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

                                    FORM 10-Q


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

         For the quarterly period ended                    JUNE 30, 2002
                                                           -------------

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

         For the transition period from ___________ to ____________


                         Commission File Number 0-33007
                                                -------

                               JCC HOLDING COMPANY
                               -------------------
             (Exact name of registrant as specified in its charter)


            Delaware                                  62-1650470
            --------                                  ----------
    (State or other jurisdiction                     (IRS employer
         of incorporation)                       identification number)

                                 One Canal Place
                           365 Canal Street, Suite 900
                          New Orleans, Louisiana, 70130
                          -----------------------------
                    (Address of principal executive offices)

                  Registrant's telephone number (504) 533-6000


         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 shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes  X   No
                                       ---  ---


          Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes  X   No
                          ---  ---

         Indicate the number of shares outstanding of the issuer's common stock,
as of the latest practicable date.

         The number of shares of the registrant's common stock outstanding at
August 9, 2002 was 12,388,050.



<PAGE>
                      JCC HOLDING COMPANY AND SUBSIDIARIES
                                  JUNE 30, 2002

                                      INDEX

<Table>
<Caption>
                                                                                                PAGE
                                                                                               NUMBER
                                                                                               ------
<S>       <C>                                                                                   <C>
SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS                                   3

PART I    FINANCIAL INFORMATION                                                                  4

          Item 1.   Financial Statements                                                         4

          Condensed Consolidated Balance Sheets as of
              June 30, 2002 and December 31, 2001 (Unaudited)                                    4

          Condensed Consolidated Statements of Operations for the
              Three and Six Months Ended June, 2002 and 2001 (Unaudited)                         5

          Condensed Consolidated Statements of Cash Flows for the
              Six Months Ended June 30, 2002 and 2001 (Unaudited)                                6

          Notes to Condensed Consolidated Financial Statements (Unaudited)                       7

          Item 2.   Management's Discussion and Analysis of Financial
              Condition and Results of Operations                                                28

          Item 3.   Quantitative and Qualitative Disclosures About Market Risk                   38

PART II  OTHER INFORMATION                                                                       39

          Item 1.   Legal Proceedings                                                            39

          Item 2.   Changes in Securities and Use of Proceeds                                    41

          Item 3.   Defaults Upon Senior Securities                                              41

          Item 4.   Submission of Matters to a Vote of Security Holders                          41

          Item 5.   Other Information                                                            41

          Item 6.   Exhibits and Reports on Form 8-K                                             42

SIGNATURES                                                                                       42
</Table>





                                       2
<PAGE>

         SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

         This Quarterly Report on Form 10-Q includes forward-looking statements
made pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995, including in particular the statements about (1) our plans,
objectives, expectations and prospects, (2) the development of non-gaming
entertainment space on the second floor of the casino in New Orleans, Louisiana
and plans for various adjacent properties and (3) the development and
implementation of a plan for expanded buffet and dining facilities and other
amenities for our patrons to the extent now permitted by applicable
restrictions. In particular, such statements appear under the heading "Item 2.
Management's Discussion and Analysis of Financial Condition and Results of
Operations" in this document. The words "expect," "anticipate," "intend,"
"plan," "believe," "seek," "estimate" and similar expressions identify
forward-looking statements. Although we believe that the plans, objectives,
expectations and prospects reflected in or suggested by such forward-looking
statements are reasonable, such statements involve uncertainties and risks, and
we cannot assure you that such plans, objectives, expectations and prospects
will be achieved. Important factors that could cause actual results to differ
materially from the results anticipated by the forward-looking statements
include such matters as:

     o    Potential delays in closing any merger transaction due to regulatory
          or other matters;

     o    our ability to achieve sufficient revenues under our Plan of
          Reorganization to meet our reduced but continuing obligations to the
          State of Louisiana, the City of New Orleans and our various other
          creditors, including, in particular, our minimum required annual
          payment to the State of Louisiana in the amount of the greater of (i)
          $60 million beginning April 1, 2002 and continuing for each casino
          operating contract fiscal year thereafter during the term of the
          casino operating contract or (ii) the sum of a sliding scale of gross
          gaming revenues that begins at 21.5% for gross gaming revenues up to
          $500 million and escalates to a high of 29% for revenues in excess of
          $900 million;

     o    our ability to compete successfully with riverboat gaming operations
          in our market area which are now permitted to remain dockside without
          the requirement of periodically traveling offshore; and

     o    our ability to develop a sufficiently effective marketing plan to
          succeed in operating in a weakened national economy, a weakened
          convention and leisure travel market and an increasingly competitive
          local and regional gaming marketplace in which we also compete with
          other entertainment alternatives.

All written or oral forward-looking statements attributable to us are expressly
qualified in their entirety by these cautionary statements.



                                       3
<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                      JCC HOLDING COMPANY AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                       JUNE 30, 2002 AND DECEMBER 31, 2001
                                   (UNAUDITED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<Table>
<Caption>
                                                                                            DECEMBER 31,
                                                                           JUNE 30, 2002       2001
                                                                           -------------    ------------
<S>                                                                          <C>            <C>
                                     ASSETS
Current Assets:
   Cash and cash equivalents (includes restricted
      cash of $4,597 and $3,253, respectively)                               $  55,911      $  41,702
   Accounts receivable, net of allowance for doubtful
      accounts of $4,768 and $4,022, respectively                                3,345          3,414
   Inventories                                                                     534            639
   Prepaids and other assets                                                     4,290          2,162
   Property available for sale                                                   6,500             --
                                                                             ---------      ---------
         Total current assets                                                   70,580         47,917
                                                                             ---------      ---------
Property and Equipment:
   Buildings on leased land                                                    129,027        129,027
   Furniture, fixtures and equipment                                            29,095         28,406
   Property held for development                                                 1,519         10,708
   Leasehold improvements                                                          284            284
   Construction in progress                                                        595            309
                                                                             ---------      ---------
         Total                                                                 160,520        168,734
   Less - accumulated depreciation                                             (40,185)       (35,253)
                                                                             ---------      ---------
         Net property and equipment                                            120,335        133,481
                                                                             ---------      ---------
Other Assets:
   Deferred operating contract cost, net of accumulated
      amortization of $4,893 and $4,351, respectively                           23,912         24,454
   Lease prepayment, net of accumulated
      amortization of $1,217 and $1,082, respectively                            5,911          6,046
   Deferred charges and other, net of accumulated
      amortization of $2,707 and $2,320, respectively                           10,830         11,225
                                                                             ---------      ---------
         Total other assets                                                     40,653         41,725
                                                                             ---------      ---------
         Total Assets                                                        $ 231,568      $ 223,123
                                                                             =========      =========

                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
   Accounts payable - trade                                                  $     999      $   2,196
   Accrued interest                                                              1,534             --
   Accrued expenses                                                             14,664         17,231
   Due to affiliates                                                             6,820          4,591
   Preconfirmation contingencies                                                   887            900
   Other                                                                         2,935          2,036
                                                                             ---------      ---------
         Total current liabilities                                              27,839         26,954
                                                                             ---------      ---------
Long-term debt, net of discount (including debt to affiliates of $83,102
      and $43,824, respectively)                                               107,674        105,676
Due to affiliates                                                                2,050          2,050
Other long-term liabilities                                                        404            428
Commitments and Contingencies
Stockholders' Equity:
   Common Stock:
      Common Stock (40,000 shares authorized; 12,386 shares
         issued and outstanding; par value $.01 per share)                         124            124
   Additional paid-in capital                                                  413,395        413,150
   Accumulated deficit                                                        (319,918)      (325,259)
                                                                             ---------      ---------
         Total stockholders' equity                                             93,601         88,015
                                                                             ---------      ---------
         Total Liabilities and Stockholders' Equity                          $ 231,568      $ 223,123
                                                                             =========      =========
</Table>

See Notes to Unaudited Condensed Consolidated Financial Statements.



                                       4
<PAGE>
                      JCC HOLDING COMPANY AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001
                                  (UNAUDITED)
                        (IN THOUSANDS, EXCEPT SHARE DATA)

<Table>
<Caption>

                                                                 THREE MONTHS ENDED                  SIX MONTHS ENDED
                                                           ------------------------------      ------------------------------
                                                               2002              2001              2002             2001
                                                           ------------      ------------      ------------      ------------
<S>                                                        <C>               <C>               <C>               <C>
Revenues:
    Casino                                                 $     68,039      $     60,095      $    138,291      $    121,455
    Food and beverage                                             6,317             5,098            12,497            10,361
    Retail, parking and other                                     3,032             2,845             6,070             5,598
    Less - casino promotional allowances                         (9,309)           (9,982)          (18,133)          (20,346)
                                                           ------------      ------------      ------------      ------------
       Total net revenues                                        68,079            58,056           138,725           117,068
                                                           ------------      ------------      ------------      ------------

Operating Expenses:
    Direct:
       Casino                                                    32,430            31,758            66,674            79,839
       Food and beverage                                          4,025             3,819             8,076             7,668
       Retail, parking and other                                  1,308               870             2,816             2,127
    General and administrative                                   22,730            19,065            42,915            39,955
    Depreciation and amortization                                 3,072             3,122             6,115             5,653
    Provision for asset impairment                                   --                --             2,689                --
                                                           ------------      ------------      ------------      ------------
       Total operating expenses                                  63,565            58,634           129,285           135,242
                                                           ------------      ------------      ------------      ------------

Operating Income (Loss)                                           4,514              (578)            9,440           (18,174)
                                                           ------------      ------------      ------------      ------------

Reorganization Expenses                                              --              (600)               --          (101,029)

Other Income (Expense):
    Interest expense, net of capitalized interest                (2,200)           (2,930)           (4,320)           (3,551)
    Interest and other income                                       129                75               221               266
                                                           ------------      ------------      ------------      ------------
       Total other income (expense)                              (2,071)           (2,855)           (4,099)           (3,285)
                                                           ------------      ------------      ------------      ------------

Income (Loss) Before Extraordinary Item                           2,443            (4,033)            5,341          (122,488)

Extraordinary Gain on Early Extinguishment of Debt                   --                --                --           213,448

                                                           ------------      ------------      ------------      ------------
Net Income (Loss)                                          $      2,443      $     (4,033)     $      5,341      $     90,960
                                                           ============      ============      ============      ============

Basic Per Share Data:
    Income (Loss) Before Extraordinary Item                $       0.20      $      (0.33)     $       0.43      $      (9.89)
    Extraordinary Gain on Early Extinguishment of Debt               --                --                --      $      17.23
                                                           ------------      ------------      ------------      ------------
    Basic Net Income (Loss)                                $       0.20      $      (0.33)     $       0.43      $       7.34
                                                           ============      ============      ============      ============

Diluted Per Share Data:
    Income (Loss) Before Extraordinary Item                $       0.19      $      (0.33)     $       0.42      $      (9.89)
    Extraordinary Gain on Early Extinguishment of Debt               --                --                --      $      17.23
                                                           ------------      ------------      ------------      ------------
    Basic Net Income (Loss)                                $       0.19      $      (0.33)     $       0.42      $       7.34
                                                           ============      ============      ============      ============

    Weighted Average Shares Outstanding                      12,386,200        12,386,200        12,386,200        12,386,200
    Dilutive Effect of Stock Options                            420,274                --           233,147                --
                                                           ------------      ------------      ------------      ------------
    Weighted Average Common and Common
       Equivalent Shares Outstanding                         12,806,474        12,386,200        12,619,347        12,386,200
                                                           ============      ============      ============      ============
</Table>

See Notes to Unaudited Condensed Consolidated Financial Statements.


                                       5
<PAGE>
                      JCC HOLDING COMPANY AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                For the Six Months Ended June 30, 2002 and 2001
                                  (Unaudited)
                                 (In thousands)

<Table>
<Caption>
                                                                                              2002          2001
                                                                                           ---------      ---------
<S>                                                                                        <C>            <C>
Cash Flows From Operating Activities:
   Net income                                                                              $   5,341      $  90,960
   Adjustments to reconcile net income to net cash
      provided by (used in) operating activities:
      Depreciation and amortization                                                            6,115          5,653
      Amortization of note discount                                                            1,246         90,884
      Deferred rent                                                                              (24)           292
      Provision for bad debts                                                                  1,003          1,057
      Provision for asset impairment                                                           2,689             --
      Amortization of unearned compensation                                                      245             --
      Extraordinary gain on early extinguishment of debt                                          --       (213,448)
      Changes in operating assets and liabilities:
         Accounts receivable                                                                    (934)         1,788
         Inventories                                                                             105             36
         Prepaids and other assets                                                            (2,128)           184
         Accounts payable - trade                                                             (1,197)         1,123
         Accrued interest                                                                      2,285             --
         Accrued expenses                                                                     (2,567)         2,960
         Preconfirmation contingencies                                                           (13)           (21)
         Due to affiliates                                                                     2,229         12,918
      Other current liabilities                                                                  899           (325)
   Payment of liabilities subject to compromise due to reorganization activities:
      Reorganization costs, excluding amortization of note discount of $90,314 in 2001            --         10,715
      Payment of reorganization costs                                                             --         (8,926)
                                                                                           ---------      ---------
         Net cash flows provided by (used in) operating activities                            15,294         (4,150)
                                                                                           ---------      ---------

Cash Flows From Investing Activities:
   Capital expenditures                                                                       (1,085)          (643)
   Change in deferred charges and other assets                                                    --           (264)
                                                                                           ---------      ---------
         Net cash flows used in investing activities                                          (1,085)          (907)
                                                                                           ---------      ---------

Cash Flows From Financing Activities:
   Net short-term borrowings - affiliate                                                          --             --
   Net proceeds from notes payable - affiliate                                                    --          5,745
                                                                                           ---------      ---------
         Net cash flows provided by financing activities                                          --          5,745
                                                                                           ---------      ---------
Net increase in cash and cash equivalents                                                     14,209            688

Cash and cash equivalents, beginning of period                                                41,702         26,626
                                                                                           ---------      ---------
Cash and cash equivalents, end of period                                                   $  55,911      $  27,314
                                                                                           =========      =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
   Cash paid during the period for:
      Interest                                                                             $     744      $   1,476
   Noncash investing and financing activities:
      Increase in long-term debt for payment-in-kind interest payments                     $     751      $   1,191
</Table>

See Notes to Unaudited Condensed Consolidated Financial Statements.



                                       6
<PAGE>

                      JCC HOLDING COMPANY AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1.  ORGANIZATION, BASIS OF PRESENTATION AND BANKRUPTCY IN JANUARY 2001

         Defined terms used herein that are not specifically defined in this
report have the meanings given to them in our Annual Report on Form 10-K filed
previously with the Securities and Exchange Commission.

         ORGANIZATION. JCC Holding Company was incorporated under Delaware law
on August 20, 1996. We are a casino and entertainment development company, and
conduct business through our wholly-owned subsidiaries, Jazz Casino Company,
L.L.C., JCC Development Company, L.L.C., JCC Canal Development, L.L.C., and JCC
Fulton Development, L.L.C., all Louisiana limited liability companies. We began
business operations in October 1998, when we assumed the business operations
formerly owned by Harrah's Jazz Company, a general partnership, and its
subsidiary, Harrah's Jazz Finance Corp., which filed for relief under the United
States Bankruptcy Code on November 22, 1995. Except as otherwise noted, for
purposes of this report, references to the words "we", "us", and "our" refer to
JCC Holding Company together with each of our subsidiaries.

         Our purpose is to operate an exclusive land-based casino entertainment
facility (the "Casino") in New Orleans, Louisiana. Our Casino commenced
operations on October 28, 1999. We also plan to develop approximately 130,000
square feet of multipurpose non-gaming entertainment space on the second floor
of the Casino and sell or develop various adjacent properties for entertainment
uses supporting the Casino. On October 15, 2001 we sold the parcel of land
across from the Casino located at 3 Canal Place to CP3 Associates, LLC. The sale
netted approximately $6 million in cash. We plan to use the proceeds from this
sale for development needs on the second floor, subject to any limitations
imposed by our financing documents. These funds, however, are not sufficient to
complete development of the second floor, and we have not obtained sufficient
financing to fully fund these developments.

