<PAGE>

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


                                    FORM 10-Q

(Mark one)
/X/   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
      SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999

                                       OR

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

FOR THE TRANSITION PERIOD FROM ______ TO ______

COMMISSION FILE NUMBER 1-14573

                      PARK PLACE ENTERTAINMENT CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                DELAWARE                                       88-0400631
     (State or other jurisdiction of                        (I.R.S. Employer
     incorporation or organization)                        Identification No.)

       3930 HOWARD HUGHES PARKWAY
            LAS VEGAS, NEVADA                                       89109
(Address of principal executive offices)                         (Zip code)

                                 (702) 699-5000
               Registrant's telephone number, including area code

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

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

<TABLE>
<CAPTION>
          TITLE OF EACH CLASS                     OUTSTANDING AT APRIL 30, 1999
          -------------------                     -----------------------------
<S>                                               <C>
Common Stock, par value $0.01 per share                    302,037,857
</TABLE>

                                       1

<PAGE>

                            PARK PLACE ENTERTAINMENT
                                      INDEX

PART I.   FINANCIAL INFORMATION

<TABLE>
<CAPTION>
                                                                                     PAGE
                                                                                     ----
<S>                                                                                  <C>
Item 1.   Financial Statements                                                       

          Condensed Consolidated Balance Sheets (unaudited)                           
          March 31, 1999 and December 31, 1998                                          3

          Condensed Consolidated Statements of Income (unaudited)                       
          Three months ended March 31, 1999 and 1998                                    4

          Condensed Consolidated Statements of Cash Flows (unaudited)                   
          Three months ended March 31, 1999 and 1998                                    5

          Notes to Condensed Consolidated Financial Statements (unaudited)              6

Item 2.   Management's Discussion and Analysis of Financial Condition and                
          Results of Operations                                                         9



PART II.   OTHER INFORMATION

Item 1.    Legal Proceedings                                                           15

Item 6.    Exhibits and Reports on Form 8-K                                            17

Signatures                                                                             18
</TABLE>

                                       2

<PAGE>

PART I.    FINANCIAL INFORMATION
ITEM 1.    FINANCIAL STATEMENTS

              PARK PLACE ENTERTAINMENT CORPORATION AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (in millions)
<TABLE>
<CAPTION>
                                                                          (UNAUDITED)
                                                                            MARCH 31,           DECEMBER 31,
                                                                              1999                  1998
                                                                          -----------           ------------
<S>                                                                       <C>                   <C>
Assets
      Cash and equivalents                                                       $ 185                $ 247
      Restricted cash                                                                6                  135
      Accounts receivable, net                                                     124                  119
      Inventory, prepaids and other                                                137                  133
                                                                            -----------          -----------
         Total current assets                                                      452                  634
                                                                            -----------          -----------

      Investments                                                                  183                  169
      Property and equipment, net                                                5,154                4,991
      Goodwill                                                                   1,282                1,290
      Other assets                                                                  85                   90
                                                                            -----------          -----------
Total assets                                                                   $ 7,156              $ 7,174
                                                                            -----------          -----------
                                                                            -----------          -----------

Liabilities and stockholders' equity
      Accounts payable and accrued expenses                                      $ 361                $ 434
      Current maturities of long-term debt                                           7                    6
      Income taxes payable                                                          23                    -
                                                                            -----------          -----------
         Total current liabilities                                                 391                  440
                                                                            -----------          -----------

      Long-term debt, net of current maturities                                  2,429                2,466
      Deferred income taxes, net                                                   634                  609
      Other liabilities                                                             52                   51
                                                                            -----------          -----------
         Total liabilities                                                       3,506                3,566
                                                                            -----------          -----------

Commitments and contingencies

Stockholders' equity
      Common stock, $0.01 par value, 400.0 million shares                            3                    3
         authorized, 303.4 million shares issued and 303.0 million
         shares outstanding
      Additional paid-in capital                                                 3,613                3,613
      Other                                                                         (8)                  (8)
      Retained earnings                                                             45                    -
      Common stock in treasury at cost, 0.4 million shares                          (3)                   -
                                                                            -----------          -----------
         Total stockholders' equity                                              3,650                3,608
                                                                            -----------          -----------
      Total liabilities and stockholders' equity                               $ 7,156              $ 7,174
                                                                            -----------          -----------
                                                                            -----------          -----------
</TABLE>

          See notes to condensed consolidated financial statements

                                       3
<PAGE>

              PARK PLACE ENTERTAINMENT CORPORATION AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                     (in millions, except per share amounts)

<TABLE>
<CAPTION>
                                                                               (UNAUDITED)
                                                                            THREE MONTHS ENDED
                                                                                 MARCH 31,
                                                                     -------------------------------
                                                                           1999                1998
                                                                     -----------          ----------
<S>                                                                  <C>                  <C>
Revenues
      Casino                                                               $540               $ 383
      Rooms                                                                  90                  76
      Food and beverage                                                      67                  58
      Other revenue                                                          51                  58
                                                                     -----------          ----------
                                                                            748                 575
                                                                     -----------          ----------
Expenses
      Casino                                                                277                 206
      Rooms                                                                  31                  24
      Food and beverage                                                      62                  57
      Other expenses                                                        177                 135
      Depreciation and amortization                                          71                  56
      Pre-opening expense                                                     3                   -
      Corporate expense                                                       8                   5
                                                                     -----------          ----------
                                                                            629                 483
                                                                     -----------          ----------
Operating income                                                            119                  92

