<PAGE>

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

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

                         SECURITIES AND EXCHANGE COMMISSION
                                          
                              WASHINGTON, D.C., 20549
                                     FORM 10-Q

[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 

     FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998.

                                         OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

                           COMMISSION FILE NUMBER 0-21122


                               ARGOSY GAMING COMPANY
               (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


               DELAWARE                                     37-1304247
     (STATE OR OTHER JURISDICTION                        (I.R.S. EMPLOYER
           OF INCORPORATION)                            IDENTIFICATION NO.)

                                  219 PIASA STREET
                               ALTON, ILLINOIS 62002
                                   (618) 474-7500
           (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
              AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

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

                       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:  24,498,333 shares 
of Common Stock, $.01 par value per share, as of August 13, 1998.

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

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

<PAGE>
                                          
                                 TABLE OF CONTENTS
                                       PART I
                                          
                                          

<TABLE>
<CAPTION>
<S>                                                                         <C>
FINANCIAL STATEMENTS OF ARGOSY GAMING COMPANY
     Condensed Consolidated Balance Sheets                                    1
     Condensed Consolidated Statements of Operations                          2
     Condensed Consolidated Statements of Cash Flows                          4
     Notes to Condensed Consolidated Financial Statements                     5


FINANCIAL STATEMENTS OF GUARANTOR SUBSIDIARIES OF THE COMPANY'S FIRST MORTGAGE
   NOTES PROVIDED PURSUANT TO RULE 3-10 OF REGULATION S-X.

     FINANCIAL STATEMENTS OF ALTON GAMING COMPANY
          Condensed Balance Sheets                                            11
          Condensed Statements of Income                                      12
          Condensed Statements of Cash Flows                                  14
          Notes to Condensed Financial Statements                             15

     FINANCIAL STATEMENTS OF THE MISSOURI GAMING COMPANY
          Condensed Balance Sheets                                            16
          Condensed Statements of Operations                                  17
          Condensed Statements of Cash Flows                                  19
          Notes to Condensed Financial Statements                             20
     
     FINANCIAL STATEMENTS OF ARGOSY OF LOUISIANA, INC.
          Condensed Consolidated Balance Sheets                               21
          Condensed Consolidated Statements of Operations                     22
          Condensed Consolidated Statements of Cash Flows                     24
          Notes to Condensed Consolidated Financial Statements                25
     
     FINANCIAL STATEMENTS OF CATFISH QUEEN PARTNERSHIP IN COMMENDAM
          Condensed Balance Sheets                                            26
          Condensed Statements of Operations                                  27
          Condensed Statements of Cash Flows                                  29
          Notes to Condensed Financial Statements                             30
     
     FINANCIAL STATEMENTS OF JAZZ ENTERPRISES, INC.
          Condensed Balance Sheets                                            31
          Condensed Statements of Operations                                  32
          Condensed Statements of Cash Flows                                  34
          Notes to Condensed Financial Statements                             35

     FINANCIAL STATEMENTS OF THE INDIANA GAMING COMPANY
          Condensed Consolidated Balance Sheets                               36
          Condensed Consolidated Statements of Income                         37
          Condensed Consolidated Statements of Cash Flows                     39
          Notes to Condensed Consolidated Financial Statements                40
</TABLE>

<PAGE>


     

                           TABLE OF CONTENTS (CONTINUED)
                                          

<TABLE>
<CAPTION>
<S>                                                                         <C>
     FINANCIAL STATEMENTS OF INDIANA GAMING COMPANY, L.P.
          Condensed Balance Sheets                                            42
          Condensed Statements of Income                                      43
          Condensed Statements of Cash Flows                                  45
          Notes to Condensed Financial Statements                             46


MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS                                                                    48
          

                                      PART II
     
     
Item 1     Legal Proceedings                                                  56
Item 2     Changes in Securities                                              58
Item 3     Defaults upon Senior Securities                                    59
Item 4     Submission of Matters to a Vote of Security Holders                59
Item 5     Other Information                                                  60
Item 6     Exhibits and Reports on Form 8-K                                   60
</TABLE>


<PAGE>

                              ARGOSY GAMING COMPANY
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                       JUNE 30,     DECEMBER 31,
                                                                         1998           1997
                                                                       ---------    -----------
                                                                     (UNAUDITED)
<S>                                                                  <C>            <C>
CURRENT ASSETS:
     Cash and cash equivalents                                          $65,320        $59,354
     Other current assets                                                10,984         10,629
                                                                       --------       --------
          Total current assets                                           76,304         69,983
                                                                       --------       --------

PROPERTY AND EQUIPMENT, NET                                             402,728        390,343
                                                                       --------       --------

OTHER ASSETS:
     Restricted cash and cash equivalents                                13,952         25,545
     Other, net                                                          69,849         73,985
                                                                       --------       --------
          Total other assets                                             83,801         99,530
                                                                       --------       --------
TOTAL ASSETS                                                           $562,833       $559,856
                                                                       --------       --------
                                                                       --------       --------

CURRENT LIABILITIES:
     Accounts payable and accrued liabilities                           $55,351        $47,780
     Other current liabilities                                           19,809         21,219
                                                                       --------       --------
          Total current liabilities                                      75,160         68,999
                                                                       --------       --------

LONG-TERM DEBT                                                          423,758        436,442
OTHER LONG-TERM OBLIGATIONS                                               3,142          4,133
MINORITY INTERESTS IN EQUITY OF CONSOLIDATED SUBSIDIARIES                22,892         17,619

SERIES A CONVERTIBLE PREFERRED STOCK, $.01 PAR VALUE,
     10,000,000 shares authorized, 800 shares issued and outstanding      7,615
  
STOCKHOLDERS' EQUITY:
     Common stock, $.01 par; 60,000,000 shares authorized;
        24,498,333 shares issued and outstanding                            245            245
     Capital in excess of par                                            71,934         72,038
     Retained deficit                                                   (41,913)       (39,620)
                                                                       --------       --------
          Total stockholders' equity                                     30,266         32,663
                                                                       --------       --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                             $562,833       $559,856
                                                                       --------       --------
                                                                       --------       --------
</TABLE>

      See accompanying notes to condensed consolidated financial statements.


                                       1

<PAGE>

                              ARGOSY GAMING COMPANY
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                           SIX MONTHS ENDED
                                                       ------------------------
                                                        JUNE 30,      JUNE 30,
                                                         1998           1997
                                                       ---------     ----------
                                                      (UNAUDITED)   (UNAUDITED)
<S>                                                  <C>            <C>
REVENUES:
     Casino                                          $   224,873     $  157,584
     Admissions                                            7,200          3,465
     Food, beverage and other                             23,565         17,161
                                                       ---------     ----------
                                                         255,638        178,210
     Less promotional allowances                         (15,481)        (8,206)
                                                       ---------     ----------
Net revenues                                             240,157        170,004
                                                       ---------     ----------

COSTS AND EXPENSES:
     Casino                                              107,372         79,586
     Food, beverage and other                             19,710         14,083
     Other operating expenses                             13,303         13,752
     Selling, general and administrative                  48,093         35,041
     Depreciation and amortization                        16,371         16,402
     Development costs                                       267            323
     Severance expense                                                    1,750
                                                       ---------     ----------
                                                         205,116        160,937
                                                       ---------     ----------
Income from operations                                    35,041          9,067
                                                       ---------     ----------

OTHER INCOME (EXPENSE):
     Interest income                                       1,642          2,835
     Interest expense                                    (28,487)       (23,215)
                                                       ---------     ----------
                                                         (26,845)       (20,380)
                                                       ---------     ----------

Income (loss) before minority interests and income taxes   8,196        (11,313)
Minority interests                                       (10,224)        (3,314)
Income tax (expense) benefit                                (250)         1,345
                                                       ---------     ----------

NET LOSS                                                  (2,278)       (13,282)
Preferred Stock dividends                                    (15)
                                                       ---------     ----------

NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS           $  (2,293)    $  (13,282)
                                                       ---------     ----------
                                                       ---------     ----------

Basic loss per share                                    $  (0.09)      $  (0.54)
                                                       ---------     ----------
                                                       ---------     ----------

Diluted loss per share                                  $  (0.09)      $  (0.54)
                                                       ---------     ----------
                                                       ---------     ----------
</TABLE>

      See accompanying notes to condensed consolidated financial statements.


                                       2

<PAGE>

                               ARGOSY GAMING COMPANY
                  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                       (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                          THREE MONTHS ENDED
                                                                     ---------------------------
                                                                       JUNE 30,        JUNE 30,
                                                                         1998            1997
                                                                     -----------     -----------
                                                                     (UNAUDITED)     (UNAUDITED)
<S>                                                                  <C>             <C>
REVENUES:
     Casino                                                            $116,550        $81,292
     Admissions                                                           4,009          1,854
     Food, beverage and other                                            12,432          8,799
                                                                       --------        -------
                                                                        132,991         91,945
     Less promotional allowances                                         (8,534)        (4,436)
                                                                       --------        -------
Net revenues                                                            124,457         87,509
                                                                       --------        -------

COSTS AND EXPENSES:
     Casino                                                              54,749         40,365
     Food, beverage and other                                            10,361          7,192
     Other operating expenses                                             6,685          6,778
     Selling, general and administrative                                 24,828         17,400
     Depreciation and amortization                                        8,303          8,508
     Development costs                                                      141            160
                                                                       --------        -------
                                                                        105,067         80,403
                                                                       --------        -------
Income from operations                                                   19,390          7,106
                                                                       --------        -------

OTHER INCOME (EXPENSE):
     Interest income                                                        832          1,393
     Interest expense                                                   (14,195)       (11,313)
                                                                       --------        -------
                                                                        (13,363)        (9,920)
                                                                       --------        -------

Income (loss) before minority interests and income taxes                  6,027         (2,814)
Minority interests                                                       (5,618)        (2,450)
Income tax (expense) benefit                                               (150)           999
                                                                       --------        -------

NET INCOME (loss)                                                           259         (4,265)
Preferred Stock dividends                                                   (15)
                                                                       --------        -------

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS                      $244        $(4,265)
                                                                       --------        -------
                                                                       --------        -------

Basic income (loss) per share                                             $0.01         $(0.17)
                                                                       --------        -------
                                                                       --------        -------

Diluted income (loss) per share                                           $0.01         $(0.17)
                                                                       --------        -------
                                                                       --------        -------
</TABLE>

       See accompanying notes to condensed consolidated financial statements.

                                       3

<PAGE>

                               ARGOSY GAMING COMPANY
                  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                            SIX MONTHS ENDED
                                                                      --------------------------
                                                                        JUNE 30,      JUNE 30,
                                                                         1998           1997
                                                                      -----------    -----------
                                                                      (UNAUDITED)    (UNAUDITED)
<S>                                                                   <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss attributable to Common Shareholders                       $(2,293)      $(13,282)
     Adjustments to reconcile net loss to net cash
       provided by operating activities:
         Depreciation                                                    15,164         15,367
         Amortization                                                     2,163          2,017
         Accrued Preferred Stock dividends                                   15
         Compensation expense recognized on issuance of stock               132               
         Deferred income taxes                                                          (1,345)
         Minority interests                                              10,224          3,314
         Changes in operating assets and liabilities:
             Income taxes receivable                                                     9,144
             Other current assets                                            96          1,530
             Deposits                                                        40           (917)
             Accounts payable and other current liabilities               7,556            720
                                                                      ---------       --------
             Net cash provided by operating activities                   33,097         16,548
                                                                      ---------       --------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchases of property and equipment                                (25,887)       (46,486)
     Decrease in restricted cash held by trustees                        11,593         17,983
     Decrease in long term obligations                                   (2,500)        (3,015)
     Decrease (increase) in other assets                                    897           (381)
                                                                      ---------       --------
          Net cash used in investing activities                         (15,897)       (31,899)
                                                                      ---------       --------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Payments on long-term debt and installment contracts                (3,290)        (3,184)
     (Repayment of)  proceeds from partner loans                        (10,384)        26,125
     Partnership equity distributions                                    (3,774)              
     Proceeds (net of issuance costs) from sale of
          Preferred Stock and Warrants                                    7,365
     Payment of preferred equity return to partner                       (1,159)          (489)
     Decrease (increase) in other assets                                      8           (231)
                                                                      ---------       --------
          Net cash (used in) provided by financing activities           (11,234)        22,221
                                                                      ---------       --------
Net increase in cash and cash equivalents                                 5,966          6,870
Cash and cash equivalents, beginning of period                           59,354         38,284
                                                                      ---------       --------
Cash and cash equivalents, end of period                                $65,320        $45,154
                                                                      ---------       --------
                                                                      ---------       --------
</TABLE>

     See accompanying notes to condensed consolidated financial statements.

                                       4
<PAGE>

                               ARGOSY GAMING COMPANY
               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
                                    (UNAUDITED)
                       (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                          



1.   BASIS OF PRESENTATION

     Argosy Gaming Company (collectively with its subsidiaries, "Argosy" or 
"Company") is engaged in the business of providing casino style gaming and 
related entertainment to the public and, through its subsidiaries, operates 
riverboat casinos in Alton, Illinois; Lawrenceburg, Indiana; Riverside, 
Missouri; Baton Rouge, Louisiana; and Sioux City, Iowa. Indiana Gaming 
Company, L.P., ("Indiana Partnership") a limited partnership in which the 
Company is general partner and holds a 57.5% partnership interest, opened a 
riverboat casino and related entertainment and support facilities at a 
temporary site in Lawrenceburg, Indiana on December 10, 1996.  The Indiana 
Partnership opened its permanent pavilion on December 10, 1997.

     IMPAIRMENT OF LONG-LIVED ASSETS-When events or circumstances indicate 
that the carrying amount of long-lived assets to be held and used might not 
be recoverable, the expected future undiscounted cash flows from the assets 
is estimated and compared with the carrying amount of the assets.  If the sum 
of the estimated undiscounted cash flows is less than the carrying amount of 
the assets, an impairment loss is recorded.  The impairment loss is measured 
by comparing the fair value of the assets with their carrying amount.  
Long-lived assets that are held for disposal are reported at the lower of the 
assets' carrying amount of fair value less costs related to the assets' 
disposition.

     The accompanying unaudited condensed consolidated financial statements 
have been prepared in accordance with the instructions to Form 10-Q and 
Article 10 of Regulation S-X.  Accordingly, they do not include all of the 
information and footnotes required by generally accepted accounting 
principles for complete financial statements.  Interim results may not 
necessarily be indicative of results which may be expected for any other 
interim period or for the year as a whole.  For further information, refer to 
the financial statements and footnotes thereto for the year ended December 
31, 1997, included in the Company's Annual Report on Form 10-K (File No. 
0-21122).  The accompanying unaudited condensed consolidated financial 
statements contain all adjustments which are, in the opinion of management, 
necessary to present fairly the financial position and the results of 
operations for the periods indicated.  Such adjustments include only normal 
recurring accruals.  Certain 1997 amounts have been reclassified to conform 
to the 1998 financial statement presentation.  

     As of June 30, 1998 the Company is in a net operating loss position and, 
therefore, has recorded a valuation allowance of $14,900 against its deferred 
tax assets.

2.  SALE OF CONVERTIBLE PREFERRED STOCK AND WARRANTS

     On June 16, 1998, the Company issued $8,000 of Series A Convertible 
Preferred Stock, together with warrants to purchase an additional 292,612 
shares of Common Stock.  The Convertible Preferred Shares mature in seven 
years and the Company has the right to force conversion and/or redeem the 
Holders at maturity. The warrants expire in five years.

     The Convertible Preferred Shares provide for a 4% dividend per annum, 
payable in cash and/or in kind, at the time of conversion or maturity, at the 
Company's option.

                                       5

<PAGE>

                               ARGOSY GAMING COMPANY
               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
                               (UNAUDITED) CONTINUED
                       (IN THOUSANDS, EXCEPT PER SHARE DATA)


     Both the Convertible Preferred Shares and Warrants have a fixed initial 
strike price, which may be reset downward in 270 days depending on market 
conditions and is subject to adjustment upon the occurrence of certain 
events. The Convertible Preferred Shares will be convertible in increments in 
120 days and in full in 210 days, at a floating price.

     This transaction provides for put and call options which, subject to 
certain restrictions and limitations, allows for up to an additional $8,000 
of Convertible Preferred Shares and Warrants to be issued.

     The Convertible Preferred Shares are required to be redeemed by the 
Company if certain triggering events occur. 

3.  EARNINGS PER SHARE
     
     The following table sets forth the computation of basic and diluted 
earnings per share:


<TABLE>
<CAPTION>
                                                                        SIX MONTHS ENDED               THREE MONTHS ENDED
                                                                    --------------------------     -------------------------
                                                                     JUNE 30,        JUNE 30,       JUNE 30,        JUNE 30,
                                                                       1998            1997           1998            1997
                                                                    -----------    -----------     ----------     ----------
                                                                    (UNAUDITED)    (UNAUDITED)     (UNAUDITED)    (UNAUDITED)
<S>                                                                 <C>            <C>             <C>            <C>
NUMERATOR:
Net (loss) income                                                   $    (2,278)   $   (13,282)    $      259     $   (4,265)
Preferred stock dividends                                                   (15)                          (15)
                                                                    -----------    -----------     ----------     ----------

Numerator for basic and diluted earnings per share -  
      (Loss) income attributable to common shareholders             $    (2,293)   $   (13,282)    $      244     $   (4,265)


DENOMINATOR:
Denominator for basic earnings per share -  
      Weighted-average shares outstanding                            24,333,333     24,333,333     24,333,333     24,333,333

Effect of dilutive securities:
      Restricted stock                                                                                 89,677
      Employee stock options                                                                           49,904
                                                                    -----------    -----------     ----------     ----------

Dilutive potential common shares                                                                      139,581

Denominator for diluted earnings per share - adjusted
      Weighted-average shares and assumed conversions                24,333,333     24,333,333     24,472,914     24,333,333
                                                                    -----------    -----------     ----------     ----------
                                                                    -----------    -----------     ----------     ----------

Basic earnings per share                                            $     (0.09)   $     (0.54)    $     0.01     $    (0.17)
                                                                    -----------    -----------     ----------     ----------
                                                                    -----------    -----------     ----------     ----------

Diluted earnings per share                                          $     (0.09)   $     (0.54)    $     0.01     $    (0.17)
                                                                    -----------    -----------     ----------     ----------
                                                                    -----------    -----------     ----------     ----------
</TABLE>

                                       6

<PAGE>

                               ARGOSY GAMING COMPANY
               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
                               (UNAUDITED) CONTINUED
                       (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                          
                                          
                                          

     Additional employee and directors stock options to purchase 1,201,183 
shares of common stock at prices ranging from $3.625 to $19.375 were not 
included in the computation of diluted earnings per share because the options 
exercise price was greater than the average market price of the common shares 
and, therefore, the effect would be anti-dilutive.