         BASIS OF PRESENTATION. The accompanying unaudited condensed
consolidated financial statements have been prepared in accordance with the
instructions to Form 10-Q, and therefore do not include all information and
notes necessary for complete financial statements in conformity with accounting
principles generally accepted in the United States of America. The results for
the periods indicated are unaudited, but reflect all adjustments (consisting
primarily of normal recurring accruals and reclassifying previously reported
amounts to conform to current classifications) which management considers
necessary for a fair presentation of operating results for the interim periods
presented. However, the results of operations for the interim periods presented
should not be used as a basis for estimating results of operations for a full
year. These condensed consolidated financial statements and related notes should
be read in conjunction with the financial statements and notes included in our
Annual Report on Form 10-K for the year ended December 31, 2001.

         We were in bankruptcy proceedings from January 4, 2001 until March 29,
2001, the effective date of consummation of our plan of reorganization.
Accordingly, for a substantial portion of the six-month period ended June 30,
2001, we were debtors-in-possession.

         BANKRUPTCY IN JANUARY 2001. On January 4, 2001, we filed a voluntary
petition for relief under Chapter 11 of the United States Bankruptcy Code in
order to allow restructuring of our obligations to the State of Louisiana and
the City of New Orleans, long-term debt, bank credit facilities, and trade and
other



                                       7
<PAGE>

obligations. The filing was made in the United States Bankruptcy Court for the
Eastern District of Louisiana in New Orleans (the "Bankruptcy Court"). After the
filing of the petition, we continued to operate as debtors-in-possession subject
to the Bankruptcy Court's supervision and orders until our plan of
reorganization was consummated.

         Our plan of reorganization, which was approved by the Bankruptcy Court
on March 19, 2001 and was consummated on March 29, 2001, resulted in, among
other things, elimination of our then existing common stock and debt securities
and the issuance of new common stock and debt securities to certain creditors.
The accounting consequences of our bankruptcy proceeding are reflected in the
financial statements as of the effective date of our reorganization. The income
statement during the first quarter 2001 includes only five days of interest
expense on our old long-term debt and other obligations, except for
debtors-in-possession loans made during the bankruptcy proceeding upon which
interest accrued through March 29, 2001, the effective date of our
reorganization. The interest charges incurred contractually during the first
quarter 2001, but not recorded as a result of our bankruptcy proceeding, totaled
$15.6 million. The cancellation of non-affiliate debt and related accrued
interest resulted in an extraordinary gain as of the effective date. During the
first quarter of 2001, we recorded an extraordinary gain on the early
extinguishment of our debt of $213.4 million. This gain arises from the
discharge of $317.0 million of outstanding principal and interest due to
non-affiliates under our senior subordinated notes with contingent payments due
2009, bank term loans, and convertible junior subordinated debentures, in
exchange for new debt and equity securities with a fair value of $103.6 million.
In addition, the cancellation of affiliate debt and other obligations resulted
in an increase of $304.8 million to additional paid-in capital as of the
effective date of our reorganization. We did not meet the requirements to
utilize fresh start reporting. Therefore, in accordance with Statement of
Position 90-7: "Financial Reporting by Entities in Reorganization Under the
Bankruptcy Code," our liabilities compromised by the confirmed plan of
reorganization have been stated at the present value of the amounts to be paid,
reorganization expenses have been separately disclosed and the forgiveness of
debt has been reported as an adjustment to additional paid-in capital and an
extraordinary item in the condensed consolidated financial statements.

         Our plan of reorganization took into account the reduction of our
annual minimum payment obligations to the Louisiana Gaming Control Board to the
greater of 21.5% of gross gaming revenue or a minimum payment of $50 million
commencing April 1, 2001, through March 31, 2002, and $60 million each fiscal
year thereafter (see Note 6). Under the plan, Harrah's Entertainment, Inc.
("Harrah's Entertainment" or "HET") and Harrah's Operating Company, Inc.
("Harrah's Operating Company" or "HOCI") (collectively "Harrah's") have provided
a new minimum payment guaranty to the Louisiana Gaming Control Board, which
secures Jazz Casino Company, L.L.C.'s ("Jazz Casino") annual minimum payment
obligation to the Louisiana Gaming Control Board for an initial four year period
through March 31, 2005, pursuant to a new agreement among Harrah's Entertainment
and Harrah's Operating Company and our subsidiary Jazz Casino (the "new HET/JCC
Agreement") (see Note 4).

         Our plan of reorganization also took into account a reduction of at
least $5 million in payments, taxes, administrative and operational costs and/or
other expenses required annually under the ground lease with the City of New
Orleans and the Rivergate Development Corporation or resulting from obligations
imposed or created by the ground lease, whether paid to the City, the Rivergate
Development Corporation or others. This reduction was to have occurred within
120 days from March 15, 2001, but was extended by 30 days. Over the following
months we worked with the special development projects committee to develop a
list of lease modifications and other items that we could agree upon, and on
January 17, 2002, the City Council approved an ordinance and lease amendments
that delineate these changes as outlined below. Each item agreed upon either
reduces payments required under the amended ground lease, or lifts some
operating restriction that we believe will result in improved operating



                                       8
<PAGE>

performance by providing cost savings other than the lease payments or by
providing additional revenue opportunities. The following is a summary of the
material items agreed upon:

          o    Jazz Casino granted an annual credit of $2.1 million in property
               tax reduction toward the total reduction, including the property
               tax reduction achieved in 2001;

          o    A small lot on the corner of Fulton and Poydras Streets, which
               was previously conveyed by Jazz Casino's predecessors to the City
               of New Orleans, will be returned to Jazz Casino either in fee
               title, if the law allows, or pursuant to a ninety-nine year
               lease, independent of the amended ground lease;

          o    A lease amendment that commits the City to support, assist and
               cooperate with the development of a hotel on the Fulton Street
               Property;

          o    A City commitment to support, assist and cooperate with our
               efforts to obtain approvals and permits for all future
               development. The agreement places time limits on Rivergate
               Development Corporation review and approval when such is
               necessary for City permitting;

          o    Jazz Casino gained permission to own and operate two courtesy
               cars and one courtesy van;

          o    The language of the amended ground lease was conformed to reflect
               the recent changes in Louisiana law with respect to food
               services, hotel development and providing complimentary services;

          o    A number of significant adjustments to the reporting, record
               keeping and other administrative requirements of the open access
               program and plans, designed to facilitate participation by
               minorities, women and disadvantaged persons and business
               enterprises in developing, constructing and operating the Casino,
               which will result in cost savings and reduction of exposure for
               defaults under that plan;

          o    The City has agreed to a reduction in the number of parking
               spaces required to be dedicated to Casino use. As a result up to
               275 spaces may be rented by Jazz Casino to third parties under
               parking contracts, which will provide additional revenue to us;
               and

          o    Mutual waivers of any defaults that any parties can allege up to
               the effective date of the amendments and a requirement of the
               dismissal of all legal proceedings filed by any parties as a
               result of the $5 million reduction issue.

          On January 28, 2002, the Mayor of New Orleans signed the ordinance
effecting the above changes and on February 7, 2002, the lease amendment was
signed by all parties. The parking changes resulted from subsequent action by
the City Planning Commission and the City Council.

          On the effective date of our plan of reorganization, our outstanding
common stock consisted of 12,386,200 shares of new common stock. Under the plan
of reorganization, in consideration of various waivers, extinguishments of
claims and other consideration, Harrah's Entertainment received 6,069,238 shares
(49%) of our new common stock. Holders of claims arising under tranche B-1 of
the bank credit facilities received 1,734,068 shares (14%) of our new common
stock; and holders of claims arising under



                                       9
<PAGE>

our senior subordinated notes received 4,582,894 shares (37%) of our new common
stock. On May 17, 2002 Harrah's Entertainment purchased an additional 2,000
shares in an open market transaction, and on June 7, 2002, Harrah's
Entertainment announced that it had purchased the shares previously issued to
holders of claims under tranche B-1 of the bank credit facilities, bringing its
total holdings to 7,805,306 shares (63%) of our new common stock. On July 30,
2002, we entered into a merger agreement with Harrah's Entertainment, under
which a Harrah's affiliate will acquire the remaining shares that Harrah's does
not already own (the "Merger") (see Note 9).

         In addition, on the effective date of our reorganization, we issued new
term notes, the Senior Notes due 2008 (the "Senior Notes"), in the aggregate
amount of $124.5 million (face value), which will mature seven years from their
issuance and bear interest at the London Interbank Offered Rate ("LIBOR") plus
275 basis points (see Note 3). The holders of claims arising under tranches A-1,
A-3 and B-1 of the bank credit facilities received $55.0 million in Senior
Notes; Harrah's Entertainment and its affiliates, as holders of claims arising
under the HET/JCC Agreement and tranche A-2 of the bank credit facilities
received $51.6 million in Senior Notes; and holders of claims arising under the
senior subordinated notes received $17.9 million in Senior Notes. All holders of
casino operation related unsecured claims were paid, in cash, the full amount of
their claims. On June 7, 2002, Harrah's Entertainment announced that it had
purchased the term notes originally issued to holders of claims arising under
tranches A-3 and B-1, bringing its ownership interest in the face amount of term
notes to $99.1 million as of June 30, 2002.

         We have up to $35 million available for working capital purposes under
a revolving line of credit provided by Harrah's Entertainment (see Note 2).

         Our manager, Harrah's New Orleans Management Company, continues to
manage the Casino pursuant to our management agreement, which was amended in
connection with our bankruptcy plan of reorganization. The amount of the
management fee previously paid to the manager was adjusted under the amended
management agreement, and certain fees charged to the Casino by the manager and
its affiliates were eliminated (see Note 4).

         PROVISION FOR ASSET IMPAIRMENT. On April 23, 2002, Fulton Development
entered into an agreement to sell the Fulton Street Property to a hotel
developer for $6.5 million. The agreement was subject to a ninety-day due
diligence period. On June 27, 2002, Fulton Development cancelled the sale
agreement due to certain conditions and terms of the sale contract not being
satisfied. During the first quarter of 2002 in connection with this conditional
sale, we recorded a provision for asset impairment of $2.7 million to reduce the
book value of the Fulton Street Property to its estimated fair value less
selling costs.

         REORGANIZATION ITEMS. During the six months ended June 30, 2001, we
incurred reorganization expenses of $101 million. These expenses include a $90.3
million charge to reflect the write off of the unamortized balance of the
discount of the senior subordinated notes, which were cancelled as a result of
our plan of reorganization to record the amount of the allowed claim. The
remaining expenses consisted primarily of consulting and legal fees and costs
associated with retention bonuses.

         NET INCOME (LOSS) PER SHARE. In accordance with the provisions of SFAS
No. 128, "Earnings Per Share," we compute our basic earnings per share by
dividing the net income (loss) attributable to common stockholders by the
weighted average number of shares outstanding during the period. Our diluted
earnings per common share is computed by dividing the net income (loss)
attributable to common stockholders by the weighted average number of shares and
dilutive common stock equivalent shares



                                       10
<PAGE>
outstanding during the period. Common stock equivalent shares consist of shares
issuable upon exercise of outstanding stock options for which market price
exceeds exercise price, excluding any "in-the-money" stock options with
antidilutive effect. For the three and six months ended June 30, 2002, common
stock equivalents consisted of stock options outstanding of 420,274 and 233,147,
respectively. During the three and six months ended June 30, 2001, no common
stock equivalents are included in net income (loss) per share as they were
antidilutive.

         STOCK-BASED COMPENSATION. In 1999, we adopted the disclosure-only
provisions of SFAS No. 123 "Accounting for Stock-Based Compensation." SFAS No.
123 encourages, but does not require, companies to adopt a fair value based
method for determining expense related to stock-based compensation. We continue
to account for stock-based compensation using the intrinsic value method as
prescribed under Accounting Principles Board Opinion ("APB") No. 25, "Accounting
for Stock Issued to Employees," and related interpretations.

         Pursuant to certain executives' employment agreements, on March 4, 2002
and March 7, 2002, we granted 498,550 options and 120,512 options, respectively,
to purchase shares of common stock at an exercise price of $2.00 per share. We
recorded compensation expense of $245,150 during the first quarter to account
for the intrinsic value of these stock option grants. On May 31, 2002, we
granted 430,500 options to purchase shares of common stock at an exercise price
of $5.05. We recorded no compensation expense during the second quarter as these
stock options were issued at fair market value on the day of the grant. All of
these stock options are the subject of litigation, as described further in Note
6. However, on July 30, 2002, we entered into a merger agreement with Harrah's
Entertainment, under which a Harrah's affiliate will acquire the remaining
shares of our common stock that Harrah's does not already own. We anticipate the
litigation regarding the stock options will be dismissed in connection with the
closing of the Merger, which in such event would result in changes to the terms
of these stock grants. For further discussion on the Merger, see Note 9.

         RECENTLY ISSUED PRONOUNCEMENTS: The Financial Accounting Standards
Board ("FASB") has recently issued Statement of Financial Accounting Standards
("SFAS") No. 141 "Business Combinations", SFAS No. 142 "Goodwill and Other
Intangible Assets", SFAS No. 143, "Accounting for Asset Retirement Obligations",
and SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets." SFAS No. 141 requires that the purchase method of accounting be used
for all business combinations initiated after June 30, 2001 and that the use of
the pooling-of-interests method is no longer allowed. SFAS No. 142 requires that
upon adoption, amortization of goodwill will cease and instead, the carrying
value of goodwill will be evaluated for impairment on an annual basis.
Identifiable intangible assets will continue to be amortized over their useful
lives and reviewed for impairment in accordance with SFAS No. 121 "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of." SFAS No. 142 is effective for fiscal years beginning after December 15,
2001. SFAS No. 143 establishes accounting standards for the recognition and
measurement of an asset retirement obligation and its associated asset
retirement cost. It also provides accounting guidance for legal obligations
associated with the retirement of tangible long-lived assets. SFAS No. 143 is
effective in fiscal years beginning after June 15, 2002, with early adoption
permitted. SFAS No. 144 establishes a single accounting model for the impairment
or disposal of long-lived assets, including discontinued operations. SFAS No.
144 superseded SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of" and APB Opinion No. 30, "Reporting
the Results of Operations - Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions." The provisions of SFAS No. 144 are effective in fiscal years
beginning after December 15, 2001, with early adoption permitted, and in general
are to be applied prospectively. We



                                       11
<PAGE>

adopted these standards effective January 1, 2002, which resulted in no
significant impact on our financial statements.

         In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections," which eliminates the treatment of an extinguishment of debt as
extraordinary unless the extinguishment meets the requirement of an
extraordinary item outlined in APB 30, "Reporting the Results of Operations -
Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary,
Unusual and Infrequently Occurring Events and Transactions." SFAS No. 145 also
requires that capital leases that are modified so that the resulting lease
agreement is classified as an operating lease be accounted for under the
sale-leaseback provisions of FASB Statement No. 98, "Accounting for Leases:
Sale-Leaseback Transactions Involving Real Estate; Sales-Type Leases of Real
Estate; Definition of the Lease Term; Initial Direct Costs of Direct Financing
Leases", or paragraphs 2 and 3 of FASB Statement No. 28, "Accounting for Sales
with Leasebacks, as applicable." Upon adoption, any gain or loss on
extinguishment of debt previously classified as extraordinary that does not meet
the requirements of APB 30 should be reclassified. SFAS 145 is effective for
fiscal years beginning after May 15, 2002. Management does not believe the
impact of any required changes on our financial statements will be material.

          RECLASSIFICATIONS. Certain reclassifications have been made in prior
year's financial statements to conform to classifications used in the current
year.