Interest and dividend income                                                  3                   9
Interest expense                                                            (29)                (23)
Interest expense, net from unconsolidated affiliates                         (3)                 (3)
                                                                     -----------          ----------

Income before income taxes, minority interest and 
 cumulative effect of accounting change                                      90                  75
      Provision for income taxes                                             42                  35
      Minority interest, net                                                  1                   1
                                                                     -----------          ----------

Income before cumulative effect of accounting change                         47                  39
Cumulative effect of accounting change, net of tax                           (2)                  -
                                                                     -----------          ----------

Net income                                                            $      45            $     39
                                                                     -----------          ----------
                                                                     -----------          ----------

Basic earnings per share
      Income before cumulative effect of accounting change               $ 0.16
      Cumulative effect of accounting change                            $ (0.01)
      Net income per share                                               $ 0.15
Diluted earnings per share
      Income before cumulative effect of accounting change               $ 0.15
      Cumulative effect of accounting change                            $ (0.01)
      Net income per share                                               $ 0.15

Basic and diluted earnings per share - pro forma
      Net income per share - pro forma                                                       $ 0.15

</TABLE>

          See notes to condensed consolidated financial statements

                                       4
<PAGE>

              PARK PLACE ENTERTAINMENT CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (in millions)

<TABLE>
<CAPTION>
                                                                          (UNAUDITED)
                                                                       THREE MONTHS ENDED
                                                                           MARCH 31,
                                                                 ------------------------------
                                                                    1999                1998
                                                                 ----------          ----------
<S>                                                              <C>                 <C>
Operating activities
      Net income                                                      $ 45                $ 39
      Adjustments to reconcile net income to net cash 
       provided by operating activities:
         Depreciation and amortization                                  71                  56
         Change in working capital components                           18                 (22)
         Change in deferred income taxes                                19                  (6)
         Other                                                           6                   1
                                                                 ----------          ----------
              Net cash provided by operating activities                159                  68
                                                                 ----------          ----------

Investing activities
      Capital expenditures                                            (223)               (134)
      Change in other investments                                      (11)                 36
      Acquisitions, net of cash acquired                                 -                 (43)
      Other                                                             (3)                  -
                                                                 ----------          ----------
              Net cash used in investing activities                   (237)               (141)
                                                                 ----------          ----------

Financing activities
      Net borrowings on Senior Credit Facility                         585                   -
      Payments on debt                                                (621)                 (4)
      Payments to Hilton                                               (73)                (13)
      Other                                                             (4)                  -
                                                                 ----------          ----------
                Net cash used in financing activities                 (113)                (17)
                                                                 ----------          ----------

Decrease in cash and equivalents                                      (191)                (90)
Cash and equivalents at beginning of period                            382                 199
                                                                 ----------          ----------

Cash and equivalents at end of period                                $ 191               $ 109
                                                                 ----------          ----------
                                                                 ----------          ----------

Supplemental cash flow disclosure 
      Cash paid for:
      Interest (net of amounts capitalized)                           $ 12                 $ 7
                                                                 ----------          ----------
                                                                 ----------          ----------
      Income taxes                                                     $ 1                 $ -
                                                                 ----------          ----------
                                                                 ----------          ----------
</TABLE>

           See notes to condensed consolidated financial statements

                                       5
<PAGE>

              PARK PLACE ENTERTAINMENT CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.   THE COMPANY

     Park Place Entertainment Corporation (the "Company"), a Delaware 
corporation, was formed in June 1998. On December 31, 1998, Hilton Hotels 
Corporation ("Hilton") completed the transfer of the operations, assets and 
liabilities of its gaming business to the Company. The stock of the Company 
was distributed to Hilton's shareholders tax-free on a one-for-one basis. 
Also on December 31, 1998, immediately following the Hilton distribution, the 
Company acquired, by means of a merger, the Mississippi gaming business of 
Grand Casinos, Inc. ("Grand") which includes the Grand Casino Biloxi, Grand 
Casino Gulfport and Grand Casino Tunica properties, in exchange for the 
assumption of debt and the issuance of Company common stock on a one-for-one 
basis.

     The Company is primarily engaged in the ownership, operation and 
development of gaming facilities. The operations of the Company currently are 
conducted under the Hilton, Flamingo, Bally, Conrad and Grand brands and 
include twelve U.S. casinos, an interest in one U.S. riverboat casino, and 
interests in two land-based casinos in Australia and one land-based casino in 
Uruguay. The Company is also in the process of developing the 2,900-room 
Paris Casino Resort on the Las Vegas Strip, which is expected to open in the 
fall of 1999.

NOTE 2.  BASIS OF PRESENTATION

     The condensed consolidated financial statements include the accounts of 
the Company, its wholly owned subsidiaries and investments accounted for 
under the equity method of accounting. Material intercompany accounts 
and transactions have been eliminated.