     Warrants to purchase 292,612 shares of common stock at $3.89 per share 
were outstanding at June 30, 1998 but were not included in the computation of 
diluted earnings per share because the exercise price was greater than the 
average market price of the common shares and, therefore, the effect would be 
anti-dilutive.

     Convertible Preferred Stock (convertible into 2,473,195 shares of common 
stock at June 30, 1998) were issued during the three months ended June 30, 
1998 but were not included in the computation of diluted earnings as the 
amount of dividend and accretion recognized during the period per common 
share obtainable on conversion, exceeded basic earnings per share thus the 
effect would be anti-dilutive.

     12% Convertible Debentures (convertible into 6,497,175 shares of common 
stock at $17.70 per share) were outstanding at June 30, 1998 but were not 
included in the computation of diluted earnings per share as the net interest 
expense per common share obtainable on conversion exceeded basic earnings per 
share, thus the effect would be anti-dilutive.

4.  COMMITMENTS AND CONTINGENT LIABILITIES

     LAWRENCEBURG, INDIANA DEVELOPMENT--On December 10, 1996 the Indiana 
Partnership was awarded a gaming license and commenced operations.    Under 
terms of the Lawrenceburg partnership agreement, after the third anniversary 
date of commencement of operations at the Lawrenceburg casino, each limited 
partner has the right to sell its interest to the other partners (pro rata in 
accordance with their respective percentage interests).  In the event of this 
occurrence, if the partners cannot agree on a selling price, the Indiana 
Partnership will be sold in its entirety.

     OTHER--A predecessor entity to the Company ("Predecessor"), as a result 
of a certain shareholder loan transaction, could be subject to federal and 
certain state income taxes (plus interest and penalties, if any) if it is 
determined that it failed to satisfy all of the requirements of the 
S-Corporation provisions of the Internal Revenue Code ("Code") relating to 
the prohibition concerning a second class of stock.

                                       7

<PAGE>

                               ARGOSY GAMING COMPANY
               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
                               (UNAUDITED) CONTINUED
                       (IN THOUSANDS, EXCEPT PER SHARE DATA)

     An audit is currently being conducted by the Internal Revenue Service 
("IRS") of the Company's federal income tax returns for the 1992 and 1993 tax 
years and the IRS has proposed certain adjustments with respect to the 
Company and the Predecessor for the 1992 and 1993 tax years principally 
regarding the S Corporation status.  If the IRS successfully challenges the 
Predecessor's S-Corporation status, the Company would be required to pay 
federal and certain state income taxes on the Predecessor's taxable income 
from the commencement of its operations until February 25, 1993 (plus 
interest and penalties, if any, thereon until the date of payment).  If the 
Predecessor was required to pay federal and state income taxes on its taxable 
earnings through February 25, 1993, such payments could amount to 
approximately $12,900, including interest through June 30, 1998, but 
excluding penalties, if any.  The Company intends to protest these proposed 
adjustments to the Appeals Office of the IRS and vigorously contest these 
proposed adjustments.  While the Company believes the Predecessor has legal 
authority for its position that it is not subject to federal and certain 
state income taxes because it met the S-Corporation requirements, no 
assurances can be given that the Predecessor's position will be upheld.  This 
contingent liability could have a material adverse effect on the Company's 
results of operations, financial condition and cash flows.  No provision has 
been made for this contingency in the accompanying condensed consolidated 
financial statements.

     The Company is subject, from time to time, to various legal and 
regulatory proceedings, in the ordinary course of business.  The Company 
believes that current proceedings will not have a material effect on the 
financial condition of the Company.
                                          


5.   SUBSIDIARY GUARANTORS

     The Company has issued $235 million First Mortgage Notes, due 2004, 
("Mortgage Notes").  The Mortgage Notes rank senior in right of payment to 
all existing and future indebtedness of the Company.

     The Mortgage Notes are unconditionally guaranteed, on a joint and 
several basis, by the following wholly-owned subsidiaries of the Company: 
Alton Gaming Company, The Missouri Gaming Company, The St. Louis Gaming 
Company, Iowa Gaming Company, Jazz Enterprises, Inc., Argosy of Louisiana, 
Inc., Catfish Queen Partnership in Commendam and The Indiana Gaming Company 
(the "Guarantors").  The Mortgage Notes are secured, subject to certain prior 
liens, by a first lien on (i) substantially all of the assets of the Company 
including the assets used in the Company's Alton, Riverside, Baton Rouge and 
Sioux City operations, (ii) a pledge of all the capital stock of, and 
partnership interests in, the Company's subsidiaries, excluding the Company's 
partnership interest in its Sioux City property, (iii) a pledge of the 
intercompany notes payable to the Company from its subsidiaries and (iv) an 
assignment of the proceeds of the management agreement relating to the 
Lawrenceburg Casino project.  The collateral for the Mortgage Notes does not 
include the assets of the Indiana Partnership.  

     The following tables present summarized balance sheet information of the 
Company as of June 30, 1998 and December 31, 1997 and summarized operating 
statement information for the six and three months ended June 30, 1998 and 
1997. The column labeled "Parent Company" represents the holding company for 
each of the Company's direct subsidiaries, the column labeled "Guarantors" 
represents each of the Company's direct subsidiaries, all of which are 
wholly-owned by the parent company, and the column labeled "Non-Guarantors" 
represents the partnerships which operate the Company's casino in Sioux City 
and Lawrenceburg, Indiana.  The Company believes that separate financial 
statements and other disclosures regarding the Guarantors, except as 
otherwise required under Regulation S-X, are not material to investors.

                                       8

<PAGE>


                               ARGOSY GAMING COMPANY
                NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               (UNAUDITED) CONTINUED
                       (IN THOUSANDS, EXCEPT PER SHARE DATA)


     Summarized balance sheet information as of June 30, 1998 and December 
31, 1997 is as follows:

<TABLE>
<CAPTION>
                                                                    JUNE 30, 1998
                                         ----------------------------------------------------------------------
                                          PARENT                        NON-  
                                          COMPANY     GUARANTORS     GUARANTORS     ELIMINATIONS   CONSOLIDATED
                                         --------     ----------     ----------     ------------   ------------
<S>                                      <C>          <C>            <C>            <C>            <C>         
ASSETS:
     Current assets                      $ 28,381       $ 24,730       $ 34,094      $ (10,901)      $ 76,304
     Non-current assets                   367,947        355,373        230,574       (467,365)       486,529
                                         --------       --------       --------      ---------       --------
                                         $396,328       $380,103       $264,668      $(478,266)      $562,833
                                         --------       --------       --------      ---------       --------
                                         --------       --------       --------      ---------       --------

LIABILITIES AND EQUITY:
     Current liabilities                 $  8,447       $ 33,790       $ 66,619      $ (33,696)      $ 75,160
     Non-current liabilities              350,000        295,207        135,118       (330,533)       449,792
     Convertible Preferred Stock            7,615                                                       7,615
     Stockholders' equity                  30,266         51,106         62,931       (114,037)        30,266
                                         --------       --------       --------      ---------       --------
                                         $396,328       $380,103       $264,668      $(478,266)      $562,833
                                         --------       --------       --------      ---------       --------
                                         --------       --------       --------      ---------       --------
</TABLE>

<TABLE>
<CAPTION>
                                                                    DECEMBER  31, 1997
                                         ----------------------------------------------------------------------
                                          PARENT                         NON-  
                                          COMPANY     GUARANTORS     GUARANTORS     ELIMINATIONS   CONSOLIDATED
                                         --------     ----------     ----------     ------------   ------------
<S>                                      <C>          <C>            <C>            <C>            <C>         
ASSETS:
     Current assets                      $ 10,106       $ 27,874       $ 44,581      $ (12,578)      $ 69,983
     Non-current assets                   381,368        387,009        222,577       (501,081)       489,873
                                         --------       --------       --------      ---------       --------
                                         $391,474       $414,883       $267,158      $(513,659)      $559,856
                                         --------       --------       --------      ---------       --------
                                         --------       --------       --------      ---------       --------


LIABILITIES AND EQUITY:
     Current liabilities                 $  8,811       $ 20,595       $ 57,088      $ (17,495)      $ 68,999
     Non-current liabilities              350,000        348,504        169,605       (409,915)       458,194
     Stockholders' equity                  32,663         45,784         40,465        (86,249)        32,663
                                         --------       --------       --------      ---------       --------
                                         $391,474       $414,883       $267,158      $(513,659)      $559,856
                                         --------       --------       --------      ---------       --------
                                         --------       --------       --------      ---------       --------
</TABLE>

                                       9

<PAGE>

                              ARGOSY GAMING COMPANY
               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              (UNAUDITED) CONTINUED
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

     Summarized operating statement information for the six and three months 
ended June 30, 1998 and 1997 is as follows:

<TABLE>
<CAPTION>
                                                            SIX MONTHS ENDED JUNE 30, 1998
                                         ----------------------------------------------------------------------
                                          PARENT                         NON-  
                                          COMPANY      GUARANTORS     GUARANTORS     ELIMINATIONS  CONSOLIDATED
                                         --------      ----------     ----------     ------------  ------------
<S>                                       <C>           <C>            <C>            <C>            <C>         
Net revenues                              $    80       $112,041       $140,116       $(12,080)      $240,157
Costs and expenses                          5,100         98,379        102,263           (626)       205,116
Net interest expense (income)              19,031         (2,640)         9,796            658         26,845
Net (loss) income                          (2,293)         9,828         21,324        (31,152)        (2,293)
</TABLE>
<TABLE>
<CAPTION>
                                                              SIX MONTHS ENDED JUNE 30, 1997
                                         ----------------------------------------------------------------------
                                          PARENT                          NON-  
                                         COMPANY       GUARANTORS     GUARANTORS     ELIMINATIONS  CONSOLIDATED
                                         --------      ----------     ----------     ------------  ------------
<S>                                      <C>            <C>             <C>            <C>           <C>         
Net revenues                             $  3,358       $100,973        $72,608        $(6,935)      $170,004
Costs and expenses                          8,975         93,539         62,885         (4,462)       160,937
Net interest expense                       15,972            535          2,086          1,787         20,380
Net (loss) income                        $(13,282)      $  3,680        $ 4,896        $(8,576)      $(13,282)
</TABLE>
<TABLE>
<CAPTION>
                                                                THREE MONTHS ENDED JUNE 30, 1998
                                         ----------------------------------------------------------------------
                                          PARENT                         NON-  
                                          COMPANY      GUARANTORS     GUARANTORS     ELIMINATIONS  CONSOLIDATED
                                         --------      ----------     ----------     ------------  ------------
<S>                                        <C>           <C>            <C>            <C>           <C>         
Net revenues                               $  (87)       $56,421        $74,888        $(6,765)      $124,457
Costs and expenses                          2,227         49,935         52,758            147        105,067
Net interest expense (income)               9,495         (1,335)         4,896            307         13,363
Net income (loss)                             244          5,281         11,903        (17,184)           244
</TABLE>
<TABLE>
<CAPTION>
                                                                THREE MONTHS ENDED JUNE 30, 1997
                                         ----------------------------------------------------------------------
                                          PARENT                         NON-  
                                         COMPANY       GUARANTORS     GUARANTORS     ELIMINATIONS  CONSOLIDATED
                                         --------      ----------     ----------     ------------  ------------
<S>                                       <C>            <C>            <C>            <C>            <C>         
Net revenues                              $ 1,500        $52,143        $39,596        $(5,730)       $87,509
Costs and expenses                          3,251         46,821         33,170         (2,839)        80,403
Net interest expense                        7,905            (19)           727          1,307          9,920
Net (loss) income                         $(4,265)       $ 2,940        $ 4,321        $(7,261)       $(4,265)
</TABLE>

                                       10


<PAGE>


                                ALTON GAMING COMPANY
                              CONDENSED BALANCE SHEETS
                  (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                       JUNE 30,      DECEMBER 31,
                                                                         1998            1997
                                                                      -----------    ------------
                                                                      (UNAUDITED)
<S>                                                                   <C>            <C>
CURRENT ASSETS:
     Cash                                                               $ 3,002        $ 3,807
     Other current assets                                                 1,788          1,450
                                                                       --------       --------
          Total current assets                                            4,790          5,257

DUE FROM AFFILIATES                                                      18,394         10,405

NET PROPERTY AND EQUIPMENT                                               27,665         27,447

OTHER ASSETS                                                                  3              6
                                                                       --------       --------

TOTAL ASSETS                                                            $50,852        $43,115
                                                                       --------       --------
                                                                       --------       --------


CURRENT LIABILITIES:
     Accounts payable                                                   $ 1,852        $   799
     Income taxes payable to affiliate                                    2,701            214
     Other accrued liabilities                                            4,966          4,395
                                                                       --------       --------
          Total current liabilities                                       9,519          5,408
                                                                       --------       --------

OTHER LONG-TERM OBLIGATIONS - RELATED PARTY                                 193            186

DEFERRED INCOME TAXES                                                     3,648          3,745

STOCKHOLDER'S EQUITY:
     Common stock - $1 par value, 1,000 shares authorized,                     
        issued and outstanding                                                1              1
     Capital in excess of par                                               256            256
     Retained earnings                                                   37,235         33,519
                                                                       --------       --------
          Total stockholder's equity                                     37,492         33,776
                                                                       --------       --------

TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY                              $50,852        $43,115
                                                                       --------       --------
                                                                       --------       --------
</TABLE>

                 See accompanying notes to condensed financial statements.

                                       11

<PAGE>


                                ALTON GAMING COMPANY
                           CONDENSED STATEMENTS OF INCOME
                                   (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                            SIX MONTHS ENDED
                                                       --------------------------
                                                        JUNE 30,        JUNE 30,
                                                          1998            1997
                                                       -----------    -----------
                                                       (UNAUDITED)    (UNAUDITED)
<S>                                                    <C>            <C>
REVENUES:
     Casino                                              $34,317        $32,055
     Food, beverage and other                              3,339          3,613
                                                        --------        -------
                                                          37,656         35,668
     Less promotional allowances                          (1,208)          (983)
                                                        --------        -------
Net revenues                                              36,448         34,685
                                                        --------        -------

COSTS AND EXPENSES
     Casino                                               16,051         15,848
     Food, beverage and other                              2,964          3,423
     Other operating expenses                              2,692          2,737
     Selling, general and administrative                   5,719          5,260
     Depreciation and amortization                         1,943          2,109
     Management fees - related party                       1,007          1,288
                                                        --------        -------
                                                          30,376         30,665
                                                        --------        -------
Income from operations                                     6,072          4,020
                                                        --------        -------
OTHER INCOME (EXPENSE)
     Interest income                                          41             23
     Interest expense                                         (7)            (7)
                                                        --------        -------
                                                              34             16
                                                        --------        -------
Income before income taxes                                 6,106          4,036
Income tax expense                                        (2,390)        (1,612)
                                                        --------        -------

NET INCOME                                               $ 3,716        $ 2,424
                                                        --------        -------
                                                        --------        -------
</TABLE>

               See accompanying notes to condensed financial statements.

                                       12

<PAGE>


                                ALTON GAMING COMPANY
                           CONDENSED STATEMENTS OF INCOME
                                   (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                           THREE MONTHS ENDED
                                                       --------------------------
                                                        JUNE 30,        JUNE 30,
                                                          1998            1997
                                                       -----------    -----------
                                                       (UNAUDITED)    (UNAUDITED)
<S>                                                    <C>            <C>
REVENUES:
     Casino                                              $17,288        $15,633
     Food, beverage and other                              1,706          1,796
                                                        --------       --------
                                                          18,994         17,429
     Less promotional allowances                            (604)          (486)
                                                        --------       --------
Net revenues                                              18,390         16,943
                                                        --------       --------
COSTS AND EXPENSES
     Casino                                                8,102          7,709
     Food, beverage and other                              1,461          1,653
     Other operating expenses                              1,345          1,285
     Selling, general and administrative                   2,817          2,529
     Depreciation and amortization                           979          1,089
     Management fees - related party                         345            467
                                                        --------       --------
                                                          15,049         14,732
                                                        --------       --------
Income from operations                                     3,341          2,211
                                                        --------       --------

OTHER INCOME (EXPENSE)
     Interest income                                          16             14
     Interest expense                                         (3)            (4)
                                                        --------       --------
                                                              13             10
                                                        --------       --------
Income before income taxes                                 3,354          2,221
Income tax expense                                        (1,321)          (886)
                                                        --------       --------

NET INCOME                                               $ 2,033        $ 1,335
                                                        --------       --------
                                                        --------       --------
</TABLE>

           See accompanying notes to condensed financial statements.

