998
amounted to $113.5 million, an increase of $13.9 million, or 13.9%, over our net
revenues recorded in fiscal 1997, due in part, to the casino expansion which
opened near the end of the first quarter of fiscal 1998. Our Council Bluffs
operating profit of $21.8 million improved by $4.2 million, or 23.8%, driven by
casino and food revenues and profits.

    CENTRAL CITY, COLORADO.  Our net revenues for the year ended November 30,
1998 amounted to $62.5 million, an increase of $13.1 million, or 26.4%, over our
net revenues recorded in fiscal 1997, due in part to a full year of availability
of additional on-site parking added by the opening of the 530-space parking
garage in June 1997. Our Central City operating profit of $14.1 million improved
by $4.3 million, or 43.3%, driven by casino revenues and profit.

                                       23
<PAGE>
    OTHER FACTORS AFFECTING RESULTS OF OPERATIONS  -  Our results for the year
ended November 30, 1998 were affected by several other factors, including the
write-off of certain business development costs, increase in depreciation and
amortization, increase in corporate expenses, decrease in interest expense, the
expense of merger-related costs, and the sale of our interest in the Hard Rock
Hotel and Casino.

    In the fourth quarter of fiscal 1998, we decided not to pursue our current
business development plans in specific geographic areas where there was a
potential for approval of casino gaming and wrote off approximately $96,000 of
costs we had previously deferred, compared to approximately $2.7 million for
fiscal 1997.

    Depreciation and amortization expense for fiscal 1998, increased
approximately $1.7 million to $20.8 million. Approximately $0.4 million of this
increase was attributable to the disposal of Lake Tahoe assets to facilitate the
construction of a Hard Rock Cafe, with the balance of the increase attributable
to the completion of the parking garage in Colorado and other replacements and
improvements.

    Our corporate expenses for fiscal 1998 amounted to approximately $12.0
million, excluding depreciation and amortization, compared to approximately
$11.0 million for fiscal 1997.

    Our interest expense, net of interest income and interest capitalized,
decreased by approximately $3.3 million to $15.6 million for fiscal 1998. The
decrease was attributable to the use of a portion of the proceeds from the sale
of our interests in the Hard Rock Hotel and Casino to pay the outstanding
balance under our credit facility, thereby reducing interest expenses. The
balance of the proceeds was invested in cash equivalents, resulting in an
increase in interest income. Approximately $0.4 million of interest expense was
capitalized during fiscal 1997 in connection with the construction of the
parking facility in Central City. No interest was capitalized during fiscal
1998.

    Our results for fiscal 1998 were also diminished by the effect of the
merger-related costs of approximately $1.2 million incurred prior to the merger.

    In the fourth quarter of fiscal 1997, as a result of the sale of our
interests in the Hard Rock Hotel and Casino, the Company received $45.0 million
cash and an additional $1.2 million cash in satisfaction of a note and other
amounts due the Company at the time of the sale. The Company recognized a gain
of approximately $27.4 million on the transaction.

LIQUIDITY AND CAPITAL RESOURCES

    As a result of the February 2, 1999 merger and the October 6, 1999
acquisition of Bluffs Run Casino, our leverage and fixed charge obligations
increased substantially.

    Harveys Acquisition Corporation financed the February 2, 1999 merger with
the following:

    - proceeds of approximately $75 million from the issuance of its Class A
      Common Stock to Colony HCR Voteco and its Class B Common Stock to Colony
      Investors III;

    - proceeds of approximately $55 million from the issuance of its 13 1/2%
      Series A Senior Redeemable Convertible Cumulative Preferred Stock to
      Colony HCR Voteco and its Series B 13 1/2% Senior Redeemable Convertible
      Cumulative Preferred Stock to Colony Investors III;

    - borrowings of $172 million; and

    - Harveys' available cash.

                                       24
<PAGE>
    Immediately following the merger; the capital stock of Harveys Acquisition
Corporation became the capital stock of Harveys. Additionally, we replaced our
existing bank credit facility with an amended and restated credit facility,
under which we assumed the liability for Harveys Acquisition Corporation's
initial borrowing of $172 million.

    On October 6, 1999, we completed the purchased of the net assets of Bluffs
Run Casino. We paid Iowa West Racing Association approximately $115 million in
cash and we may pay additional consideration of up to $50 million. The
conditional consideration to be paid depends on the outcome of a required
referendum on the continuation of gaming at pari-mutuel racetracks to be decided
in 2002 by the voters of Pottawattamie County, Iowa.

    We financed 100% of the cash purchase price of the net assets of Bluffs Run
Casino. In doing so, we amended our credit facility again to, among other
things, increase the maximum available balance from $185 million to $335
million. We also entered into a letter of credit agreement to support $45
million of the $50 million of contingent consideration. The letter of credit
exposure reduces the amount available to us under the bank credit facility.

    Other sources of cash during fiscal 1999 included approximately $42.1
million of cash flow from operations, $10.7 million from the sale of marketable
securities and the collection of approximately $1.8 million in full payment of
notes due to us from a related party. Other uses of cash included the payment of
approximately $19.9 million for a consent fee and for merger related costs,
payment of approximately $5.2 million in debt issuance costs related to the two
amendments to our bank credit facility, payment of approximately $1.6 million of
closing and transaction costs related to the Bluffs Run Casino transaction and
approximately $29 million for capital improvements including approximately $13.2
million paid on the construction of our parking garage in Council Bluffs.

    As a result of the above, our cash and cash equivalents decreased by $34.8
million, from $67.3 million at November 30, 1998 to $32.5 million at November
30, 1999. Additionally, our outstanding debt increased from $150 million at the
end of fiscal 1998 to approximately $393.9 million at the end of fiscal 1999,
excluding the unamortized premium on our senior subordinated notes. Our debt at
November 30, 1999 consisted of $150 million of senior subordinated notes and
approximately $243.9 million outstanding under our amended bank credit facility.

    In addition to our debt, we were obligated at November 30, 1999 for an
aggregate of approximately $61.4 million on our outstanding Series A Preferred
Stock and Series B Preferred Stock and the unpaid dividends accrued thereon.

    Our amended bank credit facility matures and is fully due and payable on
September 30, 2004. The permitted principal balance of the credit facility
reduces on a quarterly basis, beginning August 31, 2000. Given our outstanding
balance at November 30, 1999 and our anticipated sources and uses of cash for
fiscal year 2000, we do not expect to be subject to any mandatory principal
payment requirements in fiscal year 2000. Interest on borrowings outstanding
under the credit facility are payable, at our option, at either the London
Inter-Bank Offering Rate ("LIBOR") or an alternative base rate, in each case
plus an applicable margin. In the future, the applicable margins may be changed,
based on the ratio of our total funded debt to EBITDA. The credit facility
contains a number of covenants that, among other things, subject to applicable
gaming approvals, restrict our ability to dispose of assets, incur additional
indebtedness, prepay any principal amount of our $150 million, 10 5/8% Senior
Subordinated Notes due 2006, pay dividends, create liens on assets, make
investments, loans or advances, engage in mergers or consolidations, change the
nature of our business or engage in certain transactions with affiliates and
otherwise restrict certain corporate activities. In addition, under the credit
facility, we are required to maintain specified financial ratios and net worth
requirements, satisfy specified financial tests, including interest coverage
tests, and maintain certain levels of annual capital expenditures. The credit
facility contains events of default customary for facilities of this nature.
Specifically, the credit facility prohibits the payment of cash dividends on our
preferred stock, unless

                                       25
<PAGE>
the Leverage Ratio is less than or equal to 3 to 1. "Leverage Ratio" is
calculated as the ratio of our total indebtedness to EBITDA.

    Our senior subordinated notes are governed by an indenture and are general
unsecured obligations of the Company, subordinated in right of payment to all
existing and future senior debt of the Company. Early in fiscal 1999, we amended
the indenture with the changes becoming operative at the time of the merger,
February 2, 1999. We sought and received the consent of the holders of our
senior subordinated notes to:

    - the one-time waiver of the applicability of the indenture to the merger,
      including the waivers of (i) the change of control covenant in the
      indenture and (ii) the "Merger, Consolidation or Sale of Assets" provision
      in the Indenture that might have restricted the financing of the merger
      and related transactions, and

    - the amendment of the definition of "Consolidated Cash Flow" in the
      indenture to add back certain costs related to the merger.

    Interest on the senior subordinated notes is payable semi-annually on June 1
and December 1 of each year. The senior subordinated notes mature on June 1,
2006. The senior subordinated notes are redeemable at our option, in whole or in
part, at any time on or after June 1, 2001 at prices ranging from 105.313% of
the principal amount plus accrued and unpaid interest, to 100% of the principal
amount plus accrued and unpaid interest beginning June 1, 2004 and thereafter.

    The indenture contains certain covenants that impose limitations on, among
other things:

    - the incurrence of additional indebtedness,

    - the payment of dividends,

    - the repurchase of capital stock and the making of certain other restricted
      payments and restricted investments (as defined in the indenture),

    - mergers, consolidations and sales of assets by the Company,

    - the creation or incurrence of liens on the assets of the Company, and

    - transactions by the Company or any of its subsidiaries with affiliates (as
      defined in the indenture).

    These limitations are subject to a number of qualifications and exceptions
as described in the Indenture.

    Our Series A Preferred and Series B Preferred are entitled to quarterly
dividends at an annual rate of 13 1/2% of the $550 per share liquidation value.
To the extent we do not pay the dividends in cash, dividends will cumulate and
compound quarterly at an annual rate of 13 1/2%. The Series A Preferred and
Series B Preferred are subject to mandatory redemption on February 1, 2011 for
cash at the liquidation value plus any accrued and unpaid dividends. We have the
right to redeem the Series A Preferred and the Series B Preferred at any time
for cash at the liquidation value plus any accrued and unpaid dividends. The
certificate of designation for the preferred stock contains covenants which
limit restricted payments or investments; limit consolidation, merger and the
sale of assets; mandate the provision of financial reports; and limit business
activities. Upon the receipt of all applicable gaming approvals the Series A
Preferred and Series B Preferred are convertible at any time on or before
February 1, 2002, at the per share rate of 28.7309164 shares of the Class A
Common and Class B Common, respectively, subject to customary anti-dilution
adjustments. Any accrued and unpaid dividends at the time of a conversion will
be required to be paid in cash or, at our election, may be satisfied with
additional shares of the corresponding common stock having a fair market value
equal to the amount of accrued dividends.

                                       26
<PAGE>
    As of November 30, 1999, we were in compliance with the covenants under the
amended and restated credit facility, the indenture and the certificate of
designation.

    At the end of fiscal year 1999, we had approximately $45.3 million available
to us under the bank credit facility, net of outstanding letters of credit and
subject to compliance with certain financial covenants. We also had cash and
cash equivalents of approximately $32.5 million.

    We have budgeted $18.3 million for maintenance capital expenditures and
property improvements and approximately $2.0 million for final payments on the
construction of the parking garage at our Council Bluffs property in fiscal
2000. We believe that our existing cash and cash equivalents, cash flows from
operations and our borrowing capacity under the credit facility will be
sufficient to meet the cash requirements of our existing operations for at least
the next twelve months, including capital improvements and replacements at the
operating properties and debt service requirements. We currently believe that
our capital expenditures beyond the next twelve months will consist of debt
service requirements and capital improvements and replacements in the ordinary
course, which we expect to be met by then-existing cash, cash flows from
operations and borrowing capacity under the credit facility. We do not currently
anticipate incurring material capital expenditures, balloon or other
extraordinary payments on long-term obligations or any other extraordinary
demands or commitments beyond the next twelve months. We do not expect to pay
cash dividends on the preferred stock prior to 2004 because of, among other
reasons, restrictions in the credit facility and the indenture on the payment of
cash dividends.

YEAR 2000 UPDATE

    Many technological systems (including those that employ embedded technology
such as microcontrollers) rely on hardware, software and components that were
originally designed to recognize a date by using the last two digits of a four
digit year. Tasks performed by technological systems using these truncated
fields may not work properly for dates from 2000 and beyond. This could result
in system failures or miscalculations causing disruptions of, or the inability
to engage in, normal business operations. This is generally known as the "Year
2000 Problem".

    In 1997, we established a task force to coordinate our response to the Year
2000 Problem. This task force includes our Chief Executive Officer, Chief
Financial Officer and the Director of Information Services as well as support
staff.

    We completed the implementation of our corrective action plan prior to
calendar year-end. To date, we have not experienced any significant system
failures or miscalculations causing disruptions of normal business operations.
We continue to use internal resources to evaluate our effectiveness in achieving
our corrective action plan objectives and are not aware of any potential Year
2000 Problem that may yet occur.

    We estimate that our costs to achieve Year 2000 compliance, including those
costs that we capitalized, were approximately $4.4 million. We incurred costs of
approximately $1.0 million in fiscal year 1998, including approximately $0.7
million that we capitalized. We expended approximately $3.4 million in fiscal
1999 of which we capitalized approximately $2.7 million. We believe that our
expenditures in fiscal 2000 will not be material.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    We are exposed to market risk from changes in interest rates. We had no
variable rate debt at November 30, 1998, however, as a result of the fiscal 1999
financing of the merger and the purchase of the net assets of Bluffs Run Casino
in part through the bank facility, we now have variable rate debt. The amount
outstanding under the bank facility at November 30, 1999 was $243.9 million,
subject to a weighted-average interest rate of 8.39%. Assuming an identical
outstanding balance for all of fiscal year

                                       27
<PAGE>
2000, a hypothetical immediate 100 basis point increase in interest rates would
increase interest expense for the year by approximately $2,439,000.

    Additionally, the fair value of our fixed rate long-term debt, consisting of
the $150 million of senior subordinated notes and the $6.7 million unamortized
premium on the senior subordinated notes at November 30, 1999, and the fair
value of our fixed rate preferred stock issued as part of the merger financing,
are sensitive to differences between market interest rates and rates at the time
of issuance. A hypothetical immediate 100 basis point increase in interest rates
at November 30, 1999 would have decreased the fair value of our fixed rate
long-term debt by approximately $14.0 million. Conversely, a 100 basis point
decrease in interest rates would have increased the fair value of our
outstanding long-term debt at November 30, 1999 by approximately $17.1 million.
A hypothetical immediate 100 basis point increase in interest rates would have
decreased the fair value of our fixed rate preferred stock by approximately $4.0
million at November 30, 1999. Conversely, a 100 basis point decrease in interest
rates would have increased the fair value of the preferred stock by
approximately $4.7 million.

    The Company did not enter into any derivative financial contracts in fiscal
1998 or 1999. Effective March 1, 2000, the Company entered into an interest rate
cap agreement with a notional amount of $48 million. The Company may use
additional derivative financial instruments in the future as a risk management
tool. The Company does not use derivative financial instruments for speculative
or trading purposes.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

    The consolidated financial statements are as set forth in the "INDEX TO
CONSOLIDATED FINANCIAL STATEMENTS" on page 43.

ITEM 9. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
  DISCLOSURE

    On March 12, 1999, Deloitte & Touche LLP, who had previously been engaged as
the principal accountant to audit the financial statements of Harveys Casino
Resorts was dismissed as the Company's independent accountant.

    Deloitte and Touche LLP's reports on the financial statements of the Company
for each of the past two fiscal years preceding the change in accountants did
not contain an adverse opinion or a disclaimer of opinion, nor were the opinions
qualified or modified as to uncertainty, audit scope, or accounting principles.

    During the Company's most recent two fiscal years preceding the change in
accountants there were no disagreements with Deloitte & Touche LLP on any matter
of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which disagreement, if not resolved to the
satisfaction of Deloitte & Touche LLP would have caused them to make reference
to the subject matter of the disagreement in connection with their report.

    During the Company's most recent two fiscal years preceding the change in
accountants there were no "reportable events" as listed in paragraph (a)(1)(v)
of Item 304 of Regulations S-K.

    On March 12, 1999, Ernst & Young LLP was selected as the principal
accountant to audit the Company's financial statements.

                                       28
<PAGE>
                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS

    The table below sets forth the directors and executive officers of the
Company as of the date hereof:

<TABLE>
<CAPTION>
NAME                        AGE                                 POSITION
----                      --------                              --------
<S>                       <C>        <C>
Thomas J. Barrack,           52
Jr.(1)..................             Chairman of the Board of Directors
Charles W. Scharer......     44      President and Chief Executive Officer; Director
John J. McLaughlin(3)...     44      Senior Vice President, Chief Financial Officer, Secretary and
                                     Treasurer
Gary D. Armentrout......     52      Senior Vice President - Business Development and Government
                                     Relations
James J. Rafferty.......     44      Senior Vice President - Corporate Marketing
John R. Bellotti........     42      Senior Vice President of Human Resources
Edward B. Barraco.......     55      Senior Vice President and General Manager - Harveys Wagon Wheel
William R. Stephens.....     51      Senior Vice President and General Manager - Harveys Resort
Verne H. Welch, Jr......     62      Senior Vice President and General Manager - Harveys Casino
                                     Hotel
Kelvin L. Davis (1).....     36      Director
</TABLE>

    THOMAS J. BARRACK, JR. serves as Chairman of the Board of Directors of the
Company. Mr. Barrack became a director at the effective time of the merger,
February 2, 1999, pursuant to an Agreement and Plan of Merger dated as of
February 1, 1998 and was appointed Chairman of the Board at that time. Mr.
Barrack also holds a minority interest in Colony HCR Voteco. Mr. Barrack has
served as Chairman and Chief Executive Officer of each of Colony Capital, Inc.
and Colony Advisors, Inc. since August 1997. Colony Capital, Inc. and Colony
Advisors, Inc. are international real estate investment and management firms.
Mr. Barrack served as President of Colony Capital, Inc. and Colony Advisors,
Inc. from August 1992 and September 1991, respectively, until August 1997. Mr.
Barrack is a Director of Continental Airlines, Inc., a commercial airline,
Public Storage, Inc., a developer, owner and operator of self-storage
facilities, Kennedy-Wilson, Inc., a worldwide real estate marketing, brokerage
and investment services company and Kerry Properties Limited, a Hong Kong-based
real estate company.

    CHARLES W. SCHARER serves as a Director and President and Chief Executive
Officer of the Company. He was appointed President and Chief Executive Officer
of the Company effective December 1, 1995. He has served as a director of the
company since April 1995 and served as Chairman of the Board of Directors from
May 1, 1997 to the date of the merger, February 2, 1999. Prior to becoming
President and Chief Executive Officer of the company, Mr. Scharer served as
Executive Vice President from August 1995. He was appointed Chief Financial
Officer in July 1993 and Treasurer in September 1993.

    JOHN J. MCLAUGHLIN serves as Senior Vice President, Chief Financial Officer,
Secretary and Treasurer. He was appointed Senior Vice President, Chief Financial
Officer and Treasurer of the Company in March 1996. Mr. McLaughlin became
Secretary of the Company as of the date of the merger, February 2, 1999. He
joined the Company in September 1995 as Chief Financial Officer. From January
1993 until September 1995, he was Chief Financial Officer of President Riverboat
Casino, Inc. Mr. McLaughlin is a Certified Public Accountant.

    GARY D. ARMENTROUT serves as Senior Vice President - Business Development
and Government Relations. He has served as Senior Vice President - Business
Development and Government Relations of the Company since May 1995. In this
position he has been responsible for identifying and pursuing the development of
new projects for the Company. Prior to joining the Company, Mr. Armentrout was
employed by President Riverboat Casinos, Inc. where he served as Vice President
-Gaming from May 1990 until June 1994 when he was appointed Vice President -
Gaming Development.

                                       29
<PAGE>
    JAMES J. RAFFERTY serves as Senior Vice President - Corporate Marketing. He
was appointed Corporate Vice President of Marketing of the Company in December
1995 and was promoted to Senior Vice President of Corporate Marketing in 1997.
Mr. Rafferty served as Vice President, Marketing -Lake Tahoe from 1992 to 1995.

    JOHN R. BELLOTTI serves as Senior Vice President of Human Resources. He was
appointed Corporate Vice President of Human Resources of the Company in August
1997 and was promoted to Senior Vice President of Human Resources in December,
1999. Prior to joining the Company in August 1997, Mr. Bellotti was employed by
Hyatt Hotels Corporation, serving most recently as Assistant Vice President of
Human Resources from 1993 to 1997.

    EDWARD B. BARRACO serves as Senior Vice President and General Manager -
Harveys Wagon Wheel. He has served as the Company's Senior Vice President and
General Manager - Harveys Wagon Wheel since July 1995. From 1985 to 1995, Mr.
Barraco served as Assistant General Manager - Lake Tahoe, where he was
responsible for overseeing all aspects of the operation on an assigned shift.