NOTE 2.  SHORT-TERM BORROWINGS

         Our revolving credit facility, provided on the effective date of our
reorganization by Harrah's Entertainment and its affiliates, provides Jazz
Casino with up to $35 million of available credit to meet working capital
requirements, including up to $10 million of availability for letters of credit.
The new revolving credit facility bears interest at a rate of LIBOR plus 3.00%
per annum and will mature in 2006. The credit facility is secured by
substantially all of our assets (except the casino operating contract with the
State of Louisiana, our Casino bankroll and the gross revenue share payments due
to the Louisiana Gaming Control Board). The credit facility is also secured on a
second lien priority basis, junior only to a lien securing our obligations under
the new HET/JCC Agreement (see Note 4). We are also subject to numerous debt
covenants under the revolving credit facility, including restrictions on, among
other things, certain payments, transactions with affiliates, dividend payments,
liens, incurrence of additional indebtedness, asset sales, mergers and
consolidations, payment of certain indebtedness, capital expenditures, and
investments or loans. As of August 9, 2002, there were no outstanding borrowings
under this facility, although outstanding letters of credit totaling $700,000
have been issued under this revolving credit facility.

NOTE 3.  LONG-TERM DEBT

          On the effective date of our reorganization, our then existing
long-term debt was cancelled. The Senior Notes were issued in the aggregate
principal (face) amount of $124.5 million that will mature seven years after the
effective date (see Note 1). The Senior Notes bear interest at LIBOR plus 2.75%
per annum payable quarterly. In the first year, one half of the interest
payments on the Senior Notes may be paid in kind and added to the principal at
our option. As of August 9, 2002, we have paid $5.3 million in cash interest and
paid $3.8 million in interest in kind by issuing additional Senior Notes.
Principal payments on the Senior Notes are amortized as follows: zero in the
first year; 50% of free cash flow (as defined in the Senior Note agreement) in
the second through fourth years; and $6 million annually in the fifth through
seventh years, with all remaining unpaid principal payable at maturity. As of
the effective


                                       12
<PAGE>

date, we considered the variable interest rate on the Senior Notes to be lower
than prevailing interest rates for debt with similar terms and credit ratings.
In accordance with Statement of Position 90-7, the Senior Notes were valued
based on discounting concepts to approximate their fair value of $100.9 million
(12.5% discount rate). We are also subject to numerous debt covenants under the
Senior Note agreement, including restrictions on, among other things, certain
payments, transactions with affiliates, dividend payments, liens, incurrence of
additional indebtedness, asset sales, mergers and consolidations, payment of
certain indebtedness, capital expenditures, and investments or loans. Further,
effective March 29, 2001, each of JCC Development, Canal Development and Fulton
Development issued guarantees with respect to the Senior Notes. Under the terms
of the proposed merger agreement discussed in Note 9, Harrah's has agreed to
assume or retire all our outstanding debt.

NOTE 4.  RELATED PARTY TRANSACTIONS

          AMENDED MANAGEMENT AGREEMENT. The Casino's operations are managed by
Harrah's New Orleans Management Company pursuant to our amended management
agreement. Harrah's New Orleans Management Company is an indirect wholly owned
subsidiary of Harrah's Entertainment, which has a majority ownership interest in
us and representation on our board of directors. We have also contracted with
Harrah's Operating Company to perform various administrative services pursuant
to this management agreement. Administrative services to be provided under this
agreement include accounting, computer processing, risk management, marketing
and administration of certain human resource matters.

          On the effective date, all fees then due under our management
agreement were waived and we entered into the amended management agreement.
Under the amended management agreement, the manager will continue to be
responsible for and have authority over, among other things:

     o    hiring, supervising and establishing labor policies with respect to
          employees working in the Casino;

     o    gaming and entertainment policies and operations including security
          and internal control procedures;

     o    advertising, marketing and promoting the Casino;

     o    providing Casino-level accounting and budgeting services;

     o    maintaining, renovating and improving the Casino;

     o    performing certain system services generally performed at casinos
          owned or managed by Harrah's Entertainment or its affiliates; and

     o    performing certain other functions identified by Jazz Casino and
          agreed to by the manager.

          In addition, the manager and Harrah's Operating Company shall continue
to provide the administrative services formerly provided by Harrah's Operating
Company under the administrative services agreement, which was terminated on the
effective date, at no additional cost (other than for insurance and risk
management services). Under our amended management agreement, as consideration
for managing the Casino, the manager is entitled to receive a management fee
equal to thirty percent of earnings before interest, income taxes, depreciation,
amortization and management fees ("EBITDAM"). Under the amended management
agreement, Jazz Casino shall continue to reimburse Harrah's Entertainment for
the cost of property level executive salaries and benefits and shall continue to
reimburse Harrah's



                                       13
<PAGE>

Entertainment for insurance related to the Casino. Neither the manager or any of
its affiliates shall be entitled to receive fees for services formerly provided
under the administrative services agreement. These services must now be provided
at no additional cost (see Note 1).

          Our manager continues to manage the Casino pursuant to our management
agreement, which was amended in connection with our bankruptcy plan of
reorganization. Under our amended management agreement, we have the right to
terminate the management agreement if the Casino fails to achieve earnings
before interest, income taxes, depreciation, amortization and management fees,
adjusted for certain state and city costs and corporate overhead costs
("Adjusted EBITDAM"), of not less than 85% of the specified target Adjusted
EBITDAM for the twelve months ended March 31, 2002, 84% of the specified target
Adjusted EBITDAM for the twelve months ending March 31, 2003, and 83% of the
specified target Adjusted EBITDAM for the twelve months ending March 31, 2004
and thereafter. The targets of Adjusted EBITDAM for these first three fiscal
periods, as specified in the management agreement, are $115.2 million, $127.4
million, and $134.8 million, respectively. For the twelve months ended March 31,
2002, actual results produced $116.3 million in adjusted EBITDAM. For the twelve
months ended March 31, 2003, the target Adjusted EBITDAM is 84% of $127.4
million, or $107 million. Actual results for the three month period ended June
30, 2002 produced $36.9 million in Adjusted EBITDAM.

          NEW HET/JCC AGREEMENT. On the effective date, our minimum payment loan
along with the guaranty fees and related interest charges were cancelled and
Harrah's Entertainment and Harrah's Operating Company received Senior Notes and
new common stock in the amount of $30.6 million (face value) and approximately
3.1 million shares, respectively. In addition, Jazz Casino entered into the new
HET/JCC Agreement pursuant to which Harrah's Entertainment agreed to provide a
minimum payment guaranty to the Louisiana Gaming Control Board for an initial
four-year period through March 31, 2005, as required by the casino operating
contract. The initial minimum payment guaranty has been provided by Harrah's
Entertainment, and guarantees the following amounts payable to the Louisiana
Gaming Control Board:

     o    $50 million in the period April 1, 2001 to March 31, 2002;

     o    $60 million in the period April 1, 2002 to March 31, 2003;

     o    $60 million in the period April 1, 2003 to March 31, 2004; and

     o    $60 million in the period April 1, 2004 to March 31, 2005.

          Harrah's Entertainment and Harrah's Operating Company will receive a
fee for this guaranty in the amount of two percent of the average amount at risk
for the entire remaining guaranty period, calculated on an annual basis. The
guaranty fee of $4.1 million for the period through March 31, 2002 was accrued
and is payable in four equal installments due on March 31, 2002, March 31, 2003,
March 31, 2004, and March 31, 2005, provided that any then unpaid installments
of the deferred guaranty fee for the period through March 31, 2002 shall be due
and is payable in full upon any termination of the amended management agreement.
For any periods after March 31, 2002, the guaranty fee for each fiscal year
shall be due in four equal installments on June 30, September 30, December 31
and March 31 of the corresponding fiscal year. As of August 9, 2002, $1 million
had been paid to Harrah's Entertainment toward the guaranty fee for the year
ended March 31, 2002 and $750,000 had been paid toward the guaranty fee for the
year ended March 31, 2003. Advances made by Harrah's Entertainment on our behalf
pursuant to the new HET/JCC Agreement bear interest at the rate specified for
loans under our new revolving credit facility (LIBOR plus 3.00% per annum - see
Note 2) and are secured on a first lien priority basis by substantially all of
our assets



                                       14
<PAGE>

(except the casino operating contract, the Casino bankroll and the gross revenue
share payments due to the Louisiana Gaming Control Board).

          Under the casino operating contract, on or before March 31, 2003, we
are required to provide the Louisiana Gaming Control Board a minimum payment
guaranty for the $60 million minimum payment due for the period commencing April
1, 2005 to March 31, 2006. Unless the minimum payment guaranty obligation has
expired, this obligation to post a new guaranty or extend the existing guaranty
continues for each year thereafter such that as of April 1 of each year there
must be in place 36 months of third party guaranteed payments to the Louisiana
Gaming Control Board (see Note 6). Under the HET/JCC Agreement, neither Harrah's
Entertainment nor Harrah's Operating Company is obligated to provide guaranties
of the payments due the Louisiana Gaming Control Board beyond March 31, 2005,
the expiration of the initial four year guaranty.

NOTE 5.  INCOME TAXES

          We have available net operating loss carryforwards as of December 31,
2001 totaling approximately $270 million that begin to expire in 2018 before any
adjustments that may be applicable under Internal Revenue Code Section 382. In
connection with our reorganization upon emergence from bankruptcy, we realized a
gain from the extinguishment of certain indebtedness. This gain will not be
taxable since the gain results from reorganization under the Bankruptcy Code.
However, we are required, as of the beginning of our 2002 taxable year, to
reduce net operating loss ("NOL") carryforwards or our depreciable asset basis,
in an amount equal to such gain on extinguishment.

NOTE 6.  COMMITMENTS AND CONTINGENCIES

          CASINO OPERATING CONTRACT. Since the effective date of our
reorganization, we have operated under an amended casino operating contract
establishing the payments to the Louisiana Gaming Control Board at the greater
of (i) 21.5% of gross gaming revenues from the Casino in the applicable casino
operating contract fiscal year or (ii) $50 million for the period from April 1,
2001 to March 31, 2002, and $60 million for each April 1 to March 31 annual
period thereafter. In addition, we must pay an override on gross gaming revenues
equal to (i) 1.5% of gross gaming revenues in excess of $500 million, up to $700
million, (ii) 3.5% for gross gaming revenues in excess of $700 million, up to
$800 million, (iii) 5.5% for gross gaming revenues in excess of $800 million, up
to $900 million, and (iv) 7.5% for gross gaming revenues in excess of $900
million.

          We were required to procure an initial four-year minimum payment
guaranty guaranteeing the minimum payments required to be made to the Louisiana
Gaming Control Board under the casino operating contract, and must provide
rolling, three-year minimum payment guaranties beginning April 1, 2003. By March
31 of each year (beginning with March 31, 2003), we must obtain a minimum
payment guaranty (or extension thereof) extending the minimum payment guaranty
to the third anniversary of such date, so that three years of future payments to
the Louisiana Gaming Control Board are guaranteed. We need not procure the
guaranty if (i) our gross gaming revenue exceeds $350 million for two successive
years, (ii) we make all payments due during these years without drawing on the
guaranty, and (iii) there are no uncured defaults under the casino operating
contract. The failure to obtain and post a third party guaranty as required by
the casino operating contract is a "termination event" leading to the automatic
termination of the casino operating contract effective as of the last day that
payments are guaranteed to the Louisiana Gaming Control Board under any existing
guaranty. In addition, an automatic termination of our casino operating contract
is an event of default under our ground lease with the City of New



                                       15
<PAGE>

Orleans and the Rivergate Development Corporation, the Indenture governing our
Senior Notes, and our revolving credit agreement.

         In addition, as of the effective date of our reorganization, certain
restrictions previously imposed by our casino operating contract on food and
restaurant facilities, service, lodging and the sale of products not directly
related to gaming operations have been modified to be less restrictive.

         OTHER CONTINGENCIES. The enactment and implementation of gaming
legislation in the State of Louisiana and the development of the Casino and
related facilities have been the subject of lawsuits, claims and delays brought
about by various parties. In addition, we are involved in a number of legal
proceedings and claims arising in the normal course of business. While we cannot
predict the outcome of such legislative proceedings and litigation, we do not
expect that the final outcome of these matters will materially and adversely
affect our results of operations, cash flows, or financial condition.

         In connection with our 2001 bankruptcy, claims were filed by a number
of trade creditors with Casino operating claims. Most of these have been
resolved in the ordinary course of business. Claims were also filed by the City
and State pending the results of ongoing audits of the amounts we remit for
sales and use taxes. While these particular claims have not yet been resolved,
management does not believe the outcome of these claims will materially and
adversely affect our results of operations. Reserves have been established for
the resolution of all remaining claims.

         Following our reduction in the Casino's work force on July 17, 2001,
former employees of the Casino filed lawsuits against us in the Civil District
Court for the Parish of Orleans, State of Louisiana on August 3, 2001. The
Plaintiffs are seeking damages for being laid off prior to the expiration of the
term of alleged employment contracts between our employees and us. We believe
that we have strong legal and factual defenses, and intend to vigorously contest
the claims. No assurances can be given as to the outcome of such lawsuits, and
consequently, we cannot reasonably predict at this time whether the final
outcome of these matters will materially and adversely affect our results of
operations, cash flows, or financial condition.

         On March 15, 2002, Harrah's Entertainment, Inc. and Harrah's Operating
Company, Inc. filed a complaint in the Court of Chancery of the State of
Delaware seeking declaratory and injunctive relief regarding the interpretation
of the Second Amended and Restated Certificate of Incorporation (the "Charter")
and the Third Amended and Restated Bylaws of the Company (the "Bylaws").
Although the complaint sought an award of attorneys' fees and expenses, it did
not seek damages against the Company. The action sought to place Harrah's
nominee, Dr. Charles C. Teamer, on the ballot for election to the board of
directors in addition to Harrah's nominee, Mr. Philip Satre. Harrah's complaint,
therefore, sought a declaration that its nomination of two directors for
election at the 2002 annual meeting was valid under the Charter and Bylaws, and
injunctive relief requiring the Company to recognize its nominations. On March
29, 2002, the Company answered the complaint and filed a counterclaim for
declaratory relief seeking a declaration that the Company's Charter and Bylaws
limited Harrah's nomination right to one candidate for election to the board at
the 2002 and 2003 annual meetings. Harrah's filed its reply to counterclaim on
April 5, 2002. The parties engaged in expedited discovery. Trial was held on May
21 and 22, 2002. Following trial, on May 31, 2002, the Court of Chancery issued
a written opinion holding that the Charter and Bylaws should be construed in
favor of Harrah's and that Harrah's was entitled to nominate two directors for
election at the 2002 annual meeting. On June 10, 2002, the Court of Chancery
issued a final order and judgment from which the Company perfected an appeal to
the Delaware Supreme Court. The final order and judgment denied Harrah's
application for an award of attorneys' fees and expenses. Harrah's elected not
to pursue an appeal of the denial of its request for an award of attorneys' fees
and



                                       16
<PAGE>

expenses, and the time for any such appeal has passed. On June 11, 2002, the
Company held its annual meeting of stockholders at which Dr. Teamer and Mr.
Satre were elected to the board of directors. The parties have fully briefed the
issues raised in the Company's appeal. At the parties' request, the Delaware
Supreme Court postponed oral argument to permit the parties to engage in
negotiations regarding the Merger (see Note 9). The parties believe that the
closing of the Merger will moot the issues on appeal and, accordingly,
anticipate dismissing the appeal in connection with the closing. In the unlikely
event the Merger does not close, JCC anticipates it would request the scheduling
of oral argument and for the Delaware Supreme Court to decide its appeal.
Therefore, the ultimate outcome of this litigation and its possible effect on
the Company is presently uncertain.