                                       13

<PAGE>

                                ALTON GAMING COMPANY
                         CONDENSED STATEMENTS OF CASH FLOWS
                                   (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                           SIX MONTHS ENDED
                                                                      ---------------------------
                                                                       JUNE 30,         JUNE 30,
                                                                         1998             1997
                                                                      -----------     -----------
                                                                      (UNAUDITED)     (UNAUDITED)
<S>                                                                   <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                               $3,716         $2,424
Adjustments to reconcile net income to net cash provided
   by operating activities:
       Depreciation                                                       1,943          2,109
       Deferred income taxes                                                (94)            87
       Changes in operating assets and liabilities:
            Other current assets                                           (338)          (186)
            Accounts payable                                              1,053         (1,020)
            Income taxes payable to affiliate                             2,487          1,528
            Other accrued liabilities                                       571            (88)
                                                                        -------        -------
            Net cash provided by operating activities                     9,338          4,854
                                                                        -------        -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment                                      (2,161)        (1,322)
                                                                        -------        -------
           Net cash used in investing activities                         (2,161)        (1,322)
                                                                        -------        -------

CASH FLOWS FROM FINANCING ACTIVITIES:
Due from affiliates                                                      (7,989)        (3,510)
Increase in other long-term obligations - related party                       7              7
                                                                        -------        -------
           Net cash used in financing activities                         (7,982)        (3,503)
                                                                        -------        -------

Net (decrease) increase in cash and cash equivalents                       (805)            29
Cash and cash equivalents, beginning of period                            3,807          3,563
                                                                        -------        -------
Cash and cash equivalents, end of period                                 $3,002         $3,592
                                                                        -------        -------
                                                                        -------        -------
</TABLE>

         See accompanying notes to condensed financial statements.

                                       14

<PAGE>


                                ALTON GAMING COMPANY
                      NOTES TO CONDENSED FINANCIAL STATEMENTS
                               (DOLLARS IN THOUSANDS)
                                          
                                          
1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     BASIS OF PRESENTATION - Alton Gaming Company ("Company"), an Illinois 
Corporation and a wholly-owned subsidiary of Argosy Gaming Company 
("Argosy"), is engaged in the business of providing casino-style gaming and 
related entertainment to the public through the operation of the Alton Belle 
Casino in Alton, Illinois.

     IMPAIRMENT OF LONG-LIVED ASSETS-When events or circumstances indicate 
that the carrying amount of long-lived assets to be held and used might not 
be recoverable, the expected future undiscounted cash flows from the assets 
is estimated and compared with the carrying amount of the assets.  If the sum 
of the estimated undiscounted cash flows is less than the carrying amount of 
the assets, an impairment loss is recorded.  The impairment loss is measured 
by comparing the fair value of the assets with their carrying amount.  
Long-lived assets that are held for disposal are reported at the lower of the 
assets' carrying amount of fair value less costs related to the assets' 
disposition.

     The accompanying unaudited condensed financial statements have been 
prepared in accordance with the instructions to Article 10 of Regulation S-X. 
Accordingly, they do not include all of the information and footnotes 
required by generally accepted accounting principles for complete financial 
statements. Interim results may not necessarily be indicative of results 
which may be expected for any other interim period or for the year as a 
whole.  For further information refer to the financial statements and 
footnotes thereto for the year ended December 31, 1997 included in Argosy's 
Annual Report on Form 10-K (File No. 0-21122).  The accompanying unaudited 
condensed financial statements contain all adjustments which are, in the 
opinion of management, necessary to present fairly the financial position and 
the results of operations for the periods indicated.  Such adjustments 
include only normal recurring accruals.  Certain 1997 amounts have been 
reclassified to conform to the 1998 presentation.

2.   COMMITMENTS AND CONTINGENCIES

     A predecessor entity to the Company ("Predecessor"), as a result of a 
certain shareholder loan transaction, could be subject to federal and certain 
state income taxes (plus interest and penalties, if any) if it is determined 
that it failed to satisfy all of the requirements of the S-Corporation 
provisions of the Internal Revenue Code ("Code") relating to the prohibition 
concerning a second class of stock.  

     An audit is currently being conducted by the Internal Revenue Service 
("IRS") of the Company's federal income tax returns for the 1992 and 1993 tax 
years and the IRS has proposed certain adjustments with respect to the 
Company and the Predecessor for the 1992 and 1993 tax years principally 
regarding the S Corporation status.  If the IRS successfully challenges the 
Predecessor's S-Corporation status, the Company would be required to pay 
federal and certain state income taxes on the Predecessor's taxable income 
from the commencement of its operations until February 25, 1993 (plus 
interest and penalties, if any, thereon until the date of payment).  If the 
Predecessor was required to pay federal and certain state income taxes on its 
taxable earnings through February 25, 1993, such payments could amount to 
approximately $12,900, including interest through June 30, 1998, but 
excluding penalties, if any.  The Company intends to protest these proposed 
adjustments to the Appeals Office of the IRS and vigorously contest these 
proposed adjustments.  While the Company believes the Predecessor has legal 
authority for its position that it is not subject to federal and certain 
state income taxes because it met the S-Corporation requirements, no 
assurances can be given that the Predecessor's position will be upheld.  This 
contingent liability could have a material adverse effect on the Company's 
results of operations, financial condition and cash flows.  No provision has 
been made for this contingency in the accompanying financial statements.

     Argosy has issued $235 million of 13 1/4% First Mortgage Notes, due 2004 
("Mortgage Notes").  The assets of the Company are pledged as collateral, and 
the Company is a guarantor, under the terms of the Mortgage Notes.

                                       15

<PAGE>

                            THE MISSOURI GAMING COMPANY
                              CONDENSED BALANCE SHEETS
                  (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                       JUNE 30,      DECEMBER 31,
                                                                         1998           1997
                                                                      -----------    ------------
                                                                      (UNAUDITED)
<S>                                                                   <C>            <C>
CURRENT ASSETS:
     Cash                                                               $ 4,696        $ 3,629
     Income taxes receivable from affiliate                                 664             94
     Other current assets                                                 1,729          1,897
                                                                       --------       --------
          Total current assets                                            7,089          5,620

NET PROPERTY AND EQUIPMENT                                               68,954         70,878

OTHER ASSETS                                                              1,619          2,198
                                                                       --------       --------

TOTAL ASSETS                                                            $77,662        $78,696
                                                                       --------       --------
                                                                       --------       --------

CURRENT LIABILITIES:
     Accounts payable                                                   $   868        $ 1,352
     Other accrued liabilities                                            5,526          3,692
                                                                       --------       --------
          Total current liabilities                                       6,394          5,044
                                                                       --------       --------

DUE TO AFFILIATES                                                        53,908         56,007

DEFERRED INCOME TAXES                                                     2,151          1,851

STOCKHOLDER'S EQUITY:
     Common stock - $.01 par value, 1000 shares authorized,
        issued and outstanding                                                 
     Capital in excess of par                                             5,000          5,000
     Retained earnings                                                   10,209         10,794
                                                                       --------       --------
          Total stockholder's equity                                     15,209         15,794
                                                                       --------       --------

TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY                              $77,662        $78,696
                                                                       --------       --------
                                                                       --------       --------
</TABLE>

             See accompanying notes to condensed financial statements.

                                       16

<PAGE>

                          THE MISSOURI GAMING COMPANY
                      CONDENSED STATEMENTS OF OPERATIONS
                                (IN THOUSANDS)

<TABLE>
<CAPTION>

                                                  SIX MONTHS ENDED
                                            ----------------------------
                                              JUNE 30,         JUNE 30,
                                                1998             1997
                                            -----------      -----------
                                            (UNAUDITED)      (UNAUDITED)
<S>                                         <C>              <C>
REVENUES
  Casino                                      $35,355          $31,667
  Food, beverage and other                      5,993            4,936
                                              -------          -------
                                               41,348           36,603
  Less promotional allowances                  (3,488)          (2,428)
                                              -------          -------
Net revenues                                   37,860           34,175
                                              -------          -------

COSTS AND EXPENSES
  Casino                                       19,275           16,792
  Food, beverage and other                      4,643            4,151
  Other operating expenses                      2,196            1,874
  Selling, general and administrative           7,340            5,813
  Depreciation and amortization                 3,031            2,738
                                              -------          -------
                                               36,485           31,368
                                              -------          -------
Income from operations                          1,375            2,807
                                              -------          -------

OTHER INCOME (EXPENSE):
Interest income                                    25               94
Interest expense                               (2,338)          (2,758)
                                              -------          -------
                                               (2,313)          (2,664)
                                              -------          -------
(Loss) income before income taxes                (938)             143
Income tax benefit (expense)                      353              (82)
                                              -------          -------
NET (LOSS) INCOME                             $  (585)         $    61
                                              -------          -------
                                              -------          -------

</TABLE>

           See accompanying notes to condensed financial statements.


                                       17

<PAGE>

                          THE MISSOURI GAMING COMPANY
                      CONDENSED STATEMENTS OF OPERATIONS
                                (IN THOUSANDS)

<TABLE>
<CAPTION>

                                                 THREE MONTHS ENDED
                                            ----------------------------
                                              JUNE 30,         JUNE 30,
                                                1998             1997
                                            -----------      -----------
                                            (UNAUDITED)      (UNAUDITED)
<S>                                         <C>              <C>
REVENUES
  Casino                                      $16,996          $15,217
  Food, beverage and other                      2,940            2,439
                                              -------          -------
                                               19,936           17,656
  Less promotional allowances                  (1,690)          (1,268)
                                              -------          -------
Net revenues                                   18,246           16,388
                                              -------          -------

COSTS AND EXPENSES
  Casino                                        9,174            8,034
  Food, beverage and other                      2,281            2,055
  Other operating expenses                      1,091              914
  Selling, general and administrative           3,385            2,853
  Depreciation and amortization                 1,554            1,369
                                              -------          -------
                                               17,485           15,225
                                              -------          -------
Income from operations                            761            1,163
                                              -------          -------

OTHER INCOME (EXPENSE):
Interest income                                     8               59
Interest expense                               (1,130)          (1,364)
                                              -------          -------
                                               (1,122)          (1,305)
                                              -------          -------
Loss before income taxes                         (361)            (142)
Income tax benefit                                192               55
                                              -------          -------
NET LOSS                                      $  (169)         $   (87)
                                              -------          -------
                                              -------          -------

</TABLE>

           See accompanying notes to condensed financial statements.


                                       18

<PAGE>

                          THE MISSOURI GAMING COMPANY
                      CONDENSED STATEMENTS OF CASH FLOWS
                                (IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                            SIX MONTHS ENDED
                                                                      ----------------------------
                                                                        JUNE 30,         JUNE 30,
                                                                          1998             1997
                                                                      -----------      -----------
                                                                      (UNAUDITED)      (UNAUDITED)
<S>                                                                   <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income                                                       $  (585)         $    61
Adjustments to reconcile net (loss) income to net cash provided
  by operating activities
     Depreciation                                                         2,951            2,618
     Amortization                                                            80              120
     Deferred income taxes                                                  300                7
     Changes in operating assets and liabilities:
          Income taxes receivable from affiliate                           (570)              74
          Other current assets                                              168              366
          Accounts payable                                                 (484)          (1,941)
          Other accrued liabilities                                       1,834              268
          Other assets                                                      576             (136)
                                                                        -------          -------
          Net cash provided by operating activities                       4,270            1,437
                                                                        -------          -------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment                                      (1,104)            (921)
                                                                        -------          -------
     Net cash used in investing activities                               (1,104)            (921)
                                                                        -------          -------

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on installment contracts                                                            (94)
Due to affiliates                                                        (2,099)              61
                                                                        -------          -------
     Net cash used in financing activities                               (2,099)             (33)
                                                                        -------          -------

Net increase in cash and cash equivalents                                 1,067              483
Cash and cash equivalents, beginning of period                            3,629            6,143
                                                                        -------          -------
Cash and cash equivalents, end of period                                $ 4,696          $ 6,626
                                                                        -------          -------
                                                                        -------          -------

</TABLE>

           See accompanying notes to condensed financial statements.


                                       19

<PAGE>

                          THE MISSOURI GAMING COMPANY
                    NOTES TO CONDENSED FINANCIAL STATEMENTS
                            (DOLLARS IN THOUSANDS)


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          The Missouri Gaming Company ("Company") (a Missouri corporation
     and a wholly owned subsidiary of Argosy Gaming Company, ("Argosy"))
     owns and operates a riverboat casino and related facilities in
     Riverside, Missouri.

          IMPAIRMENT OF LONG-LIVED ASSETS-When events or circumstances
     indicate that the carrying amount of long-lived assets to be held and
     used might not be recoverable, the expected future undiscounted cash
     flows from the assets is estimated and compared with the carrying
     amount of the assets.  If the sum of the estimated undiscounted cash
     flows is less than the carrying amount of the assets, an impairment
     loss is recorded.  The impairment loss is measured by comparing the
     fair value of the assets with their carrying amount.  Long-lived
     assets that are held for disposal are reported at the lower of the
     assets' carrying amount of fair value less costs related to the
     assets' disposition.

          The accompanying unaudited condensed financial statements have
     been prepared in accordance with the instructions to Article 10 of
     Regulation S-X.  Accordingly, they do not include all of the
     information and footnotes required by generally accepted accounting
     principles for complete financial statements.  Interim results may not
     necessarily be indicative of results which may be expected for any
     other interim period or for the year as a whole.  For further
     information refer to the financial statements and footnotes thereto
     for the year ended December 31, 1997 included in Argosy's Annual
     Report on Form 10-K (File No. 0-21122).  The accompanying unaudited
     condensed financial statements contain all adjustments which are, in
     the opinion of management, necessary to present fairly the financial
     position and the results of operations for the periods indicated. 
     Such adjustments include only normal recurring accruals.  Certain 1997
     amounts have been reclassified to conform to the 1998 presentation.


2.   COMMITMENTS AND CONTINGENCIES

          The Company is restricted from making certain distributions to
     Argosy and other affiliates unless approved by state gaming
     authorities.

          Argosy has issued $235 million of 13 1/4% First Mortgage Notes,
     due 2004 ("Mortgage Notes").  The assets of the Company are pledged as
     collateral, and the Company is a guarantor, under the terms of the
     Mortgage Notes.


                                       20

<PAGE>

                           ARGOSY OF LOUISIANA, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>

                                                                        JUNE 30,       DECEMBER 31,
                                                                          1998             1997
                                                                      -----------      ------------
                                                                      (UNAUDITED)
<S>                                                                   <C>              <C>
CURRENT ASSETS:
  Cash and cash equivalents                                            $  2,956          $ 3,429
  Other current assets                                                    1,821            1,655
                                                                       --------          -------
      Total current assets                                                4,777            5,084

NET PROPERTY AND EQUIPMENT                                               41,927           43,896

OTHER ASSETS                                                              1,767            1,821
                                                                       --------          -------
TOTAL ASSETS                                                           $ 48,471          $50,801
                                                                       --------          -------
                                                                       --------          -------

CURRENT LIABILITIES:
  Accounts payable                                                     $    622          $   771
  Due to affiliates                                                       2,557            1,795
  Other accrued liabilities                                               6,222            5,013
  Current maturities of long-term debt-related party                     10,268           10,268
                                                                       --------          -------
      Total current liabilities                                          19,669           17,847
                                                                       --------          -------

LONG-TERM DEBT-RELATED PARTY                                             37,875           37,842

MINORITY INTEREST IN CONSOLIDATED PARTNERSHIP                             2,265            2,672

STOCKHOLDER'S DEFICIT:
  Common stock - $1 par value, 1,000 shares authorized
    issued and outstanding                                                    1                1
  Accumulated deficit                                                   (11,339)          (7,561)
                                                                       --------          -------
      Total stockholder's deficit                                       (11,338)          (7,560)
                                                                       --------          -------
TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIT                            $ 48,471          $50,801
                                                                       --------          -------
                                                                       --------          -------

</TABLE>

    See accompanying notes to condensed consolidated financial statements.


                                       21

<PAGE>

                           ARGOSY OF LOUISIANA, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                (IN THOUSANDS)

<TABLE>
<CAPTION>

                                                        SIX MONTHS ENDED
                                                  ----------------------------
                                                    JUNE 30,         JUNE 30,
                                                      1998             1997
                                                  -----------      -----------
                                                  (UNAUDITED)      (UNAUDITED)
<S>                                               <C>              <C>
REVENUES
  Casino                                            $24,285          $26,196
  Food, beverage and other                            3,333            3,686
                                                    -------          -------
                                                     27,618           29,882
  Less promotional allowances                        (2,075)          (2,238)
                                                    -------          -------
Net revenues                                         25,543           27,644
                                                    -------          -------

COST AND EXPENSES
  Casino                                             14,736           15,081
  Food, beverage and other                            3,005            3,462
  Other operating expenses                            2,564            2,552
  Selling, general and administrative                 6,150            6,560
  Depreciation and amortization                       2,606            2,789
                                                    -------          -------
                                                     29,061           30,444
                                                    -------          -------
Loss from operations                                 (3,518)          (2,800)
Interest (expense) income net:
  Interest to related party                            (701)            (802)
  Other                                                  34               47
                                                    -------          -------
Loss  before minority interest and income taxes      (4,185)          (3,555)
Minority interest                                       407              342
Income tax benefit                                                       597
                                                    -------          -------
NET LOSS                                            $(3,778)         $(2,616)
                                                    -------          -------
                                                    -------          -------

</TABLE>

    See accompanying notes to condensed consolidated financial statements.


