<PAGE>

                         SECURITIES AND EXCHANGE: COMMISSION
                                Washington, D.C. 20549

                                     FORM 10-KSB/A

(Mark One)

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

                     For the fiscal year ended September 30, 1996
   
                                     AMENDMENT #4
    
                                          OR

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE
    ACT OF 1934 (NO FEE REQUIRED)]

                            Commission file number 0-22242


                             CASINO RESOURCE CORPORATION
                  (Name of the small business issuer in its charter)


            MINNESOTA                                         41-0950482
    (State or jurisdiction of                             (I.R.S. Employer
    incorporation or organization)                       Identification No.)

                               707 Bienville Boulevard
                               Ocean Springs, MS 39564
                       (Address of principal executive offices)
   
                       Issuer's telephone number (601) 872-5558
    
Securities registered pursuant to Section 12(b) of the Exchange Act:  None

Name of each exchange on which registered:   N/A

Securities registered pursuant to Section 12(g) of the Exchange Act:  Common
Stock and Class A Warrants

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

    Check if disclosure of delinquent filers pursuant to Item 405 of Regulation
S-B is not contained herein, and will not be contained, to the best of
Registrant's knowledge, in the definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB.  [  ]

    The Company's revenues for the fiscal year ended September 30,1996 were
$12,906,000.

    As of  December 13, 1996, 10,043,364 shares of Common Stock were
outstanding, and the aggregate market value of such Common Stock (based upon the
last reported sale price on the Nasdaq National Market), excluding outstanding
shares beneficially owned by affiliates was approximately $17,575,887.


   
    

<PAGE>

   
    

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

    The Company opened the Country Tonite Theatre in Branson, Missouri; the
Grand Hinckley Inn in Hinckley, Minnesota in May 1994.  The Company had
previously purchased the Country Tonite production show in March 1994.

RESULTS OF OPERATIONS

    The following financial data presented below has been derived from the
Company's Consolidated Financial Statements for the fiscal years ended 
September 30, 1996 and 1995.

   
                                            Year Ended September 30
                                            ------------------------
                                              1996            1995
                                            --------       ---------
                                                 (in thousands)
INCOME FROM CONTINUING OPERATIONS
    Entertainment revenues                   $8,938         $ 6,750
    Hospitality revenues                      3,968           3,658

    Operating expense - entertainment         6,215           5,743
    Operating expense - hospitality           2,660           2,032

    General and administrative expense        2,190           2,006
    Interest expense                          1,828           1,193



    Other income (expense)                     (540)            443

LOSS FROM CONTINUING OPERATIONS                (527)           (123)

DISCONTINUED OPERATIONS
    Income from discontinued operations           -             162
                                            --------       ---------

NET INCOME (LOSS)                            $ (527)        $    39
                                            --------       ---------
                                            --------       ---------
    

    Following is management's discussion and analysis of significant factors
which have affected the Company's financial position and operating results
during the periods reflected in the accompanying consolidated financial
statements.

   
    

<PAGE>

FISCAL 1996 COMPARED TO FISCAL 1995

CONSOLIDATED

    The Company's revenues from continuing operations were $12,905,949, an
increase of $2,498,076, or 24%, from the $10,407,873 recorded in fiscal 1995.
Of the increase $2,188,241, or 88%, was provided by the entertainment segment
with the hospitality segment accounting for the remaining increase of $309,835.

ENTERTAINMENT

    COUNTRY TONITE PRODUCTION SHOW

    Country Tonite Production show revenues totaled $2,192,360 in fiscal 1996,
a decline of $173,762, or 7.3%, from fiscal 1995 revenues of $2,366,122.  The
decline was due principally to a lower contractual rate with the Aladdin Hotel
in calendar 1996.  Despite the decline in revenues, operating income increased
$205,300, or 85%, to $446,271 in fiscal 1996 from $240,971 in fiscal 1995.
Management successfully reduced operating costs (including project, general and
administrative costs and depreciation) from $2,125,152 in fiscal 1995 to
$1,746,089 in fiscal 1996, a savings of $379,063, or 18%, principally through a
concerted effort to reduce general and administrative expenses.

    COUNTRY TONITE THEATRE

    With paid attendance at the Branson Theatre reaching 40% of capacity in
fiscal 1996, up from 29% in fiscal 1995, and average ticket prices increasing
from $14.87 in fiscal 1995 to $15.57 in fiscal 1996, revenues increased
$2,362,003, or 54%, from the fiscal 1995 total of $4,383,934 to $6,745,937 in
fiscal 1996.  Operating expenses (including project, general and administrative
costs and depreciation) rose at a lower pace by $850,376, or 24%, to $4,468,470
in fiscal 1996 from $3,618,094 in fiscal 1995.  The economies of scale evident
at the 40% paid occupancy level provided an increase in operating income of
$1,511,627 or 197% to $2,277,467 in fiscal 1996 from $765,840 in fiscal 1995.
The marketing efforts at the Country Tonite Theatre and its acceptance in the
market have resulted in significant year to year increases in attendance and
revenues from the initial 1994 period.

HOSPITALITY

    GRAND HINCKLEY INN


    In fiscal 1996, the Grand Hinckley Inn continued its historical high
occupancy rates, achieving an average occupancy of 86% and average daily rate of
$54.85 compared to an average occupancy rate of 82% and an average daily rate of
$56.63 in fiscal 1995.  Revenues

   
    

<PAGE>

for fiscal 1996 increased $309,835, or 8%, to $3,967,652 in fiscal 1996 from
$3,657,817 in fiscal 1995.  Operating income fell $318,199, or 20%, from
$1,625,585 in fiscal 1995 to $1,307,386 in fiscal 1996.  Operating expenses
(including project, general and administrative costs and depreciation) rose
$628,034, or 31%, to $2,660,266 in fiscal 1996 from $2,032,232 in fiscal 1995.
The increase in operating expenses and resulting decrease in operating income
were principally the result of higher property taxes and profit sharing
expenses.  Profit sharing with the Enterprise totaled $786,000 in fiscal 1996
compared to $361,000 in fiscal 1995, as hotel revenues exceeded the cumulative
threshold during fiscal 1995.

GENERAL AND ADMINISTRATIVE

    The Company's general and administrative expenses aggregated $2,190,154 in
fiscal 1996 compared to $2,006,272 for fiscal 1995.  The increase resulted
primarily from higher legal and professional fees.


GAMING

    Loss on gaming projects of $742,000 for fiscal 1996 consists principally of
the loss on abandonment of the Palace Casino acquisition in January 1996 of
$727,000.  Although the Company reached an agreement as part of a joint venture
to again acquire the Palace Casino in September 1996, generally accepted
accounting principles do not allow reversal of the abandonment loss.

    Loss on gaming projects for fiscal 1995 consists of $250,000 of fee income
received upon signing of a gaming contract, $600,000 of fee income in exchange
for the relinquishment of rights to gaming contracts, offset by $944,248 of
abandonment costs related principally to the Hoh, Cherokee and Louisiana gaming
projects.

OTHER

    Other income for 1995 includes $403,000 from the reversal of excess
reserves principally related to the closing of the Biloxi Star Theatre.

    During fiscal 1994, management elected to discontinue its recreational
property marketing efforts, and revenue and expenses from those activities were
categorized as discontinued operations.  A gain of $162,217 from discontinued
operations during fiscal 1995 resulted from final revenues being received, and
from the reversal of excess reserves related to closing the Company's Wisconsin
offices.

    Interest expense totaled $1,828,052 for fiscal 1996 compared to 
$1,193,403 for fiscal 1995. The increase from 1995 was due principally to a 
$550,000 charge from the discount upon conversion of subordinated debentures.

    The FASB has issued SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and Long-Lived Assets

   
    

<PAGE>

Being Disposed of," which provides guidance on how and when impairment losses
are recognized on long-lived assets.  This statement, when adopted, is not
expected to have a material impact on the Company.

    The FASB has issued SFAS No. 123, "Accounting for Stock-Based
Compensation," which establishes a fair value based method of accounting for
stock-based compensation plans.  This statement provides a choice to either
adopt the fair value based method of accounting or continue to apply APB Opinion
No. 25, which would require only disclosure of the pro forma net income and
earnings per share, determined as if the fair value based method had been
applied.  The Company plans to continue to apply APB Opinion No. 25 when
adopting this statement, and accordingly, this statement is not expected to have
a material impact on the Company.

LIQUIDITY AND CAPITAL RESOURCES

    Cash and cash equivalents increased $503,469 to $1,546,422 at September 30,
1996 from $1,042,953 at September 30, 1995.  In addition to funds provided by
operations, the Company's principal source of funds in fiscal 1996 consisted of
a placement of convertible subordinated debentures of $1,493,000 and warrant
exercises which provided $918,000.  The Company's principal use of funds in
fiscal 1996 consisted of additions to deferred development costs of $2,039,165
payments of notes payable and long-term debt totaling $1,389,322 and capital
expenditures of $278,722.

    At September 30, 1996, the Company has approximately $100,000 available
under a line of credit with a bank.

    The Company expects that available cash and cash from future operations 
will be sufficient to meet the capital expenditures, debt service and working 
capital requirements of its existing businesses.  The Company will need to 
raise approximately $7,000,000 to meet the currently estimated capital 
requirements of its new businesses (Tunisia Casino - $5,000,000 and Pigeon 
Forge Theatre - $600,000) and proposed acquisition (Palace Casino - 
$1,400,000).  These estimates are subject to change as future development 
takes place.  The sources of such funding have not yet been identified and 
cannot be assured.  As of September 30, 1996, the Company has deferred costs 
totalling $682,435 related to the Tunisia project and $466,398 related to the 
proposed Palace Acquisition.  In addition the Company made $75,000 of capital 
contributions to the Country Tonite - Pigeon Forge joint venture through 
September 30, 1996.

