|   x | QUARTERLY REPORT PURSUANT TO      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934 |
|----------|---------------------------------------------------------------------------------------------------|

| For      the quarterly period ended: | September      30, 2009 |
|--------------------------------------|-------------------------|

|         o | OR |
|---------------------|----|

|   | TRANSITION      REPORT PURSUANT SECTION 13 OR 15(d) OF THE EXCHANGE  ACT |
|--------|--------------------------------------------------------------------------|

| For      the transition period from: |   | to |   |
|--------------------------------------|--------|----|--------|

| Commission      file number: | 000-30375 |
|------------------------------|-----------|

| Las      Vegas Gaming, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (Exact      name of registrant as specified in its charter)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |
| Nevada                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | 88-0392994 |
| (State      or other jurisdiction of incorporation or organization)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | (I.R.S.      Employer Identification No.) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 3980      Howard Hughes Pkwy., Suite 450, Las Vegas, Nevada 89169                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (Address      of principal executive offices)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (702)      871-7111                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (Issuer’s      telephone number)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (Former      name, former address and former fiscal year, if changed since last      report)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Check      whether the issuer (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       o                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Indicate      by check mark whether the registrant has submitted electronically and      posted on its corporate Web site, if any, every Interactive Data File      required to be submitted and posted pursuant to Rule 405 of Regulation S-T      (§232.405 of this chapter) during the preceding 12 months (or for such      shorter period that the registrant was required to submit and post such      files). Yes oNo  o                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Indicate      by check mark whether the registrant is a large accelerated filer, an      accelerated filer, a non-accelerated filer, or a smaller reporting      company.  See the definitions of “large accelerated filer,”      “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the      Exchange Act. Large      accelerated filer  o                                                                                                             Accelerated      filer    oNon-accelerated      filer    o     (do      not check if smaller reporting      company)                           Smaller      reporting company  x |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Indicate      by check mark whether the registrant is a shell company (as defined in      Rule 12b-2 of the Exchange Act). Yes o  No       x                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| APPLICABLE      ONLY TO CORPORATE ISSUERS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Indicate      the number of shares outstanding of each of the issuer’s classes of common      stock, as of the latest                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| practicable      date:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |          15,081,846 shares of Common Stock Series A, $.001 par value, as of      September 30, 2009 |

----

Table of Contents

TABLE OF CONTENTS

|                                                  |                                                                                                      | Page     |
|-------------------------------------------------------|-----------------------------------------------------------------------------------------------------------|----------|
|  PART I – FINANCIAL      INFORMATION  |
| Item      1.                                          | Financial Statements                                                                                      | 2   |
|                                                  |       Consolidated Balance Sheets                                           | 2   |
|                                                  |            Consolidated Statements of Operations                                 | 3   |
|                                                  |            Consolidated Statements of  Stockholders’      Equity | 5   |
|                                                  |            Consolidated Statements of Cash Flows                                 | 7   |
|                                                  |       Notes to Unaudited Consolidated Financial      Statements                  | 8   |
| Item      2.                                          | Management’s Discussion and Analysis of Financial Condition and      Results of Operations          | 18  |
| Item      3.                                          | Quantitative and Qualitative Disclosures About Market      Risk                                           | 25  |
| Item      4T.                                         | Controls and Procedures                                                                                   | 25       |
|  PART II – OTHER      INFORMATION     |
| Item      1.                                          | Legal Proceedings                                                                                         | 26  |
| Item      1A.                                         | Risk Factors                                                                                              | 26  |
| Item      2.                                          | Unregistered Sales of Equity Securities                                                                   | 26  |
| Item      3.                                          | Defaults Upon Senior Securities                                                                           | 26  |
| Item      4.                                          | Submission of Matters to a Vote of Security      Holders                                                  | 26  |
| Item      5.                                          | Other Information                                                                                         | 26  |
| Item      6.                                          | Exhibits                                                                                                  | 27       |

----

Table of Contents

Item1. 

