##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2009
 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
(State or Other Jurisdiction 
of Incorporation or Organization)
    
    20-8160036
(I.R.S. Employer
Identification Number)
 10777 West Twain Avenue, Las Vegas, NV
(Address of Principal Executive Offices)
    
    89135
(Zip Code)
 (702) 318-6888
  þ o
 Yes o No 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




---



##### 



PART I  FINANCIAL INFORMATION
    
    
    3ITEM 1. FINANCIAL STATEMENTS
    
    
    3Condensed Consolidated Balance Sheets-March 31, 2009 (unaudited) and December 31, 2008
    
    
    3Condensed Consolidated Statements of Operations for the Three Months
Ended March 31, 2009 and 2008 (unaudited)
    
    
    4Condensed Consolidated Statements of Cash Flows for the Three Months
Ended March 31, 2009 and 2008 (unaudited)
    
    
    5Notes to Condensed Consolidated Financial Statements (unaudited)
    
    
    7ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
    
    
    20ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    27ITEM 4(T). CONTROLS AND PROCEDURES
    
    
    28PART II  OTHER INFORMATION
    
    
    29ITEM 1. LEGAL PROCEEDINGS
    
    
    29ITEM 1A. RISK FACTORS
    
    
    29ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    29ITEM 3. DEFAULTS UPON SENIOR SECURITIES
    
    
    30ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    30ITEM 5. OTHER INFORMATION
    
    
    30ITEM 6. EXHIBITS
    
    
    30SIGNATURES
    
    
    32Exhibit 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, 2009
    
    
    December 31, 2008(unaudited)AssetsCurrent assets:Cash and cash equivalents
    
    $
    17,223
    
    
    $
    11,464Accounts receivable, net
    
    
    1,320
    
    
    
    1,013Related party receivables
    
    
    433
    
    
    
    460Inventories
    
    
    1,326
    
    
    
    1,529Prepaid expenses
    
    
    3,758
    
    
    
    3,377Current portion of notes receivable
    
    
    274
    
    
    
    261Total current assets
    
    
    24,334
    
    
    
    18,104Property and equipment, net
    
    
    108,924
    
    
    
    111,330Notes receivable, less current portion
    
    
    56
    
    
    
    117Goodwill and other intangible assets, net
    
    
    13,433
    
    
    
    14,177Deferred financing fees
    
    
    4,409
    
    
    
    4,787Other assets
    
    
    1,751
    
    
    
    1,953Total assets
    
    $
    152,907
    
    
    $
    150,468Liabilities and Members DeficitCurrent liabilities:Current portion of obligations under capital
leases
    
    $
    177
    
    
    $
    173Current portion of gaming equipment financing
    
    
    637
    
    
    
    121Current portion of long-term debt and debt
in default
    
    
    205,785
    
    
    
    205,519Accounts payable
    
    
    2,171
    
    
    
    2,557Accrued liabilities
    
    
    24,352
    
    
    
    17,084Total current liabilities
    
    
    233,122
    
    
    
    225,454Gaming equipment financing, less current portion
    
    
    98
    
    
    
    125Obligations under capital leases
    
    
    110
    
    
    
    155Total liabilities
    
    
    233,330
    
    
    
    225,734Commitments and contingencies (Note 9)Members deficit
    
    
    (80,423
    )
    
    
    (75,266
    )Total liabilities and members deficit
    
    $
    152,907
    
    
    $
    150,468
   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, 2009
    
    
    March 31, 2008Revenues:Casino
    
    $
    18,190
    
    
    $
    24,333Food and beverage
    
    
    6,092
    
    
    
    9,386Hotel
    
    
    6,375
    
    
    
    8,105Other
    
    
    3,675
    
    
    
    5,577Total revenues
    
    
    34,332
    
    
    
    47,401Lesspromotional allowances
    
    
    (6,379
    )
    
    
    (8,847
    )Net revenues
    
    
    27,953
    
    
    
    38,554Operating expenses:Casino
    
    
    8,398
    
    
    
    11,711Food and beverage
    
    
    3,613
    
    
    
    5,490Hotel
    
    
    1,338
    
    
    
    1,677Other
    
    
    1,918
    
    
    
    2,451General and administrative
    
    
    7,076
    
    
    
    10,447Depreciation and amortization
    
    
    3,868
    
    
    
    4,281Loss on sale and disposal of assets
    
    
    36
    
    
    
    163Impairment of long lived assets
    
    
    264
    
    
    
