<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                   FORM 10-Q/A


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


  For Quarter Ended April 30, 1999            Commission File Number O-7607
                    --------------                                   ------



                            FAIR GROUNDS CORPORATION
                            ------------------------
             (Exact name of registrant as specified in its charter)



           Louisiana                                     72-0361770
--------------------------------------------------------------------------------
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)


1751 Gentilly Blvd., New Orleans, LA                       70119
--------------------------------------------------------------------------------
(Address of principal executive offices)                (Zip Code)


Registrant's telephone number including area code    (504) 944-5515
                                                     --------------

             Not Applicable
             --------------
(Former name, former address, and former fiscal year, if changed since last
report)

Indicate by a check mark whether the registrant (1) has filed all reports to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such report(s)), and (2) has been subject to such filing requirements
for the past 90 days.

           [X]  Yes [ ]  No

           468,580 Common Shares were outstanding as of June 1, 1999.



<PAGE>   2

                            FAIR GROUNDS CORPORATION

                                      INDEX

<TABLE>
<CAPTION>
                                                                                                               Page
                                                                                                               ----

PART I.        FINANCIAL INFORMATION

<S>                                                                                                            <C>
               Item 1.        Financial Statements

                              Balance Sheet, April 30, 1999 (Unaudited)
                              and Balance Sheet, October 31, 1998 ........................................        2

                              Statements of Operations and Retained
                              Earnings for the Three Months Ended
                              April 30, 1999 and 1998 (Unaudited) ........................................        3

                              Statements of Operations and Retained
                              Earnings for the Six Months Ended
                              April 30, 1999 and 1998 (Unaudited).........................................        6

                              Statements of Cash Flows for the Six
                              Months Ended April 30, 1999 and 1998
                              (Unaudited) ................................................................        9

                              Notes to Financial Statements for the Six
                              Months Ended April 30, 1999 and 1998 (Unaudited)............................       11

               Item 2.        Management's Discussion and Analysis of Financial
                              Condition and Results of Operations  .......................................       18

PART II.       OTHER INFORMATION

               Item 1.        Legal Proceedings...........................................................       29

               Item 4.        Submission of Matters to a Vote of Security
                              Holders.....................................................................       29

               Item 6.        Exhibits and Reports on Form 8-K............................................       29

SIGNATURES................................................................................................       30
</TABLE>




<PAGE>   3


                                     PART I
                                EXPLANATORY NOTE


This Form 10-Q/A is being filed to amend the Registrant's Form 10-Q for the
quarter ended April 30, 1999, which was filed with the Securities and Exchange
Commission on June 14, 1999 to reflect the effects of the restatement of the
Company's financial statements as of, and for the year ended, October 31, 1998
as set forth in the Company's Form 10-K/A for the year ended October 31, 1998.



<PAGE>   4

                              FINANCIAL INFORMATION
                            FAIR GROUNDS CORPORATION
                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                         (Unaudited)
                                                           April 30,                 October 31,
                                                             1999                       1998
                                                         ------------                ------------

<S>                                                      <C>                         <C>
ASSETS

CURRENT ASSETS
      Cash and cash equivalents                          $  4,370,628                $  7,577,730
      Cash and cash equivalents
           - restricted                                       125,665                     118,218
      Accounts receivable                                   1,593,220                   1,078,638
      Mutuel settlements                                      389,990                     139,964
      Inventory                                               127,529                     118,357
      Prepaid expenses                                      1,815,138                     437,322
      Deferred Taxes                                           59,940                      59,940
                                                         ------------                ------------

           Total Current Assets                             8,482,110                   9,530,169
                                                         ------------                ------------

OTHER ASSETS                                                  277,760                     283,411
                                                         ------------                ------------

PROPERTY, PLANT AND EQUIPMENT
      Buildings and improvements                           43,957,399                  43,870,295
      Land improvements                                     4,348,135                   4,348,135
      Automotive equipment                                    963,243                     931,424
      Machinery and equipment                               2,548,797                   2,432,433
      Furniture and fixtures                                  394,118                     366,575
                                                         ------------                ------------

           Total                                           52,211,692                  51,948,862

      Less: accumulated depreciation
           and amortization                               (16,887,790)                (15,904,346)
                                                         ------------                ------------

      Depreciable property - net                           35,323,902                  36,044,516
      Land                                                  3,286,281                   3,286,281
                                                         ------------                ------------

           Property, plant and
           equipment - net                                 38,610,183                  39,330,797
                                                         ------------                ------------

           TOTAL ASSETS                                  $ 47,370,053                $ 49,144,377
                                                         ============                ============

      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
      Notes payable                                      $    635,985                $     46,894
      Accounts payable                                        209,725                   1,493,409
      Construction contract payable                                --                      58,732
      Accrued liabilities:
           Deferred purses                                  1,381,968                   7,930,825
           Host track fees                                    544,068                     374,251
           Uncashed mutuel tickets                            624,048                     446,786
           Other                                              246,715                     369,135
      Deferred revenues                                            --                     275,701
      Income taxes payable                                  2,712,534                     515,391
                                                         ------------                ------------

           Total Current Liabilities                        6,355,043                  11,511,124
                                                         ------------                ------------

DEFERRED INCOME TAXES                                       9,995,418                   9,995,418
                                                         ------------                ------------

           Total Liabilities                               16,350,461                  21,506,542
                                                         ------------                ------------

COMMITMENTS AND CONTINGENCIES                                      --                          --
                                                         ------------                ------------


STOCKHOLDERS' EQUITY
      Capital stock - no par value;
           authorized 600,000 shares,
           469,940 shares issued and
           468,580 shares outstanding                       1,525,092                   1,525,092
      Additional paid-in-capital                            1,936,702                   1,936,702
      Retained earnings                                    27,593,323                  24,211,566
                                                         ------------                ------------

           Total                                           31,055,117                  27,673,360

      Less:  treasury stock at cost,
           1,360 shares                                       (35,525)                    (35,525)
                                                         ------------                ------------

           Total Stockholders' Equity                      31,019,592                  27,637,835
                                                         ------------                ------------

           TOTAL LIABILITIES AND
                STOCKHOLDERS' EQUITY                     $ 47,370,053                $ 49,144,377
                                                         ============                ============
</TABLE>

See accompanying notes to financial statements.