     The condensed consolidated financial statements included herein have 
been prepared by the Company, without audit, pursuant to the rules and 
regulations of the Securities and Exchange Commission. Certain information 
and footnote disclosures normally included in financial statements prepared 
in accordance with generally accepted accounting principles have been 
condensed or omitted pursuant to such rules and regulations, although the 
Company believes that the disclosures are adequate to make the information 
presented not misleading. In the opinion of management, all adjustments 
(which include normal recurring adjustments) necessary for a fair statement 
of results for the interim periods have been made. The results for the three 
month period are not necessarily indicative of results to be expected for the 
full fiscal year. These financial statements should be read in conjunction 
with the consolidated financial statements and notes thereto included in the 
Company's Annual Report on Form 10-K for the year ended December 31, 1998.

     The accompanying condensed consolidated financial statements include 
revenues, expenses and cash flows of Hilton's gaming business on a 
stand-alone basis, including an allocation of corporate expenses, for the 
three months ending March 31, 1998. The balance sheet as of December 31, 1998 
reflects the distribution by Hilton and the merger with Grand.

     The condensed consolidated financial statements for the prior period 
reflect certain reclassifications to conform to classifications adopted in 
1999. These classifications have no effect on net income.

                                       6

<PAGE>

NOTE 3.  PRE-OPENING EXPENSE

     The Company adopted Statement of Position (SOP) 98-5, "Reporting on the 
Costs of Start-Up Activities" in the first quarter of 1999. The adoption of 
SOP 98-5 resulted in a write off of the unamortized balance of pre-opening 
costs in the first quarter of 1999 of $2 million, net of tax. The impact is 
shown as a cumulative effect of accounting change in the condensed 
consolidated statements of income. In addition, as required by SOP 98-5, the 
Company expensed $3 million of pre-opening costs during the three months 
ended March 31, 1999, related primarily to the development of Paris.

NOTE 4.  STOCK REPURCHASE

     In March 1999, the Company's Board of Directors approved a stock 
repurchase program allowing for the purchase of up to 8 million shares of the 
Company's currently outstanding common stock. During the three months ended 
March 31, 1999, the Company repurchased approximately .4 million shares. 
Subsequent to March 31, 1999, the Company repurchased approximately 1.3 
million shares under this program.

NOTE 5.  GRAND ACQUISITION

     Effective December 31, 1998, the Company completed the acquisition of 
Grand pursuant to an agreement dated June 30, 1998. Aggregate consideration 
consisted of approximately 42 million shares of the Company's common stock 
with an equity value of $270 million and assumption of Grand's debt at fair 
market value totaling $625 million at December 31, 1998.

     The acquisition has been accounted for using the purchase method of 
accounting. The purchase price has been preliminarily allocated based on 
estimated fair values at the date of acquisition, pending final determination 
of certain acquired balances.

     The following unaudited pro forma information for the three months ended 
March 31, 1998 has been prepared assuming that the Grand merger had taken 
place at January 1, 1998. This pro forma information does not purport to be 
indicative of future results or what would have occurred had the Grand merger 
occurred as of January 1, 1998.

<TABLE>
<CAPTION>
                                                         (IN MILLIONS, EXCEPT
                                                          PER SHARE AMOUNTS)
<S>                                                      <C>  
Revenue..............................................           $ 718
Operating income.....................................           $ 108
Net income...........................................           $  43
Basic and diluted earnings per share.................           $0.14
</TABLE>

NOTE 6.  EARNINGS PER SHARE

     Basic earnings per share (EPS) is calculated by dividing net income by 
the weighted average number of common shares outstanding for the period. The 
weighted average number of common shares outstanding for the three months 
ended March 31, 1999 was 303 million. Diluted EPS reflects the effect of 
assumed stock option exercises. The dilutive effect of the assumed exercise 
of stock options increased the weighted average number of common shares by 2 
million.

                                       7
<PAGE>

     Pro forma earnings per share is calculated for the three months ended 
March 31, 1998. The weighted average number of common shares outstanding was 
261 million. The dilutive effect of the assumed exercise of stock options 
increased the weighted average number of common shares by 3 million.

NOTE 7.  LONG TERM DEBT

Long term debt is as follows (in millions):


<TABLE>
<CAPTION>
                                                                       MARCH 31,       DECEMBER 31,
                                                                         1999              1998
                                                                       ---------       ------------
                                                                      (UNAUDITED)
<S>                                                                    <C>               <C>    
Senior and senior subordinated notes, with an average rate of
  7.5%, due 2002 to 2005 ...........................................   $ 1,023           $ 1,023
10 1/8% First Mortgage Notes due 2003 ..............................         6               490
9% Senior Unsecured Notes due 2004 .................................                         135
Senior Credit Facility .............................................     1,395               810
Capital leases and other ...........................................        12                14
                                                                       -------           -------
                                                                         2,436             2,472
   Less current maturities .........................................        (7)               (6)
                                                                       -------           -------
                                                                       -------           -------
Net long-term debt .................................................   $ 2,429           $ 2,466
                                                                       -------           -------
                                                                       -------           -------
</TABLE>

     In November 1995, Grand sold $450 million aggregate principal amount of 
10.125% First Mortgage Notes due 2003 ("First Mortgage Notes"). In connection 
with the Grand merger, the Company made a tender offer for the First Mortgage 
Notes and purchased approximately $444.5 million of the outstanding First 
Mortgage Notes, which were subsequently cancelled. In January 1999, the 
Company completed a covenant defeasance for approximately $5.5 million of 
remaining outstanding First Mortgage Notes by placing into trust all future 
payments of principal, interest and premium on the First Mortgage Notes to 
the first optional redemption date on December 1, 1999.