| LAS      VEGAS GAMING, INC. AND SUBSIDIARIES                                                                                 |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|
| CONSOLIDATED BALANCE SHEETS                                                                                                  |   |
|                                                                                                                         |   | December      31, |   |   | September      30, |   |
|                                                                                                                         |   | 2008 |   |   | 2009 |   |
| ASSETS                                                                                                                       |   |   |   |   |   |   |
|                                                                                                                         |   |   |   |   |   |   |
| Current      assets                                                                                                          |   |   |   |   |   |   |
| Cash                                                                                                                         |   | $ | 497,529 |   |   | $ | 44,786 |   |
| Investment      in marketable securities                                                                                     |   |   | 5,068 |   |   |   | - |   |
| Accounts      receivable, net of allowance of $578 and $9,347                                                                |   |   | 576,847 |   |   |   | 300,235 |   |
| Inventories                                                                                                                  |   |   | 454,026 |   |   |   | 420,516 |   |
| Prepaid      expenses, deposits and other                                                                                    |   |   | 79,881 |   |   |   | 145,626 |   |
| Jackpot      reserve deposits                                                                                                |   |   | 1,230,761 |   |   |   | 218,628 |   |
|                                                                                                                         |   |   | 2,844,112 |   |   |   | 1,129,791 |   |
|                                                                                                                         |   |   |   |   |   |   |   |   |
| Equipment,      net of accumulated depreciation of $1,238,738 and    $1,140,610                                              |   |   | 924,256 |   |   |   | 634,001 |   |
| Other      assets                                                                                                            |   |   |   |   |   |   |   |   |
| Goodwill                                                                                                                     |   |   | 2,371,178 |   |   |   | 1,740,843 |   |
| Trademarks,      copyrights, patents, software, and other identifiable intangibles, net      of                              |   |   |   |   |   |   |   |   |
|     accumulated      amortization of $1,165,742 and $1,362,724                                           |   |   | 278,330 |   |   |   | 718,187 |   |
| Other      long term assets                                                                                                  |   |   | 56,451 |   |   |   | 70,151 |   |
|                                                                                                                         |   | $ | 6,474,327 |   |   | $ | 4,292,973 |   |
|                                                                                                                         |   |   |   |   |   |   |   |   |
| LIABILITIES      AND STOCKHOLDERS' EQUITY                                                                                    |   |   |   |   |   |   |   |   |
|                                                                                                                         |   |   |   |   |   |   |   |   |
| Current      liabilities                                                                                                     |   |   |   |   |   |   |   |   |
| Note      payable                                                                                                            |   | $ | - |   |   | $ | 1,500,000 |   |
| Amount      due to Gaming Arts, LLC                                                                                          |   |   | - |   |   |   | 239,683 |   |
| Advances      from officers and major shareholders                                                                           |   |   | 600,000 |   |   |   | 75,000 |   |
| Accounts      payable and accrued expenses                                                                                   |   |   | 1,624,740 |   |   |   | 2,362,788 |   |
| Current      portion of long-term debt                                                                                       |   |   | 11,957 |   |   |   | 7,363 |   |
| Deferred      gain on sale of bingo                                                                                          |   |   | - |   |   |   | 165,666 |   |
| Current      portion of progressive jackpot liability                                                                        |   |   | 1,555,360 |   |   |   | 1,596,360 |   |
|                                                                                                                         |   |   | 3,792,057 |   |   |   | 5,946,860 |   |
|                                                                                                                         |   |   |   |   |   |   |   |   |
| Long-term      debt                                                                                                          |   |   | 23,119 |   |   |   | 17,181 |   |
|                                                                                                                         |   |   |   |   |   |   |   |   |
| Conditionally      redeemable equity                                                                                         |   |   |   |   |   |   |   |   |
| Series      B convertible preferred stock, $.001 par, 50,000 shares issued      and                                          |   |   |   |   |   |   |   |   |
|   outstanding                                                                                                      |   |   | 250,000 |   |   |   | 250,000 |   |
|                                                                                                                         |   |   | 250,000 |   |   |   | 250,000 |   |
|                                                                                                                         |   |   |   |   |   |   |   |   |
| Stockholders'      equity                                                                                                    |   |   |   |   |   |   |   |   |
| Convertible      preferred stock, $.001 par, 10,000,000 shares authorized (all      classes):                                |   |   |   |   |   |   |   |   |
|   Series      E:  810,800 shares authorized, 810,800 shares issued and      outstanding                  |   |   | 811 |   |   |   | 811 |   |
|   Series      F:  200,000 shares authorized, 200,000  and 0 shares      issued and outstanding |   |   | 200 |   |   |   | - |   |
|   Series      G: 150,000 shares authorized, 150,000 shares issued and outstanding,      respectively               |   |   | 150 |   |   |   | 150 |   |
|   Series      H:  98,500 shares authorized, 98,500 shares issued and      outstanding                    |   |   | 99 |   |   |   | 99 |   |
|   Series      I:  4,693,878 shares authorized, 4,693,878 shares issued and      outstanding              |   |   | 4,694 |   |   |   | 4,694 |   |
|   Common      stock (including Series A): $.001 par, 90,000,000 shares                                             |   |   |   |   |   |   |   |   |
|    authorized,      14,849,690 and 15,081,846 shares issued and outstanding                                   |   |   | 14,850 |   |   |   | 15,082 |   |
| Additional      paid-in capital                                                                                              |   |   | 44,160,702 |   |   |   | 44,300,772 |   |
| Less      due from employees and stockholders                                                                                |   |   | (188,245 | ) |   |   | (182,245 | ) |
| Deficit                                                                                                                      |   |   | (41,584,110 | ) |   |   | (46,060,431 | ) |
|                                                                                                                         |   |   | 2,409,151 |   |   |   | (1,921,068 | ) |
|                                                                                                                         |   |   |   |   |   |   |   |   |
|                                                                                                                         |   | $ | 6,474,327 |   |   | $ | 4,292,973 |   |
| The      accompanying notes are an integral part of these financial      statements.                                         |   |   |   |   |   |   |   |   |