                                       22

<PAGE>

                             ARGOSY OF LOUISIANA, INC.
                  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                           THREE MONTHS ENDED
                                                       -------------------------
                                                        JUNE 30,       JUNE 30,
                                                          1998           1997
                                                       -----------    ----------
                                                       (UNAUDITED)    (UNAUDITED)
<S>                                                    <C>            <C>
REVENUES
  Casino                                                 $12,181        $13,405
  Food, beverage and other                                 1,649          1,973
                                                         -------        -------
                                                          13,830         15,378
  Less promotional allowances                               (991)        (1,247)
                                                         -------        -------
Net revenues                                              12,839         14,131
                                                         -------        -------
COST AND EXPENSES
  Casino                                                   7,264          7,750
  Food, beverage and other                                 1,507          1,828
  Other operating expenses                                 1,174          1,228
  Selling, general and administrative                      2,828          3,546
  Depreciation and amortization                            1,313          1,397
                                                         -------        -------
                                                          14,086         15,749
                                                         -------        -------
Loss from operations                                      (1,247)        (1,618)
Interest (expense) income net:
  Interest to related party                                 (350)          (401)
  Other                                                       14             27
                                                         -------        -------
Loss  before minority interest and income taxes           (1,583)        (1,992)
Minority interest                                            153            192
Income tax benefit                                                          181
                                                         -------        -------
NET LOSS                                                 $(1,430)       $(1,619)
                                                         -------        -------
                                                         -------        -------
</TABLE>
                                       
      See accompanying notes to condensed consolidated financial statements.


                                      23
<PAGE>

                            ARGOSY OF LOUISIANA, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                            SIX MONTHS ENDED
                                                       -------------------------
                                                        JUNE 30,       JUNE 30,
                                                          1998           1997
                                                       -----------    ----------
                                                       (UNAUDITED)    (UNAUDITED)
<S>                                                    <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                 $(3,778)       $(2,616)
Adjustments to reconcile net loss to net cash
 used in operating activities:
  Depreciation                                             2,552          2,549
  Amortization                                                54            240
  Minority interest                                         (407)          (342)
  Deferred income taxes                                                    (597)
  Changes in operating assets and liabilities:
    Other current assets                                    (166)           185
    Accounts payable                                        (149)          (643)
    Other accrued liabilities                              1,209            985
                                                         -------        -------
    Net cash used in operating activities                   (685)          (239)
                                                         -------        -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment                         (583)          (258)
                                                         -------        -------
    Net cash used in investing activities                   (583)          (258)
                                                         -------        -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in due to affiliates                                795            896
                                                         -------        -------
    Net cash provided by financing activities                795            896
                                                         -------        -------
Net (decrease) increase in cash and cash equivalents        (473)           399
Cash and cash equivalents, beginning of period             3,429          3,051
                                                         -------        -------
Cash and cash equivalents, end of period                 $ 2,956        $ 3,450
                                                         -------        -------
                                                         -------        -------
</TABLE>

      See accompanying notes to condensed consolidated financial statements.


                                      24
<PAGE>

                            ARGOSY OF LOUISIANA, INC.
               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              (DOLLARS IN THOUSANDS)

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     DESCRIPTION OF BUSINESS

          Argosy of Louisiana, Inc. (collectively with its controlled
     partnership Catfish Queen Partnership in Commendam ("Partnership")
     "the Company") was formed on July 29, 1993.  The Company entered a
     partnership agreement with Jazz Enterprises, Inc. ("Jazz") to form the
     Partnership to provide riverboat gaming and related entertainment in
     Baton Rouge, Louisiana.  The Company, a wholly owned subsidiary of
     Argosy Gaming Company (Argosy),  is the 90% general partner of the
     Partnership, along with the 10% partner in commendam Jazz, which
     became a wholly owned subsidiary of Argosy in 1995.
     
          IMPAIRMENT OF LONG-LIVED ASSETS-When events or circumstances
     indicate that the carrying amount of long-lived assets to be held and
     used might not be recoverable, the expected future undiscounted cash
     flows from the assets is estimated and compared with the carrying
     amount of the assets.  If the sum of the estimated undiscounted cash
     flows is less than the carrying amount of the assets, an impairment
     loss is recorded.  The impairment loss is measured by comparing the
     fair value of the assets with their carrying amount.  Long-lived
     assets that are held for disposal are reported at the lower of the
     assets' carrying amount of fair value less costs related to the
     assets' disposition.

          The accompanying unaudited condensed consolidated financial
     statements have been prepared in accordance with the instructions to
     Article 10 of Regulation S-X.  Accordingly, they do not include all of
     the information and footnotes required by generally accepted
     accounting principles for complete financial statements.  Interim
     results may not necessarily be indicative of results which may be
     expected for any other interim period or for the year as a whole.  For
     further information refer to the financial statements and footnotes
     thereto for the year ended December 31, 1997 included in Argosy's
     Annual Report on Form 10-K (File No. 0-21122).  The accompanying
     unaudited condensed consolidated financial statements contain all
     adjustments which are, in the opinion of management, necessary to
     present fairly the financial position and the results of operations
     for the periods indicated.  Such adjustments include only normal
     recurring accruals.  Certain 1997 amounts have been reclassified to
     conform to the 1998 presentation.

2.   COMMITMENTS 

          The City of Baton Rouge and the Parish of East Baton Rouge 
     (collectively referred to as "City-Parish") and Jazz have an agreement 
     which requires Jazz and the Company to pay to the City-Parish $2.50 per 
     passenger.  Additionally, Jazz agreed to pay to the City-Parish an 
     additional passenger fee which is now $2.50 per passenger, until 
     construction of a hotel commences by Jazz or another Argosy affiliate. 
     Argosy has guaranteed the additional $2.50 per passenger. Through June 
     30, 1998, the Company has paid all admission payments due under the 
     above agreements.

          Argosy has issued $235 million of 13 1/4% First Mortgage Notes,
     due 2004 ("Mortgage Notes").  The assets of the Company are pledged as
     collateral, and the Company is a guarantor, under the terms of the
     Mortgage Notes.


                                      25
<PAGE>

                    CATFISH QUEEN PARTNERSHIP IN COMMENDAM
                            CONDENSED BALANCE SHEETS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                            JUNE 30,      DECEMBER 31,
                                                              1998             1997
                                                           -----------     ------------
                                                           (UNAUDITED)
<S>                                                        <C>            <C>        
CURRENT ASSETS:
  Cash and cash equivalents                                  $ 2,956        $ 3,429
  Other current assets                                           964            802
                                                             -------        -------
       Total current assets                                    3,920          4,231

NET PROPERTY AND EQUIPMENT                                    41,610         43,579

OTHER ASSETS                                                   1,767          1,821
                                                             -------        -------
TOTAL ASSETS                                                 $47,297        $49,631
                                                             -------        -------
                                                             -------        -------
CURRENT LIABILITIES:
  Accounts payable                                           $   622        $   771
  Other accrued liabilities                                    4,486          4,071
  Accrued interest-related party                               1,603            902
  Due to affiliates                                            2,557          1,795
  Notes payable and current maturities of long-term
    debt-related party                                        10,268         10,268
                                                             -------        -------
       Total current liabilities                              19,536         17,807

LONG-TERM DEBT-RELATED PARTY                                   9,103          9,103
PARTNERS' EQUITY                                              18,658         22,721
                                                             -------        -------
TOTAL LIABILITIES AND PARTNERS' EQUITY                       $47,297        $49,631
                                                             -------        -------
                                                             -------        -------
</TABLE>
                                       
            See accompanying notes to condensed financial statements.


                                      26
<PAGE>

                    CATFISH QUEEN PARTNERSHIP IN COMMENDAM
                       CONDENSED STATEMENTS OF OPERATIONS
                                   (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                            SIX MONTHS ENDED
                                                       -------------------------
                                                        JUNE 30,       JUNE 30,
                                                          1998           1997
                                                       -----------    ----------
                                                       (UNAUDITED)    (UNAUDITED)
<S>                                                    <C>            <C>
REVENUES:
  Casino                                                 $24,285        $26,196
  Food, beverage and other                                 3,333          3,686
                                                         -------        -------
                                                          27,618         29,882
  Less promotional allowances                             (2,075)        (2,238)
                                                         -------        -------
Net revenues                                              25,543         27,644
                                                         -------        -------
COSTS AND EXPENSES
  Casino                                                  14,736         15,081
  Food, beverage and other                                 3,005          3,462
  Other operating expenses                                 2,564          2,552
  Selling, general and administrative                      6,024          6,425
  Depreciation and amortization                            2,606          2,789
                                                         -------        -------
                                                          28,935         30,309
                                                         -------        -------
Loss from operations                                      (3,392)        (2,665)
INTEREST (EXPENSE) INCOME:
  Related parties                                           (701)          (802)
  Other                                                       30             47
                                                         -------        -------
                                                            (671)          (755)
                                                         -------        -------
NET LOSS                                                 $(4,063)       $(3,420)
                                                         -------        -------
                                                         -------        -------
</TABLE>

           See accompanying notes to condensed financial statements.


                                      27
<PAGE>

                    CATFISH QUEEN PARTNERSHIP IN COMMENDAM
                       CONDENSED STATEMENTS OF OPERATIONS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                           THREE MONTHS ENDED
                                                       -------------------------
                                                        JUNE 30,       JUNE 30,
                                                          1998           1997
                                                       -----------    ----------
                                                       (UNAUDITED)    (UNAUDITED)
<S>                                                    <C>            <C>
REVENUES:
  Casino                                                 $12,181        $13,405
  Food, beverage and other                                 1,649          1,973
                                                         -------        -------
                                                          13,830         15,378
  Less promotional allowances                               (991)        (1,247)
                                                         -------        -------
Net revenues                                              12,839         14,131
                                                         -------        -------
COSTS AND EXPENSES
  Casino                                                   7,263          7,750
  Food, beverage and other                                 1,507          1,828
  Other operating expenses                                 1,174          1,228
  Selling, general and administrative                      2,763          3,478
  Depreciation and amortization                            1,313          1,397
                                                         -------        -------
                                                          14,020         15,681
                                                         -------        -------

Loss from operations                                      (1,181)        (1,550)
INTEREST (EXPENSE) INCOME:
  Related parties                                           (350)          (401)
  Other                                                       10             27
                                                         -------        -------
                                                            (340)          (374)
                                                         -------        -------
NET LOSS                                                 $(1,521)       $(1,924)
                                                         -------        -------
                                                         -------        -------
</TABLE>

           See accompanying notes to condensed financial statements.


                                      28
<PAGE>

                       CATFISH QUEEN PARTNERSHIP IN COMMENDAM
                         CONDENSED STATEMENTS OF CASH FLOWS
                                   (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                            SIX MONTHS ENDED
                                                                       --------------------------
                                                                        JUNE 30,       JUNE 30,
                                                                          1998           1997
                                                                       -----------    -----------
                                                                       (UNAUDITED)    (UNAUDITED)
<S>                                                                     <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                                $(4,063)       $(3,420)
Adjustments to reconcile net loss to net cash
   used in operating activities:
     Depreciation                                                         2,552          2,549
     Amortization                                                            54            240
     Changes in operating assets and liabilities:
          Other current assets                                             (162)           165
          Accounts payable                                                 (149)          (644)
          Accrued interest to related parties                               701            302
          Other accrued liabilities                                         415            448
                                                                        -------        -------
     Net cash used in operating activities                                 (652)          (360)
                                                                        -------        -------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment                                        (583)          (258)
                                                                        -------        -------
     Net cash used in investing activities                                 (583)          (258)
                                                                        -------        -------

CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in due to affiliates                                               762          1,017
                                                                        -------        -------
     Net cash provided by financing activities                              762          1,017
                                                                        -------        -------
Net (decrease) increase in cash and cash equivalents                       (473)           399
Cash and cash equivalents, beginning of period                            3,429          3,051
                                                                        -------        -------
Cash and cash equivalents, end of period                                 $2,956         $3,450
                                                                        -------        -------
                                                                        -------        -------
</TABLE>

                 See accompanying notes to condensed financial statements.


                                       29

<PAGE>


                       CATFISH QUEEN PARTNERSHIP IN COMMENDAM
                      NOTES TO CONDENSED FINANCIAL STATEMENTS
                               (DOLLARS IN THOUSANDS)

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     BASIS OF PRESENTATION

     Catfish Queen Partnership in Commendam ("Partnership") provides riverboat
gaming and related entertainment in Baton Rouge, Louisiana. The Partnership is
comprised of a 90% general partner, Argosy of Louisiana, Inc. ("General
Partner"), a wholly owned subsidiary of Argosy Gaming Company ("Argosy"), and a
10% partner in commendam, Jazz Enterprises, Inc. ("Jazz") which became a wholly
owned subsidiary of Argosy in 1995. 

     IMPAIRMENT OF LONG-LIVED ASSETS-When events or circumstances indicate that
the carrying amount of long-lived assets to be held and used might not be
recoverable, the expected future undiscounted cash flows from the assets is
estimated and compared with the carrying amount of the assets.  If the sum of
the estimated undiscounted cash flows is less than the carrying amount of the
assets, an impairment loss is recorded.  The impairment loss is measured by
comparing the fair value of the assets with their carrying amount.  Long-lived
assets that are held for disposal are reported at the lower of the assets'
carrying amount of fair value less costs related to the assets' disposition.

     The accompanying unaudited condensed financial statements have been
prepared in accordance with the instructions to Form 10-Q and Article 10 of
Regulation S-X.  Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements.  Interim results may not necessarily be indicative of
results which may be expected for any other interim period or for the year as a
whole.  For further information, refer to the financial statements and footnotes
thereto for the year ended December 31, 1997, included in the Argosy's Annual
Report on Form 10-K (File No. 0-21122).  The accompanying unaudited condensed
financial statements contain all adjustments which are, in the opinion of
management, necessary to present fairly the financial position and the results
of operations for the periods indicated.  Such adjustments include only normal
recurring accruals.  Certain 1997 amounts have been reclassified to conform to
the 1998 financial statement presentation.

2.   COMMITMENTS

     The City of Baton Rouge and the Parish of East Baton Rouge (collectively
referred to as "City-Parish") and Jazz have an agreement which requires Jazz and
the Company to pay to the City-Parish $2.50 per passenger. Additionally, Jazz
agreed to pay to the City-Parish an additional passenger fee, which is now $2.50
per passenger, until construction of a hotel commences by Jazz or another Argosy
affiliate.  Argosy has guaranteed the additional $2.50 per passenger.  Through
June 30, 1998, the Partnership has paid all admission payments due under the
above agreements. 

     Argosy has issued $235 million of 13 1/4% First Mortgage Notes, due 2004
("Mortgage Notes") .  The assets of the Partnership are pledged as collateral,
and the Partnership is a guarantor, under the terms of the Mortgage Notes.


                                      30
<PAGE>

<TABLE>
<CAPTION>

                                              JAZZ ENTERPRISES, INC.
                                             CONDENSED BALANCE SHEETS
                                  (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

                                                                                 JUNE 30,          DECEMBER 31,
                                                                                   1998                1997
                                                                              -------------        ------------
                                                                               (UNAUDITED)       
<S>                                                                                 <C>                 <C>
CURRENT ASSETS:                                                                                  
     Cash and cash equivalents                                                      $                   $    20
     Other current assets                                                               251                 137
                                                                                    -------             -------
        Total current assets                                                            251                 157
                                                                                    -------             -------
                                                                                                    
NET PROPERTY AND EQUIPMENT                                                           53,827              54,593
GOODWILL, NET                                                                        19,624              19,922
NOTE RECEIVABLE                                                                       1,892               1,892
OTHER ASSETS                                                                          1,999               3,390
                                                                                    -------             -------

TOTAL ASSETS                                                                        $77,593             $79,954
                                                                                    -------             -------
                                                                                    -------             -------

CURRENT LIABILITIES:                                                                                
     Accounts payable and accrued liabilities                                        $3,132             $ 3,000
     Current maturities of long-term debt                                               491                 491
                                                                                    -------             -------
        Total current liabilities                                                     3,623               3,491
                                                                                    -------             -------

LONG-TERM DEBT                                                                        6,913               7,165
LONG-TERM DEBT - RELATED PARTY                                                       74,723              74,072
STOCKHOLDER'S DEFICIT                                                                               
     Common stock, no par value, 100,000 shares authorized, 200 shares                              
        issued and outstanding                                                                      
     Retained deficit                                                                (7,666)             (4,774)
                                                                                    -------             -------
         Total stockholders's deficit                                                (7,666)             (4,774)
                                                                                    -------             -------

TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIT                                         $77,593             $79,954
                                                                                    -------             -------
                                                                                    -------             -------
</TABLE>
                       See accompanying notes to condensed financial statements.


                                                     31
<PAGE>


                               JAZZ ENTERPRISES, INC.
                         CONDENSED STATEMENTS OF OPERATIONS
                                   (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                              SIX MONTHS ENDED
                                                       ------------------------------
                                                         JUNE 30,           JUNE 30,
                                                           1998               1997
                                                       -----------        -----------
                                                       (UNAUDITED)        (UNAUDITED)
<S>                                                       <C>                <C>
REVENUES:                                                                
     Lease revenue - related party                        $1,477             $1,571
     Rent revenue                                            178                184
                                                         -------            -------
                                                           1,655              1,755
                                                         -------            -------
                                                                         
COSTS AND EXPENSES:                                                      
     Operating expenses                                      611                445
     Selling, general and administrative                   1,828                635
     Depreciation and amortization                         1,266              1,177
                                                         -------            -------
                                                           3,705              2,257
                                                         -------            -------
                                                                         
Loss from operations                                      (2,050)              (502)
                                                                         
OTHER EXPENSE:                                                           
     Interest expense                                       (436)              (460)
     Equity in loss of unconsolidated partnership           (406)              (342)
                                                         -------            -------
NET LOSS                                                 $(2,892)           $(1,304)
                                                         -------            -------
                                                         -------            -------
</TABLE>
             See accompanying notes to condensed financial statements.