    In October 1997, Grand sold $115 million aggregate principal amount of 
9.0% Senior Unsecured Notes due 2004 ("Senior Notes"). On December 31, 1998, 
Grand completed a covenant defeasance for the Senior Notes by placing into 
trust approximately $135 million representing all future payments of 
principal, interest and early redemption premium. The Senior Notes were 
redeemed on February 1, 1999.

NOTE 8.  CAESARS WORLD INC. ACQUISITION

     In April 1999, the Company announced that it had entered into an 
agreement to purchase Caesars World Inc. and other gaming assets from 
Starwood Hotels and Resorts Worldwide Inc. The purchase price is $3 billion 
in cash. The acquisition will be accounted for as a purchase and accordingly, 
the purchase price will be allocated to the assets and liabilities based on 
their estimated fair market values at the date of acquisition. The 
acquisition is subject to regulatory approvals and is expected to be 
completed in the fourth quarter of 1999.

                                       8
<PAGE>

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

RESULTS OF OPERATIONS

     Results of operations include Park Place Entertainment Corporation's 
(the "Company") wholly owned subsidiaries and investments accounted for under 
the equity method of accounting. Prior to the merger with Grand Casinos, Inc. 
("Grand"), the Company operated under the Hilton, Flamingo, Bally and Conrad 
brand names with six wholly owned Nevada casino hotels; two wholly owned 
casino hotels in Atlantic City, New Jersey; a wholly owned riverboat casino 
in Robinsonville, Mississippi; a 49.9% owned and managed riverboat casino in 
New Orleans; two partially owned and managed casino hotels in Australia; and 
a partially owned and managed casino hotel in Punta del Este, Uruguay. On 
December 31, 1998, the Company completed its acquisition of the Mississippi 
gaming operations of Grand. As a result of the Grand merger, the Company now 
owns Grand Casino Tunica, Grand Casino Gulfport and Grand Casino Biloxi 
(collectively the "Grand Properties"). The results of operations for the 
Grand Properties are not included in the Company's condensed consolidated 
statement of income for the three months ended March 31, 1998, as the merger 
was completed on December 31, 1998.

     The following discussion presents an analysis of the results of 
operations of the Company for the three months ended March 31, 1999 and 1998. 
EBITDA (earnings before interest, taxes, depreciation, amortization, 
pre-opening and non-cash items) is presented supplementally in the tables 
below and in the discussion of operating results because management believes 
it allows for a more complete analysis of results of operations. This 
information should not be considered as an alternative to any measure of 
performance as promulgated under generally accepted accounting principles 
(such as operating income or net income), nor should it be considered as an 
indicator of the overall financial performance of the Company. The Company's 
calculation of EBITDA may be different from the calculation used by other 
companies and therefore comparability may be limited.

COMPARISON OF THREE MONTHS ENDED MARCH 31, 1999 AND 1998

     A summary of the Company's consolidated revenue and earnings for the 
three months ended March 31, 1999 and 1998 is as follows:

<TABLE>
<CAPTION>
                                              1999          1998        %CHANGE
                                                (in millions)
<S>                                           <C>           <C>           <C> 
Revenue ...................................   $ 748         $ 575          30%
Operating income ..........................   $ 119         $  92          29%
Net income ................................   $  45         $  39          15%
Basic and diluted earnings per share ......   $0.15         $0.15         

Other operating data
EBITDA ....................................   $ 193         $ 148          30%
</TABLE>

                                       9
<PAGE>

     The Company recorded net income of $45 million or diluted earnings per 
share of $0.15 for the three months ended March 31, 1999, compared with net 
income of $39 million or diluted earnings per share of $0.15 for the three 
months ended March 31, 1998. Impacting results in the current year was the 
Grand merger, which was effective December 31, 1998 and the adoption of 
Statement of Position (SOP) 98-5 "Reporting on the costs of Start-Up 
Activities." SOP 98-5 requires that start-up costs or pre-opening costs be 
expensed as incurred. The Company recorded a cumulative effect of accounting 
change net of tax of $2 million and expensed $3 million of pre-opening costs 
incurred during the quarter.

     Consolidated revenues increased 30 percent to $748 million for the three 
months ended March 31, 1999, from $575 million in 1998. This increase in 
revenues was primarily a result of the Grand merger. EBITDA increased 30 
percent to $193 million for the three months ended March 31, 1999, from $148 
million in 1998. The Grand properties contributed $41 million of the 
increase. Properties in the Western Region contributed $15 million to the 
increase, which was offset by a decrease in the Eastern Region of $2 million 
and at the Company's International properties of $7 million.