----

Table of Contents

| LAS      VEGAS GAMING, INC. AND SUBSIDIARIES                                         |
|--------------------------------------------------------------------------------------|
| CONSOLIDATED STATEMENTS OF OPERATIONS                                                |
| THREE      MONTHS ENDED SEPTEMBER 30, 2008 AND 2009                                  |
|                                                                                 |   |   |   |   |   |   |
|                                                                                 |   | 2008 |   |   | 2009 |   |
|                                                                                 |   |   |   |   |   |   |
| Revenues                                                                             |   |   |   |   |   |   |
|     Casino      games                                            |   | $ | 709,195 |   |   | $ | 411,394 |   |
|     Product      sales                                           |   |   | 254,369 |   |   |   | 250,527 |   |
|     Other                                                        |   |   | 238,393 |   |   |   | 278,647 |   |
|                                                                                 |   |   | 1,201,957 |   |   |   | 940,568 |   |
|                                                                                 |   |   |   |   |   |   |   |   |
| Costs      and expenses                                                              |   |   |   |   |   |   |   |   |
|     Casino      games                                            |   |   | 519,682 |   |   |   | 253,764 |   |
|     Product      costs                                           |   |   | 133,112 |   |   |   | 135,600 |   |
|     Other                                                        |   |   | 304,652 |   |   |   | 227,859 |   |
|                                                                                 |   |   | 957,446 |   |   |   | 617,223 |   |
|                                                                                 |   |   |   |   |   |   |   |   |
| Gross      operating income                                                          |   |   | 244,511 |   |   |   | 323,345 |   |
|                                                                                 |   |   |   |   |   |   |   |   |
| Other      operating expenses                                                        |   |   |   |   |   |   |   |   |
|     Selling,      general, and administrative                    |   |   | 1,502,973 |   |   |   | 936,078 |   |
|     Research      and development                                |   |   | 371,517 |   |   |   | 189,501 |   |
|     Depreciation      and amortization                           |   |   | 200,137 |   |   |   | 131,190 |   |
|                                                                                 |   |   | 2,074,627 |   |   |   | 1,256,769 |   |
|                                                                                 |   |   |   |   |   |   |   |   |
| Operating      loss                                                                  |   |   | (1,830,116 | ) |   |   | (933,424 | ) |
|                                                                                 |   |   |   |   |   |   |   |   |
| Other      income and expense                                                        |   |   |   |   |   |   |   |   |
|     Finance      costs                                           |   |   | (490,440 | ) |   |   | (55,311 | ) |
|     Interest      and other income                               |   |   | 2,233 |   |   |   | 6 |   |
|                                                                                 |   |   |   |   |   |   |   |   |
| Net      loss                                                                        |   |   | (2,318,323 | ) |   |   | (988,729 | ) |
| Preferred      stock dividends                                                       |   |   | (52,500 | ) |   |   | (211,096 | ) |
| Net      loss attributed to common stockholders                                      |   | $ | (2,370,823 | ) |   | $ | (1,199,825 | ) |
|                                                                                 |   |   |   |   |   |   |   |   |
| Net      loss per share attributed to common stockholders                            |   | $ | (0.17 | ) |   | $ | (0.07 | ) |
|                                                                                 |   |   |   |   |   |   |   |   |
| Weighted      average shares outstanding                                             |   |   | 13,689,403 |   |   |   | 15,081,846 |   |
|                                                                                 |   |   |   |   |   |   |   |   |
| The      accompanying notes are an integral part of these financial      statements. |   |   |   |   |   |   |   |   |

----

Table of Contents

| LAS      VEGAS GAMING, INC. AND SUBSIDIARIES                                         |   |
|--------------------------------------------------------------------------------------|--------|
| CONSOLIDATED STATEMENTS OF OPERATIONS                                                |   |
| NINE      MONTHS ENDED SEPTEMBER 30, 2008 AND 2009                                   |   |
|                                                                                 |   |   |   |   |   |   |
|                                                                                 |   | 2008 |   |   | 2009 |   |
| Revenues                                                                             |   |   |   |   |   |   |
|     Casino      games                                            |   | $ | 1,868,701 |   |   | $ | 1,395,959 |   |
|     Product      sales                                           |   |   | 927,738 |   |   |   | 781,876 |   |
|     Other                                                        |   |   | 716,283 |   |   |   | 866,697 |   |
|                                                                                 |   |   | 3,512,722 |   |   |   | 3,044,532 |   |
|                                                                                 |   |   |   |   |   |   |   |   |
| Costs      and expenses                                                              |   |   |   |   |   |   |   |   |
|     Casino      games                                            |   |   | 1,840,511 |   |   |   | 1,165,665 |   |
|     Product      costs                                           |   |   | 451,310 |   |   |   | 406,650 |   |
|     Other                                                        |   |   | 888,378 |   |   |   | 719,898 |   |
|                                                                                 |   |   | 3,180,199 |   |   |   | 2,292,213 |   |
|                                                                                 |   |   |   |   |   |   |   |   |
| Gross      operating income                                                          |   |   | 332,523 |   |   |   | 752,319 |   |
|                                                                                 |   |   |   |   |   |   |   |   |
| Other      operating expenses                                                        |   |   |   |   |   |   |   |   |
|     Selling,      general, and administrative                    |   |   | 4,865,008 |   |   |   | 3,707,806 |   |
|     Research      and development                                |   |   | 1,070,057 |   |   |   | 372,684 |   |
|     Depreciation      and amortization                           |   |   | 628,846 |   |   |   | 401,519 |   |
|                                                                                 |   |   | 6,563,911 |   |   |   | 4,482,009 |   |
|                                                                                 |   |   |   |   |   |   |   |   |
| Operating      loss                                                                  |   |   | (6,231,388 | ) |   |   | (3,729,690 | ) |
|                                                                                 |   |   |   |   |   |   |   |   |
| Other      income and expense                                                        |   |   |   |   |   |   |   |   |
|     Finance      costs                                           |   |   | (1,612,902 | ) |   |   | (69,647 | ) |
|     Interest      and other income (expense)                     |   |   | (89,156 | ) |   |   | (27,895 | ) |
|                                                                                 |   |   |   |   |   |   |   |   |
| Net      loss                                                                        |   | $ | (7,933,446 | ) |   | $ | (3,827,232 | ) |
| Preferred      stock dividends                                                       |   |   | (84,000 | ) |   |   | (649,089 | ) |
| Net      loss attributed to common stockholders                                      |   | $ | (8,017,446 | ) |   | $ | (4,476,321 | ) |
|                                                                                 |   |   |   |   |   |   |   |   |
| Net      loss per share attributed to common stockholders                            |   | $ | (0.61 | ) |   | $ | (0.29 | ) |
|                                                                                 |   |   |   |   |   |   |   |   |
| Weighted      average shares outstanding                                             |   |   | 13,249,905 |   |   |   | 15,062,484 |   |
|                                                                                 |   |   |   |   |   |   |   |   |
| The      accompanying notes are an integral part of these financial      statements. |   |   |   |   |   |   |   |   |