    WILLIAM R. STEPHENS serves as Senior Vice President and General Manager -
Harveys Resort. He was appointed Senior Vice President and General Manager -
Harveys Resort in May 1999. Prior to assuming his current position, Mr. Stephens
was employed by the Hard Rock Hotel/Casino in Las Vegas where he was the
director of casino operations from the opening in 1995 until 1996 when he was
promoted to the vice president of casino operations.

    VERNE H. WELCH, JR. serves as Senior Vice President and General Manager -
Harveys Casino Hotel. He has served as Senior Vice President and General Manager
-Harveys Casino Hotel since September 1995. Prior to moving to the Council
Bluffs property, Mr. Welch served as Senior Vice President and General Manager -
Lake Tahoe from December 1993 to September 1995. From 1988 to December 1993, he
served as Vice President - Casino Operations.

    KELVIN L. DAVIS serves as a Director. Mr. Davis became a director at the
time of the merger, February 2, 1999 pursuant to an Agreement and Plan of Merger
dated as of February 1, 1998. Mr. Davis also holds a majority membership
interest in Colony HCR Voteco. Mr. Davis is a partner with the Texas Pacific
Group, an international private equity investment firm. Prior to joining the
Texas Pacific Group in March, 2000, Mr. Davis served as President and Chief
Operating Officer of each of Colony Capital, Inc. and Colony Advisors, Inc.
since August 1997. He served as Executive Vice President of Colony Capital, Inc.
and Colony Advisors, Inc. from August 1992 and September 1991, respectively, to
August 1997. Mr. Davis is a director of Franchise Finance Corporation of
America, a specialty real estate financing company, and Crestline Capital Corp.,
a hotel and senior living community company.

    Mark Hedstrom, Chief Financial Officer of Colony Capital, Inc. serves as a
non-voting observer on the Board of Directors.

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES AND EXCHANGE ACT

    Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors and persons who own more than 10% of the
Company's common stock to file reports of ownership on Forms 3, 4 and 5 with the
Securities and Exchange Commission. Executive officers, directors and 10%
stockholders are required by the Securities and Exchange Commission to furnish
the Company with copies of all Forms 3,4 and 5 they file.

    Based solely on our review of the copies of the forms we received, we
believe that all our executive officers, directors and greater than 10%
beneficial owners complied with all the filing requirements applicable to them
with respect to transactions during fiscal 1999.

LEGAL PROCEEDINGS INVOLVING DIRECTORS, OFFICERS, AFFILIATES OR BENEFICIAL OWNERS

    No director, officer or affiliate of the Company or beneficial owner of more
than 5% of our outstanding shares of common stock, or any associate thereof, is
a party adverse to the Company or any of our subsidiaries in any lawsuit or has
a material adverse interest thereto.

                                       30
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

    The following table sets forth the compensation earned by the Chief
Executive Officer of the Company, the other four most highly compensated
executive officers of the Company and a former executive officer who would have
been one of the other four most highly compensated executive officers had he
continued to be an executive officer through the end of the fiscal year. The
compensation set forth is for services rendered to the Company in all capacities
during the last three fiscal years ended November 30, 1999 (the six individuals
are referred to in this report as the "Named Executive Officers").

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                     ANNUAL                       LONG-TERM
                                                  COMPENSATION                      AWARDS
                                               -------------------                ----------
                                                                     RESTRICTED   SECURITIES
                                                                       STOCK      UNDERLYING     LTIP        ALL OTHER
                                 YEAR ENDED     SALARY     BONUS       AWARD       OPTIONS      PAYOUTS    COMPENSATION
NAME AND PRINCIPAL POSITION     NOVEMBER 30,     ($)        ($)        ($)(1)        (#)        ($)(2)        ($)(3)
---------------------------     ------------   --------   --------   ----------   ----------   ---------   -------------
<S>                             <C>            <C>        <C>        <C>          <C>          <C>         <C>
Charles W. Scharer                  1999        520,000    520,000     522,032        36,360   1,210,795          20,313
President and Chief Executive       1998        467,500    448,800          --            --     118,034          17,400
Officer and Director                1997        428,462    360,000          --       183,500      81,384          11,067

Stephen L. Cavallaro (4)            1999        372,385     73,750     406,026        28,280     617,621          12,456
Chief Operating Officer             1998        351,346    263,630          --            --      80,964          12,905
                                    1997        333,462    240,000          --        48,800      61,718           9,115

John J. McLaughlin                  1999        294,077    222,358     348,022        24,240     392,744           4,800
Senior Vice President, Chief        1998        250,000    179,250          --            --          --           4,800
Financial Officer, Treasurer        1997        221,346    165,000          --        41,000          --           6,735
and Secretary

Gary D. Armentrout                  1999        240,000    129,600     174,011         9,090     354,475           4,800
Senior Vice President -             1998        236,359    128,510          --            --          --           4,800
Business
Development and Government          1997        234,598    130,000          --        41,000          --           5,512
Relations

James J. Rafferty                   1999        192,000    117,000     174,011         9,090     274,503           8,016
Senior Vice President -             1998        183,771    105,330          --                        --           4,800
Corporate Marketing                 1997        166,635    100,000          --        14,900          --           4,750

Verne H. Welch, Jr.                 1999        213,077    135,775     174,011         9,090     301,583          29,649
Senior Vice President               1998        201,194    125,931                        --      45,422          25,331
and General Manager -               1997        189,707    116,000          --        14,700      43,027          17,569
Harveys Casino Hotel
</TABLE>

------------------------------
(1) In the case of Mr. Scharer, represents the market value ($19.1431) of 27,270
    shares of restricted stock awarded to Mr. Scharer on February 2, 1999. In
    the case of Mr. Cavallaro, represents the market value ($19.1431) of 21,210
    shares of restricted stock awarded to Mr. Cavallaro on February 2, 1999. Mr.
    Cavallaro's shares were forfeited on his termination of employment with the
    Company. In the case of Mr. McLaughlin, represents the market value
    ($19.1431) of 18,180 shares of restricted stock awarded to Mr. McLaughlin on
    February 2, 1999. In the case of Mr. Armentrout, Mr. Rafferty and Mr. Welch,
    represents the market value ($19.1431) of 9,090 shares of restricted stock
    awarded to each of them on February 2, 1999.

(2) In fiscal year 1994, the Company adopted a long-term incentive plan. At the
    effective time of the merger, the plan was terminated and the participants,
    including the Named Executive Officers, each received a lump sum payment at
    maximum value. See "ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
    TRANSACTIONS."

(3) Amounts include the Company's 401(k) Plan contributions, payments of term
    life insurance premiums and above-market rate interest earned on deferred
    compensation. In fiscal 1999, the Company's 401(k) Plan contributions were
    $4,800 for each of the Named Executive Officers. In fiscal 1999, the Company
    paid a premium of $1,130 on a term life insurance policy insuring the life
    of Mr. Scharer. In fiscal 1999, the above-market rate interest earned by Mr.
    Scharer, Mr. Cavallaro, Mr. Rafferty and Mr. Welch on deferred compensation
    amounted to $14,383, $7,656, $3,216 and $24,849, respectively.

(4) On October 31, 1999, Mr. Cavallaro terminated his employment with the
    Company.

                                       31
<PAGE>
OPTION GRANTS

    The tables below set forth certain information regarding options granted to
the Named Executive Officers during fiscal year 1999:

                       OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
                                                        INDIVIDUAL GRANTS
                                                     -----------------------                POTENTIAL REALIZABLE
                                                                                              VALUE AT ASSUMED
                                                      PERCENTAGE                              ANNUAL RATES OF
                                        NUMBER OF      OF TOTAL                                 STOCK PRICE
                                          SHARES       OPTIONS      EXERCISE                  APPRECIATION FOR
                                        UNDERLYING    GRANTED TO     PRICE                      OPTION TERM
                                         OPTIONS     EMPLOYEES IN     ($/      EXPIRATION   --------------------
NAME                                     GRANTED     FISCAL YEAR     SHARE)       DATE       5% ($)     10% ($)
----                                    ----------   ------------   --------   ----------   --------   ---------
<S>                                     <C>          <C>            <C>        <C>          <C>        <C>
Charles W. Scharer....................      36,360         19.22     20.06      2/2/2009     404,399   1,075,975
Stephen L. Cavallaro (1)..............      28,280         14.95     20.06      2/2/2009          --          --
John J. McLaughlin....................      24,240         12.81     20.06      2/2/2009     269,600     717,317
Gary D. Armentrout....................       9,090          4.80     20.06      2/2/2009     101,100     268,994
James J. Rafferty.....................       9,090          4.80     20.06      2/2/2009     101,100     268,994
Verne H. Welch, Jr....................       9,090          4.80     20.06      2/2/2009     101,100     268,994
</TABLE>

--------------------------

(1) Mr. Cavallaro's options were forfeited on his October 31, 1999 termination
    of employment with the Company.

OPTION EXERCISES AND HOLDINGS

    The table below sets forth information concerning the exercise of options
during the fiscal year ended November 30, 1999 and unexercised options held at
the end of the year by the Named Executive Officers.

               AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND
                          FISCAL YEAR-END OPTION VALUE

<TABLE>
<CAPTION>
                                                            NUMBER OF SHARES         VALUE OF UNEXERCISED IN-THE-
                                          AGGREGATE      UNDERLYING UNEXERCISED         MONEY OPTIONS AT FISCAL
                                            VALUE      OPTIONS AT FISCAL YEAR END          YEAR END ($) (2)
                       SHARES ACQUIRED   -----------   ---------------------------   -----------------------------
NAME                   ON EXERCISE (#)   REALIZED(1)   EXERCISABLE   UNEXERCISABLE   EXERCISABLE    UNEXERCISABLE
----                   ---------------   -----------   -----------   -------------   ------------   --------------
<S>                    <C>               <C>           <C>           <C>             <C>            <C>
Charles W. Scharer...      215,500       $2,727,960           --         36,360             --              --
Stephen L.
  Cavallaro..........       78,800        1,042,113           --             --             --              --
John J. McLaughlin...       41,000          504,169           --         24,240             --              --
Gary D. Armentrout...       41,000          504,169           --          9,090             --              --
Verne H. Welch,
  Jr.................       44,700          622,792           --          9,090             --              --
James J. Rafferty....       32,450          441,687           --          9,090             --              --
</TABLE>

------------------------

(1) At the effective time of the merger, February 2, 1999, all outstanding
    unvested stock options vested. At that time, all outstanding stock options
    were canceled in return for a cash payment equal to the product of (i) the
    number of shares of Harveys common stock subject to the option and (ii) the
    excess of $28.7343 ( the price paid per share of Harveys common stock in the
    merger) over the exercise price per share of Harveys common stock as
    provided in the stock options. See "ITEM 13. CERTAIN RELATIONSHIPS AND
    RELATED TRANSACTIONS."

(2) Options are in-the-money if the fair market value of the underlying
    securities exceeds the exercise price of the options.

                                       32
<PAGE>
LONG-TERM INCENTIVE PLAN

    In fiscal year 1994, the Company adopted a Long-Term Incentive Plan. At the
effective time of the merger, the Long-Term Incentive Plan was terminated, and
all the Named Executive Officers received lump sum payments at maximum in
connection therewith. See "ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS". These payments are included in the Summary Compensation Table.
The table below sets forth awards made to Named Executive Officers in fiscal
year 1998, the last year of awards, under the Company's Long-Term Incentive
Plan.

             LONG-TERM INCENTIVE PLANS--AWARDS IN FISCAL YEAR 1998

<TABLE>
<CAPTION>
                                                                                        ESTIMATED FUTURE PAYOUTS
                                                                                                  UNDER
                               NUMBER OF                                               NON-STOCK PRICE-BASED PLANS
                             SHARES UNITS      PERFORMANCE OR OTHER PERIOD UNTIL     -------------------------------
NAME                        OR OTHER RIGHTS           MATURATION OR PAYOUT           THRESHOLD    TARGET    MAXIMUM
----                        ---------------   ------------------------------------   ---------   --------   --------
<S>                         <C>               <C>                                    <C>         <C>        <C>
Charles W. Scharer........         --         Three years ending November 30, 1998    $35,063    $70,125    $105,188
                                   --         Three years ending November 30, 1999    $35,063    $70,125    $105,188
                                   --         Three years ending November 30, 2000    $58,438    $85,708    $120,771
Stephen L. Cavallaro......         --         Three years ending November 30, 1998    $20,505    $41,009    $ 61,514
                                   --         Three years ending November 30, 1999    $20,505    $41,009    $ 61,514
                                   --         Three years ending November 30, 2000    $20,505    $41,009    $ 61,514
John J. McLaughlin........         --         Three years ending November 30, 1998    $12,500    $25,000    $ 37,500
                                   --         Three years ending November 30, 1999    $12,500    $25,000    $ 37,500
                                   --         Three years ending November 30, 2000    $12,500    $25,000    $ 37,500
Gary D. Armentrout........         --         Three years ending November 30, 1998    $11,804    $23,608    $ 35,412
                                   --         Three years ending November 30, 1999    $11,804    $23,608    $ 35,412
                                   --         Three years ending November 30, 2000    $11,804    $23,608    $ 35,412
James J. Rafferty.........         --         Three years ending November 30, 1998    $ 8,750    $17,500    $ 26,250
                                   --         Three years ending November 30, 1999    $ 8,750    $17,500    $ 26,250
                                   --         Three years ending November 30, 2000    $ 8,750    $17,500    $ 26,250
Verne H. Welch, Jr........         --         Three years ending November 30, 1998    $ 9,900    $19,800    $ 29,700
                                   --         Three years ending November 30, 1999    $ 9,900    $19,800    $ 29,700
                                   --         Three years ending November 30, 2000    $ 9,900    $19,800    $ 29,700
</TABLE>

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

    The tables below set forth total benefits payable to executive employees,
including certain of the Named Executive Officers, who participate in the
Company's Supplemental Executive Retirement Plan. Amounts shown represent the
aggregate amounts to which participating employees are entitled under the
Supplemental Executive Retirement Plan.

                                       33
<PAGE>
                  SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN TABLE
                              (SEVEN YEAR VESTING)

<TABLE>
<CAPTION>
                                   ESTIMATED ANNUAL BENEFITS AT AGE 65 FOR REPRESENTATIVE
AVERAGE BASE                                        YEARS OF SERVICE ($)
COMPENSATION                      ---------------------------------------------------------
FOR FINAL FIVE YEARS ($)              3           4           5           6           7
------------------------          ---------   ---------   ---------   ---------   ---------
<S>                               <C>         <C>         <C>         <C>         <C>
125,000.........................   12,500       25,000      37,500      50,000      62,500
150,000.........................   15,000       30,000      45,000      60,000      75,000
175,000.........................   17,500       35,000      52,500      70,000      87,500
200,000.........................   20,000       40,000      60,000      80,000     100,000
225,000.........................   22,500       45,000      67,500      90,000     112,500
250,000.........................   25,000       50,000      75,000     100,000     125,000
300,000.........................   30,000       60,000      90,000     120,000     150,000
400,000.........................   40,000       80,000     120,000     160,000     200,000
450,000.........................   45,000       90,000     135,000     180,000     225,000
500,000.........................   50,000      100,000     150,000     200,000     250,000
</TABLE>

                  SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN TABLE

                               (20 YEAR VESTING)

<TABLE>
<CAPTION>
                                            ESTIMATED ANNUAL BENEFITS AT AGE 65 FOR
AVERAGE BASE                                  REPRESENTATIVE YEARS OF SERVICE ($)
COMPENSATION                               -----------------------------------------
FOR FINAL FIVE YEARS ($)                      5          10         15         20
------------------------                   --------   --------   --------   --------
<S>                                        <C>        <C>        <C>        <C>
125,000..................................   15,625     31,250     46,875     62,500
150,000..................................   18,750     37,500     56,250     75,000
175,000..................................   21,875     43,750     65,625     87,500
200,000..................................   25,000     50,000     75,000    100,000
225,000..................................   28,125     56,250     84,375    112,500
250,000..................................   31,250     62,500     93,750    125,000
300,000..................................   37,500     75,000    112,500    150,000
400,000..................................   50,000    100,000    150,000    200,000
450,000..................................   56,250    112,500    168,750    225,000
500,000..................................   62,500    125,000    187,500    250,000
</TABLE>

    The seven year vesting plan presently covers approximately 19 current or
former executive employees. The 20 year vesting plan, for those who began
participation after October 1, 1994, covers approximately 8 executive employees.
Plan benefits are based on a percentage of average base compensation earned
during the participant's last five years of service. Base compensation is the
participant's annual salary (but not bonuses or incentive compensation), which
is the same as compensation depicted as salary in the Summary Compensation
Table. Benefits are generally computed as a straight-line annuity, and are not
subject to any deduction for social security benefits. Participants are entitled
to receive benefits upon attaining age 65 and having become vested. Participants
in the seven year vesting plan become 20% vested after having accumulated at
least three years of service with the Company and vesting continues in 20%
increments each year thereafter, with 100% vesting occurring upon completion of
seven years of service. Participants in the 20 year vesting plan become 25%
vested after having accumulated at least five years of service with the Company
and vesting continues in 5% increments each year thereafter, with 100% vesting
occurring upon completion of 20 years service. Amounts shown for seven years or
20 years of service in the respective tables above represent the maximum annual
payments a participant may receive. Benefits under the Supplemental Executive
Retirement Plan are payable for a period of 15 years.

                                       34
<PAGE>
    Prior to the merger, Mr. Scharer was fully vested under the terms of the
seven year vesting plan, Mr. Cavallaro had approximately five years of credited
service under the terms of the seven year vesting plan and Mr. McLaughlin had
approximately three years of credited service under the terms of the twenty year
vesting plan. Upon consummation of the Merger, the rights of Mr. Scharer,
Mr. Cavallaro and Mr. McLaughlin to participate in the Supplemental Executive
Retirement Plan were terminated, and they received lump sum payments in
connection therewith. See ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS.

    Mr. Rafferty and Mr. Welch are fully vested under the terms of the seven
year plan and Mr. Armentrout has approximately four and one-half years of
credited service under the 20 year vesting plan.

COMPENSATION OF DIRECTORS

    For fiscal year 1998 and for that part of fiscal 1999 prior to the merger,
non-employee directors were entitled to an annual retainer of $30,000, paid in
quarterly installments, and an additional $1,000 for each board meeting
attended. During those periods, non-employee committee members received $1,000
for each committee meeting attended, and the non-employee chairs of each of the
Audit Committee and The Compensation Committee received $1,200 for each meeting
attended.

    The Company had established an Outside Director's Retirement Plan pursuant
to which each outside director and any employee-director who was not covered
under the Company's Supplemental Executive Retirement Plan or Senior
Supplemental Executive Retirement Plan and who had served five or more years, or
his or her beneficiaries as applicable, was entitled to receive $25,000 per year
for up to ten years upon the director's retirement, death or disability. The
plan also provided for continuing medical insurance coverage under the Company's
executive health plan for a period of up to ten years.

    Pursuant to the Change of Control Plan (i) all options granted to directors
under the 1993 Non-Employee Director Stock Option Plan vested when the merger
became effective, and (ii) members of the board of directors who were asked to
resign as a result of the merger were paid their annual compensation for the
balance of the term for which they were elected and were paid a lump sum payment
of the compensation due under the Outside Directors' Retirement Plan.

    Directors who are also employees may be eligible to participate in the
Company's employee incentive plans.

EMPLOYMENT CONTRACTS AND CHANGE OF CONTROL AGREEMENTS

    Prior to the merger, Charles W. Scharer served as Chairman of the Board,
President and Chief Executive Officer under an employment contract with the
Company. At the effective time of the merger, February 2, 1999, the existing
contract was terminated and Mr. Scharer and the Company entered into a new
employment contract. See "ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS." Mr. Scharer serves as President and Chief Executive Officer under
the new employment contract with the Company. The term of the contract began on
February 2, 1999 and ends on February 2, 2004. The contract provides that
Mr. Scharer's initial salary will be $520,000 per year and will be reviewed at
least annually. The contract also provides that Mr. Scharer is eligible to
participate in the Company's management incentive plan or an equivalent annual
bonus plan providing for payment of an annual bonus with thresholds and
triggering events for payment based on the achievements of the Company's annual
budget and other business plan targets determined by the board of directors.
Under the contract, Mr. Scharer's maximum annual bonus will not be less than
$360,000. Concurrent with the execution of the contract, Mr. Scharer received a
restricted stock award consisting of 270 shares of Class A Common Stock and
27,000 shares of Class B Common Stock and a stock option to purchase 360
additional shares of Class A Common Stock and 36,000 additional shares of Class
B Common Stock, each at a price of $20.06 per share, subject in all respects to
the Company's

                                       35
<PAGE>
1999 Omnibus Incentive Plan, a Stock Option and Restricted Stock Agreement
between Mr. Scharer and the Company dated February 2, 1999 and a Stockholders
Agreement dated as of February 2, 1999 among the Company, Colony HCR Voteco,
Colony Investors III and certain other security holders of the Company. The
employment contract is terminable at any time (upon 30 days prior written
notice) by Mr. Scharer or the Company. If the contract is terminated by the
Company for reason other than cause, Mr. Scharer is entitled to receive a lump
sum payment in an amount equal to the sum of his then base salary and his annual
target bonus increased by a multiplier as well as certain other benefits for a
period following termination. The contract provides that if Mr. Scharer's
employment with the Company is terminated as a result of or in connection with a
change of control of the Company, Mr. Scharer is entitled to a lump sum payout
at a maximum of the bonus otherwise payable to him with respect to the then
current fiscal year under the Company's annual bonus plan, prorated through the
effective date of such termination of employment. Under the contract,
Mr. Scharer is also entitled to a lump sum payout at a maximum of the otherwise
payable bonus should the Company's annual bonus plan be terminated or amended so
as to materially adversely affect him.