WESTERN REGION

     EBITDA for the Western Region was $95 million for the three months ended 
March 31, 1999, an increase of 19 percent over the $80 million for the three 
months ended March 31, 1998. Occupancy for the Western Region properties was 
88 percent in the first quarter of 1999, compared to 86 percent in the first 
quarter of the prior year. The average room rate was $82 compared to $79 in 
the prior year period. The Las Vegas Hilton and Flamingo Hilton Las Vegas 
made signification contributions to these increases.

     EBITDA at the Las Vegas Hilton increased 59 percent to $27 million for 
the three months ended March 31, 1999. Total casino revenue increased 
significantly due to higher volumes and an increase in hold percentage in 
Baccarat. Table game win (excluding baccarat) and slot win remained constant 
with the prior year.

     Results at the Las Vegas Hilton are more volatile than the Company's 
other casinos because this property caters to the premium play segment of the 
market. Future fluctuations in premium play volume and win percentage could 
result in continued volatility in the results at this property. However, the 
Company believes that its implementation of new casino marketing and 
entertainment strategies has broadened the Las Vegas Hilton's domestic 
customer base and increased non-premium play volume.

     EBITDA at the Flamingo Hilton Las Vegas increased 28 percent in the 
first quarter of 1999, generating $32 million compared to $25 million in 
1998. Casino revenue and rooms revenue were the main contributors to the 
increase. The increase in casino revenue was mainly attributable to a ten 
percent increase in slot win and a five percent increase in table game win.

     Bally's Las Vegas generated EBITDA of $24 million in the 1999 first 
quarter, a decrease of $1 million from the first quarter in the prior year. 
An increase in slot win offset an increase in operating expenses.

     Combined EBITDA from the Reno Hilton, the Flamingo Hilton Reno and the
Flamingo Hilton Laughlin was $12 million, a decrease of $1 million from the 1998
quarter. For the first quarter of 1999, both Reno properties recorded lower
occupancy offset by an increased average rate compared to the 1998 period. The
Flamingo Hilton Laughlin recorded an 11 point increase in occupancy percentage
and a five percent increase in average daily rate. The Flamingo Hilton Laughlin
also recorded a four percent increase in slot win and a six percent decrease in
table game win.

                                      10

<PAGE>

EASTERN REGION

     EBITDA for the Eastern Region was $39 million for the three months ended 
March 31, 1999, a decrease of $2 million when compared to $41 million for the 
three months ended March 31, 1998. Occupancy and average room rate remained 
constant at 94 percent and $74, respectively.

     Bally's Park Place generated EBITDA of $33 million, a decrease of 11 
percent from last year's $37 million. The decrease was primarily attributable 
to lower hold percentage and increased costs associated with competitive 
market conditions.

      The Atlantic City Hilton reported EBITDA of $6 million, $2 million or 
50 percent above the first quarter last year. The improvement was due to 
higher table game drop and win, which was offset by a decrease in slot hold 
percentage. The Atlantic City Hilton also recorded a 20 percent increase in 
rooms revenue.

MID-SOUTH REGION

     EBITDA for the Mid-South region increased $42 million to $52 million for 
the three months ended March 31, 1999, from $9 million in 1998. The Grand 
properties contributed $41 million of the increase. The Grand properties 
results are not included in the 1998 first quarter results because the merger 
occurred on December 31, 1998. Occupancy percentage and average room rate for 
the three months ended March 31, 1999, were 94 percent and $60, respectively. 
Combined EBITDA from Bally's Robinsonville and Bally's New Orleans increased 
$1 million over the prior year.

INTERNATIONAL

     On a combined basis, first quarter 1999 EBITDA from the Conrad 
properties in Uruguay and Australia decreased to $15 million from $22 million 
in 1998. The decrease came primarily from the casino resort in Punta del 
Este, Uruguay, which was impacted by the devaluation of the Brazilian Real 
resulting in lower levels of play from Brazilian customers. On a combined 
basis the International properties reported an average daily rate of $112 and 
an occupancy percentage of 69 percent, an increase of one percent and 6 
percentage points, respectively.

DEPRECIATION AND AMORTIZATION

     Consolidated depreciation and amortization increased $15 million to $71 
million for the three months ended March 31, 1999. All of this increase is 
attributable to the Grand properties.

CORPORATE EXPENSE

     Corporate expense increased $3 million to $8 million for the three 
months ended March 31, 1999. The increase is attributable to the 
infrastructure put in place to operate and manage the Company as a public 
company.

                                      11
<PAGE>

INTEREST INCOME AND INTEREST EXPENSE

     Interest and dividend income decreased $6 million in the first quarter 
of 1999 to $3 million. The 1998 period includes interest income from the 
Company's investment in certain mortgage notes that were sold in the second 
half of 1998. Consolidated net interest expense increased $6 million to $32 
million due primarily to an increase in long-term debt associated with the 
Grand merger offset by an increase in capitalized interest. Capitalized 
interest for the three months ended March 31, 1999 and 1998 was $13 million 
and $4 million, respectively.

