<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C.

                                    FORM 10-K

(Mark One)
[X]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
       ACT OF 1934

For the annual period ended  December 31, 2003
                            ------------------

                                       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         33-69716
                       ------------------------

                            GB PROPERTY FUNDING CORP.
                                GB HOLDINGS, INC.
                        GREATE BAY HOTEL AND CASINO, INC.
--------------------------------------------------------------------------------
           (Exact name of each Registrant as specified in its charter)

                   DELAWARE                              75-2502290
                   DELAWARE                              75-2502293
                  NEW JERSEY                             22-2242014
------------------------------------------     --------------------------------
       (States or other jurisdictions of               (I.R.S. Employer
         incorporation or organization)               Identification Nos)

             c/o Sands Hotel & Casino
          Indiana Avenue & Brighton Park
            Atlantic City, New Jersey                            08401
---------------------------------------------------    -------------------------
       (Address of principal executive offices)               (Zip Code)

(Registrants" telephone number, including area code):   (609) 441-4433
                                                      ------------------


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

       Indicate by check mark whether each of the Registrants (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 12 months (or for such shorter period that the
Registrants were required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.     Yes   X     No
                                                       ----      -----

       Indicate by check mark whether the Registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.   Yes   X      No
                            -----      ------


<PAGE>

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

       Securities registered pursuant to Section 12(b) of the Act: GB Holdings,
Inc. Common Stock, $.01 par value per share.

       Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2.     Yes       No   X
                                            ----     -----

       As of March 3, 2004, the aggregate market value of GB Holdings, Inc.'s
Common Stock held by non-affiliates of the registrant was approximately
$25,000,000.

       Indicate the number of shares outstanding of each of the issuer"s classes
of common stock, as of the last practicable date.

<TABLE>
<CAPTION>

             Registrant                              Class                    Outstanding at  March 12, 2004
---------------------------------------  ---------------------------------    -------------------------------
<S>                                                    <C>                               <C>
      GB Property Funding Corp.          Common stock, $1.00 par value                   100 shares
          GB Holdings, Inc.              Common stock, $.01 par value                 10,000,000 shares
  Greate Bay Hotel and Casino, Inc.        Common stock, no par value                    100 shares

</TABLE>


                                       2
<PAGE>


                                     PART I

ITEM 1.  BUSINESS

       GB Holdings, Inc. ("Holdings") is a Delaware corporation and was a wholly
owned subsidiary of Pratt Casino Corporation ("PCC") through December 31, 1998.
PCC, a Delaware corporation, was incorporated in September 1993 and was wholly
owned by PPI Corporation ("PPI"), a New Jersey corporation and a wholly owned
subsidiary of Greate Bay Casino Corporation ("GBCC"). Effective after December
31, 1998, PCC transferred 21% of the stock ownership in Holdings to PBV, Inc.
("PBV"), a newly formed entity controlled by certain stockholders of GBCC. As a
result of a certain confirmed plan of reorganization of PCC and others in
October 1999, the remaining 79% stock interest of PCC in Holdings was
transferred to Greate Bay Holdings, LLC ("GBLLC"), whose sole member as a result
of the same reorganization was PPI. In February 1994, Holdings acquired Greate
Bay Hotel and Casino, Inc. ("GBHC"), a New Jersey corporation, through a capital
contribution by its then parent. GBHC's principal business activity is its
ownership of The Sands Hotel and Casino located in Atlantic City, New Jersey
("The Sands"). GB Property Funding Corp. ("GB Property"), a Delaware corporation
and a wholly owned subsidiary of Holdings, was incorporated in September 1993 as
a special purpose subsidiary of Holdings for the purpose of borrowing funds for
the benefit of GBHC. Atlantic Coast Entertainment Holdings, Inc. ("Atlantic
Holdings") is a Delaware corporation and a wholly-owned subsidiary of GBHC.
Atlantic Holdings was formed in November 2003 for the purpose of the
contemplated exchange of $110 million 11% Notes due 2005 for $110 million 3%
Notes due 2008 to be issued by Atlantic Holdings (see Financing Activities in
Item 7). ACE Gaming LLC, ("ACE Gaming"), a New Jersey limited liability company
and a wholly-owned subsidiary of Atlantic Holdings was formed in November 2003.
Atlantic Holdings and its subsidiary, ACE Gaming, had no operating activities in
2003. Holdings has no operating activities and its only source of income is
interest on cash equivalent investments. Holdings only significant assets are
its investment in GBHC and its cash and cash equivalents of $16.6 million and
$31.8 million as of December 31, 2003 and 2002, respectively.

       The consolidated financial statements included in Item 8 include the
accounts and operations of Holdings and its subsidiaries (Holdings, GBHC
(including its subsidiaries Atlantic Holdings and ACE Gaming), and GB Property,
collectively, the "Company"). All significant intercompany balances and
transactions have been eliminated. Throughout this document, references to Notes
are referring to the Notes to Consolidated Financial Statements contained
herein.

       On January 5, 1998, the Company filed petitions for relief under Chapter
11 of the United States Bankruptcy Code (the "Bankruptcy Code") in the United
States Bankruptcy Court for the District of New Jersey (the "Bankruptcy Court").
On August 14, 2000, the Bankruptcy Court entered an order (the "Confirmation
Order") confirming the Modified Fifth Amended Joint Plan of Reorganization Under
Chapter 11 of the Bankruptcy Code Proposed by the Official Committee of
Unsecured Creditors and High River Limited Partnership and its affiliates (the
"Plan") for the Company. High River Limited Partnership ("HighRiver") is an
entity controlled by Carl C. Icahn. On September 13, 2000, the New Jersey Casino
Control Commission (the "Commission") approved the Plan. On September 29, 2000,
the Plan became effective (the "Effective Date") (see Note 2). All material
conditions precedent to the Plan becoming effective were satisfied on or before
September 29, 2000. In addition, as a result of the Confirmation Order and the
occurrence of the Effective Date, and in accordance with Statement of Position
No. 90-7, "Financial Reporting by Entities in Reorganization under the
Bankruptcy Code" ("SOP 90-7"), the Company has adopted "fresh start reporting"
in the preparation of the accompanying consolidated financial statements. The
Company's emergence from Chapter 11 resulted in a new reporting entity with no
retained earnings or accumulated deficit as of September 30, 2000.



                                       3
<PAGE>

       On the Effective Date, GB Property's existing debt securities, consisting
of its 10 7/8% First Mortgage Notes due January 15, 2004 (the "Old Notes") and
all of Holdings' issued and outstanding shares of common stock owned by PBV and
GBLLC (the "Old Common Stock") were cancelled. As of the Effective Date, an
aggregate of 10,000,000 shares of new common stock of Holdings (the "New Common
Stock") were issued and outstanding, and $110,000,000 of 11% Notes due 2005 were
issued by GB Property (the "Existing Notes"). Holders of the Old Notes received
a distribution of their pro rata shares of (i) the Existing Notes and (ii)
5,375,000 shares of the New Common Stock (the "Stock Distribution").

       Holdings and GB Property listed the New Common Stock and Existing Notes,
respectively, on the American Stock Exchange on March 27, 2001. On January 13,
2004, the Securities and Exchange Commission granted Holdings application to
delist the Existing Notes from trading on the American Stock Exchange ("Amex").
On January 14, 2004, the Amex halted trading on the Existing Notes and on
January 15, 2004, the Amex delisted the Existing Notes.

The Sands

       For a description of The Sands' facilities, please refer to "Item 2. -
Properties."

       The Sands has segregated its gaming customers into three broad
categories:

       The Premium Categories - Those customers who have a high potential loss
per trip. This category has the lowest profit margin percentage per customer.

       The Middle Categories - Those customers who have a high repeat trip
frequency along with a potential loss per trip that equates to a high annual
potential loss per customer.

       The Mass Categories - Those customers who have a low casino loyalty and a
low potential loss per trip. This category has the highest profit margin
percentage per customer.

Business Strategy. Traditionally, The Sands' marketing strategy in the highly
competitive Atlantic City market has consisted of seeking premium category
patrons. In the past, The Sands has been successful in its marketing efforts
towards these premium patrons through its offering of private, limited-access
facilities, related amenities and use of sophisticated information technology to
monitor patron play, control certain casino operating costs and target marketing
efforts toward frequent visitors with above average gaming budgets. While The
Sands strived to maintain market share within this category, competition within
the industry for the premium category (both table and slot) reduced The Sands
ability to attract this type of player on a profitable basis.

       In 2001, The Sands focused on the "Value Gaming" concept. The general
concept in "Value Gaming" is to provide the customer with the best possible
gaming experience for the amount of time that the customer is on property.
Whether that experience is enhanced by competitive odds on games, the ability to
find a food outlet that provides an affordable quality food product, or superior
service, the intent is to provide all categories with an expanded and improved
entertainment experience that would lead to an increase in subsequent trips.

       As part of its commitment to make the "Value Gaming" concept a reality
for its customers, The Sands continued to provide the "loosest" slots in the
Atlantic City market during 2001 and through the first quarter of 2002. That is,
The Sands provided the best overall odds for winning at slots of any casino in
Atlantic City, according to monthly data filed with the Commission.



                                       4
<PAGE>

       Additionally, in 2001, The Sands invested approximately $4.6 million in
new slot machines, gaming equipment and casino renovations. The Boardwalk Buffet
reopened after renovations in the summer of 2001, providing guests with an
expanded buffet outlet featuring a wide variety of culinary choices at an
affordable price in a nostalgic Atlantic City atmosphere.

       In the second quarter of 2002, The Sands changed its marketing strategy
to reduce its focus on the lower profit margin table games business and focus
almost exclusively on the slot machine business. In the process The Sands
reduced the number of table games from 69 to 26 and increased its number of slot
machines by 400. The Sands began to market its product predominantly to the mass
slot player categories. As part of this strategy, The Sands, in keeping with its
"Value Gaming" concept, increased the number of lower denomination slot
machines, thus making the product more available to this mass category. However
the increase in the number of lower denomination slot machines created a more
competitive slot machine hold percentage and as a result caused The Sands to
move away from its "loosest" slots in Atlantic City. The "Value Gaming" concept
continued to be reinforced through the availability of slot machines, discounted
food product, and availability of hotel rooms to the mass category.

         At the end of the third quarter of 2002, it had become apparent that
the gain in slot machine revenue could not offset the loss of table game
revenue. In addition, the volume required from the mass slot player categories,
to make up the loss of the middle to premium slot player categories, could not
be accommodated in a property with the physical constraints of The Sands.
Subsequent review of marketing data revealed that the loss in table game play
had a direct effect on the loss in some slot machine play, as many slot patrons
who frequented The Sands with family and friends were forced to patronize
competitors to find the variety of gaming experience they desired. As a result,
by the end of the fourth quarter of 2002, The Sands had added fourteen table
games to bring the total number of table games to forty, and changed its
marketing strategy to focus more on the middle to premium categories of slot
players.

       During 2002 and 2003, The Sands continued to invest in improvements and
upgrades to the casino hotel complex. These improvements included new slot
machines, renovations to the first floor casino, the showroom, two private
lounges for casino guests and hotel room renovations to both The Sands and the
Madison House Hotel (see Properties). The Sands also introduced a new
comprehensive customer service program that included customer service training
for new employees, customer service monitoring for operations and customer
service recovery programs.

       The Company recognized that The "Sands" name had a strong brand
recognition and a rich heritage in gaming that went back to the original
property in Las Vegas of the 1950's. Beginning in 2003, the Atlantic City Sands
stylized a new Sands logo, which reflected this rich heritage and began to
transform the property theme into the "Players' Place." The Players' Place
identity was woven into the value gaming strategy to provide the customer with
ample access to a variety of gaming and entertainment experiences that harkened
back to the glamorous era of the Las Vegas strip. The Property will offer
outstanding gaming odds, highest table limits, more liberal player rewards to
the avid customer and unparalleled, personal boutique service that exceeds guest
expectations; all in an environment that makes the better player feel like he
has a "home court advantage."

       In 2003, further renovations to the casino floor occurred that supported
this theme. Swingers lounge was constructed in the center of the casino to
provide a multi-faceted state-of-the-art entertainment experience. The Swingers
lounge includes bartop slot machines and is staffed by "Flair Bartenders" (part
mixologist, part performance artist). In addition, further renovations to the
bus lobby entrance, the promotions center and the Platinum and Plaza Clubs
improved the customer experience by providing easier access to facilities,
shorter lines and a more relaxing and personal environment. More table games
including poker were added during 2003 and some slot machines were displaced.
However, the slot product was upgraded during 2003 including the initial phase
of converting the slots to coinless system technology. These slots accept paper
cash, coin or coupons and allow the player an option to return winnings or
cash-outs in the form of redeemable tickets.

                                       5
<PAGE>

       This technology has gained customer acceptance at competitors and
management believes it will enhance profitability by reducing labor intensive
slot transactions while providing greater customer service and more
uninterrupted player time on machines.

       As part of The Sands capital expenditure program, certain improvements,
additions and enhancements have been made, or are planned to be made, to the
facility, including upgrades and amenities to the casino floor, slot machines,
other gaming equipment and other physical plant renovations. In 2004, an entire
floor of 37 rooms in the Sands will be converted into suites to improve the
inventory of accommodations for the premium category players. These additions
and enhancements will primarily benefit guests in a variety of services and will
compliment the "Players' Place" image and the "Value Gaming" marketing strategy.

       The Sands uses sophisticated information technology that enables it to
track and rate patrons' play through the use of identification cards, which it
issues to patrons ("casino players' cards"). All Sands' slot machines are
connected with, and information with respect to table games activity can be
input into, a computer network. When patrons insert their casino players' card
into slot machines or present them to supervisors at table games, meaningful
information, including amounts wagered and duration of play, is transmitted in
real-time to a casino management database. The information contained in the
database facilitates the implementation of targeted and cost effective marketing
programs, which appropriately recognize and reward patrons during current and
future visits to The Sands. Certain of these marketing programs allow patrons to
obtain complimentaries based on levels of play. Such complimentaries include
free meals, hotel accommodations, entertainment, retail merchandise, parking,
and sweepstakes giveaways. Management believes that its ability to reward its
customers on a "same-visit" basis is valuable in encouraging the loyalty of
repeat visits. The computer systems also allow The Sands to monitor, analyze and
control the granting of gaming credit, promotional expenses and other marketing
costs. Sands Management believes this is a valuable tool and strategy that
allows The Sands to compete effectively in the Atlantic City market.

       Management primarily focuses its marketing efforts on patrons who have
been identified by its casino management computer system as profitable patrons.
Management believes that its philosophy of encouraging participation in its
casino players' card program, using the information obtained thereby to identify
the relative playing patterns of patrons and tailoring specific marketing
programs and property amenities to this market category enhances profitability
of The Sands.

       The Sands also markets to the mass casino patron market through various
forms of direct and indirect advertising, and group and bus tour programs. Once
new patrons are introduced to The Sands' "Value Gaming" concept and the casino
players' card program, management uses its information technology capabilities
to directly market to these patrons to encourage repeat patronage.

       Competition. The Sands faces intense competition from the eleven other
Atlantic City casinos, including the newly opened Borgata. According to reports
of the Commission, the twelve Atlantic City casinos currently offer
approximately 1.4 million square feet of gaming space.



                                       6
<PAGE>

       After completion of the acquisition of Caesars by Park Place
Entertainment Corp. in December 1999, Park Place Entertainment connected Caesars
to Bally's Park Place and added slot machines in the connecting space. In
January 2001, over the objections of The Sands, the CCC determined that the
proposed acquisition of the Claridge Hotel and Casino by Park Place
Entertainment which is located adjacent to The Sands and with whom The Sands
jointly operates the "People Mover" walkway from the boardwalk would not violate
the New Jersey Casino Control Act (the "NJCCA"), which includes a prohibition
against undue economic concentration. As a result of the confirmation of the
Claridge Chapter 11 Plan by the Bankruptcy Court, Park Place Entertainment
acquired the Claridge, and Park Place Entertainment constructed a connection
between the Claridge and Bally's Park Place Casino, which was already
interconnected to the Park Place Entertainment controlled Caesars Hotel and
Casino. In 2003, Bally's Park Place Casino merged the Claridge operations into
its corporate structure and under its casino license similar to its operation of
the Wild, Wild West Casino. Currently, Park Place Entertainment has changed its
name to Caesars Entertainment. Of the twelve Atlantic City casinos Caesars
Entertainment controls three casinos, the Trump Organization controls three and
the Harrah's Organization controls two. Caesars Entertainment also controls the
so-called Traymore site located between the boardwalk and The Sands and has
acquired a property contiguous to The Sands parking garage that formerly
contained the Continental Motel property. Caesars Entertainment announced that
it may develop another hotel-casino complex on this site but has not announced
specific plans at this time. On July 3, 2003, The Borgata, a joint venture of
Boyd Gaming Corporation and MGM Mirage, opened in the marina district of
Atlantic City. The Borgata features a 40-story tower with 2,010 rooms and
suites, as well as a 135,000 square-foot casino, restaurants, retail shops, a
spa and pool, and entertainment venues. This project represents a significant
increase to capacity in the market. In addition, other of the Company's
competitors in Atlantic City have recently completed expansions of their hotels
or have announced expansion projects. For example, Tropicana Atlantic City has
started to construct a 502-room hotel tower, a 25-room conference center, a
2,400 space parking garage, an expanded casino floor and a 200,000 square foot
themed shopping, dining and entertainment complex called The Quarter. Tropicana
intends to complete the project in the third quarter of 2004. Resorts is
currently constructing a hotel room addition of approximately 400 rooms and is
scheduled to open in the second quarter of 2004. During 2003, Showboat Atlantic
City opened a new 544-room hotel tower and expanded its gaming space to 101,000
square feet and increased its slot machines to 3,972. The business of the
Company may be adversely impacted (i) by the additional gaming and room capacity
generated by this increased competition in Atlantic City and/or (ii) by other
projects not yet announced in New Jersey or in other markets (e.g.,
Pennsylvania, New York and Connecticut). Accordingly, the existing and future
competing forces could have a materially adverse impact on the operations of The
Sands.

