##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2008
 OR
 o
    
    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 333-123179
 BLACK GAMING, LLC
  Nevada
    
    20-8160036(State or Other Jurisdiction
    
    (I.R.S. Employerof Incorporation or Organization)
    
    Identification Number)10777 West Twain Avenue, Las Vegas, NV
    
    89135(Address of Principal Executive Offices)
    
    (Zip Code)
 (702) 318-6860
 þ o
  Large Accelerated Filer o
    
    Accelerated Filer o
    
    Non-accelerated filer þ
(do not check if smaller reporting company)
    
    Smaller reporting company o
 o þ




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##### 



PART I  FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTSCondensed Consolidated Balance Sheets-March 31, 2008 (unaudited) and December 31, 2007
    
    
    3Condensed Consolidated Statements of Operations (unaudited) for the Three Months
Ended March 31, 2008 and 2007
    
    
    4Condensed Consolidated Statements of Cash Flows (unaudited) for the Three Months
Ended March 31, 2008 and 2007
    
    
    5Notes to Condensed Consolidated Financial Statements (unaudited)
    
    
    6ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
    
    
    17ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    22ITEM 4. CONTROLS AND PROCEDURES
    
    
    24PART II  OTHER INFORMATIONITEM 1. LEGAL PROCEEDINGS
    
    
    25ITEM 1A. RISK FACTORS
    
    
    25ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    25ITEM 3. DEFAULTS UPON SENIOR SECURITIES
    
    
    25ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    25ITEM 5. OTHER INFORMATION
    
    
    25ITEM 6. EXHIBITS
    
    
    25SIGNATURES
    
    
    26Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements.
 Black Gaming, LLC and Subsidiaries
 
 Condensed Consolidated Balance Sheets
(in thousands)
 March 31, 2008
    
    
    December 31, 2007(unaudited)AssetsCurrent assets:Cash and cash equivalents
    
    $
    9,797
    
    
    $
    9,503Accounts receivable, net
    
    
    2,333
    
    
    
    1,986Related party receivables
    
    
    224
    
    
    
    327Inventories
    
    
    1,806
    
    
    
    1,800Property held for vacation interval sales
    
    
    336
    
    
    
    336Prepaid expenses
    
    
    4,020
    
    
    
    4,180Current portion of notes receivable
    
    
    260
    
    
    
    150Total current assets
    
    
    18,776
    
    
    
    18,282Property and equipment, net
    
    
    127,711
    
    
    
    131,480Notes receivable, less current portion
    
    
    325
    
    
    
    537Goodwill and other intangible assets, net
    
    
    34,962
    
    
    
    35,828Deferred financing fees
    
    
    5,859
    
    
    
    6,259Other assets
    
    
    1,895
    
    
    
    1,898Total assets
    
    $
    189,528
    
    
    $
    194,284Liabilities and Members DeficitCurrent liabilities:Bank overdraft
    
    $
    
    
    
    $
    821Current portion of gaming equipment financing
    
    
    950
    
    
    
    1,025Current portion of long-term debt
    
    
    8,500
    
    
    
    9,500Accounts payable
    
    
    3,147
    
    
    
    2,950Accrued liabilities
    
    
    16,719
    
    
    
    17,605Total current liabilities
    
    
    29,316
    
    
    
    31,901Gaming equipment financing, less current portion
    
    
    7
    
    
    
    15Long-term debt
    
    
    184,868
    
    
    
    183,047Members deficit
    
    
    (24,663
    )
    
    
    (20,679
    )Total liabilities and members deficit
    
    $
    189,528
    
    
    $
    194,284
   3




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##### Table of Contents



Black Gaming, LLC and Subsidiaries
 
 Condensed Consolidated Statements of Operations (unaudited)
(in thousands)
 Three Months EndedMarch 31, 2008
    
    
    March 31, 2007Revenues:Casino
    
    $
    24,333
    
    
    $
    29,552Food and beverage
    
    
    9,386
    
    
    
    11,014Hotel
    
    
    8,105
    
    
    