    973Restructuring costs
    
    
    957
    
    
    
    Total operating expenses
    
    
    27,468
    
    
    
    37,193Operating income
    
    
    485
    
    
    
    1,361Interest expense, net
    
    
    5,642
    
    
    
    5,345Net loss
    
    $
    (5,157
    )
    
    $
    (3,984
    )
   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, 2009
    
    
    March 31, 2008Cash flows from operating activities:Net loss
    
    $
    (5,157
    )
    
    $
    (3,984
    )Depreciation and amortization
    
    
    3,868
    
    
    
    4,281Loss on sale and disposal of assets
    
    
    36
    
    
    
    163Impairment of long lived assets
    
    
    264
    
    
    
    973Amortization of deferred financing fees
    
    
    379
    
    
    
    400Accretion of senior subordinated notes
    
    
    317
    
    
    
    1,822Interest expense on gaming equipment financing
    
    
    
    
    
    
    5Change in operating assets and liabilities:Accounts and related party receivables, net
    
    
    (526
    )
    
    
    (244
    )Inventories
    
    
    203
    
    
    
    (6
    )Prepaid expenses
    
    
    (381
    )
    
    
    160Notes receivable
    
    
    48
    
    
    
    102Change in other assets
    
    
    
    
    
    
    (64
    )Accounts payable and accrued liabilities
    
    
    7,128
    
    
    
    (390
    )Net cash provided by operating activities
    
    
    6,179
    
    
    
    3,218Cash flows from investing activities:Proceeds received from sale of assets
    
    
    18
    
    
    
    51Capital expenditures
    
    
    (218
    )
    
    
    (250
    )Net cash used in investing activities
    
    
    (200
    )
    
    
    (199
    )Cash flows from financing activities:Proceeds from issuance of long term debt and debt in default
    
    
    396
    
    
    
    5,000Payment of gaming equipment financing
    
    
    (128
    )
    
    
    (904
    )Payment of obligations under capital lease
    
    
    (41
    )
    
    
    Payment of long term debt and debt in default
    
    
    (447
    )
    
    
    (6,000
    )Decrease in bank overdraft
    
    
    
    
    
    
    (821
    )Net cash used in financing activities
    
    
    (220
    )
    
    
    (2,725
    )Net increase in cash and cash equivalents
    
    
    5,759
    
    
    
    294Cash and cash equivalents at beginning of period
    
    
    11,464
    
    
    
    9,503Cash and cash equivalents at end of period
    
    $
    17,223
    
    
    $
    9,797
   5




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##### Table of Contents



Black Gaming, LLC and Subsidiaries
 Condensed Consolidated Statements of Cash Flows (unaudited) (continued)
(in thousands)
 Three months endedMarch 31, 2009
    
    
    March 31, 2008Supplemental cash flow disclosure:Cash paid for interest
    
    $
    421
    
    
    $
    5,915Noncash investing and financing activities:Acquisition of gaming assets with seller
financing
    
    $
    608
    
    
    $
    817
   6




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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 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.
  3 4
  7




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##### Table of Contents



Black Gaming, LLC and Subsidiaries
 Notes to Condensed Consolidated Financial Statements (unaudited) (continued)
 Interim Financial Statements
  Restructuring
Costs
 Recently Issued Accounting Standards
     8




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##### Table of Contents



Black Gaming, LLC and Subsidiaries
 Notes to Condensed Consolidated Financial Statements (unaudited) (continued)
 2. Property and Equipment
  March 31, 2009
    
    
    December 31, 2008Land
    
    $
    32,812
    
    
    $
    32,812Building
    
    
    77,575
    
    
    
    77,549Land and leasehold improvements
    
    
    13,584
    
    
    
    13,509Furniture and fixtures
    
    
    85,540
    
    
    
    84,825Construction in progress
    
    
    1,134
    
    
    
    1,518210,645
    
    
    
    210,213Less: accumulated depreciation
    
    
    (101,721
    )
    
    
    (98,883
    )Property and equipment, net
    
    $
    108,924
    
    
    $
    111,330
 3. Notes Receivable
  March 31, 2009
    
    
    December 31, 2008Vacation interval notes receivable
    
    $
    556
    
    
    $
    603Allowance for possible credit losses
    
    
    (226
    )
    
    
    (225
    )Total notes receivable
    
    
    330
    
    
    
    378Less: current portion
    
    
    (274
    )
    