----

Table of Contents

| LAS      VEGAS GAMING, INC. AND SUBSIDIARIES                                   |   |
|--------------------------------------------------------------------------------|--------|
| CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY                                |   |
| NINE      MONTHS ENDED SEPTEMBER 30, 2008 and 2009                             |   |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Common      Stock |   |   | Additional |   |   | Less      due from |   |
|                                                                           |   | Convertible      Preferred Stock |   | Including |   |   | Paid-In |   |   | officers      and |   |   |   |   |
|                                                                           |   | Series      A |   |   | Series      C |   |   | Series      D |   |   | Series      E |   |   | Series      F |   |   | Series      G |   |   | Series      H |   | Series      I |   | Series      A |   |   | Capital |   |   | stockholders |   |   | Deficit |   |
| Balances,      December 31, 2007                                               |   | $ | - |   |   | $ | 35 |   |   | $ | 125 |   |   | $ | 744 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   |   | $ | 12,563 |   |   | $ | 26,497,097 |   |   | $ | (235,414 | ) |   | $ | (28,562,419 | ) |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      loss                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (7,933,446 | ) |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividends      Payable Preferred Stock F, G, and I                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (84,000 | ) |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exercise      of warrants and options                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 93 |   |   |   | 108,705 |   |   |   | (8,412 | ) |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance      of warrants                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 337,470 |   |   |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      stock based compensation                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 255 |   |   |   | 509,079 |   |   |   | 52,000 |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      received from      employees      and      stockholders         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 9,000 |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion      of Series      B Convertible      Preferred      Stock      to |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 254 |   |   |   | 253,996 |   |   |   |   |   |   |   |   |   |
| Common      Stock Series A                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion      of      Series C Convertible      Preferred      Stock      to |   |   |   | (35 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 175 |   |   |   | (140 | ) |   |   |   |   |   |   |   |   |
| Common      Stock Series A                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion      of      Series DConvertiblePreferred      Stock      to        |   |   |   |   |   |   |   | (125 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 125 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common      Stock Series A                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Sale      of Series E Convertible Preferred Stock                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 67 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 334,933 |   |   |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Sale      of Series F Convertible Preferred Stock                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 200 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 639,872 |   |   |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Sale      of Series G Convertible Preferred Stock                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 150 |   |   |   |   |   |   |   |   |   |   |   |   | 479,904 |   |   |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Sale      of Series H Convertible Preferred Stock                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 99 |   |   |   |   |   |   |   |   | 492,402 |   |   |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Sale      of Common Stock to employees                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 55 |   |   |   | 110,667 |   |   |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Sale      of Common Stock                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 500 |   |   |   | 629,374 |   |   |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balances,      September 30, 2008                                              |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 811 |   |   | $ | 200 |   |   | $ | 150 |   |   | $ | 99 |   |   |   | $ | 14,020 |   |   | $ | 30,393,359 |   |   | $ | (182,826 | ) |   | $ | (36,579,865 | ) |

----

Table of Contents

|                                                                                 |   | Convertible      Preferred Stock |   |   | Common      Stock |   |   | Additional    |   |   | Less      due from |   |
|--------------------------------------------------------------------------------------|--------|----------------------------------|--------|--------|-------------------|--------|--------|---------------|--------|--------|--------------------|--------|
|                                                                                 |   |                             |   |   |              |   |   |          |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Including |   |   | Paid-In |   |   | officers      and |   |   |   |   |
|                                                                                 |   | Series      A                    |   |   | Series      C     |   |   | Series      D |   |   | Series      E      |   |   | Series      F |   |   | Series      G |   |   | Series      H |   |   | Series      I |   |   | Series      A |   |   | Capital |   |   | stockholders |   |   | Deficit |   |
| Balances,      January 1, 2009                                                       |   | $                                | -      |   |              | $      | -      |          |   | $      | -                  |   |   | $ | 811 |   |   | $ | 200 |   |   | $ | 150 |   |   | $ | 99 |   |   | $ | 4,694 |   |   | $ | 14,850 |   |   | $ | 44,160,702 |   |   | $ | (188,245 | ) |   | $ | (41,584,110 | ) |
|                                                                                 |   |                             |   |   |              |   |   |          |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      loss                                                                        |   |                             |   |   |              |   |   |          |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (3,827,232 | ) |
|                                                                                 |   |                             |   |   |              |   |   |          |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividends      Payable Preferred Stock F, G, and I                                   |   |                             |   |   |              |   |   |          |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (649,089 | ) |
|                                                                                 |   |                             |   |   |              |   |   |          |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance      of stock options and warrants      for services                        |   |                             |   |   |              |   |   |          |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 559,712 |   |   |   |   |   |   |   |   |   |
|                                                                                 |   |                             |   |   |              |   |   |          |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance      of common stock to reimburse      for legal expenses                   |   |                             |   |   |              |   |   |          |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 27 |   |   |   | 17,863 |   |   |   |   |   |   |   |   |   |
|                                                                                 |   |                             |   |   |              |   |   |          |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cancellation      of Common Stock                                                    |   |                             |   |   |              |   |   |          |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (20 | ) |   |   | 20 |   |   |   |   |   |   |   |   |   |
|                                                                                 |   |                             |   |   |              |   |   |          |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cancellation      of Series F Preferred Stock                                        |   |                             |   |   |              |   |   |          |   |   |               |   |   |   |   |   |   |   | (400 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (1,999,600 | ) |   |   |   |   |   |   |   |   |
|                                                                                 |   |                             |   |   |              |   |   |          |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Re-issuance      of Series F Stock                                                   |   |                             |   |   |              |   |   |          |   |   |               |   |   |   |   |   |   |   | 200 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 999,800 |   |   |   |   |   |   |   |   |   |
|                                                                                 |   |                             |   |   |              |   |   |          |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      received from employees and      stockholders                              |   |                             |   |   |              |   |   |          |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 6,000 |   |   |   |   |   |
|                                                                                 |   |                             |   |   |              |   |   |          |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Sale      of Common Stock                                                            |   |                             |   |   |              |   |   |          |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 225 |   |   |   | 562,275 |   |   |   |   |   |   |   |   |   |
|                                                                                 |   |                             |   |   |              |   |   |          |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                 |   |                             |   |   |              |   |   |          |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balances,      September 30, 2009                                                    |   | $                                | -      |   |              | $      | -      |          |   | $      | -                  |   |   | $ | 811 |   |   | $ | - |   |   | $ | 150 |   |   | $ | 99 |   |   | $ | 4,694 |   |   | $ | 15,082 |   |   | $ | 44,300,772 |   |   | $ | (182,245 | ) |   | $ | (46,060,431 | ) |
|                                                                                 |   |                             |   |   |              |   |   |          |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| The      accompanying notes are an integral part of these financial      statements. |   |                             |   |   |              |   |   |          |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