     On April 18, 2002, JCC Holding Company and Jazz Casino Company, L.L.C.
filed suit against Harrah's New Orleans Management Company ("HNOMC"), Harrah's
Operating Company, Harrah's Entertainment, Philip Satre, Bill Noble, and Anthony
Sanfilippo in Civil District Court for the Parish of Orleans, State of
Louisiana. Philip Satre is Chairman of the Board and Chief Executive Officer of
Harrah's Entertainment, Chairman of the Board and Chief Executive Officer of
HNOMC, and was a director on our board at the time this suit was filed. Bill
Noble is Senior Vice President and General Manager of HNOMC. Anthony Sanfilippo
is President of HNOMC and President of the Central Division of Harrah's
Entertainment, and was a director on our board at the time this suit was filed.
Our suit alleges that the Harrah's entities failed to adhere to the terms and
provisions of the management agreement with respect to advertising, marketing
and promoting our Casino, and that the Harrah's entities diverted business from
our Casino, where Harrah's Entertainment then owned only a 49% interest, to
other properties wholly owned by Harrah's Entertainment. We are seeking damages
for violation of the management agreement and certain tortious conduct, as well
as an injunction, as provided for under the management agreement, to prevent
future diversion of business. It is anticipated that this lawsuit will be
dismissed with prejudice upon the closing of the Merger. Therefore, the
ultimate outcome of this litigation and its possible impact on the Company is
presently uncertain.

     On April 22, 2002, Harrah's Entertainment and HOCI filed a derivative
action against Paul Debban, Preston Smart, Rudy Cerone, and Chris Lowden (the
"Individual Defendants"), as well as JCC Holding Company as a nominal defendant,
in the Court of Chancery of the State of Delaware In and For New Castle County.
Messrs. Debban, Smart, and Lowden are currently directors on our board and Mr.
Cerone was a director on our board at the time this suit was filed. All four
individuals are unaffiliated with Harrah's Entertainment. Mr. Debban is also
Chairman and President of JCC Holding Company. Mr. Smart is also Vice President
of JCC Holding Company. Mr. Lowden is, and Mr. Cerone was at the time the suit
was filed, a member of the compensation committee of our board of directors. The
allegations include breach of fiduciary duty and self-dealing in connection with
the compensation committee's deliberations and approval of the employment
agreements, which included stock option grants, for Mr. Debban and Mr. Smart.
The lawsuit seeks declaratory and injunctive relief in regard to the adoption
and implementation of the employment agreements. The Individual Defendants have
indicated for themselves and on behalf of JCC Holding Company denial of all the
allegations as baseless and intend to vigorously defend the lawsuit. The
Individual Defendants answered the complaint on June 11, 2002. No discovery has
been taken in this matter, which remains pending in the Court of Chancery. The
parties anticipate that this action will be dismissed in connection with the
closing of the Merger. The ultimate outcome of this litigation and its possible
impact on the Company is presently uncertain.

     On July 31, 2002, Michael Shapiro, who purports to be a stockholder of the
Company, filed a putative class action complaint (the "Shapiro Action") in the
Court of Chancery of the State of Delaware against Stephen H. Brammell, Gary W.
Loveman, Paul Debban, Charles Teamer, Sr., Christopher Lowden, Preston Smart,
Eddie N. Williams, JCC Holding Company, and Harrah's Entertainment, Inc.



                                       17
<PAGE>
seeking to enjoin the Merger and seeking damages against the defendants. Also
on July 31, 2002, Nechuma Cohen, who purports to be a stockholder of the
Company, filed a putative class action complaint (the "Cohen Action") in the
Court of Chancery of the State of Delaware against the same defendants named in
the Shapiro Action seeking to enjoin the Merger and seeking damages against the
defendants. Both the Shapiro and Cohen Actions attack the Merger asserting
allegations of domination and control by Harrah's Entertainment and allege
breaches of fiduciary duties to the corporation and its stockholders in
connection with the Merger. We believe that we have strong legal and factual
defenses against these claims, and intend to contest them vigorously. No
assurances can be given as to the outcome of such lawsuits, and consequently, we
cannot reasonably predict at this time whether the final outcome of these
matters will materially and adversely affect our results of operations, cash
flows, or financial condition.


NOTE 7.  SALE OF THE FULTON STREET PROPERTY

         On April 23, 2002, Fulton Development entered into an agreement to sell
the Fulton Street Property to a hotel developer for $6.5 million. The agreement
was subject to a ninety-day due diligence period and was conditioned upon, among
other things, the ability of the purchaser to construct a hotel on the site. On
June 27, 2002, Fulton Development cancelled the sale agreement due to certain
terms and conditions of the sale contract not being satisfied. During the first
quarter of 2002 in connection with this conditional sale, we recorded a
provision for asset impairment of $2.7 million to reduce the book value of the
Fulton Street Property to its estimated fair value less selling costs.

NOTE 8.  GUARANTOR FINANCIAL INFORMATION

         JCC Holding and all of its other wholly owned subsidiaries (the
"Guarantor Subsidiaries") have fully and unconditionally guaranteed on a joint
and several basis Jazz Casino's obligations under the Senior Notes described in
Note 3. The Guarantor Subsidiaries and Jazz Casino comprise all of the direct
and indirect subsidiaries of JCC Holding. All of the assets of JCC Holding's
subsidiaries are restricted and may not be transferred to JCC Holding in the
form of loans, cash or dividends without the consent of a third party. The
following consolidating schedules present condensed financial information for
Jazz Casino, JCC Holding and the Guarantor Subsidiaries on a combined basis as
of June 30, 2002 and December 31, 2001, and for the three and six months ended
June 30, 2002 and 2001:






                                       18
<PAGE>
                      JCC HOLDING COMPANY AND SUBSIDIARIES
                     CONDENSED CONSOLIDATING BALANCE SHEETS
                                  June 30, 2002
                                   (Unaudited)
                      (In thousands, except per share data)


<Table>
<Caption>
                                                            JAZZ             JCC
                                                           CASINO          HOLDING       GUARANTOR                   CONSOLIDATED
                                                           COMPANY         COMPANY     SUBSIDIARIES   ELIMINATIONS       TOTAL
                                                           -------         -------     ------------   ------------   ------------
<S>                                                        <C>            <C>            <C>            <C>            <C>
                      ASSETS
Current Assets:
   Cash and cash equivalents                               $  50,254      $      13      $   5,644      $      --      $  55,911
   Accounts receivable, net of allowance for
      doubtful accounts                                        3,345             --             --             --          3,345
   Intercompany receivables                                    2,743             --             --         (2,743)            --
   Inventories                                                   534             --             --             --            534
   Prepaids and other assets                                   4,226             --             64             --          4,290
   Property available for sale                                    --             --          6,500             --          6,500
                                                           ---------      ---------      ---------      ---------      ---------
            Total current assets                              61,102             13         12,208         (2,743)        70,580
                                                           ---------      ---------      ---------      ---------      ---------

Property and Equipment:
   Buildings on leased land                                  129,027             --             --             --        129,027
   Furniture, fixtures and equipment                          29,095             --             --             --         29,095
   Property held for development                                  --             --          1,519             --          1,519
   Leasehold improvements                                        284             --             --             --            284
   Construction in progress                                      595             --             --             --            595
                                                           ---------      ---------      ---------      ---------      ---------
            Total                                            159,001             --          1,519             --        160,520
   Less - accumulated depreciation                           (40,185)            --             --             --        (40,185)
                                                           ---------      ---------      ---------      ---------      ---------
            Net property and equipment                       118,816             --          1,519             --        120,335
                                                           ---------      ---------      ---------      ---------      ---------

Other Assets:
   Deferred operating contract cost, net of
      accumulated amortization                                23,912             --             --             --         23,912
   Lease prepayment, net of accumulated amortization           5,911             --             --             --          5,911
   Deferred charges and other, net of accumulated
      amortization                                            10,803             --             27             --         10,830
   Investment in Subsidiaries                                     --         94,489             --        (94,489)            --
                                                           ---------      ---------      ---------      ---------      ---------
            Total other assets                                40,626         94,489             27        (94,489)        40,653
                                                           ---------      ---------      ---------      ---------      ---------

                  TOTAL ASSETS                             $ 220,544      $  94,502      $  13,754      $ (97,232)     $ 231,568
                                                           =========      =========      =========      =========      =========

        LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
   Accounts payable - trade                                $     999      $      --      $      --      $      --      $     999
   Accrued interest                                            1,534             --             --             --          1,534
   Accrued expenses                                           14,721            (57)            --             --         14,664
   Due to affiliates                                           6,820             --             --             --          6,820
   Intercompany payables                                          --            958          1,786         (2,744)            --
   Preconfirmation contingencies                                 887             --             --             --            887
   Other                                                       2,935             --             --             --          2,935
                                                           ---------      ---------      ---------      ---------      ---------
            Total current liabilities                         27,896            901          1,786         (2,744)        27,839
                                                           ---------      ---------      ---------      ---------      ---------

Long-term debt, net of discount                              107,674             --             --             --        107,674
Due to affiliates                                              2,050             --             --             --          2,050
Other long-term liabilities                                      404             --             --             --            404

Commitments and Contingencies

Stockholders' Equity:
   Common stock - 40,000 shares authorized; 12,386
      shares issued and outstanding; par value $.01
      per share                                                   --            124             --             --            124
   Additional paid-in capital                                398,148        413,395         14,866       (413,014)       413,395
   Member capital                                                  1             --             --             (1)            --
   Retained earnings (accumulated deficit)                  (315,629)      (319,918)        (2,898)       318,527       (319,918)

                                                           ---------      ---------      ---------      ---------      ---------
            Total stockholders' equity                        82,520         93,601         11,968        (94,488)        93,601
                                                           ---------      ---------      ---------      ---------      ---------

            TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY     $ 220,544      $  94,502      $  13,754      $ (97,232)     $ 231,568
                                                           =========      =========      =========      =========      =========
</Table>




                                       19
<PAGE>
                      JCC HOLDING COMPANY AND SUBSIDIARIES
                     CONDENSED CONSOLIDATING BALANCE SHEETS
                                December 31, 2001
                                   (Unaudited)
                      (In thousands, except per share data)

<Table>
<Caption>
                                                            JAZZ             JCC
                                                           CASINO          HOLDING       GUARANTOR                   CONSOLIDATED
                                                           COMPANY         COMPANY     SUBSIDIARIES   ELIMINATIONS       TOTAL
                                                           -------         -------     ------------   ------------   ------------
<S>                                                        <C>            <C>            <C>            <C>            <C>
                              ASSETS
Current Assets:
   Cash and cash equivalents                               $  36,016      $      13      $   5,673     $      --      $  41,702
   Accounts receivable, net of allowance
      for doubtful accounts                                    3,414             --             --            --          3,414
   Intercompany receivables                                    1,972             --             --        (1,972)            --
   Inventories                                                   639             --             --            --            639
   Prepaids and other assets                                   2,162             --             --            --          2,162
                                                           ---------      ---------      ---------     ---------      ---------
            Total current assets                              44,203             13          5,673        (1,972)        47,917
                                                           ---------      ---------      ---------     ---------      ---------
Property and Equipment:
   Buildings on leased land                                  129,027             --             --            --        129,027
   Furniture, fixtures and equipment                          28,406             --             --            --         28,406
   Property held for development                                  --             --         10,708            --         10,708
   Leasehold improvements                                        284             --             --            --            284
   Construction in progress                                       82             --            227            --            309
                                                           ---------      ---------      ---------     ---------      ---------
            Total                                            157,799             --         10,935            --        168,734
   Less - accumulated depreciation                           (35,253)            --             --            --        (35,253)
                                                           ---------      ---------      ---------     ---------      ---------
            Net property and equipment                       122,546             --         10,935            --        133,481
                                                           ---------      ---------      ---------     ---------      ---------
Other Assets:
   Deferred operating contract cost, net                      24,454             --             --            --         24,454
   of accumulated amortization
   Lease prepayment, net of accumulated amortization           6,046             --             --            --          6,046
   Deferred charges and other, net of                         11,196             --             29            --         11,225
      accumulated amortization
   Investment in Subsidiaries                                     --         88,941             --       (88,941)            --
                                                           ---------      ---------      ---------     ---------      ---------
            Total other assets                                41,696         88,941             29       (88,941)        41,725
                                                           ---------      ---------      ---------     ---------      ---------
            TOTAL ASSETS                                   $ 208,445      $  88,954      $  16,637     $ (90,913)     $ 223,123
                                                           =========      =========      =========     =========      =========


         LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
   Accounts payable - trade                                $   2,196      $      --      $      --     $      --      $   2,196
   Accrued expenses                                           17,200             30              1            --         17,231
   Due to affiliates                                           4,591             --             --            --          4,591
   Intercompany payables                                          --            909          1,063        (1,972)            --
   Preconfirmation contingencies                                 900             --             --            --            900
   Other                                                       2,036             --             --            --          2,036
                                                           ---------      ---------      ---------     ---------      ---------
            Total current liabilities                         26,923            939          1,064        (1,972)        26,954
                                                           ---------      ---------      ---------     ---------      ---------

Long-term debt, net of discount                              105,676             --             --            --        105,676
Due to affiliates                                              2,050             --             --            --          2,050
Other long-term liabilities                                      428             --             --            --            428
Commitments and Contingencies
Stockholders' Equity:
   Common stock - 40,000 shares authorized;
      12,386 shares issued and outstanding;
      par value $.01 per share                                    --            124             --            --            124
   Additional paid-in capital                                398,148        413,150         14,866      (413,014)       413,150
   Member capital                                                  1             --             --            (1)            --
   Retained earnings (accumulated deficit)                  (324,781)      (325,259)           707       324,074       (325,259)

                                                           ---------      ---------      ---------     ---------      ---------
            Total stockholders' equity                        73,368         88,015         15,573       (88,941)        88,015
                                                           ---------      ---------      ---------     ---------      ---------

            TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY     $ 208,445      $  88,954      $  16,637     $ (90,913)     $ 223,123
                                                           =========      =========      =========     =========      =========
</Table>



                                       20
<PAGE>
                      JCC HOLDING COMPANY AND SUBSIDIARIES
                 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                    For the Three Months Ended June 30, 2002
                                   (Unaudited)
                                 (In thousands)

<Table>
<Caption>
                                                            JAZZ             JCC
                                                           CASINO          HOLDING     GUARANTOR                 CONSOLIDATED
                                                           COMPANY         COMPANY   SUBSIDIARIES  ELIMINATIONS     TOTAL
                                                           -------         -------   ------------  ------------  ------------
<S>                                                        <C>          <C>           <C>           <C>           <C>
Revenues:
                 Casino                                   $ 68,039      $     --      $     --      $     --      $ 68,039
                 Food and beverage                           6,317            --            --            --         6,317
                 Retail, parking and other                   3,032            --            --            --         3,032
                 Less - casino promotional allowances       (9,309)           --            --            --        (9,309)
                                                          --------      ------        ------        ------        --------
                 Total net revenues                         68,079            --            --            --        68,079
                                                          --------      ------        ------        ------        --------

Operating Expenses:
                 Direct:
                 Casino                                     32,430            --            --            --        32,430
                 Food and beverage                           4,025            --            --            --         4,025
                 Retail, parking and other                   1,308            --            --            --         1,308
                 General and administrative                 21,697           103           930            --        22,730
                 Depreciation and amortization               3,071            --             1            --         3,072
                 Provision for asset impairment                 --            --            --            --            --
                 Equity in Subsidiaries' income                 --        (2,546)           --         2,546            --
                                                          --------      ------        ------        ------        --------
                 Total operating expenses                   62,531        (2,443)          931         2,546        63,565
                                                          --------      ------        ------        ------        --------

Operating Income (Loss)                                      5,548         2,443          (931)       (2,546)        4,514
                                                          --------      ------        ------        ------        --------

Other Income (Expenses):
                 Interest expense, net of capitalized       (2,200)           --            --            --        (2,200)
                 interest
                 Interest and other income                     100             1            28            --           129
                                                          --------      ------        ------        ------        --------
                 Total other income (expenses)              (2,100)            1            28            --        (2,071)
                                                          --------      ------        ------        ------        --------