    Prior to the merger, John J. McLaughlin served as Senior Vice President,
Chief Financial Officer and Treasurer under an employment contract with the
Company. At the effective time of the merger, February 2, 1999, the existing
contract was terminated and Mr. McLaughlin and the Company entered into a new
employment contract. See "ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS." Mr. McLaughlin serves as Senior Vice President, Chief Financial
Officer and Treasurer under the new employment contract with the Company. On
February 2, 1999, Mr. McLaughlin was also appointed Secretary of the Company.
The term of the contract began as of February 2, 1999 and terminates on February
2, 2004. Mr. McLaughlin's annual salary established by the contract is $300,000
per year, subject to annual review. The contract also provides Mr. McLaughlin
eligibility to participate in the Company's management incentive plan or an
equivalent annual bonus plan providing for payment of an annual bonus with
thresholds and triggering events for payment based on the achievement of the
Company's annual budget and other business plan targets determined by the board
of directors. Mr. McLaughlin's maximum annual bonus will not be less than
$165,000. Concurrent with the execution of the contract, Mr. McLaughlin received
a restricted stock award consisting of 180 shares of Class A Common Stock and
18,000 shares of Class B Common Stock and a stock option to purchase 240
additional shares of Class A Common Stock and 24,000 shares of Class B Common
Stock each at a price of $20.06 per share, subject in all respects to the
Company's 1999 Omnibus Incentive Plan , a Stock Option and Restricted Stock
Agreement between Mr. McLaughlin and the Company dated February 2, 1999 and a
Stockholders Agreement dated February 2, 1999 among the Company, Colony HCR
Voteco, Colony Investors III and certain other security holders of the Company.
The contract is terminable at any time (upon 30 days prior written notice) by
Mr. McLaughlin or the Company. If the contract is terminated by the Company for
reason other than cause, Mr. McLaughlin is entitled to receive a lump sum
payment in an amount equal to the sum of his then base salary and his annual
target bonus increased by a multiplier as well as certain other benefits for a
period following termination. The contract provides that if Mr. McLaughlin's
employment with the Company is terminated as a result of or in connection with a
change of control of the Company, Mr. McLaughlin is entitled to a lump sum
payout at a maximum of the bonus otherwise payable to him with respect to the
then current fiscal year under the Company's annual bonus plan, prorated through
the effective date of such termination of employment. Under the contract
Mr. McLaughlin is also entitled to a lump sum payout at a maximum of the
otherwise payable bonus should the Company's annual bonus plan be terminated or
amended so as to materially adversely affect him.

    GARY D. ARMENTROUT serves as Senior Vice President, Business Development and
Government Relations under an employment agreement with the Company effective as
of May 9, 1995. The employment agreement was extended for additional one year
periods on August 23, 1996, September 8, 1997 and October 26, 1998. The term of
the agreement, as extended, runs through May 8, 2000. Mr. Armentrout's current
salary under the agreement is $240,000 annually and is subject to annual

                                       36
<PAGE>
review. The agreement is terminable at any time (upon 90 days notice) by
Mr. Armentrout or the Company. If the agreement is terminated by the Company for
reasons other than for cause, Mr. Armentrout is entitled to receive the full
value of his salary and other benefits for the remainder of the agreement term.
The Company has also granted to Mr. Armentrout a restricted stock award
consisting of 90 shares of Class A Common Stock and 9,000 shares of Class B
Common Stock and a stock option to purchase 90 additional shares of Class A
Common Stock and 9,000 additional shares of Class B Common Stock, each at a
price of $20.06 per share, subject in all respects to the Company's 1999 Omnibus
Incentive Plan , a Stock Option and Restricted Stock Agreement between
Mr. Armentrout and the Company dated February 2, 1999 and a Stockholders
Agreement dated February 2, 1999 among the Company, Colony HCR Voteco, Colony
Investors III and certain other security holders of the Company.

    JAMES J. RAFFERTY serves as Senior Vice President of Corporate Marketing
under an employment agreement with the Company effective as of June 23, 1997 and
modified on October 19, 1998 to extend the term of the agreement through June
22, 2000. Mr. Rafferty's current salary under the agreement is $225,000 annually
and is subject to annual review. The agreement is terminable at any time (upon
90 days notice) by Mr. Rafferty or the Company. If the agreement is terminated
by the Company for reasons other than cause, Mr. Rafferty is entitled to receive
the full value of his salary and other benefits for the remainder of the
agreement term. The Company also granted to Mr. Rafferty a restricted stock
award consisting of 90 shares of Class A Common Stock and 9,000 shares of Class
B Common Stock and a stock option to purchase 90 additional shares of Class A
Common Stock and 9,000 additional shares of Class B Common Stock, each at a
price of $20.06 per share, subject in all respects to the Company's 1999 Omnibus
Incentive Plan , a Stock Option and Restricted Stock Agreement between
Mr. Rafferty and the Company dated February 2, 1999 and a Stockholders Agreement
dated February 2, 1999 among the Company, Colony HCR Voteco, Colony Investors
III and certain other security holders of the Company.

    VERNE H. WELCH, JR. serves as Senior Vice President and General
Manager-Harveys Casino Hotel under an employment agreement with the Company
effective as of August 17, 1999. The term of the agreement runs through June 30,
2001. Mr. Welch's current salary under the agreement is $250,000 annually and is
subject to annual review. The agreement is terminable at any time (upon 90 days
notice) by Mr. Welch or the Company. If the agreement is terminated by the
Company for reasons other than cause, Mr. Welch is entitled to receive the full
value of his salary and other benefits for the remainder of the agreement term.
The Company also granted to Mr. Welch a restricted stock award consisting of 90
shares of Class A Common Stock and 9,000 shares of Class B Common Stock and a
stock option to purchase 90 additional shares of Class A Common Stock and 9,000
additional shares of Class B Common Stock, each at a price of $20.06 per share,
subject in all respects to the Company's 1999 Omnibus Incentive Plan , a Stock
Option and Restricted Stock Agreement between Mr. Welch and the Company dated
February 2, 1999 and a Stockholders Agreement dated February 2, 1999 among the
Company, Colony HCR Voteco, Colony Investors III and certain other security
holders of the Company.

                                       37
<PAGE>
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    The following table sets forth as of February 22, 2000, beneficial ownership
of the Company's Class A Common Stock (the only class of voting securities of
the Company) by (i) all persons who are beneficial owners of more than five
percent of the Class A Common Stock, (ii) each director, (iii) the Named
Executive Officers in each case who were serving as an executive officer on
behalf of the Company at the end of the last fiscal year and (iv) all directors
and executive officers, as a group. Except as otherwise indicated, the Company
believes that the beneficial owners of the Class A Common Stock listed below,
based on information furnished by such owners, have sole investment and voting
power with respect to such shares, subject to community property laws where
applicable. Unless otherwise indicated the business address of such persons is
Highway 50 and Stateline Avenue, P. O. Box 128, Lake Tahoe, Nevada 89449. As of
February 22, 2000, 39,520 shares of Class A Common Stock were outstanding.

<TABLE>
<CAPTION>
                                                     SHARES
                                                  BENEFICIALLY   PERCENT OF
NAME OF BENEFICIAL OWNER                           OWNED (1)       CLASS
------------------------                          ------------   ----------
<S>                                               <C>            <C>
Colony HCR Voteco, LLC
  1999 Avenue of the Stars, Suite 1200
  Los Angeles, California 90067.................     38,800          97.0%
Thomas J. Barrack, Jr. (2)......................     38,800          97.0
Kelvin L. Davis (2).............................     38,800          97.0
Charles W. Scharer..............................          *             *
John J. McLaughlin..............................          *             *
Gary D. Armentrout..............................          *             *
James J. Rafferty...............................          *             *
Verne H. Welch, Jr..............................          *             *
All directors and executive officers as a group
  (10 persons) (2)(3)...........................     39,520         100.0%
</TABLE>

------------------------

*   Less than one percent

(1) Beneficial ownership is determined in accordance with the rules of the
    Security and Exchange Commission and excludes grants of phantom stock and
    options that are not exercisable currently or within 60 days.

(2) Messrs. Barrack and Davis are the Managers of Colony HCR Voteco, and thereby
    each may be deemed to have beneficial ownership of the Class A Common Stock
    owned of record by Colony HCR Voteco. Messrs. Barrack and Davis each
    disclaim beneficial ownership of such shares of Class A Common Stock

(3) Includes options, which are currently exercisable, to purchase Class A
    Common Stock.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    At the time Harveys Acquisition Corporation and the Company entered into the
Agreement and Plan of Merger, Harveys Acquisition Corporation also entered into
a memorandum of understanding with Messrs. Scharer, Cavallaro and McLaughlin. At
the effective time of the merger, pursuant to the memorandum of understanding,
Messrs. Scharer, Cavallaro and McLaughlin remained in the offices they held in
the Company before the merger. Mr. Scharer continued to serve as a director, and
Mr . Cavallaro was appointed a non-voting observer to the Company's board of
directors. In addition, pursuant to the memorandum of understanding, the Company
entered into the following agreements and other arrangements immediately
following the merger.

                                       38
<PAGE>
    - The Company granted to Mr. Scharer, Mr. Cavallaro and Mr. McLaughlin 270,
      210 and 180 shares of Class A Common Stock and 27,000, 21,000 and 18,000
      shares of Class B Common, Stock respectively. The Company later granted to
      each of Mr. Armentrout, Mr. Rafferty, Mr. Bellotti, Mr. Barraco, Mr.
      Stephens and Mr. Welch 90 shares of Class A Common Stock and 9,000 shares
      of Class B Common Stock.

    - The Company reserved 800 shares of Class A Common Stock and 80,000 shares
      of Class B Common Stock for grant to the Company's executive officers and
      others as are mutually determined by the Chief Executive Officer and the
      Company's board of directors, if the Company achieves certain performance
      goals in connection with the opening or acquisition of new gaming
      facilities before February 2, 2004.

    - The Company granted to Mr. Scharer, Mr. Cavallaro and Mr McLaughlin
      options to acquire, at a price of $20.06 per share, 360, 280 and 240
      shares of Class A Common Stock and 36,000, 28,000 and 24,000 shares of
      Class B Common Stock, respectively, and the Company granted to each of Mr.
      Armentrout, Mr. Rafferty, Mr. Bellotti, Mr. Barraco, Mr. Stephens and Mr.
      Welch options to acquire, at a price of $20.06 per share, 90 shares of
      Class A Common Stock and 9,000 shares of Class B Common Stock and reserved
      for grant to members of senior management of the Company (other than the
      Company's executive officers) options to acquire, at a price of $20.06 per
      share, 400 shares of Class A Common Stock and 40,000 shares of Class B
      Common Stock.

    - Each option to purchase the Company's common stock held by those executive
      officers prior to the merger was canceled in exchange for payments equal
      to the product of (i) the number of shares of common stock subject to such
      option and (ii) the excess, if any, of (a) the price per share of the
      common stock paid in the merger for a share of the Company's common stock
      over (b) the exercise price per share of common stock of such option.
      Messrs. Scharer, Cavallaro and McLaughlin received payments of $2,727,960,
      $1,042,113 and $504,169, respectively, in consideration for cancellation
      of their options.

    - The Long-Term Incentive Plan and the rights of Messrs. Scharer, Cavallaro
      and McLaughlin to participate therein were terminated in exchange for lump
      sum payments of $965,373, $479,270 and $311,195, respectively.

    - The rights of Messrs. Scharer, Cavallaro and McLaughlin to participate in
      the Supplemental Executive Retirement Plan were terminated, and the
      accrued Supplemental Executive Retirement Plan benefits for Messrs.
      Scharer, Cavallaro and McLaughlin as of the consummation of the merger
      were determined to be $1,399,435, $781,878 and $450,000, respectively.
      One-half of the respective amount was paid in a lump sum to Messrs.
      Scharer, Cavallaro and McLaughlin, and the remaining amounts were deemed
      to be distributed to each of them and invested pursuant to certain
      deferred compensation agreements entered into between the Company and each
      of Messrs. Scharer, Cavallaro and McLaughlin.

    - The Company permitted Messrs. Scharer, Cavallaro and McLaughlin to remain
      eligible to participate in the management incentive plan, and in respect
      of fiscal year 1999, Messrs Scharer, Cavallaro and McLaughlin received
      advances of amounts payable to them pursuant to the management incentive
      plan of $130,000, $73,750 and $55,625, respectively.

    At the effective time of the merger, the employment contracts in effect
immediately prior to the merger between the Company and each of them were
terminated, and each of them entered into a new employment contract with the
Company. See "ITEM 11 EXECUTIVE COMPENSATION-Employment Contracts and Change of
Control Agreements".

    At the effective time of the merger, members of the Company's board of
directors who were asked to resign as a result of the merger were paid their
annual compensation for the balance of the term for

                                       39
<PAGE>
which they were elected and were paid a lump sum payment of the compensation due
under the Outside Directors' Retirement Plan. Payments for annual compensation
were made to Richard Kudrna, Jessica Ledbetter and Franklin Rahbeck in the
amount of $75,000 each. Payments for benefits due under the Outside Directors'
Retirement Plan were made to Jessica Ledbetter, Kirk Ledbetter and Franklin
Rahbeck in the amount of $250,000 each.

    At the time the Agreement and Plan of Merger was signed, Harveys Acquisition
Corporation, William Ledbetter, Jessica Ledbetter and Kirk Ledbetter, who
together with a trust affiliated with the Ledbetter Family owned approximately
41% of the Company's equity prior to the merger, entered into a Noncompetition
and Trade Secret Agreement. This agreement provides that for a period of three
years following the merger, none of the Ledbetter's shall compete with the
Company (except for certain permitted activities). The agreement also (i)
provides that William Ledbetter is entitled to participate in the Company's
Senior Supplemental Executive Retirement Plan and to receive the perquisites
provided for in his employment agreement dated November 12, 1993 until he
reaches age 80; (ii) designates Jessica Ledbetter a Director Emeriti of the
Company and entitles her to complimentary services of up to $8,000 per year at
Company facilities; and (iii) provided that Kirk Ledbetter receive a one-time
payment of $195,000, provides for Kirk Ledbetter to have a life insurance policy
maintained by the Company until the tenth anniversary of the closing of the
merger, and entitles him and his immediate family to complimentary services of
up to $8,000 per year at Company facilities.

    Jessica Ledbetter, Kirk Ledbetter and Franklin Rahbeck, directors of the
Company prior to the merger, and Wells Fargo Bank, N.A. are the co-trustees of
the William B. Ledbetter and Beverlee A. Ledbetter Irrevocable Trust. The trust
owns survivorship life insurance policies on the lives of William B. Ledbetter
and Beverlee A. Ledbetter, deceased. Prior to fiscal 1995 the Company paid the
premiums on the life insurance policies. The Company has no further obligation
to pay such premiums. On November 15, 1993, the trust issued a note payable to
the Company for the amounts of the premiums previously paid by the Company. On
January 31, 1994, the trust issued a note payable to the Company for the amount
of a premium paid by the Company in 1994. The notes were in the principal
amounts of $1,376,995 and $455,275. On February 3, 1999, the trust retired the
notes by paying the Company the principal amounts plus all accrued and unpaid
interest to the date of payment.

    The Agreement and Plan of Merger provides that directors and officers
liability insurance coverage will be provided to those directors and officers of
the Company prior to the merger for a term of six years following the merger.

                                       40
<PAGE>
                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

    (a) The following documents are filed as part of this report:

    (1) Financial Statements.

    The consolidated financial statements of the Company are set forth in the
"INDEX TO CONSOLIDATED FINANCIAL STATEMENTS" on page 43.

    (2) Financial Statement Schedules.

    Schedules have been omitted because they are not applicable, are not
required or because the information is included elsewhere in the Consolidated
Financial Statements or the notes thereto.

    (3) Exhibits are set forth in the "EXHIBIT INDEX" on page 78.

    (b) Reports on Form 8-K filed during the last quarter of fiscal 1999.

    On September 3, 1999, we filed a Current Report on Form 8-K, under Item 5.
Other Events, to report the execution of a Purchase and Sale Agreement and Joint
Escrow Instructions dated August 31, 1999 by and between HRB Realty Company,
Inc, a Nevada corporation and Iowa West Racing Association, Nonprofit
Corporation, an Iowa Nonprofit corporation. Pursuant to the agreement,
HBR Realty Company agreed to purchase the net assets of Bluffs Run Casino from
Iowa West Racing Association.

    On October 20, 1999, we filed a Current Report on Form 8-K under Item 2.
Acquisition of Assets, to report the October 6, 1999 purchase of the net assets
of Bluffs Run Casino by HBR Realty Company from Iowa West Racing Association.

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995

    This document includes various "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Sections
21E of the Securities Exchange Act of 1934, as amended, which represent the
Company's expectations or beliefs concerning future events. Statements
containing expressions such as "believes", "anticipates" or "expects" used in
the Company's press releases and periodic reports on Forms 10-K and 10-Q filed
with the Securities and Exchange Commission are intended to identify
forward-looking statements. All forward-looking statements involve risks and
uncertainties. Although the Company believes its expectations are based upon
reasonable assumptions within the bounds of its knowledge of its business and
operations, there can be no assurances that actual results will not materially
differ from expected results. The Company cautions that these and similar
statements included in this report and in previously filed periodic reports,
including reports filed on Forms 10-K and 10-Q, are further qualified by
important factors that could cause actual results to differ materially from
those in the forward-looking statements. Such factors include, without
limitation, the following: increased competition in existing markets or the
opening of new gaming jurisdictions; a decline in the public acceptance of
gaming; the limitation, conditioning or suspension of any of the Company's
gaming licenses; increases in or new taxes imposed on gaming revenues or gaming
devices; a finding of unsuitability by regulatory authorities with respect to
the Company's officers, directors or key employees; loss or retirement of key
executives; significant increases in fuel or transportation prices; adverse
economic conditions in the Company's key markets; severe and unusual weather in
the Company's key markets; adverse results of significant litigation matters.
Readers are cautioned not to place undue reliance on forward-looking statements,
which speak only as of the date thereof. The Company undertakes no obligation to
publicly release any revisions to such forward-looking statements to reflect
events or circumstances after the date hereof.

                                       41
<PAGE>
                                   SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of
1934, as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized this 25th day of February,
2000.

<TABLE>
<S>                                                    <C>  <C>
                                                       HARVEYS CASINO RESORTS

                                                       By:            /s/ CHARLES W. SCHARER
                                                            -----------------------------------------
                                                                        Charles W. Scharer
                                                              PRESIDENT AND CHIEF EXECUTIVE OFFICER
</TABLE>

    Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed by the following persons on behalf of the
registrant in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
                   NAME                                    TITLE                         DATE
                   ----                                    -----                         ----
<C>                                         <S>                                   <C>
        /s/ THOMAS J. BARRACK, JR.
    ---------------------------------       Chairman of the Board and Director    February 25, 2000
          Thomas J. Barrack, Jr.