    10,349Other
    
    
    5,577
    
    
    
    5,774Total revenues
    
    
    47,401
    
    
    
    56,689Lesspromotional allowances
    
    
    (8,847
    )
    
    
    (11,317
    )Net revenues
    
    
    38,554
    
    
    
    45,372Operating expenses:Casino
    
    
    11,711
    
    
    
    13,839Food and beverage
    
    
    5,490
    
    
    
    5,964Hotel
    
    
    1,677
    
    
    
    1,512Other
    
    
    2,451
    
    
    
    3,436General and administrative
    
    
    10,447
    
    
    
    12,936Depreciation and amortization
    
    
    4,281
    
    
    
    4,156Loss (gain) on sale and disposal
of assets
    
    
    163
    
    
    
    (18
    )Impairment of long lived asset
    
    
    973
    
    
    
    Total operating expenses
    
    
    37,193
    
    
    
    41,825Operating income
    
    
    1,361
    
    
    
    3,547Other expense:Interest expense, net
    
    
    (5,345
    )
    
    
    (5,146
    )Net loss
    
    $
    (3,984
    )
    
    $
    (1,599
    )
   4




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##### Table of Contents



Black Gaming, LLC and Subsidiaries
 
 Condensed Consolidated Statements of Cash Flows (unaudited)
(in thousands)
 Three Months EndedMarch 31,
    
    
    March 31,2008
    
    
    2007Cash flows from operating activities:Net loss
    
    $
    (3,984
    )
    
    $
    (1,599
    )Adjustments to reconcile net loss to net cash
provided by operating activities:Depreciation and amortization
    
    
    4,281
    
    
    
    4,156Loss (Gain) on sale and disposal of assets
    
    
    163
    
    
    
    (18
    )Amortization of deferred financing fees
    
    
    400
    
    
    
    400Accretion of senior subordinated notes
    
    
    1,822
    
    
    
    1,611Interest expense on gaming equipment financing
    
    
    5
    
    
    
    1Impairment of long lived assets
    
    
    973
    
    
    
    Change in operating assets and liabilities:Accounts and related party receivables, net
    
    
    (244
    )
    
    
    (200
    )Inventories
    
    
    (6
    )
    
    
    (104
    )Prepaid expenses
    
    
    160
    
    
    
    565Notes receivable
    
    
    102
    
    
    
    161Change in other assets
    
    
    (64
    )
    
    
    (435
    )Accounts payable and accrued liabilities
    
    
    (390
    )
    
    
    (611
    )Net cash provided by operating activities
    
    
    3,218
    
    
    
    3,927Cash flows from investing activities:Proceeds received from sale of assets
    
    
    51
    
    
    
    83Capital expenditures
    
    
    (250
    )
    
    
    (3,893
    )Net cash used in investing activities
    
    
    (199
    )
    
    
    (3,810
    )Cash flows from financing activities:Proceeds from issuance of long-term debt
    
    
    5,000
    
    
    
    9,500Payment of gaming equipment financing
    
    
    (904
    )
    
    
    (1,192
    )Payment of long-term debt
    
    
    (6,000
    )
    
    
    Decrease in bank overdraft
    
    
    (821
    )
    
    
    (722
    )Net cash provided by (used in) financing activities
    
    
    (2,725
    )
    
    
    7,586Net increase in cash and cash equivalents
    
    
    294
    
    
    
    7,703Cash and cash equivalents at beginning of period
    
    
    9,503
    
    
    
    11,118Cash and cash equivalents at end of period
    
    $
    9,797
    
    
    $
    18,821
   5




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##### Table of Contents



Black Gaming, LLC and Subsidiaries
 
 Notes to Condensed Consolidated Financial Statements (unaudited)
 1. Basis of Presentation and Background
    
    
    VRCC received 100 shares of R. Black, Inc. (RBI) from the Black
Trust. The Black Trust owns 100% of the outstanding shares of VRCC.
The 100 shares of RBI representing 100% of the outstanding capital
stock of RBI, was exchanged for 3.68 shares of VRCC held by the Black
Trust, representing 3.68% of the outstanding capital stock of VRCC.
RBI does not have any material operations, liabilities or assets other
than a 5.47% ownership in RBG. The transfer of shares of RBI to VRCC
was accounted for at the historical cost of RBG as RBI and VRCC were
under common control.
    