    
    (261
    )Non-current notes receivable
    
    $
    56
    
    
    $
    117
  4. Accrued Liabilities
  March 31, 2009
    
    
    December 31, 2008Accrued management fees
    
    $
    684
    
    
    $
    550Accrued taxes
    
    
    957
    
    
    
    730Accrued insurance
    
    
    1,276
    
    
    
    1,376Accrued slot program
    
    
    4,679
    
    
    
    4,168Accrued wages, benefits and other personnel costs
    
    
    4,244
    
    
    
    3,242Accrued interest
    
    
    9,862
    
    
    
    5,336Accrued other
    
    
    2,650
    
    
    
    1,682Total accrued liabilities
    
    $
    24,352
    
    
    $
    17,084
  9




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##### Table of Contents



Black Gaming, LLC and Subsidiaries
 Notes to Condensed Consolidated Financial Statements (unaudited) (continued)
 5. Gaming Equipment Financing
  March 31, 2009
    
    
    December 31, 2008Gaming equipment financing to purchase 6
games, no payments for one year and monthly
payments of $6 for 24 months beginning
February 2007
    
    $
    
    
    
    $
    3Gaming equipment financing, monthly payments
of $1 for 36 months beginning July 2006
    
    
    3
    
    
    
    6Gaming equipment financing, no payments for
18 months and monthly payments of $1 for 36
months beginning July 2006
    
    
    1
    
    
    
    3Gaming equipment financing, monthly payments
of $1 for 36 months and beginning on July
2006
    
    
    2
    
    
    
    3Gaming equipment financing, monthly payments
of $10 for 28 months beginning October 2008
    
    
    205
    
    
    
    231Gaming equipment financing, varying monthly
payments for 11 months with the balance due
on the 12th month beginning March 2009
    
    
    524
    
    
    
    735
    
    
    
    246Less: current portion
    
    
    (637
    )
    
    
    (121
    )Gaming equipment financing, long-term portion
    
    $
    98
    
    
    $
    125
 6. Debt
  March 31, 2009
    
    
    December 31, 2008Revolving credit facility totaling $15
million with Wells Fargo Foothill, due
June 30, 2011, at a margin above prime
or LIBOR, as defined; collateralized
by substantially all assets of the
Company as defined
    
    $
    14,785
    
    
    $
    14,8369% 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
    
    
    66,000
    
    
    
    65,683205,785
    
    
    
    205,519Less: current portion  debt in default
    
    
    (205,785
    )
    
    
    (205,519
    )Total long-term debt
    
    $
    
    
    
    $
    
 Revolving Facility
   10




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##### Table of Contents



Black Gaming, LLC and Subsidiaries
 Notes to Condensed Consolidated Financial Statements (unaudited) (continued)
   1.
    
    The LIBOR Rate Margin was increased to 5% from 3.50%, and the Base Rate Margin
was increased to 5% from 2%. Therefore, the interest rate premium payable in respect of
loans available under the Foothill Facility has been increased accordingly;2.
    
    The minimum EBITDA covenant was reduced from $15.0 million to $10.0 million for
the September 2008 through December 2008 reporting periods;3.
    
    The Borrowing Base multiple was increased from 1.0x to 1.5x from the execution
of the Forbearance Agreement until January 15, 2009;4.
    
    The Company was allowed to temporarily reduce operations at the Oasis Resort &
Casino (Oasis) during the Forbearance Period.
     11




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##### Table of Contents



Black Gaming, LLC and Subsidiaries
 Notes to Condensed Consolidated Financial Statements (unaudited) (continued)
    Senior Secured and Senior Subordinated Notes
    12




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##### Table of Contents



Black Gaming, LLC and Subsidiaries
 Notes to Condensed Consolidated Financial Statements (unaudited) (continued)
     7. Related Party Transactions
    13




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##### Table of Contents



Black Gaming, LLC and Subsidiaries
 Notes to Condensed Consolidated Financial Statements (unaudited) (continued)
    8. Impairment of Long Lived Assets
 ® ®
 9. Commitment and Contingencies
 Sales
and Use Tax on Complimentary Meals
 Environmental
Matter
  14




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##### Table of Contents



Black Gaming, LLC and Subsidiaries
 Notes to Condensed Consolidated Financial Statements (unaudited) (continued)
 10. Going Concern
    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
   Parent
    