Table of Contents

| LAS      VEGAS GAMING, INC. AND SUBSIDIARIES                                                 |
|----------------------------------------------------------------------------------------------|
| CONSOLIDATED STATEMENTS OF CASH FLOWS                                                        |
| NINE      MONTHS ENDED SEPTEMBER 30, 2008 AND 2009                                           |
|                                                                                         |   |   |   |   |   |   |
|                                                                                         |   |   |   |   |   |   |
|                                                                                         |   | 2008 |   |   | 2009 |   |
|                                                                                         |   |   |   |   |   |   |
| Operating      activities                                                                    |   |   |   |   |   |   |
|                                                                                         |   |   |   |   |   |   |
| Net      loss                                                                                |   | $ | (7,933,446 | ) |   | $ | (3,827,232 | ) |
| Marketable      security received for licensing fee                                          |   |   | 42,444 |   |   |   | 5,068 |   |
| Depreciation      and amortization of equipment                                              |   |   | 266,462 |   |   |   | 204,539 |   |
| Loss      on disposal of assets                                                              |   |   | 72,040 |   |   |   | 25,445 |   |
| Bad      debt expense                                                                        |   |   | - |   |   |   | 39,385 |   |
| Amortization      of debt issuance costs and intangibles                                     |   |   | 1,653,545 |   |   |   | 196,980 |   |
| Fair      market value adjustment of debt derivative liability                               |   |   | (141,307 | ) |   |   | - |   |
| Stock-based      compensation to employees and consultants                                   |   |   | 689,113 |   |   |   | 567,602 |   |
| Other                                                                                        |   |   | (1,724 | ) |   |   | (13,698 | ) |
| Changes      in operating assets and liabilities:                                            |   |   |   |   |   |   |   |   |
|    Accounts      receivable                                                   |   |   | 28,789 |   |   |   | 150,759 |   |
|    Inventories                                                                |   |   | 64,105 |   |   |   | 21,353 |   |
|    Prepaid      expenses, deposits and other                                  |   |   | 88,418 |   |   |   | (65,746 | ) |
|    Accounts      payable and accrued expenses                                 |   |   | 1,266,471 |   |   |   | 170,386 |   |
|    Advances      from Gaming Arts, LLC                                        |   |   | - |   |   |   | 239,683 |   |
|    Progressive      jackpot liability                                         |   |   | 560,918 |   |   |   | 41,000 |   |
|    Deferred      gain on sale of bingo                                        |   |   | - |   |   |   | 165,666 |   |
| Net      cash (used in) operating activities                                                 |   |   | (3,344,172 | ) |   |   | (2,078,810 | ) |
|                                                                                         |   |   |   |   |   |   |   |   |
| Investing      activities                                                                    |   |   |   |   |   |   |   |   |
| Purchase      of property, equipment, and software                                           |   |   | (248,619 | ) |   |   | (95,436 | ) |
| Proceeds      from sale of equipment                                                         |   |   | 55,250 |   |   |   | 6,150 |   |
| Proceeds      from sale of Bingo                                                             |   |   | - |   |   |   | 832,251 |   |
| Capitalize      Player Vision 3 engineering costs                                            |   |   | - |   |   |   | (631,899 | ) |
| Jackpot      reserve deposits                                                                |   |   | (1,298,640 | ) |   |   | 1,012,133 |   |
| Net      cash provided by (used in) investing activities                                     |   |   | (1,492,009 | ) |   |   | 1,123,199 |   |
|                                                                                         |   |   |   |   |   |   |   |   |
| Financing      activities                                                                    |   |   |   |   |   |   |   |   |
| Dividend      payments on Series F preferred stock                                           |   |   | - |   |   |   | (32,877 | ) |
| Redemption      of Series F preferred stock                                                  |   |   | - |   |   |   | (2,000,000 | ) |
| Re-issuance      of Series F preferred stock                                                 |   |   | - |   |   |   | 1,000,000 |   |
| Redemption      of Series B preferred stock                                                  |   |   | (137,500 | ) |   |   | - |   |
| Repayment      of debt                                                                       |   |   | (61,747 | ) |   |   | (7,755 | ) |
| Sale      of Series E convertible preferred stock                                            |   |   | 335,000 |   |   |   | - |   |
| Sale      of Series F convertible preferred stock                                            |   |   | 640,072 |   |   |   | - |   |
| Sale      of Series G convertible preferred stock                                            |   |   | 480,054 |   |   |   | - |   |
| Sale      of Series H convertible preferred stock                                            |   |   | 492,501 |   |   |   | - |   |
| Advances      from officers and major shareholders                                           |   |   | 2,100,000 |   |   |   | 300,000 |   |
| Repayment      of advances from shareholders                                                 |   |   | - |   |   |   | (825,000 | ) |
| Increase      in notes payable                                                               |   |   | - |   |   |   | 1,500,000 |   |
| Exercise      of warrants and options for common stock                                       |   |   | 100,387 |   |   |   | - |   |
| Collection      of stock subscription receivables                                            |   |   | 9,000 |   |   |   | 6,000 |   |
| Sale      of common stock                                                                    |   |   | 740,596 |   |   |   | 562,500 |   |
| Net      cash provided by financing activities                                               |   |   | 4,698,363 |   |   |   | 502,868 |   |
|                                                                                         |   |   |   |   |   |   |   |   |
| Net      (decrease) in cash and cash equivalents                                             |   |   | (137,818 | ) |   |   | (452,743 | ) |
| Cash,      beginning of period                                                               |   |   | 489,262 |   |   |   | 497,529 |   |
| Cash,      end of period                                                                     |   | $ | 351,444 |   |   | $ | 44,786 |   |
|                                                                                         |   |   |   |   |   |   |   |   |
| Non-cash      investing and financing activities                                             |   |   |   |   |   |   |   |   |
|                                                                                         |   |   |   |   |   |   |   |   |
| Conversion      of Series B Convertible Preferred Stock to                                   |   |   |   |   |   |   |   |   |
|      Common      Stock Series A                                     |   | $ | 254,250 |   |   | $ | - |   |
| Conversion      of Series C Convertible Preferred Stock to                                   |   |   |   |   |   |   |   |   |
|      Common      Stock Series A                                     |   |   | 35 |   |   |   | - |   |
| Conversion      of Series D Convertible Preferred Stock to                                   |   |   |   |   |   |   |   |   |
|      Common      Stock Series A                                     |   |   | 125 |   |   |   | - |   |
| Exercise      of stock warrants and options increasing subscriptions      receivable         |   |   | 8,412 |   |   |   | - |   |
| Equipment      acquired directly with proceeds of new borrowing                              |   |   | 34,025 |   |   |   | - |   |
| Debt      retired through issuance of Common Stock Series A                                  |   |   | 107,500 |   |   |   | - |   |
| Prepayment      of lease costs through issuance of Common Stock Series    A                  |   |   | 106,000 |   |   |   | - |   |
| Accrued      and prepaid interest added to face amount of note due to debt      modification |   |   | 801,250 |   |   |   | - |   |
| Dividends      declared on Series F, G, and I Preferred Stock                                |   |   | 84,000 |   |   |   | 649,089 |   |
| Dividend      paid in Common Stock Series A on Series F Preferred Stock                      |   |   | - |   |   |   | (10,000 | ) |
|                                                                                         |   |
| The      accompanying notes are an integral part of these financial      statements          |   |