    VRCC received a 3.8% membership interest in RBG from the Black Trust
in exchange for 2.57 shares of VRCC held by the Black Trust,
representing 2.57% of the outstanding capital stock of VRCC. The
transfer of membership interests of RBG to VRCC was accounted for at
historical cost as the Black Trust and VRCC were under common control.
    
    VRCC received a 1.92% membership interest in RBG from Glenn Teixeira
in exchange for 1.29 shares of VRCC held by the Black Trust,
representing 1.29% of the outstanding capital stock of VRCC. The
acquisition of the membership interests from RBG from Glenn Teixeira
was accounted for at fair value as it was considered an acquisition of
a minority interest of a subsidiary. Based upon an internal analysis
the fair value of Glenn Teixeiras interest approximated book value.
    6




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##### Table of Contents



Black Gaming, LLC and Subsidiaries
 Notes to Condensed Consolidated Financial Statements (unaudited) (continued)
 1. Basis of Presentation and Background (continued)
 Interim Financial Statements
  Reclassifications
 Recently Issued Accounting Standards
     2. Discontinued Operations
   For the three monthsended March 31, 2007Operating revenues
    
    $
    1,131Operating expenses
    
    
    861Depreciation
    
    
    45Income from discontinued operations
    
    $
    225
  7




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##### Table of Contents



Black Gaming, LLC and Subsidiaries
 Notes to Condensed Consolidated Financial Statements (unaudited) (continued)
 3. Property and Equipment
  March 31, 2008
    
    
    December 31, 2007Land
    
    $
    32,812
    
    
    $
    32,812Buildings
    
    
    77,906
    
    
    
    77,897Land and leasehold improvements
    
    
    18,106
    
    
    
    17,940Furniture, fixtures and equipment
    
    
    84,292
    
    
    
    83,922Construction in progress
    
    
    4,084
    
    
    
    5,325217,200
    
    
    
    217,896Less: accumulated depreciation
    
    
    (89,489
    )
    
    
    (86,416
    )Property and equipment, net
    
    $
    127,711
    
    
    $
    131,480
 4. Notes Receivable
  March 31, 2008
    
    
    December 31, 2007Vacation interval notes receivable
    
    $
    728
    
    
    $
    912Allowance for possible credit losses
    
    
    (143
    )
    
    
    (225
    )Total notes receivable
    
    
    585
    
    
    
    687Less: current portion
    
    
    (260
    )
    
    
    (150
    )Non-current notes receivable
    
    $
    325
    
    
    $
    537
    8




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##### Table of Contents



Black Gaming, LLC and Subsidiaries
 Notes to Condensed Consolidated Financial Statements (unaudited) (continued)
 5. Accrued Liabilities
  March 31, 2008
    
    
    December 31, 2007Accrued management fees
    
    $
    235
    
    
    $
    863Accrued taxes
    
    
    1,886
    
    
    
    1,072Accrued insurance
    
    
    1,214
    
    
    
    1,212Accrued slot program
    
    
    4,516
    
    
    
    4,299Accrued wages, benefits and other personnel costs
    
    
    3,742
    
    
    
    2,043Accrued interest on Senior Notes
    
    
    2,548
    
    
    
    5,343Accrued other
    
    
    2,578
    
    
    
    2,773Total accrued liabilities
    
    $
    16,719
    
    
    $
    17,605
  9




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##### Table of Contents



Black Gaming, LLC and Subsidiaries
 Notes to Condensed Consolidated Financial Statements (unaudited) (continued)
 6. Gaming Equipment Financing
  March 31, 2008
    
    
    December 31, 2007Gaming equipment financing to purchase 478 games, no payments for one
year and monthly payments of $251 for 24 months beginning February
2006
    
    $
    
    
    