                                                          --------      ------        ------        ------        --------
Net Income (Loss)                                         $  3,448      $  2,444      $   (903)     $ (2,546)     $  2,443
                                                          ========      ========      ========      ========      ========
</Table>



                                       21
<PAGE>
                      JCC HOLDING COMPANY AND SUBSIDIARIES
                 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                    For the Three Months Ended June 30, 2001
                                   (Unaudited)
                        (In thousands, except share data)

<Table>
<Caption>
                                                            JAZZ             JCC
                                                           CASINO          HOLDING     GUARANTOR                 CONSOLIDATED
                                                           COMPANY         COMPANY   SUBSIDIARIES  ELIMINATIONS     TOTAL
                                                           -------         -------   ------------  ------------  ------------
<S>                                                        <C>          <C>           <C>           <C>           <C>
Revenues:
       Casino                                            $ 60,095      $     --           $--      $     --      $ 60,095
       Food and beverage                                    5,098            --            --            --         5,098
       Retail, parking and other                            2,842            --             3            --         2,845
       Less: casino promotional allowances                 (9,982)           --            --            --        (9,982)
                                                         --------      --------      --------      --------      --------
              Total net revenues                           58,053            --             3            --        58,056
                                                         --------      --------      --------      --------      --------

Operating Expenses:
       Direct
               Casino                                      31,758            --            --            --        31,758
               Food and beverage                            3,819            --            --            --         3,819
               Retail, parking and other                      870            --            --            --           870
       General and administrative                          18,986            25            54            --        19,065
       Depreciation and amortization                        3,121            --             1            --         3,122
       Equity in subsidiaries' losses                          --         4,008            --        (4,008)           --
                                                         --------      --------      --------      --------      --------
              Total operating expenses                     58,554         4,033            55        (4,008)       58,634
                                                         --------      --------      --------      --------      --------

Operating Income (Loss)                                      (501)       (4,033)          (52)        4,008          (578)
                                                         --------      --------      --------      --------      --------

Reorganization Expenses                                      (600)           --            --            --          (600)

Other Income (Expenses):
       Interest expense, net of capitalized interest       (2,930)           --            --            --        (2,930)
       Interest and other income                               75            --            --            --            75
                                                         --------      --------      --------      --------      --------
              Total other income (expenses)                (2,855)           --            --            --        (2,855)
                                                         --------      --------      --------      --------      --------

Net Income (Loss)                                        $ (3,956)     $ (4,033)     $    (52)     $  4,008      $ (4,033)
                                                         ========      ========      ========      ========      ========
</Table>




                                       22
<PAGE>
                      JCC HOLDING COMPANY AND SUBSIDIARIES
                 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                     For the Six Months Ended June 30, 2002
                                   (Unaudited)
                                 (In thousands)

<Table>
<Caption>
                                                            JAZZ             JCC
                                                           CASINO          HOLDING     GUARANTOR                   CONSOLIDATED
                                                           COMPANY         COMPANY   SUBSIDIARIES    ELIMINATIONS     TOTAL
                                                           -------         -------   ------------    ------------   ------------
<S>                                                        <C>          <C>           <C>              <C>            <C>
Revenues:
                 Casino                                   $ 138,291      $      --      $      --      $      --      $ 138,291
                 Food and beverage                           12,497             --             --             --         12,497
                 Retail, parking and other                    6,070             --             --             --          6,070
                 Less - casino promotional allowances       (18,133)            --             --             --        (18,133)
                                                          ---------      ---------      ---------      ---------      ---------
                    Total net revenues                      138,725             --             --             --        138,725
                                                          ---------      ---------      ---------      ---------      ---------

Operating Expenses:
                 Direct:
                    Casino                                   66,674             --             --             --         66,674
                    Food and beverage                         8,076             --             --             --          8,076
                    Retail, parking and other                 2,816             --             --             --          2,816
                 General and administrative                  41,744            207            964             --         42,915
                 Depreciation and amortization                6,113             --              2             --          6,115
                 Provision for asset impairment                  --             --          2,689             --          2,689
                 Equity in subsidiaries' income                  --         (5,548)            --          5,548             --
                                                          ---------      ---------      ---------      ---------      ---------
                    Total operating expenses                125,423         (5,341)         3,655          5,548        129,285
                                                          ---------      ---------      ---------      ---------      ---------

Operating Income (Loss)                                      13,302          5,341         (3,655)        (5,548)         9,440
                                                          ---------      ---------      ---------      ---------      ---------

Other Income (Expenses):
                 Interest expense, net of capitalized        (4,320)            --             --             --         (4,320)
                 interest
                 Interest and other income                      169              1             51             --            221
                                                          ---------      ---------      ---------      ---------      ---------
                    Total other income (expenses)            (4,151)             1             51             --         (4,099)
                                                          ---------      ---------      ---------      ---------      ---------

                                                          ---------      ---------      ---------      ---------      ---------
Net Income (Loss)                                         $   9,151      $   5,342      $  (3,604)     $  (5,548)     $   5,341
                                                          =========      =========      =========      =========      =========
</Table>




                                       23
<PAGE>
                      JCC HOLDING COMPANY AND SUBSIDIARIES
                 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                     For the Six Months Ended June 30, 2001
                                   (Unaudited)
                        (In thousands, except share data)

<Table>
<Caption>
                                                     JAZZ          JCC
                                                     CASINO      HOLDING        GUARANTOR                    CONSOLIDATED
                                                    COMPANY      COMPANY       SUBSIDIARIES    ELIMINATIONS      TOTAL
                                                    -------      -------       ------------    ------------   -----------
<S>                                               <C>            <C>            <C>            <C>            <C>
Revenues:
   Casino                                         $ 121,455      $      --      $      --      $      --      $ 121,455
   Food and beverage                                 10,361             --             --             --         10,361
   Retail, parking and other                          5,593             --              5             --          5,598
   Less: casino promotional                         (20,346)            --             --             --        (20,346)
      allowances
                                                  ---------      ---------      ---------      ---------      ---------
            Total net revenues                      117,063             --              5             --        117,068
                                                  ---------      ---------      ---------      ---------      ---------

Operating Expenses:
   Direct
      Casino                                         79,839             --             --             --         79,839
      Food and beverage                               7,668             --             --             --          7,668
      Retail, parking and other                       2,127             --             --             --          2,127
   General and administrative                        39,774             75            106             --         39,955
   Depreciation and amortization                      5,651             --              2             --          5,653
   Equity in subsidiaries' losses                        --        (91,035)            --         91,035             --

                                                  ---------      ---------      ---------      ---------      ---------
            Total operating expenses                135,059        (90,960)           108         91,035        135,242
                                                  ---------      ---------      ---------      ---------      ---------

Operating Income (Loss)                             (17,996)        90,960           (103)       (91,035)       (18,174)
                                                  ---------      ---------      ---------      ---------      ---------

Reorganization Expenses                            (101,029)            --             --             --       (101,029)

Other Income (Expenses):
   Interest expense, net of                          (3,551)            --             --             --         (3,551)
      capitalized interest
   Interest and other income                            266             --             --             --            266
                                                  ---------      ---------      ---------      ---------      ---------
            Total other income (expenses)            (3,285)            --             --             --         (3,285)
                                                  ---------      ---------      ---------      ---------      ---------

Income (Loss) Before Extraordinary Items:          (122,310)        90,960           (103)       (91,035)      (122,488)


   Extraordinary gain on early extinguishment       213,448             --             --             --        213,448


                                                  ---------      ---------      ---------      ---------      ---------
Net Income (Loss)                                 $  91,138      $  90,960      $    (103)     $ (91,035)     $  90,960
                                                  =========      =========      =========      =========      =========
</Table>




                                       24
<PAGE>
                      JCC HOLDING COMPANY AND SUBSIDIARIES
                CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
                     For the Six Months Ended June 30, 2002
                                   (Unaudited)
                                 (In thousands)

<Table>
<Caption>
                                                                      JAZZ          JCC
                                                                     CASINO       HOLDING   GUARANTOR                  CONSOLIDATED
                                                                     COMPANY      COMPANY  SUBSIDIARIES  ELIMINATIONS      TOTAL
                                                                     -------      -------  ------------  ------------  -----------
<S>                                                                    <C>       <C>         <C>         <C>         <C>
Cash Flows From Operating Activities:
   Net income (loss)                                                 $  9,151    $  5,342    $ (3,604)   $ (5,548)      $  5,341
   Adjustments to reconcile net income (loss) to net cash provided
      by (used in) operating activities:
      Depreciation and amortization                                     6,113          --           2          --          6,115
      Amortization of note discount                                     1,246          --          --          --          1,246
      Deferred rent                                                       (24)         --          --          --            (24)
      Provision for bad debts                                           1,003          --          --          --          1,003
      Provision for asset impairment                                       --          --       2,689          --          2,689
      Amortization of unearned compensation                                --         245          --          --            245
      Equity in Subsidiary income                                          --      (5,548)         --       5,548             --
      Changes in operating assets and liabilities:
         Accounts receivable                                             (934)         --          --          --           (934)
         Inventories                                                      105          --          --          --            105
         Prepaids and other assets                                     (2,064)         --         (64)         --         (2,128)
         Intercompany receivable/payable                                 (771)         49         723          (1)            --
         Accounts payable - trade                                      (1,197)         --          --          --         (1,197)
         Accrued interest                                               2,285          --          --          --          2,285
         Accrued expenses                                              (2,479)        (87)         (1)         --         (2,567)
         Preconfirmation contingencies                                    (13)         --          --          --            (13)
         Due to affiliates                                              2,229          --          --          --          2,229
         Other current liabilities                                        899          --          --          --            899
                                                                     --------    --------    --------    --------       --------
            Net cash flows provided by (used in) operating activities  15,549           1        (255)         (1)        15,294
                                                                     --------    --------    --------    --------       --------

Cash Flows From Investing Activities:
   Capital expenditures                                                (1,085)         --          --          --        (1,085)
                                                                     --------    --------    --------    --------        --------
            Net cash flows used in investing activities                (1,085)         --          --          --         (1,085)
                                                                     --------    --------    --------    --------       --------

Cash Flows From Financing Activities                                       --          --          --          --             --
                                                                     --------    --------    --------    --------       --------

Net increase (decrease) in cash and cash                               14,464           1        (255)         (1)        14,209
equivalents

Cash and cash equivalents, beginning of period                         36,016          13       5,673          --         41,702

Cash and cash equivalents, end of period                             $ 50,480    $     14    $  5,418    $     (1)      $ 55,911
                                                                     ========    ========    ========    ========       ========
</Table>




                                       25
<PAGE>
                      JCC HOLDING COMPANY AND SUBSIDIARIES
                CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
                     For the Six Months Ended June 30, 2001
                                   (Unaudited)
                                 (In thousands)

<Table>
<Caption>
                                                                     JAZZ          JCC
                                                                     CASINO      HOLDING      GUARANTOR                CONSOLIDATED
                                                                     COMPANY     COMPANY    SUBSIDIARIES  ELIMINATIONS    TOTAL
                                                                     -------     -------    ------------  ------------  -----------
<S>                                                                  <C>          <C>          <C>          <C>          <C>
Cash Flows From Operating Activities:
   Net income (loss)                                                 $  91,138    $  90,960    $    (103)   $ (91,035)   $  90,960
   Adjustments to reconcile net income (loss) to net cash
      provided by (used in) operating activities:
      Depreciation and amortization                                      5,651           --            2           --        5,653
      Amortization of note discount                                     90,884           --           --           --       90,884
      Extraordinary gain on early extinguishment of debt              (213,448)          --           --           --     (213,448)
      Deferred rent                                                        292           --           --           --          292
      Provision for bad debts                                            1,057           --           --           --        1,057
      Equity in Subsidiary losses                                           --      (91,035)          --       91,035           --
   Changes in operating assets and liabilities:
      Accounts receivable                                                1,787           --            1           --        1,788
      Inventories                                                           36           --           --           --           36
      Prepaids and other assets                                            287           --         (103)          --          184
      Intercompany receivable/payable                                     (309)          90          219           --           --
      Accounts payable - trade                                           1,123           --           --           --        1,123
      Accrued interest                                                      --           --           --           --           --
      Accrued expenses                                                   2,976          (16)          --           --        2,960
      Preconfirmation contingencies                                        (21)          --           --           --          (21)
      Due to affiliates                                                 12,918           --           --           --       12,918
      Other current liabilities                                           (325)          --           --           --         (325)
   Payment of liabilities subject to compromise due to
      reorganization activities:
      Reorganization costs, excluding amortization of note
         discount of $90,314                                            10,715           --           --           --       10,715

      Payment of reorganization costs                                   (8,926)          --           --           --       (8,926)
                                                                     ---------    ---------    ---------    ---------    ---------
         Net cash flows provided by (used in) operating activities      (4,165)          (1)          16           --       (4,150)
                                                                     ---------    ---------    ---------    ---------    ---------
Cash Flows From Investing Activities:
      Capital expenditures                                                (630)          --          (13)          --         (643)
      Increase in deferred charges and other assets                       (266)          --            2           --         (264)
                                                                     ---------    ---------    ---------    ---------    ---------
         Net cash flows used in investing activities                      (896)          --          (11)          --         (907)
                                                                     ---------    ---------    ---------    ---------    ---------
Cash Flows From Financing Activities:
      Net borrowings (repayments) of short-term
         borrowings - affiliate                                             --           --           --           --           --
      Net proceeds / (repayments) of notes
         payable - affiliate                                             5,745           --           --           --        5,745
                                                                     ---------    ---------    ---------    ---------    ---------
         Net cash flows provided by financing activities                 5,745           --           --           --        5,745
                                                                     ---------    ---------    ---------    ---------    ---------
Net increase (decrease) in cash and cash equivalents                       684           (1)           5           --          688

Cash and cash equivalents, beginning of period                          26,602           14           10           --       26,626
                                                                     ---------    ---------    ---------    ---------    ---------
Cash and cash equivalents, end of period                             $  27,286    $      13    $      15    $      --    $  27,314
                                                                     =========    =========    =========    =========    =========

</Table>





                                       26
<PAGE>

NOTE 9.  SUBSEQUENT EVENT

         On July 30, 2002, we entered into a merger agreement with Harrah's
Entertainment, under which a Harrah's affiliate will acquire the remaining
shares of our common stock that Harrah's does not already own. Harrah's
currently holds about 63 percent of our outstanding common stock. Under terms of
the merger agreement, which was unanimously approved by our full board of
directors, Harrah's has agreed to pay $10.54 per share for the remaining JCC
stock. Harrah's also agreed to assume or retire all of our outstanding debt. It
is anticipated that litigation between Harrah's and JCC will be dismissed in
connection with closing of the transaction. Also, under the terms of the merger
agreement, certain officers of JCC agreed to enter into separation agreements
with JCC which could result in changes to the number and terms of certain
outstanding options previously issued as compensation. The Merger is subject to
the approval of our shareholders, as well as gaming regulatory approvals and
other customary conditions, and is expected to be completed during the fourth
quarter of 2002. In connection with the proposed Merger, we expect to file a
proxy statement with the Securities and Exchange Commission. The proxy statement
will be sent to holders of JCC Holding Company stock and will contain important
information about JCC Holding Company, Harrah's Entertainment and its applicable
affiliates and the proposed Merger, risks relating to the Merger, and related
matters. We urge all of our stockholders to read the proxy statement  when it
becomes available.








                                       27
<PAGE>



     ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
             RESULTS OF OPERATIONS

OVERVIEW

         The following discussion and analysis of our financial position and
operating results for our consolidated subsidiaries for the three and six months
ended June 30, 2002 and 2001, updates, and should be read in conjunction with,
Management's Discussion and Analysis of Financial Condition and Results of
Operations presented in our Annual Report on Form 10-K for the fiscal year ended
December 31, 2001.