    Notes receivable totaling $1,232,000 related to the warrant exercise 
originally due in January and December 1996 are in the process of being 
restructured due to the payor's failure to pay.  Collection of monies due
is not anticipated in the 1997 fiscal year.

   
    

<PAGE>

CAPITAL EXPENDITURES

    Capital expenditures by the Company were $278,722 for the year ended
September 30, 1996 compared to $85,836 for the 1995 fiscal year.  Capital
expenditures for 1996 consisted principally of additional equipment purchases
for the entertainment segment.

FUTURE OPERATIONS

    The Company is currently evaluating new venues for its Country Tonite
production in such high-tourist areas as Myrtle Beach, South Carolina; Reno,
Nevada; and Laughlin, Nevada.

    Potential new hospitality opportunities continue to be explored as well.

    The Grand Hinckley Inn has been profitable since inception and management
is presently exploring potential new hospitality endeavors.

    The Country Tonite production, playing at the Aladdin Hotel and Casino in
Las Vegas, is contracted through December 31, 1997.


    In September 1995 the Company abandoned its efforts as to the Cherokee,
Louisiana and Hoh gaming projects, but concluded negotiations with Harrah's
Entertainment, Inc. ("Harrah's") whereby the Company will act as a consultant in
the development and management of one or more casinos to be funded by Harrah's
for the Pokagon Band of Potawatomi Indians in northern Indiana and in
southwestern Michigan.  The Company will, upon commencement of operations,
receive 21.6% of Harrah's management fee, without being required to provide any
of the capital necessary for development.

    In March 1997, the Company, through a 60% owned joint venture, will operate
a theatre in Pigeon Forge, Tennessee, as a new venue for the Country Tonite
Show.


    Under terms of the prospective transaction to purchase the Palace Casino as
part of a joint venture, the Company is scheduled to close the transaction in
January 1997, assuming all regulatory clearances have been obtained.

    The Company continues to pursue other opportunities to own and manage
additional non-gaming and gaming facilities either singularly or in conjunction
with other gaming industry participants.

   
    

<PAGE>

SEASONALITY

    The Company expects its hotel operations will be affected by seasonal
factors, including holidays, weather and travel conditions. The theatre
operation in Branson, Missouri will also be affected by seasonal factors and in
addition will be closed annually from mid-December through mid-March, a period
when theatres normally close in Branson.

IMPACT OF INFLATION

    Management of the Company does not believe that inflation has had any
significant adverse impact on the Company's financial condition or results of
operations for the periods presented. However, an increase in the rate of
inflation could adversely affect the Company's future operations and expansion
plans.

FOREIGN CURRENCY TRANSACTIONS



    The Company's transactions with respect to the proposed casino venture in
Tunisia will be in dinars.  As such, there are all the risks pertaining to
fluctuations in foreign exchange rates and potential restrictions or costs
associated with the transfer of funds to the United States.

PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

    All statements contained herein that are not historical facts are based on
current expectations.  These statements are forward looking in nature and
involve a number of risks and uncertainties.  Actual results may differ
materially.  Among the factors that could cause actual results to differ
materially are the following:  the availability of sufficient capital to finance
the Company's business plan on terms satisfactory to the Company; competitive
factors, such as the introduction of new hotels or renovation of existing hotels
in the same markets; changes in travel patterns which could affect demand for
the Company's hotels; changes in development and operating costs, including
labor, construction, land, equipment, and capital costs; general business and
economic conditions; and other risk factors described from time to time in the
Company's reports filed with the Securities and Exchange Commission.  The
Company wishes to caution readers not to place undue reliance on any such
forward looking statements, which statements are made pursuant to the Private
Securities Litigation Reform Act of 1995, and as such, speak only as to the date
made.

   
    

<PAGE>

                                      SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, hereunto duly authorized.

                                 CASINO RESOURCE CORPORATION

   
Date: June 9, 1997               By: /s/ JOHN J. PILGER
                                    -----------------------------------
    
                                    John J. Pilger, 
                                    Chief Executive Officer

   
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below on June 9, 1997 by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.
    

                                  Signature and Title
                                  -------------------


                                   /s/ JOHN J. PILGER
                                  -------------------------------------------
                                  John J. Pilger, Chief Executive Officer,
                                  President and Chairman of the Board of
                                  Directors


                                   /s/ MAURICE GAUDET
                                  -------------------------------------------
                                  Maurice Gaudet, Chief Financial Officer


                                   /s/ NOREEN POLLMAN
                                  -------------------------------------------
                                  Noreen Pollman, Vice President - Operations
                                  and Director


                                   /s/ ROBERT J. ALLEN
                                  -------------------------------------------
                                  Robert J. Allen, Vice President -
                                  Entertainment and Director


   
    

<PAGE>


                  CASINO RESOURCE CORPORATION AND SUBSIDIARIES

                        INDEX TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------

INDEPENDENT AUDITORS' REPORT                             F-2


CONSOLIDATED FINANCIAL STATEMENTS
 Balance Sheets                                          F-3-4
 Statements of Operations                                F-5
 Statements of Stockholders' Equity                      F-6
 Statements of Cash Flows                                F-7-8
 Notes to Consolidated Financial Statements              F-9-23



                                       F-1


<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS




Casino Resource Corporation
and Subsidiaries

Biloxi, Mississippi

We have audited the accompanying consolidated balance sheets of Casino 
Resource Corporation and Subsidiaries as of September 30, 1996 and 1995, and 
the related consolidated statements of operations, stockholders' equity and 
cash flows for the years then ended. These financial statements are the 
responsibility of the Company's management. Our responsibility is to express 
an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing 
standards. Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free 
of material misstatement. An audit includes examining, on a test basis, 
evidence supporting the amounts and disclosures in the financial statements. 
An audit also includes assessing the accounting principles used and 
significant estimates made by management, as well as evaluating the overall 
financial statement presentation. We believe that our audits provide a 
reasonable basis for our opinion. 

In our opinion, the consolidated financial statements referred to above 
present fairly, in all material respects, the consolidated financial position 
of Casino Resource Corporation and Subsidiaries at September 30, 1996 and 
1995, and the results of their operations and their cash flows for the years 
then ended, in conformity with generally accepted accounting principles.


                                          BDO SEIDMAN, LLP

Chicago, Illinois
November 5, 1996, except for Note 14
as to which the date is
December 26, 1996 and Note 6 as to
which the date is May 19, 1997

                                   F-2



<PAGE>

                     CASINO RESOURCE CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
September 30,                                                 1996            1995
--------------------------------------------------------------------------------------
<S>                                                     <C>              <C>
ASSETS

CURRENT ASSETS
  Cash and cash equivalents                                $1,546,422      $1,042,953
  Restricted cash                                             338,602         327,261
  Accounts receivable - trade and other, net of 
    allowance for uncollectibles of $3,043 in 1996 
    and $3,000 in 1995                                        307,204         525,885
  Prepaid expenses                                            438,042         413,897
--------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS                                        2,630,270       2,309,996
--------------------------------------------------------------------------------------

PROPERTY AND EQUIPMENT, LESS ACCUMULATED DEPRECIATION
  AND AMORTIZATION                                         15,082,906      15,860,940
--------------------------------------------------------------------------------------

OTHER ASSETS
  Cost in excess of fair value of assets acquired, less 
    accumulated amortization of $124,645 in 1996 and 
    $76,395 in 1995                                           599,097         647,347
  Deferred development costs                                2,201,211         895,358
  Notes and advances receivable - related parties             556,895         443,931
  Deferred charges, less accumulated amortization
    of $244,047 in 1996 and $231,825 in 1995                   40,781         102,526
  Deposits and other                                          673,384         691,350
--------------------------------------------------------------------------------------
TOTAL OTHER ASSETS                                          4,071,368       2,780,512
--------------------------------------------------------------------------------------
                                                          $21,784,544     $20,951,448
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
</TABLE>


                                    F-3

<PAGE>

               CASINO RESOURCE CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
September 30,                                              1996             1995
--------------------------------------------------------------------------------------
<S>                                                    <C>              <C>
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES 
  Accounts payable                                      $1,173,449       $1,657,878
  Notes and accounts payable to related parties                  -          103,243
  Note payable - Grand Casinos, Inc.                       589,410        1,289,410
  Current maturities of long-term debt                     547,755          677,801
  Accrued expenses and other liabilities                   917,370          600,237
  Provision for contingencies                               29,647          101,000
--------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES                                3,257,631        4,429,569
--------------------------------------------------------------------------------------

LONG-TERM LIABILITIES
  Long-term debt, less current maturities                9,952,366       10,487,701
  Subordinated Convertible Debentures                      350,000                -
--------------------------------------------------------------------------------------
Total long-Term Liabilities                             10,302,366       10,487,701
--------------------------------------------------------------------------------------

TOTAL LIABILITIES                                       13,559,997       14,917,270

Commitments and Contingencies

STOCKHOLDERS' EQUITY
  Preferred stock, 8% cumulative; $.01 par value; 
    authorized 5,000,000 shares; none issued                     -                -
  Common stock, $.01 par value; authorized 30,000,000 
    shares; 9,761,803 and 7,746,007 shares issued and 
    outstanding in 1996 and 1995, respectively              97,618           77,460
  Additional paid-in capital                            22,671,175       18,741,575
  Notes receivable - common stock                       (1,232,000)               -
  Deficit                                               13,312,246      (12,784,857)
--------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY                               8,224,547        6,034,178
--------------------------------------------------------------------------------------
                                                       $21,784,544      $20,951,448
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
</TABLE>

          See accompanying notes to consolidated financial statements.