    $
    248Gaming equipment financing to purchase 68 games, no payments for one
year and monthly payments of $43 for 24 months beginning January
2006
    
    
    
    
    
    
    43Gaming equipment financing to purchase 70 games, no payments for one
year and monthly payments of $39 for 24 months beginning March 2006
    
    
    
    
    
    
    38Gaming equipment financing to purchase 80 games, monthly payments of
$27 for 36 months beginning April 2005
    
    
    
    
    
    
    165Gaming equipment financing to purchase 64 games, no payments for one
year and monthly payments of $26 for 24 months beginning February
2006
    
    
    
    
    
    
    52Gaming equipment financing to purchase 38 games, monthly payments of
$13 for 36 months beginning April 2005
    
    
    
    
    
    
    37Gaming equipment financing to purchase 55 games, no payments for one
year and monthly payments of $16 for 24 months beginning January
2006
    
    
    169
    
    
    
    282Gaming equipment financing, monthly payments of $3 for 36 months
beginning January 2005
    
    
    
    
    
    
    1Gaming equipment financing to purchase 4 games, monthly payments of
$1 for 36 months beginning April 2005
    
    
    
    
    
    
    8Gaming equipment financing to purchase 6 games, no payments for one
year and monthly payments of $6 for 24 months beginning February
2007
    
    
    28
    
    
    
    36Gaming equipment financing, monthly payments of $1 for 36 months
beginning July 2006
    
    
    15
    
    
    
    18Gaming equipment financing, no payments for 18 months and monthly
payments of $1 for 36 months beginning July 2006
    
    
    8
    
    
    
    104Gaming equipment financing, monthly payments of $1 for 36 months and
beginning on July 2006
    
    
    6
    
    
    
    8Gaming equipment financing, monthly payments of $27 for 9 months and
beginning April 2008
    
    
    236
    
    
    
    Gaming equipment financing, monthly payments of $12 for 11 months
and beginning February 2008
    
    
    102
    
    
    
    Gaming equipment financing, monthly payments of $38 for 11 months
and beginning February 2008
    
    
    329
    
    
    
    Gaming equipment financing, monthly payments of $7 for 9 months
beginning April 2008
    
    
    64
    
    
    
    957
    
    
    
    1,040Less: current portion
    
    
    (950
    )
    
    
    (1,025
    )Gaming equipment financing, long-term portion
    
    $
    7
    
    
    $
    15
  10




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##### Table of Contents



Black Gaming, LLC and Subsidiaries
 Notes to Condensed Consolidated Financial Statements (unaudited) (continued)
 7. Long-term Debt
  March 31, 2008
    
    
    December 31, 2007Revolving credit facility
totaling $15 million with Wells
Fargo Foothill at a margin
above prime or LIBOR, as
defined; collateralized by
substantially all assets of the
Company as defined
    
    $
    8,500
    
    
    $
    9,5009% senior secured notes,
interest payable semiannually,
principal due January 15, 2012,
callable January 15, 2009
    
    
    125,000
    
    
    
    125,00012 3/4 % senior subordinated
notes, non-cash interest will
accrue at an annual rate of 12
3/4 % in the form of increased
accreted value until January
15, 2009. Beginning July 15,
2009, interest payable
semiannually, principal due
January 15, 2013, callable
January 15, 2009
    
    
    59,868
    
    
    
    58,047193,368
    
    
    
    192,547Less: current portion
    
    
    (8,500
    )
    
    
    (9,500
    )Total long-term debt
    
    $
    184,868
    
    
    $
    183,047
 Revolving Facility
   Senior Secured and Senior Subordinated Notes
 3 4
    11




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##### Table of Contents



Black Gaming, LLC and Subsidiaries
 Notes to Condensed Consolidated Financial Statements (unaudited) (continued)
 7. Long-term Debt (continued)
    8. Related Party Transactions
        12




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##### Table of Contents



Black Gaming, LLC and Subsidiaries
 Notes to Condensed Consolidated Financial Statements (unaudited) (continued)
 9. Impairment of Long Lived Assets
   10. Commitment and Contingencies
  11. Supplemental Guarantor Condensed Consolidating Financial Statements
   13