                                      32
<PAGE>

                                JAZZ ENTERPRISES, INC.
                         CONDENSED STATEMENTS OF OPERATIONS
                                  (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                            THREE MONTHS ENDED
                                                        --------------------------
                                                          JUNE 30,       JUNE 30,
                                                            1998           1997
                                                        -----------    -----------
                                                        (UNAUDITED)    (UNAUDITED)
<S>                                                         <C>              <C>
REVENUES:
     Lease revenue - related party                          $   723          $ 804
     Rent revenue                                                89             95
                                                            -------          -----
                                                                812            899
                                                            -------          -----
COSTS AND EXPENSES:                                    
     Operating expenses                                         351            300
     Selling, general and administrative                      1,432            296
     Depreciation and amortization                              614            588
                                                            -------          -----
                                                              2,397          1,184
                                                            -------          -----
Loss from operations                                         (1,585)          (285)
                                                       
OTHER EXPENSE:                                         
     Interest expense                                          (216)          (230)
     Equity in loss of unconsolidated partnership              (152)          (192)
                                                            -------          -----
NET LOSS                                                    $(1,953)         $(707)
                                                            -------          -----
                                                            -------          -----
</TABLE>
              See accompanying notes to condensed financial statements.


                                       33
<PAGE>
                                  JAZZ ENTERPRISES, INC.
                           CONDENSED STATEMENTS OF CASH FLOWS
                                     (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                              SIX MONTHS ENDED
                                                                         ---------------------------
                                                                           JUNE 30,       JUNE 30,
                                                                             1998           1997
                                                                         -----------     -----------
                                                                         (UNAUDITED)     (UNAUDITED)
<S>                                                                        <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES                                    
Net loss                                                                   $(2,892)       $(1,304)
Adjustments to reconcile net loss to net cash (used in) provided by     
   operating activities:                                                
   Depreciation                                                                878            878
   Amortization                                                                388            299
   Equity in loss of unconsolidated partnership                                407            342
   Changes in operating assets and liabilities:                                   
         Other current assets                                                 (114)            78
         Accounts payable and accrued liabilities                              132            743
                                                                           -------        -------
         Net cash (used in) provided by operating activities                (1,201)         1,036
                                                                           -------        -------
CASH FLOWS FROM INVESTING ACTIVITIES:                                   
     Capital expenditures                                                     (113)          (943)
                                                                           -------        -------
          Net cash used in investing activities                               (113)          (943)
                                                                           -------        -------
CASH FLOWS FROM FINANCING ACTIVITIES:                                   
     Principal payments on long-term debt                                     (252)           (89)
     Advances from affiliate                                                   651            372
     Decrease (increase) in other assets                                       895           (376)
                                                                           -------        -------
          Net cash provided by (used in) financing activities                1,294            (93)
                                                                           -------        -------
Net (decrease) increase in cash and cash equivalents                           (20)              
Cash and cash equivalents, beginning of period                                  20               
                                                                           -------        -------
Cash and cash equivalents, end of period                                   $              $
                                                                           -------        -------
                                                                           -------        -------
</TABLE>
                See accompanying notes to condensed financial statements.


                                      34

<PAGE>

                               JAZZ ENTERPRISES, INC.
                      NOTES TO CONDENSED FINANCIAL STATEMENTS
                               (DOLLARS IN THOUSANDS)


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     BASIS OF PRESENTATION

     Jazz Enterprises, Inc., ("Jazz" or "the Company") a Louisiana corporation
was incorporated for the purpose of developing a riverboat gaming operation and
an entertainment complex known as "Catfish Town" in Baton Rouge, Louisiana.
     
     The Company is in a partnership with Argosy of Louisiana, Inc. (a wholly
owned subsidiary of Argosy Gaming Company ("Argosy") ("ALI") in which the
Company owns 10% and ALI owns 90%, to operate a riverboat casino in Baton Rouge,
Louisiana.
     
     IMPAIRMENT OF LONG-LIVED ASSETS-When events or circumstances indicate that
the carrying amount of long-lived assets to be held and used might not be
recoverable, the expected future undiscounted cash flows from the assets is
estimated and compared with the carrying amount of the assets.  If the sum of
the estimated undiscounted cash flows is less than the carrying amount of the
assets, an impairment loss is recorded.  The impairment loss is measured by
comparing the fair value of the assets with their carrying amount.  Long-lived
assets that are held for disposal are reported at the lower of the assets'
carrying amount of fair value less costs related to the assets' disposition.
     
     The accompanying unaudited condensed financial statements have been
prepared in accordance with the instructions to Form 10-Q and Article 10 of
Regulation S-X.  Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements.  Interim results may not necessarily be indicative of
results which may be expected for any other interim period or for the year as a
whole.  For further information, refer to the financial statements and footnotes
thereto for the year ended December 31, 1997, included in the Argosy's Annual
Report on Form 10-K (File No. 0-21122).  The accompanying unaudited condensed
financial statements contain all adjustments which are, in the opinion of
management, necessary to present fairly the financial position and the results
of operations for the periods indicated.  Such adjustments include only normal
recurring accruals.  Certain 1997 amounts have been reclassified to conform to
the 1998 financial statement presentation.

2.   COMMITMENTS

     The City of Baton Rouge and the Parish of East Baton Rouge (collectively
referred to as "City-Parish") and the Company entered into an agreement which
required the Company and the partnership to pay to the City-Parish $2.50 per
passenger.  Additionally, the Company agreed to pay to the City-Parish an
additional passenger fee which is now $2.50 per passenger until construction of
a hotel commences by the Company or another Argosy affiliate.    Argosy has
guaranteed the additional $2.50 per passenger.  Through June 30, 1998, the
partnership has paid all admission payments due under the above agreements.

     Argosy has issued $235 million of 13 1/4% First Mortgage Notes, due 2004
("Mortgage Notes")  The assets of the Company are pledged as collateral, and the
Company is a guarantor, under the terms of the Mortgage Notes.


                                      35
<PAGE>
                                  THE INDIANA GAMING COMPANY
                            CONDENSED CONSOLIDATED BALANCE SHEETS
                       (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>

                                                                        JUNE 30,     DECEMBER 31,
                                                                          1998           1997
                                                                     ------------    ------------
                                                                      (UNAUDITED)
<S>                                                                    <C>            <C>
CURRENT ASSETS:
     Cash and cash equivalents                                         $ 29,763       $ 41,257
     Other current assets                                                 2,361          1,635
                                                                       --------       --------
        Total current assets                                             32,124         42,892
                                                                       --------       --------

NET PROPERTY AND EQUIPMENT                                              194,106        176,407
                                                                       --------       --------
OTHER ASSETS:
     Deposits                                                                              530
     Cash and cash equivalents-restricted                                 3,014         13,114
     Other, net                                                          30,153         30,844
     Deferred income taxes                                                2,099          2,785
                                                                       --------       --------
        Total other assets                                               35,266         47,273
                                                                       --------       --------

TOTAL ASSETS                                                           $261,496       $266,572
                                                                       --------       --------
                                                                       --------       --------


CURRENT LIABILITIES:
     Accounts payable                                                  $  3,739       $  5,936
     Accrued interest and dividends payable-related parties               3,653          5,260
     Other accrued liabilities                                           33,099         17,951
     Current maturities of long-term debt                                13,013         12,856
     Current maturities of other long-term obligations                    3,083          4,583
                                                                       --------       --------
        Total current liabilities                                        56,587         46,586
                                                                       --------       --------

LONG-TERM DEBT                                                          162,695        195,405
OTHER LONG-TERM OBLIGATIONS                                               1,000          2,000
MINORITY INTERESTS                                                       22,880         17,656

STOCKHOLDER'S EQUITY:
     Common stock - $.01 par value, 1,000 shares authorized
         issued and outstanding
     Retained earnings                                                   18,334          4,925
                                                                       --------       --------
        Total stockholder's equity                                       18,334          4,925
                                                                       --------       --------
  
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY                             $261,496       $266,572
                                                                       --------       --------
                                                                       --------       --------
</TABLE>
          See accompanying notes to condensed consolidated financial statements.


                                          36
<PAGE>

                             THE INDIANA GAMING COMPANY
                    CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                           SIX MONTHS ENDED
                                                      ---------------------------
                                                        JUNE 30,        JUNE 30,
                                                          1998            1997
                                                      -----------     -----------
                                                      (UNAUDITED)     (UNAUDITED)
<S>                                                     <C>             <C>
REVENUES:
     Casino                                             $120,065        $57,418
     Admissions                                            7,200          3,465
     Food, beverage and other                              9,722          2,981
                                                        --------        -------
                                                         136,987         63,864
     Less promotional allowances                          (8,176)        (1,995)
                                                        --------        -------
Net revenues                                             128,811         61,869
                                                        --------        -------

COST AND EXPENSES:
     Casino                                               50,924         25,469
     Food, beverage and other                              8,270          2,206
     Other operating expenses                              4,103          6,330
     Selling, general and administrative                  20,357         10,466
     Depreciation and amortization                         5,947          5,390
     Management fees-related parties                       2,176            869
                                                        --------        -------
                                                          91,777         50,730
                                                        --------        -------
Income from operations                                    37,034         11,139
                                                        --------        -------

OTHER INCOME (EXPENSE):
     Interest income                                         765            597
     Interest expense                                     (5,214)        (1,170)
                                                        --------        -------
                                                          (4,449)          (573)
                                                        --------        -------
Income before minority interests and income taxes         32,585         10,566
Minority interests                                       (10,177)        (3,406)
Income tax expense                                        (8,999)        (2,509)
                                                        --------        -------
NET INCOME                                              $ 13,409        $ 4,651
                                                        --------        -------
                                                        --------        -------
</TABLE>
       See accompanying notes to condensed consolidated financial statements.


                                      37
<PAGE>

                             THE INDIANA GAMING COMPANY
                    CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                           THREE MONTHS ENDED
                                                       --------------------------
                                                         JUNE 30,      JUNE 30,
                                                           1998          1997
                                                       -----------    -----------
                                                       (UNAUDITED)    (UNAUDITED)
<S>                                                      <C>            <C>
REVENUES:
     Casino                                              $64,495        $31,698
     Admissions                                            4,009          1,854
     Food, beverage and other                              5,535          1,580
                                                         -------        -------
                                                          74,039         35,132
     Less promotional allowances                          (4,979)        (1,143)
                                                         -------        -------
Net revenues                                              69,060         33,989
                                                         -------        -------

COST AND EXPENSES:
     Casino                                               26,892         13,564
     Food, beverage and other                              4,687          1,221
     Other operating expenses                              2,112          3,188
     Selling, general and administrative                  11,441          5,468
     Depreciation and amortization                         3,053          2,932
     Management fees-related parties                       1,115            527
                                                         -------        -------
                                                          49,300         26,900
                                                         -------        -------
Income from operations                                    19,760          7,089
                                                         -------        -------

OTHER INCOME (EXPENSE):
     Interest income                                         319            292
     Interest expense                                     (2,536)          (426)
                                                         -------        -------
                                                          (2,217)          (134)
                                                         -------        -------
Income before minority interests and income taxes         17,543          6,955
Minority interests                                        (5,557)        (2,401)
Income tax expense                                        (4,888)        (1,434)
                                                         -------        -------
NET INCOME                                               $ 7,098        $ 3,120
                                                         -------        -------
                                                         -------        -------
</TABLE>
     See accompanying notes to condensed consolidated financial statements.


                                      38
<PAGE>

                             THE INDIANA GAMING COMPANY
                  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                           SIX MONTHS ENDED
                                                                      --------------------------
                                                                        JUNE 30,       JUNE 30,
                                                                          1998           1997
                                                                      -----------    -----------
                                                                      (UNAUDITED)    (UNAUDITED)
<S>                                                                     <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                              $13,409         $4,651
Adjustments to reconcile net income to net cash provided by
   operating activities:
      Depreciation                                                        5,256          4,778
      Amortization                                                          691            612
      Deferred income taxes                                                 663         (1,345)
      Minority interests                                                 10,177          3,406
   Changes in operating assets and  liabilities:
           Other current assets                                            (704)          (160)
           Deposits                                                                       (772)
           Accounts payable                                              (2,197)        (1,780)
           Accrued interest payable to related parties                   (1,627)          (151)
           Accrued liabilities                                           15,957          6,930
                                                                        -------        -------
           Net cash provided by operating activities                     41,625         16,169
                                                                        -------        -------
CASH FLOWS FROM INVESTING ACTIVITIES:
      Restricted cash held in escrow                                     10,100         (3,506)
      Purchases of property and equipment                               (22,124)       (42,355)
      Payments under development agreement and other
         infrastructure improvements                                     (2,500)        (3,015)
                                                                        -------        -------
           Net cash used in investing activities                        (14,524)       (48,876)
                                                                        -------        -------
CASH FLOWS FROM FINANCING ACTIVITIES:
      Payments on installment contracts                                  (1,108)        (2,998)
      (Repayment of) proceeds from long-term debt                       (32,554)        45,066
      Payment of preferred equity return to partner                      (1,159)          (489)
      Partnership equity distributions to partners                       (3,774)
      Other                                                                                (60)
                                                                        -------        -------
           Net cash (used in) provided by financing activities          (38,595)        41,519
                                                                        -------        -------
Net (decrease) increase in cash and cash equivalents                    (11,494)         8,812
Cash and cash equivalents, beginning of period                           41,257          9,216
                                                                        -------        -------
Cash and cash equivalents, end of period                                $29,763        $18,028
                                                                        -------        -------
                                                                        -------        -------
</TABLE>
          See accompanying notes to condensed consolidated financial statements.


                                         39
<PAGE>

                             THE INDIANA GAMING COMPANY
                NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               (DOLLARS IN THOUSANDS)


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     BASIS OF PRESENTATION-The Indiana Gaming Company, a wholly owned 
subsidiary of Argosy Gaming Company ("Argosy") (collectively with its 
controlled partnership Indiana Gaming Company L.P. ("Partnership") "the 
Company") was formed effective April 11, 1994 to provide riverboat gaming and 
related entertainment in Lawrenceburg, Indiana. The Company is a 57 1/2% 
general partner in the Partnership, together with, three limited partners.  
On December 10, 1996, the Company commenced operations at a temporary site 
and ceased being in the development stage.  The Partnership opened its 
permanent pavilion on December 10, 1997.

     IMPAIRMENT OF LONG-LIVED ASSETS-When events or circumstances indicate 
that the carrying amount of long-lived assets to be held and used might not 
be recoverable, the expected future undiscounted cash flows from the assets 
is estimated and compared with the carrying amount of the assets.  If the sum 
of the estimated undiscounted cash flows is less than the carrying amount of 
the assets, an impairment loss is recorded.  The impairment loss is measured 
by comparing the fair value of the assets with their carrying amount.  
Long-lived assets that are held for disposal are reported at the lower of the 
assets' carrying amount of fair value less costs related to the assets' 
disposition.

     The accompanying unaudited condensed consolidated financial statements 
have been prepared in accordance with the instructions to Form 10Q and 
Article 10 of Regulation S-X.  Accordingly, they do not include all of the 
information and footnotes required by generally accepted accounting 
principles for complete financial statements.  Interim results may not 
necessarily be indicative of results which may be expected for any other 
interim period or for the year as a whole.  For further information refer to 
the financial statements and footnotes thereto for the year ended December 
31, 1997, included in Argosy's Annual Report on Form 10-K (File No. 0-21122). 
The accompanying unaudited condensed consolidated financial statements 
contain all adjustments which are, in the opinion of management, necessary to 
present fairly the financial position and the results of operations for the 
periods indicated.  Such adjustments include only normal recurring accruals.  
Certain 1997 amounts have been reclassified to conform to the 1998 financial 
statement presentation.

2.   INCOME TAXES

   In 1996, the Company recorded a valuation allowance against all of its 
deferred tax assets due to the uncertainty of realization.  During the six 
months ended June 30, 1997, the Company utilized a net operating loss 
carryforward of approximately $260.

3.   COMMITMENTS AND CONTINGENCIES

     CITY INFRASTRUCTURE IMPROVEMENTS AND UNRESTRICTED GRANTS-In accordance 
with the terms of the Development Agreement, the Company entered into a lease 
with the City of Lawrenceburg for docking privileges for the riverboat 
casino. The initial term of the lease is for six years and thereafter 
automatically extends for up to nine renewal term periods of five years each, 
unless terminated by the Company. Under the terms of the Development 
Agreement, the Company pays an annual fee to the City of Lawrenceburg ranging 
from 5%-14% of Adjusted Gross Receipts, as defined, with a minimum of 
$6 million per year. 


                                      40
<PAGE>

                            THE INDIANA GAMING COMPANY
         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                              (DOLLARS IN THOUSANDS)



     The Company has agreed to pay the City of Lawrenceburg approximately 
$33,848 in reimbursements for infrastructure improvements and unrestricted 
grants. These have been recorded as an intangible asset in the accompanying 
balance sheets.  The reimbursement for infrastructure improvements and 
unrestricted city grants are being amortized over the 28 year term, including 
extensions, of the Development Agreement. 
                                          
     Included in other long term obligations at June 30, 1998 is $4,083 
representing the remaining grants and infrastructure payments due by the 
Company under the terms of the Riverboat Gaming Development Agreement with 
the City of Lawrenceburg ("Development Agreement").  Total remaining is due 
$2,083 in 1998 and $2,000 in 1999.