                                       2
<PAGE>   5

                            FAIR GROUNDS CORPORATION
                 STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
               For the Three Months Ended April 30, 1999 and 1998
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                      1999                     1998
                                                  -----------               -----------

<S>                                               <C>                      <C>
REVENUES
      Pari-mutuel commissions                     $ 8,525,023               $ 7,583,440
      Breakage                                        232,441                   164,069
      Uncashed mutuel tickets                          90,847                    61,912
                                                  -----------               -----------

           Total                                    8,848,311                 7,809,421

      Less: pari-mutuel tax                         1,020,115                   985,375
                                                  -----------               -----------

      Commission income                             7,828,196                 6,824,046
      Host track fees                               4,768,461                 3,257,958
                                                  -----------               -----------

           Total Mutuel Income                     12,596,657                10,082,004

      Concessions                                     868,971                   813,935
      Video poker (net)                               446,060                   439,680
      Admissions(net of taxes)                        277,838                   166,239
      Parking                                          25,994                    20,505
      Programs and forms                              440,121                   419,714
      Miscellaneous                                   279,044                   154,503
                                                  -----------               -----------

           Total Operating Revenues                14,934,685                12,096,580
                                                  -----------               -----------

RACING EXPENSES
      Purses                                        5,434,563                 4,137,271
      Salaries and related taxes
           and benefits                             2,487,827                 2,024,239
      Contracts and services                          979,985                   774,356
      Host track fees                                 882,577                   938,787
      Depreciation                                    484,340                   453,129
      Cost of sales - concessions                     329,754                   276,049
      Utilities                                       298,886                   304,702
      Repairs and maintenance                         130,040                   224,987
      Programs, forms and other
           supplies                                   574,444                   497,469
      Advertising and promotion                       278,008                   222,123
      Rent                                             85,955                    78,816
      Miscellaneous                                   242,716                   169,723
                                                  -----------               -----------

           Total Racing Expenses                  $12,209,095               $10,101,651
                                                  -----------               -----------
</TABLE>



                                       3
<PAGE>   6

                            FAIR GROUNDS CORPORATION
                 STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
                                   (CONTINUED)
               For the Three Months Ended April 30, 1999 and 1998
                                   (Unaudited)


<TABLE>
<CAPTION>

                                                                                1999                      1998
                                                                            ------------              -----------
 <S>                                                                        <C>                       <C>
 GENERAL AND ADMINISTRATIVE EXPENSES
      Salaries and related taxes
           and benefits                                                   $    896,257                $    328,017
      Insurance                                                                188,470                     257,326
      Property taxes                                                           246,467                     219,477
      Legal, audit and director fees                                           329,023                     186,056
      Contracts and services                                                    10,837                      26,495
      Office expenses                                                          209,930                     157,876
      Miscellaneous                                                          1,085,547                     147,868
                                                                          ------------                ------------
           Total General and
           Administrative Expenses                                           2,966,531                   1,323,115
                                                                          ------------                ------------

NET INCOME (LOSS) FROM OPERATIONS                                             (240,941)                    671,814

OTHER INCOME (EXPENSE)
      Jazz and Heritage Festival Income                                      1,054,646                     526,694
      Interest expense                                                            (520)                    (20,239)
      Interest income                                                           56,133                      17,223
      Insurance settlement                                                          --                      56,553
                                                                          ------------                ------------
INCOME  BEFORE PROVISION FOR INCOME
TAXES AND EXTRAORDINARY ITEM                                                   869,318                   1,252,045

Provision for income taxes                                                     521,353                     463,257
                                                                          ------------                ------------

INCOME BEFORE EXTRAORDINARY ITEM (per share - 1999 - $ .74,
      1998 - $1.68)                                                            347,965                     788,788

Extraordinary item - gain from fire
      (net of $1,521,162 of taxes
      in 1999.)                                                              2,267,118                          --
                                                                          ------------                ------------

NET INCOME (per share
      1999 - $5.58, 1998 - $1.68)                                         $  2,615,083                $    788,788

RETAINED EARNINGS, BEGINNING OF
PERIOD                                                                    $ 25,446,820                $ 23,554,029
</TABLE>



                                       4
<PAGE>   7

                            FAIR GROUNDS CORPORATION
                 STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
                                   (CONTINUED)
               For the Three Months Ended April 30, 1999 and 1998
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                1999                    1998
                                                                            ------------             ------------
<S>                                                                         <C>                      <C>

DIVIDENDS PAID                                                                  (468,580)                      --

RETAINED EARNINGS, END OF PERIOD                                            $ 27,593,323             $ 24,342,817
                                                                            ============             ============

CASH DIVIDENDS PER SHARE                                                    $       1.00             $       NONE
                                                                            ============             -===========

WEIGHTED AVERAGE NUMBER OF
      SHARES OUTSTANDING                                                         468,580                  468,580
                                                                            ============             ============

</TABLE>

See accompanying notes to financial statements

                                       5




<PAGE>   8
                            FAIR GROUNDS CORPORATION
                 STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
                For the Six Months Ended April 30, 1999 and 1998
                                   (Unaudited)

<TABLE>
<CAPTION>
                                             1999             1998
                                         -----------      -----------
<S>                                      <C>              <C>

REVENUES
      Pari-mutuel commissions            $16,054,094      $14,392,714
      Breakage                               436,399          306,074
      Uncashed mutuel tickets                174,024          132,860
                                         -----------      -----------

           Total                          16,664,517       14,831,648

      Less: pari-mutuel tax                1,947,761        1,874,035
                                         -----------      -----------

      Commission income                   14,716,756       12,957,613
      Host track fees                      9,935,506        7,459,016
                                         -----------      -----------

           Total Mutuel Income            24,652,262       20,416,629

      Concessions                          1,750,315        1,638,553
      Video poker (net)                      879,124          842,381
      Admissions(net of taxes)               573,967          613,361
      Parking                                 56,628           43,875
      Programs and forms                     870,268          881,264
      Miscellaneous                          652,457          302,748
                                         -----------      -----------

           Total Operating Revenues       29,435,021       24,738,811
                                         -----------      -----------