       The gaming industry is highly competitive and the Company's competitors
may have greater resources than the Company. If other properties operate more
successfully, if existing properties are enhanced or expanded, or if additional
hotels and casinos are established in and around the location in which the
Company conduct business, the Company may lose market share. In particular,
expansion of gaming in or near the geographic area from which the Company
attracts or expects to attract a significant number of customers could have a
significant adverse effect on the Company's business, financial condition and
results of operations. The Sands competes, and will in the future compete, with
all forms of existing legalized gaming and with any new forms of gaming that may
be legalized in the future. Additionally, the Company faces competition from all
other types of entertainment.

       The Casino Reinvestment Development Authority ("CRDA") is a governmental
agency that administers the statutorily mandated investments required to be
funded by casino licensees. Legislation enacted during 1993 and 1996 allocated
an aggregate of $175 million of CRDA funds and credits to subsidize and
encourage the construction of additional hotel rooms by Atlantic City casino
licensees. Competitors of The Sands that have the financial resources to
construct hotel rooms can take advantage of such credits more readily than The
Sands. The Sands has an approved hotel expansion program with the CRDA and a
retail entertainment development project. Plans have been announced by other
casino operators to complete expansions within the required subsidy period. The
expansion of existing gaming facilities and the addition of new casinos will
continue to increase competition within the Atlantic City market.



                                       7
<PAGE>

       In this highly competitive environment, each property's relative success
is affected by a great many factors that relate to its location and facilities.
These include the number of parking spaces and hotel rooms it possesses, close
proximity to Pacific Avenue, the Boardwalk and to other casino/hotels and access
to the main expressway entering Atlantic City. The Company believe that, in
prior years, its operating strategy enabled The Sands to compete against most
other Atlantic City casino/hotels. In the past, many of their competitors had
greater financial resources for capital improvements, marketing and promotional
activities than the Company and, as a result, The Sands' facilities and
amenities fell behind many of the other casinos. In order to improve the
Company's competitive position, they sought the approval of the Bankruptcy Court
for a capital expenditure program to renovate the majority of its hotel rooms
and suites and to purchase approximately 700 slot machines. The Bankruptcy Court
approved the capital expenditure program in the amount of approximately $13.6
million in March 1998. In addition, the lack of access to Pacific Avenue
hampered The Sands' efforts to expand its "drive-in" patron base. During 1999,
in an effort to increase and utilize available Pacific Avenue frontage The Sands
acquired land parcels on Pacific Avenue and demolished the existing structures
and constructed a new front entrance to The Sands' facility on Pacific Avenue,
which opened in June 2000. During 2003, the new front entrance was redesigned
and refurbished as an exclusive entrance for its bus patrons, complete with a
new and expanded bus waiting lounge. Also during 2003, the porte cochere was
renovated and expanded in order to make The Sands more easily accessible to the
drive-in customer.

       In order to enhance its competitive position in the marketplace, a
capital expenditure plan was recently approved by the Board of Directors of the
Company, and management believes that cash generated from operations and cash
reserves will be sufficient to meet the requirements of the plan. Based upon
expected cash flow generated from operations, management determined that it
would be prudent for the Company to obtain a line of credit to provide
additional cash availability, to meet the Company's working capital needs, in
the event that anticipated cash flow is less than expected or expenses exceed
those anticipated. At the request of the Company, Ealing Corp., a Nevada
corporation and an affiliate of Mr. Icahn, agreed to provide a revolving credit
facility, secured by a first lien on all of the assets of the Company, under
which the Company may borrow up to an aggregate amount of $10 million for
general working capital purposes. Ealing's obligation to provide the financing
pursuant to the commitment letter is subject to the negotiation and execution of
a definitive loan and security agreements and related documents as well as
certain customary conditions. However, there can be no assurance that the loan
agreement with Ealing will be consummated, that if the loan agreement with
Ealing is not consummated, the Company will be able to obtain financing from
another lender on terms as or more favorable than the terms of the commitment
letter, or whether the Company will need to borrow funds for working capital.

       The Sands also competes with legalized gaming from casinos located on
Native American tribal lands. In October 2001, the New York State Legislature
enacted a bill, which the governor signed, authorizing a total of six Indian
casinos in the State of New York - three in Western New York and three in the
Catskill Region - and approved the use of video lottery terminals at racetracks
and authorized the participation of New York State in a multi-state lottery. On
January 29, 2002, a lawsuit was commenced contesting the above legislation
package on the grounds that certain of its provisions were adopted in violation
of the State's constitution. The likely outcome of this lawsuit cannot be
ascertained at this time. The implementation of VLT's and the outcome of this
lawsuit could adversely affect visitation of The Sands from New York residents.



                                       8
<PAGE>

       Pennsylvania and Maryland are among the other states currently
contemplating some form of gaming legislation. Legislative proposals introduced
in Pennsylvania would potentially allow for a wide range of gaming activities,
including riverboat gaming, slot machines at racetracks, video lottery terminals
at liquor stores and the formation of a gaming commission. Maryland's proposed
legislation would authorize video lottery terminals at some of Maryland's racing
facilities. The results of the gubernatorial elections in Pennsylvania and
Maryland in 2002 have also increased the likelihood of gaming legislation in
such states. Since The Sands' market is primarily a drive-to-market, legalized
gambling in Pennsylvania or one or more states neighboring or within close
proximity to New Jersey could have a material adverse effect on the Atlantic
City gaming industry overall, including The Sands.

       A significant amount of The Sands' revenues is derived from patrons
living in northern New Jersey, southeastern Pennsylvania and metropolitan New
York City. Proposals to allow casino gaming in certain areas of Pennsylvania
have been defeated within the past three years. If casino gaming were to be
legalized in those areas or in other venues that are more convenient to those
areas, it could have a material adverse effect on The Sands. Gaming is currently
conducted on Indian lands in nearby states, including the Foxwoods and Mohegan
Sun Casinos in Connecticut and the Turning Stone Casino in Oneida, New York near
Syracuse, Casino Niagara, which has operated a temporary casino facility in
Niagara Falls, Ontario, since 1996, intends to open an expanded permanent
facility in the spring of 2004. In addition, New York State passed legislation
that was signed by the Governor in October 2001 to allow slot machines at
racetracks and six Indian owned casinos within the State of New York. The
Saratoga race track in upstate New York began operating slot machines in January
2004. The legislation also allowed the State to join the multi-state Powerball
lottery. The gaming portion of the legislation may face legal challenges
including a challenge based on the New York State Constitution. Therefore, it is
not possible to determine the timing or financial impact of this legislation on
Atlantic City at this time.

       Industry Developments. On July 1, 2003, the State of New Jersey amended
the NJCCA to impose various tax increases on Atlantic City casinos, including
The Sands. Among other things, the amendments to the NJCCA include the following
new tax provisions: (i) a new 4.25% tax on casino complimentaries, with proceeds
deposited to the Casino Revenue Fund; (ii) an 8% tax on casino service industry
multi-casino progressive slot machine revenue with the proceeds deposited to the
Casino Revenue Fund; (iii) a 7.5% tax on adjusted net income of licensed casinos
in State fiscal years 2004 through 2006 based upon 2003 Net Income with a
minimum payment of $350,000, with the proceeds deposited to the Casino Revenue
Fund; (iv) a fee of $3.00 per day on each hotel room in a casino hotel facility
that is occupied by a guest, for consideration or as a complimentary item, with
the proceeds deposited into the Casino Revenue Fund in State fiscal years 2004
through 2006 and, beginning in State fiscal year 2007, $2.00 of the fee
deposited into the Casino Revenue Fund and $1.00 to be transferred to the CRDA;
(v) an increase in the amount paid by the casino hotel for patron cars parked
from $1.50 to $3.00, of the minimum casino hotel parking charge from $2.00 to
$3.00, with $1.50 of the fee to be deposited into the Casino Revenue Fund in
State fiscal years 2004 through 2006 and, beginning in State fiscal year 2007,
$0.50 to be deposited into the Casino Revenue Fund and $1.00 to be transferred
to the CRDA for its purposes pursuant to law, and for use by the CRDA to bond
for $30 million for deposit into the Casino Capital Construction Fund, which was
also created by the July 1, 2003 Act that amended the NJCCA; and the new taxes
imposed on The Sands and other Atlantic City casinos, will reduce our
profitability. It is anticipated that these new and increased taxes will cost
The Sands approximately $1.5-$2.0 million annually in additional expenses.



                                       9
<PAGE>

       Slot machines have become increasingly more popular than table games
particularly with frequent patrons and with recreational and other casual
visitors. Casino operators have been catering increasingly to slot patrons
through new forms of promotions and incentives such as slot machines that are
linked among the various casinos enabling the pay out of large pooled jackpots,
and through more attractive and entertaining gaming machines with secondary
jackpots. Various competitors have committed efforts to provide coinless
technology in their slot product, which appears to be an industry trend for the
future. Slot machines generally produce higher margins and profitability than
table games because they require less labor and have lower operating costs. As a
result, slot machine revenue growth has outpaced table game revenue growth in
recent years. In 2003, according to Commission filings, slot win accounted for
approximately 74.8% of total Atlantic City gaming win. However, table games
remain important to a select category of gaming patrons. Management believes the
availability of table games provides a varied gaming experience that benefits
both slot and table game revenues.

       Casino Credit. Casino operations are conducted on both a credit and a
cash basis. Patron gaming debts incurred in accordance with the NJCCA are
enforceable under New Jersey law. For the year ended December 31, 2003, gaming
credit extended to The Sands' table game patrons accounted for approximately
22.0% of overall table game wagering, and table game wagering accounted for
approximately 10.2% of overall casino wagering during the period. At December
31, 2003, gaming receivables amounted to $9.5 million before an allowance for
uncollectible gaming receivables of $5.6 million. Management believes that such
allowance is adequate.

       License Agreement. GBHC's rights to the trade name "Sands" (the "Trade
Name") were derived from a license agreement between Greate Bay Casino
Corporation and an unaffiliated third party. Amounts payable by GBHC for these
rights were equal to the amounts paid to the unaffiliated third party. On
September 29, 2000, High River Limited Partnership assigned GBHC the rights
under a certain agreement with the owner of the Trade Name to use the Trade Name
as of September 29, 2000 through May 19, 2086, subject to termination rights for
a fee after a certain minimum term. High River is an entity controlled by Carl
C. Icahn. High River received no payments for its assignment of these rights.
Payment is made directly to the owner of the Trade Name. For the years ended
December 31, 2003, 2002 and 2001, the license fee amounted to $263,000, $272,000
and $268,000, respectively.

       Employees and Labor Relations. In Atlantic City, all employees, except
certain hotel employees, must be licensed under the Casino Act. Due to the
seasonality of the operations of The Sands, the number of employees varies
during the course of the year. At December 31, 2003, The Sands had approximately
2,211 employees. The Sands has collective bargaining agreements with three
unions that represent approximately 818 employees, most of whom are represented
by the Hotel, Restaurant Employees and Bartenders International Union, AFL-CIO,
Local 54. The collective bargaining agreement with Local 54 expires in September
2004. The collective bargaining agreements with the Carpenters, Local 623 and
Entertainment Workers, Local 68 expire in April and July 2005, respectively.
Management considers its labor relations to be good.

Casino Regulation

       Casino gaming is strictly regulated in Atlantic City under the NJCCA and
the regulations of the Commission, which affect virtually all aspects of the
operations of The Sands. The Casino Act and regulations affecting Atlantic City
casino licensees concern primarily the financial stability, integrity and
character of casino operators, their employees, their debt and equity security
holders and others financially interested in casino operations; the nature of
casino/hotel facilities; the operation methods (including rules of games and
credit granting procedures); and financial and accounting practices used in
connection with casino operations. A number of these regulations require
practices that are different from those in casinos in Nevada and elsewhere, and
some of these regulations result in casino operating costs greater than those in
comparable facilities in Nevada and elsewhere.



                                       10
<PAGE>

       Casino Licenses. The Casino Act requires that all casino owners and
management contractors be licensed by the Commission and that all employees
(except for certain non-casino related job positions), major shareholders and
other persons or entities financially interested in the casino operation be
either licensed or approved by the Commission. A license is not transferable and
may be revoked or suspended under certain circumstances by the Commission. A
plenary license authorizes the operation of a casino with the games authorized
in an operation certificate issued by the Commission, and the operation
certificate may be issued only on a finding that the casino conforms to the
requirements of the Casino Act and applicable regulations and that the casino is
prepared to entertain the public. Under such determination, GBHC has been issued
a plenary casino license. The plenary license issued to The Sands was renewed by
the Commission in September 2000 for a period of four years.

       In order to renew GBHC's casino license, the Commission must determine
that GBHC and Holdings are financially stable. In order to be found "financially
stable" under the NJCCA, GBHC and Holdings must demonstrate, among other things,
their ability to pay, exchange, or refinance debts that mature or otherwise
become due and payable during the license term, or to otherwise manage such
debts. Because the Existing Notes will become due during the period following
the renewal of the license in 2004, the Commission will require GBHC and
Holdings to indicate the efforts they will pursue or are pursuing to refinance
the Existing Notes prior to maturity and during the new license term. Currently,
the Commission is and will continue to monitor the efforts of GBHC and Holdings
to manage and refinance the Existing Notes. There has been no precedent of
non-renewal of a casino license in this situation.

       The NJCCA provides for a casino license fee of not less than $200,000
based upon the cost of the investigation and consideration of the license
application, and a renewal fee of not less than $100,000 or $200,000 for a one
year or four year renewal, respectively, based upon the cost of maintaining
control and regulatory activities. In addition, a licensee must pay annual taxes
of 8% of casino win (as defined in the Casino Act. During the years ended
December 31, 2003, 2002 and 2001, the taxes and the license and other fees
incurred by The Sands amounted to $19.0 million, $21.3 million and $23.0
million, respectively.

       The NJCCA also requires casino licensees to pay an investment alternative
tax of 2.5% of Gross Revenue (the "2.5% Tax") or, in lieu thereof, to make
quarterly deposits of 1.25% of quarterly Gross Revenue with the CRDA (the
"Deposits"). The Deposits are then used to purchase bonds at below-market
interest rates from the CRDA or to make qualified investments approved by the
CRDA. The CRDA administers the statutorily mandated investments required to be
funded by casino licensees and is required to expend the monies received by it
for eligible projects as defined in the Casino Act. The Sands has elected to
make the Deposits with the CRDA rather than pay the 2.5% Tax.

       The Sands has, from time to time, contributed certain amounts held in
escrow by the CRDA to fund CRDA sponsored projects. During 2003, The Sands
contributed $694,000 of its escrowed funds to CRDA sponsored projects. No
specific refund or future credit has been associated with the 2003
contributions. During 2002, The Sands contributed $925,000 of its escrowed funds
to CRDA sponsored projects and received $116,000 in a cash refund. In 2001, The
Sands contributed $322,000 of its escrowed funds to CRDA sponsored projects and
received $80,000 in a cash refund and $84,000 in waivers of certain future
Deposit obligations. Prior to this, the CRDA had granted The Sands both cash
refunds and waivers of certain of its future Deposit obligations in
consideration of similar contributions. Other assets aggregating $621,000 and
$811,000, respectively, have been recognized on the accompanying consolidated
balance sheets at December 31, 2003 and 2002, and are being amortized over a
period of ten years commencing with the completion of the projects. Amortization
of other assets totaled $205,000, $199,000 and $202,000 for the years ended
December 31, 2003, 2002 and 2001, respectively.



                                       11
<PAGE>

       The NJCCA also imposes certain restrictions upon the ownership of
securities issued by a corporation that holds a casino license or is a holding
company of a corporate licensee. Among other restrictions, the sale, assignment,
transfer, pledge or other disposition of any security issued by a corporate
licensee or holding company is subject to the regulation of the Commission. The
Commission may require divestiture of any security held by a disqualified holder
such as an officer, director or controlling stockholder who is required to be
qualified under the NJCCA.

       Note holders are also subject to the qualification provisions of the
NJCCA and may, in the sole discretion of the Commission, be required to make
filings, submit to regulatory proceedings and qualify under the Casino Act. If
an investor is an "Institutional Investor" such as a retirement fund for
governmental employees, a registered investment company or adviser, a collective
investment trust, or an insurance company, then, in the absence of a prima facie
showing by the New Jersey Division of Gaming Enforcement that the "Institutional
Investor" may be found unqualified, the Commission shall grant a waiver of this
qualification requirement with respect to publicly traded debt or equity
securities of parent companies or affiliates if the investor will own (i) less
than 10% of the common stock of the company in question on a fully diluted
basis, or (ii) less than 20% of such company's overall indebtedness provided the
investor owns less than 50% of an outstanding issue of indebtedness of such
company; the Commission, upon a showing of good cause, may, in its sole
discretion, grant a waiver of qualification to an "Institutional Investor" not
satisfying the above percentage criteria. An "Institutional Investor" must also
purchase securities for investment and have no intent to influence the
management or operations of such company. The Commission may, in its sole
discretion, grant a waiver of the qualification requirement to investors not
qualifying as "Institutional Investors" under the Casino Act if such investors
will own less than 5% of the publicly traded common stock of such company on a
fully diluted basis or less than 15% of the publicly traded outstanding
indebtedness of such company.

ITEM 2.  PROPERTIES

        The Sands is located in Atlantic City, New Jersey on approximately 6.1
acres of land one-half block from the Boardwalk at Brighton Park between Indiana
Avenue and Dr. Martin Luther King, Jr. Boulevard. The Sands facility currently
consists of a casino and simulcasting facility with approximately 78,000 square
feet of gaming space containing approximately 2,202 slot machines and
approximately 73 table games; 2 hotels (see discussion on the Madison House
Hotel immediately below) with an overall total of 637 rooms (including 170
suites); five restaurants; two cocktail lounges; two private lounges for invited
guests; an 800-seat cabaret theater; retail space; an adjacent nine-story office
building with approximately 77,000 square feet of office space for its
executive, financial and administrative personnel; the "People Mover", an
elevated, enclosed, one-way moving sidewalk connecting The Sands to the
Boardwalk using air rights granted by an easement from the City of Atlantic City
and a garage and surface parking for approximately 1,750 vehicles.