----

Table of Contents

LAS VEGAS GAMING

----

Table of Contents

NOTES TO UNAUDITED 

|                                                                                                                                                                                                                                                                                                                                                |   | December      31, 2008 |      |   | September      30, 2009(Unaudited) |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|-----------|--------|------------------------------------|--------|
| Production      equipment                                                       |   | $                      | 1,561,513 |   |                               | $      | 1,466,267 |   |
| Equipment,      furniture, and fixtures                                                                                                                                                                                                                                                                                                             |   |                   | 557,855   |   |                               |   | 308,344 |   |
| Leasehold      improvements                                                     |   |                   | 43,627    |   |                               |   | 0 |   |
|                                                                                                                                                                                                                                                                                                                                                |   |                   | 2,162,995 |   |                               |   | 1,774,611 |   |
| Less      accumulated depreciation and   amortization                                                                                                                                                                                                                                                                                |   |                   | 1,238,739 |   |                               |   | 1,140,610 |   |
|                                                                                                                                                                                                                                                                                                                                                |   | $                      | 924,256   |   |                               | $      | 634,001 |   |

|                                                                                                                                                                                                                                                                                                                             |   | December      31, 2008 |      |   | September      30, 2009(Unaudited) |    |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|-----------|--------|------------------------------------|---------|
| Capitalized      PlayerVision engineering costs                                                                                                                                                                                                                                                                                  |   |                   |      |   | $                                  | 651,899 |   |
| PlayerVision      technology patents                                                                                                                                                                                                                                                                                             |   | $                      | 1,016,236 |   |                               |    | 996,236 |   |
| Software                                                     |   |                   | 427,836   |   |                               |    | 432,775 |   |
|                                                                                                                                                                                                                                                                                                                             |   |                   | 1,444,072 |   |                               |    | 2,080,910 |   |
| Less      accumulated amortization                                                                                                                                                                                                                                                                                               |   |                   | 1,165,742 |   |                               |    | 1,362,723 |   |
|                                                                                                                                                                                                                                                                                                                             |   | $                      | 278,330   |   |                               | $       | 718,187 |   |

| 2009   |   | $      | 53,318  |   |
|--------|--------|--------|---------|--------|
| 2010   |   |   | 238,062 |   |
| 2011   |   |   | 215,512 |   |
| 2012   |   |   | 211,295 |   |
| 2013   |   |   | 0       |   |
| 2014   |   |   | 0       |   |
|   |   | $      | 718,187 |   |

----

Table of Contents

|                                                                                                                                                                                                                                                                                                                                                  |   | December      31, 2008 |   |   | September      30, 2009 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|--------|--------|-------------------------|--------|
| Other      notes      payable                                                     |   | $                      | 35,076 |   |                    | $      | 24,544 |   |
| Less      amounts due within one year                                                                                                                                                                                                                                                                                                                 |   |                   | 11,957 |   |                    |   | 7,363 |   |
|                                                                                                                                                                                                                                                                                                                                                  |   | $                      | 23,119 |   |                    | $      | 17,181 |   |