RACING EXPENSES
      Purses                              10,811,614        8,893,741
      Salaries and related taxes
           and benefits                    4,672,647        4,349,289
      Contracts and services               1,713,985        1,510,192
      Host track fees1,                      646,332        1,537,884
      Depreciation                           980,516          963,539
      Cost of sales - concessions            570,145          541,773
      Utilities                              498,756          560,356
      Repairs and maintenance                375,254          439,862
      Programs, forms and other
           supplies                        1,162,323        1,077,922
      Advertising and promotion              731,697          559,391
      Rent                                   164,713          175,272
      Miscellaneous                          458,809          302,814
                                         -----------      -----------

           Total Racing Expenses         $23,786,791      $20,912,035
                                         -----------      -----------
</TABLE>

(Continued)



                                       6
<PAGE>   9



                            FAIR GROUNDS CORPORATION
                 STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
                                   (CONTINUED)
                For the Six Months Ended April 30, 1999 and 1998
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                1999                    1998
                                                                            ------------             ------------
<S>                                                                         <C>                      <C>
GENERAL AND ADMINISTRATIVE EXPENSES
      Salaries and related taxes
           and benefits                                                     $  1,203,270             $    609,417
      Insurance                                                                  416,081                  476,444
      Property taxes                                                             479,870                  361,693
      Legal, audit and director fees                                             436,647                  373,731
      Loan closing costs                                                              --                   24,042
      Contracts and services                                                      64,294                  117,709
      Office expenses                                                            336,268                  300,254
      Miscellaneous                                                            1,190,618                  233,979
                                                                            ------------              -----------

           Total General and
           Administrative Expenses                                             4,127,048                2,497,269
                                                                            ------------              -----------

NET INCOME FROM OPERATIONS                                                     1,521,182                1,329,507

OTHER INCOME (EXPENSE)
      Jazz and Heritage Festival Income                                        1,054,646                  526,694
      Interest expense                                                           (10,309)                 (17,215)
      Interest income                                                             69,520                   68,212
                                                                            ------------              -----------
      Insurance settlement                                                            --                   56,553
INCOME  BEFORE PROVISION FOR INCOME
TAXES AND EXTRAORDINARY ITEM                                                   2,635,039                1,963,751

Provision for income taxes                                                     1,174,670                  726,588
                                                                            ------------              -----------

INCOME BEFORE EXTRAORDINARY ITEM
      (per share - 1999 - $3.12,
      1998 - $2.64)                                                           1,460,369                 1,237,163

Extraordinary item - gain from fire
      (net of $1,593,312 and $2,849,000                                        2,389,968                4,851,000
      of taxes in 1999 and 1998,                                            ------------              -----------
      respectively)


NET INCOME (per share
      1999 - $8.22, 1998 - $12.99)                                          $  3,850,337             $  6,088,163

RETAINED EARNINGS, BEGINNING OF
PERIOD                                                                      $ 24,211,566             $ 18,254,654
</TABLE>



                                       7
<PAGE>   10

                            FAIR GROUNDS CORPORATION
                 STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
                                   (CONTINUED)
                For the Six Months Ended April 30, 1999 and 1998
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                   1999                       1998
                                               ------------                ------------

<S>                                            <C>                         <C>
DIVIDENDS PAID                                     (468,580)                         --

RETAINED EARNINGS, END OF PERIOD               $ 27,593,323                $ 24,342,817
                                               ============                ============


CASH DIVIDENDS PER SHARE                       $       1.00                $       NONE
                                               ============                ============
WEIGHTED AVERAGE NUMBER OF
      SHARES OUTSTANDING                            468,580                     468,580
                                               ============                ============
</TABLE>


See accompanying notes to financial statements



                                       8
<PAGE>   11

                            FAIR GROUNDS CORPORATION
                            STATEMENTS OF CASH FLOWS
                For the Six Months Ended April 30, 1999 and 1998
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                               1999                        1998
                                                           ------------                ------------

<S>                                                         <C>                       <C>
CASH FLOWS FROM OPERATING ACTIVITIES
       Net income                                          $  3,850,337                $  6,088,163
                                                           ------------                ------------
      Adjustments to reconcile net income
           to net cash used for
           operating activities:
           Extraordinary item -
                gain from fire                               (3,983,280)                 (7,700,000)
           Depreciation                                         980,516                     963,539
           Deferred income taxes                                     --                   3,575,588
           Change in assets and liabilities:
           (Increase) decrease in:
                Accounts receivable                            (761,680)                   (694,806)
                Inventory                                        (9,172)                    (67,911)
                Prepaid expenses                             (1,377,816)                   (587,433)
                Restricted cash                                  (7,447)                         --
           Increase (decrease) in
                Accounts payable and
                     accrued liabilities                     (1,236,287)                    (79,968)
                Deferred revenue                               (275,701)                         --
                Deferred purses                              (6,548,857)                 (6,172,476)
                Income taxes payable                          2,197,143                          --
                Uncashed mutuel tickets                         177,262                          --
                Contracts Payable                               (58,732)                         --

                     Total adjustments                      (10,904,051)                (10,763,467)
                                                           ------------                ------------

           Net cash used for operating
                activities                                   (7,053,714)                 (4,675,304)
                                                           ------------                ------------

CASH FLOWS FROM INVESTING ACTIVITIES
           Proceeds from litigation
                settlement                                    3,983,280                   7,700,000
           Capital expenditures                                (262,830)                 (3,618,537)
           Decrease in deposits                                   5,651                       2,504
           Proceeds provided by sale of
                investment securities                                --                     391,053
           Decrease in restricted cash                               --                   2,553,714
                                                           ------------                ------------
           Net cash provided by investing
                activities                                    3,726,101                   7,028,734
                                                           ------------                ------------
</TABLE>

(Continued)



                                       9
<PAGE>   12

                            FAIR GROUNDS CORPORATION
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                For the Six Months Ended April 30, 1999 and 1998
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                       1999                      1998
                                                   -----------                -----------

<S>                                                <C>                        <C>
CASH FLOWS FROM FINANCING ACTIVITIES
      Loan proceeds                                $   200,627                $        --
      Principal repayments on loans                   (111,536)                (5,224,562)
      Advances from third party                      1,000,000                  1,000,000
      Repayments to third party                       (500,000)                  (640,840)
      Dividends Paid                                  (468,580)
                                                   -----------                -----------