       The Sands entered into a long-term lease of the Madison House Hotel. The
initial lease period is from December 2000 to December 2012 with lease payments
ranging from $1.8 million per year to $2.2 million per year. The Madison House
is physically connected at two floors to the existing Sands casino-hotel
complex. The Sands completed renovations in 2002 to upgrade and combine the
rooms of the Madison House into a total of 113 suites and 13 single rooms. It is
the intention of The Sands to maintain and operate the Madison House at the same
quality level as The Sands.



                                       12
<PAGE>

       With the exception of the land over which the People Mover is constructed
and the Madison House Hotel land, The Sands owns the land and improvements
comprising The Sands facility. The Sands owns and operates the casino, the
hotel, all of the restaurants, the cocktail lounge, the private lounges, the
theatre and a retail gift shop. In addition, The Sands has licensed certain
space within the hotel building to unrelated third parties who operate a beauty
shop, a peanut shop, a game room and a coffee stand.

ITEM 3.  LEGAL PROCEEDINGS

        Tax appeals on behalf of GBHC and the City of Atlantic City challenging
the amount of GBHC's real property assessments for tax years 1996 through 2003
are pending before the NJ Tax Court.

        In 2001, GBHC discovered certain failures relating to currency
transaction reporting which resulted in the failure of GBHC to file legally
required currency transaction reports. Following this discovery, GBHC
self-reported the situation to the applicable regulatory agencies. GBHC
conducted an internal examination of the matter and the New Jersey Division of
Gaming Enforcement conducted a separate review. There has not been an impact on
GBHC's financial reporting because of these failures, GBHC has revised internal
control processes and taken other measures to address the situation. In May
2003, GBHC was advised by the Department of the Treasury that it will not pursue
a civil penalty.

        By letter dated January 23, 2004, Sheffield Enterprises, Inc. asserted
potential claims against The Sands under the Lanham Act for permitting a show
entitled The Main Event, to run at the Sands during 2001. Sheffield also asserts
certain copyright infringement claims growing out of the Main Event
performances. It has not yet been determined whether or not the claims made by
Sheffield would, if adversely determined, materially impact the financial
position or results of operations of the Company.

        On February 26, 2003, The Sands received a letter from counsel for Mr.
Frederick H. Kraus, Executive Vice President, General Counsel and Secretary,
indicating that he had been retained to represent Mr. Kraus "in regards to a
constructive discharge, breach of contract, severance pay" and other claims.
This matter has been amicably resolved.

        GBHC is a party in various legal proceedings with respect to the conduct
of casino and hotel operations and has received employment related claims.
Although a possible range of losses cannot be estimated, in the opinion of
management, based upon the advice of counsel, GBHC does not expect settlement or
resolution of these proceedings or claims to have a material adverse impact upon
their consolidated financial position or results of operations, but the outcome
of litigation and the resolution of claims is subject to uncertainties and no
assurances can be given. The consolidated financial statements do not include
any adjustments that might result from these uncertainties.

        From time to time, GBHC and certain of its officers, directors, agents
and employees, are subject to various legal and administrative proceedings
incidental to the business of GBHC, GBHC does not believe any proceedings
currently pending are material to the conduct of the business of GBHC.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        On July 9, 2003, the annual meeting of shareholders was held to elect
the Board of Directors and the appointment of independent auditors. Proxies were
solicited for the annual meeting under Regulation 14A.



                                       13
<PAGE>


                                     PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY
         HOLDER MATTERS

       GB Property's voting securities consist of 100 shares of common stock
with a par value of $1.00 per share, all of which are owned by Holdings.

       GBHC's voting securities consist of 100 shares of common stock with no
par value per share, all of which are owned by Holdings.

       Holdings' voting securities consist of an aggregate of 10,000,000 shares
of common stock with a par value of .01 per share. As of March 1, 2004 there
were 9 record holders of GBHC common stock.

       The Company has not paid any dividends in the past and has no plans to
pay any in the future.

       The New Common Stock (trading symbol "GBH") and the Existing Notes were
listed and commenced trading on the American Stock Exchange ("AMEX") on March
27, 2002. To Holdings' knowledge, other than certain of the shares of the New
Common Stock owned by Icahn (77.49%), and HMC Investors, LLC (8%), substantially
all of the shares of the New Common Stock are held by Cede & Co. as nominee.

       The range of high and low market prices for the New Common Stock on the
American Stock Exchange Composite Tape from January 1, 2002 through December 31,
2003 is as follows:

       Quarter Ended:                               High             Low
       -------------                                ----             ---

       March 31, 2002                               $3.11            $2.48
       June 30, 2002                                $3.15            $2.22
       September 30, 2002                           $3.16            $2.25
       December 31, 2002                            $3.19            $2.62

       March 31, 2003                               $2.98            $2.45
       June 30, 2003                                $6.20            $2.66
       September 30, 2003                           $6.00            $2.56
       December 31, 2003                            $3.70            $2.41



                                       14
<PAGE>


Equity Compensation Plan Information

The Sands does not maintain any equity compensation plans.
<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------------------
                                (a)                          (b)                          (c)

----------------------------------------------------------------------------------------------------------------------
<S>                             <C>                          <C>                           <C>
Plan category                   Number of securities to      Weighted-average             Number of securities
                                the issued upon exercise     exercise price of            remaining available for
                                of outstanding options,      outstanding options,         future issuance under
                                warrants and rights          warrants and rights          equity compensation plans
                                                                                          (excluding securities
                                                                                          reflected in column (a))
----------------------------------------------------------------------------------------------------------------------
Equity Compensation plans
approved by security holders              -                           -                           -
----------------------------------------------------------------------------------------------------------------------
Equity compensation plans not
approved by security holders              -                           -                           -
----------------------------------------------------------------------------------------------------------------------
Total                                     -                           -                           -
----------------------------------------------------------------------------------------------------------------------
</TABLE>

ITEM 6.  SELECTED FINANCIAL DATA

       GB Holdings, Inc. and Subsidiaries

       The following table sets forth selected financial information for
Holdings, and is qualified in its entirety by, and should be read in conjunction
with, Holdings' Financial Statements and Notes thereto contained elsewhere
herein. The data as of December 31, 2003 and 2002 and for the years ended
December 31, 2003, 2002 and 2001 have been derived from the audited financial
statements of Holdings contained in Item 8 below.

       The Company implemented SOP 90-7 and, therefore, adopted "fresh start
reporting" as of September 30, 2000. The Company's emergence from its Chapter 11
proceedings resulted in a new reporting entity with no retained earnings or
accumulated deficit as of September 30, 2000. Accordingly, the Company's
consolidated financial statements for periods prior to September 30, 2000 are
not comparable to consolidated financial statements presented on or subsequent
to September 30, 2000. Column headings have been included on the accompanying
Consolidated Statement of Operations Data and Consolidated Balance Sheet Data to
distinguish between the pre-reorganization and post-reorganization entities. A
black line has been drawn on the accompanying consolidated financial statements
data to distinguish between the pre-reorganization and post-reorganization
entities.

                                       15
<PAGE>

                       GB HOLDINGS, INC. AND SUBSIDIARIES
               (dollars in thousands except income per share data)

Statement of Operations Data:
<TABLE>
<CAPTION>
                                                                                                |
                                                      Post-reorganization                       |       Pre-reorganization
                                 ---------------------------------------------------------------| -------------------------------
                                          Year         Year           Year        10/01/00      |     01/01/00          Year
                                         Ended        Ended          Ended          Ended       |       Ended           Ended
                                       12/31/03     12/31/02        12/31/01      12/31/00      |     09/30/00        12/31/99
                                  ------------    -------------  -------------  --------------  |   ------------   -------------
<S>                               <C>             <C>             <C>           <C>                 <C>            <C>
Total Revenues .................. $    219,890    $     244,601   $    278,030  $       62,485  |   $    209,575    $     270,578
Promotional Allowances ..........      (49,632)         (51,128)       (62,281)        (15,774) |        (47,112)         (60,767)
                                  ------------    -------------   ------------  --------------  |   ------------    -------------
Net revenues ....................      170,258          193,473        215,749          46,711  |        162,463          209,811
                                  ------------    -------------   ------------  --------------  |   ------------    -------------
Expenses:                                                                                       |
                                                                                                |
    Departmental.................      146,049          159,714        185,255          45,427  |        131,985          178,188
    General and administrative...       11,582           12,799         11,512           2,175  |          7,663           10,586
    Depreciation and                                                                            |
      amortization including                                                                    |
      provision for obligatory                                                                  |
      investments................       16,244           15,457         12,133           3,834  |          9,414           16,215
                                                                                                |
    Loss on impairment of assets.        1,282                -              -               -  |              -                -
    Loss (gain) on disposal of                                                                  |
      fixed assets...............         (105)             185             20              11  |             10             (259)
                                  ------------    -------------   ------------  --------------  |   ------------    -------------
      Total Expenses.............      173,770          189,437        208,920          51,447  |        149,072          204,730
                                  ------------    -------------   ------------  --------------  |   ------------    -------------
    Income (loss) from operations       (3,512)           4,036          6,829          (4,736) |         13,391            5,081
                                  ------------    -------------   ------------  --------------  |   ------------    -------------
Non-operating income (expense):                                                                 |
    Interest income..............          627            1,067          2,671           1,338  |            518              649
    Interest expense.............      (12,027)         (11,640)       (11,279)         (3,133) |           (366)            (295)
    Reorganization and other                                                                    |
      related costs..............       (1,843)               -              -              34  |         (2,807)          (2,154)
    Gain on prepetition debt                                                                    |
      discharge..................            -                -              -               -  |         14,795                -
                                  ------------    -------------   ------------  --------------  |   ------------    -------------
      Total non-operating                                                                       |
        expense, net.............      (13,243)         (10,573)        (8,608)         (1,761) |         12,140           (1,800)
                                  ------------    -------------   ------------  --------------  |   ------------    -------------
Income (loss) before                                                                            |
 income taxes ...................      (16,755)          (6,537)        (1,779)         (6,497) |         25,531            3,281
Income tax provision ............         (958)            (784)           (55)              -  |              -             (133)
                                  ------------    -------------   ------------  --------------  |   ------------    -------------
Net income (loss) ............... $    (17,713)   $      (7,321)  $     (1,834) $       (6,497) |   $     25,531    $       3,148
                                  ------------    -------------   ------------  --------------  |   ------------    -------------
                                                                                                |
Basic/diluted income (loss) per                                                                 |
  common share: ................. $      (1.77)   $       (0.73)  $      (0.18) $        (0.65) |   $       2.55(2) $        0.32(2)
                                  ============    =============   ============  ==============  |   ============    =============
    Weighted avaerage common                                                                    |
      shares outstanding.........   10,000,000       10,000,000     10,000,000      10,000,000  |     10,000,000       10,000,000
                                  ============    =============   ============  ==============  |   ============    =============


Balance Sheet Data:                                   Post-reorganization                                   Pre-reorganization

                                  ------------------------------------------------------------------------------------------------

                                     12/31/03         12/31/02        12/31/01         12/31/00           9/30/00        12/31/99
                                  --------------  --------------  -------------   ---------------     --------------  ------------
Total assets .................... $    227,563    $     244,712   $    255,922    $      264,247      $    272,676    $    208,416

Total long-term debt ............      110,000          110,000        110,371           110,838           110,858         197,898

Shareholder's equity (deficit) ..       91,635          109,348        116,669           118,503           125,000         (39,593)

</TABLE>
---------------

(1)   On January 5, 1998, Holdings, GB Property Funding and GBHC filed petitions
      for relief under Chapter 11 of the United States Bankruptcy Code in the
      United States Bankruptcy Court for the District of New Jersey. The accrual
      of interest expense on the First Mortgage Notes, the Subordinated Notes
      (as hereafter defined) and other affiliate advances for periods subsequent
      to the filing was suspended.

(2)   Income (loss) per share information is presented on a pro forma basis
      for periods presented prior to the Effective Date.



                                       16
<PAGE>


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
              CONDITION AND RESULTS OF OPERATIONS

       This Annual Report on Form 10-K contains forward-looking statements about
the business, financial condition and prospects of Holdings, GB Property Funding
and GBHC. The actual results could differ materially from those indicated by the
forward-looking statements because of various risks and uncertainties. Such
risks and uncertainties are beyond management's ability to control and, in many
cases, cannot be predicted by management. When used in this Annual Report on
Form 10-K, the words "believes", "estimates", "anticipates", "expects",
"intends" and similar expressions as they relate to Holdings, GB Property
Funding and GBHC or its management are intended to identify forward-looking
statements (see "Private Securities Litigation Reform Act" below).

        OVERVIEW

        The Company faced a number of competitive challenges during fiscal 2003,
including increased competition from the newly opened Borgata, increased
competition from existing casinos that invested in capital improvements, and a
corresponding increase in competition for slot machine players. Severe winter
weather and a loss of customers resulting in part from The Sands' decreased
table gaming capacity also had a negative effect on revenues for the first half
of fiscal 2003. These factors resulted in a decline of $23.2 million (12%), in
net revenues as compared to the prior fiscal year, and a net loss of $17.7
million compared to a net loss of $7.3 million in the prior fiscal year.

        Management is currently focused on restructuring its debt to
significantly reduce the cash requirements for debt service and defer the
payment of principal, which is presently due in September 2005, for three years.
These funds would then be available for operational and capital investment,
including opportunities that arise to expand The Sands' casino, rooms, parking,
entertainment and retail facilities.

        Pursuant to New Jersey law, GBHC is required to maintain a casino
license in order to operate The Sands. The gaming licenses required to own and
operate The Sands must be renewed in 2004, which requires that the CCC determine
that GBHC and Holdings are financially stable. In order to be found "financially
stable" under NJCCA, GBHC and Holdings must demonstrate among other things,
their ability to pay exchange, or refinance debts that mature or otherwise
become due and payable during the license term, or to otherwise manage such
debts. If the CCC determines that Holdings may be unable to make the required
payments pursuant to the Existing Notes or pay the principal when it becomes due
in 2005, GBHC may be unable to obtain renewal of the casino license required to
own and operate The Sands. Currently, the CCC is and will continue to monitor
the effect of GBHC and Holdings to manage and refinance the Existing Notes.
There has been no precedent of non-renewal of a casino license in this
situation.

        The Sands primarily generates revenues from gaming operations in its
Atlantic City facility (see Properties). Although The Sands' other business
segments including rooms, entertainment, retail store, food and beverage
operations also generate some cash sales, these revenues are nominal in
comparison to the casino operations. The non-casino operations primarily support
the casino operation by providing complimentary goods and services to deserving
casino customers (see Promotional Allowances). The Company competes in a capital
intensive industry (see Competition) that requires continual reinvestment in its
facility and technology.

                                       17
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

        Summary

        During 2004, management anticipates making tax payments of approximately
$1.1 million to the State of New Jersey. Management believes that cash flows
generated from operations during 2004, as well as available cash reserves, will
be sufficient to meet its operating plan. In the first quarter of 2004, the
Board approved a capital expenditures program for 2004 under which Holdings and
its subsidiaries anticipate making capital expenditures of approximately $20.0
million to invest in and upgrade The Sands. Management believes that cash
generated from operations and cash reserves will be sufficient to meet the
requirements of the plan. Based upon expected cash flow generated from
operations, management determined that it would be prudent for the Company to
obtain a line of credit to provide additional cash availability, to meet the
Company's working capital needs, in the event that anticipated cash flow is less
than expected or expenses exceed those anticipated. At the request of the
Company, Ealing Corp., a Nevada corporation and an affiliate of Mr. Icahn,
agreed to provide a revolving credit facility, secured by a first lien on all of
the assets of the Company, under which the Company may borrow up to an aggregate
amount of $10 million for general working capital purposes. Ealing's obligation
to provide the financing pursuant to the commitment letter is subject to the
negotiation and execution of definitive loan and security agreements and related
documents as well as certain customary conditions. However, there can be no
assurance that the loan agreement with Ealing will be consummated, that if the
loan agreement with Ealing is not consummated, the Company will be able to
obtain financing from another lender on terms as or more favorable than the
terms of the commitment letter, or whether the Company will need to borrow funds
for working capital.

        Operating Activities

        At December 31, 2003, the Company had cash and cash equivalents of $33.5
million. The Company used $2.3 million of net cash from operations during the
year ended December 31, 2003 compared to generating $9.7 million during the same
prior year period. The 2003 decrease in net cash from operations was primarily
due to the decline in net revenues as a result of the increased competition and
capacity in the Atlantic City market. The 2002 increase in net cash from
operations is a result of a combination of a decrease in accounts receivable and
an increase in depreciation expense that offset a decrease in income from
operations. During 2002, based upon a periodic review of long-lived assets for
impairment in conjunction with a review of the Company's marketing programs and
product mix, certain expenditures incurred for property expansion plans, that
were included in construction in progress, were determined to be unusable and
resulted in a loss on asset impairment in the amount of $1.3 million.

        Investing Activities

        Capital expenditures at The Sands for the year ended December 31, 2003
amounted to approximately $12.8 million compared to $14.1 million in 2002 and
$23.1 million in 2001. In order to enhance its competitive position in the
market place, The Sands may determine to incur additional substantial costs and
expenses to maintain, improve and expand its facilities and operations.
Management has approval from its Board of Directors for a 2004 capital
expenditure plan of up to $23.6 million which includes new slot machines, casino
and hotel renovations as well as replacement and upgrades to infrastructure and
technology. However, in order to avoid disruption of its operations during the
peak summer season and based upon operating results and available cash,
management may defer some slot machine replacements and casino renovations to
the latter half of 2004 or beyond, thereby reducing capital expenditures for
2004. Accordingly, additional financing requirements could be reduced
significantly.



                                       18
<PAGE>

        The Sands is required by the Casino Act to make certain quarterly
deposits based on gross revenue with the Casino Reinvestment Development
Authority ("CRDA") in lieu of a certain investment alternative tax. Deposits for
the years ended December 31, 2003, 2002 and 2001 amounted to $2.3 million, $2.5
million and $2.8 million, respectively.

        Financing Activities

        There were no financing activities during the year ended December 31,
2003. As of December 31, 2003, the only scheduled payment of long-term debt is
the Existing Notes, which mature on September 29, 2005.