INCOME TAXES

     The effective income tax rate for the 1999 period remained flat with the 
three months ended March 31, 1998 at 46.7 percent. The Company's effective 
income tax rate is determined by the level and composition of pretax income 
subject to varying foreign, state and local taxes and exceeds the Federal 
statutory rate due primarily to non-deductible amortization of goodwill.

OTHER

     The gaming industry continues to experience growth primarily in existing 
markets. The Las Vegas and Atlantic City markets are becoming increasingly 
competitive due to new developments and expansion projects which challenge 
the Company's existing market share. These projects could adversely impact 
the Company's future gaming income.

LIQUIDITY AND CAPITAL RESOURCES

     As of March 31, 1999, the Company had cash and cash equivalents of $185 
million. Cash provided by operating activities for the three months ended 
March 31, 1999 was $159 million. In addition, the Company had borrowings 
available under its senior bank credit facility of $750 million at March 31, 
1999. The Company expects to finance its current operations and capital 
expenditures through cash flow from operations, existing cash balances, 
commercial paper borrowings, and borrowings under its senior credit facility.

     In the first quarter of 1999, the Company borrowed approximately $600 
million on its senior bank credit facility in order to settle the tender 
offer for the 10.125% Grand First Mortgage Notes and to redeem the Grand 9.0% 
Senior Unsecured Notes.

     Capital expenditures for the three months ended March 31, 1999 were $223 
million and include costs relating to the construction (which began in April 
1997) of the $760 million, 2,900-room Paris Casino-Resort ("Paris"). This 
property, which is located adjacent to the Bally's Las Vegas on the Strip, 
will feature an 85,000 square foot casino, a 50-story replica of the Eiffel 
Tower, eight restaurants, five lounges, 130,000 square feet of convention 
space and a retail shopping complex with a French influence. This project is 
expected to be completed in the fall of 1999.

     In addition to an estimated $350 million in 1999 expenditures related to 
new construction, the Company anticipates spending approximately $160 million 
in 1999 on normal capital replacements and technology upgrades and $60 
million on improvement projects that are evaluated on a return on investment 
basis.

                                      12

<PAGE>

     In April 1999, the Company announced that it had entered into an 
agreement to purchase Caesars World Inc. ("Caesars") and other gaming assets 
from Starwood Hotels and Resorts Worldwide Inc. The purchase price is $3 
billion in cash. The acquisition is subject to regulatory approvals and 
expected to be completed in the fourth quarter of 1999. The Company 
anticipates financing the $3 billion purchase price through additional bank 
borrowings and the issuance of long-term debt.

     In January 1999, the Company filed a shelf registration statement (the 
"Shelf") with the Securities and Exchange Commission registering up to $1 
billion in debt or equity securities. The terms of any securities offered 
pursuant to the Shelf will be determined by market conditions at the time of 
issuance.

     In March 1999, the Company's Board of Directors approved a common stock 
repurchase program to acquire up to 8 million shares of the Company's common 
stock. During the three months ended March 31, 1999, the Company repurchased 
approximately .4 million shares. Subsequent to March 31, 1999, the Company 
repurchased approximately 1.3 million shares under this program.

     The Company has established a $1 billion commercial paper program as of 
December 31, 1998. No amounts were outstanding at March 31, 1999. Interest 
under the program will be a market rate for varying periods.

STRATEGY

     As exemplified by the acquisition of Bally Entertainment Corporation in 
1996, Grand Casinos, Inc. in 1998, the anticipated opening of Paris in the 
fall of 1999, and the expected purchase of Caesars World and related assets 
in late 1999, the Company is interested in expanding its business through the 
acquisition of quality gaming assets and selective new development. It 
believes it is well-positioned to, and may from time to time, pursue 
additional strategic acquisitions or alliances which it believes to be 
financially beneficial to the Company and its long term interests.

OTHER MATTERS

YEAR 2000

     The Company is currently working to resolve the potential impact of the 
Year 2000 on the processing of date-sensitive information by its computerized 
information systems. The Year 2000 problem is the result of computer programs 
being written using two digits (rather than four) to define the applicable 
year. Any of the Company's programs that have time-sensitive software may 
recognize a date using "00" as the year 1900 rather than the Year 2000, which 
could result in miscalculations or system failures.

     The Company has a Year 2000 program, the objective of which is to 
determine and assess the risks of the Year 2000 issue, and plan and institute 
mitigating actions to minimize those risks. The Company's standard for 
compliance requires that for a computer system or business process to be Year 
2000 compliant, it must be designed to operate without error in dates and 
date-related data prior to, on and after January 1, 2000. The Company expects 
to be fully Year 2000 compliant with respect to all significant business 
systems prior to December 31, 1999.

The Company's various project teams are focusing their attention in the 
following major areas:

 INFORMATION TECHNOLOGY (IT). Information Technology systems account for much 
of the Year 2000 work and include all computer systems and technology managed 
by The Company. These core systems have been assessed, plans are in place, 
and work is being undertaken to test and implement changes where required. No 
significant remediation has been identified. The appropriate vendors and 
suppliers

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have been contacted as to their Year 2000 compliance and their deliverables 
have been factored into the Company's plans.