     BONDING OBLIGATION-The Company is required, by Indiana Gaming Statute, 
to post a bond in favor of the Indiana Gaming Commission to collateralize 
certain obligations to the City of Lawrenceburg under the Development 
Agreement, and to the State of Indiana. This bond is collateralized by 
certain real estate of the Company. 

     TERMINATION OF LAWRENCEBURG PARTNERSHIP-Under the terms of the 
partnership agreement, after the third anniversary date of commencement of 
operations each limited partner has the right to sell its interest to the 
other partners (pro rata in accordance with their respective percentage 
interests). In the event of this occurrence, if the partners cannot agree on 
a selling price, the Partnership will be sold in its entirety. 

     GUARANTY OF PARENT OBLIGATIONS-Argosy has issued $235 million of 13 1/4% 
First Mortgage Notes, due 2004 ("Mortgage Notes"). The Company has pledged 
its interest in the Partnership, and its rights to certain payments from the 
Partnership, as collateral, under the terms of the Mortgage Notes. 
Additionally, the Company is a guarantor of the Mortgage Notes.


                                      41

<PAGE>

                                       
                          INDIANA GAMING COMPANY, L.P.
                            CONDENSED BALANCE SHEETS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                        JUNE 30,     DECEMBER 31,
                                                                          1998           1997
                                                                     -------------   ------------
                                                                      (UNAUDITED)
CURRENT ASSETS:
<S>                                                                   <C>            <C>
     Cash and cash equivalents                                        $  29,763      $  41,257
     Other current assets                                                 2,245          1,561
                                                                      ----------     ---------
        Total current assets                                             32,008         42,818
                                                                      ----------     ---------
NET PROPERTY AND EQUIPMENT                                              192,819        175,030
                                                                      ----------     ---------
OTHER ASSETS:
     Deposits                                                                              589
     Cash and cash equivalents-restricted                                 3,014         13,114
     Other, net                                                          30,153         30,844
                                                                      ----------     ---------
        Total other assets                                               33,167         44,547
                                                                      ----------     ---------
TOTAL ASSETS                                                          $ 257,994      $ 262,395
                                                                      ----------     ---------
                                                                      ----------     ---------
CURRENT LIABILITIES:
     Accounts payable                                                 $   4,356      $   5,936
     Accrued interest and dividends payable-related parties               8,727         12,571
     Other accrued liabilities                                           19,206         11,715
     Due to affiliates                                                       92          1,182
     Current maturities of long-term debt                                25,991         25,832
     Current maturities of other long-term obligations                    3,083          4,583
                                                                      ----------     ---------
        Total current liabilities                                        61,455         61,819
                                                                      ----------     ---------
LONG-TERM DEBT                                                          131,798        148,934
OTHER LONG-TERM OBLIGATIONS                                               1,000          2,000
PARTNERS' EQUITY:
     General partner                                                     40,909         32,031
     Limited partners                                                    22,832         17,611
                                                                      ----------     ---------
        Total partners' equity                                           63,741         49,642
                                                                      ----------     ---------
TOTAL LIABILITIES AND PARTNERS' EQUITY                                $ 257,994      $ 262,395
                                                                      ----------     ---------
                                                                      ----------     ---------
</TABLE>
See accompanying notes to condensed financial statements.

                                       42
<PAGE>

                            INDIANA GAMING COMPANY, L.P.
                           CONDENSED STATEMENTS OF INCOME
                                   (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                            SIX MONTHS ENDED
                                                       --------------------------
                                                         JUNE 30,       JUNE 30,
                                                          1998            1997
                                                       -----------    -----------
                                                       (UNAUDITED)    (UNAUDITED)
<S>                                                    <C>            <C>
REVENUES:
     Casino                                            $ 120,065       $ 57,418
     Admissions                                            7,200          3,465
     Food, beverage and other                              9,722          2,981
                                                       ---------       --------
                                                         136,987         63,864
     Less promotional allowances                          (8,176)        (1,995)
                                                       ---------       --------
Net revenues                                             128,811         61,869
                                                       ---------       --------
COST AND EXPENSES:
     Casino                                               50,924         25,469
     Food, beverage and other                              8,270          2,206
     Other operating expenses                              4,103          6,330
     Selling, general and administrative                  20,357         10,466
     Depreciation and amortization                         5,919          5,390
     Management fees-related parties                       5,645          2,175
                                                       ---------       --------
                                                          95,218         52,036
                                                       ---------       --------
Income from operations                                    33,593          9,833
                                                       ---------       --------
OTHER INCOME (EXPENSE):
     Interest income                                         765            597
     Interest expense                                    (10,412)        (2,519)
                                                       ---------       --------
                                                          (9,647)        (1,922)
                                                       ---------       --------
NET INCOME PRIOR TO PREFERRED EQUITY RETURN               23,946          7,911
Preferred equity return                                   (2,780)        (2,741)
                                                       ---------       --------
NET INCOME ATTRIBUTABLE TO COMMON EQUITY PARTNERS      $  21,166       $  5,170
                                                       ---------       --------
                                                       ---------       --------
</TABLE>

See accompanying notes to condensed financial statements.

                                       43
<PAGE>

                           INDIANA GAMING COMPANY, L.P.
                          CONDENSED STATEMENTS OF INCOME
                                  (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                           THREE MONTHS ENDED
                                                       --------------------------
                                                         JUNE 30,       JUNE 30,
                                                          1998            1997
                                                       -----------    -----------
                                                       (UNAUDITED)    (UNAUDITED)
<S>                                                    <C>            <C>
REVENUES:
     Casino                                             $ 64,495       $ 31,698
     Admissions                                            4,009          1,854
     Food, beverage and other                              5,535          1,580
                                                       ---------       --------
                                                          74,039         35,132
     Less promotional allowances                          (4,979)        (1,143)
                                                       ---------       --------
Net revenues                                              69,060         33,989
                                                       ---------       --------
COST AND EXPENSES:
     Casino                                               26,892         13,564
     Food, beverage and other                              4,687          1,221
     Other operating expenses                              2,112          3,188
     Selling, general and administrative                  11,441          5,468
     Depreciation and amortization                         3,038          2,932
     Management fees-related parties                       2,991          1,319
                                                       ---------       --------
                                                          51,161         27,692
                                                       ---------       --------
Income from operations                                    17,899          6,297
                                                       ---------       --------
OTHER INCOME (EXPENSE):
     Interest income                                         319            292
     Interest expense                                     (5,142)          (940)
                                                       ---------       --------
                                                          (4,823)          (648)
                                                       ---------       --------
NET INCOME PRIOR TO PREFERRED EQUITY RETURN               13,076          5,649
Preferred equity return                                   (1,378)        (1,378)
                                                       ---------       --------
NET INCOME ATTRIBUTABLE TO COMMON EQUITY PARTNERS       $ 11,698       $  4,271
                                                       ---------       --------
                                                       ---------       --------
</TABLE>

See accompanying notes to condensed financial statements.

                                       44
<PAGE>

                            INDIANA GAMING COMPANY, L.P.
                         CONDENSED STATEMENTS OF CASH FLOWS
                                   (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                          SIX MONTHS ENDED
                                                                                    --------------------------
                                                                                      JUNE 30,        JUNE 30,
                                                                                        1998            1997
                                                                                    -----------     -----------
                                                                                    (UNAUDITED)     (UNAUDITED)
<S>                                                                                 <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income                                                                       $ 21,166       $  5,170
     Adjustments to reconcile net income to net cash provided by
       operating activities:
        Depreciation                                                                     5,228          4,778
        Amortization                                                                       691            612
        Accrued preferred equity return                                                  2,780          2,741
     Changes in operating assets and liabilities:
        Due from affiliates                                                               (452)              
        Other current assets                                                              (684)          (160)
        Accounts payable                                                                (2,216)        (1,868)
        Accrued interest payable to related parties                                     (3,757)          (336)
        Accrued liabilities                                                              8,160          2,244
        Deposits                                                                                         (772)
                                                                                     ---------       --------
           Net cash provided by operating activities                                    30,916         12,409
                                                                                     ---------       --------
CASH FLOWS FROM INVESTING ACTIVITIES:
        Restricted cash held in escrow                                                  10,100         (3,506)
        Purchases of property and equipment                                            (22,129)       (42,137)
        Payments under development agreement and other
          infrastructure improvements                                                   (2,500)        (3,015)
                                                                                     ---------       --------
           Net cash used in investing activities                                       (14,529)       (48,658)
                                                                                     ---------       --------
CASH FLOWS FROM FINANCING ACTIVITES:
        Payments on installment contracts                                               (1,108)        (2,998)
        Partnership equity distributions                                                (8,881)              
        Payment of preferred return to partners                                         (2,726)        (1,151)
        Proceeds from (payments on) long-term debt and partners' equity                (16,979)        49,270
        Partner equity contributions                                                     1,813
        Other                                                                                             (60)
                                                                                     ---------       --------
           Net cash (used in) provided by financing activities                         (27,881)        45,061
                                                                                     ---------       --------
Net (decrease) increase in cash and cash equivalents                                   (11,494)         8,812
Cash and cash equivalents,  beginning of period                                         41,257          9,216
                                                                                     ---------       --------
Cash and cash equivalents,  end of period                                             $ 29,763       $ 18,028
                                                                                     ---------       --------
                                                                                     ---------       --------
</TABLE>

See accompanying notes to condensed financial statements.

                                       45
<PAGE>

                            INDIANA GAMING COMPANY, L.P.
                      NOTES TO CONDENSED FINANCIAL STATEMENTS
                               (DOLLARS IN THOUSANDS)



1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     BASIS OF PRESENTATION-Indiana Gaming Company,  L.P. ("Partnership"), an 
Indiana limited partnership, provides riverboat gaming and related 
entertainment in Lawrenceburg, Indiana. The Partnership is comprised of a 
57.5% general partner, The Indiana Gaming Company ("General Partner"), a 
wholly owned subsidiary of Argosy Gaming Company, ("Argosy"), and three 
limited partners. Net income (loss) is allocated to the partners based on 
their respective ownership interests. On December 10, 1996, the Partnership 
commenced operations at a temporary site and ceased being in the development 
stage. The Partnership opened its permanent pavilion  on December 10, 1997. 

     IMPAIRMENT OF LONG-LIVED ASSETS-When events or circumstances indicate 
that the carrying amount of long-lived assets to be held and used might not 
be recoverable, the expected future undiscounted cash flows from the assets 
is estimated and compared with the carrying amount of the assets.  If the sum 
of the estimated undiscounted cash flows is less than the carrying amount of 
the assets, an impairment loss is recorded.  The impairment loss is measured 
by comparing the fair value of the assets with their carrying amount.  
Long-lived assets that are held for disposal are reported at the lower of the 
assets' carrying amount of fair value less costs related to the assets' 
disposition.

     The accompanying unaudited condensed financial statements have been 
prepared in accordance with the instructions to Form 10Q and Article 10 of 
Regulations S-X.  Accordingly, they do not include all of the information and 
footnotes required by generally accepted accounting principles for complete 
financial statements.  Interim results may not necessarily be indicative of 
results which may be expected for any other interim period or for the year as 
a whole.  For further information, refer to the financial statements and 
footnotes thereto for the year ended December 31, 1997, included in Argosy's 
Annual Report on Form 10-K (File No.0-21122).  The accompanying unaudited 
condensed financial statements contain all adjustments which are, in the 
opinion of management, necessary to present fairly the financial position and 
the results of operations for the periods indicated.  Such adjustments 
include only normal recurring accruals.  Certain 1997 amounts have been 
reclassified to conform to the 1998 financial statement presentation.

2.   COMMITMENTS AND CONTINGENCIES

     CITY INFRASTRUCTURE IMPROVEMENTS AND UNRESTRICTED GRANTS-In accordance 
with the terms of the Development Agreement, the Partnership entered into a 
lease with the City of Lawrenceburg for docking privileges for its riverboat 
casino. The initial term of the lease is for six years and thereafter 
automatically extends for up to nine renewal term periods of five years each, 
unless terminated by the Partnership.  Under the terms of the Development 
Agreement, the Partnership pays an annual fee to the City of Lawrenceburg 
ranging from 5%-14% of Adjusted Gross Receipts, as defined, with a minimum of 
$6 million per year. 

                                       46
<PAGE>

                            INDIANA GAMING COMPANY, L.P.
                NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
                               (DOLLARS IN THOUSANDS)



     The Partnership has agreed to pay the City of Lawrenceburg $33,848 in 
reimbursements for infrastructure improvements and unrestricted grants. These 
have been recorded in other assets in the accompanying balance sheets.  The 
reimbursement for infrastructure improvements and unrestricted city grants 
are being amortized over the 28 year term, including extensions, of the 
Development Agreement. 

     Included in other long term obligations at June 30, 1998 is $4,083 
representing the remaining grants and infrastructure payments due by the 
Partnership under the terms of the Riverboat Gaming Development Agreement 
with the City of Lawrenceburg ("Development Agreement").  Total remaining 
payments are due $2,083 in 1998 and $2,000 in 1999.

     BONDING OBLIGATION-The Partnership is required, by Indiana Gaming 
Statute, to post a bond in favor of the Indiana Gaming Commission to 
collateralize certain obligations to the City of Lawrenceburg under the 
Development Agreement, and to the State of Indiana. This bond is 
collateralized by certain real estate of the Partnership. 

     TERMINATION OF PARTNERSHIP-Under the terms of the Partnership Agreement, 
after the third anniversary date of commencement of operations each limited 
partner has the right to sell its interest to the other partners (pro rata in 
accordance with their respective percentage interests). In the event of this 
occurrence, if the partners cannot agree on a selling price, the Partnership 
will be sold in its entirety.

                                       47
<PAGE>
                                       
                             ARGOSY GAMING COMPANY
               MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 
                      CONDITION AND RESULTS OF OPERATIONS


OVERVIEW

     The Company opened its first riverboat casino, the Alton Belle Casino, 
in Alton, Illinois in September 1991.  Subsequently, the Company opened the 
Argosy Casino in Riverside, Missouri in June 1994; the Belle of Baton Rouge 
in Baton Rouge, Louisiana in September 1994; and the Belle of Sioux City in 
Sioux City, Iowa in October 1994.  In addition, the Company, through its 
57.5% equity interest in Indiana Gaming Company, L.P., opened a temporary 
casino in Lawrenceburg, Indiana on December 10, 1996, and opened the 
permanent pavilion on December 10, 1997.

     The Company's results of operations for the six and three months ended 
June 30, 1998 were favorably impacted by improved performance at Lawrenceburg 
due to the opening of the permanent pavilion in December of 1997 and by 
improved performance in Alton and Sioux City due to focused marketing efforts 
and operating efficiencies. The Company's results of operations were 
adversely affected by increased competition at the Riverside property and by 
a market decline in Baton Rouge due to increased competition from other 
gaming opportunities in nearby locations.  Under the terms of the development 
agreement with the City of Baton Rouge the Company is required to pay a head 
tax of $2.50 per passenger until such time as the Company commences 
construction on a hotel near the Company's facility. Once construction 
commences on the hotel the head tax ceases and the Company would save 
approximately $3.5 million annually. The Company is in negotiations with 
several developers pertaining to the construction of a hotel. While the 
Company believes it will structure an agreement for the development of the 
hotel no assurances can be given as to the timing of the development of a 
hotel or as to the required financial commitment of the Company with respect 
to the development of a hotel. These factors have resulted in the Company 
reporting increased revenues and operating income at Lawrenceburg, Alton and 
Sioux City and decreased operating income at Riverside for the six and three 
months ended June 30, 1998.  Baton Rouge reported decreased revenues and 
increased operating losses for the six months ended June 30, 1998 and 
decreased revenues and operating losses for the three months ended June 30, 
1998. The Company expects the competitive environment in each of its markets 
to remain intense.

     The Company is in a net operating loss carryforward position at June 30, 
1998 and, as such, the Company has not recorded any federal tax benefits on 
its 1998 and 1997 operating losses due to the uncertainty of realization.