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##### Table of Contents



Black Gaming, LLC and Subsidiaries
 Notes to Condensed Consolidated Financial Statements (unaudited) (continued)
 11. Supplemental Guarantor Condensed Consolidating Financial Statements (continued)
 Non-Guarantor
    
    
    GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedAs of March 31, 2008BALANCE SHEET:Current Assets, including intercompany accounts
    
    $
    4,043
    
    
    $
    52,680
    
    
    $
    
    
    
    $
    (37,947
    )
    
    $
    18,776Property and equipment, net
    
    
    272
    
    
    
    127,439
    
    
    
    
    
    
    
    
    
    
    
    127,711Goodwill and Other Intangibles
    
    
    
    
    
    
    34,962
    
    
    
    
    
    
    
    
    
    
    
    34,962Other assets excluding intercompany accounts
    
    
    
    
    
    
    111,197
    
    
    
    
    
    
    
    (103,118
    )
    
    
    8,079$
    4,315
    
    
    $
    326,278
    
    
    $
    
    
    
    $
    (141,065
    )
    
    $
    189,528Current Liabilities, including intercompany accounts
    
    $
    7,200
    
    
    $
    60,063
    
    
    $
    
    
    
    $
    (37,947
    )
    
    $
    29,316Long-term debt, less current portion
    
    
    
    
    
    
    184,868
    
    
    
    
    
    
    
    
    
    
    
    184,868Gaming equipment financing, less current portion
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    7Members (Deficit) Equity
    
    
    (2,885
    )
    
    
    81,340
    
    
    
    
    
    
    
    (103,118
    )
    
    
    (24,663
    )$
    4,315
    
    
    $
    326,278
    
    
    $
    
    
    
    $
    (141,065
    )
    
    $
    189,528
 Non-Guarantor
    
    
    GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedAs of December 31, 2007BALANCE SHEET:Current Assets, including intercompany accounts
    
    $
    5,257
    
    
    $
    43,001
    
    
    $
    
    
    
    $
    (29,976
    )
    
    $
    18,282Property and equipment, net
    
    
    420
    
    
    
    131,060
    
    
    
    
    
    
    
    
    
    
    
    131,480Goodwill and Other Intangibles
    
    
    
    
    
    
    35,828
    
    
    
    
    
    
    
    
    
    
    
    35,828Other assets excluding intercompany accounts
    
    
    
    
    
    
    111,812
    
    
    
    
    
    
    
    (103,118
    )
    
    
    8,694$
    5,677
    
    
    $
    321,701
    
    
    $
    
    
    
    $
    (133,094
    )
    
    $
    194,284Current Liabilities, including intercompany accounts
    
    $
    8,077
    
    
    $
    53,800
    
    
    $
    
    
    
    $
    (29,976
    )
    
    $
    31,901Long-term debt, less current portion
    
    
    
    
    
    
    183,047
    
    
    
    
    
    
    
    
    
    
    
    183,047Gaming equipment financing, less current portion
    
    
    
    
    
    
    15
    
    
    
    
    
    
    
    
    
    
    
    15Members (Deficit) Equity
    
    
    (2,400
    )
    
    
    84,839
    
    
    
    
    
    
    
    (103,118
    )
    
    
    (20,679
    )$
    5,677
    
    
    $
    321,701
    
    
    $
    
    
    
    $
    (133,094
    )
    
    $
    194,284
  14




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##### Table of Contents



Black Gaming, LLC and Subsidiaries
 Notes to Condensed Consolidated Financial Statements (unaudited) (continued)
 11. Supplemental Guarantor Condensed Consolidating Financial Statements (continued)
 Guarantor
    
    
    Non-GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedFor the three months ending March 31, 2008STATEMENT OF OPERATIONSNet Revenues
    
    $
    
    
    
    $
    40,129
    
    
    $
    
    
    
    $
    (1,575
    )
    