----

Table of Contents

----

Table of Contents

----

Table of Contents

|                             |   | Options/Warrants |      |   | Weighted Average      Price |   |
|----------------------------------|--------|------------------|-----------|--------|----------------------------------|--------|
| Balance,      January 1, 2009    |   |             | 8,656,209 |   |                             | $      | 2.46 |   |
| Granted                          |   |             | 1,112,440 |   |                             |   | 2.50 |   |
| Exercised                        |   |             | -         |   |                             |   | - |   |
| Forfeited                        |   |             | (367,500  | )      |                             |   | (1.04 | ) |
| Balance,      September 30, 2009 |   |             | 9,411,149 |   |                             | $      | 2.53 |   |

|                             |   | Non-vested      Options |      |   | Weighted Average      Price |   |
|----------------------------------|--------|-------------------------|-----------|--------|----------------------------------|--------|
| Balance,      January 1, 2009    |   |                    | 1,393,210 |   |                             | $      | 3.45 |   |
| Granted                          |   |                    | 642,580   |   |                             |   | 2.50 |   |
| Vested                           |   |                    | (552,860  | )      |                             |   | (3.56 | ) |
| Forfeited                        |   |                    | -         |   |                             |   | - |   |
| Balance,      September 30, 2009 |   |                    | 1,482,830 |   |                             | $      | 3.00 |   |

|                             |   | Non-vested      Warrants |    |   | Weighted Average      Price |   |
|----------------------------------|--------|--------------------------|---------|--------|----------------------------------|--------|
| Balance,      January 1, 2009    |   |                     | 110,417 |   |                             | $      | 2.52 |   |
| Granted                          |   |                     | 15,500  |   |                             |   | 2.50 |   |
| Vested                           |   |                     | (47,917 | )      |                             |   | (2.55 | ) |
| Forfeited                        |   |                     | -       |   |                             |   | - |   |
| Balance,      September 30, 2009 |   |                     | 78,000  |   |                             | $      | 2.50 |   |

----

Table of Contents

|     |   |     |   |   |        |   |      | Weighted      Average |   |   |        |   |   | Weighted      Average |      |
|----------|--------|----------|--------|--------|-------------|--------|-----------|-----------------------|--------|--------|-------------|--------|--------|-----------------------|-----------|
|     |   | Exercise |   |   | Number      |   |      | Remaining             |   |   | Number      |   |   | Remaining             |      |
|     |   | Price    |   |   | Outstanding |   |      | Life      in years    |   |   | Exercisable |   |   | Life      in years    |      |
| Options  |   | $        | 1.00   |   |        |   | 170,000   |                  |   |   | 0.25        |   |   |                  | 170,000   |   |   |   | 0.25 |   |
|     |   | $        | 2.00   |   |        |   | 460,000   |                  |   |   | 3.54        |   |   |                  | 310,000   |   |   |   | 3.54 |   |
|     |   | $        | 2.50   |   |        |   | 1,748,773 |                  |   |   | 4.33        |   |   |                  | 740,943   |   |   |   | 4.30 |   |
|     |   | $        | 3.00   |   |        |   | 100,900   |                  |   |   | 0.42        |   |   |                  | 100,900   |   |   |   | 0.42 |   |
|     |   | $        | 4.55   |   |        |   | 25,000    |                  |   |   | 0.25        |   |   |                  | 25,000    |   |   |   | 0.25 |   |
|     |   | $        | 5.00   |   |        |   | 1,123,000 |                  |   |   | 2.97        |   |   |                  | 798,000   |   |   |   | 2.91 |   |
| Warrants |   | $        | 1.00   |   |        |   | 110,000   |                  |   |   | 2.77        |   |   |                  | 110,000   |   |   |   | 2.77 |   |
|     |   | $        | 1.48   |   |        |   | 2,675,000 |                  |   |   | 1.56        |   |   |                  | 2,675,000 |   |   |   | 1.56 |   |
|     |   | $        | 1.50   |   |        |   | 30,000    |                  |   |   | 3.59        |   |   |                  | 30,000    |   |   |   | 3.59 |   |
|     |   | $        | 2.00   |   |        |   | 185,000   |                  |   |   | .90         |   |   |                  | 185,000   |   |   |   | .90 |   |
|     |   | $        | 2.10   |   |        |   | 23,809    |                  |   |   | 1.12        |   |   |                  | 23,809    |   |   |   | 1.12 |   |
|     |   | $        | 2.45   |   |        |   | 1,500,000 |                  |   |   | 2.06        |   |   |                  | 1,500,000 |   |   |   | 2.06 |   |
|     |   | $        | 2.50   |   |        |   | 155,667   |                  |   |   | 4.02        |   |   |                  | 77,667    |   |   |   | 4.00 |   |
|     |   | $        | 3.00   |   |        |   | 854,000   |                  |   |   | 1.31        |   |   |                  | 854,000   |   |   |   | 1.31 |   |
|     |   | $        | 4.00   |   |        |   | 100,000   |                  |   |   | 0.37        |   |   |                  | 100,000   |   |   |   | 0.37 |   |
|     |   | $        | 5.00   |   |        |   | 150,000   |                  |   |   | 1.53        |   |   |                  | 150,000   |   |   |   | 1.53 |   |
|     |   |     |   |   |        |   | 9,411,149 |                  |   |   | 2.39        |   |   |                  | 7,850,319 |   |   |   | 2.07 |   |

----

Table of Contents

----

Table of Contents

|                         |   | Nine      months ended September 30, |       |
|------------------------------|--------|--------------------------------------|------------|
|                         |   | 2008                                 |       |   | 2009 |   |
| Revenue                      |   |                                 |       |   |   |   |
| Casino      Games            |   | $                                    | 1,868,701  |   |   | $ | 1,395,959 |   |
| Product      Sales           |   |                                 | 927,738    |   |   |   | 781,875 |   |
| Other                        |   |                                 | 716,283    |   |   |   | 866,697 |   |
|                         |   | $                                    | 3,512,722  |   |   | $ | 3,044,532 |   |
|                         |   |                                 |       |   |   |   |   |   |
| Operating      income (loss) |   |                                 |       |   |   |   |   |   |
| Casino      Games            |   | $                                    | 28,190     |   |   | $ | 230,294 |   |
| Product      Sales           |   |                                 | 476,428    |   |   |   | 375,226 |   |
| Other                        |   |                                 | (172,095   | ) |   |   | 146,800 |   |
| Unallocated                  |   |                                 | (6,563,911 | ) |   |   | (4,482,010 | ) |
|                         |   | $                                    | (6,231,388 | ) |   | $ | (3,729,690 | ) |
|                         |   |                                 |       |   |   |   |   |   |
| Identifiable      assets     |   |                                 |       |   |   |   |   |   |
| Casino      Games            |   | $                                    | 3,974,808  |   |   | $ | 1,592,741 |   |
| Product      Sales           |   |                                 | 315,723    |   |   |   | 222,585 |   |
| Other                        |   |                                 | 398,492    |   |   |   | 338,796 |   |
| Unallocated                  |   |                                 | 2,430,445  |   |   |   | 2,138,851 |   |
|                         |   | $                                    | 7,119,468  |   |   | $ | 4,292,973 |   |