         We are a casino and entertainment development company. We were
incorporated under Delaware law on August 20, 1996, and conduct business through
our wholly-owned subsidiaries, Jazz Casino Company, JCC Development Company, JCC
Canal Development and JCC Fulton Development. We began operations in October
1998, when we assumed the business operations formerly owned by Harrah's Jazz
Company, a general partnership, and its subsidiary, Harrah's Jazz Finance
Corporation, which filed for relief under the United States Bankruptcy Code on
November 22, 1995.

         On January 4, 2001, we filed voluntary petitions for relief under
Chapter 11 of the United States Bankruptcy Code in order to allow restructuring
of our obligations to the State of Louisiana and the City of New Orleans,
long-term debt, bank credit facilities, and trade and other obligations. The
filing was made in the U.S. Bankruptcy Court for the Eastern District of
Louisiana in New Orleans (the "Bankruptcy Court"). While the Company was in
bankruptcy, we continued to operate as debtors-in-possession subject to the
Bankruptcy Court's supervision and orders.

         Our plan of reorganization, which was approved by the Bankruptcy Court
on March 19, 2001, and was consummated on March 29, 2001 (the "Effective Date"),
resulted in, among other things, elimination of our then existing common stock
and debt securities and the issuance of new equity and debt securities to
certain creditors including Harrah's Entertainment. The consequences of this
bankruptcy proceeding were reflected in the financial statements as of the
Effective Date. The cancellation of non-affiliate debt and related accrued
interest resulted in an extraordinary gain as of the effective date of our plan
of reorganization. In addition, the cancellation of affiliate debt and other
obligations resulted in an increase to additional paid in capital as of the
effective date.

         We did not meet the requirements to utilize fresh start reporting,
since our holders of existing voting shares immediately before confirmation
received more than 50 percent of voting shares of the emerging entity.
Therefore, in accordance with Statement of Position 90-7: "Financial Reporting
by Entities in Reorganization Under the Bankruptcy Code," our liabilities
compromised by the confirmed plan of reorganization have been stated at the
present value of the amounts to be paid, reorganization expenses have been
separately disclosed and the forgiveness of debt has been reported as an
adjustment to additional paid in capital and an extraordinary item in the 2001
condensed consolidated financial statements.

         Harrah's Entertainment received 49 percent of our equity on the
Effective Date in exchange for its claims. Then on May 17, 2002, Harrah's
Entertainment purchased an additional 2,000 shares of our common stock in an
open market transaction, and on June 7, 2002, Harrah's Entertainment announced
that it had purchased the shares previously issued to holders of claims under
tranche B-1 of the bank credit facilities, bringing its total holdings to
7,805,306 shares (63%) of our common stock. On July 30, 2002, we entered into a
merger agreement with Harrah's Entertainment, under which a Harrah's affiliate
will acquire the remaining shares of our common stock that Harrah's does not
already own (the



                                       28
<PAGE>

"Merger"). Under terms of the merger agreement, which was unanimously approved
by our full board of directors, Harrah's has agreed to pay $10.54 per share for
the remaining JCC Holding Company stock. Harrah's also agreed to assume or
retire all of our outstanding debt. The acquisition is subject to the approval
of our shareholders, as well as gaming regulatory approvals and other customary
conditions, and is expected to be completed during the fourth quarter of 2002.
It is anticipated that the existing litigation between Harrah's and JCC will be
dismissed in connection with closing of the transaction (see PART II, ITEM 1).

RESULTS OF OPERATIONS

         TOTAL NET REVENUES. For the three months ended June 30, 2002, net
revenues increased $10.0 million (or 17.3%), while net revenues for the six
months ended June 30, 2002 increased by $21.7 million (or 18.5%) as compared to
the same period in the previous year. The following table reflects the changes
in revenues by category:

<Table>
<Caption>
                                         THREE MONTHS ENDED       SIX MONTHS ENDED
                                           JUNE 30, 2002            JUNE 30, 2002
                                         INCREASE/(DECREASE)      INCREASE/(DECREASE)
                                        ---------------------    --------------------
(in thousands)                              $           %            $            %
                                         --------      ----       --------      ----
<S>                                      <C>           <C>        <C>           <C>
Revenues:
   Casino                                $  7,944      13.2%      $ 16,836      13.9%
   Food and beverage                        1,219      23.9%         2,136      20.6%
   Retail, parking and other                  187       6.6%           472       8.4%
   Less - casino promotional allowances      (673)     (6.7%)       (2,213)     (10.9%)
                                         --------                 --------
      Total Net Revenues                 $ 10,023      17.3%      $ 21,657      18.5%
                                         ========                 ========
</Table>

         Casino revenue increased during the three and six months ended June 30,
2002 by 13.2% and 13.9% respectively. Casino revenues increased during the three
months ended June 30, 2002 as a result of marketing efforts focused on building
volume, primarily through promotional events and slot offerings geared to a
broader audience. We also experienced increased traffic volume during the first
three months of 2002, primarily the result of Super Bowl fans, coupled with
larger crowds this year for Sugar Bowl and Mardi Gras.

         Food and beverage revenue increased during the three and six months
ended June 30, 2002 primarily due to increased complimentary revenue.
Complimentary revenue increased in the first six months of 2002 because of
increased customer traffic and a heavier focus on internal, rather than
external, complimentaries. Retail, parking, and other revenue also increased
during the three and six months ended June 30, 2002 primarily due to increased
parking revenues as a result of a change in complimentary parking policies,
which were effective as of March 1, 2002. Promotional allowances decreased for
the three and six months ending June 30, 2002 due to a significant decrease in
"cash back" and free coin offers.

         OPERATING EXPENSES. For the three and six months ended June 30, 2002,
operating expenses increased by $4.9 million (or 8.4%) and decreased by $6
million (or 4.4%), respectively, resulting in operating income of $4.5 million
and $9.4 million, respectively. The following table reflects the changes in
operating expenses by category:


                                       29
<PAGE>
<Table>
<Caption>
                                         THREE MONTHS ENDED       SIX MONTHS ENDED
                                           JUNE 30, 2002            JUNE 30, 2002
                                         INCREASE/(DECREASE)     INCREASE/(DECREASE)
                                        ---------------------    --------------------
(in thousands)                              $           %            $            %
                                         --------      ----       --------      ----
<S>                                      <C>           <C>        <C>           <C>
Revenues:
Operating Expenses:
   Direct:
      Casino                             $    672        2.1%     ($13,165)     (16.5%)
      Food and beverage                       206        5.4%          408        5.3%
      Retail, parking and other               438       50.3%          689       32.4%
General and administrative                  3,665       19.2%        2,960        7.4%
Depreciation and amortization                 (50)      (1.6%)         462        8.2%
Provision for asset impairment                 --        0.0%        2,689      100.0%
                                         --------                 --------
Total operating expenses                 $  4,931        8.4%     $ (5,957)      (4.4%)
                                         ========                 ========
</Table>




         Payments to the Louisiana Gaming Control Board ("LGCB") were $20
million and $32.4 million for the three and six months ended June 30, 2002,
respectively, as compared to $12.5 million and $37.4 million for the same
periods in 2001. The overall $5.0 million decrease in payments during the six
months ended June 30, 2002, was attributable to the decrease negotiated with the
State in connection with our 2001 plan of reorganization. The remaining decrease
in casino operating expenses for the six months ended June 30, 2002 was
primarily due to reduced costs of external complimentaries, lower labor costs
related to operational efficiencies achieved through improved staffing and
scheduling practices and reduced costs related to various broad-based marketing
programs and promotions. There was a $2.5 million increase in payments to the
LGCB for the three months ended June 30, 2002, as compared to the same period
for 2001, due to the change in the minimum annual amount from $50 million in
2001 to $60 million in 2002. This more than offsets the decrease in other casino
operating expenses for that period.

         While food and beverage expenses increased in total year over year
primarily due to increased volume resulting from the larger crowds in 2002, they
have decreased as a percentage of food and beverage revenue due to increased
buffet pricing. Retail, parking and other expenses primarily increased in the
first six months of 2002 due to the casino's new parking validation policy.
Because the casino now gives complimentary parking for players, an expense
related to these complimentaries is now being recognized.

         General and administrative expenses increased for the three and six
months ended June 30, 2002 as a result of legal fees related to the litigation
described in Part II, Item 1. This increase more than offset the decrease due to
negotiated price reductions related to various administrative services provided
by Harrah's Entertainment and a decrease in utility and entertainment costs.
Depreciation expense remained relatively constant from the second three months
of 2002 compared to the second three months of 2001. The increase in
depreciation expense for the six months ended June 30, 2002 is due to capital
expenditures incurred in April of 2001 for new slot machines. As these assets
were not acquired until April of 2001, depreciation expense during the first
quarter of 2001 was less than the first quarter of 2002.

         PROVISION FOR ASSET IMPAIRMENT. On April 23, 2002, Fulton Development
entered into an agreement to sell the Fulton Street Property to a hotel
developer for $6.5 million. The agreement was subject to a ninety-day due
diligence period and was conditioned upon, among other things, the ability of
the purchaser to construct a hotel on the site. Fulton Development cancelled the
agreement on June 27,



                                       30
<PAGE>

2002 due to certain terms and conditions of the sale agreement not being met.
During the first quarter of 2002 in connection with this conditional sale, we
recorded a provision for asset impairment of $2.7 million to reduce the book
value of the Fulton Street Property to its estimated fair value less cost of
sale.

         REORGANIZATION ITEMS. During the six months ended June 30, 2001, we
incurred reorganization expenses of $101 million. These expenses include a $90.3
million charge to reflect the write off of the unamortized balance of the
discount of the senior subordinated notes, which were cancelled as a result of
our plan of reorganization to record the amount of the allowed claim. The
remaining expenses consisted primarily of consulting and legal fees, and costs
associated with retention bonuses.

         OTHER INCOME (EXPENSE). For the three months ended June 30, 2002 and
2001, we incurred interest charges of $2.2 million and $2.9 million,
respectively. The $700,000 decrease is the result of decreased borrowings under
our revolving credit agreement in 2002 coupled with lower interest rates on our
$124.5 million Senior Notes due 2008 (the "Senior Notes"). However, for the six
months ended June 30, 2002, interest charges of $4.3 million exceeded interest
charges for the six months ended June 30, 2001 of $3.6 million by approximately
$700,000. The reason for the year over year increase is that during the first
three months of 2001, we incurred interest for only five days on our long term
debt and other obligations as a result of our voluntary bankruptcy petition.
Subsequent to March 29, 2001, interest charges were incurred related to our $35
million revolving credit facility and our $124.5 million Senior Notes.

         For the six months ended June 30, 2002 and 2001, we generated interest
income of $221,000 and $266,000, respectively, attributable primarily to
overnight repurchase investments of balances in our operating and capital
reserve accounts, as well as short-term commercial paper investments made with
available funds during the six months ended June 30, 2002.

         EXTRAORDINARY GAIN ON EARLY EXTINGUISHMENT OF DEBT. During the first
quarter of 2001, we recorded an extraordinary gain on the early extinguishment
of our debt of $213.4 million. This gain arises from the discharge of $317.0
million of outstanding principal and interest due to non-affiliates under our
senior subordinated notes with contingent payments due 2009, convertible junior
subordinated debentures and our bank term loans in exchange for new debt and
equity securities with a fair value of $103.6 million.


LIQUIDITY AND CAPITAL RESOURCES

         REORGANIZATION OF OUR DEBT AND CAPITAL STRUCTURE. On January 4, 2001,
we filed a voluntary petition for Chapter 11 reorganization in the Bankruptcy
Court for the Eastern District of Louisiana in New Orleans. Our plan of
reorganization, which was approved by the Bankruptcy Court on March 19, 2001,
and was consummated on March 29, 2001, reflects the reorganization of our debt
and capital structure in conjunction with a reduction in our $100 million
minimum annual payment to the State of Louisiana, a reduction in rent and
certain other charges imposed by the City of New Orleans, relief from certain
additional financial obligations and relief from certain operating restrictions.
The timing of this filing was in part the result of our need to conclude our
reorganization process prior to March 31, 2001, to meet the obligations imposed
by our casino operating contract with the State of Louisiana and prevent closure
of the casino.

         Our confirmed plan of reorganization resulted in, among other things,
elimination of all of our common stock existing prior to March 29, 2001 and the
issuance of new equity and debt securities to certain creditors in exchange for
a reduction of our obligations to them. The casino remained open and



                                       31
<PAGE>

continued operations during the bankruptcy proceedings. No disruptions in
employment or operations were experienced.

         The following discussion of our performance should be read in
conjunction with and in light of our plan of reorganization which was
consummated on March 29, 2001.

         WORKING CAPITAL FOR OPERATIONS. During the six months ended June 30,
2002, net cash flow provided by operations was $15.3 million. During the six
months ended June 30, 2001, net cash flow used in operations was $4.2 million.
The improvement in cash flow provided by operating activities as compared to the
same period last year is due to improved operating results coupled with the
reduction in the minimum annual payment to the Louisiana Gaming Control Board.
During 2002, cash from operations was used to fund capital expenditures totaling
$1.1 million, resulting in an increase in cash at June 30, 2002 of $14.2
million. As of June 30, 2002, there were no outstanding borrowings under our $35
million revolving line of credit.

         A number of our contractual agreements prior to our restructuring in
2001 contained provisions that allowed us to defer payment of certain operating
expenses to help minimize our use of funds prior to our reorganization. As of
March 29, 2001, we had deferred a total of $45.6 million of payments to our
manager, Harrah's Operating Company and Harrah's Entertainment under the terms
of the various agreements. Additionally, a total of $28.5 million in interest
payments related to our senior subordinated notes due 2009 with contingent
payments and our convertible junior subordinated debentures had been paid in
kind since October 1998. Under our credit agreement, $25.0 million was available
for working capital purposes under our revolving line of credit, which was also
used to partially cover operating losses.

         Under the HET/JCC agreement in effect prior to the bankruptcy, advances
by Harrah's Entertainment and Harrah's Operating Company under the minimum
payment guaranty constituted a demand obligation and were secured by first
priority liens on our assets. During various periods in 2000 and 2001, under the
terms of the minimum payment guaranty, HOCI began making the minimum daily
payments of approximately $274,000 due to the Louisiana Gaming Control Board
under our casino operating contract in order to provide us with necessary
working capital. As of March 29, 2001, Harrah's Entertainment and Harrah's
Operating Company had advanced $51.8 million to the Louisiana Gaming Control
Board on our behalf under the minimum payment guaranty. Interest accumulated on
these advances in accordance with the terms of the agreement and as of March 29,
2001, the outstanding balance was $53.8 million including principal and
interest.

         In connection with our plan of reorganization, the claims of the
various debt holders including the claims of our senior noteholders, our bank
term loans and our revolving credit facility (including the amounts funded by
Harrah's Entertainment pursuant to its guarantee) were settled in exchange for
the Senior Notes issued by our subsidiary, Jazz Casino Company, L.L.C., with a
face amount of $124.5 million and approximately 12.4 million shares of our
common stock. Additionally, we entered into an agreement with Harrah's
Entertainment to provide us with a new $35 million revolving line of credit for
the purpose of providing working capital for the business. The unsecured claims
resulting from amounts owed to parties under the previous deferral arrangements
were also eliminated.

         Our Senior Notes provide for quarterly interest payments at a rate
equal to LIBOR plus 2.75% annually. During the first year commencing April 1,
2001, 50% of the interest payments on the notes may be paid in kind at the
borrower's option. As of August 9, 2002, we have paid $5.3 million in cash
interest on these notes and paid $3.8 million in interest in kind by issuing
additional new term notes. Our new revolving credit agreement requires that we
pay 50% of the interest payments during the first year in



                                       32
<PAGE>

kind. Principal payments on these notes are to be made semi-annually on November
15 and May 15 of each year commencing November 2002. Until May 2005, the
payments are calculated at 50% of semi annual free cash flow, as defined in the
Indenture governing our Senior Notes. Commencing September 30, 2005, principal
payments of $1.5 million per quarter are due, with one final payment of all
amounts due at March 31, 2008.