                                    F-4

<PAGE>

               CASINO RESOURCE CORPORATION AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,                                    1996            1995
--------------------------------------------------------------------------------------
<S>                                                     <C>               <C>
REVENUE
  Revenue - entertainment                                $8,938,297       $6,750,056
  Revenue - hospitality                                   3,967,652        3,657,817
--------------------------------------------------------------------------------------
Total revenue                                            12,905,949       10,407,873
--------------------------------------------------------------------------------------

COSTS AND EXPENSES
  Operating costs - entertainment                         6,214,560        5,743,246
  Operating costs - hospitality                           2,660,266        2,032,232
  General and administrative                              2,190,154        2,006,272
  Other (income) expense - principally adjustments 
    of provisions of contingencies in 1995                  (65,893)        (503,071)
  Interest expense - net of interest income of 
    $136,019 and $34,959 in 1996 and 1995                 1,692,033        1,158,444
  Loss on abandonment of gaming projects - net              742,218           94,248
--------------------------------------------------------------------------------------
Total costs and expenses                                 13,433,338       10,531,371
--------------------------------------------------------------------------------------
Loss from continuing operations                            (527,389)        (123,498)
--------------------------------------------------------------------------------------

INCOME FROM DISPOSAL OF DISCONTINUED OPERATIONS                   -          162,217
--------------------------------------------------------------------------------------
Income  from discontinued operations                              -          162,217
--------------------------------------------------------------------------------------

NET INCOME (LOSS)                                         $(527,389)         $38,719
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------

INCOME (LOSS) PER COMMON SHARE
  Loss from continuing operations                            $(0.05)          $(0.01)
  Income from disposal of discontinued operations                               0.02
--------------------------------------------------------------------------------------

NET INCOME (LOSS) PER COMMON SHARE                           $(0.05)           $0.01
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING      8,980,105        7,609,076
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
</TABLE>

          See accompanying notes to consolidated financial statements.


                                    F-5

<PAGE>

               CASINO RESOURCE CORPORATION AND SUBSIDIARIES
             CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
                                                                        Additional        Notes
                                                     Common Stock         Paid-in       Receivable
                                                  Shares      Amount      Capital      Common Stock      Deficit       Total
--------------------------------------------------------------------------------------------------------------------------------
<S>                                            <C>          <C>       <C>             <C>            <C>            <C>         
BALANCE, SEPTEMBER 30, 1994                     7,390,007    $73,900    $17,561,810    $          -    ($12,823,576)  $4,812,134
Issuance of common stock - purchase 
  of gaming contract                              100,000      1,000        330,250                              -      331,250
Issuance of common stock - acquisition             10,000        100         20,212                              -       20,312
Issuance of common stock - employee stock 
  options                                          29,000        290          3,980                              -        4,270
Issuance of common stock - settlement of
  advances and expenses                            92,000        920        183,973                              -      184,893
Issuance of common stock - exercise of 
  warrants                                        125,000      1,250        530,000                              -      531,250
Other                                                   -          -        111,350                              -      111,350
Net income                                              -          -              -                         38,719       38,719
--------------------------------------------------------------------------------------------------------------------------------
BALANCE, SEPTEMBER 30, 1995                     7,746,007     77,460     18,741,575              -     (12,784,857)   6,034,178
Issuance of common stock - conversion of 
  debenture                                       839,852      8,399      1,768,390                              -    1,776,789
Issuance of common stock - acquisition             17,500        175         35,919                              -       36,094
Issuance of common stock - settlement of 
  litigation                                       15,000        150         31,725                              -       31,875
Issuance of common stock - exercise of 
  warrants                                      1,143,444     11,434      2,138,566     (1,232,000)              -      918,000
Cancellation of previously issued warrants              -          -        (45,000)                             -      (45,000)
Net loss                                                -          -              -                       (527,389)    (527,389)
--------------------------------------------------------------------------------------------------------------------------------
BALANCE, SEPTEMBER 30, 1996                     9,761,803    $97,618    $22,671,175    ($1,232,000)   ($13,312,246)  $8,224,547
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>

          See accompanying notes to consolidated financial statements.


                                    F-6

<PAGE>

             CASINO RESOURCE CORPORATION AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Year ended September 30,                                                  1996             1995
---------------------------------------------------------------------------------------------------
<S>                                                                  <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Loss from continuing operations                                      ($527,389)        ($123,498)
    Adjustments to reconcile loss from continuing operations to 
      net cash provided by (used in) operating activities
        Depreciation and amortization                                  1,203,049         1,349,909
        Abandonment cost - gaming ventures                               742,218           255,255
        Discount upon conversion of convertible debentures               550,000                 -
        Provision for doubtful accounts                                       43           (33,458)
        Expenses paid through issuance of common stock                    57,297            84,893
        Loss on sale/abandonment of property and equipment                     -           104,986
        Changes in assets and liabilities
          Accounts receivable - trade and other                          218,638            71,448
          Prepaid expenses                                                22,141           (97,733)
          Other assets                                                    17,966           103,087
          Accounts payable - trade                                      (484,429)       (1,216,295)
          Accrued expenses and other liabilities                         317,133          (192,093)
---------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY CONTINUING OPERATING ACTIVITIES                   2,116,667           306,501

  Income  from discontinued operations                                         -           162,217

  Change in provision for contingencies                                  (71,353)         (189,565)
---------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                    2,045,314           279,153
---------------------------------------------------------------------------------------------------

Cash Flows From Investing Activities
  Decrease (increase) in restricted cash                                 (11,341)          692,793
  Increase in deferred development costs                              (2,039,165)         (759,220)
  Purchase of property and equipment                                    (278,722)          (85,536)
  Increase  in due to/from  related parties                              (26,207)          (91,670)
  Increase  in deferred charges and other                               (272,584)         (106,492)
---------------------------------------------------------------------------------------------------

NET CASH USED IN INVESTING ACTIVITIES                                 (2,628,019)         (350,125)
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
</TABLE>

                                    F-7


<PAGE>

              CASINO RESOURCE CORPORATION AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Year ended September 30,                                                    1996           1995
---------------------------------------------------------------------------------------------------
<S>                                                                  <C>              <C> 
CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from issuance of common stock and other equity 
    transactions                                                           801,555         586,869
  Proceeds from (payments on) line-of-credit borrowings                   (700,000)      1,289,410
  Proceeds from long-term debt                                           1,673,941
  Payments on long-term debt                                              (689,322)       (902,292)
---------------------------------------------------------------------------------------------------
Net cash provided by financing activities                                1,086,174         973,987
---------------------------------------------------------------------------------------------------

Net Increase (Decrease) in Cash and Cash Equivalents                       503,469         903,015

Cash and Cash Equivalents, at beginning of year                          1,042,953         139,938
---------------------------------------------------------------------------------------------------

Cash and Cash Equivalents, at end of year                               $1,546,422      $1,042,953
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
  Cash paid during the year for
    Interest                                                            $1,296,763      $1,166,139
    Income taxes                                                            68,603          21,223

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND 
  FINANCING ACTIVITIES
    Issuance of common stock as payment for deferred 
      development costs                                                    $36,084        $491,250
    Conversion of subordinated convertible debentures                    1,300,000               -
    Deferred cost write-offs                                               (49,670)              -
</TABLE>


                                    F-8


<PAGE>

NOTE 13.  COMMITMENTS AND CONTINGENCIES

    A)  Under a Marketing Enhancement Agreement, entered into with the Tribal
Commission of the Mille Lacs Band of Ojibwe Indians (owners of the Grand Casino
Hinckley) and Grand, the Company receives a $20 fee per night per occupied room.
The Company recognized approximately $982,000 and $925,000 from the marketing
subsidy in 1996 and 1995, respectively.  In return for the marketing enhancement
fee, the hotel has entered into a revenue-sharing plan with the casino which
requires that 50% of all room revenues above a defined cumulative threshold (up
to the amount of marketing subsidy paid to the hotel) be paid to the casino.
The cumulative threshold was exceeded in fiscal 1995.  Payments due under the
revenue sharing plan totaled $786,000 and $361,000 in 1996 and 1995,
respectively.  Payments to Grand under this windfall profit sharing agreement
for fiscal 1997 will vary based on revenues and the change, if any, in the
operating cost threshold.  The Company and the Tribal Commission of the Mille
Lacs Band have entered into an agreement regarding future ownership of the
hotel.  The Tribal Commission has the unilateral right to purchase the hotel on
the anniversary date of its initial occupancy (May 1994) in each of years 2001
through 2006 at a cost equivalent to the original development cost of the hotel
plus the depreciated cost of personal property and all inventories.  Conversely,
in the event that the Tribal Commission allows the construction of more than 500
hotel or equivalent rooms on property owned by the Tribal Commission or Grand,
the Company has the right to require the Tribal Commission to purchase the hotel
at the cost stated above.

    B)  The Company has guaranteed rent payments, totaling $360,000 per year
for up to five years, of its 60% owned joint venture, Country Tonite Theatre,
L.L.C., commencing March 1, 1997.