          /s/ CHARLES W. SCHARER            President, Chief Executive Officer
    ---------------------------------       and Director (Principal Executive     February 25, 2000
            Charles W. Scharer              Officer)

           /s/ KELVIN L. DAVIS
    ---------------------------------       Director                              February 25, 2000
             Kelvin L. Davis

                                            Senior Vice President, Chief
          /s/ JOHN J. MCLAUGHLIN            Financial Officer, Secretary and
    ---------------------------------       Treasurer (Principal Financial        February 25, 2000
            John J. McLaughlin              Officer)

            /s/ JOHN P. HEWITT
    ---------------------------------       Corporate Controller (Principal       February 25, 2000
              John P. Hewitt                Accounting Officer)
</TABLE>

                                       42
<PAGE>
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

<S>                                                           <C>
Report of Ernst & Young LLP, Independent Auditors' Report...     44
Report of Deloitte & Touche LLP, Independent Auditors'
  Report....................................................     45
Consolidated Balance Sheets as of November 30, 1998 and
  1999......................................................     46
Consolidated Statements of Operations for the Years Ended
  November 30, 1997, 1998 and the Year Ended November 30,
  1999, of which the period from December 1, 1998 through
  February 1, 1999 represents the predecessor Company.......     47
Consolidated Statements of Stockholders' Equity for the
  Years Ended November 30, 1997, 1998 and the Year Ended
  November 30, 1999, of which the period from December 1,
  1998 through February 1, 1999 represents the predecessor
  Company...................................................     48
Consolidated Statements of Cash Flows for the Years Ended
  November 30, 1997, 1998 and the Year Ended November 30,
  1999, of which the period from December 1, 1998 through
  February 1, 1999 represents the predecessor Company.......     49
Notes to Consolidated Financial Statements..................     51
</TABLE>

                                       43
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of Harveys Casino Resorts:

    We have audited the accompanying consolidated balance sheet of Harveys
Casino Resorts (the "Company") as of November 30, 1999, and the related
consolidated statements of operations, stockholders' equity and cash flows for
the year then ended, of which the period from December 1, 1998 through February
1, 1999 represents the predecessor company, as discussed in Note 1. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

    We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

    In our opinion, the 1999 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Harveys
Casino Resorts as of November 30, 1999, and the consolidated results of its
operations and its cash flows for the year then ended, of which the period from
December 1, 1998 through February 2, 1999 represents the predecessor company, in
conformity with accounting principles generally accepted in the United States.

                                          ERNST & YOUNG LLP

Reno, Nevada

December 30, 1999

                                       44
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of Harveys Casino Resorts:

    We have audited the accompanying consolidated balance sheet of Harveys
Casino Resorts and subsidiaries (the "Company") as of November 30, 1998, and the
related consolidated statements of operations, stockholders' equity and cash
flows for each of the two years in the period ended November 30, 1998. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

    We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

    In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Harveys Casino Resorts as of
November 30, 1998, and the results of its operations and its cash flow for the
two years in the period ended November 30, 1998 in conformity with generally
accepted accounting principles.

DELOITTE & TOUCHE LLP

Reno, Nevada

January 5, 1999

                                       45
<PAGE>
                             HARVEYS CASINO RESORTS

                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                       NOVEMBER 30,
                                                              -------------------------------
                                                                   1998             1999
                                                              --------------   --------------
                                                               PREDECESSOR
                                                                 COMPANY
                                                                 (NOTE 1)
<S>                                                           <C>              <C>
                                           ASSETS
Current assets
  Cash and cash equivalents.................................  $  67,299,230    $  32,496,319
  Marketable securities.....................................     10,657,245               --
  Accounts receivable, net of allowances for doubtful
    accounts of
    $343,042 in 1999 and $127,410 in 1998...................      4,566,169        5,810,264
  Inventories...............................................      3,621,568        3,703,915
  Prepaid expenses and other current assets.................      2,450,549        2,228,359
  Deferred income taxes.....................................        525,416        3,141,457
                                                              -------------    -------------
    Total current assets....................................     89,120,177       47,380,314
                                                              -------------    -------------
Property and equipment
  Land......................................................     20,717,873       53,876,000
  Buildings and improvements................................    263,522,463      295,755,884
  Leasehold improvements....................................     21,151,757       24,795,276
  Equipment, furniture and fixtures.........................    153,559,283       85,203,521
  Construction in progress..................................      2,607,324               --
                                                              -------------    -------------
                                                                461,558,700      459,630,681
  Less: Accumulated depreciation and amortization...........   (146,207,321)     (18,871,618)
                                                              -------------    -------------
                                                                315,351,379      440,759,063
                                                              -------------    -------------
  Notes receivable-related parties..........................      1,874,831           50,321
  Cost in excess of net assets acquired.....................             --      155,903,555
  Other assets..............................................     17,812,018       29,826,379
                                                              -------------    -------------
Total assets................................................  $ 424,158,405    $ 673,919,632
                                                              =============    =============
                            LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
  Current portion of long-term debt.........................  $     220,304    $          --
  Accounts and contracts payable............................      5,031,996        7,551,442
  Construction payable......................................             --        2,200,877
  Accrued expenses..........................................     24,892,096       34,466,973
                                                              -------------    -------------
    Total current liabilities...............................     30,144,396       44,219,292
Long-term debt, net of current portion......................    150,000,000      400,577,205
Deferred income taxes.......................................     24,948,131       58,091,337
Other liabilities...........................................     18,612,243       28,234,008
                                                              -------------    -------------
    Total liabilities.......................................    223,704,770      531,121,842
                                                              -------------    -------------
Preferred stock, $.01 par value; 1,000,000 shares
  authorized, 10 Series A and 99,990 Series B 13 1/2% Senior
  Redeemable Convertible Cumulative shares outstanding
  (liquidation value $55,000,000)...........................             --       61,442,346
                                                              -------------    -------------
Commitments and contingencies (see note 8)
Stockholders' equity
  Common stock, $.01 par value; at November 30, 1999,
    20,000,000 shares authorized and 4,018,790 shares
    issued; at November 30, 1998, 30,000,000 shares
    authorized and 10,079,671 shares issued.................        100,797           40,188
  Additional paid-in capital and other......................     43,495,650       74,959,812
  Retained earnings.........................................    157,110,720        6,355,444
  Treasury stock, at cost; 14,560 shares....................       (253,532)              --
                                                              -------------    -------------
  Total stockholders' equity................................    200,453,635       81,355,444
                                                              -------------    -------------
Total liabilities and stockholders' equity..................  $ 424,158,405    $ 673,919,632
                                                              =============    =============
</TABLE>

        The accompanying notes are an integral part of these statements.

                                       46
<PAGE>
                             HARVEYS CASINO RESORTS
                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                            PREDECESSOR COMPANY (NOTE 1)
                                   ----------------------------------------------     FEBRUARY 2, 1999
                                    YEARS ENDED NOVEMBER 30,     DECEMBER 1, 1998   (DATE OF ACQUISITION)
                                   ---------------------------       THROUGH               THROUGH
                                       1997           1998       FEBRUARY 1, 1999     NOVEMBER 30, 1999
                                   ------------   ------------   ----------------   ---------------------
<S>                                <C>            <C>            <C>                <C>
Revenues
  Casino.........................  $216,564,140   $244,784,494     $ 41,454,266         $229,016,000
  Racing.........................            --             --               --              931,790
  Lodging........................    32,175,206     34,272,546        5,958,214           31,002,326
  Food and beverage..............    44,405,880     47,078,908        8,107,313           42,989,594
  Other..........................     7,276,772      7,111,072        1,270,850            6,638,389
  Management fees and joint
    venture......................     4,507,159             --               --                   --
  Less: Casino promotional
    allowances...................   (21,365,746)   (23,738,316)      (5,002,943)         (22,414,697)
                                   ------------   ------------     ------------         ------------
    Total net revenues...........   283,563,411    309,508,704       51,787,700          288,163,402
                                   ------------   ------------     ------------         ------------
Costs and expenses
  Casino.........................   100,500,468    115,836,815       21,146,422          106,156,751
  Racing.........................            --             --               --            1,858,542
  Lodging........................    13,373,681     13,710,144        1,996,897           11,048,491
  Food and beverage..............    29,886,093     30,142,182        4,726,052           27,192,624
  Other operating................     2,811,332      2,885,443          592,456            2,703,704
  Selling, general and
    administrative...............    73,945,020     78,986,651       13,428,090           68,910,009
  Depreciation and
    amortization.................    19,077,058     20,796,922        3,552,595           22,611,160
  Business development costs.....     2,689,875         95,961          129,817            2,052,285
  Merger related costs...........            --      1,217,720       19,879,276                   --
                                   ------------   ------------     ------------         ------------
  Total costs and expenses.......   242,283,527    263,671,838       65,451,605          242,533,566
                                   ------------   ------------     ------------         ------------
Operating income (loss)..........    41,279,844     45,836,866      (13,663,905)          45,629,836
                                   ------------   ------------     ------------         ------------
Other income (expense)
  Interest income................       509,620      2,258,771          337,642              124,152
  Interest expense...............   (19,401,110)   (17,835,647)      (3,015,944)         (24,272,489)
  Gain on sale of interests in
    unconsolidated affiliate.....    27,422,228             --               --                   --
  Other, net.....................      (137,448)      (141,059)          76,779             (549,886)
                                   ------------   ------------     ------------         ------------
    Total other income
      (expense)..................     8,393,290    (15,717,935)      (2,601,523)         (24,698,223)
                                   ------------   ------------     ------------         ------------
Income (loss) before income taxes
  and extraordinary item.........    49,673,174     30,118,931      (16,265,428)          20,931,613
Income tax (provision) benefit...   (18,898,553)   (11,417,279)       3,904,000           (8,133,823)
                                   ------------   ------------     ------------         ------------
Income (loss) before
  extraordinary item.............    30,774,621     18,701,652      (12,361,428)          12,797,790
Loss on early retirement of debt,
  net of taxes...................            --             --         (868,779)                  --
                                   ------------   ------------     ------------         ------------
Net income (loss)................  $ 30,774,621   $ 18,701,652     $(13,230,207)        $ 12,797,790
                                   ============   ============     ============         ============
</TABLE>

        The accompanying notes are an integral part of these statements.

                                       47
<PAGE>
                             HARVEYS CASINO RESORTS
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                      COMMON
                                      STOCK     ADDITIONAL
                                     $.01 PAR     PAID-IN       DEFERRED       TREASURY      RETAINED
                                      VALUE       CAPITAL     COMPENSATION      STOCK        EARNINGS        TOTAL
                                     --------   -----------   -------------   ----------   ------------   ------------
<S>                                  <C>        <C>           <C>             <C>          <C>            <C>
Predecessor Company
  (Note 1)
Balance December 1, 1996: 9,808,286
  shares outstanding; 10,036 shares
  in treasury......................  $98,183    $38,634,439     $(425,187)    $(151,276)   $111,606,913   $149,763,072
Stock options exercised; 35,166
  shares...........................      352        531,920            --            --              --        532,272
Other..............................       --         25,031            --            --              --         25,031
Forfeiture of restricted stock;
  2,000 shares.....................       --             --        40,250       (40,250)             --             --
Acquisition of treasury stock; 480
  shares...........................       --             --            --        (8,146)             --         (8,146)
Amortization of deferred
  compensation.....................       --             --       236,868            --              --        236,868
Cash dividends declared............       --             --            --            --      (1,966,168)    (1,966,168)
Net income.........................       --             --            --            --      30,774,621     30,774,621
                                     --------   -----------     ---------     ---------    ------------   ------------
Balance November 30, 1997;
  9,840,972 shares outstanding;
  12,516 shares in treasury........   98,535     39,191,390      (148,069)     (199,672)    140,415,366    179,357,550
Stock options exercised; 226,183
  shares...........................    2,262      4,309,985            --            --              --      4,312,247
Acquisition of treasury stock;
  2,044 shares.....................       --             --            --       (53,860)             --        (53,860)
Amortization of deferred
  compensation.....................       --             --       142,344            --              --        142,344
Cash dividends declared............       --             --            --            --      (2,006,298)    (2,006,298)
Net income.........................       --             --            --            --      18,701,652     18,701,652
                                     --------   -----------     ---------     ---------    ------------   ------------
Balance November 30, 1998;
  10,065,111 shares outstanding;
  14,560 shares in treasury........  100,797     43,501,375        (5,725)     (253,532)    157,110,720    200,453,635
Acquisition of treasury stock; 164
  shares...........................       --             --            --        (4,458)             --         (4,458)
Amortization of deferred
  compensation.....................       --             --         1,138            --              --          1,138
Net loss...........................       --             --            --            --     (13,230,207)   (13,230,207)
                                     --------   -----------     ---------     ---------    ------------   ------------
Balance February 1, 1999;
  10,064,947 shares outstanding;
  14,742 shares in treasury........  $100,797   $43,501,375     $  (4,587)    $(257,990)   $143,880,513   $187,220,108
                                     ========   ===========     =========     =========    ============   ============
</TABLE>

<TABLE>
<CAPTION>
                                                              COMMON STOCK
                                                           -------------------
                                                           CLASS A    CLASS B    ADDITIONAL
                                                           $.01 PAR   $.01 PAR     PAID-IN      RETAINED
                                                            VALUE      VALUE       CAPITAL      EARNINGS        TOTAL
                                                           --------   --------   -----------   -----------   -----------
<S>                                             <C>        <C>        <C>        <C>           <C>           <C>
Balance February 2, 1999; 38,800
  shares of Class A and
  3,880,000 shares of
  Class B outstanding.........................               $388     $38,800    $74,960,812   $        --   $75,000,000
Restricted stock awards, net of forfeitures;
  990 shares of Class A and 99,000 shares of
  Class B.....................................                 10         990         (1,000)           --            --
Dividends accrued on
  preferred stock.............................                 --          --             --    (6,442,346)   (6,442,346)
Net income....................................                 --          --             --    12,797,790    12,797,790
                                                             ----     -------    -----------   -----------   -----------
Balance November 30, 1999: 39,790 shares of
  Class A and 3,979,000 shares of Class B
  Outstanding.................................               $398     $39,790    $74,959,812   $ 6,355,444   $81,355,444
                                                             ====     =======    ===========   ===========   ===========
</TABLE>

        The accompanying notes are an integral part of these statements.

                                       48
<PAGE>
                             HARVEYS CASINO RESORTS

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                   PREDECESSOR COMPANY (NOTE 1)
                                          ----------------------------------------------     FEBRUARY 2, 1999
                                           YEARS ENDED NOVEMBER 30,     DECEMBER 1, 1998   (DATE OF ACQUISITION)
                                          ---------------------------       THROUGH               THROUGH
                                              1997           1998       FEBRUARY 1, 1999     NOVEMBER 30, 1999
                                          ------------   ------------   ----------------   ---------------------
<S>                                       <C>            <C>            <C>                <C>
Cash flows from operating activities
Net income (loss).......................  $ 30,774,621   $ 18,701,652     $(13,230,207)        $  12,797,790
Adjustments to reconcile net income
  (loss) to net cash provided by
  operating activities:
  Depreciation and amortization.........    19,077,058     20,796,922        3,552,594            19,648,761
  Gain on sale of interests in
    unconsolidated affiliate............   (27,422,228)            --               --                    --
  Equity in income of unconsolidated
    affiliate...........................    (1,665,880)            --               --                    --
  Amortization of deferred
    compensation........................       236,868        142,344            1,137             1,167,233
  Amortization of debt issuance costs...     1,042,668      1,078,423          506,428               841,276
  Amortization of intangible assets.....            --             --               --             2,962,399
  Amortization of premium on long term
    debt................................            --             --               --              (846,413)
  Retirement of debt costs, net of
    tax.................................            --             --          868,779                    --
  Deferred income taxes.................     6,515,243      2,052,065          135,141             1,347,616
  Expensed consent fee and related
    costs...............................            --             --       19,879 276                    --
  Loss on disposition of assets.........            --             --           35,828               466,554
  Other.................................       162,369         98,808               --                    --
  (Increase) decrease in assets
    Accounts receivable, net............     2,984,090        697,668       (1,355,803)              817,289
    Inventories.........................      (369,346)        37,178         (112,741)             (150,864)
    Prepaid expenses and other current
      assets............................      (235,227)       961,311         (207,747)            1,643,873
    Other assets........................        74,573     (3,874,864)        (772,631)            7,452,500
  Increase (decrease) in liabilities
    Accounts and contracts payable......       236,936     (1,567,028)       1,084,299               317,225
    Accrued expenses....................     4,433,595      3,970,058       (5,864,717)             (961,634)
    Income taxes payable................     7,056,237     (7,056,237)              --            (1,850,292)
    Other liabilities...................     1,734,973      2,349,282          275,633            (8,385,966)
                                          ------------   ------------     ------------         -------------
      Net cash provided by operating
        activities......................    44,636,550     38,387,582        4,795,269            37,267,347
                                          ------------   ------------     ------------         -------------
Cash flows from investing activities
  Proceeds from disposition of assets...     3,716,157        138,463           14,180               239,982
  Capital expenditures..................   (22,531,641)   (17,680,546)      (3,830,177)          (26,725,901)
  Proceeds from sale of marketable
    securities..........................       498,032             --       10,000,000               657,245
  Purchase of marketable securities.....       (27,751)   (10,657,245)              --                    --
  Advances to employees.................      (173,510)       (78,796)         (49,409)               (7,097)
  Proceeds from notes receivable........       168,910         79,730            1,300             1,879,716
  Proceeds from sale of interests in
    unconsolidated affiliate............    46,226,920             --               --                    --
  Increase (decrease) in construction
    payables............................    (3,448,828)       608,660         (261,554)            1,853,771
  Investment in Bluffs Run, net of cash
    acquired............................            --             --               --          (107,212,243)
                                          ------------   ------------     ------------         -------------
      Net cash provided by (used in)
        investing activities............    24,428,289    (27,589,734)       5,874,340          (129,314,527)
                                          ------------   ------------     ------------         -------------
</TABLE>

        The accompanying notes are an integral part of these statements.

                                       49
<PAGE>
                             HARVEYS CASINO RESORTS

               CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

<TABLE>
<CAPTION>
                                                   PREDECESSOR COMPANY (NOTE 1)
                                          ----------------------------------------------     FEBRUARY 2, 1999
                                           YEARS ENDED NOVEMBER 30,     DECEMBER 1, 1998   (DATE OF ACQUISITION)
                                          ---------------------------       THROUGH               THROUGH
                                              1997           1998       FEBRUARY 1, 1999     NOVEMBER 30, 1999
                                          ------------   ------------   ----------------   ---------------------
<S>                                       <C>            <C>            <C>                <C>
Cash flows from financing activities
  Net borrowings under short-term credit
    agreements..........................      (340,335)            --               --                    --
  Proceeds from long-term debt..........    11,013,876             --               --           179,789,083
  Principal payments on long-term
    debt................................   (44,266,675)      (633,354)        (220,304)         (107,865,465)
  Dividends paid........................    (1,966,168)    (2,006,298)              --                    --
  Debt issuance costs...................      (116,178)      (152,214)         (27,359)           (5,217,561)
  Stock options exercised...............       532,272      4,312,247               --                    --
  Consent fee and related costs.........            --             --                -           (19,879,276)
  Acquisition of treasury stock.........        (8,146)       (53,860)          (4,458)                   --
                                          ------------   ------------     ------------         -------------
      Net cash provided by (used in)
        financing activities............   (35,151,354)     1,466,521         (252,121)           46,826,781
                                          ------------   ------------     ------------         -------------
      Increase (decrease) in cash and
        cash equivalents................    33,913,485     12,264,369       10,417,488           (45,220,399)
Cash and cash equivalents at beginning
  of period.............................    21,121,376     55,034,861       67,299,230            77,716,718
                                          ------------   ------------     ------------         -------------
Cash and cash equivalents at end of
  period................................  $ 55,034,861   $ 67,299,230     $ 77,716,718         $  32,496,319
                                          ============   ============     ============         =============
Supplemental disclosure of cash flow
  information
  Cash paid for interest, net of amounts
    capitalized.........................  $ 18,426,216   $ 16,631,889     $     98,858         $  24,746,300
  Cash paid for income taxes............     3,429,087     17,705,000               --               318,000
  Assumption of debt related to
    merger..............................            --             --               --           172,000,000
In connection with the Bluffs Run Casino
  acquisition, the Company assumed
  liabilities as follows:
  Fair value of assets acquired.........            --             --               --         $ 130,601,665
  Cash paid for the acquisition,
    including acquisition costs.........            --             --               --          (116,605,508)
                                                                                               -------------
  Liabilities assumed and amount payable
    to seller...........................            --             --               --         $  13,996,157
                                                                                               =============
</TABLE>

        The accompanying notes are an integral part of these statements.

                                       50
<PAGE>
                             HARVEYS CASINO RESORTS

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In the following footnotes, the words, "Company," "Harveys," "we," "our" and
"us" refer to Harveys Casino Resorts, a Nevada corporation, and its wholly-owned
subsidiaries unless the context requires otherwise.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    BASIS OF PRESENTATION AND CONSOLIDATION

    Harveys has been engaged in the casino entertainment industry for over 50
years. On February 2, 1999, Harveys Acquisition Corporation merged with and into
Harveys (see Note 2). Harveys was the surviving corporation in the merger and is
continuing business operations as conducted prior to the merger. Harveys Tahoe
Management Company, Inc., a wholly-owned subsidiary, owns and operates Harveys
Resort & Casino on the south shore of Lake Tahoe, Nevada. Harveys Iowa
Management Company, Inc., a wholly-owned subsidiary, is the owner and operator
of Harveys Casino Hotel, a riverboat casino, hotel and convention center complex
in Council Bluffs, Iowa. On October 6, 1999, HBR Realty Company, Inc., a
wholly-owned subsidiary, purchased the net assets of Bluffs Run Casino, a
greyhound racetrack and land-based casino in Council Bluffs, Iowa (see Note 2).
Harveys C. C. Management Company, Inc., a wholly-owned subsidiary, owns and
operates Harveys Wagon Wheel Hotel/Casino in Central City, Colorado. Until
October 24, 1997, Harveys L. V. Management Company, Inc., a wholly-owned
subsidiary, owned 40% of the equity interest in Hard Rock Hotel, Inc., which
owns the Hard Rock Hotel and Casino in Las Vegas, Nevada. Harveys L. V.
Management had a contract to manage the Las Vegas hotel and casino. On October
24, 1997 we sold our 40% equity interest and our interest in the management
contract to Hard Rock Hotel, Inc. ( see Note 13).