    $
    38,554Operating Expenses:Casino
    
    
    
    
    
    
    11,711
    
    
    
    
    
    
    
    
    
    
    
    11,711Food and beverage
    
    
    
    
    
    
    5,490
    
    
    
    
    
    
    
    
    
    
    
    5,490Hotel
    
    
    
    
    
    
    1,677
    
    
    
    
    
    
    
    
    
    
    
    1,677Other
    
    
    
    
    
    
    2,451
    
    
    
    
    
    
    
    
    
    
    
    2,451General and administrative
    
    
    471
    
    
    
    11,551
    
    
    
    
    
    
    
    (1,575
    )
    
    
    10,447Depreciation and amortization
    
    
    13
    
    
    
    4,268
    
    
    
    
    
    
    
    
    
    
    
    4,281Loss on disposal of assets
    
    
    
    
    
    
    163
    
    
    
    
    
    
    
    
    
    
    
    163Impairment of long lived assets
    
    
    
    
    
    
    973
    
    
    
    
    
    
    
    
    
    
    
    973Operating (loss) income
    
    
    (484
    )
    
    
    1,845
    
    
    
    
    
    
    
    
    
    
    
    1,361Other Expense:Interest expense
    
    
    (1
    )
    
    
    (5,344
    )
    
    
    
    
    
    
    
    
    
    
    (5,345
    )Net loss
    
    $
    (485
    )
    
    $
    (3,499
    )
    
    $
    
    
    
    $
    
    
    
    $
    (3,984
    )STATEMENT OF CASH FLOWSNet cash provided by operating activities
    
    $
    34
    
    
    $
    3,184
    
    
    $
    
    
    
    $
    
    
    
    $
    3,218Net cash used in investing activities
    
    
    (34
    )
    
    
    (165
    )
    
    
    
    
    
    
    
    
    
    
    (199
    )Net cash provided by financing activities
    
    
    
    
    
    
    (2,725
    )
    
    
    
    
    
    
    
    
    
    
    (2,725
    )
  15




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##### Table of Contents



Black Gaming, LLC and Subsidiaries
 Notes to Condensed Consolidated Financial Statements (unaudited) (continued)
 11. Supplemental Guarantor Condensed Consolidating Financial Statements (continued)
 Guarantor
    
    
    Non-GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedFor the three months ended March 31, 2007STATEMENT OF OPERATIONSNet Revenues
    
    $
    
    
    
    $
    46,947
    
    
    $
    
    
    
    $
    (1,575
    )
    
    $
    45,372Operating Expenses:Casino
    
    
    
    
    
    
    13,839
    
    
    
    
    
    
    
    
    
    
    
    13,839Food and beverage
    
    
    
    
    
    
    5,964
    
    
    
    
    
    
    
    
    
    
    
    5,964Hotel
    
    
    
    
    
    
    1,512
    
    
    
    
    
    
    
    
    
    
    
    1,512Other
    
    
    
    
    
    
    3,436
    
    
    
    
    
    
    
    
    
    
    
    3,436General and administrative
    
    
    584
    
    
    
    13,927
    
    
    
    
    
    
    
    (1,575
    )
    
    
    12,936Depreciation and amortization
    
    
    3
    
    
    
    4,153
    
    
    
    
    
    
    
    
    
    
    
    4,156Gain/loss on disposal of assets
    
    
    
    
    
    
    (18
    )
    
    
    
    
    
    
    
    
    
    
    (18
    )Operating (loss) income
    
    
    (587
    )
    
    
    4,134
    
    
    
    
    
    
    
    
    
    
    
    3,547Other Expense:Interest expense
    
    
    
    
    
    
    (5,146
    )
    
    
    
    
    
    
    
    
    
    
    (5,146
    )Net loss
    
    $
    (587
    )
    
    $
    (1,012
    )
    
    $
    
    
    
    $
    
    
    
    $
    (1,599
    )STATEMENT OF CASH FLOWSNet cash provided by operating activities
    
    $
    95
    
    
    $
    3,832
    
    
    $

    
    