<PAGE>

    C)  The Company commenced an arbitration action in November 1994 with the
Arbitration Association in Minneapolis, Minnesota, against Cuningham Hamilton
Quiter, P.A. (CHQ), the architect it retained in connection with the
construction of the Biloxi theatre.  In this action, the Company seeks to
recover the damages it believes it incurred as a result of the architectural
design work on the Biloxi theatre relating to cost overruns in the construction
of the Biloxi theatre.  The arbitration demand seeks damages in an amount in
excess of $1,000,000.  On December 30, 1994, the architectural firm commenced a
suit in a Mississippi state court seeking, among other things, to foreclose on a
mechanics' lien it filed on the Biloxi theatre project in the amount of
approximately $321,000.  The architectural firm has also asserted claims for
breach of contract, tortuous interference with economic advantage and punitive
damages.  The Company previously placed $321,000 in escrow to cover such
mechanics' lien claim.  The Company and the architectural firm have agreed to,
among other things, resolve all disputes between them with respect to the Biloxi
theatre project in the Minneapolis arbitration action and stay the lawsuit in
Mississippi.  The arbitration action was heard by a panel of arbitrators in
November.  A decision was rendered on December 26, 1996 (See Note 14).

    D)  In 1995, a suit was brought against the Company in the Federal District
Court of New Jersey in connection with the Company's former ownership of the
Biloxi theatre.  The Company sold the Biloxi Star Theatre in September 1994.
Venue was subsequently transferred to the Federal District Court for the
Southern District of Mississippi.  The plaintiff asserts it had a contract 
with the Company for the promotion of eight professional boxing events at the 
Company's former Biloxi theatre.  Total claims are for $500,000 in compensatory
damages, punitive damages and attorneys' fees, interest and costs, and other 
relief the court may deem just and proper.  The Company intends to vigorously 
defend itself in this action.

    E)  In May 1995, the Company was advised by written correspondence that a
Minnesota company claims an interest in certain assets of Monarch, principally
Monarch's interest in Indian gaming ventures.  No specific amount was claimed.
On November 13, 1995 Casino Resorts, Inc. commenced an action in the Hennepin
County District Court in Minneapolis, Minnesota against Monarch and the Company
alleging breach of contract against Monarch and tortuous interference with a
contractual or business relationship against the Company.  Management of the
Company and Monarch each plan to vigorously defend themselves against the
claims.

    F)  James Barnes and Prudence Barnes, two former officers of a subsidiary
of the Company have brought suit on January 31, 1996 against the Company in the
State District Court, Clark County, Nevada, in connection with their employment
termination in June 1995.  No specific amount of damages has been claimed, 
however, prior to the filing of the suit the plaintiffs offered to settle the 
matter for $500,000.  The Company intends to vigorously defend itself in this 
matter.

    In March 1996, PDC, a Minnesota limited liability company, and two of its 
officers filed suit against the Company and Harrah's Entertainment, in 
Minnesota, the Fourth Judicial District Court of Minnesota, (and Michigan, 
which venue has been dropped), alleging tortuous interference with its 
business relations and prospective economic advantage, as well as false light 
invasion of privacy in connection with the Pokagon Indian Gaming Award. The 
Company's general liability carrier has taken up the defense of the Company. 
The Company intends to vigorously defend itself in this matter.

   G)  The Company is also party to other items of litigation, none of which,
either individually or collectively, are material.


<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
-------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    BUSINESS

    Casino Resource Corporation and Subsidiaries (the "Company") is primarily 
    engaged in the hospitality and entertainment businesses. The Company owns
    and operates a hotel in Hinckley, Minnesota (the Grand Hinckley Inn), a 
    production theatre in Branson, Missouri (the Country Tonite Theatre) and
    a production company in Las Vegas, Nevada (Country Tonite Enterprises) 
    and has formed a joint venture, Country Tonite Theatre, L.L.C., to lease
    and operate a theatre in Pigeon Forge, Tennessee beginning in March 1997.

    The Company is in the process of entering the gaming industry as a result 
    of its participation with Harrah's Entertainment, Inc. in a major Indian 
    gaming award in Indiana and Michigan, its pending contract as part of a 
    joint venture to purchase an existing casino in Biloxi, Mississippi, and 
    its agreement to lease and operate a casino in Tunisia.

    BASIS OF PRESENTATION

    The accompanying consolidated financial statements include the accounts 
    of Casino Resource Corporation and its majority and wholly owned 
    subsidiaries. All significant intercompany balances and transactions have 
    been eliminated.

    ESTIMATES

    The preparation of financial statements in conformity with generally 
    accepted accounting principles requires management to make estimates and 
    assumptions that affect the reported amounts of assets and liabilities and 
    disclosure of contingent assets and liabilities at the date of the 
    financial statement, and the reported amounts of revenues and expenses 
    during the reporting period. Actual results could differ from those 
    estimates.

                                     F-9

<PAGE>

    CASH AND CASH EQUIVALENTS

    For purposes of the consolidated statements of cash flows, cash 
    equivalents consist of short-term investments having an original maturity
    of three months or less. Carrying amounts approximate fair value because 
    of the short-term maturity of the investments.

    RESTRICTED CASH

    The Company has restricted cash being held by a Mississippi state court 
    in conjunction with litigation involving the construction and subsequent 
    sale of the Biloxi Star Theatre.

    CONCENTRATIONS OF CREDIT RISK

    Financial instruments that potentially subject the Company to significant 
    concentrations of credit risk consist principally of cash instruments and 
    accounts receivables. The Company maintains cash, cash equivalents with 
    various financial institutions. The Company provides credit in the normal 
    course of business. The Company performs ongoing credit evaluation of its 
    customers and maintains allowances for potential credit loses, if 
    necessary.

    ADVERTISING

    Advertising expenditures are generally charged to operations in the year 
    incurred and totaled $289,906 in 1996 and $271,186 in 1995. The company has 
    advertising commitments for fiscal 1997 totaling $24,960 at September 30, 
    1996, which consist primarily of outdoor sign contracts.

    PROPERTY AND EQUIPMENT

    Property and equipment are stated at cost. For financial reporting 
    purposes depreciation and amortization is computed over the estimated 
    useful lives of the assets (or the lease term, if shorter) by the 
    straight-line method over the following lives:

    Land improvements                     20 - 25 years
    Buildings                             35 - 40 years
    Leasehold improvements                10 - 15 years
    Office equipment                       5 -  6 years
    Transportation equipment               5 -  7 years
    Other                                       5 years

    COST IN EXCESS OF FAIR VALUE OF ASSETS ACQUIRED

    Cost in excess of fair value of assets acquired is amortized using the 
    straight-line method over fifteen years.

                                     F-10

<PAGE>

    DEFERRED DEVELOPMENT COSTS

    Deferred development costs consist of external costs incurred in the 
    evaluation of potential ventures. The costs are expensed if a 
    determination is made to abandon the project.

    DEFERRED CHARGES

    Deferred charges consist of pre-opening expenses at the Country Tonite 
    Theatre, loan and convertible debt origination fees and organization 
    expenses. Amortization is on the straight-line method over estimated 
    useful lives ranging from one to five years.

    DISCONTINUED OPERATIONS

    Until the third quarter of 1994, the Company was in the resort marketing 
    business. The operations of this business segment have been accounted for
    as a discontinued operation. A gain of $162,217 from discontinued 
    operations in 1995 results from reversing a portion of the provision for
    contingencies established in 1994 and from additional revenues being 
    received during 1995 whereas related operating expenses were previously 
    recognized.

    NET INCOME (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE

    Net income (loss) per share data are computed using the weighted average 
    number of common stock outstanding during each period. Common equivalent 
    shares from stock options and warrants have been included in the 
    computation using the treasury stock method only when their effect would 
    be dilutive. Fully dilutive net income per share has not been presented 
    as the difference is not significant.

    RECLASSIFICATIONS

    Certain reclassifications have been made to the previously reported 1995 
    financial statements to conform with the 1996 presentation.

    RECENT ACCOUNTING PRONOUNCEMENTS

    Effective for fiscal years beginning after December 15, 1995, Statement 
    of Financial Accounting Standards Number 121; "Accounting for the 
    Impairment of Long-Lived Assets to be Disposed of" ("Statement 121") 
    was adopted by the Financial Accounting Standards Board ("FASB"). The 
    adoption by the Company of Statement 121 is not expected to have a 
    materially adverse effect on the Company's financial condition or results 
    of operations.

    In December 1995, FASB issued Statement of Financial Standards Number 
    123, "Accounting for Stock-Based Compensation." This standard encourages a 
    new method of recognizing stock-based compensation expense using an option 
    pricing model measurement of estimated fair value of employee stock options.
    Alternatively, companies may choose to retain the current approach set forth
    in Accounting Principles Board Opinion Number 25, "Accounting for Stock 
    Issued to Employees," and provide expanded footnote disclosure as to what 
    the

                                     F-11

<PAGE>

    effects of utilizing the option pricing model measurement would have been.
Statement 123 is effective for fiscal years beginning in 1996. The Company 
does not plan to use the option pricing model measurement of Statement 123 
and will provide the required footnote disclosure.

2.  RELATED PARTIES

    The related party receivables and payables of the Company consist 
    primarily of funds loaned to and from the Company by and to shareholders 
    and related entities.

    As described in Note 8, the Company has leased various equipment and 
    facilities from related parties.

    Notes and advances receivable includes notes and related interest due 
    from officers and stockholders totaling $806,895 and $443,931 at September 
    30, 1996 and 1995, respectively, at interest rates ranging from 7% to 9.5%.
    The notes mature from December 31, 1996 to October 15, 1998. Interest 
    income from these notes was $88,448 and $30,840 in 1996 and 1995, 
    respectively.

    Notes and accounts payable at September 30, 1995 consist of 
    reimbursements due officers and accrued and unpaid compensation to an 
    officer of the Company who is a significant shareholder and director. 
    The debt was due on demand and carried a 7% interest rate. Related 
    party interest expense was $1,065 and $17,277 in 1996 and 1995, 
    respectively.

    In October 1996, the Company extended a $100,000 promissary note to an 
    officer with interest at the prime rate. The note matures on April 13, 
    1997 with interest payable quarterly.