    
    Issuers
    
    
    Guarantor
    
    
    Non-GuarantorBG LLC
    
    
    B&BB
    
    
    RBG
    
    
    VRCC
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedAs of March 31, 2009BALANCE SHEET:Current assets,
including
intercompany
accounts
    
    $
    4,664
    
    
    $
    27,635
    
    
    $
    33,068
    
    
    $
    5,265
    
    
    $
    13,932
    
    
    $
    
    
    
    $
    (60,230
    )
    
    $
    24,334Property and
equipment, net
    
    
    202
    
    
    
    7,489
    
    
    
    39,534
    
    
    
    32,831
    
    
    
    28,868
    
    
    
    
    
    
    
    
    
    
    
    108,924Goodwill and other
intangibles
    
    
    
    
    
    
    5,813
    
    
    
    5,817
    
    
    
    
    
    
    
    1,803
    
    
    
    
    
    
    
    
    
    
    
    13,433Other assets
excluding
intercompany
accounts
    
    
    
    
    
    
    763
    
    
    
    25,266
    
    
    
    90,859
    
    
    
    1,265
    
    
    
    
    
    
    
    (111,937
    )
    
    
    6,216$
    4,866
    
    
    $
    41,700
    
    
    $
    103,685
    
    
    $
    128,955
    
    
    $
    45,868
    
    
    $
    
    
    
    $
    (172,167
    )
    
    $
    152,907Current
Liabilities,
including
intercompany
accounts
    
    $
    10,610
    
    
    $
    244,935
    
    
    $
    232,308
    
    
    $
    215,948
    
    
    $
    20,845
    
    
    $
    
    
    
    $
    (491,524
    )
    
    $
    233,122Long-term capital
lease obligation
    
    
    
    
    
    
    
    
    
    
    59
    
    
    
    
    
    
    
    51
    
    
    
    
    
    
    
    
    
    
    
    110Gaming equipment
financing, less
current portion
    
    
    
    
    
    
    98
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    98Members (Deficit)
Equity
    
    
    (5,744
    )
    
    
    (203,333
    )
    
    
    (128,682
    )
    
    
    (86,993
    )
    
    
    24,972
    
    
    
    
    
    
    
    319,357
    
    
    
    (80,423
    )$
    4,866
    
    
    $
    41,700
    
    
    $
    103,685
    
    
    $
    128,955
    
    
    $
    45,868
    
    
    $
    
    
    
    $
    (172,167
    )
    
    $
    152,907
  16




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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)
 Parent
    
    
    Issuers
    
    
    Guarantor
    
    
    Non-GuarantorBG LLC
    
    
    B&BB
    
    
    RBG
    
    
    VRCC
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedAs of December 31,
2008BALANCE SHEET:Current assets,
including
intercompany
accounts
    
    $
    4,957
    
    
    $
    24,191
    
    
    $
    28,875
    
    
    $
    4,071
    
    
    $
    13,140
    
    
    $
    
    
    
    $
    (57,130
    )
    
    $
    18,104Property and
equipment, net
    
    
    214
    
    
    
    7,856
    
    
    
    40,197
    
    
    
    33,208
    
    
    
    29,855
    
    
    
    
    
    
    
    
    
    
    
    111,330Goodwill and other
intangibles
    
    
    
    
    
    
    6,140
    
    
    
    6,049
    
    
    
    
    
    
    
    1,988
    
    
    
    
    
    
    
    
    
    
    
    14,177Other assets
excluding
intercompany
accounts
    
    
    
    
    
    
    811
    
    
    
    26,545
    
    
    
    91,131
    
    
    
    1,463
    
    
    
    
    
    
    
    (113,093
    )
    
    
    6,857$
    5,171
    
    
    $
    38,998
    
    
    $
    101,666
    
    
    $
    128,410
    
    
    $
    46,446
    
    
    $
    
    
    
    $
    (170,223
    )
    
    $
    150,468Current
liabilities,
including
intercompany
accounts
    
    $
    9,610
    
    
    $
    237,875
    
    
    $
    225,532
    
    
    $
    211,090
    
    
    $
    20,187
    
    
    $
    
    
    
    $
    (478,840
    )
    
    $
    225,454Long-term capital
lease obligation
    
    
    
    
    
    
    
    
    
    
    83
    
    
    
    
    
    
    
    72
    
    
    
    
    
    
    
    
    
    
    
    155Gaming equipment
financing, less
current portion
    
    
    
    
    
    
    125
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    125Members (Deficit)
Equity
    
    
    (4,439
    )
    
    
    (199,002
    )
    