Net cash provided by (used for)
           financing activities                        120,511                 (4,865,402)
                                                   -----------                -----------

NET DECREASE IN CASH
   AND CASH EQUIVALENTS                             (3,207,102)                (2,511,972)

CASH AND CASH EQUIVALENTS AT
      BEGINNING OF PERIOD                            7,577,730                  5,192,756
                                                   -----------                -----------

CASH AND CASH EQUIVALENTS AT
      END OF PERIOD                                $ 4,370,628                $ 2,680,784
                                                   -----------                -----------

SUPPLEMENTAL DISCLOSURES:

      Interest paid                                $    10,309                $    17,215
                                                   -----------                -----------


      Income taxes paid                            $ 1,112,000                $        --
                                                   ===========                -----------
</TABLE>




                                       10


<PAGE>   13
                            FAIR GROUNDS CORPORATION
                         NOTES TO FINANCIAL STATEMENTS
                FOR THE SIX MONTHS ENDED APRIL 30, 1999 AND 1998
                                  (UNAUDITED)


NOTE 1 - COMMITMENTS AND CONTINGENCIES

Fire Related Litigation

The Company has been a party to a number of legal proceedings which have arisen
as a result of the December 1993 fire or in connection with the Company's
efforts to collect insurance proceeds after the fire. The following is a brief
description of such fire-related proceedings that were concluded during the six
months ended April 30, 1999 or have not yet been concluded:

Travelers Litigation

           On May 14, 1994, the Company filed an action in the 24th Judicial
           Court in the State of Louisiana against Travelers Indemnity Company
           of Illinois ("Travelers") and others. The Company contended that the
           insurance policy provided by Travelers provided the Company with
           blanket coverage in the amount of $24.2 million in excess of the $10
           million of underlying coverage. Accordingly, the Company maintained
           that Travelers was liable for the difference between $24.2 million
           and the amount which had been paid at that time (approximately $9.5
           million), plus statutory penalties of 10% of the amount not paid,
           interest, attorney's fees and costs. The Company further contended
           that the insurance agent and the insurance broker who arranged for
           the insurance were liable to the Company for any damages sustained
           including any damages sustained because the amount of coverage is
           less than that claimed by the Company. Travelers' position is that
           its liability under such policy is limited to the amount which it
           had previously paid.

           In November 1996, the Company entered into a joint settlement with
           the insurance agent and broker pursuant to which the insurance agent
           and broker


                                      11
<PAGE>   14

                            FAIR GROUNDS CORPORATION
                         NOTES TO FINANCIAL STATEMENTS
                FOR THE SIX MONTHS ENDED APRIL 30, 1999 AND 1998
                                  (UNAUDITED)


NOTE 1 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

           agreed to pay a total of $10,000,000 to the Company. Such amount was
           placed in escrow until April 9, 1997, when the Company utilized such
           funds in connection with the closing of its construction financing
           previously reported. The settlement agreement included a "Mary
           Carter" provision whereby the liability insurers of the insurance
           agent and broker would be entitled to share in the Company's
           recovery from Travelers in that litigation.

           The Company's action against Travelers was tried in September 1997,
           and in April 1998, the trial court entered judgment in favor of the
           Company and against Travelers, awarding the Company an additional
           $2,410,905 in business interruption insurance, legal interest on
           that sum from May 13, 1994 until paid, statutory penalties in the
           amount of $222,128 and attorney's fees in an amount to be set by the
           Court. In August 1998, the Court denied all post trial motions and
           certified the judgment as being immediately appealable. The court
           later fixed the amount of attorney's fees at $75,000. Appeals by
           both the Company and Travelers are now pending before the state
           court of appeals. Under the Mary Carter agreement referenced above,
           the liability insurers of the agent and broker are entitled to share
           in any recovery from Travelers.


ADT Litigation

           In December 1994, the Company filed an action in the Civil District
           Court for the Parish of Orleans, State of Louisiana against ADT
           Security Systems, Mid-South, Inc. ("ADT"), the company which
           provided and maintained the fire alarm system at the race track,


                                      12
<PAGE>   15

                               FAIR GROUNDS CORPORATION
                         NOTES TO FINANCIAL STATEMENTS
                FOR THE SIX MONTHS ENDED APRIL 30, 1999 AND 1998
                                  (UNAUDITED)


NOTE 1 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

           and other defendants. The complaint sought damages that were
           allegedly caused by the negligence of one or more of the defendants.
           The Company's three fire insurers and a third party's insurance
           company, which insured the operator of the video poker machines
           destroyed in the fire, intervened in the suit asserting subrogation
           claims against the same defendants.

           In late 1996, the Company and the three insurance companies entered
           into settlements with the manufacturer of a lighting ballast and an
           architect. After division of the settlement proceeds among the
           Company and the three insurance companies and the payment of various
           litigation expenses, the Company received approximately $268,000. In
           March 1997, a jury trial was held on the remaining claims and
           resulted in an award in favor of the Company and the subrogated
           insurance companies of approximately $49.8 million in the aggregate
           in damages against ADT, plus interest, of which approximately $31.8
           million, plus interest, was awarded to the Company and the balance
           to the subrogated insurance companies, including approximately $4.25
           million to the Company's primary property insurer. The judgment was
           appealed to the Court of Appeals of Louisiana, Fourth Circuit, by
           ADT, the Company and three of the subrogated insurance companies. In
           June 1997, the insurance company that insured the initial layer of
           ADT's liability tendered approximately $9.3 million in partial
           settlement of the action. After a dispute with the subrogated
           insurers over the division of these funds was resolved in August
           1997, the Company received approximately $4 million of those
           proceeds after litigation expenses.