    Subsequent to year end, the Company extended a $135,000 line of credit to an
    officer of the Company. The loan accrues interest at the prime rate and is 
    due on May 11, 1997. This line is secured by common stock.

3.  PROPERTY AND EQUIPMENT

    SEPTEMBER 30,                           1996           1995
    -------------                           ----           ----
    Land and improvements                   $ 2,226,724    $ 2,226,724
    Buildings                                11,327,492     11,309,549
    Leasehold improvements                      404,364        404,364
    Furniture, fixtures and equipment         3,711,359      3,450,580
                                            -----------    -----------
                                             17,669,939     17,391,217
    Less accumulated depreciation
     and amortization                        (2,587,033)    (1,530,277)
                                            -----------    -----------
    Net property and equipment              $15,082,906    $15,860,940
                                            -----------    -----------
                                            -----------    -----------

                                     F-12



<PAGE>

4. DEFERRED DEVELOPMENT COSTS

     Deferred development costs consist of the following:

     SEPTEMBER 30,                             1996             1995
     ------------------------------------------------------------------------

     Pokagon Indian Gaming Project (A)     $ 1,052,378      $   645,287

     Tunisia Casino Project (B)                682,435                -

     Palace Casino Project (C)                 466,398          250,071
     ------------------------------------------------------------------------
                                           $ 2,201,211      $   895,358
     ------------------------------------------------------------------------

     (A)  Monarch Casinos, Inc. sold its rights to the Pokagon Indian gaming 
     contract to the Company in fiscal 1995 for consideration consisting of 
     the Company's assumption of certain trade payables of the seller; the 
     Company's obligation to reimburse certain of the seller's principals for 
     travel and other new business development costs; the Company's 
     obligation to loan the seller limited amounts of funding; the execution 
     of an agreement with the seller for the payment of future new business 
     development fees; and the issuance of 100,000 of the Company's common 
     shares plus the contingent issuance of an additional 1.9 million common 
     shares (to be earned as the Pokagon gaming contract achieves certain 
     governmental approval levels and upon commencement of operations of the 
     initial casino).

     Also, included in this amount is a $250,000 advance to an officer of 
     Monarch Casinos, Inc.  This advance was made in accordance with the 
     contract described above.  This advance accrues interest at 7% and 
     is due on demand after June 6, 1995, or will be canceled upon the second
     anniversary date of the opening of the first Pokagon casino.

     All external costs and costs assigned to the issuance of the Company's 
     common shares will be capitalized and expensed over five years 
     commencing with the receipt of initial management fees from the Pokagon 
     gaming venture.

     The Company in turn entered into an agreement with Harrah's 
     Entertainment, Inc. ("Harrah's") whereby the Company's rights to the 
     Pokagon gaming contract were assigned to Harrah's in return for a share 
     of Harrah's future management fee from operations of planned Pokagon 
     tribal casinos.  Harrah's is primarily responsible to fund all costs 
     attributable to development and operation of the casinos, receiving in 
     return a management fee, as defined.  The Company, while not primarily 
     responsible to fund any such development or operational costs might, in 
     certain circumstances, be required to provide reimbursements to 
     Harrah's.  The Company will receive 21.6% of Harrah's fees earned.  The 
     Company has agreed to pay a percentage of the fees it earns from Indian 
     gaming contracts to certain consultants.

     In addition to the agreement above, Harrah's agreed to reimburse the 
     Company for all the costs associated with the venture related to the 
     Eastern Band of Cherokee Indians in exchange for the Company renouncing 
     any rights or claims to any other business ventures of

                                     F-13

<PAGE>

     Harrah's and its affiliates.  The amount to be reimbursed is $600,000 
     which is recorded as an other asset.  Harrah's will pay CRC $120,000 per 
     year commencing on the opening of the first Pokagon casino and each year 
     after for four years.  These payments will be reduced by $5,000 each 
     month for a period of 40 months to cover Harrah's costs for 
     administering the contract.  Harrah's is in the process of obtaining the 
     necessary regulatory approvals for the project.

     B)  The Company entered into a lease agreement with Samara Casino 
     Company in June 1996 for the casino and its surroundings.  The annual 
     rent is $460,000 with a ten percent increase each year plus a variable 
     percentage of the casino's gross income as defined per the agreement.

     In 1996, the Company paid $682,435 for costs related to the lease 
     agreement.  The principal portion of these costs, $480,000, are rent 
     prepayments for the casino's first year of operation.  The casino has a 
     June 1, 1997 tentative opening date and this amount will be written off 
     over twelve months of the casino's opening.

     The remaining costs incurred of $202,435 are costs associated with 
     obtaining the agreement including architect and legal fees.  These costs 
     will be amortized overt the initial lease term of three years.  The 
     lease agreement can be renewed for two successive periods of three years.

     C)  In 1995, the Company attempted to purchase certain assets of the 
     Palace Casino.  In February 1996, the Company did not consummate the 
     planned purchase and expensed costs totaling approximately $727,000 of 
     which $250,071 were deferred at September 30, 1995.

     In 1996, the Company entered into an operating agreement with two 
     individuals acting as joint tenants to purchase certain assets of the 
     Palace Casino.  The Company has a 20% interest in the joint venture with 
     an option to purchase up to 49%.

     The Company incurred $466,398 of costs relating to the project.  The 
     costs consist principally of the Company's initial investment of 
     $400,000 and $46,094 for stock issued and other payments for land 
     rights.  The acquisition is expected to close in the second quarter of 
     fiscal 1997.

                                     F-14

<PAGE>

5. ACCRUED EXPENSES AND OTHER LIABILITIES

     Accrued expenses and other liabilities consist of the following:

     SEPTEMBER 30,                             1996            1995
     ------------------------------------------------------------------------

     Payroll and payroll taxes               $204,888        $142,487

     Sales tax                                 44,612          61,270

     Interest                                  95,136         113,699

     Real estate taxes                        128,714          82,244
    
     Other                                    444,020         200,537
     ------------------------------------------------------------------------
                                             $917,370        $600,237
     ------------------------------------------------------------------------

6. SUBORDINATED CONVERTIBLE DEBENTURES

     In February 1996, the Company completed a private placement of 
     $1,650,000, 8% subordinated convertible debentures (with net proceeds of 
     $1,493,000). The debentures have a one year maturity with conversion into
     shares of common stock on or prior to the anniversary date at a price equal
     to 75% of market value based on the then current trading prices.  The 
     debentures were not registered under the Securities Act of 1933.  
     Through September 30, 1996, $1,300,000 of principal amount of the 
     debentures have been converted into 839,851 common shares.


     Recognition of the discount upon conversion of the subordinated debentures
     resulted in a charge of $550,000 to interest expense in 1996 with an 
     offsetting credit of $550,000 to Additional Paid-in capital.

7. LONG-TERM DEBT

     Long-term debt consists of the following:

     SEPTEMBER 30,                                        1996        1995
     ------------------------------------------------------------------------

     Mortgage payable, prime plus 1% (9.25% at
     September 30, 1996)(7% floor and 10% ceiling),
     collateralized by real estate, payable in monthly
     installments of $73,035 including interest through
     March 1999, with a final payment of $7,077,978
     due in April 1999                                  $7,600,142  $7,756,403

     Mortgage payable, prime plus 2% (10.25% at 
     September 30, 1996)(11% ceiling), guaranteed
     by Grand Casinos, Inc. (see Note 11),
     collateralized by real estate, payable in monthly
     installments of $43,942 including interest through
     May 2004                                            2,771,952   3,000,151


                                     F-15

<PAGE>

     Other notes payable, interest at rates ranging from
     8.5% to 10%, collateralized by real estate, other
     assets and the personal guarantee by a certain
     officer, payable in monthly installments of $3,002
     through October, 2000.                                128,027     126,628

     Notes payable, 10.75%, repaid during 1996                   0     282,320
     -------------------------------------------------------------------------
                                                        10,500,121  11,165,502
     Less current maturities                              (547,755)   (677,801)
     -------------------------------------------------------------------------
                                                       $ 9,952,366 $10,487,701
     -------------------------------------------------------------------------
     Maturities of long-term debt are as follows:

     YEAR ENDING SEPTEMBER 30,
     -------------------------------------------------------------------------

     1998                                              $  485,436
     1999                                               7,538,639
     2000                                                 352,005
     2001                                                 383,969
     Thereafter                                         1,192,317
     -------------------------------------------------------------------------
                                                       $9,952,366
     -------------------------------------------------------------------------


8. LEASE COMMITMENTS

     The Company leases various equipment and facilities from related and 
     unrelated parties.  These leases require that the Company pay 
     maintenance, utilities, insurance and taxes.

     Based upon the terms of the leases, they have been classified in the 
     accompanying consolidated financial statements as operating leases.

     Total rent expense under operating leases was $106,272 and $224,527 for 
     the years ended September 30, 1996 and 1995, respectively.  
     Related-party rent expense was $45,905 and $60,909 in 1996 and 1995, 
     respectively.


                                     F-16

<PAGE>

     Minimum annual rental commitments of noncancellable operating leases 
     covering facilities and equipment at September 30, 1996 are 
     approximately:

                                       RELATED
     YEAR ENDING SEPTEMBER 30,          PARTY        OTHER       TOTAL
     -------------------------------------------------------------------------

     1997                              $24,000     $641,979     $665,979
     1998                                    0      880,303      880,303
     1999                                    0      865,319      865,319
     2000                                    -      799,543      799,543
     2001                                    -      672,001      672,001
     Thereafter                              -      280,002      280,002
                                      ----------------------------------------
                                       $24,000   $4,139,147   $4,163,147
                                      ----------------------------------------


9. TAXES ON INCOME

     The provision or income taxes include federal and state income taxes 
     currently payable and those deferred because of temporary differences 
     between financial statement and the tax bases of assets and liabilities 
     and the utilization of net operating loss carryforward.