    We accounted for the February 2, 1999 merger as a purchase. This required us
to allocate the purchase price to the individual assets acquired and liabilities
assumed based on their fair value at the time of the merger. As a result, our
consolidated financial statements for the periods after the merger are presented
on a different basis of accounting from those for the periods before the merger
and, therefore, are not directly comparable. The accompanying consolidated
statements of operations and consolidated statements of cash flows for periods
prior to the merger are captioned as the predecessor company and are shown for
informational purposes.

    We accounted for the acquisition of the net assets of Bluffs Run Casino as a
purchase. Consequently, the net assets acquired are included in our consolidated
balance sheet based on their fair value as of the date of acquisition. Our
consolidated statement of operations includes the revenues and expenses of
Bluffs Run Casino from the date of acquisition.

    Our consolidated financial statements include the accounts of Harveys and
its wholly-owned subsidiaries. We eliminated all significant intercompany
accounts and transactions.

    USE OF ESTIMATES

    The preparation of financial statements in conformity with generally
accepted accounting principles requires us to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Our actual results could differ from those estimates.

    CASH AND CASH EQUIVALENTS

    Cash and cash equivalents consist of cash on hand and in banks, interest
bearing deposits and highly liquid debt instruments purchased with initial
maturities of three months or less. Cash equivalents are carried at cost which
approximates market value. Cash and cash equivalents at

                                       51
<PAGE>
                             HARVEYS CASINO RESORTS

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
November 30, 1999 included approximately $878,000 related to pari-mutuel taxes
which were restricted for distribution to the taxing authorities, and
approximately $1.0 million required by the Iowa State Racing and Gaming
Commission to guarantee the payment of wagering taxes.

    MARKETABLE SECURITIES

    We considered all of our marketable securities held at November 30, 1998 to
be available-for-sale. Securities that are available-for-sale are stated at
market value, which is determined by the closing price of the security as of the
balance sheet date.

    INVENTORIES

    Inventories consist primarily of operating supplies and food and beverage
stock and are stated at the lower of weighted-average cost or market.

    PROPERTY, EQUIPMENT AND DEPRECIATION

    Property and equipment are stated at cost. We capitalize interest incurred
during construction and amortize it over the life of the asset. Costs of
improvements are capitalized. Costs of normal repairs and maintenance are
charged to expense as incurred. On the sale or retirement of property and
equipment, we remove the cost and related accumulated depreciation from the
respective accounts, and include the resulting gain or loss, if any, in income.
We provide for depreciation of property and equipment on the straight-line
method over the estimated useful lives of the respective assets. Leasehold
improvements are amortized over the shorter of the asset life or lease term.
Depreciable lives are as follows:

<TABLE>
<CAPTION>

<S>                                                           <C>
Buildings and improvements..................................  15 to 45 years
Riverboat...................................................        20 years
Leasehold improvements......................................   5 to 30 years
Equipment, furniture and fixtures...........................   5 to 10 years
</TABLE>

    UNAMORTIZED LOAN COSTS AND DEBT ISSUANCE COSTS

    We amortize loan costs incurred in connection with a reducing revolving
credit agreement to interest expense over the term of the loan on a
straight-line method. We amortize debt issuance costs associated with our senior
subordinated notes to interest expense over the term of the notes on the
interest method.

    COSTS IN EXCESS OF NET ASSETS ACQUIRED

    Costs in excess of net assets acquired consist primarily of goodwill
acquired in the February merger ($66.9 million) which is being amortized over 40
years and the value assigned to the operating agreement in the Bluffs Run Casino
acquisition ($91.6 million), a substantial portion of which is being amortized
over the 25 year life of the associated management and lease agreement (see Note
2).

                                       52
<PAGE>
                             HARVEYS CASINO RESORTS

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    CASINO REVENUES AND PROMOTIONAL ALLOWANCES

    In accordance with industry practice, Harveys recognizes as casino revenues
the net win from gaming activities, which is the difference between gaming wins
and losses. Promotional allowances consist principally of the retail value of
complimentary rooms, food, beverage, and other promotional allowances provided
to customers without charge. We classify the estimated costs of providing those
complimentary services as casino operating expenses through interdepartmental
allocations as follows:

<TABLE>
<CAPTION>
                                                       PREDECESSOR COMPANY
                                             ---------------------------------------      PERIOD
                                                                           PERIOD      FEBRUARY 2,
                                                                         DECEMBER 1,   1999(DATE OF
                                                 FISCAL YEAR ENDED          1998       ACQUISITION)
                                                   NOVEMBER 30,            THROUGH       THROUGH
                                             -------------------------   FEBRUARY 1,   NOVEMBER 30,
                                                1997          1998          1999           1999
                                             -----------   -----------   -----------   ------------
<S>                                          <C>           <C>           <C>           <C>
Hotel......................................  $ 2,743,124   $ 3,247,715   $  861,685    $ 2,708,800
Food and beverage..........................   10,871,776    11,845,611    2,404,409     11,429,460
Other......................................       63,505        80,594       16,747        142,859
                                             -----------   -----------   ----------    -----------
                                             $13,678,405   $15,173,920   $3,282,841    $14,281,119
                                             ===========   ===========   ==========    ===========
</TABLE>

    ADVERTISING COSTS

    We expense advertising costs as incurred, except costs for direct-response
advertising, which we capitalize and amortize over the period of the related
program. Direct-response advertising costs consist primarily of production and
mailing costs associated with direct mail programs. Capitalized advertising
costs were immaterial at November 30, 1998 and 1999. We expensed approximately
$6.2 million and $6.5 million of advertising costs in fiscal 1997 and 1998,
respectively. We expensed approximately $0.9 million and $6.6 million of
advertising costs for the periods December 1, 1998 through February 1, 1999 and
February 2, 1999 through November 30, 1999, respectively.

    INCOME TAXES

    Harveys and its subsidiaries file a consolidated federal income tax return.
Deferred tax assets and liabilities are determined based on the differences
between financial reporting and tax bases of assets and liabilities and are
measured using the enacted tax rates and laws that will be in effect when the
temporary differences are expected to be reversed. Additionally, deferred tax
assets and liabilities are separated into current and non-current amounts based
on the classification of the related assets and liabilities for financial
reporting purposes.

    FAIR VALUE OF FINANCIAL INSTRUMENTS

    SFAS No. 107--DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS requires
the determination of fair value for certain of the Company's assets, liabilities
and contingent liabilities.

    Long-term debt: The fair value of our bank credit facility is estimated
based on the current borrowing rates offered to the Company for debt of the same
remaining maturities. The fair value of our senior subordinated notes is
estimated based on indicative trading prices, when available. We believe the
carrying amount of our long-term debt approximates fair value at November 30,
1999.

                                       53
<PAGE>
                             HARVEYS CASINO RESORTS

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    There is no current market for the Company's preferred stock, however, we
believe the carrying amount including accrued dividends approximates fair value
at November 30, 1999.

    LONG-LIVED ASSETS

    In accordance with the provisions of SFAS No. 121--ACCOUNTING FOR THE
IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO BE DISPOSED OF, the
Company reviews the carrying amount of long-lived assets and certain
identifiable intangibles whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. Such reviews have
not had a material effect on the Company's results of operations or financial
position.

    CONCENTRATIONS OF CREDIT RISK

    We maintain our cash in bank deposit accounts which, at times, may exceed
federally insured limits. The Company has not experienced any losses in such
accounts. We believe the Company is not exposed to any significant concentration
of credit risk on cash and cash equivalents.

    We extend credit to some casino, hotel and convention customers. We maintain
an allowance for doubtful accounts to reduce our receivables to their carrying
amount, which we believe approximates fair value. We believe the Company is not
exposed to any significant concentration of credit risk on accounts receivable.

    FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK

    Harveys is a party to financial instruments with off-balance-sheet risk in
the normal course of business. These financial instruments consist of standby
letters of credit.

    Our exposure to credit loss in the event of nonperformance by the other
party to the standby letters of credit is represented by the contractual amount
of those instruments. We use the same credit policies in making commitments and
conditional obligations as we do for on-balance-sheet instruments. The Company
does not have collateral or other security to support financial instruments with
off-balance-sheet credit risk.

    RECENTLY ISSUED ACCOUNTING STANDARDS

    The FASB has issued SFAS No. 133--ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND
HEDGING ACTIVITIES, which establishes accounting and reporting standards for
derivative instruments and hedging activities. SFAS No. 133 will be effective
for the Company's fiscal year beginning December 1, 2000. We believe that the
adoption of this statement will not have a material impact on the Company's
financial condition or results of operation.

    The Accounting Standards Executive Committee of the American Institute of
Certified Public Accountants has issued Statement of Position ("SOP")
98-5--REPORTING ON THE COSTS OF START-UP ACTIVITIES. SOP 98-5 requires costs of
start-up activities (commonly referred to as pre-opening costs in the gaming
industry) to be expensed as incurred. We are required to adopt SOP 98-5
beginning December 1, 1999. On adoption, restatement of previously issued
financial statements will not be permitted. The initial effect of adopting SOP
98-5 will be reported as the cumulative effect of a change in accounting
principle. We anticipate incurring an initial charge of approximately $3.1
million, net of tax, on adoption of SOP 98-5, including the effects of expensing
previously deferred organization and licensing costs of $3.7 million as well as
business development costs of $910,000.

                                       54
<PAGE>
                             HARVEYS CASINO RESORTS

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    Prior to the adoption of SOP 98-5 the Company capitalized costs associated
with new gaming projects until (i) the project was no longer considered viable
and the costs were expensed, or (ii) the likelihood of the project was
relatively certain and the costs were reclassified to pre-opening and expensed
when operations commenced. Capitalized future development costs, including land
costs, relating to potential new gaming projects, of approximately $3.1 million
and $2.7 million as of November 30, 1998 and 1999, respectively, are included on
the accompanying consolidated balance sheets as other assets. For fiscal 1998
and 1999, the Company expensed approximately $96,000 and $2.2 million,
respectively, of future business development costs.

    RECLASSIFICATIONS

    Certain reclassifications have been made to the prior years' consolidated
financial statements to conform to the current year presentation. These
reclassifications have no effect on net income.

2. MERGER AND ACQUISITION

    MERGER

    On February 2, 1999, Harveys Acquisition Corporation merged with and into
Harveys. Harveys Acquisition Corporation was formed at the direction of Colony
Investors III, L. P., a Delaware limited partnership, solely for the purpose of
acquiring Harveys. Prior to the merger, Harveys was a publicly held company.
Following the merger, the capital stock of Harveys Acquisition Corporation
became the capital stock of Harveys. Consequently, Colony Investors III now owns
approximately 96% of the common equity interests in Harveys. The remaining
common equity interests are owned by Colony HCR Voteco LLC, a Delaware limited
liability company and by certain members of Harveys' management. As a result,
Colony HCR Voteco can govern all matters of Harveys that are subject to a vote
of our shareholders, including the appointment of our directors and the
amendment of our Articles of Incorporation and Bylaws. Additionally, Colony
Investors III owns 99.99% of our outstanding preferred stock and Colony HCR
Voteco owns the remaining .01 percent. Colony HCR Voteco is an affiliate of
Colony Investors III. Harveys was the surviving corporation in the merger and we
are continuing our business operations as conducted prior to the merger.

    Harveys Acquisition Corporation financed the merger and paid related fees
and expenses with the following:

    - Proceeds of $75 million from the issuance of its Class A Common Stock
      (voting) to Colony HCR Voteco and its Class B Common Stock (nonvoting) to
      Colony Investors III.

    - Proceeds of $55 million from the issuance of its 13 1/2% Series A Senior
      Redeemable Convertible Cumulative Preferred Stock to Colony HCR Voteco and
      its 13 1/2% Series B Redeemable Convertible Cumulative Preferred Stock to
      Colony Investors III.

    - Borrowings of $172 million from a consortium of banks.

    - Harveys' available cash.

                                       55
<PAGE>
                             HARVEYS CASINO RESORTS

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. MERGER AND ACQUISITION (CONTINUED)

    We have recorded the net assets acquired in the merger at their fair value
at the time of the merger. Our allocation of the purchase price to the assets
acquired and liabilities assumed follows (in thousands of dollars):

<TABLE>
<S>                                                           <C>
Merger consideration paid for outstanding common stock......  $289,252
Merger consideration paid for stock options.................     9,998
Direct costs of the merger..................................     6,647
                                                              --------
Purchase price to be allocated..............................  $305,897
                                                              ========
Fair value of:
Assets acquired.............................................  $518,420
Cost in excess of net assets acquired (goodwill)............    66,854
Liabilities assumed.........................................  (279,377)
                                                              --------
                                                              $305,897
                                                              ========
</TABLE>

    ACQUISITION

    On October 6, 1999, HBR Realty Company purchased the net assets (excluding
the gaming equipment) of Bluffs Run Casino, the greyhound racetrack and casino
in Council Bluffs, Iowa. We purchased the facilities pursuant to a Purchase and
Sale Agreement and Joint Escrow Instructions dated as of August 31, 1999 by and
between HBR Realty Company and Iowa West Racing Association. At the closing, we
paid approximately $115 million in cash to Iowa West Racing Association and
approximately $1.6 million in closing costs and transaction costs. Iowa West
Racing Association also received the first $5.0 million of cash flow from the
operations of Bluffs Run Casino following the acquisition. Additionally, Iowa
West Racing Association is entitled to approximately $8.4 million of Bluffs Run
Casino's cash flow, payable in installments of $1.35 million every six months in
arrears following the acquisition. Those semi-annual payments will continue
until the fifth business day following the date that the results of a required
referendum on the continuation of gaming at pari-mutuel racetracks, to be
decided by the voters of Pottawattamie County, Iowa, in 2002 are certified to
the County Auditor of Pottawattamie County. We may be required to pay additional
consideration up to $50 million pending the results of the referendum, which
amount will not be accrued until those results are known.

    Immediately after closing of the transaction, we leased the Bluffs Run
Casino facilities back to Iowa West Racing Association for an initial term of
25 years. At the same time, Iowa West Racing Association retained Harveys BR
Management Company, Inc., our wholly-owned subsidiary, to manage the operations
of Bluffs Run Casino. Iowa West Racing Association continues to hold the
pari-mutuel and gaming licenses under Iowa law. Harveys, through its
wholly-owned subsidiaries, receives management fees and lease income generally
equal to the ongoing cash flow from the operations of Bluffs Run Casino.

                                       56
<PAGE>
                             HARVEYS CASINO RESORTS

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. MERGER AND ACQUISITION (CONTINUED)
    We accounted for the acquisition using purchase method accounting. Our
allocation of the purchase price to the assets acquired and liabilities assumed
follows (in thousands of dollars):

<TABLE>
<S>                                                           <C>
Acquired assets:
    Cash acquired, including restricted cash of $1,761......  $  9,393
    Other current assets....................................     1,203
    Property and equipment..................................    28,443
    Intangible assets.......................................    91,562
Assumed liabilities
    Accounts payable........................................    (1,707)
    Accrued expenses........................................    (7,288)
                                                              --------
Allocated purchase price....................................  $121,606
                                                              ========
</TABLE>

    We are amortizing the cost of the intangible assets acquired (primarily the
right to operate Bluffs Run Casino under the gaming license held by Iowa West
Racing Association and the right to use the gaming equipment owned by Iowa West
Racing Association and located at Bluffs Run Casino) over periods of two to
25 years.

    The following unaudited pro forma information gives effect to the
February 2, 1999 merger and the October 6, 1999 acquisition of the net assets of
Bluffs Run Casino as though each of those events had occurred at the beginning
of each of the periods presented (in thousands of dollars):

<TABLE>
<CAPTION>
                                                     YEAR ENDED NOVEMBER 30,
                                                  ------------------------------
                                                  PREDECESSOR COMPANY
                                                         1998             1999
                                                  -------------------   --------
<S>                                               <C>                   <C>
Net revenues....................................       $432,524         $446,480
                                                       ========         ========
Income before extraordinary item................       $ 16,749         $ 19,546
                                                       ========         ========
Net income......................................       $ 16,749         $ 18,677
                                                       ========         ========
</TABLE>

                                       57
<PAGE>
                             HARVEYS CASINO RESORTS

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. REPORTABLE OPERATING SEGMENTS

    At November 30, 1999, Harveys had three reportable segments; Harveys Resort
& Casino (Lake Tahoe, Nevada), Harveys Casino Hotel (Council Bluffs, Iowa) and
Harveys Wagon Wheel (Central City, Colorado). All of the operating units offer
casino gaming and the attendant amenities of lodging, food and beverage, and
various entertainment events. Each of the reportable segments is managed
separately.

    Harveys evaluates performance and allocates resources based on EBITDA,
adjusted for unusual items, produced by the reportable segments. The accounting
policies of the reportable segments are the same as those described in our
summary of significant accounting policies.

    The following presents certain financial information relative to our
reportable segments (in thousands). There are no significant intersegment sales.

<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30, 1997                 HARVEYS RESORT   HARVEYS CASINO   HARVEYS WAGON
PREDECESSOR COMPANY                             & CASINO          HOTEL            WHEEL        ALL OTHER    TOTALS
-------------------                          --------------   --------------   --------------   ---------   --------
<S>                                          <C>              <C>              <C>              <C>         <C>
Net revenues from external customers.......     $129,970         $ 99,641         $49,446       $  4,507    $283,564
Operating income...........................       23,674           17,630           9,848         (9,872)     41,280
Depreciation and amortization..............        8,451            6,655           3,267            705      19,078
Other significant item:
  Writedown of business development
    costs..................................           --               --              --          2,690       2,690
EBITDA.....................................       32,124           24,285          13,114         (6,477)     63,046
YEAR ENDED NOVEMBER 30, 1998 PREDECESSOR
  COMPANY
Net revenues from external customers.......     $133,454         $113,540         $62,514       $     --    $309,508
Operating income...........................       23,768           21,824          14,107        (13,862)     45,837
Depreciation and amortization..............        9,392            7,241           3,624            539      20,796
Other significant item:
  Writedown of business development
    costs..................................           --               --              --             96          96
  Merger related costs.....................           --               --              --          1,218       1,218
EBITDA.....................................       33,160           29,065          17,731        (12,009)     67,947
Assets.....................................      176,777          115,740          81,368        221,502     595,387
PERIOD FROM DECEMBER 1, 1998 THROUGH
  FEBRUARY 1, 1999 PREDECESSOR COMPANY
Net revenues from external customers.......     $ 21,413         $ 20,662         $ 9,713       $     --    $ 51,788
Operating income...........................        2,374            4,382           1,554        (21,973)    (13,663)
Depreciation and amortization..............        1,548            1,287             629             88       3,552
Other significant item:
  Writedown of business development
    costs..................................           --               --              --            130         130
  Consent fee and merger related costs.....           --               --              --         19,879      19,879
EBITDA.....................................        3,922            5,669           2,183         (1,876)      9,898
PERIOD FROM FEBRUARY 2, 1999 (DATE OF
  ACQUISITION) THROUGH NOVEMBER 30, 1999
Net revenues from external customers.......     $119,133         $103,466         $46,762       $ 18,802    $288,163
Operating income...........................       24,168           21,281           8,561         (8,381)     45,629
Depreciation and amortization..............        8,343            6,919           3,368          3,981      22,611
Other significant item:
  Writedown of business development
    costs..................................           --               --              --          2,052       2,052
EBITDA.....................................       32,511           28,200          11,929         (1,179)     71,461
Assets.....................................      246,068          147,033          89,972        476,934     960,007
</TABLE>

    All other revenue for the period from February 2, 1999 through November 30,
1999, consists of revenue from Bluffs Run Casino from October 6, 1999, the date
of acquisition.

                                       58
<PAGE>
                             HARVEYS CASINO RESORTS

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. REPORTABLE OPERATING SEGMENTS (CONTINUED)
    The following reconciles reportable segment assets to our consolidated
totals.