    
    (123,949
    )
    
    
    (82,680
    )
    
    
    26,187
    
    
    
    
    
    
    
    308,617
    
    
    
    (75,266
    )$
    5,171
    
    
    $
    38,998
    
    
    $
    101,666
    
    
    $
    128,410
    
    
    $
    46,446
    
    
    $
    
    
    
    $
    (170,223
    )
    
    $
    150,468
  17




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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)
 Parent
    
    
    Issuers
    
    
    Guarantor
    
    
    Non-GuarantorBG LLC
    
    
    B&BB
    
    
    RBG
    
    
    VRCC
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedFor the three months ending March 31, 2009STATEMENT OF OPERATIONSNet revenues
    
    $
    
    
    
    $
    12,722
    
    
    $
    13,095
    
    
    $
    1,657
    
    
    $
    2,054
    
    
    $
    
    
    
    $
    (1,575
    )
    
    $
    27,953Operating expenses:Casino
    
    
    
    
    
    
    4,227
    
    
    
    3,961
    
    
    
    
    
    
    
    210
    
    
    
    
    
    
    
    
    
    
    
    8,398Food and beverage
    
    
    
    
    
    
    1,727
    
    
    
    1,857
    
    
    
    
    
    
    
    29
    
    
    
    
    
    
    
    
    
    
    
    3,613Hotel
    
    
    
    
    
    
    525
    
    
    
    577
    
    
    
    1
    
    
    
    235
    
    
    
    
    
    
    
    
    
    
    
    1,338Other
    
    
    
    
    
    
    313
    
    
    
    1,161
    
    
    
    
    
    
    
    444
    
    
    
    
    
    
    
    
    
    
    
    1,918General and administrative
    
    
    336
    
    
    
    4,307
    
    
    
    2,925
    
    
    
    83
    
    
    
    1,000
    
    
    
    
    
    
    
    (1,575
    )
    
    
    7,076Depreciation and amortization
    
    
    12
    
    
    
    1,105
    
    
    
    1,292
    
    
    
    376
    
    
    
    1,083
    
    
    
    
    
    
    
    
    
    
    
    3,868(Gain) loss on disposal of assets
    
    
    
    
    
    
    (1
    )
    
    
    37
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    36Impairment of long lived asset
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    264
    
    
    
    
    
    
    
    
    
    
    
    264Restructuring costs
    
    
    957
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    957Operating (loss) income
    
    
    (1,305
    )
    
    
    519
    
    
    
    1,285
    
    
    
    1,197
    
    
    
    (1,211
    )
    
    
    
    
    
    
    
    
    
    
    485Interest expense, net
    
    
    
    
    
    
    522
    
    
    
    11
    
    
    
    5,105
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    5,642Net (loss) income
    
    $
    (1,305
    )
    
    $
    (3
    )
    
    $
    1,274
    
    
    $
    (3,908
    )
    
    $
    (1,215
    )
    
    $
    
    
    
    $
    
    
    
    $
    (5,157
    )STATEMENT OF CASH FLOWSNet cash provided by operating activities
    
    $
    132
    
    
    $
    3,879
    
    
    $
    1,799
    
    
    $
    52
    
    
    $
    317
    
    
    $
    
    
    
    $
    
    
    
    $
    6,179Net cash (used in) provided by investing
activities
    
    
    
    
    
    
    (98
    )
    
    
    (104
    )
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    (200
    )Net cash used in financing activities
    
    
    
    
    
    
    (78
    )
    
    
    (68
    )
    
    
    (51
    )
    
    
    (23
    )
    
    
    
    
    
    
    
    
    
    
    (220
    )
  18




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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)
 Parent
    
    
    Issuers
    
    
    Guarantor
    
    
    Non-GuarantorBG LLC
    
    
    B&BB
    
    
    RBG
    
    
    VRCC
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedFor the three months ending March 31,
2008STATEMENT OF OPERATIONSNet revenues
    
    $
    
    
    
    $
    11,555
    
    
    $
    14,017
    
    
    $
    1,885
    
    
    $
    12,672
    
    
    $
    
    
    
    $
    (1,575
    )
    
    $
    38,554Operating expenses:Casino
    
    
    
    
    
    
    3,964
    
    
    
    4,181
    
    
    
    
    
    
    
    3,566
    
    
    
    
    
    
    
    
    
    
    
    11,711Food and beverage
    
    
    
    
    
    
    1,760
    
    
    