    
    $
    
    
    
    $
    3,927Net cash used in investing activities
    
    
    (95
    )
    
    
    (3,715
    )
    
    
    
    
    
    
    
    
    
    
    (3,810
    )Net cash provided by financing activities
    
    
    
    
    
    
    7,586
    
    
    
    
    
    
    
    
    
    
    
    7,586
  16




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
 You should read the following discussion and analysis together with our unaudited condensed
consolidated financial statements and the accompanying notes. This discussion contains
forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as
amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities
Litigation Reform Act of 1995, including statements regarding our expected financial position,
business and financing plans. Some of the forward-looking statements can be identified by the use
of forward-looking terms such as believes, expects, may, will, should, could, seek,
intends, plans, estimates, anticipates, or other comparable terms. Forward-looking
statements involve inherent risks and uncertainties which could cause actual results to differ
materially from those in the forward-looking statement, including those discussed herein and
elsewhere in our Form 10-K for the year ended December 31, 2007, particularly under the heading
Risk Factors. We caution readers not to place undue reliance upon any such forward-looking
statements, which speak only as of the date made. Unless the context indicates otherwise, all
references to the Company, Black Gaming, we, us and our refer to Black Gaming, LLC and
its direct and indirect wholly owned subsidiaries, Virgin River Casino Corporation, RBG, LLC, B & B
B, Inc., Casablanca Resorts, LLC, Oasis Interval Ownership, LLC, Oasis Interval Management, LLC,
Oasis Recreational Properties, Inc. and R. Black, Inc.
 Overview
      17




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##### Table of Contents




    
    VRCC received 100 shares of R. Black, Inc. (RBI) from the Black Trust. The Black Trust
owns 100% of the outstanding shares of VRCC. The 100 shares of RBI, representing 100% of the
outstanding capital stock of RBI, were exchanged for 3.68 shares of VRCC held by the Black
Trust, representing 3.68% of the outstanding capital stock of VRCC. RBI does not have any
material operations, liabilities or assets other than a 5.47% ownership in RBG. The transfer
of shares of RBI to VRCC was accounted for at the historical cost of RBG as RBI and VRCC were
under common control.
 
    
    VRCC received a 3.8% membership interest in RBG from the Black Trust in exchange for 2.57
shares of VRCC held by the Black Trust, representing 2.57% of the outstanding capital stock of
VRCC. The transfer of membership interests of RBG to VRCC was accounted for at historical cost
as the Black Trust and VRCC were under common control.
    
    VRCC received a 1.92% membership interest in RBG from Glenn Teixeira in exchange for 1.29
shares of VRCC held by the Black Trust, representing 1.29% of the outstanding capital stock of
VRCC. The acquisition of the membership interests in RBG from Glenn Teixeira was accounted for at
fair value as it was considered an acquisition of a minority interest of a subsidiary. Based upon
an internal analysis the fair value of Glenn Teixeiras interest approximated book value.
      18




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##### Table of Contents



Key Performance Indicators
        19




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##### Table of Contents



Financial Highlights of Black Gaming, LLC and Subsidiaries
 For the three months ended March 31, 2008 and 2007 (unaudited) (in thousands)
 Three months ended March 31,2008
    
    
    2007
    
    
    % ChangeCasino revenues
    
    $
    24,333
    
    
    $
    29,552
    
    
    
    (17.7
    )%Casino expenses
    
    
    11,711
    
    
    
    13,839
    
    
    
    (15.4
    )%Profit margin
    
    
    51.9
    %
    
    
    53.2
    %
    
    
    Food and beverage revenues
    
    $
    9,386
    
    
    $
    11,014
    
    
    
    (14.8
    )%Food and beverage expenses
    
    
    5,490
    
    
    
    5,964
    
    
    
    (7.9
    )%Profit margin
    
    
    41.5
    %
    
    
    45.9
    %
    
    
    Hotel revenues
    
    $
    8,105
    
    
    $
    10,349
    
    
    
    (21.7
    )%Hotel expenses
    
    
    1,677
    
    
    