NON-IT SYSTEMS. An inventory of all property level non-IT systems (including 
elevators, electronic door locks, gaming devices, etc.) is near completion. 
The majority of these non-IT systems have been assessed, plans are in place, 
and work is being undertaken to test and implement changes where required. 
The appropriate vendors and suppliers have been contacted as to their Year 
2000 compliance and their deliverables have been factored into the Company's 
plans.

SUPPLIERS. The Company is communicating with its significant suppliers to 
understand their Year 2000 issues and how they might prepare themselves to 
manage those issues as they relate to the Company. To date, no significant 
supplier has informed the Company that a material Year 2000 issue exists 
which will have a material effect on the Company.

     During the remainder of 1999, the Company will continually review its 
progress against its Year 2000 plans and determine what contingency plans are 
appropriate to reduce its exposure to Year 2000 related issues.

     Based on the Company's current assessment, the costs of addressing 
potential problems are expected to be less than $4 million. However, if the 
Company is unable to resolve its Year 2000 issues, contingency plans to 
update existing systems (i.e., reservation, payroll, etc.) are in place for 
which the Company expects the cost to be an additional $2 million. If the 
Company's customers or vendors identify significant Year 2000 issues in the 
future and are unable to resolve such issues in a timely manner, it could 
result in a material financial risk. Accordingly, the Company plans to devote 
the necessary resources to resolve all significant Year 2000 issues in a 
timely manner.

FORWARD-LOOKING STATEMENTS

     Forward-looking statements in this report, including without limitation, 
those set forth under the captions "Strategy," "Results of Operations," 
"Liquidity and Capital Resources" and "Other Matters," and statements 
relating to the Company's plans, strategies, objectives, expectations, 
intentions and adequacy of resources, are made pursuant to the safe harbor 
provisions of the Private Securities Litigation Reform Act of 1995. The words 
"believes," "anticipates," "expects," "continues" and similar expressions are 
intended to identify forward-looking statements. These forward-looking 
statements reflect the Company's current views with respect to future events 
and financial performance, and are subject to certain risks and 
uncertainties, including those identified above under "Management's 
Discussion and Analysis of Financial Condition and Results of Operations," 
other factors described from time to time in the Company's reports filed with 
the SEC, and (i) the effect of economic conditions, (ii) the impact of 
competition, (iii) customer demand, which could cause actual results to 
differ materially from historical results or those anticipated, (iv) 
regulatory, licensing, and other governmental approvals, (v) access to 
available and reasonable financing, (vi) political uncertainties, including 
legislative action, referendum, and taxation, (vii) litigation and judicial 
actions, (viii) third party consents and approvals, and (ix) construction 
issues, including environmental restrictions, weather, soil conditions, 
building permits and zoning approvals. Although the Company believes the 
expectations reflected in such forward-looking statements are based upon 
reasonable assumptions, it can give no assurance that its expectations will 
be attained.

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PART II.    OTHER INFORMATION
ITEM 1.     LEGAL PROCEEDINGS

     For a discussion of certain litigation to which the Company and its 
subsidiaries are a party, see the Company's Annual Report on Form 10-K for 
the year ended December 31, 1998.

     Grand Casinos, Inc. ("Grand") and its subsidiaries are parties to 
various lawsuits and any liability with respect thereto is an obligation of 
the Company. Pursuant to the Grand distribution agreement and the merger 
agreement, Grand is to be indemnified by Lakes Gaming, Inc. (the Company that 
retained the non-Mississippi business of Grand prior to the merger) for 
certain liabilities. If Lakes is unable to satisfy its indemnification 
obligations, Grand will be responsible for any liabilities which could have a 
material adverse effect on the Company.

GRAND DERIVATIVE ACTION

     Certain of Grand's current and former officers and directors are 
defendants in a legal action filed on February 6, 1997 in the Minnesota 
District Court, Hennepin County. The plaintiffs, who are current or former 
Grand shareholders, allege the defendants breached fiduciary duties to the 
shareholders of Grand as a result of certain transactions involving the 
Stratosphere project. Grand is providing the defense for the defendants 
pursuant to Grand's indemnification obligations to the defendants. Grand's 
Board of Directors appointed an independent special litigation committee 
under Minnesota law to evaluate whether Grand should pursue claims against 
the officers and directors. The committee recommended to the court that the 
plaintiffs' claims not be pursued. In May 1998, the Court granted Grand's 
motion for summary judgment, thereby dismissing the plaintiffs' claims. On 
March 9, 1999 the Minnesota Court of Appeals affirmed the summary judgment. 
Plaintiffs have petitioned for appellate consideration by the Minnesota 
Supreme Court, which petition is being contested by Grand.