    1,937
    
    
    
    
    
    
    
    1,793
    
    
    
    
    
    
    
    
    
    
    
    5,490Hotel
    
    
    
    
    
    
    504
    
    
    
    498
    
    
    
    
    
    
    
    675
    
    
    
    
    
    
    
    
    
    
    
    1,677Other
    
    
    
    
    
    
    293
    
    
    
    1,171
    
    
    
    
    
    
    
    987
    
    
    
    
    
    
    
    
    
    
    
    2,451General and administrative
    
    
    471
    
    
    
    4,121
    
    
    
    3,643
    
    
    
    114
    
    
    
    3,673
    
    
    
    
    
    
    
    (1,575
    )
    
    
    10,447Depreciation and amortization
    
    
    13
    
    
    
    1,170
    
    
    
    1,399
    
    
    
    378
    
    
    
    1,321
    
    
    
    
    
    
    
    
    
    
    
    4,281Loss on disposal of assets
    
    
    
    
    
    
    60
    
    
    
    41
    
    
    
    
    
    
    
    62
    
    
    
    
    
    
    
    
    
    
    
    163Impairment of long lived asset
    
    
    
    
    
    
    
    
    
    
    973
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    973Operating (loss) income
    
    
    (484
    )
    
    
    (317
    )
    
    
    174
    
    
    
    1,393
    
    
    
    595
    
    
    
    
    
    
    
    
    
    
    
    1,361Interest expense, net
    
    
    1
    
    
    
    516
    
    
    
    
    
    
    
    4,822
    
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    5,345Net (loss) income
    
    $
    (485
    )
    
    $
    (833
    )
    
    $
    174
    
    
    $
    (3,429
    )
    
    $
    589
    
    
    $
    
    
    
    $
    
    
    
    $
    (3,984
    )STATEMENT OF CASH FLOWSNet cash provided by operating activities
    
    $
    34
    
    
    $
    187
    
    
    $
    1,343
    
    
    $
    1,064
    
    
    $
    590
    
    
    $
    
    
    
    $
    
    
    
    $
    3,218Net cash used in investing activities
    
    
    (34
    )
    
    
    (31
    )
    
    
    (33
    )
    
    
    (8
    )
    
    
    (93
    )
    
    
    
    
    
    
    
    
    
    
    (199
    )Net cash used in financing activities
    
    
    
    
    
    
    (355
    )
    
    
    (1,127
    )
    
    
    (1,000
    )
    
    
    (243
    )
    
    
    
    
    
    
    
    
    
    
    (2,725
    )
  19




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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, 2008, 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
     20




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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.
      21




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##### Table of Contents



Key Performance Indicators
   Financial Highlights of Black Gaming, LLC and Subsidiaries
   
    
    Weak housing market and significant declines in housing prices and related home equity;
    
    Higher oil and gas prices which impact travel costs;
    
    Weaknesses in employment and increases in unemployment; and
    
    Decreases in equity market value, which impacted many customers
   22




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##### Table of Contents



For the three months ended March 31, 2009 and 2008 (unaudited) (in thousands)
 Three months ended March 31,
    
    
    %2009
    
    
    2008
    
    
    ChangeCasino revenues
    
    $
    18,190
    
    
    $
    24,333
    
    
    
    (25.2
    %)Casino expenses
    
    
    8,398
    
    
    
    11,711
    
    
    
    (28.3
    %)Profit margin
    
    
    53.8
    %
    
    
    51.9
    %
    
    
    Food and beverage revenues
    
    $
    6,092
    
    
    $
    9,386
    
    
    
    (35.1
    %)Food and beverage expenses
    
    
    3,613
    
    
    
    5,490
    
    
    
    (34.2
    %)Profit margin
    
    
    40.7
    %
    
    
    41.5
    %
    
    
    Hotel revenues
    
    $
    6,375
    
    
    $
    8,105
    
    
    
    (21.3
    %)Hotel expenses
    
    
    1,338
    
    
    
    1,677
    
    
    
    (20.2
    %)Profit margin
    
    
    79.0
    %
    
    
    79.3
    %
    
    
    Other revenues
    
    $
    3,675
    
    
    $
    5,577
    
    
    
    (34.1
    %)Other expenses
    
    
    1,918
    
    
    
    2,451
    
    
    
    (21.7
    %)Promotional allowances
    
    $
    6,379
    
    
    $
    8,847
    
    
    