     The Company's provision for income taxes ($0) differs from the federal 
     statutory rate due to the utilization of net operating loss carryforward.

     Deferred income taxes consist of the following:

     SEPTEMBER 30,                                        1996        1995
     -------------------------------------------------------------------------

     Total deferred tax assets, relating principally
     to net operating loss carryforward               $ 4,500,000  $ 4,600,000
     
     Deferred tax liabilities                               -          (20,000)
     -------------------------------------------------------------------------
                                                        4,500,000    4,580,000

     Less Valuation allowance                          (4,500,000)  (4,580,000)
     -------------------------------------------------------------------------
     Total net deferred tax assets                    $     -      $    -
     -------------------------------------------------------------------------

     Due to the uncertainty of realizing the deferred tax asset in the 
     future, the Company has recorded a valuation allowance equaling the 
     deferred tax asset.  At September 30, 1996, the Company has federal net 
     operating loss carryforwards available to offset future taxable income 
     of approximately $11,000,000, which expire in various years through 2010.

                                     F-17


<PAGE>

10. CAPITAL STOCK

     In 1995, a consultant to the Company received 50,000 common shares for 
     services rendered, and 100,000 shares were issued to Monarch Casinos, 
     Inc., as consideration for introducing the Company to potential gaming 
     ventures, including the Pokagon Tribal award (see Note 4).

     During fiscal 1995, 71,000 common shares were issued to current and 
     former employees under the exercise of employee incentive options and 
     severance agreements.

     In September 1995 an investor exercised warrants to acquire 125,000 
     common shares. (See Warrants)

     In November 1995 the Company's former Chairman of the Board exercised 
     warrants to acquire 1,143,444 shares of common stock for $2,150,000 or 
     $1.88 per share, by the payment of $650,000 cash and execution of 
     promissory notes due January 31, 1996 ($500,000) and December 31, 1996 
     ($1.0 million). At September 30, 1996, $1,232,000 is outstanding.

     During 1996, 15,000 shares of stock were issued in settlement of 
     litigation with a former officer of the Company.

     In 1996, 17,500 shares of common stock were issued in connection with the 
     acquisition of leasehold rights for the proposed Palace Casino 
     acquisition.

     Through September 30, 1996, 839,581 shares were issued upon conversion 
     of subordinated convertible debentures (see Note 6).

     WARRANTS

     As part of the public offering in September and October 1993 the Company 
     issued Class A Warrants (the IPO Warrants), expiring, after a one year 
     extension, on September 15, 1997, for the purchase of 2,760,000 common 
     shares at $6.75 per share. None of these warrants have been exercised to 
     date.

     In connection with the sale of the Biloxi Star Theater in September 
     1994, the Company issued warrants for the purchase of 1,018,444 common 
     shares to Grand Casinos, Inc. ("Grand"). These warrants, originally 
     priced to exercise at $2.00 per share, were transferred by Grand to the 
     Company's former Chairman of the Board in exchange for services provided 
     to Grand. The warrants were exercised in November 1995 at a price of 
     $1.88 per share.

     Options to acquire 35,000 common shares issued to the former owners of 
     Country Tonite Enterprises expired in March 1996.

                                    F-18

<PAGE>

     In April 1994 the Company issued warrants to Grand for the purchase of 
     250,000 common shares at $4.50 per share, as partial consideration for 
     Grand's guarantee of Company debt. During 1995 these warrants were 
     transferred by Grand to an investor and to the Company's former Chairman 
     of the Board in exchange for services provided to Grand. In September 
     1995, 125,000 shares were issued to the investor pursuant to a partial 
     exercise of these warrants for $531,250. The Company escrowed $50,000 of 
     such funds and paid to the investor his interest and transaction costs 
     equal to such escrow. The remaining 125,000 warrants were exercised in 
     November 1995 at $1.88 per share.

     The managing underwriter of the public offering received warrants to 
     acquire 240,000 shares at $8.25 per share (expiring on September 18, 
     1998) and options to acquire 240,000 IPO warrants at $.41 per warrant 
     (expired on September 18, 1996). The warrants are exercisable at $6.75 
     per share. None of these warrants have been exercised to date.

     Warrants for the purchase of 200,000 common shares issued in May 1995 to 
     an investment advisor were cancelled in 1996.

     OPTIONS AND AWARDS

     Certain financial consultants to the Company received options in 
     December 1992 and in January 1993 to acquire 87,500 shares of common 
     stock as consideration for services rendered. These options are fully 
     vested and are exercisable at $2.375 per share (17,500 shares) and at 
     $.75 per share (70,000 shares). None of these options have been exercised 
     to date.

     A former Company executive was granted options in September 1995, as 
     part of an employment termination arrangement, to acquire 50,000 shares 
     of common stock at $2.50 each (as to 25,000 shares) and $6.80 each (as 
     to 25,000 shares). The aggregate options expire in September 2003 and 
     none of the options have been exercised to date.

     STOCK INCENTIVE PLAN

     In fiscal 1995 the Company's 1993 Long-Term Incentive and Stock Option 
     Plan was amended (now the Amended and Restated 1993 Long-Term Incentive 
     and Stock Option Plan) to provide for the issuance of an aggregate 
     500,000 options/awards of shares. Likewise, all previously outstanding 
     options or awards were canceled and replacement awards issued at fair 
     market value.

                                    F-19

<PAGE>

<TABLE>
<CAPTION>
                                                               Exercise Price
                                            Shares                Per Share
     --------------------------------------------------------------------------
     <S>                                   <C>                 <C>

     Outstanding, October 1, 1994           188,000             $3.75 - $5.00
       Granted                              310,000             $1.70 - $4.14
       Exercised                            (29,000)            $2.13 - $3.88
       Canceled and Expired                (188,000)            $3.75 - $5.00
     --------------------------------------------------------------------------
     Outstanding, September 30, 1995        281,000             $1.70 - $4.14
       Granted                              154,000             $1.94 - $3.13
       Exercised                               -                      -
       Canceled and Expired                  53,600             $2.00 - $4.14
     --------------------------------------------------------------------------
     Outstanding, September 30, 1996        381,400             $1.60 - $4.14
     --------------------------------------------------------------------------
     Options exercisable at
       September 30, 1996                   227,500             $1.60 - $4.14
     Options available for future grant      89,600        
     --------------------------------------------------------------------------

</TABLE>

11. TRANSACTIONS WITH GRAND CASINOS, INC.

     On September 23, 1994 the Company entered into a term loan agreement 
     with Grand Casinos, Inc. (Grand). Under the agreement the Company 
     obtained advances aggregating $1,289,410 through September 30, 1995. 
     Advances under this agreement bear interest at 10% per annum. Through 
     July 31, 1996, $600,000 was repaid. Beginning in August, 1996, the 
     loan is being amortized at a rate of $50,000 principal per month plus 
     interest.

     In connection with provisions of the term loan, the Company granted 
     Grand a second mortgage on the Grand Hinckley Inn. In addition, the 
     Company granted to Grand a right of first refusal to purchase the hotel 
     on the same terms and conditions offered by a prospective purchaser. 
     This right is exercisable for a period of 30 days after the Company 
     notifies Grand of a pending offer.

     The Company issued common stock warrants in April 1994, which entitles 
     Grand to acquire 250,000 shares of common stock. The warrants are 
     exercisable between April 1995 and April 1998 at an exercise price of 
     $4.25 per share. These warrants were issued as consideration for Grand's 
     guarantee of the Company's debt (see Note 10).

     For the years ended September 30, 1996 and 1995, 21% and 19% of total 
     revenues and 55% and 54% of hospitality revenues were received through 
     Grand's marketing department, respectively.

                                    F-20



<PAGE>

12. BUSINESS SEGMENTS

     The Company operates principally in two industry segments: (1) 
     Entertainment Industry includes Country Tonite Enterprises, a production 
     company, and the Branson Theatre; and (2) Hospitality Industry includes 
     the Hinckley Hotel.

     Specified financial information by business segment is included in the 
     following summary:

<TABLE>
<CAPTION>     

     YEAR ENDED SEPTEMBER 30,               1996            1995
     -------------------------------------------------------------------------
     <S>                                  <C>              <C>

     Net Sales
       Entertainment                     $ 8,938,297      $ 6,750,056
       Hospitality                         3,967,652        3,657,817
     -------------------------------------------------------------------------
       Consolidated                      $12,905,949      $10,407,873
     -------------------------------------------------------------------------
     Operating income (loss)
       Entertainment                     $ 2,723,739      $ 1,006,810
       Hospitality                         1,307,386        1,625,585
       Corporate                          (2,190,156)      (2,006,272)
     -------------------------------------------------------------------------
       Consolidated                      $ 1,840,969      $   626,123
     -------------------------------------------------------------------------
     Identifiable assets
       Entertainment                     $11,085,112      $11,183,101
       Hospitality                         5,894,115        6,235,176
       Corporate                           4,805,317        3,533,171
     -------------------------------------------------------------------------
       Consolidated                      $21,784,544      $20,951,448
     -------------------------------------------------------------------------
     Capital expenditures
       Entertainment                     $   240,328      $    29,890
       Hospitality                            11,602           50,952
       Corporate                              26,792            4,694
     -------------------------------------------------------------------------
       Consolidated                      $   278,722      $    85,536
     -------------------------------------------------------------------------
     Depreciation and amortization
       Entertainment                     $   705,386      $   879,483
       Hospitality                           399,317          380,019
       Corporate                              98,346           90,407
     -------------------------------------------------------------------------
       Consolidated                      $ 1,203,049      $ 1,349,909
     -------------------------------------------------------------------------