                                       48
<PAGE>

                               ARGOSY GAMING COMPANY
                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                        CONDITION AND RESULTS OF OPERATIONS
                                    (CONTINUED)

<TABLE>
<CAPTION>
                                            SIX MONTHS ENDED             THREE MONTHS ENDED
                                       -------------------------     --------------------------
                                         JUNE 30,       JUNE 30,       JUNE 30,       JUNE 30,
                                           1998           1997           1998           1997
                                       -----------    -----------    -----------     -----------
                                       (UNAUDITED)    (UNAUDITED)    (UNAUDITED)     (UNAUDITED)
<S>                                    <C>            <C>            <C>             <C>
CASINO REVENUES
     Alton                              $  34,317      $  32,055      $  17,288       $ 15,633
     Riverside                             35,355         31,667         16,996         15,217
     Baton Rouge                           24,285         26,196         12,181         13,405
     Sioux City                            10,851         10,248          5,590          5,339
     Lawrenceburg                         120,065         57,418         64,495         31,698
                                       ----------     ----------     ----------      ---------
          Total                         $ 224,873      $ 157,584      $ 116,550       $ 81,292
                                       ----------     ----------     ----------      ---------
                                       ----------     ----------     ----------      ---------
NET REVENUES
     Alton                              $  36,448      $  34,685      $  18,390       $ 16,943
     Riverside                             37,860         34,175         18,246         16,388
     Baton Rouge                           25,543         27,644         12,839         14,131
     Sioux City                            11,306         10,739          5,829          5,607
     Lawrenceburg                         128,811         61,869         69,060         33,989
     Other                                    189            892             93            451
                                       ----------     ----------     ----------      ---------
          Total                         $ 240,157      $ 170,004      $ 124,457       $ 87,509
                                       ----------     ----------     ----------      ---------
                                       ----------     ----------     ----------      ---------
INCOME (LOSS) FROM OPERATIONS(1)
     Alton                              $   7,079      $   5,308      $   3,686       $  2,678
     Riverside                              1,375          2,807            761          1,163
     Baton Rouge                           (1,915)        (1,094)          (458)          (746)
     Sioux City                               792            349            528            365
     Lawrenceburg                          37,062         11,139         19,775          7,089
     Jazz                                  (2,456)          (844)        (1,737)          (477)
     Corporate (3)                         (5,083)        (6,521)        (2,220)        (2,901)
     Other                                 (1,813)          (327)          (945)           (65)
                                       ----------     ----------     ----------      ---------
          Total                         $  35,041      $  10,817      $  19,390       $  7,106
                                       ----------     ----------     ----------      ---------
                                       ----------     ----------     ----------      ---------
EBITDA(1)(2)
     Alton                              $   9,022      $   7,417         $4,665       $  3,767
     Riverside                              4,406          5,545          2,315          2,532
     Baton Rouge                              691          1,695            855            651
     Sioux City                             1,306            826            788            606
     Lawrenceburg                          42,981         16,529         22,813         10,021
     Jazz                                  (2,673)        (1,239)        (1,851)          (693)
     Corporate(3)                          (4,670)        (5,266)        (2,013)        (2,243)
     Other                                    349          1,712            121            973
                                       ----------     ----------     ----------      ---------
          Total                         $  51,412      $  27,219      $  27,693       $ 15,614
                                       ----------     ----------     ----------      ---------
                                       ----------     ----------     ----------      ---------
</TABLE>

                                       49
<PAGE>

                               ARGOSY GAMING COMPANY
                  MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
                        CONDITION AND RESULTS OF OPERATIONS
                                    (CONTINUED)




(1)  Income from operations and EBITDA are presented before consideration of 
     any management fee paid to the Company or intercompany rent charges in 
     Baton Rouge and in the case of Sioux City and Lawrenceburg before the 30%
     and 42.5% minority interests, respectively.

(2)  "EBITDA" is defined as earnings before interest, taxes, depreciation and 
     amortization and is presented before any management fees paid to Argosy. 
     EBITDA should not be construed as an alternative to operating income, or 
     net income (as determined in accordance with generally accepted 
     accounting principles) as an indicator of the Company's operating 
     performance, or as an alternative to cash flows generated by operating, 
     investing and financing activities (as an indicator of cash flow or a 
     measure of liquidity).  EBITDA is presented solely as a supplemental 
     disclosure because management believes that it is a widely used measure 
     of operating performance in the gaming industry and for companies with a 
     significant amount of depreciation and amortization. EBITDA may not be 
     comparable to similarly titled measures reported by other companies. The 
     Company has other significant uses of cash flows, including capital 
     expenditures, which are not reflected in EBITDA.

(3)  Excludes severance expenses of approximately $1.8 million for the six 
     months ended June 30, 1997.


                                       50
<PAGE>

                              ARGOSY GAMING COMPANY
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS
                                   (CONTINUED)


SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO SIX MONTHS ENDED JUNE 30, 1997

     CASINO--Casino revenues for the six months ended June 30, 1998 increased 
by $67.3 million to $224.9 million from $157.6 million for the six months 
ended June 30, 1997 due primarily to a $62.7 million increase in casino 
revenues at the Lawrenceburg casino, which generated total casino revenues of 
$120.1 million for the six months ended June 30, 1998.  The Company's other 
properties reported an aggregate 5% increase in casino revenues from $100.2 
to $104.8 million.  In particular, Alton casino revenues increased from $32.1 
to $34.3 million, Riverside casino revenues increased from $31.7 to $35.4 
million, Sioux City casino revenues increased from $10.2 to $10.9 million 
offset by a decrease in Baton Rouge casino revenues from $26.2 to $24.3 
million.

     Casino expenses increased to $107.4 million for the six months ended 
June 30, 1998 from $79.6 million for the six months ended June 30, 1997.  
This is primarily due to an increase in Lawrenceburg casino expenses of  
$25.5 million to $50.9 million, attributable to the overall increase in 
Lawrenceburg casino revenues of $62.7 million.

     ADMISSIONS--Admissions revenue increased $3.7 million to $7.2 million 
for the six months ended June 30, 1998 due to an increased number of 
customers at the Lawrenecburg casino.

     FOOD AND BEVERAGE--Food, beverage and other revenues increased $6.4 
million to $23.6 million for the six month period ended June 30, 1998, due to 
the increased casino revenues generated by the Lawrenceburg casino.  Food, 
beverage and other net profit improved $0.8 million to $3.9 million for the 
six months ended June 30, 1998 due primarily to the increases in customers at 
the Lawrenceburg casino.

     OTHER OPERATING EXPENSES--Other operating expenses decreased $0.5 
million to $13.3 million for the six months ended June 30, 1998.  

     SELLING, GENERAL AND ADMINISTRATIVE--Selling, general and administrative 
expenses increased $13.1 million to $48.1 million for the six months ended 
June 30, 1998 due primarily to an increase of $9.9 million at Lawrenceburg 
relating to expanded marketing and operating costs of the larger facility, an 
increase of $1.5 million at Riverside due to expanded marketing efforts and a 
$1.0 million charge related to deferred lease costs at the Catfish Town real 
estate project in Baton Rouge.

     DEPRECIATION AND AMORTIZATION--Depreciation and amortization remained 
the same at $16.4 for the six months ended June 30, 1998 compared to the six 
months ended June 30, 1997.

     INTEREST EXPENSE--Net interest expense increased $6.4 million to $26.8 
million for the six months ended June 30, 1998.  The increase in interest 
expense is primarily attributable to additional loans by the partners of the 
Lawrenceburg casino, an equipment loan at the Indiana partnership and a 
decrease of $2.1 million in the amount of interest capitalized due to the 
completion of the final phase of the Lawrenceburg project.

     NET LOSS--Net loss decreased from $13.3 million for the six months ended 
June 30, 1997 to $2.3 million for the six months ended June 30, 1998 due 
primarily to the factors discussed above and approximately $1.8 million in 
severance expenses recognized in 1997.

                                       51
<PAGE>


                               ARGOSY GAMING COMPANY
                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                        CONDITION AND RESULTS OF OPERATIONS
                                    (CONTINUED)


THREE MONTHS ENDED JUNE 30, 1998 COMPARED TO THREE MONTHS ENDED JUNE 30, 1997

     CASINO--Casino revenues for the three months ended June 30, 1998 
increased by $35.3 million to $116.6 million from $81.3 million for the three 
months ended June 30, 1997 due primarily to a $32.8 million increase in 
casino revenues at the Lawrenceburg casino, which generated total casino 
revenues of $64.5 million for the three months ended June 30, 1998.  The 
Company's other properties reported an aggregate 5% increase in casino 
revenues from $49.6 to $52.1 million.  In particular, Alton casino revenues 
increased from $15.6 to $17.3 million, Riverside casino revenues increased 
from $15.2 to $17.0 million, Sioux City casino revenues increased from $5.3 
to $5.6 million offset by a decrease in Baton Rouge casino revenues from 
$13.4 to $12.2 million.

     Casino expenses increased to $54.7 million for the three months ended 
June 30, 1998 from $40.4 million for the three months ended June 30, 1997.  
This increase is primarily due to increased Lawrenceburg casino expenses of  
$13.3 million to $26.9 million attributable to the overall increase in 
Lawrenceburg casino revenues of $32.8 million.

     ADMISSIONS--Admissions revenue increased $2.1 million to $4.0 million 
for the three months ended June 30, 1998 due to an increase in the number of 
customers at the Lawrenceburg casino.

     FOOD AND BEVERAGE--Food, beverage and other revenues increased $3.6 
million to $12.4 million for the three month period ended June 30, 1998, due 
to the increased casino revenues generated by the Lawrenceburg casino.  Food, 
beverage and other net profit improved $0.4 million to $2.0 million for the 
three months ended June 30, 1998 due primarily to the increases in customers 
at the Lawrenceburg casino.

     OTHER OPERATING EXPENSES--Other operating expenses remained 
approximately the same at $6.7 million for the three months ended June 30, 
1998 compared to the three months ended June 30, 1997.  

     SELLING, GENERAL AND ADMINISTRATIVE--Selling, general and administrative 
expenses increased $7.4 million to $24.8 million for the three months ended 
June 30, 1998 due primarily to an increase of $6.0 million at Lawrenceburg 
relating to expanded marketing and operating costs of the larger facility and 
a $1.0 million charge related to deferred lease costs at the Catfish Town 
real estate project in Baton Rouge.

     DEPRECIATION AND AMORTIZATION--Depreciation and amortization decreased 
$0.2 million from $8.5 million for the three months ended June 30, 1997 to 
$8.3 million for the three months ended June 30, 1998.

     INTEREST EXPENSE--Net interest expense increased $3.5 million to $13.4 
million for the three months ended June 30, 1998.  The increase in interest 
expense is primarily attributable to additional loans by the partners of the 
Lawrenceburg casino, an equipment loan at the Indiana partnership and a 
decrease of $1.5 million in the amount of interest capitalized due to the 
completion of the final phase of the Lawrenceburg project.

                                       52
<PAGE>


                               ARGOSY GAMING COMPANY
                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                        CONDITION AND RESULTS OF OPERATIONS
                                   (CONTINUED)

COMPETITION

     The Company's Alton Casino faces competition from four other riverboat 
casino facilities currently operating in the St. Louis area and expects the 
level of competition to remain intense in the future.  The most recent casino 
complex to open includes two independently owned facilities, each of which 
operate two dockside vessels.  This casino complex, which increased gaming 
capacity in St. Louis by approximately 50%, opened in March of 1997. The 
Company's Riverside Casino currently faces competition from three casino 
companies in the Kansas City area that offer dockside gaming, two of which 
offer two gaming vessels each.  Until July 1998, there was an additional 
competitor in the Kansas City market which recently closed their facility.  
The Company's Baton Rouge Casino faces competition from one casino located in 
downtown Baton Rouge, a nearby native American casino and multiple casinos 
throughout Louisiana.  Currently, the Company faces competition in Sioux 
City, Iowa, from two land-based Native American casinos, slot machines at a 
pari-mutual race track in Council Bluffs, Iowa and from two riverboat casinos 
in the Council Bluffs, Iowa/Omaha, Nebraska market.  The Indiana Partnership 
faces competition from one other riverboat casino in the Cincinnati market, 
which opened in October 1996.  There could be further unanticipated 
competition in any market which the Company operates as a result of 
legislative changes or other events.  The Company expects each market in 
which it participates, both current and prospective, to be highly competitive.

LIQUIDITY AND CAPITAL RESOURCES

     In the six months ended June 30, 1998, the Company generated cash flows 
from operating activities of $33.1 million compared to $16.5 million for the 
same period in 1997.  Cash flow from operating activities  increased by $25.7 
million for the six months ended June 30, 1998 over the same period in 1997 
when the effect of  an income tax receivable of $9.1 million for 1997 is 
excluded from total 1997 cash flows.  This increase is attributable to the 
opening of the Lawrenceburg permanent pavilion in December 1997 as well as 
increased cash flows from the Company's Alton and Sioux City properties.

     In the six months ended June 30, 1998, the Company used cash flows for 
investing activities of $15.9 million versus $31.9 million for the six months 
ended June 30, 1997.  The primary use of funds in both periods was the 
investment in the construction of the Lawrenceburg facility.  Overall capital 
expenditures have decreased between periods reflecting the substantial 
completion of the Lawrenceburg casino.

     During the six months ended June 30, 1998, the Company used $11.2 
million in cash flows for financing activities compared to generating $22.2 
million of cash flows from financing activities for the same period in 1997.  
The uses of cash flows in 1998 were to repay loans related to the Company's 
Lawrenceburg casino, and for payments on installment contracts and other 
long-term debt offset by the net proceeds of $7.4 million from the sale of 
Preferred Stock and Warrants in June 1998.  In 1997, the Company had net 
proceeds from partnership loans of $26.1 million, offset by payments on 
long-term debt and installment contracts of $3.2 million.

     As of June 30, 1998, the Company had approximately $65.3 million of 
cash, cash equivalents, and marketable securities, including approximately  
$29.8 million held at the Indiana Partnership.  Approximately $7.9 million of 
the cash held at the Indiana Partnership is expected to be used towards the 
completion of the Lawrenceburg project.  In addition, the Company had $14.0 
of restricted cash, $10.9 million of which is in a disbursement account to be 
used to fund the Company's portion of the remaining Lawrenceburg construction 
costs and which cannot be used for any other purpose.  In addition to the 
disbursement account, the Indiana Partnership has placed approximately $3.1 
million in an escrow account representing unbilled construction costs 

                                       53
<PAGE>

                               ARGOSY GAMING COMPANY
                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                        CONDITION AND RESULTS OF OPERATIONS
                                    (CONTINUED)

of the permanent Lawrenceburg facility.  The Company has outstanding $235 
million of First Mortgage Notes which were issued in June 1996 and are due 
June 2004.  Additionally, the Company has outstanding $115 million of 
Convertible Subordinated Notes outstanding which were issued in June 1994 and 
are due June 2001.

     In June 1998, the Company issued $8 million of Convertible Preferred 
Stock together with Warrants to purchase an additional 292,612 shares of 
Common Stock. The Preferred Shares provide for a 4% dividend per annum, 
payable in cash or in kind at the time of conversion or maturity at the 
Company's option.  The Convertible Preferred Shares mature in seven years and 
the Company has the right for force conversion and/or redeem the Holder at 
maturity.  The Warrants expire in five years.  The Convertible Preferred 
Shares are puttable to the Company for cash if certain triggering events 
occur.  This transaction provides for put and call options which, subject to 
certain restrictions and limitations, allows for up to an additional $8.0 
million of Convertible Preferred Shares and Warrants to be issued.

     The Company estimates that the total construction costs of the 
Lawrenceburg casino and entertainment project will approximate $228 million 
(excluding capitalized interest).  This forward looking statement involves 
certain risks and uncertainties and this amount is subject to numerous 
factors including weather and other construction risks.  As of June 30, 1998, 
approximately $210 million has been contributed to the partnership for the 
project by all partners.  The remaining Lawrenceburg construction costs will 
be funded from cash on hand in Lawrenceburg and from the Company from the 
disbursement account under provisions of the partnership agreement, as 
Conseco has fulfilled its funding obligation as of June 30, 1998. The Company 
expects that the restricted cash on hand at June 30, 1998, together with the 
$7.9 remaining proceeds from the equipment financing, will be sufficient to 
complete the Lawrenceburg project.

     As a result of its June 1995 acquisition of Jazz, the Company is now the 
developer of the Catfish Town real estate project in Baton Rouge, Louisiana. 
The Company estimates that the completion of the Catfish Town project will 
cost an additional $2 to $5 million (primarily tenant allowance) as of June 
30, 1998. Further, if a Predecessor entity of the Company's  status as an 
S-Corporation, which has been asserted as an issue by the IRS during an 
ongoing audit, is successfully challenged, the Company currently estimates 
that it would require up to approximately $12.9 million (excluding penalties) 
to fund the potential income tax liability.  

     The Company believes that cash on hand will be sufficient to fund its 
current capital expenditure obligations, including the completion of the 
permanent Lawrenceburg casino development, debt service obligations and 
operating requirements during the next twelve months.  However, the Company's 
ability to meet its operating and debt service requirements, however is 
substantially dependent upon the success of the Lawrenceburg casino.  If 
events that negatively impact its sources or uses of cash, such as a 
significant deterioration in the operating results of the Company's casino 
properties particularly in Lawrenceburg, or an adverse IRS ruling, the 
Company may be unable to meet future debt service payments without obtaining 
additional debt or additional equity financing or without the disposition of 
assets.  No assurance can be given that the Company would be able to obtain 
such additional financing on suitable terms or sell assets on favorable 
terms, if required.  In light of the foregoing, the Company recently issued 
the $8 million of Convertible Preferred Stock, mentioned above, and is 
considering various other long term options with respect to the Company's 
capital structure, including additional financings and asset dispositions.  
The disposal of assets could result in a significant charge to earnings.

                                       54
<PAGE>

                               ARGOSY GAMING COMPANY
                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                        CONDITION AND RESULTS OF OPERATIONS
                                   (CONTINUED)

YEAR 2000

     The Company has determined that it will need to modify or replace 
significant portions of its software so that its computer systems will 
function properly with respect to dates in the Year 2000 and beyond.  As the 
Company is dependent on third party software for all of its major 
applications, the Company has initiated discussions with its significant 
software vendors and financial institutions to ensure that those parties have 
appropriate plans to remediate Year 2000 issues. Through these discussions, 
the Company has determined that all of the systems that are critical to the 
Company's operations are either 2000 compliant or that 2000 compliant 
versions exist that can be implemented by the Company.

     The next phase in the Company's efforts will be to plan for and 
implement the Year 2000 versions of the software into the Company's systems. 
The Company has a June 1999 target date to complete its implementation 
efforts.