          In December 1997, the Company entered into a settlement


                                      13
<PAGE>   16

                               FAIR GROUNDS CORPORATION
                         NOTES TO FINANCIAL STATEMENTS
                FOR THE SIX MONTHS ENDED APRIL 30, 1999 AND 1998
                                  (UNAUDITED)


NOTE 1 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

          with ADT and ADT's excess coverage insurers pursuant to which the
          Company was paid $37 million and agreed to indemnify ADT and its
          insurers against the judgment creditor claims of the four subrogated
          insurers. In December 1997, the Company received $7.7 million of such
          funds net of litigation expenses, and the balance of the settlement
          funds was placed in escrow pending resolution of the subrogation
          claims. In July 1998, the Company settled the subrogation claims of
          three of the four insurers, as well as an action filed in April 1997
          in United States District Court for the Eastern District of Louisiana
          by those three insurers against the Company seeking a declaratory
          judgement that a contract had been entered into by the parties
          respecting the distribution of funds recovered in the ADT litigation.
          Under the terms of this settlement, the three insurers received a
          total of $12.97 million from the funds in escrow. At that time, the
          Company received an additional $2.2 million from the funds in escrow,
          net of litigation expenses. Approximately $6.3 million was held in
          escrow pending resolution of the claims between the Company and its
          primary property insurer.

          In September 1998, the Court of Appeals, among other things, reversed
          the trial court's award of $4.25 million to the Company's primary
          property insurer on its subrogation claim, concluding that the trial
          court had erred in making that award to the insurer when the Company
          had not been fully compensated for its property loss. This decision
          rendered moot the remainder of the appeals. The insurer appealed this
          decision to the Louisiana Supreme Court which denied the appeal. In
          February and March 1999, the Company received additional funds
          totaling $3.79 million, net of


                                      14
<PAGE>   17

                            FAIR GROUNDS CORPORATION
                         NOTES TO FINANCIAL STATEMENTS
                FOR THE SIX MONTHS ENDED APRIL 30, 1999 AND 1998
                                  (UNAUDITED)


NOTE 1 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

     litigation expenses, from the funds held in escrow.


Other Litigation

         In 1996, a suit was filed in U.S. District Court in Baton Rouge by
      Livingston Downs Racing Association ("Livingston") naming the Company and
      other defendants in an antitrust/civil RICO suit alleging the Company
      participated in a conspiracy to prevent the plaintiff from entering the
      live racing, off-track betting and video poker markets. This suit is
      currently in the discovery stages. Management of the Company believes the
      action is without merit. Livingston had previously filed a series of
      other legal actions against the Company which were resolved in the
      Company's favor. The amount in question in this action has not yet been
      determined but could be substantial.

        A suit was filed in 1996 by the Louisiana Horsemen's Benevolent and
     Protective Association ("HBPA") against the Company, the State of
     Louisiana, and all other pari-mutuel wagering facilities operating in
     Louisiana. The HBPA is seeking a larger portion of video poker proceeds.
     The Company believes it is currently in compliance with the guidelines
     established by the Louisiana State Police Gaming Division, which regulates
     compliance with the State of Louisiana video poker law.

         In July 1997, Evelyn Allen and other present or former security or
     concessions employees of the Company filed an action in the United States
     District Court in New Orleans claiming that the plaintiffs were entitled,
     under the Fair Labor Standards Act, to overtime for hours worked over 40 in
     each work week from July 1994 to July 1997. Two of the plaintiffs also
     sought to recover damages for alleged


                                      15
<PAGE>   18

                            FAIR GROUNDS CORPORATION
                         NOTES TO FINANCIAL STATEMENTS
                FOR THE SIX MONTHS ENDED APRIL 30, 1999 AND 1998
                                  (UNAUDITED)


NOTE 1 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

     retaliatory discharge. In December 1998, the Company and the plaintiffs
     reached a settlement agreement and in May 1999 the Company paid the
     plaintiffs $100,000 in full settlement of all claims for overtime pay. The
     retaliatory discharge claims were tried in December 1998. At the
     conclusion of evidence, the court dismissed those claims. The plaintiffs'
     claim for attorneys fees has not yet been resolved.

     Except as described above, there are no material pending legal
     proceedings, other than ordinary routine litigation incidental to its
     business, to which the Company is a party or of which any of its property
     is the subject.

NOTE 2 - ADVANCE

      In January 1999, the Company received a non-interest bearing advance of
      $1,000,000 from Video Services, Inc., and is being repaid in six equal
      monthly installments beginning in February 1999. The unpaid balance of
      the advance is included in notes payable in the financial statements.

NOTE 3 - RECLASSIFICATION

      In the three months and the six months ended April 30, 1999, host track
      fee income was reported at its contractual rate of approximately 3% of the
      betting handle. In the prior comparable periods, host track fee income was
      shown net of related purse expenses. The April 30, 1998 host track fees
      and related purse expenses have been reclassified to conform to the
      current three months and six months presentations. This reclassification
      has no effect on the earnings for the three months or six months ended
      April 30, 1998.


                                      16
<PAGE>   19

                            FAIR GROUNDS CORPORATION
                         NOTES TO FINANCIAL STATEMENTS
                FOR THE SIX MONTHS ENDED APRIL 30, 1999 AND 1998
                                  (UNAUDITED)


NOTE 4 - RESTATEMENT OF 1998 FINANCIAL STATEMENTS

The financial statements for the quarter ended April 30, 1999 have been
restated to correct for an error in the calculation of deferred income taxes
occurring during the fiscal year ended October 31, 1998. The Company's
statement of operations for the fiscal year ended October 31, 1998 erroneously
reflected a benefit for income taxes of $3,364,232 and net income for fiscal
1998 of $8,973,671. The benefit for income taxes was primarily related to the
insurance and litigation recoveries arising out of a fire at the Company's race
track in 1993 and the reinvestment of those recoveries in the Company's new
facilities. Had this error not occurred, net income would have been reduced by
$3,016,759, or $6.38 per share, to $5,956,912, or $12.69 per share.
Stockholders' equity at October 31, 1998 would have been $27,637,835 as
compared to the previously reported amount of $30,654,594. The Company's
financial statements as of, and for the year ended, October 31, 1998 have been
restated to reflect this adjustment. This restatement affected income taxes
payable, deferred income taxes and retained earnings at April 30, 1999 and
resulted in stockholders' equity at April 30, 1999 totaling $31,019,592 as
compared to the previously reported amount of $34,036,351. This adjustment had
no effect on the Company's Statement of Operations for the six months ended
April 30, 1999. The Company's financial statements as of, and for the quarter
ended, April 30, 1999 have been restated to reflect the effects of this
adjustment.