<TABLE>
<CAPTION>
                                                                   NOVEMBER 30
                                                              ----------------------
                                                              PREDECESSOR
                                                                COMPANY
                                                                 1998         1999
                                                              -----------   --------
<S>                                                           <C>           <C>
Assets
Total assets for reportable segments........................    $373,885    $483,073
All other assets............................................     221,502     476,934
                                                                --------    --------
                                                                 595,387     960,007
Elimination of intercompany notes and accounts receivable...    (171,229)   (286,087)
                                                                --------    --------
  Total consolidated assets.................................    $424,158    $673,920
                                                                ========    ========
</TABLE>

    At November 30, 1999, all other assets include the cost in excess of net
assets acquired in the February 1999 merger ($65.3 million) and in the October
1999 acquisition ($90.6 million)

4. ACCRUED EXPENSES

    Accrued expenses consist of the following as of:

<TABLE>
<CAPTION>
                                                         NOVEMBER 30,
                                               ---------------------------------
                                               PREDECESSOR COMPANY
                                                      1998              1999
                                               -------------------   -----------
<S>                                            <C>                   <C>
Provision for progressive jackpot payouts....      $ 1,676,510       $ 1,020,741
Accrued interest.............................          167,202         1,819,370
Accrued salaries, wages and other employee
  benefits...................................       10,204,932         8,699,623
Accrued taxes other than income taxes........        4,947,385         5,660,245
Self-funded workers' compensation and medical
  claims accrual.............................        2,395,703         2,548,347
Outstanding gaming chips and tokens..........          807,936         2,676,401
Race and sports book futures and unclaimed
  winners....................................        1,087,665         1,235,189
Accrued gaming promotional expense...........               --         2,979,716
Amounts due Iowa West Racing Association.....               --         4,050,000
Other accrued liabilities....................        3,604,763         3,777,341
                                                   -----------       -----------
                                                   $24,892,096       $34,466,973
                                                   ===========       ===========
</TABLE>

                                       59
<PAGE>
                             HARVEYS CASINO RESORTS

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. LONG-TERM DEBT

    Long-term debt consists of the following as of:

<TABLE>
<CAPTION>
                                                          NOVEMBER 30,
                                                   ---------------------------
                                                   PREDECESSOR
                                                     COMPANY
                                                       1998           1999
                                                   ------------   ------------
<S>                                                <C>            <C>
10 5/8% senior subordinated notes, due 2006
  (including unamortized premium of $6,653,587 in
  1999)..........................................  $150,000,000   $156,653,587
Note payable to banks............................            --    243,923,618
Other............................................       220,304             --
                                                   ------------   ------------
                                                    150,220,304    400,577,205
Less current portion.............................       220,304             --
                                                   ------------   ------------
                                                   $150,000,000   $400,577,205
                                                   ============   ============
</TABLE>

    Aggregate annual maturities of long-term debt, based on amounts borrowed as
of November 30, 1999 are as follows:

<TABLE>
<CAPTION>
YEARS ENDING NOVEMBER 30,
-------------------------
<S>                                                           <C>
2000........................................................  $         --
2001........................................................            --
2002........................................................            --
2003........................................................            --
2004........................................................   243,923,618
2005 and thereafter.........................................   150,000,000
                                                              ------------
                                                              $393,923,618
                                                              ============
</TABLE>

    10 5/8% SENIOR SUBORDINATED NOTES, DUE 2006

    Before the merger, we sought and received the consent of the holders of our
10 5/8% Senior Subordinated Notes, due June 1, 2006, to amend the indenture that
governs these notes. The amendments included:

      * A one-time waiver of the applicability of the governing indenture to the
        merger, which included waivers of provisions that might have restricted
        the financing of the merger and related transactions.

      * A change in the definition in the indenture of "Consolidated Cash Flow"
        that allows us to add back certain costs related to the merger when
        calculating Consolidated Cash Flow.

    Immediately after the merger, the fair market value of our senior
subordinated notes was 105% of the principal amount. Accordingly, when we
applied purchase method accounting to the merger, we recorded a premium of
$7.5 million relative to the senior subordinated notes. We are amortizing the
premium as a reduction of interest expense over the remaining term of the notes.

                                       60
<PAGE>
                             HARVEYS CASINO RESORTS

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. LONG-TERM DEBT (CONTINUED)

    The senior subordinated notes are governed by an indenture and are general
unsecured obligations of the Company, subordinated in right of payment to all
existing and future senior debt of the Company. The senior subordinated notes
are guaranteed by each of the restricted subsidiaries of the Company (as defined
in the indenture). Each guarantee is a general unsecured obligation of the
guaranteeing restricted subsidiary, subordinated in right of payment to all
existing and future senior debt of each guaranteeing restricted subsidiary. The
guaranteeing restricted subsidiaries are Harveys C.C. Management Company, Inc.,
Harveys Iowa Management Company, Inc., Harveys LV Management Company, Inc., and
Harveys Tahoe Management Company, Inc. Separate financial statements of the
guaranteeing restricted subsidiaries have not been included because management
has determined that they are not material to investors.

    Interest on the senior subordinated notes is payable semi-annually on
June 1 and December 1 of each year. The senior subordinated notes will mature on
June 1, 2006. The senior subordinated notes are redeemable at the option of the
Company, in whole or in part, at any time on or after June 1, 2001 at prices
ranging from 105.313% of the principal amount plus accrued and unpaid interest
to 100% of the principal amount plus accrued and unpaid interest beginning
June 1, 2004 and thereafter. Upon a change of control (as defined in the
indenture) each holder of the senior subordinated notes will have the right to
require the Company to repurchase such holder's senior subordinated notes at
101% of the principal amount plus accrued and unpaid interest to the repurchase
date.

    The indenture contains certain covenants that impose limitations on, among
other things: (i) the incurrence of additional indebtedness by the Company,
(ii) the payment of dividends, (iii) the repurchase of capital stock and the
making of certain other restricted payments and restricted investments (each as
defined in the indenture), (iv) mergers, consolidations and sales of assets,
(v) the creation or incurrence of liens on the assets of the Company, and
(vi) transactions by the Company or any of its subsidiaries with affiliates (as
defined in the indenture). These limitations are subject to a number of
qualifications and exceptions as described in the indenture. The Company was in
compliance with these covenants at November 30, 1999.

    NOTE PAYABLE TO BANKS

    At the time of the merger, we replaced our existing bank credit facility
with an amended and restated credit facility, under which we assumed the
liability for Harveys Acquisition Corporation's initial borrowing of
$172 million. In financing the acquisition of the net assets of Bluffs Run
Casino, we again amended and restated our bank credit facility.

    This second amended and restated credit facility, dated as of October 5,
1999, provides us with a revolving loan facility, a swingline facility that
allows us to borrow money on same-day notice and a letter of credit facility. We
can borrow up to $10 million dollars under the swingline facility. The maximum
available to us under the credit facility, including amounts outstanding under
the swingline facility and the letter of credit is $335 million. The maximum
permitted principal balance is reduced quarterly, beginning August 31, 2000.
Amounts outstanding under our credit facility will mature and be

                                       61
<PAGE>
                             HARVEYS CASINO RESORTS

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. LONG-TERM DEBT (CONTINUED)
fully due and payable on September 30, 2004. Until then, the annual year-end
maximum principal balances are as follows:

<TABLE>
<CAPTION>
NOVEMBER 30,
------------
<S>                                                           <C>
2000........................................................  $328,330,000
2001........................................................   314,990,000
2002........................................................   294,890,000
2003........................................................   271,440,000
</TABLE>

    At November 30, 1999, we had approximately $243.9 million in outstanding
borrowings and approximately $45.8 million in letter of credit exposure.

    We pay interest on outstanding borrowings at a base rate plus an applicable
margin. The base rate is equal to the higher of the prime rate or the federal
funds rate plus one-half of one percent. We may, at our option and under certain
circumstances, elect to pay interest based on the London Interbank Offered Rate
("LIBOR") plus an applicable margin. The applicable margins are based on the
ratio of our total funded debt to our earnings before deductions for interest,
taxes, depreciation and amortization ("EBITDA"). The applicable margins are
determined quarterly and are subject to change. At November 30, 1999 the
applicable margin relative to the base rate was 1.50% and the applicable margin
relative to the LIBOR was 2.50%.

    The amounts the banks lend us under our bank facility are secured by
substantially all of our assets including a pledge of the capital stock of our
subsidiaries.

    Our bank facility contains a number of covenants that restrict our ability
to (i) dispose of assets, (ii) incur additional indebtedness, (iii) prepay our
10 5/8% senior subordinated notes, (iv) pay dividends, (v) create liens on
assets, (vi) make investments, loans or advances, (vii) engage in mergers or
consolidations, change our business, engage in certain transactions with
affiliates, and (viii) engage in certain corporate activities. We are required
to maintain specified financial ratios and net worth requirements, satisfy
specified financial tests, including interest coverage tests, and maintain
certain levels of annual capital expenditures. We are prohibited from paying
cash dividends on our preferred stock unless our leverage ratio is less than or
equal to 3 to 1. Our leverage ratio is calculated by reference to our ratio of
total indebtedness to EBITDA. At November 30, 1999 we were in compliance with
these covenants.

    Our credit facility replaced a credit agreement we had in place before the
merger. Consequently, at the time of the merger, we expensed all unamortized
loan fees and other financing costs related to the prior credit agreement. This
expense is reflected in our consolidated statement of operations as an
extraordinary item, net of tax. We are amortizing new loan fees and other
financing costs over the term of the new credit facility.

6. REDEEMABLE PREFERRED STOCKS

    As of the effective date of the merger, and at November 30, 1999, we had
outstanding 10 shares of our 13 1/2% Series A Senior Redeemable Convertible
Cumulative Preferred Stock and 99,990 shares of our 13 1/2% Series B Senior
Redeemable Convertible Cumulative Preferred Stock. Our Series A Preferred Stock
and Series B Preferred Stock each have a liquidation value of $550 per share.
Both

                                       62
<PAGE>
                             HARVEYS CASINO RESORTS

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. REDEEMABLE PREFERRED STOCKS (CONTINUED)
series of preferred stock are entitled to quarterly dividends at an annual rate
of 13 1/2% of the liquidation value. If we do not pay the dividends in cash when
due, they cumulate and compound at an annual rate of 13 1/2%. We must redeem all
the outstanding preferred stock on February 1, 2011, for cash, at the
liquidation value plus any accrued and unpaid dividends. We have the right to
redeem our preferred stock, at any time, at the liquidation value plus any
accrued and unpaid dividends. Our Series A Preferred Stock and our Series B
Preferred Stock are convertible, at any time on or prior to February 1, 2002,
into corresponding shares of our Class A Common Stock and Class B Common Stock.
The conversion rate is 28.7309164 shares of common stock per share of preferred
stock and is subject to customary antidilution adjustments. The conversion of
our preferred stock to common stock would require the approval of all applicable
gaming authorities. At the time of conversion, we would have the option of
satisfying any accrued and unpaid dividends due on the preferred stock being
converted by paying cash or issuing additional shares of the corresponding Class
A Common Stock or Class B Common Stock having a market value equal to the amount
of accrued dividends.

    The documents governing our preferred stock contain covenants which limit
our ability to make restricted payments or investments, limit consolidation,
merger and the sale of assets, require us to provide certain financial reports
and limit our business activities. At November 30, 1999, we were in compliance
with these covenants.

    The combined liquidation value of our Series A Preferred Stock and Series B
Preferred Stock at November 30, 1999 was $55 million. Additionally, on that
date, there were approximately $6.4 million of accrued and unpaid dividends on
our preferred stock.

7. OPERATING LEASE COMMITMENTS

    The Company's future minimum lease commitments under noncancellable
operating leases (principally for land) as of November 30, 1999 are as follows:

<TABLE>
<CAPTION>
YEARS ENDING NOVEMBER 30,
-------------------------
<S>                                                           <C>
2000........................................................  $  3,589,300
2001........................................................     3,397,361
2002........................................................     3,363,919
2003........................................................     3,331,596
2004........................................................     3,415,009
2005 and thereafter.........................................   187,497,911
</TABLE>

    Certain leases included above have provisions which require periodic
increases in the rental payments based upon the consumer price index as of
certain dates. In addition, annual lease payments under an obligation on a land
lease are based upon an escalating percentage of gross gaming revenues or all
net revenues, whichever calculation is greater, of Harveys Resort & Casino. The
percentages applicable to gross gaming revenues and all net revenues in fiscal
2000 and years thereafter will be 3.5% and 2.35%, respectively. The actual rent
paid is the greater of the rent calculated as a percentage or a minimum rent, as
adjusted for the consumer price index. In 1997, the land lease was extended to
the year 2045. For 1997, 1998 and 1999, the Company recognized rental expense in
connection with the land lease of approximately $3.0 million, $3.5 million and
$3.6 million, respectively, which includes approximately $0.8 million,
$0.9 million and $1.2 million, respectively, above the minimum rental

                                       63
<PAGE>
                             HARVEYS CASINO RESORTS

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. OPERATING LEASE COMMITMENTS (CONTINUED)
amounts. Total rental expense recognized for 1997, 1998 and 1999 amounted to
approximately $3.7 million, $3.9 million and $4.2 million, respectively.

    The Company is also a lessor on several noncancellable lease agreements. Of
the rental income recognized for the years ended November 30, 1997, 1998 and
1999, approximately $118,000, $380,000 and $634,000, respectively, represents
rents received as a percentage of gross receipts. The remaining amounts are
attributable to specified minimum rent. Future minimum payments due to the
Company under these noncancellable lease agreements are as follows:

<TABLE>
<CAPTION>
YEARS ENDING NOVEMBER 30,
-------------------------
<S>                                                           <C>
2000........................................................  $1,119,100
2001........................................................     609,200
2002........................................................     169,000
2003........................................................       6,100
2004........................................................          --
</TABLE>

8. INCOME TAXES

    The provision for income taxes consists of the following:

<TABLE>
<CAPTION>
                                                  PREDECESSOR COMPANY
                                      --------------------------------------------
                                                                       PERIOD               PERIOD
                                          FISCAL YEAR ENDED         DECEMBER 1,        FEBRUARY 2, 1999
                                            NOVEMBER 30,                1998         (DATE OF ACQUISITION)
                                      -------------------------       THROUGH               THROUGH
                                         1997          1998       FEBRUARY 1, 1999     NOVEMBER 30, 1999
                                      -----------   -----------   ----------------   ---------------------
<S>                                   <C>           <C>           <C>                <C>
Current.............................  $12,383,310   $ 9,365,214      $(4,039,141)         $ 6,786,207
Deferred............................    6,515,243     2,052,065          135,141            1,347,616
                                      -----------   -----------      -----------          -----------
Income tax provision before
  extraordinary item................   18,898,553    11,417,279       (3,904,000)           8,133,823
Income tax benefit of extraordinary
  item..............................           --            --         (275,000)                  --
                                      -----------   -----------      -----------          -----------
Income tax provision................  $18,898,553   $11,417,279      $(4,179,000)         $ 8,133,823
                                      ===========   ===========      ===========          ===========
</TABLE>

    The difference between the Company's provision for income taxes as presented
in the accompanying consolidated statements of operations, and the provision for
income taxes computed at

                                       64
<PAGE>
                             HARVEYS CASINO RESORTS

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. INCOME TAXES (CONTINUED)
the statutory rate is comprised of the items shown in the following table as a
percent of pre-tax earnings.

<TABLE>
<CAPTION>
                                                               PREDECESSOR COMPANY
                                                  ---------------------------------------------
                                                         FISCAL YEAR
                                                            ENDED                  PERIOD              PERIOD
                                                        NOVEMBER 30,          FEBRUARY 2, 1999    FEBRUARY 2, 1999
                                                  -------------------------        THROUGH             THROUGH
                                                    1997             1998     NOVEMBER 30, 1999   NOVEMBER 30, 1999
                                                  --------         --------   -----------------   -----------------
<S>                                               <C>              <C>        <C>                 <C>
Federal income tax provision (benefit) at the
  statutory rate................................    35.0%            35.0%          (34.0)%               34%
Non-deductible expenses.........................     1.2              2.3             5.9                3.4
Tax credits.....................................    (0.5)            (0.3)           (0.2)              (0.7)
Tax exempt income...............................      --             (0.5)           (0.1)              (0.5)
State income tax, net of federal benefit........     1.7              1.9              --                6.4
Other, net......................................     0.6             (0.5)            4.4               (3.7)
                                                    ----             ----           -----               ----
                                                    38.0%            37.9%          (24.0)%             38.9
                                                    ====             ====           =====               ====
</TABLE>

    The components of the deferred income tax assets and liabilities as
presented in the consolidated balance sheets, are as follows at November 30:

<TABLE>
<CAPTION>
                                                              PREDECESSOR COMPANY
                                                              -------------------
                                                                     1998               1999
                                                              -------------------   ------------
<S>                                                           <C>                   <C>
DEFERRED TAX ASSET
Accrued compensation........................................     $  6,166,766       $  7,673,063
Other accrued expenses......................................        2,259,119          7,772,388
                                                                 ------------       ------------
                                                                    8,425,885         15,945,451
                                                                 ------------       ------------
DEFERRED TAX LIABILITY
Prepaid expenses............................................       (1,587,996)        (1,259,605)
Property and equipment......................................      (31,260,604)       (69,135,726)
                                                                 ------------       ------------
                                                                  (32,848,600)       (70,395,331)
                                                                 ------------       ------------
Net deferred tax liability..................................     $(24,422,715)      $(54,949,880)
                                                                 ============       ============

Current deferred asset......................................     $    525,416       $  3,141,457
Noncurrent deferred liability...............................      (24,948,131)       (58,091,337)
                                                                 ------------       ------------
Net deferred tax liability..................................     $(24,422,715)      $(54,949,880)
                                                                 ============       ============
</TABLE>

    The Internal Revenue Service has completed an examination of the limited
liability company, through which we previously owned Harveys Wagon Wheel, for
the years ended November 30, 1995 and 1996 and the six month period ended May
31, 1997. We have made adequate provision for any adjustments resulting from
those tax examinations.

                                       65
<PAGE>
                             HARVEYS CASINO RESORTS

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. STOCK-BASED COMPENSATION

    OMNIBUS INCENTIVE PLANS

    In November 1993, the Company adopted the 1993 Omnibus Incentive Plan and in
March 1996, the Company adopted the 1996 Omnibus Incentive Plan. Under each of
the two plans, shares of the Company's common stock could be granted to
employees or prospective employees of the Company and/or its subsidiaries who
were responsible for the management, growth and protection of the business of
the Company. Issuance of shares of common stock under the plans could consist of
stock options, stock appreciation rights, restricted stock grants, performance
units and dividend equivalents. The plans were administered by a committee of
the board of directors of Harveys whose members determined who would be awarded
stock options, stock appreciation rights, restricted stock grants, performance
units and dividend equivalents.

    Under the 1993 plan, 915,219 shares of the Company's common stock were
reserved for potential awards and under the 1996 plan, an additional 500,000
shares of the Company's common stock were reserved.

    The exercise price of stock options granted under the plans was established
by the committee. The exercise price of any stock options granted was not less
than the market price of the Company's common stock on the date the option was
granted. The term of each stock option was fixed by the committee. The term of
any stock option granted did not exceed ten years. Stock options granted under
the plans generally vested ratably over a three year period from the date of
grant.

    Restricted stock grants were awards of shares of common stock granted
subject to such restrictions, terms and conditions as the committee deemed
appropriate. The committee determined the number of restricted shares to be
granted and imposed different terms and conditions on any particular restricted
stock grant made to any employee. We granted a total of 228,500 shares of
restricted common stock through November 30, 1998. Of the restricted shares
granted, in each case, 25% of the shares vested immediately as of the date of
the grant and vested an additional 25% on each of the next three anniversaries
of the grant. As of February 1, 1999, grantees of the restricted shares had
forfeited 8,375 shares pursuant to terms of the plans. We recognized
approximately $237,000, $142,000 and $1,000 as compensation expense in fiscal
1997, 1998, and the period from December 1, 1998 through February 1, 1999,
respectively.

    On February 2, 1999, the Company adopted the 1999 Omnibus Incentive Plan.
Under the plan, shares of the Company's common stock may be granted to officers,
directors or employees of the Company or to consultants or advisors to the
Company. Grants under the plan may consist of stock options, stock appreciation
rights or limited stock appreciation rights, restricted stock, performance
shares, deferred stock or any combination of the foregoing. The plan is
administered by the Company's board of directors who have the power to select
participants to receive grants, determine what grants are to be awarded and
determine the terms and conditions, not inconsistent with the terms of the plan,
which apply to any award granted under the plan.

    The total number of shares of Class A Common Stock reserved under the plan
is 4,000 and the total number of shares of Class B Common Stock reserved under
the plan is 400,000.