        On July 14, 2003, a Form 8-K was filed with the SEC reporting that a
committee of the independent directors of the Company approved a proposed
restructuring of the Existing Notes, together with various other corporate
changes to be accomplished in connection with the proposed restructuring. In
connection with the foregoing, on November 13, 2003, Atlantic Holdings filed
with the SEC, a Registration Statement on Form S-4 (which contains a preliminary
prospectus), under the Securities Act of 1933, as amended (the "Securities
Act"), to transfer substantially all of the assets and liabilities of Holdings,
GBHC, and GB Property, to Atlantic Holdings, in exchange for Atlantic Holdings
issuance of 3% Notes due 2008 in exchange for the Existing Notes and the
cancellation of such Notes) and the registration of certain securities to be
issued to the stockholders of the Company; and, also on such date, Atlantic
Holdings and ACE Gaming filed with the SEC, a Registration Statement on Form S-4
under the Securities Act, with respect to a consent solicitation and exchange
offer with respect to the Existing Notes. Neither of such Registration
Statements have been declared effective and each was amended by filing Amendment
No. 1 to Form S-4/A on February 13, 2004. The Company and Atlantic Holdings also
filed with the SEC a schedule 13e-3, under the Securities and Exchange Act of
1934, with respect to such transactions, which was also amended by the filing of
a Schedule 13e-3/A on February 13, 2004.

        During 2004, Management anticipates making its next scheduled interest
payment on the Existing Notes of $6.1 million on March 29, 2004 and depending on
the timing of the anticipated exchange of Existing Notes, a payment of up to
$1.0 million per month for each month the Existing Notes remain outstanding.

        Management estimates that consent fees associated with the exchange of
Existing Notes will be between $6.4 million and $11.0 million. Additional
financing fees are estimated to be between $700,000 and $800,000.

        Pursuant to New Jersey law, GBHC is required to maintain a casino
license in order to operate The Sands. The gaming licenses required to own and
operate The Sands must be renewed in September 2004, and for each renewal the
CCC must determine that GBHC and Holdings are financially stable. In order to be
found "financially stable" under NJCCA, GBHC and Holdings must demonstrate among
other things, their ability to pay exchange, or refinance debts that mature or
otherwise become due and payable during the license term, or to otherwise manage
such debts. If the CCC determines that Holdings may be unable to make the
required payments pursuant to the Existing Notes or pay the principal when it
becomes due in 2005, GBHC may be unable to obtain renewal of the casino license
required to own and operate The Sands. GBHC's inability to obtain renewal of is
casino license will have a material adverse effect on Holdings.



                                       19
<PAGE>

        Critical Accounting Policies and Estimates

        The Company's discussion and analysis of its results of operations and
financial condition are based upon its consolidated financial statements that
have been prepared in accordance with accounting principles generally accepted
in the United States of America ("US GAAP"). The preparation of financial
statements in conformity with US GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues
and expenses, and the disclosure of contingent assets and liabilities. Estimates
and assumptions are evaluated on an ongoing basis and are based on historical
and other factors believed to be reasonable under the circumstances. The results
of these estimates may form the basis of the carrying value of certain assets
and liabilities and may not be readily apparent from other sources. Actual
results, under conditions and circumstances different from those assumed, may
differ from estimates. The impact and any associated risks related to estimates,
assumptions, and accounting policies are discussed within Management's
Discussion and Analysis of Results of Operations and Financial Condition, as
well as in the Notes to the Consolidated Financial Statements, if applicable,
where such estimates, assumptions, and accounting policies affect the Company's
reported and expected financial results.

        The Company believes the following accounting policies are critical to
its business operations and the understanding of results of operations and
affect the more significant judgments and estimates used in the preparation of
its consolidated financial statements:

        Allowance for Doubtful Accounts - The Company maintains accounts
receivable allowances for estimated losses resulting from the inability of its
customers to make required payments. The adequacy of the allowance is determined
by management based on a periodic review of the receivable portfolio. Additional
allowances may be required if the financial condition of the Company's customers
deteriorates.

        Commitments and Contingencies - Litigation - On an ongoing basis, the
Company assesses the potential liabilities related to any lawsuits or claims
brought against the Company. While it is typically very difficult to determine
the timing and ultimate outcome of such actions, the Company uses its best
judgment to determine if it is probable that it will incur an expense related to
the settlement or final adjudication of such matters and whether a reasonable
estimation of such probable loss, if any, can be made. In assessing probable
losses, the Company makes estimates of the amount of insurance recoveries, if
any. The Company accrues a liability when it believes a loss is probable and the
amount of loss can be reasonably estimated. Due to the inherent uncertainties
related to the eventual outcome of litigation and potential insurance recovery,
it is possible that certain matters may be resolved for amounts materially
different from any provisions or disclosures that the Company has previously
made.



                                       20
<PAGE>

        Impairment of Long-Lived Assets - The Company periodically reviews
long-lived assets for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable.
Assumptions and estimates used in the determination of impairment losses, such
as future cash flows and disposition costs, may affect the carrying value of
long-lived assets and possible impairment expense in the Company's consolidated
financial statements.

        Self-Insurance - The Company retains the obligation for certain losses
related to customer's claims of personal injuries incurred while on the Company
property as well as workers compensation claims beginning in 2002 and major
medical claims for non-union employees in 2003. The Company accrues for
outstanding reported claims, claims that have been incurred but not reported and
projected claims based upon management's estimates of the aggregate liability
for uninsured claims using historical experience, an adjusting company's
estimates and the estimated trends in claim values. Although management believes
it has the ability to adequately project and record estimated claim payments, it
is possible that actual results could differ significantly from the recorded
liabilities.

        Allowance for Obligatory Investments - The Company maintains obligatory
investment allowances for its investments made in satisfaction of its CRDA
obligation. The obligatory investments may ultimately take the form of CRDA
issued bonds, which bear interest at below market rates, direct investments or
donations. CRDA bonds bear interest at approximately one-third below market
rates. Management bases its reserves on the type of investments the obligation
has taken or is expected to take. Donations of The Sands' quarterly deposits to
the CRDA have historically yielded a 51% future credit or refund of obligations.
Therefore, management has reserved the predominant balance of its obligatory
investments at between 33% and 49%.


                                       21
<PAGE>



RESULTS OF OPERATIONS

        Gaming Operations

        Information contained herein, regarding Atlantic City casinos other than
The Sands, was obtained from reports filed with the Commission.

        The following table sets forth certain unaudited financial and operating
data relating to The Sands' and all other Atlantic City casinos' capacities,
volumes of play, hold percentages and revenues:

<TABLE>
<CAPTION>

                                                                              Year Ended December 31,
                                                            --------------------------------------------------------------
                                                                  2003                 2002                     2001
                                                            --------------         -------------           ---------------
                                                                                (Dollars In Thousands)
<S>                                                                    <C>                    <C>                     <C>
Units: (at year-end)
    Table Games     - Sands                                            73                     40                      69
                    - Atlantic City (ex. Sands)                     1,311                  1,167                   1,061
    Slot Machines   - Sands                                         2,202                  2,322                   2,060
                    - Atlantic City (ex. Sands)                    40,176                 35,795                  35,423
Gross Wagering (1)
    Table Games     - Sands                                 $     217,984           $    242,731            $    457,992
                    - Atlantic City (ex. Sands)                 6,858,441              6,684,168               6,773,640
    Slot Machines   - Sands                                     1,920,379              2,227,830               2,348,180
                    - Atlantic City (ex. Sands)                39,025,945             38,237,932              36,772,969
Hold Percentages (2)
    Table Games     - Sands                                         14.89%                 15.00%                  14.92%
                    - Atlantic City (ex. Sands)                     15.91%                 15.73%                  15.65%
    Slot Machines   - Sands (accrual basis)                          7.78%                  7.57%                   6.88%
                    - Sands (cash basis)                             7.94%                  7.76%                   7.10%
                    - Atlantic City (ex. Sands)
                      (accrual basis)                                 N/A                    N/A                     N/A
                    - Atlantic City (ex. Sands)
                      (cash basis)                                   8.14%                  8.08%                   8.09%
Revenues (2)
    Table Games     - Sands                                 $      32,451            $    36,401             $    68,351
                    - Atlantic City (ex. Sands)                 1,091,479              1,051,103               1,059,881
    Slot Machines   - Sands (accrual basis)                       149,394                168,697                 161,503
                    - Sands (cash basis)                          152,527                172,833                 166,657
                    - Atlantic City (ex. Sands)
                      (accrual basis)                                 N/A                    N/A                     N/A
                    - Atlantic City (ex. Sands)
                      (cash basis)                              3,174,834              3,089,067               2,974,610
    Other (3)       - Sands                                         1,191                  1,319                   2,515
                    - Atlantic City (ex. Sands)                    45,510                 41,735                  42,554
</TABLE>

-------------------------------

(1)     Gross wagering consists of the total value of chips purchased for table
        games (excluding poker) and keno wagering (the "Drop") and coins, cash
        and/or equivalent value tickets wagered in slot machines (the "Handle").

                                       22
<PAGE>

(2)     Casino revenues consist of the portion of gross wagering that a casino
        retains and, as a percentage of gross wagering, is referred to as the
        "hold percentage." The Sands' hold percentages and revenues are
        reflected on an accrual basis. Comparable accrual basis data for the
        remainder of the Atlantic City gaming industry as a whole is not
        available; consequently, industry hold percentages and revenues are
        based on information available from the Commission. Cash basis slot
        machine revenue does not include an accrual for industry-wide
        progressive slot jackpots, whereas accrual basis slot machine revenue
        does include such accrual.

(3)     Consists of revenues from poker and simulcast horse racing wagering. The
        Sands provides its customers both poker and simulcast horse wagering,
        however, not all Atlantic City Casinos provide these same gaming
        options.

        Patron Gaming Volume

        Information contained herein, regarding Atlantic City casinos other than
The Sands, was obtained from reports filed with the Commission.

        Table game drop decreased by $24.7 million (10.2%) during 2003 compared
with 2002 and by $215.3 million (47.0%) in 2002 compared to 2001. By comparison,
according to Commission reports, table game drop at all other Atlantic City
casinos increased 2.6% in 2003 compared to 2002 and decreased 1.3% in 2002
compared to 2001. During 2003, The Sands increased the number of table games
from 40 to 73 units in an effort to recapture market share by providing the
customer ample access to a variety of table games. The increase in table game
capacity was supported by marketing, player development and customer service
programs that focused on attracting premium and middle category table game
players.

        During the second half of 2003, table game drop increased $36.3 million
(43.5%) compared to the same prior year period. This occurred despite a
significant increase in table games in the Atlantic City market as a result of
the opening of a new casino in July 2003. However, these positive results were
not enough to offset the decline in table game drop in the first half of 2003
compared to the same prior year period, which was negatively impacted by severe
winter weather.

        Slot machine handle decreased $307.5 million (13.8%) during 2003,
compared with 2002 and $120.4 million (5.1%) in 2002 compared to 2001. By
comparison, according to Commission reports, the percentage increase in slot
machine handle for all other Atlantic City casinos for the same periods was 2.1%
and 4.0%, respectively. The decreased Sands slot handle during 2003 can be
attributed to a combination of a decrease in the number of units and an increase
in competitive capacity in the Atlantic City Market. The number of slot machines
decreased 5.2% at The Sands to 2,202 at December 31, 2003 compared to December
31, 2002. For all other Atlantic City casinos, the number of slot machines
increased 12.2% in 2003 compared to 2002, primarily due to the opening of a new
casino in July 2003.

        The majority (52.3%) of the 2003 decrease in Sands slot machine handle
occurred during the second half of 2003 compared to the same prior year period.
This was primarily due to increased market capacity as a result of the Borgata
opening on July 3, 2003.

        Aggregate gaming space at all other Atlantic City casinos increased by
approximately 144,000 square feet (12.1%) at December 31, 2003 compared to
December 31, 2002, primarily due to the opening of a new casino in July 2003.
The amount of gaming space at The Sands decreased approximately 781 square feet
(1.0%) between periods. Revenues



                                       23
<PAGE>

        Casino revenues at The Sands decreased by $23.4 million (11.3%) in 2003
compared to 2002 and decreased by $26.0 million (11.2%) in 2002 compared to
2001. The 2003 decrease was due to the $19.3 million decline in slot revenues,
which was a result of the $307.5 million (13.8%) decrease in slot handle. An
increase in slot hold percentage from 7.57% in 2002 to 7.78% in 2003 slightly
offset the impact of the decrease in slot handle. The 2002 decrease was due to
the $32.1 million decline in table game revenues, which was a result of the
$215.3 million (47.0%) decrease in table game drop. The decrease in table game
drop was primarily due to fewer table games available during the third quarter
2002. Slot revenues increased during 2002 as a result of increased hold
percentage despite a decrease in handle of $120.4 million. The increase in slot
machine revenue was not enough to offset the decrease in table game revenue. As
a result, the Company, by the end of 2002, had replaced 14 of the table games
removed in the second quarter of 2002 and shifted its marketing strategy to
focus on the middle and premium category slot player business.

        Room revenues decreased by $157,000 (1.4%) in 2003 compared to 2002 and
decreased by $430,000 (3.7%) in 2002 compared to 2001. The 2003 decrease is due
to a decrease in occupied room nights while average room rates remained flat.
This was a result of a decrease in occupied room nights for cash sales, offset
slightly by an increase in occupied room nights for complimentary rooms. The
decline in occupied room nights for cash sales is primarily due to the increased
rooms inventory in the Atlantic City market as a result of the Borgata, which
opened in July 2003, as well as room additions at existing competitors.
Management believes competition in this market will increase as further
expansion of the rooms inventory in Atlantic City is expected in 2004. The 2002
decrease is due to a decrease in occupied room nights and a slightly lower
average daily room rate. The 2002 decrease in occupied room nights is due to a
decrease in complimentary rooms.

        Food and beverage revenues decreased $1.4 million (5.8%) in 2003
compared to 2002 and decreased by $6.1 million (20.8%) in 2002 compared to 2001.
The 2003 decrease is due to a decrease in food revenue ($2.2 million) partially
offset by an increase in beverage revenues ($841,000). The decrease in food
revenue occurred predominantly in the high volume outlets (Boardwalk Buffet and
Food Factory). The Food Factory has been closed since December 2002. In 2002,
these outlets were the preferred choice of the mass category slot player. The
2003 increase in beverage revenue is primarily due to the new Swingers lounge,
which opened in July 2003, as well as increases in room service and casino
service bars. The 2002 decrease was due to a decrease in the average check of
$6.89 (25.6%) as a result of fewer complimentaries to premium outlets.

        Other revenues increased $186,000 (5.0%) in 2003 compared to 2002 and
decreased by $944,000 (20.2%) in 2002 compared to 2001. The 2003 increase is due
to increased revenue in entertainment ($338,000), lobby store sales ($142,000)
and parking ($53,000). These increases were primarily from complimentaries
provided to customers in the middle and premium categories. The 2002 decrease is
predominantly due to the decline in entertainment revenues, $470,000 (47.9%)
which was primarily a result of discontinuation of review shows in 2002.

        Promotional Allowances

        Promotional allowances are comprised of (i) the estimated retail value
of goods and services provided free of charge to casino customers under various
marketing programs, (ii) the cash value of redeemable points earned under a
customer loyalty program based on the amount of slot play and (iii) coin and
cash coupons and discounts. As a percentage of casino revenues, promotional
allowances increased to 27.1% during 2003 compared to 24.8% during 2002 and
26.8% in 2001. The 2003 increase is primarily attributable to marketing, player
development and customer service programs implemented to recapture lost market
share in the middle and premium player categories due to the reduction in table
games and the marketing program during the summer of 2002 that focused on the
mass slot player category.



                                       24
<PAGE>

        Departmental Expenses

        Casino expenses at The Sands decreased by $12.1 million (8.4%) in 2003
compared to 2002 and by $25.5 million (15.1%) in 2002 compared to 2001. The 2003
decrease is primarily due to reduction in casino payroll and employee benefits
($2.9 million) as a result of a full year of lower employment levels related to
a series of layoffs and job eliminations beginning in 2001. Other favorable
casino expense variances in 2003 were directly related to the lower casino
revenues, which in turn, lowers general, marketing and promotional allocations
($6.6 million) and gaming taxes ($1.8 million). The 2002 decrease in casino
expenses is primarily due to the reduction of complimentary costs associated
with food and beverage provided free of charge. Casino payroll expenses
decreased due to the reduction in table games. The decrease in the provision for
doubtful accounts expense was caused by a reduction in credit issuance due to
lower table game activity. Lower costs for customer transportation were a result
of reduced volume in air travel and ground transportation. Reductions in
advertising expense and gaming revenue tax also contributed significantly to the
decreases in casino expenses in 2002.

        Rooms expenses decreased by $631,000 (21.1%) in 2003 compared to 2002
and $406,000 (12.0%) in 2002 compared to 2001. The 2003 decrease is primarily
due to reductions in staffing, which reduced payroll and employee benefits.
Linen usage and laundry expense decreased as a result of fewer occupied rooms in
2003 compared to 2002. The 2002 decreases were due to a decrease in housekeeping
supplies expense, amenity package costs, linen and uniform usage, which resulted
from fewer occupied room nights and also outside maintenance contracts.

        Food and beverage expenses decreased by $1.5 million (13.3%) in 2003
compared to 2002 and by $1.1 million in 2002 compared to 2001. The 2003 decrease
is due to a decrease in payroll and employee benefits as a result of staffing
reductions. Food cost of sales decreased as a result of lower food costs in the
Boardwalk Buffet and the closing of the Food Factory in 2002. These favorable
variances were offset slightly by lower allocable food and beverage costs
transferred to other departments. The 2002 increases were due to a smaller share
of costs allocated to casino expense as a result of a decrease in food and
beverage complimentaries generated by casino operations. These were offset
slightly by decreases in payroll, benefits and food and beverage cost of sales
as a result of the lower volume.

        Other expenses increased by $492,000 (18.7%) in 2003 compared to 2002
and decreased by $749,000 (22.2%) in 2002 compared to 2001. The 2003 increase
was due to increased entertainment costs as the theatre was open more often with
headliner entertainers than it was in 2002. The decrease in 2002 is primarily
due to savings resulting from discontinuation of review shows in the theatre.