                                      17
<PAGE>   20

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

RESULTS OF OPERATIONS

COMPARISON OF THE THREE MONTHS ENDED APRIL 30, 1999 AND 1998

          Revenues. During the fiscal quarters ended April 30, 1999 and 1998,
          the Company derived its pari-mutuel income by conducting live racing
          41 and 42 days, respectively, during each fiscal quarter and in the
          operation of its tele-tracks for off-track wagering. During each such
          fiscal quarter, in addition to live racing conducted at the Fair
          Grounds Race Course in New Orleans, the Company operated tele-tracks
          in New Orleans at the Fair Grounds Race Course and on Bourbon Street,
          and at locations in Jefferson, Lafourche, St. Bernard and St. John
          Parishes, Louisiana. Through Finish Line Management Corporation, an
          affiliated company, the Company operated tele-track facilities in
          Terrebonne, St. Tammany, and Jefferson Parishes, Louisiana.

          For the fiscal quarter ended April 30, 1999, the Company reported
          total in-state pari-mutuel wagering of $40,852,671 compared to
          $38,402,692 in the same quarter in fiscal 1998.

          Comparative pari-mutuel wagering and attendance figures for the
          quarters ended April 30, 1999 and 1998 are as follows:

<TABLE>
<CAPTION>
                                            1999                1998
                                       --------------      --------------
<S>                                    <C>                 <C>
Pari-mutuel wagering:
   On-track handle                     $   13,126,751      $   12,577,916
   Off-track handle                        27,725,920          25,824,776
                                       --------------      --------------
   Total in-state wagering             $   40,852,671      $   38,402,692
                                       ==============      ==============

   Out-of-state simulcast handle       $  156,644,135      $   98,940,282
                                       ==============      ==============

Total On-Track Attendance                     163,551             179,022
                                       ==============      ==============
</TABLE>


                                      18
<PAGE>   21

          The Company attributes the $548,835, or 4.4%, increase in the
          on-track handle in the current fiscal quarter primarily to [the
          amenities provided by the new racing facility and] the improved
          quality of racing resulting from increased purses paid in the current
          fiscal quarter. The Company believes that the $1,901,144, or 7.3%,
          increase in off-track handle is primarily due to the Company
          transmitting better simulcasting signals and to higher quality horses
          racing in the Company's 1998-99 live racing meet. The $57,703,853, or
          58.3%, increase in out-of-state handle is believed to be the result
          of those same factors. In addition, during the second quarter of
          fiscal 1999, the Company's races were sometimes simulcasted to some
          locations that do not generally simulcast the Company's races because
          certain other tracks were unable to race due to severe winter
          weather, thus increasing the Company's simulcasting handle. During
          the quarter ended April 30, 1999, the Company experienced significant
          handle increases from California and New York. These two markets
          accounted for approximately $35.9 million of the handle increase.

          As a result of the increases in total handle, the Company's operating
          revenues in the quarter ended April 30, 1999 increased by $2,838,105,
          or 23.5%, from the prior comparable fiscal quarter. This included
          increases of $941,583, or 12.4%, in pari-mutuel commissions, $68,372,
          or 41.7%, in breakage, $28,935, or 46.7%, in uncashed mutuel tickets,
          $1,510,503, or 46.4%, in host track fees, $6,380, or 1.5%, in video
          poker revenues, $5,439, or 26.5%, in parking revenues, $20,407, or
          4.9% in programs and forms revenue, $111,599, or 67.1% in admissions
          revenue, and $124,541, or 81%, in miscellaneous revenues.

          As previously reported, in fiscal 1998, all box and suite admissions
          revenues were recognized in the quarter ended January 31, 1998,
          rather than pro-rated


                                      19
<PAGE>   22

          over the racing season as is being done in fiscal 1999. As a result,
          the increase in admissions during the current fiscal quarter relates
          only to a timing of revenue recognition.

          Racing Expenses. Total racing expenses for the quarter ended April
          30, 1999 increased $2,107,444, or 20.9%, over the prior comparable
          fiscal quarter, primarily as a result of the increased pari-mutuel
          activities. These included an increase of $1,297,292, or 31.4%, in
          purses. Other increases included salaries and related taxes and
          benefits, contracts and services, programs, forms and other supplies,
          advertising and promotions, and miscellaneous racing expenses. These
          increases were partially offset by decreases in host track fees paid
          by the Company and repair and maintenance. Maintenance costs were
          higher in the prior comparable fiscal quarter due to certain costs
          associated with the move to the new facilities.

          General and Administrative Expenses. General and administrative
          expenses increased by $1,643,416, or 124%, in the current fiscal
          quarter primarily as a result of an increase in salaries due to
          performance bonuses paid to key personnel, increased office expenses,
          and increased legal fees relating to ongoing litigation discussed
          elsewhere herein. Miscellaneous expenses increased in the current
          fiscal quarter as a result of a guaranty fee of [approximately]
          $988,000 paid to Marie G. Krantz for her guaranty of, and pledge of
          personal assets to secure, the Company's reconstruction debt from
          1994 through completion in late 1997. These increases were partially
          offset by decreases in insurance costs due to lower property and
          general liability premiums.

          Other Income (Expenses). Other income increased in the current fiscal
          quarter by $530,028, or 91.3%, primarily as a result of a $527,952
          increase in Jazz and Heritage


                                      20
<PAGE>   23

          Festival income. The increase in Jazz and Heritage Festival income
          was primarily attributable to five days of the 1999 Jazz and Heritage
          Festival falling in the second quarter of fiscal 1999 compared to
          three days of the 1998 Jazz and Heritage Festival falling in the
          second quarter of fiscal 1998.

          Extraordinary Items. During fiscal quarter ended April 30, 1999, the
          Company received settlement payments in connection with the fire
          related litigation previously reported in the aggregate amount of
          $3.86 million. These proceeds were reported net of related taxes of
          approximately $1.52 million. In the prior comparable fiscal quarter,
          no settlement proceeds were received.

          Income Taxes. For the fiscal quarter ended April 30, 1999 income tax
          expense was $521,353 compared to income tax expense of $463,257 in
          the comparable quarter in fiscal 1998

          Net Income. The Company reported net income of $2,615,083 for the
          fiscal quarter ended April 30, 1999 compared to $788,788 for the
          fiscal quarter ended April 30, 1998. Excluding the extraordinary
          items discussed above, net income in the current year quarter was
          $347,965 compared to $788,788 in the quarter ended April 30, 1998.