         Our revolving credit agreement is provided by Harrah's Entertainment
and its affiliates and provides an available line of credit of up to $35
million, with a letter of credit sublimit of $10 million. Interest is payable at
LIBOR plus 3%. The facility matures on March 30, 2006, subject to extension
until March 30, 2007 at the borrower's option. The revolver will be used to fund
our operating needs that are not fulfilled by cash flows from operations of our
casino. As of August 9, 2002, there were no outstanding borrowings and $700,000
in outstanding letters of credit issued under this revolving credit facility.

         Under the terms of the proposed merger agreement, Harrah's has agreed
to assume or retire all of our debt.

         In addition to the capital and debt changes to our structure outlined
above, some material reductions to our operating expense structure came about as
a result of the implementation of our plan of reorganization, as discussed
below.

         The gaming payments to the Louisiana Gaming Control Board required by
our casino operating contract were reduced to the greater of 21.5% of gross
gaming revenue or (i) $50 million in the first year ended March 31, 2002; or
(ii) $60 million each fiscal year thereafter. In addition, we must pay an
override on gross gaming revenues equal to (i) 1.5% of gross gaming revenues in
excess of $500 million, up to $700 million, (ii) 3.5% for gross gaming revenues
in excess of $700 million, up to $800 million, (iii) 5.5% for gross gaming
revenues in excess of $800 million, up to $900 million, and (iv) 7.5% for gross
gaming revenues in excess of $900 million. The casino operating contract
requires a rolling three year guaranty of this amount, with an initial four year
unconditional guaranty. In connection with our plan of reorganization, we
entered into the HET/JCC Agreement, pursuant to which Harrah's Entertainment has
agreed to provide the initial four year unconditional guaranty of the required
minimum payment to the State of Louisiana through March 31, 2005. Harrah's
Entertainment receives an annual fee from Jazz Casino in exchange for providing
this guaranty. The obligations under this guaranty are secured by, among other
things, a first lien on substantially all of our assets.

         Our Casino Operating contract requires us to find a guarantor by March
31, 2003 to provide the guaranty for the period April 1, 2005 through March 31,
2006. Harrah's Entertainment is under no obligation to provide the additional
guaranty under its current agreement. Failure to obtain this guaranty is a
"termination event" leading to the automatic termination of the casino operating
contract. In addition, an automatic termination of our Casino Operating contract
is an event of default under our ground lease with the City of New Orleans, the
Indenture governing our Senior Notes and our revolving credit facility. Efforts
to find a suitable guarantor have not begun pending the anticipated Merger.

         Additionally, in connection with our plan of reorganization, the City
of New Orleans agreed to reduce the payments and other impositions required in
connection with our lease with the City by $5 million per year. We entered into
the amended ground lease whereby the City of New Orleans had agreed to designate
the sources of the savings within 120 days from March 15, 2001, which date was
later extended by 30 days. Over the following months we worked with the special
development projects committee to develop a list of lease modifications and
other items that we could agree upon, and on January 17, 2002, the City Council
approved an ordinance and lease amendments that delineate these



                                       33
<PAGE>

changes as outlined below. Each item agreed upon either reduces payments
required under the amended ground lease, or lifts some operating restriction
that we believe will result in improved operating performance by providing cost
savings other than the lease payments or by providing additional revenue
opportunities. The following is a summary of the material items agreed upon:

          o    Jazz Casino granted an annual credit of $2.1 million in property
               tax reduction toward the total reduction, including the property
               tax reduction achieved in 2001;

          o    A small lot on the corner of Fulton and Poydras Streets, which
               was previously conveyed by Jazz Casino's predecessors to the City
               of New Orleans, will be returned to Jazz Casino either in fee
               title, if the law allows, or pursuant to a ninety-nine year
               lease, independent of the amended ground lease;

          o    A lease amendment that commits the City to support, assist and
               cooperate with the development of a hotel on the Fulton Street
               Property;

          o    A City commitment to support, assist and cooperate with our
               efforts to obtain approvals and permits for all future
               development. The agreement places time limits on Rivergate
               Development Corporation review and approval when such is
               necessary for City permitting;

          o    Jazz Casino gained permission to own and operate two courtesy
               cars and one courtesy bus;

          o    The language of the amended ground lease was conformed to reflect
               the recent changes in Louisiana law with respect to food
               services, hotel development and providing complimentary services;

          o    A number of significant adjustments to the reporting, record
               keeping and other administrative requirements of the open access
               program and plans, designed to facilitate participation by
               minorities, women and disadvantaged persons and business
               enterprises in developing, constructing and operating the casino,
               which will result in cost savings and reduction of exposure for
               defaults under that plan;

          o    The City has agreed to a reduction in the number of parking
               spaces required to be dedicated to casino use. As a result up to
               275 spaces may be rented by Jazz Casino to third parties under
               parking contracts, which will provide additional revenue to us;
               and

          o    Mutual waivers of any defaults that any parties can allege up to
               the effective date of the amendments and a requirement of the
               dismissal of all legal proceedings filed by any parties as a
               result of the $5 million reduction issue.

         On January 28, 2002, the Mayor of New Orleans signed the ordinance
effecting the above changes and on February 7, 2002, the lease amendment was
signed by all parties. The parking changes resulted from subsequent action by
the City Planning Commission and the City Council.

         Since emerging from bankruptcy we have continued to seek ways to
improve the financial performance of the casino to assist in making the company
financially stable over the long term. After extensive analysis and evaluation
concerning financial efficiencies, we have, among other things,



                                       34
<PAGE>

reduced the casino's work force by eliminating 148 positions on July 17, 2001.
Our agreements with the State preclude us from reducing our employment levels
below certain thresholds, which were calculated based on employment and
compensation levels at the casino during March 2001. In addition, our agreement
with the City creates certain obligations with respect to employment levels.
There are no pending City or State actions regarding our current employment
levels.

         Under the terms of the proposed merger agreement, Harrah's has agreed
to assume or retire all of our outstanding debt. However, notwithstanding the
merger, we currently expect payments on our short-term obligations to be made
from cash flows from operations. Barring unforeseen extenuating circumstances
that would materially and adversely affect our financial condition, or the
failure to obtain a replacement guarantor under our casino operating contract in
the event the Merger does not close, we should have sufficient liquidity to meet
our long-term obligations.

         EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION, AND AMORTIZATION.
Earnings before interest, taxes, depreciation, and amortization ("EBITDA"), for
the three months ended June 30, 2002 was $7.7 million as compared to $2 million
in the three months ended June 30, 2001. The improvement in EBITDA is related
primarily to increased revenues and improved operating results.

         EBITDA should not be construed as a substitute for operating income or
a better indicator of liquidity than cash flow from operating, investing and
financing activities, which are determined in accordance with accounting
principles generally accepted in the United States of America, and it is
included herein to provide additional information with respect to our ability to
meet our future debt service, capital expenditure and working capital
requirements. Although EBITDA is not necessarily a measure of our ability to
fund our cash needs, management believes that EBITDA is a useful tool for
measuring our ability to service our debt. Our definition of EBITDA may not be
the same as that of similarly captioned measures used by other companies.

         Under our amended management agreement, there are performance targets
that the manager must meet for each twelve-month period ended March 31,
beginning with the twelve months ended March 31, 2002. Under the terms of the
amended management agreement, failure to meet these targets, unless such failure
is the result of a force majeure as defined in the management agreement, could
result in termination of the agreement. The targets, which have been previously
established for the first three fiscal periods, are based on a calculation of
earnings before interest, income taxes, depreciation, amortization and
management fees, adjusted for certain corporate overhead costs ("Adjusted
EBITDAM"). For the twelve months ended March 31, 2003, the target Adjusted
EBITDAM is 84% of $127.4 million, or $107 million. Actual results for the
three-month period ended June 30, 2002, produced $36.9 million in Adjusted
EBITDAM.

         CAPITAL EXPENDITURES. Pursuant to our amended and restated ground lease
with the Rivergate Development Corporation and City of New Orleans, our
management agreement with our manager and our casino operating contract, we
established a capital replacement fund to fund the capital expenditures
necessary to operate the casino. We were contractually required to fund monthly
payments into the capital replacement fund in an aggregate amount equal to $3
million for the first 12 months following the casino's opening, $4 million for
the second 12 months following the casino's opening, $5 million for the third 12
months following the casino's opening, and 2% of the gross revenues of the
casino for each fiscal year thereafter. As of June 30, 2002, we had deposited
$9.9 million into the interest-bearing capital reserve account and expended
approximately $5.7 million. Funds in this account are restricted for uses in
accordance with the terms of the ground lease.


                                       35
<PAGE>

         As a result of our plan of reorganization, we are now free to expand
our seated buffet facilities from 250 to 400 seats and develop a restaurant with
seating for 150 people. We have not yet determined how much capital will be
required to expand our dining facilities, but we are in the process of
finalizing plans and budgets for this expansion. We expect the buffet expansion
to begin in 2002. The funds for such expansion and development will need to be
obtained from cash flow from operations or external financing in the event the
Merger does not close.

         CAPITAL RESOURCES FOR DEVELOPMENT ACTIVITIES. In addition to the gaming
related entertainment offered at the casino, as funding and circumstances may
permit, we also plan to develop additional real estate in New Orleans for
entertainment uses that support the casino. The second floor of our casino was
constructed to the point at which the shell of the structure was complete when
the casino opened in October 1999. The casino's second floor was planned to
ultimately consist of approximately 130,000 square feet of multipurpose
non-gaming entertainment space.

         We have spent approximately $2.4 million through June 30, 2002 towards
developing a master plan for the build out and leasing of the second floor of
the casino for non-gaming uses and for construction-related work that needed to
take place on the second floor of the casino prior to opening the casino in
order to prevent disruption to the casino's gaming operations. We presented a
preliminary master plan governing the use of the second floor of the casino to
the City of New Orleans on February 22, 2000. We intend to revise the master
plan to include restaurant facilities now that the restrictions against us
providing such facilities have been reduced as a result of our plan of
reorganization, and are currently considering alternatives for financing the
remainder of this development. Without additional financing, we will be unable
to build-out and develop the second floor of the casino. Other than the proceeds
from the sale of land, we have not obtained sufficient financing to fund these
developments, and cannot assure that we will ever be able to do so.

         We also owned the parcel of land across from the casino located at 3
Canal Place, adjacent to the Canal Place Shopping Center. On October 15, 2001,
we closed on the sale of this property to CP3 Associates, LLC. The sale netted
approximately $6 million in cash, and we plan to use these funds for development
needs on the second floor, subject to any limitations imposed by our financing
documents.

         We also own the city block of historical buildings across the street
from the casino and its garages (the "Fulton Street Property.") On April 23,
2002, Fulton Development entered into an agreement to sell the Fulton Street
Property to a hotel developer for $6.5 million. The agreement was subject to a
ninety-day due diligence period and was conditioned upon, among other things,
the ability of the purchaser to construct a hotel on the site. On June 27, 2002,
Fulton Development cancelled the sale agreement due to certain terms and
conditions of the sale contract not being satisfied. During the first quarter of
2002, we recorded a provision for asset impairment of $2.7 million to reduce the
book value of the Fulton Street Property to its estimated net realizable value.
We plan to use the proceeds from any sale of this property for development needs
on the second floor, subject to any limitations imposed by our financing
documents.

         Funds from these two sales, however, would not be sufficient to
complete development of the second floor.

         SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES. We prepare our
consolidated financial statements in conformity with accounting principles
generally accepted in the United States of America. Certain of our accounting
policies, including the estimated lives assigned to our assets, the evaluation
of uncollectible accounts receivable, preconfirmation contingencies, self
insurance accruals, note discount, valuation



                                       36
<PAGE>

allowance for deferred taxes, and asset impairment require that we apply
significant judgment in defining the appropriate assumptions for calculating
financial estimates. By their nature, these judgments are subject to an inherent
degree of uncertainty. Our judgments are based on our historical experience,
terms of existing contracts, our observance of trends in the industry,
information provided to us by our customers and information available from other
outside sources, as appropriate. To provide an understanding of the methodology
we apply, our significant accounting policies are discussed where appropriate in
this discussion and analysis and in the notes to our consolidated financial
statements in our Form 10-K for the fiscal year ended December 31, 2001.

         RECENTLY ISSUED PRONOUNCEMENTS. The Financial Accounting Standards
Board ("FASB") has recently issued Statement of Financial Accounting Standards
("SFAS") No. 141 "Business Combinations", SFAS No. 142 "Goodwill and Other
Intangible Assets", SFAS No. 143, "Accounting for Asset Retirement Obligations",
and SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets." SFAS No. 141 requires that the purchase method of accounting be used
for all business combinations initiated after June 30, 2001 and that the use of
the pooling-of-interests method is no longer allowed. SFAS No. 142 requires that
upon adoption, amortization of goodwill will cease and instead, the carrying
value of goodwill will be evaluated for impairment on an annual basis.
Identifiable intangible assets will continue to be amortized over their useful
lives and reviewed for impairment in accordance with SFAS No. 121 "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of." SFAS No. 142 is effective for fiscal years beginning after December 15,
2001. SFAS No. 143 establishes accounting standards for the recognition and
measurement of an asset retirement obligation and its associated asset
retirement cost. It also provides accounting guidance for legal obligations
associated with the retirement of tangible long-lived assets. SFAS No. 143 is
effective in fiscal years beginning after June 15, 2002, with early adoption
permitted. SFAS No. 144 establishes a single accounting model for the impairment
or disposal of long-lived assets, including discontinued operations. SFAS No.
144 superseded SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of" and APB Opinion No. 30, "Reporting
the Results of Operations - Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions." The provisions of SFAS No. 144 are effective in fiscal years
beginning after December 15, 2001, with early adoption permitted, and in general
are to be applied prospectively. We adopted these standards effective January 1,
2002, which resulted in no significant impact on our financial statements.

         In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections," which eliminates the treatment of an extinguishment of debt as
extraordinary unless the extinguishment meets the requirement of an
extraordinary item outlined in APB 30, "Reporting the Results of Operations -
Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary,
Unusual and Infrequently Occurring Events and Transactions." SFAS No. 145 also
requires that capital leases that are modified so that the resulting lease
agreement is classified as an operating lease be accounted for under the
sale-leaseback provisions of FASB Statement No. 98, "Accounting for Leases:
Sale-Leaseback Transactions Involving Real Estate; Sales-Type Leases of Real
Estate; Definition of the Lease Term; Initial Direct Costs of Direct Financing
Leases", or paragraphs 2 and 3 of FASB Statement No. 28, "Accounting for Sales
with Leasebacks, as applicable." Upon adoption, any gain or loss on
extinguishment of debt previously classified as extraordinary that does not meet
the requirements of APB 30 should be reclassified. SFAS 145 is effective for
fiscal years beginning after May 15, 2002. Management does not believe the
impact of any required changes on our financial statements will be material.



                                       37
<PAGE>

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         We do not engage in trading market risk sensitive instruments. We also
do not purchase, for investment, hedging or for purposes "other than trading,"
instruments that are likely to expose us to market risk, whether interest rate,
foreign currency exchange, commodity price or equity price risk, except as
discussed in the following paragraph. We have not entered into any forward or
futures contracts, purchased any options or entered into any swaps. We have no
foreign operations and currently do not deal in foreign currencies. Thus, we do
not believe that we have any material exposure to foreign currency exchange rate
risk.

         We have a significant amount of indebtedness, which accrues interest at
variable rates. As of June 30, 2002, the aggregate amount of our outstanding
indebtedness was $128.4 million. The interest rate of our variable rate
indebtedness will fluctuate with changes in the LIBOR rate applicable under our
credit facility. A change in LIBOR under our credit facility will affect the
interest rate at which indebtedness outstanding under the credit facility
accrues. As a result, a significant increase in LIBOR could materially and
adversely affect our financial position and results of operations. For example,
a 50 basis point movement in interest rates would result in an approximate
$642,000 annualized increase or decrease in interest expense based on the
outstanding balance of our variable rate indebtedness as of June 30, 2002.