</TABLE>

                                    F-21

<PAGE>

13. COMMITMENTS AND CONTINGENCIES

    A)  Under a Marketing Enhancement Agreement, entered into with the Tribal
Commission of the Mille Lacs Band of Ojibwe Indians (owners of the Grand Casino
Hinckley) and Grand, the Company receives a $20 fee per night per occupied room.
The Company recognized approximately $982,000 and $925,000 from the marketing
subsidy in 1996 and 1995, respectively.  In return for the marketing enhancement
fee, the hotel has entered into a revenue-sharing plan with the casino which
requires that 50% of all room revenues above a defined cumulative threshold (up
to the amount of marketing subsidy paid to the hotel) be paid to the casino.
The cumulative threshold was exceeded in fiscal 1995.  Payments due under the
revenue sharing plan totaled $786,000 and $361,000 in 1996 and 1995,
respectively.  Payments to Grand under this windfall profit sharing agreement
for fiscal 1997 will vary based on revenues and the change, if any, in the
operating cost threshold.  The Company and the Tribal Commission of the Mille
Lacs Band have entered into an agreement regarding future ownership of the
hotel.  The Tribal Commission has the unilateral right to purchase the hotel on
the anniversary date of its initial occupancy (May 1994) in each of years 2001
through 2006 at a cost equivalent to the original development cost of the hotel
plus the depreciated cost of personal property and all inventories.  Conversely,
in the event that the Tribal Commission allows the construction of more than 500
hotel or equivalent rooms on property owned by the Tribal Commission or Grand,
the Company has the right to require the Tribal Commission to purchase the hotel
at the cost stated above.

    B)  The Company has guaranteed rent payments, totaling $360,000 per year
for up to five years, of its 60% owned joint venture, Country Tonite Theatre,
L.L.C., commencing March 1, 1997.

    C)  The Company commenced an arbitration action in November 1994 with the
Arbitration Association in Minneapolis, Minnesota, against Cuningham Hamilton
Quiter, P.A. (CHQ), the architect it retained in connection with the
construction of the Biloxi theatre.  In this action, the Company seeks to
recover the damages it believes it incurred as a result of the architectural
design work on the Biloxi theatre relating to cost overruns in the construction
of the Biloxi theatre.  The arbitration demand seeks damages in an amount in
excess of $1,000,000.  On December 30, 1994, the architectural firm commenced a
suit in a Mississippi state court seeking, among other things, to foreclose on a
mechanics' lien it filed on the Biloxi theatre project in the amount of
approximately $321,000.  The architectural firm has also asserted claims for
breach of contract, tortuous interference with economic advantage and punitive
damages.  The Company previously placed $321,000 in escrow to cover such
mechanics' lien claim.  The Company and the architectural firm have agreed to,
among other things, resolve all disputes between them with respect to the Biloxi
theatre project in the Minneapolis arbitration action and stay the lawsuit in
Mississippi.  The arbitration action was heard by a panel of arbitrators in
November.  A decision was rendered on December 26, 1996 (See Note 14).


                                    F-22


<PAGE>


    D)  In 1995, a suit was brought against the Company in the Federal District
Court of New Jersey in connection with the Company's former ownership of the
Biloxi theatre.  The Company sold the Biloxi Star Theatre in September 1994.
Venue was subsequently transferred to the Federal District Court for the
Southern District of Mississippi.  The plaintiff asserts it had a contract 
with the Company for the promotion of eight professional boxing events at the 
Company's former Biloxi theatre.  Total claims are for $500,000 in compensatory
damages, punitive damages and attorneys' fees, interest and costs, and other 
relief the court may deem just and proper.  The Company intends to vigorously 
defend itself in this action.

    E)  In May 1995, the Company was advised by written correspondence that a 
Minnesota company claims an interest in certain assets of Monarch, 
principally Monarch's interest in Indian gaming ventures.  No specific amount 
was claimed. On November 13, 1995 Casino Resorts, Inc. commenced an action in 
the Hennepin County District Court in Minneapolis, Minnesota against Monarch 
and the Company alleging breach of contract against Monarch and tortuous 
interference with a contractual or business relationship against the Company. 
The plaintiff seeks compensatory damages and has not claimed a specific 
amount of damages but claims damages in excess of $50,000.  The plaintiff 
also seeks reimbursement of its costs and disbursements.  Management of the 
Company and Monarch each plan to vigorously defend themselves against the 
claims.

    F)  James Barnes and Prudence Barnes, two former officers of a subsidiary
of the Company have brought suit on January 31, 1996 against the Company in the
State District Court, Clark County, Nevada, in connection with their employment
termination in June 1995.  No specific amount of damages has been claimed, 
however, prior to the filing of the suit the plaintiffs offered to settle the 
matter for $500,000.  The Company intends to vigorously defend itself in this 
matter.

    G)  In March 1996, PDC, a Minnesota limited liability company, and two of 
its officers filed suit against the Company and Harrah's Entertainment, in 
Minnesota, the Fourth Judicial District Court of Minnesota, (and Michigan, 
which venue has been dropped), alleging defamation, violation of the Lanham 
Act, violation of the Michigan Consumer Protection Act, tortuous interference 
with its business relations and prospective economic advantage, as well as 
false light invasion of privacy in connection with the Pokagon Indian Gaming 
Award.  The plaintiffs seek compensatory damages and have not claimed a 
specific amount of damages, but claim such damages exceed $50,000.  The 
plaintiffs also seek recovery of their attorneys' fees. Under the Lanham Act, 
the plaintiffs are claiming a right to treble damages. The Company's general 
liability carrier has taken up the defense of the Company. The Company 
intends to vigorously defend itself in this matter.

    H)  The Company is also party to other items of litigation, none of 
which, either individually or collectively, are material.

14. SUBSEQUENT EVENT

     On December 26, 1996, the arbitrators for the CHQ arbitration case 
announced their decision. The Company's recovery was limited to a reduction 
of previously escrowed fees of approximately $321,000, on deposit with a 
Mississippi state court, to approximately $142,000. The decision which is 
subject to appeal, would result in a gain to the Company of approximately 
$139,000.

                                     F-23
<PAGE>

EXHIBIT INDEX
-------------
   
                                                                   Sequentially
Exhibit No.                 Description of Exhibit                Numbered Pages
    
-----------  ---------------------------------------------------  --------------
   
2.1          Palace Casino Asset Acquisition Agreement(7)
    

3.1          Restated Articles of Incorporation of the Company,
             as amended(2)

3.2          Bylaws of the Company, as amended(3)

   
10.1         Employment Agreement dated May 20, 1996 between the
             Company and John J. Pilger(7)
    

10.2         Ground Lease dated as of August 11, 1993, as 
             amended by the Amendment to Ground Lease date as
             of April 5, 1995, between Casino Building 
             Corporation and Grand Casinos, Inc. relating to the
             site for the Grand Hinckley Inn.(5)

10.3         Hotel Development Agreement dated July 23, 1993,
             between the Company and Grand Casinos, Inc. 
             relating to the development of the Grand Hinckley
             Inn.(1)

10.4         Marketing Enhancement and Purchase/Put Option
             Agreement dated as of August 11,1993, between the
             Company, the Corporate Commission and Grand 
             Casinos, Inc. relating to the Grand Hinckley Inn.(1)

10.5         Form of Warrant Agreement between the Company and
             Norwest Bank Minnesota, N.A., as Warrant Agent, 
             dated September 15, 1993(1)

10.6         Promissory Note dated as of September 15, 1993,
             made by John J. Pilger in favor of the Company.(3)

10.7         Contract to Produce Show dated December 28, 1995,
             between JMJ, Inc., dba Aladdin Hotel & Casino and
             Country Tonite Enterprises, Inc. relating to the 
             Las Vegas production show(2)

10.8         Agreement for Purchase and Sale of Theatre dated
             March 11, 1994, among the Company, CRC of Branson,
             Inc. and Ahab of the Ozarks, Inc. relating to the
             acquisition of the Country Tonite Theatre.(2)

10.9         Construction and Term Loan Agreement dated as of
             April 1, 1994, as amended by the Amendment to
             Construction and Term Loan Agreement dated as of 
             May 1, 1994, between the Casino Building 
             Corporation and Miller & Schroeder Investments
             Corporation relating to the construction and
             financing of the Grand Hinckley Inn.(5)

10.10        Promissory Note dated April 5, 1994, made by Casino
             Building Corporation in favor of Miller & Schroeder
             Investments Corporation in the amount of 
             $3,300,000.(5)

10.11        Mortgage, Security Agreement and Financing
             Statement dated as of April 1, 1994, between the
             Casino Building Corporation and Miller & Schroeder
             Investments Corporation.(5)

10.12        Guaranty Agreement dated April 1, 1994, by the
             Company in favor of Miller & Schroeder Investments
             Corporation.(5)

                                       E-1
<PAGE>

10.13        Assignment of Rents and Leases dated as of April 
             1, 1994, as amended by the Amendment to Assignment 
             of Rents and Leases dated as of May 1, 1994, 
             between Casino Building Corporation and Miller & 
             Schroeder Investments Corporation.(5) 

10.14        Subordination Agreement dated as of April 1, 1994, 
             among the Company, Casino Building Corporation and 
             Miller & Schroeder Investments Corporation.(5) 

10.15        Loan Purchase Agreement dated April 1, 1994, among 
             the Company, Casino Building Corporation and 
             Miller & Schroeder Investments Corporation.(5) 