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

COMPARISON OF THE SIX MONTHS ENDED APRIL 30, 1999 AND 1998


          Revenues. During the six months ended April 30, 1999 and 1998, the
          Company derived its pari-mutuel income by conducting live racing 88
          days during each six month


                                      21
<PAGE>   24

          period and in the operation of its tele-tracks for off-track
          wagering. During each six month period, the Company utilized its new
          grandstand and clubhouse facilities, which were completed in November
          1997. During each such period, the Company operated tele-tracks in
          New Orleans at the Fair Grounds Race Course and on Bourbon Street,
          and at locations in Jefferson, Lafourche, St. Bernard and St. John
          Parishes, Louisiana. Through Finish Line Management Corporation, an
          affiliated company, the Company operated tele-track facilities in
          Terrebonne, St. Tammany, and Jefferson Parishes, Louisiana.

          For the six months ended April 30, 1999, the Company reported total
          in-state pari-mutuel wagering of $105,949,866 compared to $99,302,551
          in the same period in fiscal 1998.

          Comparative pari-mutuel wagering and attendance figures for the six
          months ended April 30, 1999 and 1998 are as follows:

<TABLE>
<CAPTION>
                                                      1999                1998
                                                 --------------      --------------
          <S>                                    <C>                 <C>
          Pari-mutuel wagering:
             On-track handle                     $   27,412,562      $   25,789,351
             Off-track handle                        78,537,304          73,513,200
                                                 --------------      --------------
             Total in-state wagering             $  105,949,866      $   99,302,551
                                                 ==============      ==============

             Out-of-state simulcast handle       $  321,342,925      $  219,770,183
                                                 ==============      ==============

          Total On-Track Attendance                     336,466             365,617
                                                 ==============      ==============
</TABLE>


          The Company attributes the $1,623,211, or 6.3%, increase in the
          on-track handle in the current six month period primarily to the
          amenities provided by the new racing facility and the improved
          quality of racing resulting from increased purses paid in the current
          six month period.

          The Company believes that the $6,647,315, or 6.7%, increase in
          off-track handle is primarily due to the


                                      22
<PAGE>   25

          Company transmitting better simulcasting signals and higher quality
          horses racing in the Company's 1998-99 live racing meet. The
          $101,572,742, or 46.2%, increase in out-of-state handle is believed
          to be the result of those same factors. In addition, the Company's
          races were sometimes simulcasted to some locations that do not
          generally simulcast the Company's races because certain other tracks
          were unable to race due to severe winter weather, thus increasing the
          Company's simulcasting handle. During the six months ended April 30,
          1999, the Company experienced significant handle increases from
          California and New York. These two markets accounted for
          approximately $46.4 million of the handle increase.

          As a result of the increases in total handle, the Company's operating
          revenues in the six months ended April 30, 1999 increased by
          $4,696,210, or 19%, from the prior period. This included increases of
          $1,661,380, or 11.5%, in pari-mutuel commissions, $130,32, or 42.6%,
          in breakage, $41,164, or 31%, in uncashed mutuel tickets, $2,476,490,
          or 33.2%, in host track fees, $36,473, or 4.3%, in video poker
          revenues, $12,753, or 29.1%, in parking revenues, and $349,709, or
          115%, in miscellaneous revenues, which included approximately
          $150,000 of promotional fee revenues paid by third parties who
          advertise in the Company's racing program.

          Racing Expenses. Total racing expenses increased $2,874,756, or
          13.7%, over the prior period, primarily as a result of the increased
          pari-mutuel activities. These included an increase of $1,917,873, or
          21.5%, in purses. Other increases included salaries and related taxes
          and benefits, contracts and services, programs, forms and other
          supplies, advertising and promotions, host track fees and
          miscellaneous racing expenses. These were partially offset by
          decreases in utilities and repairs and maintenance, which were higher
          to the prior period as a result of the move to the new facilities.


                                      23

<PAGE>   26
          General and Administrative Expenses. General and Administrative
          expenses increased by $1,629,779, or 65.3%, in the current six month
          period primarily as a result of increased salaries due to performance
          bonuses paid to key personnel, increased office expenses, increased
          property taxes, and increased legal fees relating to ongoing
          litigation discussed elsewhere herein. Miscellaneous expenses
          increased in the current six month period as a result of a corporate
          debt guarantee fee of approximately $988,000 paid to Marie G. Krantz
          for her pledge of personal assets to secure the reconstruction debt
          from 1994 through completion in late 1997. These increases were
          partially offset by decreases in insurance costs due to lower
          property and general liability premiums, and decreased contracts and
          services.

          Other Income (Expenses). Other income increased by $479,613, or
          75.6%, as a result of increased Jazz and Heritage Festival income of
          $527,952. In 1999, the Festival held 5 of its 7 days in April. In
          prior years only 3 days were held in April.

          Extraordinary Items. During the six months ended April 30, 1999, the
          Company received settlement payments in connection with the fire
          related litigation previously reported in the aggregate of $3.98
          million. These proceeds were reported net of related taxes of
          approximately $1.59 million. In the prior six month period,
          settlements totaled $47.7 million and were reported net of $2.85
          million of related taxes.

          Income Taxes. In addition to the components of net income previously
          discussed, the net income for the six months ended April 30, 1999
          included income tax expense of $1,174,670, compared to income tax
          expense of $726,588 for the comparable six months in fiscal 1998.

          Net Income. The Company reported net income of $3,850,337 for the six
          months ended April 30, 1999


                                      24
<PAGE>   27



          compared to $6,088,163 for the six months ended April 30, 1998.
          Excluding the extraordinary items discussed above, net income in the
          current six month period was $1,460,369 compared to $1,237,163 in the
          period ended April 30, 1998.

LIQUIDITY AND CAPITAL RESOURCES

          General

          Cash and cash equivalents decreased $3,207,102 during the six months
          ended April 30, 1999, compared to a decrease of $2,511,972 during the
          six months ended April 30, 1998. The decrease in cash and cash
          equivalents in fiscal 1999 was the result of cash used by operations
          of $7,053,714, partially offset by cash provided by investing
          activities of $3,726,101, and cash provided by financing activities
          of $120,511.