        General and Administrative Expenses

        General and administrative expenses decreased by $1.2 million (9.5%) in
2003 compared to 2002 and increased by $1.3 million (11.2%) in 2002 compared to
2001. The 2003 decrease was primarily due to lower payroll and benefits costs
($2.1 million) as a result of continued staff reductions. Also contributing to
the decrease in 2003, was lower severance payouts ($1.6 million) than in 2002 as
a result of smaller adjustments in staffing levels than in the prior year. These
favorable variances were offset somewhat by increases in insurance premiums and
reserves due to market conditions and higher payouts and more significant claims
in 2003. The 2002 increase was due to costs arising from severance packages and
higher costs for insurance, property taxes and utilities.



                                       25
<PAGE>

        Depreciation and Amortization, including Provision for Obligatory
        Investments

        Depreciation and amortization, including provision for obligatory
investments, increased by $787,000 (5.1%) in 2003 compared to 2002 and by $3.3
million (27.4%) in 2002 compared to 2001. The 2003 increase is due to increased
depreciation expense ($826,000) resulting from further renovations and upgrades
to infrastructure and public areas such as Swingers lounge, Platinum Club and
the new bus entrance and waiting area. The provision for obligatory investments
decreased in 2003 ($441,000) primarily due to a decrease in casino revenues, on
which the obligation is based. The 2002 increase is a result of the continued
investment in and renovation of the casino, hotel and administrative complex at
The Sands.

        Interest Income and Expense

        Interest income decreased by $440,000 (41.2%) in 2003 compared to 2002
and decreased by $1.6 million (60.1%) in 2002 compared to 2001. The 2003
decrease was due to lower invested cash reserves. The decrease in 2002 was due
to earnings on decreased cash reserves and lower interest rates.

        Interest expense increased by $387,000 (3.3%) in 2003 compared to 2002
and $361,000 (3.2%) in 2002 compared to 2001. The increase in 2003 is due to
lower levels of capitalized interest than in 2002. The 2002 increase is due to a
lower amount of capitalized interest partially offset by the elimination of
debt.

        Income Tax Provision

       Income tax provision increased $174,000 (22.2%) in 2003 compared to 2002
and $729,000 (1,325.5%) in 2002 compared to 2001. The 2003 increase is
predominantly due to the newly enacted New Jersey Casino Net Income Tax
($175,000), which became effective in July 2003. The increase in 2002 was
directly related to the enactment of New Jersey alternative minimum assessment
in July 2002, which is based on gross receipts or gross profits.

                                       26
<PAGE>

       Contractual Obligations

        The following table sets forth the contractual obligations of the
Company at December 31, 2003:

<TABLE>
<CAPTION>

                                                                   Payments Due By Period
                                      ---------------------------------------------------------------------------------
                                                                                                               More
                                                           Less than          1-3               3-5            Than
Contractual Obligations                     Total           1 year           years             years          5 years
------------------------              --------------      -----------   --------------    ------------    -------------
<S>                                   <C>                <C>            <C>               <C>             <C>
Long-Term Debt                        $  110,000,000     $         -    $  110,000,000    $          -    $          -
Capital Lease Obligations                          -               -                 -               -               -
Obligatory Contributions                   4,808,000          72,000           228,000       2,244,000       2,264,000
Operating Leases:
   Madison House                          18,026,000       1,800,000         5,797,000       3,996,000       6,433,000
   Equipment                                 352,000         186,000           167,000               -               -
Purchase Obligations                               -               -                 -               -               -
Other Long-term liabilities on
    balance sheet under GAAP                       -               -                 -               -               -
                                      --------------    ------------    --------------    ------------    ------------
    Total Contractual Obligations     $  133,186,000    $  2,058,000    $  116,192,000    $  6,240,000    $  8,697,000
                                      ==============    ============    ==============    ============    ============
</TABLE>


        The Sands has agreed to contribute certain of its future investment
obligations to the CRDA in connection with the renovation related to the
Atlantic City Boardwalk Convention Center. The projected total contribution will
amount to $6.9 million, which will be paid through 2011 based on an estimate of
certain of The Sands' future CRDA deposit obligations. As of December 31, 2003,
The Sands had satisfied $2.1 million of this obligation.

        Inflation

        Management believes that, in the near term, modest inflation and
increased competition within the gaming industry for qualified and experienced
personnel will continue to cause increases in operating expenses, particularly
labor and employee benefits costs.

        Seasonality

        Historically, The Sands' operations have been highly seasonal in nature,
with the peak activity occurring from May to September. Consequently, the
results of operations for the first and fourth quarters are traditionally less
profitable than the other quarters of the fiscal year. In addition, The Sands'
operations may fluctuate significantly due to a number of factors, including
chance. Such seasonality and fluctuations may materially affect casino revenues
and profitability.



                                       27
<PAGE>

        New Accounting Pronouncements

        In June 2002, the FASB issued FAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities" ("FAS No. 146"). FAS No. 146
nullifies Emerging Issues Task Force or EITF Issue No. 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a Restructuring)" and requires
that a liability for a cost associated with an exit or disposal activity be
recognized and measured initially at fair value in the period in which the
liability is incurred. Under EITF 94-3, a liability for an exit cost was
required to be recognized at the date of an entity's commitment to an exit plan.
The adoption of FAS No. 146 is expected to result in delayed recognition for
some types of costs as compared to the provisions of EITF 94-3. FAS No. 146 is
effective for new exit or disposal activities that are initiated after December
31, 2002, and does not affect amounts currently reported in the Company's
consolidated financial statements. FAS No. 146 will affect the types and timing
of costs included in future restructuring programs, if any.

        On January 1, 2003, the Company adopted FAS No. 143, "Asset Retirement
obligations" ("FAS No. 143"), which provides the accounting requirements for
retirement obligations associated with tangible long-lived assets. This
statement requires entities to record the fair value of a liability for an asset
retirement obligation in the period in which it is incurred. The adoption of FAS
No. 143 did not have any impact on the Company's consolidated financial
statements.

         On January 1, 2003, the Company adopted FAS No. 148, "Accounting for
Stock-Based Compensation - Transition and Disclosure" ("FAS No. 148"), which
provides alternative methods of transition for companies that choose to switch
to the fair value method of accounting for stock options. FAS No. 148 also makes
changes in the disclosure requirements for stock-based compensation, regardless
of which method of accounting is chosen. The adoption of FAS No. 148 did not
have any impact on the Company's consolidated financial statements.

        Private Securities Litigation Reform Act

        The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. Certain information included in this
Form 10-K and other materials filed or to be filed by Holdings, GB Property or
GBHC with the Securities and Exchange Commission (as well as information
included in oral statements or other written statements made by such companies)
contains statements that are forward-looking, such as statements relating to
future expansion plans, future construction costs and other business development
activities including other capital spending, economic conditions, financing
sources, competition and the effects of tax regulation and state regulations
applicable to the gaming industry in general or Holdings, GB Property and GBHC
in particular. Such forward-looking information involves important risks and
uncertainties that could significantly affect anticipated results in the future
and, accordingly, such results may differ from those expressed in any
forward-looking statements made by or on behalf of Holdings, GB Property or
GBHC. These risks and uncertainties include, but are not limited to, those
relating to development and construction activities, dependence on existing
management, leverage and debt service (including sensitivity to fluctuations in
interest rates), domestic or global economic conditions, activities of
competitors and the presence of new or additional competition, fluctuations and
changes in customer preference and attitudes, changes in federal or state tax
laws or the administration of such laws and changes in gaming laws or
regulations (including the legalization of gaming in certain jurisdictions).



                                       28
<PAGE>

Risk Factors Related to the Business of The Company

The Company's quarterly operating results are subject to fluctuations and
seasonality, and if the Company fails to meet the expectations of securities
analysts or investors, the Company's share price may decrease significantly.

         The Company's quarterly operating results are highly volatile and
subject to unpredictable fluctuations due to unexpectedly high or low losses,
changing customer tastes and trends, unpredictable patron gaming volume, the
proportion of table game revenues to slot game revenues, weather and
discretionary decisions by The Sands' patrons regarding frequency of visits and
spending amounts. The Company's operating results for any given quarter may not
meet analyst expectations or conform to the operating results of the Company's
local, regional or national competitors. If the Company's operating results do
not conform to such expectations our share price may be adversely affected.
Conversely, favorable operating results in any given quarter may be followed by
an unexpected downturn in subsequent quarters.

GBHC may be unable to obtain renewal from the CCC of the casino license that is
necessary to operate The Sands due to the outstanding debt of GB Holdings.

         Pursuant to New Jersey law, GBHC is required to maintain a casino
license in order to operate The Sands. The gaming licenses required to own and
operate The Sands must be renewed in September 2004, which requires that the CCC
determine that GBHC and GB Holdings are financially stable. In order to be found
"financially stable" under NJCCA, GBHC and GB Holdings must demonstrate among
other things, their ability to pay, exchange, or refinance debts that mature or
otherwise become due and payable during the license term, or to otherwise manage
such debts. If the CCC determines during its license renewal process that GB
Holdings is unable to make the required payments pursuant to the Existing Notes,
or pay the principal when it becomes due in 2005, or refinance its debt, GBHC
may be unable to obtain renewal of the casino license required to own and
operate The Sands. GBHC's inability to obtain renewal of is casino license will
have a material adverse effect on GB Holdings.

The Company will need to increase capital expenditures to compete effectively.

        Capital expenditures, such as room refurbishments, amenity upgrades and
new gaming equipment, are necessary from time to time to preserve the
competitiveness of The Sands. The gaming industry market is very competitive and
is expected to become more competitive in the future. If cash from operations is
insufficient to provide for needed levels of capital expenditures, The Sands'
competitive position could deteriorate if the Company is unable to borrow funds
for such purposes.

The Company may need to obtain financing for working capital purposes.

        A capital expenditure plan was recently approved by the Board of
Directors of the Company, and management believes that cash generated from
operations and cash reserves will be sufficient to meet the requirements of the
plan. Based upon expected cash flow generated from operations, management
determined that it would be prudent for the Company to obtain a line of credit
to provide additional cash availability, to meet the Company's working capital
needs, in the event that anticipated cash flow is less than expected or expenses
exceed those anticipated. At the request of the Company, Ealing agreed to
provide a revolving credit facility, secured by a first lien on all of the
assets of the Company, under which the Company may borrow up to an aggregate
amount of $10 million for general working capital purposes. Ealing's obligation
to provide the financing pursuant to the commitment letter is subject to the
negotiation and execution of a definitive loan and security agreements and
related documents as well as certain customary conditions. However, there can be
no assurance that the loan agreement with Ealing will be consummated, that if
the loan agreement with Ealing is not consummated, the Company will be able to
obtain financing from another lender on terms as or more favorable than the
terms of the commitment letter, or whether the Company will need to borrow funds
for working capital.

                                       29
<PAGE>

If the Company fails to offer competitive products and services or maintain the
loyalty of The Sands patrons, its business will be adversely affected.

         In addition to capital expenditures, the Company is required to
anticipate the changing tastes of The Sands' patrons and offer both competitive
and innovative products and services to ensure that repeat patrons return and
new patrons visit The Sands. The demands of meeting the Company's debt service
payments and the need to make capital expenditures limits the available cash to
finance such products and services. In addition, the consequences of incorrect
strategic decisions may be difficult or impossible to anticipate or correct in a
timely manner.

Increased state taxation of gaming and hospitality revenues could adversely
affect the Company's results of

operations.

         The casino industry represents a significant source of tax revenues to
the various jurisdictions in which casinos operate. Gaming companies are
currently subject to significant state and local taxes and fees in addition to
normal federal and state corporate income taxes. For example, casinos in
Atlantic City pay for licenses as well as special taxes to the city and state.
New Jersey taxes annual gaming revenues at the rate of 8.0%. New Jersey also
levies an annual investment alternative tax of 2.5% on annual gaming revenues in
addition to normal federal and state income taxes. This 2.5% obligation,
however, can be satisfied by purchasing certain bonds or making certain
investments in the amount of 1.25% of annual gaming revenues. On July 3, 2002,
the State of New Jersey passed the New Jersey Business Tax Reform Act, which,
among other things, suspended the use of the New Jersey net operating loss
carryforwards for two years and introduced a new alternative minimum assessment
under the New Jersey corporate business tax based on gross receipts or gross
profits. For the years ended December 31, 2003 and 2002, there was a charge to
income tax provision of $778,000 and $774,000, respectively, related to the
impact of the New Jersey Business Tax Reform Act.

         On July 1, 2003, the State of New Jersey amended the New Jersey Casino
Control Act (the "NJCCA") to impose various tax increases on Atlantic City
casinos, including The Sands. Among other things, the amendments to the NJCCA
include the following new tax provisions: (i) a new 4.25% tax on casino
complimentaries, with proceeds deposited to the Casino Revenue Fund; (ii) an 8%
tax on casino service industry multi-casino progressive slot machine revenue,
with the proceeds deposited to the Casino Revenue Fund; (iii) a 7.5% tax on
adjusted net income of licensed casinos (the "Casino Net Income Tax) in State
fiscal years 2004 through 2006, with the proceeds deposited to the Casino
Revenue Fund; (iv) a fee of $3.00 per day on each hotel room in a casino hotel
facility that is occupied by a guest, for consideration or as a complimentary
item, with the proceeds deposited into the Casino Revenue Fund in State fiscal
years 2004 through 2006, and beginning in State fiscal year 2007 $2.00 of the
fee deposited into the Casino Revenue Fund and $1.00 transferred to the CRDA;
(v) an increase of the minimum casino hotel parking charge from $2 to $3, with
$1.50 of the fee to be deposited into the Casino Revenue Fund in State fiscal
years 2004 through 2006, and beginning in State fiscal year 2007, $0.50 to be
deposited into the Casino Revenue Fund and $1.00 to be transferred to the CRDA
for its purposes pursuant to law, and for use by the CRDA to post a bond for $30
million for deposit into the Casino Capital Construction Fund, which was also
created by the July 1, 2003 Act; and (vi) the elimination of the deduction from
casino licensee calculation of gross revenue for uncollectible gaming debt.
These changes to the NJCCA, and the new taxes imposed on The Sands and other
Atlantic City casinos, will reduce the Company's profitability.



                                       30
<PAGE>

         Future changes in New Jersey state taxation of casino gaming companies
cannot be predicted and any such changes could adversely affect The Company's
profitability.

The Company's former use of Arthur Andersen LLP as its independent public
accountants may pose risks to Parent and the Company and will limit your ability
to seek potential recoveries from Arthur Andersen LLP related to their work.

        Arthur Andersen LLP, independent certified public accountants, were
engaged as the principal accountants to audit the Company's consolidated
financial statements until the Parent Company dismissed them on May 16, 2002 and
engaged KPMG LLP. In May 2002, Arthur Andersen was convicted on a federal
obstruction of justice charge. Some investors, including institutional
investors, may choose not to invest in or hold securities of a company whose
prior financial statements (or those of its predecessor entity) were audited by
Arthur Andersen, which may serve to, among other things, suppress the price of
the Company's securities. In addition, rules promulgated by the SEC require the
Company to present its audited financial statements in various SEC filings,
along with Arthur Andersen's consent to inclusion of its audit report in those
filings. The SEC has provided temporary regulatory relief designed to allow
companies that file reports with them to dispense with the requirement to file a
consent of Arthur Andersen in certain circumstances. Notwithstanding the SEC's
temporary regulatory relief, the inability of Arthur Andersen to provide its
consent or to provide assurance services to the Company with regard to future
SEC filings could negatively affect the Company's ability to, among other
things, access capital markets. Any delay or inability to access capital markets
as a result of this situation could have a material adverse impact on the
business of the Company.

        The Company cannot assure you that it will be able to continue to rely
on the temporary relief granted by the SEC. If the SEC no longer accepts
financial statements audited by Arthur Andersen, requires audits of other
financial statements or financial information or requires changes to financial
statements previously audited by Arthur Andersen, this may affect ability to
access the public capital markets in the future, unless the Company's current
independent auditors or another independent accounting firm is able to audit the
consolidated financial statements originally audited by Arthur Andersen in a
timely manner. Any delay or inability to access the capital markets may have an
adverse impact on the business of the Company.

Energy price increases may adversely affect the Company's costs of operations
and revenues of The Sands.

         The Sands uses significant amounts of electricity, natural gas and
other forms of energy. While no shortages of energy have been experienced,
substantial increases in the cost of forms of energy in the U.S. will negatively
affect the Company's operating results. The extent of the impact is subject to
the magnitude and duration of the energy price increases, but this impact could
be material. In addition, higher energy and gasoline prices which affect The
Sands' customers may result in reduced visitation to The Sands' property and a
reduction in revenues.

A downturn in general economic conditions may adversely affect the Company's
results of operations.

         The Company's business operations are affected by international,
national and local economic conditions. A recession or downturn in the general
economy, or in a region constituting a significant source of customers for The
Sands' property, could result in fewer customers visiting the Company's property
and a reduction in spending by customers who do visit the Company's property,
which would adversely affect the Company's revenues while some of its costs
remain fixed, resulting in decreased earnings.



                                       31
<PAGE>

         A majority of The Sands' patrons are from automobile travel and bus
tours. Higher gasoline prices could reduce automobile travel to The Sands'
location and could increase bus fares to The Sands. In addition, adverse winter
weather conditions could reduce automobile travel to The Sands' location and
could reduce bus travel. Accordingly, the Company's business, assets, financial
condition and results of operations could be adversely affected by a weakening
of regional economic conditions and higher gasoline prices or adverse winter
weather conditions.

Acts of terrorism and the uncertainty of the outcome and duration of the
activity in Iraq and elsewhere, as well as other factors affecting discretionary
consumer spending, have impacted the gaming industry and may harm the Company's
operating results and the Company's ability to insure against certain risks.

       The terrorist attacks of September 11, 2001 had an immediate impact on
hotel and casino volume. The Sands hotel occupancy was down approximately ten
percentage points during the week that followed the attacks. Bus passenger
volume for The Sands was lower than normal, especially from those bus tours
originating from the New York metropolitan area. There were approximately 22.5%
less bus passengers at The Sands during September 2001 than during the same
month in the prior year. These events, the potential for future terrorist
attacks, the national and international responses to terrorist attacks and other
acts of war or hostility have created many economic and political uncertainties
which could adversely affect the Company's business and results of operations.
Future acts of terror in the U.S. or an outbreak of hostilities involving the
United States, may again reduce The Sands' guests' willingness to travel with
the result that the Company's operations will suffer.