    1,512
    
    
    
    10.9
    %Profit margin
    
    
    79.3
    %
    
    
    85.4
    %
    
    
    Other revenues
    
    $
    5,577
    
    
    $
    5,774
    
    
    
    (3.4
    )%Other expenses
    
    
    2,451
    
    
    
    3,436
    
    
    
    (28.7
    )%Promotional allowances
    
    $
    8,847
    
    
    $
    11,317
    
    
    
    (21.8
    )%Percent of gross revenues
    
    
    18.7
    %
    
    
    20.0
    %
    
    
    General and administrative expenses
    
    $
    10,447
    
    
    $
    12,936
    
    
    
    (19.2
    )%Percent of net revenues
    
    
    27.1
    %
    
    
    28.5
    %
    
    
    
 Three months ended March 31, 2008 compared to the three months ended March 31, 2007
 Consolidated Net Revenues.
 Consolidated Operating Income.
 Casino.
  20




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##### Table of Contents



Food and Beverage.
 Hotel.
 Other Revenues.
 Promotional Allowances.
 General and Administrative (G&A).
 Depreciation and Amortization.
 Interest Expense.
 Liquidity and Capital Resources
 Cash Flows and Credit Facility
   21




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##### Table of Contents



Operating Activities
  Investing Activities
  Financing Activities
  Contractual Obligations and Commitments for Black Gaming, LLC
  Critical Accounting Policies for Black Gaming, LLC
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk.
  Maturity
    
    Face
    
    
    Carrying
    
    
    EstimatedDate
    
    Amount
    
    
    Value
    
    
    Fair ValueSenior secured credit facility
at an average interest rate of
6.6%
    
    December 2008
    
    $
    15,000
    
    
    $
    8,500
    
    
    $
    8,5009% senior secured notes
    
    January 2012
    
    
    125,000
    
    
    
    125,000
    
    
    
    94,85012 3/4 % senior subordinated notes
    
    January 2013
    
    
    66,000
    
    
    
    59,868
    
    
    
    36,056Total
    
    
    
    $
    206,000
    
    
    $
    193,368
    
    
    $
    139,406
   22




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##### Table of Contents



Current portion as of March 31,2008
    
    
    2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    Thereafter
    
    
    TotalLong-term debt
(including current
portion):Fixed-rate
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    125,000
    
    
    $
    66,000
    
    
    $
    
    
    
    $
    191,000Average interest rate
    
    
    10.21
    %
    
    
    10.30
    %
    
    
    10.30
    %
    
    
    10.30
    %
    
    
    12.48
    %
    
    
    12.75
    %
    
    
    10.30
    %Variable-rate
    
    $
    8,500
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    8,500Average interest rate
    
    
    6.58
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6.58
    %
   23




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##### Table of Contents



Item 4. Controls and Procedures.
 Evaluation of Disclosure Controls
   Limitations on the Effectiveness of Controls
  Conclusions
  Changes in Internal Controls
 i.e.
  24




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 1A. Risk Factors.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  
 Item 3. Defaults Upon Senior Securities.
  
 Item 4. Submission of Matters to a Vote of Security Holders.
  
 Item 5. Other Information.
  
 Item 6. Exhibits.
 31.1
    
    Certification pursuant to §302 of the Sarbanes-Oxley Act of 2002, Robert R. Black, Sr.31.2
    
    Certification pursuant to §302 of the Sarbanes-Oxley Act of 2002, Sean P. McKay32.1
    
    Certification pursuant to §906 of the Sarbanes-Oxley Act of 2002, Robert R. Black, Sr.32.2
    
    Certification pursuant to §906 of the Sarbanes-Oxley Act of 2002, Sean P. McKay
  25




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##### Table of Contents



SIGNATURES
  BLACK GAMING, LLCBy:
    
    /s/ Sean P. McKay
    
    May 15, 2008Sean P. McKayChief Accounting Officer(Principal Financial Officer)
  26




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description31.1
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley
Act of 200231.2
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley
Act of 200232.1
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
  27