    (27.9
    %)Percent of gross revenues
    
    
    18.6
    %
    
    
    18.7
    %
    
    
    General and administrative expenses
    
    $
    7,076
    
    
    $
    10,447
    
    
    
    (32.3
    %)Percent of net revenues
    
    
    25.3
    %
    
    
    27.1
    %
    
    
    
 Three months ended March 31, 2009 compared to the three months ended March 31, 2008
 Consolidated Net Revenues.
 Consolidated Operating Income.
 Casino.
  23




---



##### Table of Contents



Food and Beverage.
 Hotel.
 Other Revenues.
 Promotional Allowances.
 General and Administrative (G&A).
 Restructuring Costs.
 Depreciation and Amortization.
 Impairment of Long Lived Assets. ® ®
  24




---



##### Table of Contents



Interest Expense.
 Liquidity and Capital Resources
 Default status
 3 4
  Cash Flows and Credit Facility
  Operating Activities
   25




---



##### Table of Contents



Investing Activities
  Financing Activities
  Other Liquidity Matters
     Critical
Accounting Policies for Black Gaming, LLC
  Recently Issued Accounting Standards
    26




---



##### Table of Contents



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
9.61%
    
    June 2011
    
    $
    15,000
    
    
    $
    14,785
    
    
    $
    14,7859% senior secured notes
    
    January 2012
    
    
    125,000
    
    
    
    125,000
    
    
    
    12,18812 3/4 % senior subordinated notes
    
    January 2013
    
    
    66,000
    
    
    
    66,000
    
    
    
    1,406Total
    
    
    
    
    
    $
    206,000
    
    
    $
    205,785
    
    
    $
    28,379
   Current Portion as of March 31,2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    Thereafter
    
    
    TotalLong-term debt
(including current
portion):Fixed-rate
    
    $
    191,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    191,000Average interest rate
    
    
    10.30
    %
    
    
    10.30
    %
    
    
    10.30
    %
    
    
    12.48
    %
    
    
    12.75
    %
    
    
    
    
    
    
    10.55
    %Variable-rate
    
    $
    14,785
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    14,785Average interest rate
    
    
    9.61
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9.61
    %
  27




---



##### Table of Contents



Item 4(T). Controls and Procedures.
 Evaluation of Disclosure Controls
   Limitations on the Effectiveness of Controls
  Conclusions
  Changes in Internal Controls
 i.e.
  28




---



##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 1A. Risk Factors.
  An actual or feared outbreak of highly infectious disease could adversely affect the number of
visitors to our properties and disrupt our operations, resulting in a material adverse effect on
our financial condition, results or operations and cash flows.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
   29




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##### Table of Contents



Item 3. Defaults Upon Senior Securities.
    
 Item 4. Submission of Matters to a Vote of Security Holders.
  
 Item 5. Other Information.
  
 Item 6. Exhibits.
 10.1
    
    
    Executive Employment Agreement dated January 8, 2009 made by Black Gaming, LLC
with Robert R. Black, Sr., incorporated by reference to registrants Current Report on
Form 8-K, as filed with the Securities and Exchange Commission on January 14, 2009.10.2
    
    
    Executive Employment Agreement dated January 8, 2009 made by Black Gaming, LLC
with Anthony Toti, incorporated by reference to registrants Current Report on Form
8-K, as filed with the Securities and Exchange Commission on January 14, 2009.10.3
    
    
    First Amendment to Forbearance, Consent and Third Amendment to Credit Agreement
dated January 15, 2009, by and among Virgin River Casino Corporation, RBG, LLC, B & B
B, Inc., certain subsidiaries, Wells Fargo Foothill, Inc. as the arranger and
administrative agent and the other lending parties thereto, incorporated by reference
to registrants Current Report of Form 8-K, as filed with the Securities and Exchange
Commission on January 20, 2009.10.4
    
    
    Second Amendment to Forbearance, Consent and Third Amendment to Credit
Agreement dated February 2, 2009, by and among Virgin River Casino Corporation, RBG,
LLC, B & B B, Inc., certain subsidiaries, Wells Fargo Foothill, Inc. as the arranger
and administrative agent and the
other lending parties thereto, incorporated by reference to registrants Current
Report of Form 8-K, as filed with the Securities and Exchange Commission on February
6, 2009.
  30