The Company may incur losses that would not be covered by insurance and the cost
of insurance will increase.

         Although the Company has agreed in the New Indenture governing the New
Notes to maintain insurance customary and appropriate for its business, the
Company cannot assure you that insurance will be available or adequate to cover
all loss and damage to which the Company's business or the Company's assets
might be subjected. In connection with insurance renewals subsequent to
September 11, 2001, the insurance coverage for certain types of damages or
occurrences has been diminished substantially and is unavailable at commercial
rates. Consequently, the Company is self-insured for certain risks. The lack of
insurance for certain types or levels of risk could expose the Company to
significant losses in the event that an uninsured catastrophe occurred. Any
losses the Company incurs that are not covered by insurance may decrease its
future operating income, require it to find replacements or repairs for
destroyed property and reduce the funds available for payments of its
obligations on the Existing Notes.

There are risks related to the creditworthiness of patrons of the casinos.

       The Sands is exposed to certain risks related to the creditworthiness of
its patrons. Historically The Sands has extended credit on a discretionary basis
to certain qualified patrons. For the year ended December 31, 2003, gaming
credit extended to Sands' table game patrons accounted for approximately 22.0%
of overall table game wagering, and table game wagering accounted for
approximately 10.2% of overall casino wagering during the period. At December
31, 2003, gaming receivables amounted to $9.5 million before an allowance for
uncollectible gaming receivables of $5.6 million. There can be no assurance that
defaults in the repayment of credit by patrons of The Sands would not have a
material adverse effect on the results of operations of The Sands and,
consequently the Company.



                                       32
<PAGE>

The Company's success depends in part on the availability of qualified
management and personnel and on the Company's ability to retain such employees.

         The quality of individuals hired for positions in the hotel and gaming
operations will be critical to the success of the Company's business. It may be
difficult to attract, retain and train qualified employees due to the
competition for employees with other gaming companies and their facilities in
the Company's jurisdiction and nationwide. The Borgata, a recently opened casino
located in the marina district of Atlantic City has aggravated this problem. The
Company cannot assure you that it will be successful in retaining current
personnel or in hiring or retaining qualified personnel in the future. A failure
to attract or retain qualified management and personnel at all levels or the
loss of any of the Company or Operating's key executives could have a material
adverse effect on the Company's financial condition and results of operations.

Risk Factors Related to the Gaming Industry

The gaming industry is highly competitive.

        The gaming industry is highly competitive and the Company's competitors
may have greater resources than the Company. If other properties operate more
successfully, if existing properties are enhanced or expanded, or if additional
hotels and casinos are established in and around the location in which the
Company conducts business, the Company may lose market share. In particular,
expansion of gaming in or near the geographic area from which the Company
attracts or expects to attract a significant number of customers could have a
significant adverse effect on the Company's business, financial condition and
results of operations. The Sands competes, and will in the future compete, with
all forms of existing legalized gaming and with any new forms of gaming that may
be legalized in the future. Additionally, the Company faces competition from all
other types of entertainment.

       On July 3, 2003, The Borgata, a joint venture of Boyd Gaming Corporation
and MGM Mirage, opened in the marina district of Atlantic City. The Borgata
features a 40-story tower with 2,010 rooms and suites, as well as a 135,000
square-foot casino, restaurants, retail shops, a spa and pool, and entertainment
venues. This project represents a significant increase to capacity in the
market. In addition, other of the Company's competitors in Atlantic City have
recently completed expansions of their hotels or have announced expansion
projects. For example, Tropicana Atlantic City has started to construct a
502-room hotel tower, a 25-room conference center, a 2,400 space parking garage,
an expanded casino floor and a 200,000 square foot themed shopping, dining and
entertainment complex called The Quarter. Tropicana intends to complete the
project in the third quarter of 2004. Resorts is currently constructing a hotel
room addition of approximately 400 rooms and is scheduled to open in the third
quarter of 2004. The business of the Company may be adversely impacted (i) by
the additional gaming and room capacity generated by this increased competition
in Atlantic City and/or (ii) by other projects not yet announced in New Jersey
or in other markets (e.g., Pennsylvania, New York and Connecticut).



                                       33
<PAGE>

Gaming is a regulated industry and changes in the law could have a material
adverse effect on the Company's ability to conduct gaming.

         Gaming in New Jersey is regulated extensively by federal and state
regulatory bodies, including the CCC and state and federal taxing, law
enforcement and liquor control agencies. The ownership and operation of The
Sands is subject to strict state regulation under the NJCCA. The Company has
received the licenses, permits and authorizations required to operate The Sands.
If the exchange of Existing Notes is not consummated and, as a result, the CCC
determines during its license renewal process that Holdings is unable to make
the required payments pursuant to the Existing Notes or pay the principal when
it becomes due in 2005. GBHC may be unable to obtain renewal of the casino
license required to own and operate The Sands. GBHC's inability to obtain
renewal of its casino license would have a material adverse effect on the
Company.

Pending and enacted gaming legislation from New York and New Jersey may harm The
Sands.

         In the summer of 2003, the State of New Jersey considered approving
video lottery terminals ("VLTs") at the racetracks in the state and on July 1,
2003, the NJCCA was amended to impose various new and increased taxes on casino
license revenues. There is no guarantee that New Jersey will not consider
approving VLTs in the future, and if VLTs are approved, it could adversely
affect the Company's operations, and an increase in the gross gaming tax without
a significant simultaneous increase in revenue would adversely affect the
Company's results of operations.

         The Sands also competes with legalized gaming from casinos located on
Native American tribal lands. In October 2001, the New York State Legislature
enacted a bill, which the governor signed, authorizing a total of six Indian
casinos in the State of New York--three in Western New York and three in the
Catskill Region--and approved the use of video lottery terminals at racetracks
and authorized the participation of New York State in a multi-state lottery. On
January 29, 2002, a lawsuit was commenced contesting the above legislation
package on the grounds that certain of its provisions were adopted in violation
of the State's constitution. The likely outcome of this lawsuit cannot be
ascertained at this time. The implementation of VLT'S and the outcome of this
lawsuit could adversely affect visitation of The Sands from New York.

         Pennsylvania and Maryland are among the other states currently
contemplating some form of gaming legislation. Legislative proposals introduced
in Pennsylvania would potentially allow for a wide range of gaming activities,
including riverboat gaming, slot machines at racetracks, video lottery terminals
at liquor stores and the formation of a gaming commission. Maryland's proposed
legislation would authorize video lottery terminals at some of Maryland's racing
facilities. The results of the gubernatorial elections in Pennsylvania and
Maryland in 2002 have also increased the likelihood of gaming legislation in
such states. Since The Sands' market is primarily a drive-to-market, legalized
gambling in Pennsylvania or one or more states neighboring or within close
proximity to New Jersey could have a material adverse effect on the Atlantic
City gaming industry overall, including The Sands.

Holders of the Company's securities are subject to the CCC and the NJCCA.

        The holders of the Company's common stock, par value $.01 per share
("Common Stock") and Existing Notes are subject to certain regulatory
restrictions on ownership. While holders of publicly traded obligations such as
the New Notes are generally not required to be investigated and found suitable
to hold such securities, the CCC has the discretionary authority to (i) require
holders of securities of corporations governed by New Jersey gaming law to file
applications; (ii) investigate such holders; and (iii) require such holders to
be found suitable or qualified to be an owner or operator of a gaming
establishment. Pursuant to the regulations of the CCC such gaming corporations
may be sanctioned, including the loss of its approvals, if, without prior
approval of the CCC, it (i) pays to the unsuitable or unqualified person any
dividend, interest or any distribution whatsoever; (ii) recognizes any voting
right by such unsuitable or unqualified person in connection with the
securities; (iii) pays the unsuitable or unqualified person remuneration in any
form; or (iv) makes any payments to the unsuitable or unqualified person by way
of principal, redemption, conversion, exchange, liquidation, or similar
transaction. If the Company is served with notice of disqualification of any
holder, such holder will be prohibited by the NJCCA from receiving any payments
on, or exercising any rights connected to, the Company's Common Stock or
Existing Notes, as applicable.



                                       34
<PAGE>

        Common Stock Listing

        Currently the common stock of Holdings is listed on the American Stock
Exchange ("AMEX") under the ticker symbol "GBH". As described in the Schedule
13e-3/A filed on February 13, 2004, under certain circumstances the Holdings may
apply to delist the common stock of Holdings from trading on AMEX. The delisting
of the common stock of Holdings from trading on the AMEX will make it more
difficult for shareholders to sell their shares of common stock of Holdings.

Item 7a.       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        Market risk is the risk of loss arising from changes in market rates and
prices, such as interest rates and foreign currency exchange rates. The Company
does not have securities subject to interest rate fluctuations and has not
invested in derivative-based financial instruments.

        At December 31, 2003, the fair value of the Company's fixed-rate debt
was $91.3 million compared with its carrying amount of $110 million.



                                       35
<PAGE>


ITEM 8.  INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                                          Page
                                                                                                          ----
<S>                                                                                                      <C>
GB Holdings, Inc. and Subsidiaries

   Reports of Independent Public Accountants..............................................................37 - 38
       ...................................................................................................and 76

   Consolidated Balance Sheets of GB Holdings, Inc.
     and Subsidiaries as of December 31, 2003 and 2002 .................................................  39 - 40

   Consolidated Statements of Operations of GB Holdings, Inc.
     and Subsidiaries for the Years Ended December 31, 2003, 2002 and 2001..............................   41

   Consolidated Statement of Changes in Shareholder's Equity (Deficit)
     of GB Holdings, Inc. and Subsidiaries for the Years Ended
     December 31, 2003, 2002 and 2001 ..................................................................   42

   Consolidated Statements of Cash Flows of GB Holdings, Inc.
     and Subsidiaries for the Years Ended December 31, 2003, 2002 and 2001..............................   43

   Notes to Consolidated Financial Statements of GB Holdings, Inc.
     and Subsidiaries ..................................................................................   44

   Schedule II, Valuation and Qualifying Accounts of GB Holdings, Inc.
     and Subsidiaries for the Years Ended December 31, 2003, 2002 and 2001 .............................   77


</TABLE>




                                       36
<PAGE>

                          Independent Auditors' Report

To the Shareholders of GB Holdings, Inc.:

We have audited the accompanying consolidated balance sheets of GB Holdings,
Inc. and subsidiaries as of December 31, 2003 and 2002 and the related
consolidated statements of operations, shareholders' equity, and cash flows for
each of the years in the two-year period ended December 31, 2003. In connection
with our audits of the 2003 and 2002 consolidated financial statements, we also
have audited the 2003 and 2002 consolidated financial statement schedule as
listed in the accompanying index. These consolidated financial statements and
financial statement schedule are the responsibility of the company's management.
Our responsibility is to express an opinion on these consolidated financial
statements and consolidated financial statement schedule based on our audits.
The 2001 consolidated financial statements of GB Holdings, Inc. and subsidiaries
as listed in the accompanying index were audited by other auditors who have
ceased operations. Those auditors expressed an unqualified opinion on those
consolidated financial statements, before the revision related to the adoption
of Emerging Issues Task Force 01-09 "Accounting for Consideration Given by a
Vendor to a Customer (Including a Reseller of the Vendor's Products)" ("EITF
01-09"), described in Note 2 to the consolidated financial statements, in their
report dated March 8, 2002.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 provides a
reasonable basis for our opinion. In our opinion, the 2003 and 2002 consolidated
financial statements referred to above present fairly, in all material respects,
the consolidated financial position of GB Holdings, Inc. and subsidiaries as of
December 31, 2003 and 2002, and the results of their operations and their cash
flows for each of the years in the two-year period ended December 31, 2003, in
conformity with accounting principles generally accepted in the United States of
America. Also in our opinion, the related 2003 and 2002 consolidated financial
statement schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly, in all material
respects, the information set forth therein.

As discussed in Note 2 to the consolidated financial statements, the company
adopted EITF 01-09, as of January 1, 2002. As discussed above, the 2001
consolidated financial statements of GB Holdings, Inc. and subsidiaries as
listed in the accompanying index were audited by other auditors who have ceased
operations. As described in Note 2, these consolidated financial statements have
been revised to include application of EITF 01-09, which was adopted by the
company as of January 1, 2002. We audited the reclassifications described in
Note 2 that were applied to revise the 2001 consolidated statement of
operations. In our opinion, such reclassifications and disclosures required by
EITF 01-09 for 2001 as discussed in Note 2 are appropriate and have been
properly applied. However, we were not engaged to audit, review, or apply any
procedures to the 2001 consolidated financial statements of GB Holdings, Inc.
and subsidiaries other than with respect to such disclosures and, accordingly,
we do not express an opinion or any other form of assurance on the 2001
consolidated financial statements taken as a whole.

/s/ KPMG LLP

Short Hills, New Jersey

February 27, 2004


                                       37
<PAGE>

INFORMATION REGARDING PREDECESSOR INDEPENDENT PUBLIC ACCOUNTANTS' REPORT

THE FOLLOWING REPORT IS A COPY OF A PREVIOUSLY ISSUED REPORT BY ARTHUR ANDERSEN
LLP ("ANDERSEN"). THE REPORT HAS NOT BEEN REISSUED BY ANDERSEN NOR HAS ANDERSEN
CONSENTED TO ITS INCLUSION IN THIS ANNUAL REPORT ON FORM 10-K. THE ANDERSEN
REPORT REFERS TO THE CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2001 and 2000
AND THE CONSOLIDATED STATEMENTS OF INCOME, SHAREHOLDERS' EQUITY/DEFICIT AND CASH
FLOWS FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999 (PRE-REORGANIZATION) WHICH
ARE NO LONGER INCLUDED IN THE ACCOMPANYING FINANCIAL STATEMENTS.

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders of GB Holdings, Inc.:

We have audited the accompanying consolidated balance sheets of GB Holdings,
Inc. and subsidiaries (the Company, a Delaware corporation) as of December 31,
2001 and 2000, and the related consolidated statements of operations,
shareholders' equity (deficit) and cash flows for the period ended December 31,
2001 (post-reorganization), the periods from October 1, 2000 through December
31, 2000 (post-reorganization), January 1, 2000 through September 30, 2000
(pre-reorganization) and the period ended December 31, 1999
(pre-reorganization). These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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 financial position of GB Holdings, Inc.
and subsidiaries as of December 31, 2001 and 2000, and the results of their
operations and their cash flows for the period ended December 31, 2001
(post-reorganization), the periods from October 1, 2000 through December 31,
2000 (post-reorganization), January 1, 2000 through September 30, 2000
(pre-reorganization), and the period ended December 31, 1999
(pre-reorganization) in conformity with accounting principles generally accepted
in the United States.

                                                          ARTHUR ANDERSEN LLP
Roseland, New Jersey
March 8, 2002



                                       38
<PAGE>
                       GB HOLDINGS, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS
<TABLE>
<CAPTION>
                                                                    December 31,                December 31,
                                                                        2003                        2002
                                                                   --------------              --------------
<S>                                                                <C>                         <C>
Current Assets:
    Cash and cash equivalents                                      $   33,454,000              $   50,645,000
    Accounts receivable, net of allowances
       of $5,918,000 and $11,301,000, respectively                      5,247,000                   4,976,000
    Inventories                                                         2,222,000                   1,857,000
    Income tax deposits                                                 1,365,000                   1,359,000
    Prepaid expenses and other current assets                           3,343,000                   3,622,000
                                                                   --------------              --------------
       Total current assets                                            45,631,000                  62,459,000
                                                                   --------------              --------------

Property and Equipment:
    Land                                                               54,344,000                  54,344,000
    Buildings and improvements                                         88,249,000                  87,102,000
    Equipment                                                          64,722,000                  50,659,000
    Construction in progress                                            2,111,000                   3,612,000
                                                                   --------------              --------------
                                                                      209,426,000                 195,717,000
    Less - accumulated depreciation and
       amortization                                                  (40,013,000)                 (26,095,000)
                                                                   --------------              --------------
    Property and equipment, net                                       169,413,000                 169,622,000
                                                                   --------------              --------------
Other Assets:
    Obligatory investments, net of allowances of
      $11,340,000 and $10,028,000, respectively                        10,705,000                  10,069,000
    Other assets                                                        1,814,000                   2,562,000
                                                                   --------------              --------------
       Total other assets                                              12,519,000                  12,631,000
                                                                   --------------              --------------
                                                                   $  227,563,000              $  244,712,000
                                                                   ==============              ==============
</TABLE>

                The accompanying notes to consolidated financial
   statements are an integral part of these consolidated financial statements.

                                       39
<PAGE>
                       GB HOLDINGS, INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

                      LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                                    December 31,                December 31,
                                                                        2003                        2002
                                                                   --------------              -------------
<S>                                                                <C>                         <C>
Current Liabilities:
    Accounts payable                                               $    6,815,000               $  5,598,000
    Accrued liabilities -
       Salaries and wages                                               3,570,000                  3,717,000
       Interest                                                         3,092,000                  3,092,000
       Gaming obligations                                               2,744,000                  3,752,000
       Insurance                                                        2,505,000                  1,805,000
       Other                                                            3,473,000                  3,955,000
                                                                   --------------              -------------
       Total current liabilities                                       22,199,000                 21,919,000
                                                                   --------------              -------------
Long-Term Debt, net of current maturities                             110,000,000                110,000,000
                                                                   --------------              -------------
Other Noncurrent Liabilities                                            3,729,000                  3,445,000
                                                                   --------------              -------------

Commitments and Contingencies

Shareholders' Equity:
    Preferred stock, $.01 par value per share;
       5,000,000 shares authorized; 0 shares
       outstanding                                                              -                          -
    Common Stock, $.01 par value per share;
      20,000,000 shares authorized;
      10,000,000 shares issued and outstanding                            100,000                    100,000
    Additional paid-in capital                                        124,900,000                124,900,000
    Accumulated deficit                                               (33,365,000)               (15,652,000)
                                                                   --------------              -------------
       Total shareholders' equity                                      91,635,000                109,348,000
                                                                   --------------              -------------
                                                                   $  227,563,000              $ 244,712,000
                                                                   ==============              =============
</TABLE>

                The accompanying notes to consolidated financial
   statements are an integral part of these consolidated financial statements.