                                       38
<PAGE>

                           PART II - OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

         We are subject to legal proceedings and claims that arise in the normal
course of business. While we cannot predict the outcome of these matters with
certainty, we believe that the ultimate resolution of litigation will not have a
materially adverse effect on our business, financial condition or results of
operations.

         Following our reduction in the Casino's work force on July 17, 2001,
former employees of the Casino filed lawsuits against us in the Civil District
Court for the Parish of Orleans, State of Louisiana on August 3, 2001. The
Plaintiffs are seeking damages for being laid off prior to the expiration of the
term of alleged employment contracts between our employees and us. We believe
that we have strong legal and factual defenses, and intend to vigorously contest
the claims. No assurances can be given as to the outcome of such lawsuits, and
consequently, we cannot reasonably predict at this time whether the final
outcome of these matters will materially and adversely affect our results of
operations, cash flows, or financial condition.

         On March 15, 2002, Harrah's Entertainment, Inc. ("Harrah's
Entertainment") and Harrah's Operating Company, Inc. ("HOCI," collectively
"Harrah's") filed a complaint in the Court of Chancery of the State of Delaware
seeking declaratory and injunctive relief regarding the interpretation of the
Second Amended and Restated Certificate of Incorporation (the "Charter") and the
Third Amended and Restated Bylaws of the Company (the "Bylaws"). Although the
complaint sought an award of attorneys' fees and expenses, it did not seek
damages against the Company. The action sought to place Harrah's nominee, Dr.
Charles C. Teamer, on the ballot for election to the board of directors in
addition to Harrah's nominee, Mr. Philip Satre. Harrah's complaint, therefore,
sought a declaration that its nomination of two directors for election at the
2002 annual meeting was valid under the Charter and Bylaws, and injunctive
relief requiring the Company to recognize its nominations. On March 29, 2002,
the Company answered the complaint and filed a counterclaim for declaratory
relief seeking a declaration that the Company's Charter and Bylaws limited
Harrah's nomination right to one candidate for election to the board at the 2002
and 2003 annual meetings. Harrah's filed its reply to counterclaim on April 5,
2002. The parties engaged in expedited discovery. Trial was held on May 21 and
22, 2002. Following trial, on May 31, 2002, the Court of Chancery issued a
written opinion holding that the Charter and Bylaws should be construed in favor
of Harrah's and that Harrah's was entitled to nominate two directors for
election at the 2002 annual meeting. On June 10, 2002, the Court of Chancery
issued a final order and judgment from which the Company perfected an appeal to
the Delaware Supreme Court. The final order and judgment denied Harrah's
application for an award of attorneys' fees and expenses. Harrah's elected not
to pursue an appeal of the denial of its request for an award of attorneys' fees
and expenses, and the time for any such appeal has passed. On June 11, 2002, the
Company held its annual meeting of stockholders at which Dr. Teamer and Mr.
Satre were elected to the board of directors. The parties have fully briefed the
issues raised in the Company's appeal. At the parties' request, the Delaware
Supreme Court postponed oral argument to permit the parties to engage in
negotiations regarding the Merger. The parties believe that the closing of the
Merger will moot the issues on appeal and, accordingly, anticipate dismissing
the appeal in connection with the closing. In the unlikely event the Merger does
not close, JCC anticipates it would request the scheduling of oral argument and
for the Delaware Supreme Court to decide its appeal. Therefore, the ultimate
outcome of this litigation and its possible effect on the Company is presently
uncertain.

                                       39
<PAGE>

         On April 18, 2002, JCC Holding Company and Jazz Casino Company, L.L.C.
filed suit against Harrah's New Orleans Management Company, Harrah's Operating
Company, Harrah's Entertainment, Philip Satre, Bill Noble, and Anthony
Sanfilippo in Civil District Court for the Parish of Orleans, State of
Louisiana. Philip Satre is Chairman of the Board and Chief Executive Officer of
Harrah's Entertainment, Chairman of the Board and Chief Executive Officer of
Harrah's New Orleans Management Company, and was a director on our board at the
time the suit was filed. Anthony Sanfilippo is President of Harrah's New Orleans
Management Company and President of the Central Division of Harrah's
Entertainment, and was a director on our board at the time the suit was filed.
Our suit alleges that the Harrah's entities failed to adhere to the terms and
provisions of the management agreement with respect to advertising, marketing
and promoting our Casino, and that the Harrah's entities diverted business from
our Casino, where Harrah's Entertainment then owned only a 49% interest, to
other properties wholly owned by Harrah's Entertainment. We are seeking damages
for violation of the management agreement and certain tortious conduct, as well
as an injunction, as provided for under the management agreement, to prevent
future diversion of business. It is anticipated that this lawsuit will be
dismissed with prejudice upon the closing of the Merger. Therefore, the ultimate
outcome of this litigation and its possible effect on the company is uncertain.

     On April 22, 2002, Harrah's Entertainment and HOCI filed a derivative
action against Paul Debban, Preston Smart, Rudy Cerone, and Chris Lowden (the
"Individual Defendants"), as well as JCC Holding Company as a nominal defendant,
in the Court of Chancery of the State of Delaware In and For New Castle County.
Messrs. Debban, Smart, and Lowden are currently directors on our board and Mr.
Cerone was a director on our board at the time this suit was filed. All four
individuals are unaffiliated with Harrah's Entertainment. Mr. Debban is also
Chairman and President of JCC Holding Company. Mr. Smart is also Vice President
of JCC Holding Company. Mr. Lowden is, and Mr. Cerone was at the time the suit
was filed, a member of the compensation committee of our board of directors. The
allegations include breach of fiduciary duty and self-dealing in connection with
the compensation committee's deliberations and approval of the employment
agreements, which included stock option grants, for Mr. Debban and Mr. Smart.
The lawsuit seeks declaratory and injunctive relief in regard to the adoption
and implementation of the employment agreements. The Individual Defendants have
indicated for themselves and on behalf of JCC Holding Company denial of all the
allegations as baseless and intend to vigorously defend the lawsuit. The
Individual Defendants answered the complaint on June 11, 2002. No discovery has
been taken in this matter, which remains pending in the Court of Chancery. The
parties anticipate that this action will be dismissed in connection with the
closing of the Merger. The ultimate outcome of this litigation and its possible
impact on the Company is presently uncertain.

     On July 31, 2002, Michael Shapiro, who purports to be a stockholder of the
Company, filed a putative class action complaint (the "Shapiro Action") in the
Court of Chancery of the State of Delaware against Stephen H. Brammell, Gary W.
Loveman, Paul Debban, Charles Teamer, Sr., Christopher Lowden, Preston Smart,
Eddie N. Williams, JCC Holding Company, and Harrah's Entertainment, Inc. seeking
to enjoin the Merger and seeking damages against the defendants. Also on July
31, 2002, Nechuma Cohen, who purports to be a stockholder of the Company, filed
a putative class action complaint (the "Cohen Action") in the Court of Chancery
of the State of Delaware against the same defendants named in the Shapiro Action
seeking to enjoin the Merger and seeking damages against the defendants. Both
the Shapiro and Cohen Actions attack the Merger asserting allegations of
domination and control by Harrah's Entertainment and allege breaches of
fiduciary duties to the corporation and its stockholders in connection with the
Merger. We believe that we have strong legal and factual defenses against these
claims, and intend to contest them vigorously. No assurances can be given as to
the outcome of such lawsuits, and consequently, we cannot reasonably predict at
this time whether the



                                       40
<PAGE>

final outcome of these matters will materially and adversely affect our results
of operations, cash flows, or financial condition.


ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

         None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None.

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

         Our annual meeting of shareholders was held on June 11, 2002. The
voting results were as follows:

Number of Shares Outstanding as of Record Date:  12,386,200
Number of Shares Present:  12,024,376
Percent of Shares Present:  97%

PROPOSAL 1
ELECTION OF DIRECTORS

<Table>
<Caption>
                                         For              Withheld
                                         ---              --------
<S>                                  <C>                   <C>
       Rudy J. Cerone                 4,211,703              9,367
       Philip Satre                  11,643,561            380,815
       Charles C. Teamer, Sr.         7,803,306                  0
</Table>


Mr. Satre and Mr. Teamer were elected as directors. The terms of the following
directors continued after the meeting:

Paul D. Debban
Chris Lowden
Anthony Sanfilippo
Preston Smart
Eddie Williams

PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS

         We included in our proxy statement for the 2002 annual meeting of
shareholders, a proposal to ratify our board of directors' prior selection of
Deloitte & Touche LLP ("Deloitte") as our independent public accountants for the
year ending December 31, 2002. We subsequently dismissed Deloitte as our
independent public accountants in order to assure the complete independence of
our public accountants since our primary shareholder, Harrah's Entertainment had
retained Deloitte as its independent public accountants. Our board of directors
therefore revoked its request that shareholders ratify the prior selection of
Deloitte as our independent public accountants.


                                       41
<PAGE>

ITEM 5.  OTHER INFORMATION

      During the course of the litigation in Delaware described in PART II, ITEM
1, it came to our attention that two of our current directors (one of which was
Mr. Satre, who was also a nominee for re-election, as discussed in PART II, ITEM
4 above) were disqualified under our charter documents from serving as directors
because of their status as officers of the manager. On June 6, 2002, JCC
notified the two board members in question, namely Mr. Satre and Anthony
Sanfilippo, advising them that their terms as directors were automatically
terminated as required by JCC Holding Company's certificate of incorporation and
requesting that suitable replacements for their positions be nominated. By
letter dated June 7, 2002, Mr. Satre advised us that although he and Mr.
Sanfilippo disagreed with our position with respect to the matter, each of them
would resign from our board of directors. On June 17, 2002, Gary Loveman and
Stephen Brammell were designated by Harrah's Entertainment to fill the seats
previously held by Mr. Satre and Mr. Sanfilippo.

         On May 17, 2002, Harrah's Entertainment purchased an additional 2,000
shares of our common stock in an open market transaction, and on June 7, 2002,
Harrah's Entertainment announced that it had purchased the shares previously
issued to holders of claims under tranche B-1 of the bank credit facilities,
bringing its total holdings to 7,805,306 shares (63%) of our common stock. On
July 30, 2002, we entered into a merger agreement with Harrah's Entertainment,
under which a Harrah's affiliate will acquire the remaining shares of our common
stock. Under terms of the merger agreement, which was unanimously approved by
our full board of directors, Harrah's has agreed to pay $10.54 per share for the
remaining JCC stock. Harrah's also agreed to assume or retire all of our
outstanding debt. It is anticipated that the existing litigation between
Harrah's and JCC will be dismissed in connection with closing of the
transaction. The Merger is subject to the approval of our shareholders, as well
as gaming regulatory approvals and other customary conditions, and is expected
to be completed during the fourth quarter of 2002 (see PART I, ITEM 2). In
connection with the proposed Merger, we expect to file a proxy statement with
the Securities and Exchange Commission. The proxy statement will be sent to
holders of JCC Holding Company stock and will contain important information
about JCC Holding Company, Harrah's Entertainment and its applicable affiliates
and the proposed Merger, risks relating to the Merger, and related matters.
We urge all of our stockholders to read the proxy statement when it becomes
available.



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

          (a)  Exhibits.

    2.1*       Agreement and Plan of Merger By and Among Harrah's Operating
               Company, Inc., Satchmo Acquisition, Inc. and JCC Holding Company,
               Dated as of July 30, 2002

    3.1*       Fourth Amended and Restated Bylaws of JCC Holding Company

   10.1*       Employment Agreement by and between JCC Holding Company and
               Paul D. Debban, for the term April 1, 2002 to March 31, 2003

   10.2*       Employment Agreement by and between JCC Holding Company and
               Preston Smart, for the term April 1, 2002 to March 31, 2003



                                       42
<PAGE>

   10.3*       Separation Agreement By and Among JCC Holding Company, Harrah's
               Operating Company, Inc., and Paul Debban, dated as of July 30,
               2002

   10.4*       Separation Agreement By and Among JCC Holding Company, Harrah's
               Operating Company, Inc., and Preston Smart, dated as of July 30,
               2002

   99.1*       Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
               Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

   99.2*       Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
               Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*  Filed herewith


     (b)  Reports on Form 8-K.

          (1)  On April 17, 2002, we filed a Current Report on Form 8-K pursuant
               to Item 5. Other Events concerning our press release dated April
               16, 2002. The date of the earliest event reported was April 16,
               2002.

          (2)  On April 22, 2002, we filed a Current Report on Form 8-K pursuant
               to Item 9. Regulation FD Disclosure regarding disclosures made by
               an officer of Harrah's Entertainment. The date of the earliest
               event reported was April 18, 2002.

          (3)  On May 23, 2002 we filed a Current Report on Form 8-K pursuant to
               Item 4. Changes in Registrant's Certifying Accountant regarding
               the dismissal of Deloitte & Touche LLP as our independent public
               accountants. The date of the earliest event reported was May 17,
               2002.

          (4)  On June 3, 2002 we filed a Current Report on Form 8-K pursuant to
               Item 5. Other Events concerning our press release dated May 31,
               2002. The date of the earliest event reported was May 31, 2002.

          (5)  On June 7, 2002 we filed a Current Report on Form 8-K pursuant to
               Item pursuant to Item 5. Other Events concerning our press
               release dated June 6, 2002. The date of the earliest event
               reported was June 6, 2002.

          (6)  On June 17, 2002 we filed a Current Report on Form 8-K pursuant
               to Item 1. Change in Control of Registrant and 5. Other Events
               concerning our annual meeting. The date of the earliest event
               reported was June 7, 2002.

          (7)  On June 19, 2002 we filed a Current Report on Form 8-K pursuant
               to Item 5. Other Events concerning our press release dated June
               17, 2002. The date of the earliest event reported was June 17,
               2002.

          (8)  On July 31, 2002 we filed a Current Report on Form 8-K pursuant
               to Item 5. Other Events concerning our press release dated July
               31, 2002.

                                       43
<PAGE>


                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) 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.

                                      JCC HOLDING COMPANY


Date:    August 14, 2002          By:  /s/ Paul D. Debban
                                      -----------------------
                                      Paul D. Debban, President
                                      (Duly Authorized Officer)


Date:    August 14, 2002          By:  /s/ L. Camille Fowler
                                      -----------------------
                                      L. Camille Fowler, Vice President-Finance,
                                      Treasurer and Secretary
                                      (Principal Financial Officer and Principal
                                      Accounting Officer of the Registrant)









                                       44
<PAGE>


                                  EXHIBIT INDEX

<Table>
<Caption>
     EXHIBIT
       NO.                                                     DESCRIPTION
     --------                                                  -----------

<S>                 <C>
       2.1*         Agreement and Plan of Merger By and Among Harrah's Operating Company, Inc.,
                    Satchmo Acquisition, Inc. and JCC Holding Company, Dated as of July 30, 2002

       3.1*         Fourth Amended and Restated Bylaws of JCC Holding Company

      10.1*         Employment Agreement by and between JCC Holding Company and Paul D. Debban, for the term April
                    1, 2002 to March 31, 2003

      10.2*         Employment Agreement by and between JCC Holding Company and Preston Smart, for the term April 1,
                    2002 to March 31, 2003

      10.3*         Separation Agreement By and Among JCC Holding Company, Harrah's Operating Company, Inc., and
                    Paul Debban, dated as of July 30, 2002

      10.4*         Separation Agreement By and Among JCC Holding Company, Harrah's Operating Company, Inc., and
                    Preston Smart, dated as of July 30, 2002

      99.1*         Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
                    Sarbanes-Oxley Act of 2002

      99.2*         Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
                    Sarbanes-Oxley Act of 2002
</Table>

*  Filed herewith