FORM 10-QSB











September 30, 2004


















0-30375





LAS VEGAS GAMING, INC.







Nevada ______       88-0392994











4000 WEST ALI BABA, SUITE D


LAS VEGAS, NEVADA 89118







702-871-7111


(Issuers telephone number)













X





7,088,955 shares of Common Stock as of October 30, 2004.







1




PART I. FINANCIAL INFORMATION





Item 1.  Financial Statements






































2  LAS VEGAS GAMING, INC. AND SUBSIDIARIES


BALANCE SHEET


SEPTEMBER 30, 2004 (UNAUDITED) AND DECEMBER 31, 2003





**ASSETS**

**2004**


**2003****Current assets**Cash and equivalents
**$**
**1,140,670**

$
1,005,561Accounts receivable, net of allowance

**508,018**


454,679Inventory

**331,463**


349,604Jackpot reserve deposits

**3,974,167**


3,812,963**5,954,318**


5,622,807**Equipment and software, net of accumulated depreciation**

**624,755**


724,832**Other assets**Goodwill

**955,277**


955,277Trademarks, copyrights, patents and other intangibles, net of accumulated
amortization of $20,387 and $258,100

**32,796**


108,227Due from officers, including accrued interest

**53,648**


50,392Deposits and other

**329,881**


234,595**$**
**7,950,675**

$
7,696,130**LIABILITIES AND STOCKHOLDERS EQUITY****Current liabilities**Accounts payable
**$**
**550,615**

$
466,116Note payable

**320,000**Progressive jackpot liability

**1,017,849**


850,988**1,888,464**


1,317,104**Stockholders' equity**Series A convertible preferred stock, $.001 par, 5,000,000 shares authorized,
541,400 shares issued and outstanding

**541**


541Series B convertible preferred stock, $.001 par, 5,000,000 shares authorized,
346,140 and 316,540 shares issued and outstanding

**346**


317Series C convertible preferred stock, $.001 par, 5,000,000 shares authorized,
76,000 and no shares issued and outstanding

**76**Common stock $.001 par, 25,000,000 shares authorized, 6,807,955 and
6,688,955 shares issued and outstanding

**6,808**


6,689Additional paid-in capital

**15,518,735**


14,830,975Less due from officers and stockholders

**(320,000**
**)**

(420,000)Deficit

**(9,144,295**
**)**

(8,039,496)**6,062,211**


6,379,026**$**
**7,950,675**

$
7,696,130







3  LAS VEGAS GAMING, INC. AND SUBSIDIARIES


STATEMENTS OF OPERATIONS (UNAUDITED)


THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003








**2004**


**2003****Revenues**
Casino games
**$**
**386,374**

$
231,909Product sales

**563,950**


360,671Other sales

**470,548**


374,090**1,420,872**


939,670**Costs and expenses**Casino games - net of progressive liability changes of $88,057and $(63,982) in 2004 and 2003 due to interest rate fluctuations

**379,681**


274,928Product costs

**319,232**


242,712Other

**334,140**


169,986Selling, general, and administrative

**475,693**


728,514Research and development

**63,294**


61,216Depreciation and amortization

**59,082**


83,212**1,613,122**


1,560,568**Operating loss**

**(192,250**
**)**

(620,898)**Other income (expense)**Sundry expense




(9,433)Interest, officers

**4,625**Interest, others

**10,047**


4,905**Net loss**
**$**
**(177,578**
**)**
$
(625,426)**Net loss per share, basic and diluted**
**$**
**(0.03**
**)**
$
(0.10)**Weighted average shares outstanding, basic and diluted**

**6,988,955**


6,135,455







4  LAS VEGAS GAMING, INC. AND SUBSIDIARIES


STATEMENTS OF OPERATIONS (UNAUDITED)


NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003








**2004**


**2003****Revenues**
Casino games
**$**
**960,651**

$
679,898Product sales

**1,264,623**


645,176Other

**1,140,512**


503,675**3,365,786**


1,828,749**Costs and expenses**Casino games - net of progressive liability changes of $39,889 in2004 due to interest rate fluctuations

**807,288**


872,673Product costs

**789,471**


478,627Other costs

**822,453**


207,311Selling, general, and administrative

**1,619,481**


1,371,812Impairment write-down, game rights

**55,829**Research and development

**221,498**


121,697Depreciation and amortization

**191,340**


235,612**4,507,360**


3,287,732**Operating loss**

**(1,141,574**
**)**

(1,458,983)**Other income**Interest, officers

**16,506**


19,859Interest, others

**20,269**


25,912**Net loss**
**$**
**(1,104,799**
**)**
$
(1,413,212)**Net loss per share, basic and diluted**
**$**
**(0.16**
**)**
$
(0.24)**Weighted average shares outstanding, basic and diluted**

**6,860,384**


6,011,169







5  LAS VEGAS GAMING, INC. AND SUBSIDIARIES


STATEMENT OF CASH FLOW (UNAUDITED)


FOR THE NINE MONTHS ENDED SEPTEBMER 30, 2004 AND 200 3







**2004**


**2003****Operating activities**Net cash in operating activities
**$******
******(635,854**
******)**
**$******
******(965,766)****Investing activities**Acquisitions




**17,057**Deposits and other




**22,147**Jackpot reserve deposits

**(161,204**
**)**

**260,753**Purchase of property and equipment

**(67,628**
**)**

**(225,176)**Disposition of intangibles

**51,796**Net cash used in investing activities

**(177,036**
**)**

**74,781****Financing activities**Repayment of borrowings

**320,000**


**(200,000)**Proceeds from sale of convertible preferred stock

**627,999**


**1,252,200**Net cash provided by financing activities

**947,999****Net increase (decrease) in cash**

**135,109**


**1,052,200****Cash, beginning of period**

**1,005,561**


**1,050,610****Cash, end of period**
**$******
******1,140,670**

**$******
******1,211,825****Non-cash investing and financing activities**Warrants issued to acquire game rights



$
5,145





6  LAS VEGAS GAMING, INC. AND SUBSIDIARIES  NOTES TO UNAUDITED FINANCIAL STATEMENTS





1.  Basis of Presentation:










2.  Segment Information:








Three Months Ended Nine Months Ended


2004 2003 2004 2003








470,548 347,090 1,140,512 503,675














9,090 8,730 26,799 54,191






7  LAS VEGAS GAMING, INC. AND SUBSIDIARIES


NOTES TO UNAUDITED FINANCIAL STATEMENTS







Three Months Ended Nine Months Ended


2004 2003 2004 2003_








136,408 177,104 318,059 296,364











3.  Contingencies:




Gaming regulations and licensing




Litigation


8  LAS VEGAS GAMING, INC. AND SUBSIDIARIES


NOTES TO UNAUDITED FINANCIAL STATEMENTS







Progressive jackpots










Liability   Obligation



































126,736   126,736












9  Item 2.     Managements Discussion and Analysis of Financial Condition and Results of Operations








Overview















th





th





Liquidity and Capital Resources







10










Results of operations















Critical accounting estimates and policies


















11


Revenue and cost recognition.









Jackpot reserve deposits.





Item 3.  Controls and Procedures










12


PART II - OTHER INFORMATION
















































13





**Exhibit**
**Number**
**Description of Exhibit**31.1


32.1
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002







14


SIGNATURES















/s/ Russell Roth










15