|                      |   | Nine      months ended September 30, |    |
|---------------------------|--------|--------------------------------------|---------|
| Capital      expenditures |   | 2008                                 |    |   | 2009 |   |
| Casino      Games         |   | $                                    | 118,535 |   |   | $ | 23,248 |   |
| Product      Sales        |   |                                 | -       |   |   |   | 4,936 |   |
| Other                     |   |                                 | 98,947  |   |   |   | 36,604 |   |
| Unallocated               |   |                                 | 65,162  |   |   |   | 30,648 |   |
|                      |   | $                                    | 282,644 |   |   | $ | 95,436 |   |

----

Table of Contents

----

Table of Contents

Item 2.  

----

Table of Contents

----

Table of Contents

----

Table of Contents

----

Table of Contents

----

Table of Contents

----

Table of Contents

----

Table of Contents

Item 3. 

Item 4(T).

----

Table of Contents

Item 1. 

Item 1A. 

Item 2.  

Item 3. 

Item 4. 

 Item 5.   

----

Table of Contents

Item 6. 

| 2.1   | Asset      Purchase Agreement dated August 19, 2009 between the Company and Gaming      Arts, LLC, incorporated by reference to the Company’s Current Report on      Form 8-K/A filed with the Securities and Exchange Commission on August 27,      2009.                |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.1  | Technology      Royalty Agreement dated August 6, 2009 between the Company and Perfect      Storm Software, LLC, incorporated by reference to the Company’s Quarterly      Report on Form 10-Q filed with the Securities and Exchange Commission on      August 19, 2009. |
| 10.2  | Secured      Promissory Note dated June 1, 2009 in favor of IGT.                                                                                                                                                                                                                |
| 10.3  | First      Addendum to Intellectual Property Access Agreement between the Company and      IGT dated September 4, 2009 (to be effective June 1,  2009).                                                                                                                         |
| 10.4* | First      Addendum to License and Application Support Agreement between the Company      and IGT dated September 4, 2009 (to be effective June 1,      2009).                                                                                                                  |
| 10.5  | Asset      Purchase Agreement dated November 4, 2009 between the Company and Session      Gaming, LLC, incorporated by reference to the Company’s Current Report on      Form 8-K filed with the Securities and Exchange Commission on November 20,      2009.            |
| 31.1  | Certifications      pursuant to Section 302 of the Sarbanes-Oxley Act of  2002                                                                                                                                                                                                  |
| 31.2  | Certifications      pursuant to Section 302 of the Sarbanes-Oxley Act of  2002                                                                                                                                                                                                  |
| 32.1  | Certifications      pursuant to Section 906 of the Sarbanes-Oxley Act of  2002                                                                                                                                                                                                  |

----

Table of Contents

|   |                   | Las      Vegas Gaming, Inc. |
|--------|------------------------|-----------------------------|
|   |                   | (Registrant)                |
|   |                   |                        |   |   |
| Date:  | November      23, 2009 | By:                         | /s/      Jon D. Berkley |   |
|   |                   |                        | Jon      D. Berkley |   |
|   |                   | Its:                        | President      and Chief Executive Officer |   |
|   |                   |                        | (Principal      Executive Officer) |   |
|   |                   |                        |   |   |
| Date:  | November      23, 2009 | By:                         | /s/      Bruce A. Shepard |   |
|   |                   |                        | Bruce      A. Shepard |   |
|   |                   | Its:                        | Chief      Financial Officer |   |
|   |                   |                        | (Principal      Financial Officer) |   |

----

Table of Contents

EXHIBIT INDEX

| Exhibit |   | Document      Description                                                                                                                                                                                                                                                       |
|---------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2.1     |   | Asset      Purchase Agreement dated August 19, 2009 between the Company and Gaming      Arts, LLC, incorporated by reference to the Company’s Current Report on      Form 8-K/A filed with the Securities and Exchange Commission on August 27,      2009.                |
| 10.1    |   | Technology      Royalty Agreement dated August 6, 2009 between the Company and Perfect      Storm Software, LLC, incorporated by reference to the Company’s Quarterly      Report on Form 10-Q filed with the Securities and Exchange Commission on      August 19, 2009. |
| 10.2    |   | Secured Promissory Note dated June 1, 2009 in favor of      IGT.                                                                                                                                                                                                                |
| 10.3    |   | First Addendum to Intellectual Property Access Agreement      between the Company and IGT dated September 4, 2009 (to be effective June      1, 2009).                                                                                                                          |
| 10.4*   |   | First Addendum to License and Application Support      Agreement between the Company and IGT dated September 4, 2009 (to be      effective June 1, 2009).                                                                                                                       |
| 10.5    |   | Asset      Purchase Agreement dated November 4, 2009 between the Company and Session      Gaming, LLC, incorporated by reference to the Company’s Current Report on      Form 8-K filed with the Securities and Exchange Commission on November 20,      2009.            |
| 31.1    |   | Certifications pursuant to Section 302 of the      Sarbanes-Oxley Act of 2002                                                                                                                                                                                                   |
| 31.2    |   | Certifications pursuant to Section 302 of the      Sarbanes-Oxley Act of 2002                                                                                                                                                                                                   |
| 32.1    |   | Certifications pursuant to Section 906 of the      Sarbanes-Oxley Act of 2002                                                                                                                                                                                                   |

----

Table of Contents