     As of June 30, 1998, the Company has incurred less than $25,000 of costs 
related to Year 2000 issues. The Company estimates it will incur less than 
$250,000 in future expenses to ensure all systems will function properly with 
respect to dates in the Year 2000. These expenses are not expected to have a 
material impact on the financial position, cash flow or operations of the 
Company.
                                          

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

     THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF 
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.  WHEN USED IN THIS 
DOCUMENT, THE WORDS "ANTICIPATE", "BELIEVE", "ESTIMATE" AND "EXPECT" AND 
SIMILAR EXPRESSIONS ARE GENERALLY INTENDED TO IDENTIFY FORWARD-LOOKING 
STATEMENTS. INVESTORS ARE CAUTIONED THAT ANY FORWARD-LOOKING STATEMENTS, 
INCLUDING THOSE REGARDING THE INTENT, BELIEF OR CURRENT EXPECTATIONS OF THE 
COMPANY OR ITS MANAGEMENT, ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND 
INVOLVE RISKS AND UNCERTAINTIES, AND THAT ACTUAL RESULTS MAY DIFFER 
MATERIALLY FROM THOSE IN THE FORWARD-LOOKING STATEMENTS AS A  RESULT OF 
VARIOUS FACTORS INCLUDING, BUT NOT LIMITED TO, (i) GENERAL ECONOMIC 
CONDITIONS IN THE MARKETS IN WHICH THE COMPANY OPERATES, (ii) INCREASED 
COMPETITIVE PRESSURES IN THE MARKETS IN WHICH THE COMPANY OPERATES, (iii) THE 
EFFECT OF FUTURE LEGISLATION OR REGULATORY CHANGES ON THE COMPANY'S 
OPERATIONS, AND (iv) OTHER RISKS DETAILED FROM TIME TO TIME IN THE COMPANY'S 
SECURITIES AND EXCHANGE COMMISSION FILINGS.  THE COMPANY DOES NOT INTEND TO 
UPDATE THESE FORWARD-LOOKING STATEMENTS. 

                                       55
<PAGE>
                                       
                              ARGOSY GAMING COMPANY
                                OTHER INFORMATION


PART II.  OTHER INFORMATION

Item 1.   LEGAL PROCEEDINGS -

     The Company is from  time to time a party to legal proceedings arising 
in the ordinary course of business. Other than as described below the Company 
is unaware of any legal procedures which, even if the outcome were unfavorable 
to the Company, would have a material adverse impact on either its financial 
condition or results of operations.

CAPITOL HOUSE PRESERVATION COMPANY, L.L.C. VS. JAZZ ENTERPRISES, INC., ET AL.

     In July 1995, Capitol House Preservation Company, L.L.C. ("Capitol 
House") filed a cause of action in the U. S. District Court of the Middle 
District of Louisiana against Jazz, the former shareholders of Jazz ("Former 
Jazz Shareholders"), Catfish Queen Partnership (the "Partnership"), Argosy of 
Louisiana, Inc. ("Argosy Louisiana") and the Company alleging that Jazz and 
Argosy obtained the gaming license for Baton Rouge based upon false and 
fraudulent pretenses and declarations and financial misrepresentations.  The 
complaint alleges tortious conduct as well as violations of RICO and seeks 
damages of $158 million plus court costs and attorneys' fees.  The plaintiff 
was an applicant for a gaming license in Baton Rouge whose application was 
denied by the Louisiana Enforcement Division.  The Company believes the 
allegations of the plaintiff are without merit and intends to vigorously 
defend such cause of action.

     On June 7, 1995, the Company consummated its purchase of all of the 
outstanding capital stock of Jazz from the Former Jazz Shareholders.  The 
Company intends to seek indemnification from the Former Jazz Shareholders for 
any liability the Company, Argosy Louisiana or Jazz suffers as a result of 
such cause of action.  As part of the consideration payable by the Company to 
the Former Jazz Shareholder for the acquisition of Jazz, the Company agreed 
at the time of such acquisition to annual deferred purchase price payments of 
$1,350,000 for each of the first ten years after closing and $500,000 for 
each of the next ten years.  Payments are to be made quarterly by the 
Company.  The definitive acquisition documents provide the Company with 
off-set rights against such deferred purchase price payments for 
indemnification claims of the Company against the Former Jazz Shareholders 
and for the liabilities that the Former Jazz Shareholder contractually agreed 
to retain.  There can be no assurance that the Former Jazz Shareholders will 
have assets sufficient to satisfy any claim in excess of the Company's 
off-set rights.

     The defendants filed a Motion to Dismiss, or alternatively to abstain 
and stay the action, pending resolution of certain Louisiana state court 
claims filed by Capitol House.  The trial court decided in favor of the 
defendants and dismissed the suit without prejudice to the rights of 
plaintiff to revive the suit after the conclusion of the pending state court 
matters.  The plaintiff appealed this dismissal to the U. S. Fifth Circuit 
Court of Appeals.  While the appeal was pending, several of the Louisiana 
state court claims were resolved. On March 11, 1997, the U. S. Fifth Circuit 
Court of Appeals vacated the trial court's dismissal and remanded the case to 
the district court for further proceedings.  The defendants have re-urged the 
previously filed motion to dismiss.  On November 17, 1997, the district court 
granted the motion and dismissed, with prejudice, all of the federal claims 
under RICO.  The claims of Capitol House that arose under Louisiana state law 
were dismissed, without prejudice.  Capitol House filed an appeal of the 
district court dismissal on January 9, 1998, and the matter will be appealed 
to the U. S. Fifth Circuit Court of Appeals.  Additionally, Capitol House 
filed an amended petition in the Nineteenth Judicial District Court for East 
Baton Rouge Parish, State of Louisiana, Suit Number 418,525 on November 26, 
1997, amending its previously filed but unserved suit against Richard 
Perryman, the person selected by the Louisiana Gaming Division to evaluate 
and rank the applicants seeking a gaming license for East


                                       56
<PAGE>

Baton Rouge Parish, and now adding its state law claims against Jazz, the 
former shareholders of Jazz, Argosy Gaming Company, Argosy of Louisiana, Inc. 
and Catfish Queen Partnership in Commendam, d/b/a the Belle of Baton Rouge 
Casino.  This suit alleges that these parties violated the Louisiana Unfair 
Trade Practices Act in connection with obtaining the gaming license which was 
issued to the Company.  This suit alleges the same, or substantially similar, 
facts that formed the basis of the federal claim which was dismissed on 
November 17, 1997.  The defendants have filed a Peremptory Exception of No 
Cause of Action, Peremption and Prescription and Exception of Lis Pendens in 
response to Capitol House's state court suit.  A hearing on these exceptions 
was held June 1, 1998, before Judge McDonald.  The Court granted the 
exception and dismissed the suit as to Argosy Gaming Company, Argosy of 
Louisiana, Inc. and Catfish Queen Partnership in Commendam, d/b/a the Belle 
of Baton Rouge Casino. The Court denied the exception as to Jazz and the 
former shareholders of Jazz. On behalf of Jazz and its former shareholders, a 
supervisory writ has been filed with the First Circuit Court of Appeal, State 
of Louisiana, seeking a dismissal of the claims.  Capitol House has appealed 
the dismissal of the claims as to the other parties.  The appeal and writ 
applications are currently pending in the First Circuit. An adverse ruling in 
this matter could have a material adverse effect on the Company.

PENDING INTERNAL REVENUE SERVICE MATTER

     On November 1, 1994, the Company received a Notice of the beginning of 
an Administrative Proceeding from the Internal Revenue Service ("IRS") for 
the 1992 and 1993 tax years of Metro Entertainment & Tourism, Inc.  
("Metro").  Metro was merged with and into the Company immediately prior to 
its initial public offering in February 1993.  Metro and J. Connors Group, 
Inc. ("Connors") were the partners of Alton Riverboat Gambling Partnership 
("ARGP") which until the Company's initial public offering owned and operated 
the Alton, Illinois riverboat casino.  The IRS has proposed certain 
adjustments with respect to the Company for its 1993 tax year in a 30-day 
letter.  The IRS has also proposed adjustments for ARGP that flow through to 
Metro in a 60-day letter.  Finally, on March 16, 1998 the IRS issued a 60-day 
letter to Metro for its tax years ending December 1992 and February 1993.  
The principal issues raised by the IRS in the Metro 60-day letter involve the 
status of Metro as an S Corporation and the deductibility of the $8.5 million 
accommodation fee paid to William McEnery in 1992 and 1993.  The total 
Federal tax liability asserted by the IRS against the Company resulting from 
these proposed adjustments is approximately $11 million including interest 
through June 30, 1998 but excluding penalties, if any.  On May 12, 1998, the 
Company filed a protest to these proposed adjustments to the Appeals Office 
of the IRS and is vigorously contesting these proposed adjustments.

GAMEDEV OF SIOUX CITY, INC., F/K/A SIOUX CITY RIVERBOAT CORP., INC. V. ARGOSY 
GAMING COMPANY AND IOWA GAMING COMPANY

     This suit was filed on June 11, 1998, in the Iowa District Court in 
Woodbury County, Iowa.  Gamedev, the limited partner of the limited 
partnership, Belle of Sioux City, L.P., seeks monetary damages and an 
equitable accounting based on claims of breach of fiduciary duty and 
negligent misrepresentation against the defendants.  Iowa Gaming Company, a 
wholly-owned subsidiary of the Company, is the general partner of the Belle 
of Sioux 

                                       57
<PAGE>

City, L.P.  On July 21, 1998, the defendants responded to the Petition by 
filing a motion to dismiss on the grounds that plaintiff's claims are 
derivative in nature, and that plaintiff has failed to comply with the demand 
requirements under Iowa limited partnership law.  Also, plaintiff is not 
entitled to an equitable accounting because it has an adequate remedy at law. 
 Plaintiff's filed its resistance to the motion to dismiss and filed a first 
amended and substituted  petition alleging additional causes of action of 
breaches of contracts and fraudulent misrepresentation on August 4, 1998.  
The Company's reply brief in support of the motion to dismiss and its 
responsive pleading to the first amended and substituted petition are due in 
August.  This motion is pending before the court and will be scheduled for 
oral argument in the future.

MATTERS CONCERNING H. STEVEN NORTON

     In September, 1993, H. Steven Norton, an employee of the Company at the 
time, filed a cause of action against John T. Connors, a significant 
shareholder of the Company and a former officer of J. Connors Group Inc., a 
predecessor entity of the Company ("JCG"), seeking $50 million in damages. 
Mr. Norton alleged that Mr. Connors failed to fulfill his promise made in the 
summer of 1991 to establish a partnership with Mr. Norton in which each would 
have an equal 50% interest in JCG, which had a 25% partnership interest in 
the Company's predecessor entity that owned the Alton Belle casino. As a 
result of the reorganization effected immediately prior to its initial public 
offering, the Company succeeded to all the rights, properties and assets, and 
assumed all the liabilities, of all of its predecessor entities, including 
JCG. Subsequent to filing the lawsuit, Mr. Connors advised the Company that 
his dealings with Mr. Norton, which are the subject of the litigation, were 
in his capacity as an officer of JCG, and that the Company should assume the 
defense and reimburse Mr. Connors for the approximately $130,000 spent to 
date on legal fees, and that any liability resulting from the litigation was 
assumed by the Company as a result of the Company's reorganization. The 
Company responded to Mr. Connors that it believed that his actions and 
dealings with Mr. Norton were solely in his individual capacity as a 
shareholder of JCG, and the Company declined to assume the defense or 
reimburse him for previously incurred legal fees, and the Company denied that 
it has any liability with respect to such matter. If, however, JCG were to 
have been found liable to Mr. Norton as a result of the actions of Mr. 
Connors, then the Company could under certain circumstances be liable to Mr. 
Norton for any damages awarded against JCG.

     In April 1995, Messrs. Norton and Connors agreed to voluntarily dismiss 
the lawsuit without prejudice. However, on May 22, 1996, Mr. Norton refiled 
the suit against Mr. Connors and is again seeking $50 million in damages.

     On May 21, 1998 Mr. Connors filed a third party complaint directed 
against the Company. In the complaint Connors alleges that the Company 
purchased JCG's assets and liabilities and that to the extent Mr. Connors is 
held liable the Company must indemnify Mr. Connors for the amount of any 
judgement obtained by Mr. Norton, together with other unnamed damages. The 
Company has filed a motion to dismiss the third party complaint of Mr. 
Connors. That motion is still pending.

     There can be no assurance that the lawsuit will not lead to events 
having a material adverse effect on the Company.

Item 2.   CHANGES IN SECURITIES -

     On June 16, 1998, the Company completed an equity financing through a 
private placement of Series A Convertible Preferred Stock with proceeds to 
the Company of approximately $8.0 million.  The Company, subject to certain 
conditions, may exercise a put option for up to an additional $8.0 million of 
Series A Shares and the investors, subject to certain conditions, may 
exercise a call option for up to an additional $8.0 million of Series A 
Shares.  The Company has filed a registration statement that has not yet 
become effective for the resale of the shares of the Company's Common Stock 
that may be acquired on conversion of the Series A Shares. The Preferred 
Stock carries warrants to purchase an additional 292,612 shares of Common 
Stock at $3.89.

CONVERSION

     The Series A Shares are convertible into shares of Common Stock at the 
election of the holder of such Series A Shares, at a price ("Conversion 
Rate") equal to the lower of 120% of the average of the closing bid prices of 
the Common Stock for the five consecutive days prior to the issuance date 
($3.89 at June 16, 1998) or the average of the five lowest consecutive 
closing bid prices during the thirty consecutive trading days immediately 
preceding the date a holder delivers notice of his election to convert such 
shares.  Except upon the occurrence of certain events, the Investor(s) may 
convert, in aggregate, only up to a maximum of a specified percentage of the 
Series A Shares according to the following schedule:

<TABLE>
<CAPTION>
               Days from Issuance Date    % of Shares
               -----------------------    -----------
                 <S>                          <C>
                     1 - 120 days               0%
                   121 - 165 days              33%
                   166 - 210 days              66%
                 211 days and after           100%
</TABLE>

     Subject to certain exceptions, any Series A Shares outstanding seven 
years after the date such shares were initially issued will be converted into 
shares of the Registrant's Common Stock at the then applicable rate or 
redeemed for cash at the Company's option.  The Warrants expire five years 
from the date of issuance.

ADJUSTMENTS TO CONVERSION RATE

     The Conversion Rate is subject to proportional adjustment upon any stock 
split,  stock dividend or other similar change to the capital stock of the 
Registrant as well other adjustments upon the issuance, or deemed issuance, 
of other shares of Common Stock at a price below the then effective Fixed 
Conversion Price.  Both the Convertible Preferred Stock Conversion Rate and 
the Warrants Exercise Price may be reset downward 270 days after the initial 
issuance date if the closing bid price for a certain length of time is lower 
than the closing bid price prior to the initial close.

                                       58
<PAGE>

REDEMPTION

     The holders of Series A Shares have a right to require the Registrant to 
redeem the Series A Shares upon the occurrence of certain events, including a 
Major Transaction, or a Triggering Event, as each is defined in the 
Certificate of Designation.

LIMITATIONS ON CONVERSION AND EXERCISE

     The Purchase Agreement provides that the number of shares of the 
Registrant's Common Stock issuable upon conversion of the Series A Shares 
cannot exceed 20% of the outstanding shares of the Registrant's Common Stock 
without the approval of the stockholders of the Registrant.  If the closing 
bid price of the Company's Common Stock is $2.75 or less for five consecutive 
days then the Preferred Shareholders can force the Company to request 
approval of the stockholders.  Likewise, the number of shares of the 
Registrant's Common Stock issuable to any single Investor cannot exceed 4.99% 
or more of the Registrant's outstanding Common Stock.

EFFECT ON RIGHTS OF EXISTING SECURITY HOLDERS

     There is no change to the rights, preferences or privileges of the 
holders of the Registrant's Common Stock as a result of the transactions 
which are the subject of the Purchase Agreement.  However, in addition to the 
dilutive impact of the issuance of additional shares of Capital Stock, the 
Series A Shares have a liquidation preference which entitles the holders 
thereof to receive payment upon any dissolution or liquidation of the 
Registrant in preference to the holders of Common Stock.  The amount of such 
preference is equal to $10,000 plus an amount equal to the product of (.04) 
(N/365) ($10,000) for each of the Series A Shares where "N" is the number of 
days since the initial issuance of such shares.

Item 3.   DEFAULTS UPON SENIOR SECURITIES - None

Item 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS -

     The Company's Annual Meeting of Stockholders was held on April 23, 1998. 
At the meeting, stockholders voted on (1) the election of three directors and 
(2) an amendment to the Company's Amended and Restated Certificate of 
Incorporation.  Voting on each matter was as follows:

<TABLE>
<CAPTION>
                                        Votes          Votes       Withheld/      Broker
                                         For          Against       Abstain      Non-Votes
                                      -----------   ----------     ---------    -----------
<S>                                    <C>            <C>           <C>          <C>
1.  Election of Directors

     F. Lance Callis                   21,242,293                   214,595
     John B. Pratt Sr.                 21,241,173                   215,715
     Edward Brennan                    21,239,193                   217,695

2.  Amendment to Amended
     and Restated Certificate
     of Incorporation                  21,328,907     86,304         41,677

</TABLE>

                                       59
<PAGE>

Item 5.   OTHER INFORMATION-None

Item 6.   EXHIBITS AND REPORTS ON FORM 8-K

(a)       EXHIBITS.

               27 - Financial Data Schedule

(b)       REPORTS ON FORM 8-K

          1.   Report on Form 8-K and Form 8-K/A-1, dated June 16, 1998, 
               filed with the Securities and Exchange Commission containing 
               information regarding the Company's sale of Convertible 
               Preferred Stock and Warrants.

                                       60
<PAGE>

                               ARGOSY GAMING COMPANY
                                     SIGNATURES



     Pursuant to the requirement of the Securities Exchange Act of 1934, the 
registrant has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.

<TABLE>
<S>                            <C>
Date:     August 14, 1998      /s/   Dale R. Black
     -----------------------   -------------------------------------------
                                     Dale R. Black
                                     Vice President-Chief  Financial Officer
                                     (Principal Accounting Officer)
</TABLE>

                                       61