---



##### Table of Contents



10.5
    
    
    Amended and Restated Forbearance Agreement dated February 12, 2009, by and
among Virgin River Casino Corporation, RBG, LLC, B & B B, Inc., certain subsidiaries,
Wells Fargo Foothill, Inc. as the arranger and administrative agent and the other
lending parties thereto, incorporated by reference to registrants Current Report of
Form 8-K, as filed with the Securities and Exchange Commission on February 19, 2009.10.6
    
    
    Forbearance Agreement dated February 19, 2009, by and among Virgin River Casino
Corporation, RBG, LLC, B & B B, Inc., certain subsidiaries, and Drawbridge Special
Opportunities Advisors LLC, BlackRock Financial Management, Inc. High Yield Group,
Midland National Life Insurance Company and 1 888 FUND, LTD., and Silver Point Capital
Offshore Fund Ltd., incorporated by reference to registrants Current Report of Form
8-K, as filed with the Securities and Exchange Commission on February 23, 2009.10.7
    
    
    Second Amended and Restated Forbearance Agreement dated February 25, 2009, by
and among Virgin River Casino Corporation, RBG, LLC, B & B B, Inc., certain
subsidiaries, Wells Fargo Foothill, Inc. as the arranger and administrative agent and
the other lending parties thereto, incorporated by reference to registrants Current
Report of Form 8-K, as filed with the Securities and Exchange Commission on March 2,
2009.31.1
    
    
    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
  31




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##### Table of Contents



SIGNATURES
  BLACK GAMING, LLCBy:
    
    /s/ Sean P. McKay
    
    
    
    May 15, 2009Sean P. McKayChief Accounting Officer(Principal Financial Officer)
  32




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##### Table of Contents



ExhibitNumber
    
    Description10.1
    
    
    Executive Employment Agreement dated January 8, 2009 made by Black Gaming, LLC with Robert R.
Black, Sr., incorporated by reference to registrants Current Report on Form 8-K, as filed
with the Securities and Exchange Commission on January 14, 2009.10.2
    
    
    Executive Employment Agreement dated January 8, 2009 made by Black Gaming, LLC with Anthony
Toti, incorporated by reference to registrants Current Report on Form 8-K, as filed with the
Securities and Exchange Commission on January 14, 2009.10.3
    
    
    First Amendment to Forbearance, Consent and Third Amendment to Credit Agreement dated January
15, 2009, by and among Virgin River Casino Corporation, RBG, LLC, B & B B, Inc., certain
subsidiaries, Wells Fargo Foothill, Inc. as the arranger and administrative agent and the
other lending parties thereto, incorporated by reference to registrants Current Report of
Form 8-K, as filed with the Securities and Exchange Commission on January 20, 2009.10.4
    
    
    Second Amendment to Forbearance, Consent and Third Amendment to Credit Agreement dated
February 2, 2009, by and among Virgin River Casino Corporation, RBG, LLC, B & B B, Inc.,
certain subsidiaries, Wells Fargo Foothill, Inc. as the arranger and administrative agent and
the other lending parties thereto, incorporated by reference to registrants Current Report of
Form 8-K, as filed with the Securities and Exchange Commission on February 6, 2009.10.5
    
    
    Amended and Restated Forbearance Agreement dated February 12, 2009, by and among Virgin River
Casino Corporation, RBG, LLC, B & B B, Inc., certain subsidiaries, Wells Fargo Foothill, Inc.
as the arranger and administrative agent and the other lending parties thereto, incorporated
by reference to registrants Current Report of Form 8-K, as filed with the Securities and
Exchange Commission on February 19, 2009.10.6
    
    
    Forbearance Agreement dated February 19, 2009, by and among Virgin River Casino Corporation,
RBG, LLC, B & B B, Inc., certain subsidiaries, and Drawbridge Special Opportunities Advisors
LLC, BlackRock Financial Management, Inc. High Yield Group, Midland National Life Insurance
Company and 1 888 FUND, LTD., and Silver Point Capital Offshore Fund Ltd., incorporated by
reference to registrants Current Report of Form 8-K, as filed with the Securities and
Exchange Commission on February 23, 2009.10.7
    
    
    Second Amended and Restated Forbearance Agreement dated February 25, 2009, by and among
Virgin River Casino Corporation, RBG, LLC, B & B B, Inc., certain subsidiaries, Wells Fargo
Foothill, Inc. as the arranger and administrative agent and the other lending parties thereto,
incorporated by reference to registrants Current Report of Form 8-K, as filed with the
Securities and Exchange Commission on March 2, 2009.31.1
    
    
    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
  33