                                       40
<PAGE>
                       GB HOLDINGS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                            Year Ended            Year Ended        Year Ended
                                                                           December 31,          December 31,      December 31,
                                                                               2003                  2002              2001
                                                                          -------------         -------------     -------------
<S>                                                                       <C>                  <C>              <C>
Revenues:

               Casino                                                     $ 183,036,000         $ 206,417,000     $ 232,369,000
               Rooms                                                         10,983,000            11,140,000        11,570,000
               Food and beverage                                             21,946,000            23,305,000        29,408,000
               Other                                                          3,925,000             3,739,000         4,683,000
                                                                          -------------         -------------     -------------
                                                                            219,890,000           244,601,000       278,030,000
               Less - promotional allowances                                (49,632,000)          (51,128,000)      (62,281,000)
                                                                          -------------         -------------     -------------
                 Net revenues                                               170,258,000           193,473,000       215,749,000
                                                                          -------------         -------------     -------------
Expenses:

               Casino                                                       131,117,000           143,189,000       168,676,000
               Rooms                                                          2,354,000             2,985,000         3,391,000
               Food and beverage                                              9,461,000            10,915,000         9,814,000
               Other                                                          3,117,000             2,625,000         3,374,000
               General and administrative                                    11,582,000            12,799,000        11,512,000
               Depreciation and amortization, including
                 provision for obligatory investments                        16,244,000            15,457,000        12,133,000
               Loss on impairment of fixed assets                                     -             1,282,000                 -
               (Gain) loss on disposal of assets                               (105,000)              185,000            20,000
                                                                          -------------         -------------     -------------
                 Total expenses                                             173,770,000           189,437,000       208,920,000
                                                                          -------------         -------------     -------------
Income (loss) from operations                                                (3,512,000)            4,036,000         6,829,000
                                                                          -------------         -------------     -------------
Non-operating income (expense):
               Interest income                                                  627,000             1,067,000         2,671,000
               Interest expense                                             (12,027,000)          (11,640,000)      (11,279,000)
               Reorganization and other related costs                        (1,843,000)                    -                 -
                                                                          -------------         -------------     -------------
               Total non-operating expense, net                             (13,243,000)          (10,573,000)       (8,608,000)
                                                                          -------------         -------------     -------------
Loss before income taxes                                                    (16,755,000)           (6,537,000)       (1,779,000)

               Income tax provision                                            (958,000)             (784,000)          (55,000)
                                                                          -------------         -------------     -------------
Net loss                                                                  $ (17,713,000)        $  (7,321,000)    $  (1,834,000)
                                                                          =============         =============     =============
Basic/diluted loss per common share                                       $       (1.77)        $       (0.73)    $       (0.18)
                                                                          =============         =============     =============
Weighted average common shares outstanding                                   10,000,000            10,000,000        10,000,000
                                                                          =============         =============     =============
</TABLE>
                The accompanying notes to consolidated financial
   statements are an integral part of these consolidated financial statements.



                                       41
<PAGE>
                        GB HOLDINGS INC. AND SUBSIDIARIES

                       CONSOLIDATED STATEMENTS OF CHANGES
                        IN SHAREHOLDERS' EQUITY (DEFICIT)
              For the Years ended December 31, 2003, 2002 and 2001
<TABLE>
<CAPTION>
                                                                         Additional
                                               Common Stock                Paid-in       Accumulated
                                           Shares       Amount             Capital         Deficit            Total
                                         ----------   ----------       --------------   -------------     --------------
<S>                                     <C>          <C>              <C>              <C>               <C>
BALANCE, January 1, 2001                 10,000,000   $  100,000       $  124,900,000   $  (6,497,000)    $  118,503,000
    Net Loss                                      -            -                    -      (1,834,000)        (1,834,000)
                                         ----------   ----------       --------------   -------------     --------------

BALANCE, December 31, 2001               10,000,000   $  100,000       $  124,900,000   $  (8,331,000)    $  116,669,000
    Net Loss                                      -            -                    -      (7,321,000)        (7,321,000)
                                         ----------   ----------       --------------   -------------     --------------

BALANCE, December 31, 2002               10,000,000   $  100,000       $  124,900,000   $ (15,652,000)    $  109,348,000
    Net Loss                                      -            -                    -     (17,713,000)       (17,713,000)
                                         ----------   ----------       --------------   -------------     --------------

BALANCE, DECEMBER 31, 2003               10,000,000   $  100,000       $  124,900,000   $ (33,365,000)    $   91,635,000
                                         ==========   ==========       ==============   =============     ==============
</TABLE>


       The accompanying notes to consolidated financial statements are an
                integral part of these consolidated statements.



                                       42
<PAGE>
                        GB HOLDINGS INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                       Year Ended        Year Ended        Year Ended
                                                                      December 31,       December 31,      December 31,
                                                                          2003              2002              2001
                                                                     --------------     -------------     -------------
<S>                                                                 <C>                <C>               <C>
OPERATING ACTIVITIES:
    Net loss                                                         $  (17,713,000)    $  (7,321,000)    $  (1,834,000)
    Adjustments to reconcile net loss to
      net cash (used in) provided by operating activities:
      Depreciation and amortization, including provision
       for obligatory investments                                        16,244,000        15,457,000        12,133,000
      Loss on impairment of fixed assets                                          -         1,282,000                 -
      (Gain) loss on disposal of assets                                    (105,000)          185,000            20,000
      Provision for doubtful accounts, net                                1,040,000         1,586,000         4,991,000
      Deferred Income Tax benefit                                                 -                 -           292,000
      (Increase) decrease in income tax deposits                             (6,000)         (600,000)          400,000
      Decrease (increase) in accounts receivable                         (1,312,000)        2,349,000        (2,930,000)
      Decrease in accounts payable and
       and accrued liabilities                                             (684,000)       (3,124,000)       (5,605,000)
      Increase in other current assets                                      (92,000)         (426,000)          861,000
      Net change in other noncurrent assets and liabilities                 358,000           285,000        (2,580,000)
                                                                     --------------     -------------     -------------
       Net cash (used in) provided by operating activities               (2,270,000)        9,673,000         5,748,000
                                                                     --------------     -------------     -------------
INVESTING ACTIVITIES:
      Purchase of property and equipment                                (12,825,000)      (14,058,000)      (23,095,000)
      Proceeds from disposition of assets                                   110,000           320,000             4,000
      Proceeds from sale of obligatory investments                          130,000           208,000           114,000
      Purchase of obligatory investments                                 (2,336,000)       (2,496,000)       (2,838,000)
                                                                     --------------     -------------     -------------
        Net cash used in investing activities                           (14,921,000)      (16,026,000)      (25,815,000)
                                                                     --------------     -------------     -------------
FINANCING ACTIVITIES:
      Repayments of long-term debt                                                -          (371,000)         (467,000)
                                                                     --------------     -------------     -------------
        Net cash used in financing activities                                     -          (371,000)         (467,000)
                                                                     --------------     -------------     -------------
        Net decrease in cash and cash equivalents                       (17,191,000)       (6,724,000)      (20,534,000)
         Cash and cash equivalents at beginning of period                50,645,000        57,369,000        77,903,000
                                                                     --------------     -------------     -------------
         Cash and cash equivalents at end of period                  $   33,454,000     $  50,645,000     $  57,369,000
                                                                     ==============     =============     =============

SUPPLEMENTAL CASH FLOW INFORMATION:

      Interest paid                                                  $   12,100,000     $  12,128,000     $  12,156,000
                                                                     ==============     =============     =============
      Interest Capitalized                                           $      300,000     $     766,000     $   1,207,000
                                                                     ==============     =============     =============
      Income Taxes paid                                              $      899,000     $   1,764,000     $     205,000
                                                                     ==============     =============     =============
</TABLE>

           The accompanying notes to consolidated financial statements
        are an integral part of these consolidated financial statements.


                                       43
<PAGE>
                       GB HOLDINGS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) Organization, Business and Basis of Presentation

        GB Holdings, Inc. ("Holdings") is a Delaware corporation and was a
wholly owned subsidiary of Pratt Casino Corporation ("PCC") through December 31,
1998. PCC, a Delaware corporation, was incorporated in September 1993 and was
wholly owned by PPI Corporation ("PPI"), a New Jersey corporation and a wholly
owned subsidiary of Greate Bay Casino Corporation ("GBCC"). Effective after
December 31, 1998, PCC transferred 21% of the stock ownership in Holdings to
PBV, Inc. ("PBV"), a newly formed entity controlled by certain stockholders of
GBCC. As a result of a certain confirmed plan of reorganization of PCC and
others in October 1999, the remaining 79% stock interest of PCC in Holdings was
transferred to Greate Bay Holdings, LLC ("GBLLC"), whose sole member as a result
of the same reorganization was PPI. In February 1994, Holdings acquired Greate
Bay Hotel and Casino, Inc. ("GBHC"), a New Jersey corporation, through a capital
contribution by its then parent. GBHC's principal business activity is its
ownership of The Sands Hotel and Casino located in Atlantic City, New Jersey
(the "Sands"). GB Property Funding Corp. ("GB Property"), a Delaware corporation
and a wholly owned subsidiary of Holdings, was incorporated in September 1993 as
a special purpose subsidiary of Holdings for the purpose of borrowing funds for
the benefit of GBHC. Atlantic Coast Entertainment Holdings, Inc. ("Atlantic
Holdings") is a Delaware corporation and a wholly-owned subsidiary of GBHC.
Atlantic Holdings was formed in November 2003 for the purpose of the
contemplated exchange of $110 million 11% Notes due 2005 for $110 million 3%
Notes due 2008 to be issued by Atlantic Holdings. ACE Gaming LLC, ("ACE
Gaming"), a New Jersey limited liability company and a wholly-owned subsidiary
of Atlantic Holdings was formed in November 2003. Atlantic Holdings and its
subsidiary, ACE Gaming, had no operating activities in 2003. Holdings has no
operating activities and its only source of income is interest on cash
equivalent investments. Holdings only significant assets are its investment in
GBHC and its cash and cash equivalents of $16.6 million and $31.8 million as of
December 31, 2003 and 2002, respectively.

        On July 14, 2003, a Form 8-K was filed with the SEC reporting that a
committee of the independent directors of the Company approved a proposed
restructuring of the Existing Notes, together with various other corporate
changes to be accomplished in connection with the proposed restructuring. In
connection with the foregoing, on November 13, 2003, Atlantic Holdings filed
with the SEC, a Registration Statement on Form S-4 (which contains a preliminary
prospectus), under the Securities Act of 1933, as amended (the "Securities
Act"), to transfer substantially all of the assets and liabilities of Holdings,
GBHC, and GB Property, to Atlantic Holdings, in exchange for Atlantic Holdings
issuance of 3% Notes due 2008 in exchange for the Existing Notes and the
cancellation of such Notes) and the registration of certain securities to be
issued to the stockholders of the Company; and, also on such date, Atlantic
Holdings and ACE Gaming filed with the SEC, a Registration Statement on Form S-4
under the Securities Act, with respect to a consent solicitation and exchange
offer with respect to the Existing Notes. Neither of such Registration
Statements have been declared effective and each was amended by filing Amendment
No. 1 to Form S-4/A on February 13, 2004. The Company and Atlantic Holdings also
filed with the SEC a schedule 13e-3, under the Securities and Exchange Act of
1934, with respect to such transactions, which was also amended by the filing of
a Schedule 13e-3/A on February 13, 2004.

       The accompanying consolidated financial statements include the accounts
and operations of Holdings and its subsidiaries (Holdings, GBHC (and its
subsidiaries, Atlantic Holdings and ACE Gaming), and GB Property, collectively,
the "Company"). All significant intercompany balances and transactions have been
eliminated. Throughout this document, references to Notes are referring to the
Notes to Consolidated Financial Statements contained herein.


                                       44
<PAGE>
                       GB HOLDINGS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

        The Sands is located in Atlantic City, New Jersey on approximately 6.1
acres of land one-half block from the Boardwalk at Brighton Park between Indiana
Avenue and Dr. Martin Luther King, Jr. Boulevard. The Sands facility currently
consists of a casino and simulcasting facility with approximately 78,000 square
feet of gaming space containing approximately 2,202 slot machines and
approximately 73 table games; a hotel with 637 rooms (including 57 suites); five
restaurants; two cocktail lounges; two private lounges for invited guests; an
800-seat cabaret theater; retail space; an adjacent nine-story office building
with approximately 77,000 square feet of office space for its executive,
financial and administrative personnel; the "People Mover", an elevated,
enclosed, one-way moving sidewalk connecting The Sands to the Boardwalk using
air rights granted by an easement from the City of Atlantic City and a garage
and surface parking for approximately 1,750 vehicles.

       On January 5, 1998, the Company filed petitions for relief under Chapter
11 of the United States Bankruptcy Code (the "Bankruptcy Code") in the United
States Bankruptcy Court for the District of New Jersey (the "Bankruptcy Court").
On August 14, 2000, the Bankruptcy Court entered an order (the "Confirmation
Order") confirming the Modified Fifth Amended Joint Plan of Reorganization Under
Chapter 11 of the Bankruptcy Code Proposed by the Official Committee of
Unsecured Creditors and High River Limited Partnership and its affiliates (the
"Plan") for the Company. High River Limited Partnership ("High River") is an
entity controlled by Carl C. Icahn. On September 13, 2000, the New Jersey Casino
Control Commission (the "Commission") approved the Plan. On September 29, 2000,
the Plan became effective (the "Effective Date") (see Note 2). All material
conditions precedent to the Plan becoming effective were satisfied on or before
September 29, 2000. Accordingly, the accompanying consolidated financial
statements have been prepared in accordance with Statement of Position No. 90-7,
"Financial Reporting by Entities in Reorganization under the Bankruptcy Code"
("SOP 90-7"). In addition, as a result of the Confirmation Order and the
occurrence of the Effective Date, and in accordance with SOP 90-7, the Company
has adopted "fresh start reporting" in the preparation of the accompanying
consolidated financial statements. The Company's emergence from Chapter 11
resulted in a new reporting entity with no retained earnings or accumulated
deficit as of September 30, 2000.

       A significant amount of The Sands' revenues are derived from patrons
living in northern New Jersey, southeastern Pennsylvania and metropolitan New
York City. Competition in the Atlantic City gaming market is intense and
management believes that this competition will continue or intensify in the
future especially with the opening of a new casino during 2003 and the expected
expansion of the market's rooms inventory at pre-existing competitors in 2004.

       On the Effective Date, GB Property's existing debt securities, consisting
of its 10 7/8% First Mortgage Notes due January 15, 2004 (the "Old Notes") and
all of Holdings' issued and outstanding shares of common stock owned by PBV and
GBLLC (the "Old Common Stock"), were cancelled. As of the Effective Date, an
aggregate of 10,000,000 shares of new common stock of Holdings (the "New Common
Stock") were issued and outstanding, and $110,000,000 of 11% First Mortgage
Notes due 2005 were issued by GB Property (the "Existing Notes"). Holders of the
Old Notes received a distribution of their pro rata shares of (i) the Existing
Notes and (ii) 5,375,000 shares of the New Common Stock (the "Stock
Distribution"). In addition, $65,000,000 in cash was obtained from affiliates of
the majority shareholder.

                                       45
<PAGE>
                       GB HOLDINGS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

       Despite annual net losses and the 2003 negative net cash from operations,
Management believes that cash reserves, expected net cash flow from 2004
operations and additional financing will be adequate to meet the 2004 funding
requirements for operations, capital expenditures and refinancing debt. Based
upon expected cash flow generated from operations, management determined that it
would be prudent for the Company to obtain a line of credit to provide
additional cash availability, to meet the Company's working capital needs, in
the event that anticipated cash flow is less than expected or expenses exceed
those anticipated. At the request of the Company, Ealing Corp., a Nevada
corporation and an affiliate of Mr. Icahn, agreed to provide a revolving credit
facility, secured by a first lien on all of the assets of the Company, under
which the Company may borrow up to an aggregate amount of $10 million for
general working capital purposes. Ealing's obligation to provide the financing
pursuant to the commitment letter is subject to the negotiation and execution of
definitive loan and security agreements and related documents as well as certain
customary conditions. However, there can be no assurance that the loan agreement
with Ealing will be consummated, that if the loan agreement is not consummated,
the Company will be able to obtain financing from another lender on terms as or
more favorable than the terms of the commitment letter, or whether the Company
will need to borrow for working capital.

(2) Summary of Significant Accounting Policies

       The significant accounting policies followed in the preparation of the
accompanying consolidated financial statements are discussed below. The
consolidated financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America. The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America 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 balance sheets, and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Casino revenues, promotional allowances and departmental expenses -

        The Sands recognizes the net win from gaming activities (the difference
between gaming wins and losses) as casino revenues. Casino revenues are net of
accruals for anticipated payouts of progressive and certain other slot machine
jackpots. Such anticipated jackpots and payouts are included in gaming
liabilities on the accompanying consolidated balance sheets.

        In 2001, the Emerging Issues Task Force (the "EITF") reached a consensus
on Issue No. 01-09: "Accounting for Consideration Given by a Vendor to a
Customer (Including a Reseller of the Vendor's Products)" ("EITF 01-09"). For a
sales incentive offered voluntarily by a vendor to its patrons, EITF 01-09
requires the vendor to recognize the cost of the sales incentive at the later of
the date at which the related revenue is recorded by the vendor, or the date at
which the sales incentive is offered. Application of EITF 01-09 is required in
annual or interim financial statements for periods beginning after December 15,
2002. EITF 01-09 requires, among other things, that cash or other consideration
provided to customers as part of a transaction is presumed to be a reduction in
revenue unless the vendor is able to establish both that it received or will
receive a separate identifiable benefit and the fair value of the benefit can be
reasonably estimated. The Company offers cash inducements to encourage
visitation and play at the casino and, as the Company was unable to meet the
criteria as discussed in EITF 01-09, these costs have been classified as
promotional allowances on the accompanying consolidated statements of
operations.