          Cash used in operations was primarily due to the payment of purses
          during the Company's live racing meet. Cash provided by financing was
          primarily the result of an advance of $1 million from the Company's
          video poker operator less amounts repaid to date. Cash provided from
          investing was primarily from proceeds from fire litigation
          settlements described elsewhere herein.

          As of April 30, 1999, the Company had received cumulatively, since
          the December 1993 fire, approximately $48 million, before taxes, of
          insurance proceeds resulting from fire loss claims submitted to the
          Company's insurance carriers or in litigation settlements. The
          Company's new main grandstand and racing facility was substantially
          completed in November 1997 and was opened for the start of the
          Company's 1997-98 live racing meet. The total cost of constructing
          and furnishing the facility, including the tele-track facility at the
          Fair Grounds Race Course that was completed in late 1994, through
          April 30, 1999


                                      25
<PAGE>   28


          was in excess of $35 million.

          The Company has a working capital line of credit agreement with Bank
          One. The line of credit is for $2.5 million with interest at 8% on
          amounts outstanding. In addition to monthly interest payments on
          outstanding balances, any amounts outstanding plus unpaid accrued
          interest were due on April 14, 1999. Such agreement has been extended
          but terms have not yet been finalized. There were no amounts drawn
          down or outstanding on this line of credit during the fiscal six
          months ended April 30, 1999.

          In January 1999, the Company received a $1.0 million non-interest
          bearing advance from its video poker operator which it began to repay
          in six equal installments beginning in February 1999.

          The Company believes that the combination of existing cash, cash from
          future operations, any additional amounts received in the
          fire-related litigation, funds available under its working capital
          line of credit, and the Company's increased capacity to incur
          short-term and long-term indebtedness, if necessary, will be
          sufficient to fund the Company's cash requirements for the
          foreseeable future, including the repayment of the $1.0 million
          advance from the Company's video poker operator. As a result of the
          fire insurance and other litigation settlements received, the Company
          has a total net deferred tax liability of approximately $7.08 million
          at April 30, 1999. The deferred tax liability is to be paid over
          approximately 39 years in accordance with Internal Revenue Service
          regulations. The Company intends to fund these future tax obligations
          through operations.

          Year 2000 Compliance

          A significant part of the Company's operations are dependent on
          computer systems and applications. These


                                       26
<PAGE>   29


          systems are either owned by the Company or are provided under
          contract by third party technology or other service providers. If
          these systems are not year 2000 compliant, the Company could
          experience system failures or miscalculations leading to disruption
          of business operations.

          In fiscal 1998 the Company began, and is now continuing, its
          assessment of its data processing functions to determine if they are
          year 2000 compliant. The Company has a task force which is assisting
          in its assessment of year 2000 readiness. Based in part on that
          assessment, in fiscal 1998 the Company purchased and installed an
          updated version of its accounting software that its vendor states is
          year 2000 compliant and is now in the process of testing that
          compliance.

          The Company has also made, and is continuing to make, inquiries to
          third party providers as to their compliance and is in the process of
          obtaining written assurances from certain vendors, as well as other
          race tracks with which the Company interfaces, as to their year 2000
          readiness. The Company's plant and equipment, as well as the
          providers of services to the plant and equipment, are also being
          reviewed to determine whether they are year 2000 ready. The services
          of those providers, including electrical and telephone services, are
          essential to the Company's ability to operate. The Company's most
          significant third party technology services provider is Autotote,
          which performs the totalisator functions for the Company. The
          Company's contract with Autotote provides that the services are to be
          year 2000 compliant. Autotote has contracted with a third party
          consultant to attain such compliance. It is our understanding that
          Autotote is currently undergoing testing and believes it is near year
          2000 compliant. If Autotote does not become compliant, the Company's
          operations could be adversely affected until another provider of the
          totalisator


                                      27
<PAGE>   30


          function can be found. The video services provided by another third
          party provider are also important to the Company's operations. These
          services include the production of the telecast signal at the Fair
          Grounds Race Course and distribution to the Company's tele-tracks and
          to other wagering facilities within and outside Louisiana. The
          Company is working with such provider to ensure that the software
          applications that provide the graphical enhancements and other
          distinguishing features to the telecast signals are year 2000
          compliant. The video poker devices at the Company's facilities are
          provided by another third party provider. The Company is working with
          that provider to ensure that such equipment is year 2000 compliant.

          To date, the Company has incurred costs of approximately $45,000,
          including the cost and time of Company employees, to address year
          2000 issues. Although the Company has not completed its assessment of
          its facility, data processing and other equipment and, accordingly,
          has not determined the total costs associated with its efforts to
          prepare for year 2000, the Company currently believes that the costs
          of addressing its year 2000 transition will not have a material
          adverse effect on the Company's financial condition or business
          operations. The Company has not yet completed a contingency plan
          addressing failure to be year 2000 ready.

          Impact of Inflation

          To date, inflation has not had a material effect in the Company's
          operations.


                                      28
<PAGE>   31


                                    PART II
                               OTHER INFORMATION

Item 1.          Legal Proceedings.

There were no material developments during the first quarter of fiscal 1999 in
any of the Company's legal proceedings as described in the Form 10-K for the
fiscal year ended October 31, 1998, except that in December 1998 the Company
settled its remaining claims against United National in the case filed in the
United States District Court for the Eastern District of Louisiana by St. Paul
Mercury Insurance Company, with United National's payment of an additional
$140,000 to the Company. In February and March 1999, in the Company's action
filed against ADT Security Systems, Mid-South, Inc., the Company received
additional funds totaling $3.79 million, net of litigation expenses, from the
funds held in escrow. No material legal proceeding was instituted during the
first quarter to which the Company is a party or of which any of its property
is subject.

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

Item 6.          Exhibits and Reports on Form 8-K

       Exhibit 27 Financial Data Schedule (Filed electronically only)


                                       29
<PAGE>   32



                                   SIGNATURES



Pursuant to the requirements 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.



                                                   FAIR GROUNDS CORPORATION
                                              ---------------------------------
                                                         (Registrant)


Date:   March 14, 2000                        By: /s/ Bryan G. Krantz
     -----------------------                     ------------------------------
                                                 President


                                       30