BELLE OF ORLEANS

     Bally's Louisiana, Inc. (the "Louisiana Subsidiary"), owns 49.9% of the 
Belle of Orleans, L.L.C. ("Belle"), a limited liability company which owns 
and holds the riverboat gaming license to operate Bally's Casino Lakeshore 
Resort. Metro Riverboat Associates, Inc. ("Metro") owns the remaining 50.1% 
interest in Belle. The parties entered into certain operating and management 
agreements defining their relationships and the operation and governance of 
the riverboat casino. The parties are currently involved in numerous lawsuits 
regarding their rights and obligations under those agreements, which lawsuits 
have been described in previous Company filings. Current significant 
developments are as follows:

     On December 28, 1998, Metro filed an action in the Civil District Court 
for the Parish of Orleans, State of Louisiana, seeking injunctive relief to 
prevent the spin-off of Hilton's gaming operations to the Company. Both the 
Louisiana Fourth Circuit Court of Appeal (on December 31, 1998) and the 
Louisiana Supreme Court (on January 7 and 27, 1999) denied the issuance of a 
temporary restraining order against the Louisiana Subsidiary. On March 5, 
1999, the trial court additionally denied Metro's petition for a preliminary 
injunction.

     From January 5, 1999 to date, Metro has filed several petitions in the 
Nineteenth Judicial District Court for the Parish of East Baton Rouge, State 
of Louisiana, against the Louisiana Subsidiary and the Louisiana Gaming 
Control Board ("Gaming Board") seeking to: (a) compel the Gaming Board to 
conduct a public hearing prior to approval of the Hilton/Park Place 
Entertainment transaction and prior to renewal of Belle's gaming license, (b) 
stay or reverse the Gaming Board's December 29, 1998 conditional approval of 
the Hilton/Park Place Entertainment spin-off, and (c) compel the Louisiana 
Subsidiary and

                                      15

<PAGE>

the Gaming Board to escrow certain Belle operating funds. On January 27, 1999 
the court ordered the Gaming Board to conduct a public hearing to determine 
whether the Hilton/Park Place Entertainment transaction should be approved. 
Upon application by the Gaming Board, that order was suspended and no stay of 
enforcement was issued. On March 16, 1999, The Gaming Board ordered that the 
gross gaming revenues of the Belle be placed into escrow, subject to 
disbursement upon approval by the Gaming Board or the Louisiana State Police. 
On March 26, 1999, the Louisiana Subsidiary filed suit against the Gaming 
Board in the Nineteenth Judicial District Court for the Parish of East Baton 
Rouge, State of Louisiana, appealing the mandatory escrow order. At a Gaming 
Board meeting of April 20, 1999, the Gaming Board stayed implementation of 
its escrow order, and ordered that cash disbursements merely be monitored by 
the Louisiana State Police, with no prior approvals required for 
disbursement. The Gaming Board also ordered Metro to provide the Louisiana 
Subsidiary with a listing of cash disbursements to which it objects and the 
basis for such objections.

CITY OF NEW ORLEANS

     In two separate actions brought in the Civil District Court for the 
Parish of Orleans, Belle of Orleans L.L.C. is contesting allegedly unpaid 
taxes to the City of New Orleans in the total amount of approximately $2.72 
million dollars. The dispute arises out of a disagreement over how admission 
fees are to be collected. In the first action, brought on March 26, 1998, 
Belle sued the city to recover approximately $1.12 in taxes paid under 
protest. Judgment was entered by the Court in favor of Belle, and the City 
has appealed. In the second action, the City filed suit on December 29, 1998 
against Belle to recover an additional approximate $1.6 million in allegedly 
owed subsequent taxes which Belle declines to pay in light of the Court's 
judgment in the earlier case.

BALLY MERGER LITIGATION

     An action against Bally Entertainment Corporation ("Bally"), its 
directors, and Hilton, was commenced in September, 1996 in the Delaware Court 
of Chancery, in connection with the December 1996 merger of Bally and Hilton. 
The allegations include alleged breach of fiduciary duties to Plaintiff, who 
purports to bring the action on behalf of a class of all Bally shareholders. 
Both injunctive relief and damages were sought. Defendants filed a motion to 
dismiss the complaint in its entirety, which was granted by the Court. On 
January 25, 1999, the Delaware Supreme Court reversed the dismissal order and 
remanded the case to the Court of Chancery for further proceedings.

                                      16

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ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)     EXHIBITS
          2.1            Stock Purchase Agreement dated as of April 27, 1999

          27             Financial Data Schedule


(b)     REPORTS ON FORM 8-K

           The Company filed a Form 8-K dated January 8, 1999. The Company
           reported under "Item 2" the merger with Grand Casinos, Inc. and under
           "Item 5" the spin-off of the Company from Hilton Hotels Corporation
           and related matters.

           The Company filed a Form 8-K dated January 20, 1999. The Company
           reported under "Item 5" the expansion of its Board of Directors and
           the appointment of a new director.

           The Company filed a form 8-K dated February 4, 1999. The Company
           reported under "Item 5" its earnings for its fourth fiscal quarter
           and year ended December 31, 1998.

           The Company filed a Form 8-K/A dated March 12, 1999. The Company
           reported under "Item 7" the audited financial statements of Grand
           Casinos, Inc. following its spin-off of Lakes Gaming, Inc.

                                      17

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.



PARK PLACE ENTERTAINMENT CORPORATION
(Registrant)




Date: May 14, 1999


/s/ SCOTT A. LAPORTA
----------------------------
Scott A. LaPorta
Executive Vice President and
Chief Financial Officer
(Principal Accounting Officer)

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