10.16        Assignment dated as of April 1, 1994, between 
             Casino Building Corporation and Miller & Schroeder 
             Investments Corporation relating to the assignment 
             of the Marketing Enhancement and Purchase/Put 
             Option Agreement.(5) 

10.17        Common Stock Purchase Warrant dated April 5, 1994, 
             granted to Grand Casino, Inc. by the Company with 
             respect to 98,130 shares.(5) 

10.18        Common Stock Purchase Warrant dated April 19, 
             1994, granted to Grand Casino Inc. by the Company 
             with respect to 151,870 shares.(5) 

10.19        Promissory Note dated March 29, 1994, made by 
             Casino Building Corporation for $939,739.50 in 
             favor of PDS Financial Corporation relating to the 
             financing of furniture, fixtures and equipment for 
             the Grand Hinckley Hotel.(5) 

10.20        Security Agreement dated March 29, 1994, between 
             Casino Building Corporation and PDS Financial 
             Corporation.(5) 

10.21        Guaranty dated March 29, 1994, made by the Company 
             in favor of PDS Financial Corporation(5) 

10.22        Debt Subordination Agreement date March 29, 1994, 
             among Casino Building Corporation, the Company and 
             PDS Financial Corporation(5) 

10.23        Assignment dated March 29, 1994, among Casino 
             Building Corporation, the Company and PDS Financial
             Corporation(5)

10.24        Biloxi Star Theater Asset Purchase Agreement dated 
             August 18, 1994, among Grand Casinos, Inc., Grand 
             Casinos of Mississippi, Inc., -Biloxi, the Company 
             and Casino Building Corporation of Mississippi, 
             Inc.(2) 

10.25        Assignment and Assumption of Ground Sublease and 
             Related Documents dated September 30, 1994, 
             between Casino Building Corporation of Mississippi,
             Inc. and Grand Casinos Biloxi Theater, Inc.(2) 

10.26        Bill of Sale date September 30, 1994, between 
             Casino Building Corporation of Mississippi, Inc. 
             and Grand Casinos Biloxi Theater, Inc.(2) 

10.27        Assignment of Warranties, Permits, Licenses, 
             Contracts, Service Agreements and other Intangible 
             Rights dated September 30, 1994, between Casino 
             Building Corporation of Mississippi, Inc. and 
             Grand Casinos Biloxi Theater, Inc.(2)

                                       E-2
<PAGE>

10.28        Indemnification Agreement dated September 30, 
             1994, among the Company, Casino Building 
             Corporation of Mississippi, Inc., Grand Casinos, 
             Inc., Grand Casinos, of Mississippi, Inc.-Biloxi 
             and Grand Casinos Biloxi Theater, Inc.(2)

10.29        Non-Compete Agreement dated September 30, 1994, 
             among the Company, Casino Building Corporation of 
             Mississippi, Inc., Grand Casinos, Inc., Grand 
             Casinos Biloxi Theater, Inc. and John J. Pilger.(2)

10.30        Termination Agreement dated as of September 30, 
             1994, among the Company, Casino Building 
             Corporation of Mississippi, Inc., Grand Casinos, 
             Inc., Grand Casinos of Mississippi, Inc.-Biloxi(2)

10.31        Registration Rights Agreement dated as of 
             September 30, 1994, between the Company and Grand 
             Casinos, Inc.(2)

10.32        Term Loan Agreement dated as of August 18, 1894, 
             between Casino Building Corporation and Grand 
             Casinos, Inc. relating to the line of credit.(2)

10.33        Term Note dated as of September 23, 1994, between 
             Casino Building Corporation and Grand Casinos, 
             Inc.(2)

10.34        Mortgage, Security Agreement, Fixture Financing 
             Statement and Assignment of Leases and Rents, 
             dated as of September 23, 1994, made by Casino 
             Building Corporation to Grand Casinos, Inc., 
             securing $1,750,000 Term Note.(2)

10.35        Continuing Guaranty (Unlimited) made by the 
             Company in favor of Grand Casinos, Inc. dated as 
             of September 23, 1994, relating to the $1,750,000 
             Term Note.(2)

10.36        Third Party Pledge Argeement dated as of September 
             23, 1994, made by the Company in favor of Grand 
             Casinos, Inc. and relating to the Term Loan.(2)

10.37        Warrant to Purchase Common Stock dated as of 
             September 27, 1994, granted to Grand Casinos, 
             Inc.(2)

10.38        Rights of First Refusal Agreement dated as of 
             September 23, 1994, between the Company and Grand 
             Casinos, Inc., with respect to the sale of the 
             Grand Hinckley Inn.(2)

10.39        Stock Purchase Agreement, dated as of December 18, 
             1992, between Mr. Pilger and Mr. Howarth(1) as 
             amended by First Amendment dated June 2, 1993(5) 
             Second Amendment dated July 2, 1993(5), and Third 
             Amendment dated November 30, 1994.(4)

10.40        Settlement Agreement dated as of September, 1994, 
             between the Company and Gerald North.(2)

10.41        Settlement Agreement dated December 8, 1994 
             between the Company and Resource Financial 
             Services.(2)

10.42        Agreement dated as of October 15, 1993, between 
             the Company and Kevin Kean Company, Inc.(3) as 
             amended by the Amendment dated as of December 15, 
             1994, relating to Cherokee gaming project.(5)

10.43        Management Agreement dated February 1995 between 
             CRC West, Inc. and Hoh Indian Tribe.(5)

                                       E-3
<PAGE>

10.44        Mutual Release dated August 31, 1995, between CRC 
             West, Inc. and Hoh Indian Tribe.(5)

10.45        Memorandum of Understanding dated January 10, 
             1995, between The Promus Companies Incorporated 
             and the Company with respect to the development of 
             certain gaming projects.(3)

10.46        Memorandum of Understanding dated January 18, 
             1995, between Monarch Casinos, Inc. and the 
             Company with respect to the development of certain 
             gaming projects.(3)

10.47        Memorandum of Understanding dated March 10, 1995, 
             between the Company, the Kevin Kean Company, Inc. 
             and James E. Barnes with respect to the 
             development of certain gaming projects.(5)

10.48        Agreement dated May 8, 1995, between Monarch 
             Casinos, Inc. an the Company with respect to the 
             January 18, 1995, Memorandum of Understanding.(5)

10.49        Lease Modification Agreement dated August 7, 1995, 
             with respect to the Elkhorn Wisconsin Lease.(3)

10.50        Settlement Agreement dated August 7, 1995, between 
             the Company, John J. Pilger an Richard A. Howarth, 
             Jr.(3)

10.51        Letter Agreement dated August 22, 1995, relating 
             to extension of maturity date for September 23, 
             1994 Term Note.(3)

10.52        Agreement dated December 1, 1995, between the 
             Company and Kevin M. Kean.(5)

10.53        Warrant Purchase Agreement and Cherokee Dispute 
             Resolution dated December 1, 1995, between the 
             Company and Kevin M. Kean.(5)

10.54        Promissory Notes dated December 1, 1995, made to 
             Kevin M. Kean in favor of the Company.(5)

   
10.55        Promissory Note dated December 31, 1994, between 
             the Company and John J. Pilger.(7)
    

   
10.56        Promissory Note dated October 25, 1995, between 
             the Company and John J. Pilger.(7)
    

   
10.57        Promissory Note dated April 8, 1996 between the 
             Company and John J. Pilger.(7)
    

   
10.58        Non-Circumvention and Non-Disclosure Agreement 
             dated July 26, 1996, between the Company and Huong 
             "Henry" Le.(7)
    

   
10.59        Consulting Agreement dated December 6, 1995, 
             between the Company and Monarch Casinos.(7)
    

   
10.60        Technical Assistance and Consulting Agreement 
             dated June 10, 1996, between the Company and 
             Harrah's Southwest Michigan Casino Corporation.(7)
    

   
10.61        Lease Agreement dated September 4, 1996, between 
             J. MacDonald Burkhart M.D. and Country Tonite 
             Theatre L.L.C.(7)
    

   
10.62        Operating Agreement of Country Tonite Theatre 
             L.L.C. dated September 24, 1996(7).
    

   
10.63        Limited Liability Company Operating Agreement of 
             New Palace Casino, L.L.C(7)
    

   
10.64        Lease Contract dated June, 1996 between the 
             Company and Samara Casino Company.(7)
    

   
10.65        Consultanting Agreement between the Company and 
             Mondhor Ben Hamida.(7)
    
                                       E-4
<PAGE>

   
11.1         Statement Re. Computation of Per Share Earnings.(7)
    

   
21.1         Subsidiaries of Registrant (7)
    

   
23.1         Consent of BDO Seidman, L.L.P.(6)
    

   
27.1         Financial Data Schedule.(7)
    

   
             (1)   Incorporated by reference to the Company's Registration 
                   Statement on Form SB-2, File No. 33-66504, declared effective
                   September 15, 1993.
             (2)   Incorporated by reference to the Company's Form 10-KSB for
                   the fiscal year ended September 30, 1994, filed on
                   January 12, 1995.
             (3)   Incorporated by reference to the Company's Registration
                   Statement on Form SB-2, File No. 33-90114, originally 
                   declared effective May 5, 1995.
             (4)   Incorporated by reference to the Company's Form 10-KSB for 
                   the fiscal year ended September 30, 1995, filed on
                   January 16, 1996.
             (5)   Incorporated by reference to the Company's Registration 
                   Form S-3, File No. 33-31534, originally declared effective
                   February 29, 1996.
             (6)   Filed herewith.
             (7)   Previously filed with Form 10-KSB for the fiscal year ended 
                   September 30, 1996.
    

                                       E-5