    Stock options granted under the plan may be of two types: (i) incentive
stock options within the meaning of Section 422 of the Internal Revenue Code, as
amended from time to time and (ii) non-qualified stock options. During 1999, the
Company granted to certain officers and employees incentive

                                       66
<PAGE>
                             HARVEYS CASINO RESORTS

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. STOCK-BASED COMPENSATION (CONTINUED)
stock options and non-qualified stock options to acquire shares of the Company's
Class A Common Stock and Class B Common Stock. The option price per share of
stock subject to stock options granted was equal to or greater than the fair
market value of the underlying stock on the date of grant. The stock options
granted vest 20% on each of the first five anniversaries of the date of grant.
The term of the stock options granted is ten years.

    During 1999, the Company granted certain key executives restricted shares of
the Company's Class A Common Stock and Class B Common Stock, the restrictions of
which lapse 20% per year. Under certain conditions, the restricted shares may be
canceled and an equivalent number of deemed shares created under a deferred
compensation arrangement, under which the Company may be obligated to the
executives for the fair market value of the deemed shares. The Company accrued
compensation expense of $464,000 relating to the vesting of the restricted
shares and recorded the associated amount as part of other liabilities on the
accompanying consolidated balance sheet at November 30, 1999.

    As a result of the merger, the rights of certain key executives to
participate in the supplemental executive retirement plan were terminated, with
50% of the accrued benefits paid out in cash and the remainder transferred to a
deemed share account in a deferred compensation arrangement under which the
Company will be obligated to the executives for the fair market value of the
deemed shares. The Company accrued compensation expense of $703,000 relating to
the increase in the estimated value of the deemed shares and the total
obligation of $2,019,000 is included as part of other liabilities on the
accompanying consolidated balance sheet at November 30, 1999.

    1993 NON-EMPLOYEE DIRECTORS' STOCK OPTION PROGRAM

    In November 1993, the Company adopted the 1993 Non-Employee Directors' Stock
Option Program whereby each currently serving non-employee director was granted
an option to purchase 4,500 shares of the Company's common stock, and was
granted an option to purchase 1,500 shares of common stock immediately following
each annual meeting. Each new non-employee director received a grant of an
option to purchase 4,500 shares of the Company's common stock immediately after
the first annual meeting of shareholders after that director was elected or
appointed to the board of directors and received an option to purchase 1,500
shares of common stock immediately following each subsequent annual meeting. Of
the options granted, in each case, 33 1/3% vested immediately on the date of
grant and vest an additional 33 1/3% on each of the next two anniversaries of
grant. The exercise price was the fair market value of the common stock on the
date of grant. A total of 60,000 shares was reserved for issuance under the
program.

    STOCK OPTIONS PURSUANT TO EMPLOYMENT CONTRACTS

    Two of the Company's directors, who were also employees, were granted
options, outside of the Omnibus Incentive Plans or the Non-Employee Director's
Stock Option Program, to purchase 15,000 and 12,500 shares of the Company's
common stock, respectively. The stock options were granted in November 1993
pursuant to employment contracts and in anticipation of the Company's initial
public offering in February 1994. The stock options had an exercise price of
$14.00 per share.

    At the effective time of the merger, February 2, 1999, all outstanding
unvested stock options and restricted stock grants vested. At that time, all
outstanding stock options were canceled in return for a cash payment equal to
the product of (i) the number of shares of Harveys common stock subject to the
option and (ii) the excess of $28.7343 (the price paid per share of Harveys
common stock in the merger) over the exercise price per share of Harveys common
stock as provided in the stock option. As a result of the merger, each
outstanding share of Harveys common stock, including the restricted stock
grants, was converted into the right to receive $28.7343.

                                       67
<PAGE>
                             HARVEYS CASINO RESORTS

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. STOCK-BASED COMPENSATION (CONTINUED)

    Following the merger, the 1993 Omnibus Incentive Plan, the 1996 Omnibus
Incentive Plan and the 1993 Non-Employee Director's Stock Option Program were
terminated.

    The following table summarizes information relative to stock options
granted, exercised, canceled, outstanding and exercisable under the various
plans discussed above:

<TABLE>
<CAPTION>
                                                                          WEIGHTED-AVERAGE
                                                               OPTIONS     EXERCISE PRICE
                                                              ---------   ----------------
<S>                                                           <C>         <C>
Options outstanding at December 1, 1996.....................    879,513        16.96
Options granted.............................................    684,193        16.48
Options canceled............................................   (513,080)       19.04
Options exercised...........................................    (35,166)       13.77
                                                              ---------

Options outstanding at November 30, 1997....................  1,015,460        15.69
Options granted.............................................     17,500        27.16
Options canceled............................................    (19,515)       17.19
Options exercised...........................................   (226,183)       14.95
                                                              ---------

Options outstanding at November 30, 1998....................    787,262        16.02
Options exercised...........................................     (1,139)       16.96
Options cashed out at the effective time of the merger......   (786,123)       16.02
                                                              ---------

Options outstanding February 2, 1999........................         --           --
                                                              =========

Options granted.............................................    189,210        20.06
Options canceled............................................    (37,370)       20.06
                                                              ---------

Options outstanding November 30, 1999.......................    151,840        20.06
                                                              =========

Options exercisable at November 30, 1997....................    377,583        14.35
Options exercisable at November 30, 1998....................    347,992        15.25
Options exercisable at November 30, 1999....................         --        20.06
</TABLE>

    The following table provides additional information relative to stock
options outstanding at November 30, 1999:

<TABLE>
<CAPTION>
                                 OPTIONS OUTSTANDING
                            ------------------------------                   OPTIONS EXERCISABLE
                                          WEIGHTED-AVERAGE   ---------------------------------------------------
                                             REMAINING                                             WEIGHTED-
                              NUMBER        CONTRACTUAL      WEIGHTED-AVERAGE      NUMBER           AVERAGE
EXERCISE PRICE              OUTSTANDING    LIFE IN YEARS     EXERCISABLE PRICE   EXERCISABLE   EXERCISABLE PRICE
--------------              -----------   ----------------   -----------------   -----------   -----------------
<S>                         <C>           <C>                <C>                 <C>           <C>
$20.06....................    151,840           9.31              $20.06                 --          $20.06
</TABLE>

    The FASB has issued SFAS No. 123--ACCOUNTING FOR STOCK-BASED COMPENSATION.
SFAS No. 123 provides, among other things, that companies may elect to either
record expense based on the fair value of stock-based compensation upon issuance
or continue to apply the methods prescribed by Accounting Principles Board
Opinion No. 25 ("APB No. 25") whereby no compensation cost is

                                       68
<PAGE>
                             HARVEYS CASINO RESORTS

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. STOCK-BASED COMPENSATION (CONTINUED)
recognized upon grant if certain requirements are met. We elected to continue to
account for stock-based compensation in accordance with APB No. 25.

    Had we recorded stock-based compensation cost consistent with the provisions
of SFAS No. 123, our net income for fiscal years 1997 and 1998 would have been
reduced to the pro forma amounts included in the table below. The table also
discloses the weighted-average assumptions used in estimating the fair value of
stock options using the Black-Scholes option pricing model and the
weighted-average fair value of the stock options granted. The Black-Scholes
option valuation model was developed for use in estimating the fair value of
traded options, which have no vesting restrictions and are fully transferable.
Additionally, option valuation models require the input of highly subjective
assumptions including the expected stock price volatility. Because the Company's
stock-based compensation has characteristics significantly different from those
of traded options, and because changes in the subjective input assumptions can
materially affect the fair value estimate, in our opinion, the existing models
do not necessarily provide a reliable single measure of the fair value of the
Company's stock-based compensation.

<TABLE>
<CAPTION>
                                                                     YEARS ENDED
                                                                    NOVEMBER 30,
                                                              -------------------------
                                                                 PREDECESSOR COMPANY
                                                                1997             1998
                                                              --------         --------
                                                                DOLLARS IN THOUSANDS,
                                                              EXCEPT PER SHARE AMOUNTS
<S>                                                           <C>              <C>
Income before extraordinary item
  As reported...............................................  $30,775          $18,702
  Pro forma.................................................   30,406           17,938
Net income
  As reported...............................................  $30,775          $18,702
  Pro forma.................................................   30,406           17,938

Weighted-average assumptions
  Expected stock price volatility...........................    31.70%           31.24%
  Risk-free interest rate...................................     5.20%            5.07%
  Expected option lives (years).............................     2.84             3.44
  Expected dividend yield...................................     1.00%            0.80%
  Estimated fair value of options granted...................  $  4.05          $  6.53
</TABLE>

    The stock-based compensation cost calculated pursuant to the provisions of
SFAS No. 123 would have an immaterial effect on net income for the period ended
November 30, 1999.

10. EMPLOYEE BENEFIT PLANS

    401(K) PLAN

    The Company maintains a defined contribution retirement savings plan for all
full-time employees who have at least one year of continuous employment and
1,000 hours of service. The Company contributes amounts equal to 50% of each
eligible employee's voluntary contributions. For purposes of determining the
Company's required contribution to the plan, the employee's voluntary
contributions cannot exceed 6% of the employee's qualified compensation. The
Company's contribution to the plan

                                       69
<PAGE>
                             HARVEYS CASINO RESORTS

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10. EMPLOYEE BENEFIT PLANS (CONTINUED)
for the years ended November 30, 1997 and 1998 amounted to approximately $1.6
million and $1.4 million, respectively. The Company's contribution to the plan
for the period of December 1, 1998 through February 1, 1999 and the period
February 2, 1999 through November 30, 1999 amounted to approximately $418,000
and $1.1 million, respectively.

    LONG-TERM INCENTIVE PLAN

    In 1994, the Company adopted a long-term incentive plan for key employees.
Under the plan, incentives were accrued based upon annual operating results;
however, ultimate payment of these incentives was contingent upon the Company
attaining certain financial objectives over consecutive and concurrent
three-year periods. As of November 30, 1998, the amount due to plan participants
was approximately $1.6 million. At the effective time of the merger, we
terminated the long-term incentive plan and made final lump sum payments, at the
maximum payout value, to the participants in the aggregate amount of
approximately $3.1 million.

    DEFERRED COMPENSATION PLAN

    In 1990, the Company established a non-qualified deferred compensation plan
for designated executives and outside directors. Individuals electing to
participate in this plan may voluntarily defer receipt of up to twenty-five
percent (25%) of their annual compensation. We credit deferred compensation to
each participant's account, and add interest on such amounts to the
participant's account each quarter. The interest rate paid on amounts deferred
prior to calendar year 1995 is the prime rate at the beginning of each quarter
plus five percent (13.25% at November 30,1999). The interest rate paid on
amounts deferred subsequent to December 31, 1994 is the prime rate plus two and
one-half percent (10.75% at November 30, 1999). We are under no obligation to
fund amounts under this plan, and such amounts are unsecured and treated as
general obligations of the Company. As of November 30, 1998 and 1999, the amount
due participants in this plan was approximately $2.9 million and $3.4 million,
respectively.

    POSTRETIREMENT BENEFITS

    The Company provides postretirement medical benefits for certain key
executives and members of the Company's board of directors. The Company had
elected to amortize, over a period of 20 years the accumulated postretirement
benefit obligation (transition obligation) related to prior service costs. At
the effective time of the merger, the application of purchase method accounting
required us to recognize as a liability the unamortized accumulated
postretirement benefit obligation, unrecognized prior service cost and any
unrecognized net loss. As a result, we recognized an additional increase in the
net liability attributable to the post retirement benefit plan of approximately
$422,000.

                                       70
<PAGE>
                             HARVEYS CASINO RESORTS

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10. EMPLOYEE BENEFIT PLANS (CONTINUED)
    The following table reconciles the unfunded status of our plan with the
accrued postretirement benefit liability recognized in our consolidated balance
sheets.

<TABLE>
<CAPTION>
                                                        PREDECESSOR COMPANY
                                                  -------------------------------        PERIOD FROM
                                                  FISCAL YEAR      PERIOD FROM        FEBRUARY 2, 1999
                                                     ENDED       DECEMBER 1, 1998   (DATE OF ACQUISITION)
                                                  NOVEMBER 30,       THROUGH               THROUGH
                                                      1998       FEBRUARY 1, 1999     NOVEMBER 30, 1999
                                                  ------------   ----------------   ---------------------
<S>                                               <C>            <C>                <C>
CHANGE IN BENEFIT OBLIGATION:
  Beginning of period...........................  $   915,072      $ 1,143,780           $ 1,262,493
  Service cost..................................       78,782           13,679                43,077
  Interest Cost.................................       67,884           13,492                69,771
  Change in discount rate.......................       69,633               --               (55,800)
  Experience loss...............................       17,374           91,542                40,217
  Benefits paid.................................       (4,965)              --              (131,461)
                                                  -----------      -----------           -----------
  End of period.................................  $ 1,143,780      $ 1,262,493           $ 1,228,297
                                                  -----------      -----------           -----------
CHANGE IN PLAN ASSETS:
  Fair value of plan assets at beginning of
    period......................................           --               --                    --
  Actual return on plan assets..................           --               --                    --
  Employer contribution.........................        4,965               --               131,461
  Benefits paid.................................       (4,965)              --              (131,461)
                                                  -----------      -----------           -----------
  Fair value of plan assets at end of period....           --               --                    --

  Funded status.................................     (810,435)      (1,262,493)           (1,228,297)
  Unrecognized actuarial loss...................      (73,418)              --               (15,583)
  Unrecognized prior service cost...............      (89,181)              --                    --
  Unrecognized net initial asset(obligation)....     (170,746)              --                    --
                                                  -----------      -----------           -----------
  Accrued benefit liability.....................  $(1,143,780)     $(1,262,493)          $(1,243,880)
                                                  ===========      ===========           ===========
</TABLE>

    For the period ending November 30, 1999 we used a discount rate of 7.75% to
arrive at year-end obligations. For fiscal year ending November 30, 1998 we used
a discount rate of 6.75%. We assumed future medical costs will increase 6% per
year.

                                       71
<PAGE>
                             HARVEYS CASINO RESORTS

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10. EMPLOYEE BENEFIT PLANS (CONTINUED)
    The Company's current policy is to fund the plan as covered benefits are
paid. The following table sets forth the components of our net periodic
postretirement benefit costs.

<TABLE>
<CAPTION>
                                                        PREDECESSOR COMPANY
                                           ----------------------------------------------        PERIOD FROM
                                           FISCAL YEAR    FISCAL YEAR      PERIOD FROM        FEBRUARY 2, 1999
                                              ENDED          ENDED       DECEMBER 1, 1999   (DATE OF ACQUISITION)
                                           NOVEMBER 30,   NOVEMBER 30,       THROUGH               THROUGH
                                               1997           1998       FEBRUARY 1, 1999     NOVEMBER 30, 1999
                                           ------------   ------------   ----------------   ---------------------
<S>                                        <C>            <C>            <C>                <C>
COMPONENTS OF NET PERIODIC POSTRETIREMENT
BENEFIT COSTS
  Service cost...........................    $ 75,219       $ 78,782         $13,679              $ 43,077
  Interest cost..........................      56,907         67,884          13,492                69,771
  Expected return on plan assets.........          --             --              --                    --
  Amortization of unrecognized transition
    obligation...........................      12,197         12,197           2,033                    --
  Amortization of prior service cost.....       6,683          6,683           1,114                    --
  Recognized net actuarial loss..........          --             --             115                    --
                                             --------       --------         -------              --------
  Net periodic postretirement benefit
    cost.................................    $151,006       $165,546         $30,433              $112,848
                                             ========       ========         =======              ========
</TABLE>

    Increasing the assumed health care cost trend rates by one percentage point
in each future year would increase the postretirement benefit obligation by
approximately $166,000 at November 30, 1998; $133,000 at February 1, 1999; and
$145,000 at November 30, 1999. A one percent increase in the assumed health care
cost trend in each future year would increase the service and interest costs
components of the net periodic benefit cost by approximately $23,000 each for
fiscal years 1997 and 1998; $4,000 for the period of December 1, 1998 through
February 1, 1999; and $16,000 for the period from February 2, 1999 through
November 30, 1999. Likewise a one percent decrease in the assumed health care
cost trend for each future year would have decreased the postretirement benefit
obligation by approximately $100,000 at February 1, 1999 and by approximately
$110,000 at November 30, 1999. A one percent decrease would have decreased the
service and interest costs components by approximately $4,000 for the period
December 1, 1998 through February 1, 1999 and by approximately $12,000 for the
period February 2, 1999 through November 30, 1999.

    SUPPLEMENTAL RETIREMENT PLANS

    The Company provides noncontributory supplemental executive retirement plans
for certain key executives. Normal retirement under the supplemental executive
retirement plans is age 65, and participants receive benefits based on years of
service and compensation. The Company also provided a noncontributory plan for
members of the Company's board of directors. At the effective time of the
merger, the application of purchase method accounting required us to recognize
as a liability the unamortized accumulated benefit obligation, unrecognized
prior service cost and any unrecognized net loss. As a result, we recognized an
additional increase in the liability attributable to the supplemental executive
retirement plans of approximately $4.1 million and the elimination of a related
intangible asset of approximately $2.6 million. Additionally, at the time of the
merger, those members of the Company's board of directors who had a vested
benefit in their plan received a lump sum payment and that plan was terminated.

                                       72
<PAGE>
                             HARVEYS CASINO RESORTS

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10. EMPLOYEE BENEFIT PLANS (CONTINUED)
    The following table reconciles the unfunded status of our plan with the
accrued postretirement benefit liability recognized in our consolidated balance
sheets.

<TABLE>
<CAPTION>
                                                       PREDECESSOR COMPANY
                                                 -------------------------------        PERIOD FROM
                                                 FISCAL YEAR      PERIOD FROM        FEBRUARY 2, 1999
                                                    ENDED       DECEMBER 1, 1998   (DATE OF ACQUISITION)
                                                 NOVEMBER 30,       THROUGH               THROUGH
                                                     1998       FEBRUARY 1, 1999     NOVEMBER 30, 1999
                                                 ------------   ----------------   ---------------------
<S>                                              <C>            <C>                <C>
CHANGE IN BENEFIT OBLIGATION
Beginning of period............................  $ 15,135,038     $ 17,841,348         $ 14,722,986
Service cost...................................       649,139          139,118              407,543
Interest Cost..................................     1,096,557          199,414              803,447
Change in discount rate........................       834,570               --           (1,481,732)
Experience (gain) or loss......................       411,618       (2,302,642)                  --
Benefits paid..................................      (283,574)      (1,154,252)            (684,168)
                                                 ------------     ------------         ------------
End of period..................................  $ 17,841,348     $ 14,722,986         $ 13,768,076
                                                 ============     ============         ============
CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of
  period.......................................            --               --                   --
Actual return on plan assets...................            --               --                   --
Employer contribution..........................       283,574        1,154,252              684,168
Benefits paid..................................      (283,574)      (1,154,252)            (684,168)
                                                 ------------     ------------         ------------
Fair value of plan assets at end of period.....            --               --                   --
Funded status..................................   (17,841,348)     (14,722,986)         (13,768,076)
Unrecognized actuarial (gain) loss.............     3,763,138               --           (1,481,732)
Unrecognized prior service cost................     1,436,155               --                   --
Unrecognized net initial asset(obligation).....     1,542,423               --                   --
                                                 ------------     ------------         ------------
Accrued pension cost...........................  $(11,099,652)    $(14,722,986)        $(15,249,808)
                                                 ============     ============         ============
</TABLE>

    For the period ending November 30, 1999 we used a discount rate of 7.75% to
arrive at year-end obligations. For fiscal year ending November 30, 1998 we used
a discount rate of 6.75 percent. We assumed future salary increases of 5% per
year.

                                       73
<PAGE>
10. EMPLOYEE BENEFIT PLANS (CONTINUED)

    The following table sets forth the components of our net periodic pension
costs.

<TABLE>
<CAPTION>
                                                 PREDECESSOR COMPANY                         PERIOD FROM
                               --------------------------------------------------------   FEBRUARY 2, 1999
                                                                         PERIOD FROM          (DATE OF
                                                                       DECEMBER 1, 1999     ACQUISITION)
                               FISCAL YEAR ENDED   FISCAL YEAR ENDED       THROUGH             THROUGH
                               NOVEMBER 30, 1997   NOVEMBER 30, 1998   FEBRUARY 1, 1999   NOVEMBER 30, 1999
                               -----------------   -----------------   ----------------   -----------------
<S>                            <C>                 <C>                 <C>                <C>
COMPONENTS OF NET PERIODIC
  PENSION COSTS
Service cost.................     $  502,946          $  649,139           $ 139,118         $  407,543
Interest cost................        987,746           1,096,557             199,414            803,447
Expected return on plan
  assets.....................             --                  --                  --                 --
Amortization of unrecognized
  transition obligation......        171,699             171,699              28,617                 --
Amortization of prior service
  cost.......................        212,997             212,997              35,500                 --
Recognized net actuarial
  loss.......................        111,477             123,043              28,036                 --
                                  ----------          ----------           ---------         ----------
Net periodic pension cost....     $1,986,865          $2,253,435           $ 430,685         $1,210,990
                                  ==========          ==========           =========         ==========
</TABLE>

    SELF INSURED PLANS

    The Company is self insured for employee medical coverage and workers'
compensation for the benefit of its employees. Estimated accrued obligations for
claims under these self-insured plans as of November 30, 1998 and 1999 were
approximately $2.4 million and $2.5 million, respectively. The Company's maximum
liability under both plans is limited by stop-loss agreements with insurance
companies.

11. COMMITMENTS AND CONTINGENCIES

    LETTERS OF CREDIT

    In connection with the acquisition of the net assets of Bluffs Run Casino,
we were obligated to enter into an irrevocable standby letter of credit to
support $45.0 million of contingent consideration we may be obligated to pay. In
connection with regulatory requirements, we were required to issue an
irrevocable standby letter of credit to guarantee our payment of workers'
compensation benefits. Outstanding standby letters of credit as of November 30,
1999 were as follows:

<TABLE>
<CAPTION>
                                                   AMOUNT      EXPIRATION DATE
                                                 -----------   ---------------
<S>                                              <C>           <C>
Contingent purchase price consideration........  $45,000,000   October 5, 2000
St. Paul Fire and Marine (workers'
  compensation)................................      812,500    April 15, 2000
                                                 -----------
                                                 $45,812,500
                                                 ===========
</TABLE>

    EMPLOYMENT CONTRACTS

    The Company has entered into employment agreements, each of which expires
prior to February 3, 2004, with certain key executives. The employment
agreements provide for, among other things, annual base compensation,
participation in bonus plans, certain stock grants and stock option provisions.

                                       74
<PAGE>
11. COMMITMENTS AND CONTINGENCIES (CONTINUED)
    CLAIMS AND LEGAL ACTIONS

    The Company is involved in various claims and legal actions arising in the
ordinary course of business. In the opinion of management, all pending matters
are either adequately covered by insurance or if not covered by insurance, will
not have a material adverse effect on the Company's financial statements taken
as a whole.

12. RELATED PARTY TRANSACTIONS

    NOTES RECEIVABLE FROM RELATED PARTY TRUST

    Jessica L. Ledbetter, Kirk B. Ledbetter and Franklin K. Rahbeck, all
directors of the Company prior to the merger, and Wells Fargo Bank, National
Association are the co-trustees of the William B. Ledbetter and Beverlee A.
Ledbetter Irrevocable Trust ('the Trust'). The Trust owns survivorship life
insurance policies on the lives of William B. Ledbetter and Beverlee A.
Ledbetter, deceased. Until November 1998, William B. Ledbetter was an officer
and director of the Company and until her death on September 12, 1995, Beverlee
A. Ledbetter was the largest shareholder of the Company. Prior to fiscal 1995,
the Company had paid premiums on the life insurance policies owned by the Trust.
The Company has no further obligation to pay such premiums. The Trust has issued
two notes payable to the Company for the amounts of the premiums previously paid
by the Company. The notes were in the principal amounts of $1,376,995 and
$455,272. On February 3, 1999, the Trust retired the notes by paying the Company
the principal amounts plus all accrued and unpaid interest to the date of
payment.

13. SALE OF INTERESTS IN UNCONSOLIDATED AFFILIATE

    Until October 24, 1997, Harveys owned a 40% equity interest in Hard Rock
Hotel, Inc. We accounted for this investment on the equity method. Pursuant to a
management agreement between Hard Rock Hotel, Inc. and Harveys LV Management
Company, Inc., relating to the management and operations of the Hard Rock Hotel
and Casino owned by Hard Rock Hotel, Inc., Harveys earned a base management fee
of 4% of adjusted gross revenue, and up to an additional 2% of adjusted gross
revenue if certain financial targets were met.

    On October 24, 1997, we sold all of the capital stock of Hard Rock Hotel,
Inc. held by Harveys, representing 40% of the then outstanding capital stock of
Hard Rock Hotel, Inc., and all our rights under the management agreement. The
capital stock and the rights under the management agreement were sold to Hard
Rock Hotel, Inc.. The sale closed pursuant to the terms of a Stock Purchase and
Management Buyout Agreement entered into on July 1, 1997.

    Harveys received $45.0 million cash for the capital stock and its rights
under the management agreement. Harveys received, in addition, approximately
$1.2 million cash in satisfaction of a note and other amounts due to Harveys
from Hard Rock Hotel, Inc. as of October 24, 1997.

    Summarized statement of income information for Hard Rock Hotel, Inc. for the
period from December 1, 1996 through October 24, 1997 follows:

<TABLE>
<CAPTION>
                                                              PERIOD ENDED
                                                              OCTOBER 24,
                                                                  1997
                                                              ------------
<S>                                                           <C>
Summarized Statement of Income Information (in thousands)
Revenues....................................................     $68,699
Operating income............................................      11,323
Net income..................................................       4,295
</TABLE>

                                       75
<PAGE>
14. SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

    The following table sets forth unaudited selected quarterly financial
information for each quarter of fiscal 1998 and 1999. This information, in the
opinion of management, includes only normal recurring adjustments necessary for
a fair representation of the information set forth therein. The operating
results for any quarter are not indicative of results for any future period.
Quarterly results may not be comparative due to the seasonal nature of
operations.

<TABLE>
<CAPTION>
(IN THOUSANDS)                                            FIRST      SECOND     THIRD      FOURTH
--------------                                           --------   --------   --------   --------
<S>                                                      <C>        <C>        <C>        <C>
Fiscal 1998
  Revenue (a)..........................................  $ 68,772   $76,552    $87,632    $76,553
  Operating income.....................................     6,583    12,191     17,169      9,893
  Income before income taxes...........................     2,551     8,155     13,220      6,193
  Net income...........................................     1,531     4,892      7,932      4,347
Fiscal 1999
  Revenue..............................................  $ 75,649   $77,635    $88,370    $98,295
  Operating income (b).................................   (10,646)    9,342     18,528     14,742
  Income (loss) before income taxes and extraordinary
    items..............................................   (15,470)    2,391     11,859      5,886
  Extraordinary item, net of tax.......................      (869)       --         --         --
  Net income (loss)....................................   (12,746)    1,455      7,218      3,642
</TABLE>

------------------------

(a) Revenues for the second and third quarters of fiscal 1998 differ from the
    amount originally reported in the Company's Quarterly Reports on Form 10-Q
    for the quarters ended May 31, 1998 and August 31, 1998 due to the
    reclassification of telephone commission income at Harveys Casino Hotel.

(b) Operating income for the second and third quarters of Fiscal 1999 differs
    from the amount originally reported in the Company's Quarterly Reports on
    Form 10-Q for the quarters ended May 31, 1999 and August 31, 1999 due to the
    reclassification of gain (loss) on disposition of assets at Harveys Lake
    Tahoe.

                                       76
<PAGE>
                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
           EXHIBIT
           NUMBER           DESCRIPTION
    ---------------------   -----------
    <C>                     <S>
             2.1            Stock Purchase Agreement, dated July 2, 1997 (9)

             3.1            Amendments to Articles of Incorporation of Harveys Casino
                              Resorts as Surviving Constituent Entity (filed as Exhibit
                              A to Articles of Merger of Harveys Acquisition Corporation
                              into Harveys Casino Resorts). (13) (Articles of
                              Incorporation are incorporated herein by reference to
                              Harveys Acquisition Corporations's Registration Statement
                              of Form 10 (File No. 0-25093), filed November 20, 1998).

             3.2            Certificate of Designation of the 13-1/2% Series A Senior
                              Redeemable Convertible Cumulative Preferred Stock, ($0.01
                              per value per share) and the 13-1/2% Series B Redeemable
                              Convertible Cumulative Preferred Stock ($0.01 par value
                              per share) of Harveys Casino Resorts (13)

             3.3            Eighth Amended and Restated Bylaws of the Registrant (17)

             4.1            Form of Stock Certificate of the Registrant (17)

             4.2            Indenture, dated as of May 15, 1996 ( the "Original
                              Indenture") by and among the Registrant, Harveys Wagon
                              Wheel Casino Limited Liability Company, Harveys C. C.
                              Management Company, Inc., Harveys Iowa Management Company,
                              Inc. and Harveys L. V. Management Company, Inc. ( the
                              "Guarantors") and IBJ Schroder Bank & Trust Company as
                              Trustee ( including form of Note) (6)

             4.3            First Supplemental Indenture, dated as of June 5, 1996,
                              supplementing the Original Indenture (7)

             4.4            Second Supplemental Indenture, dated as of May 22, 1997,
                              supplementing the Original Indenture (11)

             4.5            Third Supplemental Indenture, dated as of December 24, 1998,
                              among the Registrant, Harveys Tahoe Management Company,
                              Inc., Harveys C. C. Management Company, Inc., Harveys Iowa
                              Management Company, Inc., Harveys L. V. Management
                              Company, Inc. and IBJ Schroder Bank and Trust Company,
                              supplementing the Original Indenture (17)

             4.6            Fourth Supplemental Indenture, dated as of December 24,
                              1998, among the Registrant, Harveys Tahoe Management
                              Company, Inc., Harveys C. C. Management Company, Inc.,
                              Harveys Iowa Management Company, Inc., Harveys L. V.
                              Management Company, Inc. and IBJ Schroder Bank and Trust
                              Company, supplementing the Original Indenture (17)

            10.1            Net Lease Agreement, dated February 28, 1985, between Park
                              Cattle Co. and the
                              Registrant (1)

            10.2            Lease, dated July 9, 1973, between Park Cattle Co. and the
                              Registrant (1)

            10.3            Supplemental Executive Retirement Plan (1)

            10.4            Senior Supplemental Executive Retirement Plan (1)

            10.5            Honorary Director Resolution--Vera Gross (1)

            10.6            1998 Deferred Compensation Plan Participants (14)

            10.7            Form of Indemnification Agreement for Directors and Officers
                              and Schedule of
                              Indemnities (17)
</TABLE>

                                       77
<PAGE>

<TABLE>
<CAPTION>
           EXHIBIT
           NUMBER           DESCRIPTION
    ---------------------   -----------
    <C>                     <S>
            10.8            Excursion Boat Sponsorship and Operations Agreement, dated
                              August 22, 1994, by and between Iowa West Racing
                              Association and Harveys Iowa Management Company, Inc. (2)

            10.9            Employment Agreement dated May 9, 1995 by and between the
                              Registrant and Gary Armentrout (3)

            10.10           Employment Agreement dated August 14, 1995, by and between
                              the Registrant and Kevin Servatius (4)

            10.11           Employment Agreement dated August 24, 1995, by and between
                              the Registrant and Edward B. Barraco (4)

            10.12           Harveys Casino Resorts Management Incentive Plan, approved
                              August 8, 1995. (5)

            10.13           1997 Deferred Compensation Participants and Form of
                              Agreement (8)

            10.14           Extension to Employment Agreement, dated January 30, 1997
                              between Edward B. Barraco and the Registrant (10)

            10.15           Employment Agreement, dated June 23, 1997 between James J.
                              Rafferty and the
                              Registrant (11)

            10.16           Employment Agreement, dated July 1, 1997 between Verne Welch
                              and the Registrant (11)

            10.17           Employment Agreement, dated July 21, 1997 between John R.
                              Bellotti and
                              the Registrant (11)

            10.18           Assignment of Leases, effective June 1, 1997, by and between
                              Harveys Casino Resorts, formerly known as Harvey's Wagon
                              Wheel, Inc., a Nevada corporation, Harveys Tahoe
                              Management Company, Inc., a Nevada corporation, and Park
                              Cattle Co., a Nevada corporation (11)

            10.19           Third Amendment to Lease Agreement, dated June 1, 1997, by
                              and between Park Cattle Co., a Nevada corporation and
                              Harveys Casino Resorts, formerly known as Harvey's Wagon
                              Wheel, Inc., a Nevada corporation (11)

            10.20           First Amendment to Lease Agreement, dated June 1, 1997,
                              between Park Cattle Co., a Nevada corporation and Harveys
                              Casino Resorts, formerly known as Harveys Wagon Wheel,
                              Inc., a Nevada corporation (Douglas County, Nevada
                              property) (11)

            10.21           First Amendment to Lease Agreement, dated June 1, 1997,
                              between Park Cattle Co., a Nevada corporation and Harveys
                              Casino Resorts, formerly known as Harveys Wagon Wheel,
                              Inc., a Nevada corporation (El Dorado County, California
                              property) (11)

            10.22           Asset Transfer Agreement between Harveys Casino Resorts and
                              Harveys Tahoe Management Company, Inc., effective June 1,
                              1997 (11)

            10.23           Harveys Casino Resorts Change of Control Plan, effective
                              June 1, 1997 (16)

            10.24           Supplemental Executive Retirement Plan, effective as of
                              November 20, 1997 (16)

            10.25           Extension of Employment Agreement dated September 8, 1997
                              between Gary Armentrout and the Registrant (16)
</TABLE>

                                       78
<PAGE>

<TABLE>
<CAPTION>
           EXHIBIT
           NUMBER           DESCRIPTION
    ---------------------   -----------
    <C>                     <S>
            10.26           Amended and Restated Credit Facility dated as of December 9,
                              1998 among Harveys Casino Resorts, Harveys C. C.
                              Management Company, Inc., Harveys Iowa Management Company,
                              Inc., Harveys Tahoe Management Company, Inc., HCR Services
                              Company, Inc., as borrowers, and Wells Fargo Bank, The
                              First National Bank of Chicago, First Security Bank, N.
                              A., U.S. Bank National Association, Credit Lyonnais Los
                              Angeles Branch, Societe Generale, Imperial Bank, Hibernia
                              Bank, Bank of the West and First Hawaiian Bank, as
                              lenders, and Wells Fargo Bank, as swingline lender, L/C
                              issuer and agent bank. (17)

            10.27           Employment Agreement made and entered into February 2, 1999
                              by and between Harveys Casino Resorts and Charles W.
                              Scharer. (17)

            10.28           Employment Agreement made and entered into February 2, 1999
                              by and between Harveys Casino Resorts and Stephen L.
                              Cavallaro.(17)

            10.29           Employment Agreement made and entered into February 2, 1999
                              by and between Harveys Casino Resorts and John J.
                              McLaughlin. (17)

            10.30           Deferred Compensation Agreement dated as of February 2, 1999
                              by and between Harveys Casino Resorts and Charles W.
                              Scharer. (17)

            10.31           Deferred Compensation Agreement dated as of February 2, 1999
                              by and between Harveys Casino Resorts and Stephen L.
                              Cavallaro. (17)

            10.32           Deferred Compensation Agreement dated as of February 2, 1999
                              by and between Harveys Casino Resorts and John J.
                              McLaughlin. (17)

            10.33           1999 Omnibus Stock Incentive Plan. (17)

            10.34           Stockholders Agreement entered into as of February 2, 1999
                              by and among Harveys Casino Resorts (the "Company"),
                              Colony HCR Voteco LLC, Colony Investors III, L. P. And the
                              securityholders of the Company as identified from time to
                              time on Schedule A thereto. (17)

            10.35           Real Estate Option Agreement dated January 8, 1998 by and
                              between the Registrant and Grand Plaza Limited
                              Partnership. (14)

            10.36           Amendment, dated as of September 15, 1998, to Option
                              Agreement dated as of January 8, 1998 by and between the
                              Registrant and Grand Plaza Limited Partnership. (17)

            10.37           Extension of Employment Agreement dated as of October 19,
                              1998, by and between the Registrant and James J. Rafferty.
                              (17)

            10.38           Extension of Employment Agreement dated as of October 26,
                              1998, by and between the Registrant and Gary Armentrout.
                              (17)

            10.39           1999 Deferred Compensation Plan Participants. (17)

            10.42           Noncompetition and Trade Secret Agreement dated as of
                              February 1, 1998 by and among Harveys Acquisition
                              Corporation and the individuals signatory thereto. (15)

            10.43           Stock Option and Restricted Stock Agreement dated as of
                              February 2, 1999 by and between Harveys Casino Resorts and
                              Gary Armentrout. (17)

            10.44           Deferred Compensation Agreement dated as of February 2, 1999
                              by and between Harveys Casino Resorts and Gary Armentrout.
                              (17)

            10.45           Employment Agreement made and entered into June 14, 1999
                              between Harveys Casino Resorts and William Stephens. (18)
</TABLE>

                                       79
<PAGE>

<TABLE>
<CAPTION>
           EXHIBIT
           NUMBER           DESCRIPTION
    ---------------------   -----------
    <C>                     <S>
            10.46           Stock Option and Restricted Stock Agreement dated as of
                              May 7, 1999 by and between Harveys Casino Resorts and
                              William Stephens. (18)

            10.47           Deferred Compensation Agreement dated as of May 7, 1999 by
                              and between Harveys Casino Resorts and William Stephens.
                              (18)

            10.48           Employment Agreement made and entered into on August 17,
                              1999 by and between Harveys Casino Resorts and Verne
                              Welch. (19)

            10.49           Agreement and Covenant not to Compete or Use or Disclose
                              Trade Secrets made and entered into on August 17, 1999 by
                              and between Verne Welch and Harveys Casino Resorts. (19)

            10.50           Purchase and Sale Agreement and Joint Escrow Instructions
                              dated August 31, 1999 by and between HBR Realty Company,
                              Inc., a Nevada corporation and Iowa West Racing
                              Association, Nonprofit Corporation, an Iowa nonprofit
                              corporation. (22)

            10.51           Lease by and between HBR Realty Company, Inc., a Nevada
                              corporation, as Landlord and Iowa West Racing Association,
                              Nonprofit Corporation, an Iowa nonprofit corporation as
                              Tenant, dated October 5, 1999. (22)

            10.52           First Amendment to Purchase and Sale Agreement and Joint
                              Escrow Instructions by and between HBR Realty Company,
                              Inc., and Iowa West Racing Association, Nonprofit
                              Corporation, dated October 6, 1999. (22)

            10.53           Amended and Restated Excursion Boat Sponsorship and
                              Operations Agreement by and between Iowa West Racing
                              Association, and Harveys Iowa Management Company, Inc.,
                              dated October 6, 1999. (22)

            10.54           Management Agreement by and between Harveys BR Management
                              Company, Inc., and Iowa West Racing Association dated
                              October 6, 1999. (22)

            16.1            Deloitte & Touche LLP's letter regarding change in
                              certifying accountant. (21)

            21.1            List of Subsidiaries of the Registrant. (22)

            27              Financial Data Schedule. (22)
</TABLE>

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(1) Incorporated herein by reference to Registration Statement No. 33-70670

(2) Incorporated herein by reference to Registrant's Annual Report on Form 10-K
    for the period ended November 30, 1994

(3) Incorporated herein by reference to Registrant's Quarterly Report on Form
    10-Q for the period ended May 31, 1995

(4) Incorporated herein by reference to Registrant's Quarterly Report on Form
    10-Q for the period ended August 31, 1995

(5) Incorporated herein by reference to Registrant's Annual Report on Form 10-K
    for the period ended November 30, 1995

(6) Incorporated herein by reference to Registration Statement No. 333-3576

(7) Incorporated herein by reference to Registrant's Current Report on Form 8-K
    filed June 14, 1996

(8) Incorporated herein by reference to Registrant's Quarterly Report on Form
    10-Q for the period ended February 28, 1997

(9) Incorporated herein by reference to Registrant's Current Report on Form 8-K
    filed July 2, 1997

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<PAGE>
(10) Incorporated herein by reference to Registrant's Quarterly Report on Form
    10-Q for the period ended May 31, 1997

(11) Incorporated herein by reference to Registrant's Quarterly Report on Form
    10-Q for the period ended August 31, 1997

(12) Incorporated herein by reference to Registrant's Quarterly Report on Form
    8-K filed February 3, 1998

(13) Incorporated herein by reference to Registrant's Current Report on Form 8-K
    filed February 12, 1999

(14) Incorporated herein by reference to Registrant's Quarterly Report on Form
    10-Q for the period ended February 28, 1998

(15) Incorporated herein by reference to Registration Statement on Form 10 of
    Harveys Acquisition Corporation, File No. 0-25093, filed November 20, 1998

(16) Incorporated herein by reference to the Registrant's Annual Report on Form
    10-K for the period ended November 30, 1997

(17) Incorporated herein by reference to the Registrant's Annual Report on
    Form 10-K for the period ended November 30, 1998

(18) Incorporated herein by reference to the Registrant's Quarterly Report of
    Form 10-Q for the period ended May 31, 1999.

(19) Incorporated herein by reference to the Registrant's Quarterly Report on
    Form 10-Q for the period ended August 31, 1999.

(20) Incorporated herein by reference to the Registrant's Current Report on Form
    8-K filed on September 3, 1999.

(21) Incorporated herein by reference to the Registrant's Current Report on
    Form 8-K filed March 18, 1999.

(22) Filed herewith

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