                                       46
<PAGE>
                       GB HOLDINGS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

        With the adoption of EITF 01-09, the 2001 statement of operations has
been reclassified to conform to the new presentation. This resulted in a $20.1
million increase in promotional allowance and a corresponding reduction in
casino expense for the year-end December 31, 2001. Application of the
requirements of EITF 01-09 did not have an impact on previously reported
operating income or net loss and had no impact on the previously reported
consolidated financial statements, which were adjusted to these standards at
December 31, 2002 for the prior period ended December 31, 2001.

        The estimated value of rooms, food and beverage and other items that
were provided to customers without charge has been included in revenues and a
corresponding amount has been deducted as promotional allowances. The costs of
such complimentaries have been included in casino expenses on the accompanying
consolidated statements of operations. Costs of complimentaries allocated from
the rooms, food and beverage and other operating departments to the casino
department were as follows:

                              Year Ended      Year Ended    Year Ended
                             December 31,    December 31,  December 31,
                                 2003            2002          2001
                            -------------   -------------  -------------
Rooms                       $   7,253,000   $   8,194,000  $   8,139,000
Food and Beverage              18,270,000      19,846,000     26,409,000
Other                           2,611,000       2,223,000      4,614,000
                            -------------   -------------  -------------
                            $  28,134,000   $  30,263,000  $  39,162,000
                            =============   =============  =============

Cash and cash equivalents -

       Cash and cash equivalents are generally comprised of cash and investments
with original maturities of three months or less, such as commercial paper,
certificates of deposit and fixed repurchase agreements.

Allowance for doubtful accounts -

       In its normal course of business The Sands incurs receivables arising
from credit provided to casino customers, hotel customers and accrued interest
receivable. The allowance for doubtful accounts adjusts these gross receivables
to Management's estimate of their net realizable value. The provision for
doubtful accounts charged to expense is determined by Management based on a
periodic review of the receivable portfolio. This provision is based on
estimates, and actual losses may vary from these estimates. The allowance for
doubtful accounts is maintained at a level that Management considers adequate to
provide for possible future losses. Provisions for doubtful accounts amounting
to $1,040,000, $1,586,000 and $4,991,000 for the years ended December 31, 2003,
2002 and 2001, respectively, were recorded in Casino Expenses on the
accompanying consolidated statements of operations.

Inventories -

       Inventories are stated at the lower of cost (on a first-in, first-out
basis) or market.

                                       47
<PAGE>
                       GB HOLDINGS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Property and equipment -

       As of the Effective Date, property and equipment were restated pursuant
to SOP 90-7 (see Note 2) and are being depreciated utilizing the straight line
method over their remaining estimated useful lives.

       Property and equipment purchased after the Effective Date have been
recorded at cost and are being depreciated utilizing the straight-line method
over their estimated useful lives as follows:

       Buildings and improvements                25-40 years
       Operating equipment                         3-7 years

       Interest costs related to property and equipment acquisitions are
capitalized during the acquisition period and are being amortized over the
useful lives of the related assets.

Deferred financing costs -

       The costs of issuing long-term debt, including all related underwriting,
legal, directors and accounting fees, were capitalized and are being amortized
over the term of the related debt issue. Deferred financing costs of $180,000
were incurred in connection with GB Property's offering of $110,000,000 11%
Notes due 2005 (the "Existing Notes"). During 2002, additional costs associated
with a Consent Solicitation by GB Property to modify the original indenture for
the Existing Notes were capitalized and are also being amortized over the
remaining term of the Existing Notes. Total Consent Solicitation costs,
including expenses, amounted to $2,083,000 in 2001 (see Note 4). For the years
ended December 31, 2003, 2002 and 2001 amortization of deferred financing costs
were $555,000, $555,000 and $174,000, respectively.

Long-lived assets -

        In 2002, the Company adopted FASB Statement No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets" ("FAS No. 144"), which excludes
from the definition of long-lived assets goodwill and other intangibles that are
not amortized in accordance with FAS No. 142. FAS No. 144 requires that
long-lived assets to be disposed of by sale be measured at the lower of carrying
amount or fair value less cost to sell, whether reported in continuing
operations or in discontinued operations. FAS No. 144 also expands the reporting
of discontinued operations to include components of an entity that have been or
will be disposed of rather than limiting such discontinuance to a segment of a
business. The adoption of FAS No. 144 did not have an impact on the Company's
consolidated financial statements.

       The Company periodically reviews long-lived assets, for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. Impairments are recognized when the expected
future undiscounted cash flows derived from such assets are less than their
carrying value. For such cases, losses are recognized for the difference between
the fair value and the carrying amount. Assets to be disposed of by sale or
abandonment, and where management has the current ability to remove such assets
from operations, are recorded at the lower of carrying amount or fair value less
cost of disposition. Depreciation for these assets is suspended during the
disposal period, which is generally less than one year. Assumptions and
estimates used in the determination of impairment losses, such as future cash
flows and disposition costs, may affect the carrying value of long-lived assets
and possible impairment expense in the Company's consolidated financial
statements. Management does not believe that any material impairment currently
exists related to its long-lived assets.

                                       48
<PAGE>
                       GB HOLDINGS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Accrued insurance -

       GBHC is self insured for a portion of its general liability, workers
compensation, certain health care and other liability exposures. A third party
insures losses over prescribed levels. Accrued insurance includes estimates of
such accrued liabilities based on an evaluation of the merits of individual
claims and historical claims experience. Accordingly, GBHC's ultimate liability
may differ from the amounts accrued.

Income taxes -

       Since 1999, Holdings' provision for federal income taxes is calculated
and paid on a consolidated basis with GB Property and GBHC.

       Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted rates
expected to apply to taxable income in the years in which temporary differences
are expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in the tax rates is recognized in income in the period
of the enactment date.

Loss Per Share

       Financial Accounting Standards No. 128, "Earnings Per Share" (FAS 128),
requires, among other things, the disclosure of basic and diluted earnings per
share for public companies. Since the capital structure of Holdings is simple,
in that no potentially dilutive securities were outstanding during the periods
presented, basic loss per share is equal to diluted loss per share. Basic loss
per share is computed by dividing net loss by the weighted average number of
common shares outstanding.

New Accounting Pronouncements

       On January 1, 2003, the Company adopted FAS No. 143, "Asset Retirement
obligations" ("FAS No. 143"), which provides the accounting requirements for
retirement obligations associated with tangible long-lived assets. This
statement requires entities to record the fair value of a liability for an asset
retirement obligation in the period in which it is incurred. The adoption of FAS
No. 143 did not have any impact on the Company's consolidated financial
statements.

       On January 1, 2003, the Company adopted FAS No. 148, "Accounting for
Stock-Based Compensation -- Transition and Disclosure" ("FAS No. 148"), which
provides alternative methods of transition for companies that choose to switch
to the fair value method of accounting for stock options. FAS No. 148 also makes
changes in the disclosure requirements for stock-based compensation, regardless
of which method of accounting is chosen. The adoption of FAS No. 148 did not
have any impact on the Company's consolidated financial statements.

Reclassifications -

       Certain reclassifications have been made to prior years' consolidated
financial statements to conform to the current year consolidated financial
statement presentations.

(3) Long-Term Debt

    Long-term debt is comprised of the following:

                                              December 31,        December 31,
                                                 2003                2002
                                             -------------       -------------
 11% notes, due September 29, 2005 (a)       $ 110,000,000       $ 110,000,000
                                             =============       =============

                                       49
<PAGE>
                       GB HOLDINGS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(a)    As a result of the Confirmation Order and the occurrence of the Effective
       Date and under the terms of the Plan, the Old Notes were cancelled and
       replaced with Existing Notes. Interest on the Existing Notes is payable
       on March 29 and September 29, beginning March 29, 2002. The outstanding
       principal is due on September 29, 2005. The Existing Notes are
       unconditionally guaranteed, on a joint and several basis, by both
       Holdings and GBHC, and are secured by substantially all of the assets, as
       of the Effective Date, other than cash and gaming receivables of Holdings
       and GBHC.

       The original indenture for the Existing Notes contained various
       provisions, which, among other things, restricted the ability of
       Holdings, and GBHC to incur certain senior secured indebtedness beyond
       certain limitations, and contained certain other limitations on the
       ability to merge, consolidate, or sell substantially all of their assets,
       to make certain restricted payments, to incur certain additional senior
       liens, and to enter into certain sale-leaseback transactions.

       In a Consent Solicitation Statement and Consent Form dated September 14,
       2001, GB Property sought the consent of holders of the Existing Notes to
       make certain changes to the original indenture (the "Modifications"). The
       Modifications included, but were not limited to, a deletion of, or
       changes to, certain provisions the result of which would be (i) to permit
       Holdings and its subsidiaries to incur any additional indebtedness
       without restriction, to issue preferred stock without restriction, to
       make distributions in respect of preferred stock and to prepay
       indebtedness without restriction, to incur liens without restriction and
       to enter into sale-leaseback transactions without restriction, (ii) to
       add additional exclusions to the definition of "asset sales" to exclude
       from the restrictions on "asset sales" sale-leaseback transactions,
       conveyances or contributions to any entity in which Holdings or its
       subsidiaries has or obtains equity or debt interests, and transactions
       (including the granting of liens) made in accordance with another
       provision of the Modifications relating to collateral release and
       subordination or any documents entered into in connection with an
       "approved project" (a new definition included as part of the
       Modifications which includes, if approved by the Board of Directors of
       Holdings, incurrence of indebtedness or the transfer of assets to any
       person if Holdings or any of its subsidiaries has or obtain debt or
       equity interests in the transferee or any similar, related or associated
       event, transaction or activity) in which a release or subordination of
       collateral has occurred including, without limitation, any sale or other
       disposition resulting from any default or foreclosure, (iii) to exclude
       from the operation of covenants related to certain losses to collateral,
       any assets and any proceeds thereof, which have been subject to the
       release or subordination provisions of the Modifications, (iv) to permit
       the sale or other conveyances of Casino Reinvestment Development
       Authority investments in accordance with the terms of a permitted
       security interest whether or not such sale was made at fair value, (v) to
       exclude from the operation of covenants related to the deposit into a
       collateral account of certain proceeds of "asset sales" or losses to
       collateral any assets and any proceeds thereof, which have been subject
       to the release or subordination provisions of the Modifications, (vi) to
       add new provisions authorizing the release or subordination of the
       collateral securing the Existing Notes in connection with, in
       anticipation of, as a result of, or in relation to, an "approved
       project", and (vii) various provisions conforming the text of the
       original indenture to the intent of the preceding summary of the
       Modifications.

                                       50
<PAGE>
                       GB HOLDINGS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

       Holders representing approximately 98% in principal amount of the
       Existing Notes provided consents to the Modifications. Under the terms of
       the original indenture, the consent of holders representing a majority in
       principal amount of Existing Notes was a necessary condition to the
       Modifications. Accordingly, GB Property, as issuer, and Holdings and
       GBHC, as guarantors, and Wells Fargo Bank Minnesota, National
       Association, as Trustee, entered into an Amended and Restated Indenture
       dated as of October 12, 2001, containing the Modifications to the
       original indenture described in the Consent Solicitation Statement (the
       "Amended and Restated Indenture"). In accordance with the terms of the
       Consent Solicitation Statement, holders of Existing Notes, who consented
       to the Modifications and who did not revoke their consents ("Consenting
       Noteholders"), were entitled to $17.50 per $1,000 in principal amount of
       Existing Notes, subject to certain conditions including entry into the
       Amended and Restated Indenture. Upon entry into the Amended and Restated
       Indenture on October 12, 2001, the Company transferred approximately $1.9
       million to the Trustee for distribution to Consenting Noteholders.

       As of December 31, 2003 the only scheduled payment of long-term debt is
the $110 million for Existing Notes, due September 29, 2005.

       At December 31, 2003 and 2002, accrued interest on the Existing Notes was
$3,092,000 and $3,092,000, respectively.

(4) Income Taxes

       The components of the (provision) benefit for income taxes are as
follows:
<TABLE>
<CAPTION>
                                         Year Ended       Year Ended       Year Ended
                                        December 31,     December 31,     December 31,
                                           2003             2002              2001
                                        ------------     ------------     ------------
<S>                                     <C>              <C>              <C>
Federal income tax (provision) benefit  $                $                $
   Current                                       -                 -         (292,000)
   Deferred                                      -                 -          292,000


State income tax (provision) benefit
   Current                                (958,000)         (784,000)         (55,000)
   Deferred                                      -                 -                -
                                        ----------       -----------      -----------
                                        $ (958,000)      $  (784,000)     $   (55,000)
                                        ==========       ===========      ===========
</TABLE>

                                       51
<PAGE>
                       GB HOLDINGS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

         Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for financial
reporting purposes, and the amounts used for income tax purposes. The major
components of deferred tax liabilities and assets as of December 31, 2003 and
2002 were as follows:
<TABLE>
<CAPTION>
                                                                                   2003                2002
                                                                               ------------        -------------
<S>                                                                           <C>                 <C>
Deferred tax assets:
      Bad debt reserve                                                         $  2,418,000        $   5,137,000
      Deferred financing costs                                                      234,000            1,053,000
      Group insurance                                                               747,000              936,000
      Accrued vacation                                                              613,000              732,000
      Action cash awards accrual                                                    123,000              499,000
      Jackpot accrual                                                               298,000              337,000
      Medical reserve                                                               408,000              109,000
      Reorganization Costs                                                          754,000                    -
      CRDA                                                                        5,724,000            5,512,000
      Federal and state net operating loss carryforward                          17,004,000            8,163,000
      Grantors trust income                                                       3,616,000            3,570,000
      Credit and capital loss carryforwards                                       3,385,000            2,421,000
      Other                                                                         297,000              330,000
                                                                                -----------        -------------

              Total deferred tax assets                                          35,621,000           28,799,000
              Less valuation allowance                                          (17,685,000)         (10,257,000)
                                                                                -----------        -------------
              Total deferred tax assets after valuation allowance                17,936,000           18,542,000
                                                                                -----------        -------------

Deferred tax liabilities:
    Noncurrent:

      Depreciation of plant and equipment                                       (17,812,000)         (18,466,000)
      Chips and tokens                                                             (124,000)             (76,000)
                                                                                -----------        -------------

             Total deferred tax liabilities                                     (17,936,000)         (18,542,000)
                                                                                -----------        -------------

               Net deferred tax assets (liabilities)                            $         -        $           -
                                                                                ===========        =============
</TABLE>

       Federal net operating loss carryforwards totaled approximately $39
million as of December 31, 2003 and will begin expiring in the year 2022 and
forward. New Jersey net operating loss carryforwards totaled approximately $58
million as of December 31, 2003. The enactment of the Business Tax Reform Act
("BTR") on July 2, 2002 deferred New Jersey net operating losses ("State NOL's")
set to expire in 2002 and 2003, for a two year period. As a result, about $6
million of state net operating loss carryforwards set to expire in 2003 are
extended to 2005. The Company also has general business credit carryforwards of
approximately $1.4 million which expire in 2004 through 2022. Additionally, as
of December 2003, the Company has a federal alternative minimum tax (AMT) credit
carryforward of about $72,000 and a New Jersey alternative minimum assessment
(AMA) credit carryforward of approximately $1.5 million, both of which can be
carried forward indefinitely.

                                       52
<PAGE>
                       GB HOLDINGS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

       Financial Accounting Standards No. 109 ("FAS l09") requires that the tax
benefit of NOL's and deferred tax assets resulting from temporary differences be
recorded as an asset and, to the extent that management can not assess that the
utilization of all or a portion of such NOL's and deferred tax assets is more
likely than not, requires the recording of a valuation allowance. Management has
determined that the realization of certain of the Company's deferred tax assets
is not more likely than not and, thus, has provided a valuation allowance
against those assets at December 31, 2003 and 2002.

       The provision for income taxes differs from the amount computed at the
federal statutory rate as a result of the following:

                                                       Years Ended December 31,
                                                       ------------------------
                                                         2003            2002
                                                        ------          ------

        Federal statutory rate                          (35.0)%         (35.0)%
        State taxes net of federal benefit               (2.2)%          (1.6)%
        Permanent differences                             0.2 %           0.9 %
        Tax credits                                      (5.2)%         (13.2)%
        Deferred tax valuation allowance                 47.9 %          57.8 %
        Other                                             0.0 %           3.1 %
                                                        -------         -------
                                                          5.7 %          12.0 %
                                                        =======         =======

         Holdings also had a change of ownership as defined under Internal
Revenue Code Section 382 upon the Effective Date. Management currently estimates
there will be no significant limitations on the ability of the Company to use
its tax credit carryforwards on a post confirmation basis as a result of this
change of ownership. On July 3, 2002, the State of New Jersey passed the New
Jersey Business Tax Reform Act, which, among other things, suspended the use of
the New Jersey net operating loss carryforwards for two years and introduced a
new alternative minimum assessment under the New Jersey corporate business tax
based on gross receipts or gross profits. For the years ended December 31, 2003
and 2002, there was a charge to income tax provision of $778,000 and $774,000,
respectively, related to the impact of the New Jersey Business Tax Reform Act.
On July 1, 2003, the State of New Jersey amended the New Jersey Casino Control
Act (the "NJCCA") to impose various tax increases on Atlantic City casinos,
including The Sands. Among other things, the amendments to the NJCCA include the
following new tax provision: the greater of a $350,000 minimum tax or a 7.5% tax
on adjusted net income of licensed casinos (the "Casino Net Income Tax) in State
fiscal years 2004 through 2006, with the proceeds deposited to the Casino
Revenue Fund. For the year ended December 31, 2003, $175,000 was charged to the
income tax provision related to the minimum Casino Net Income Tax, which is
payable in quarterly installments of $87,500 each.

(5) Transactions with related parties

       GBHC's rights to the trade name "The Sands" (the "Trade Name") were
derived from a license agreement between Greate Bay Casino Corporation and an
unaffiliated third party. Amounts payable by GBHC for these rights were equal to
the amounts paid to the unaffiliated third party. On September 29, 2000, High
River Limited Partnership assigned GBHC the rights under a certain agreement
with the owner of the Trade Name to use the Trade Name as of September 29, 2000
through May 19, 2086, subject to termination rights for a fee after a certain
minimum term. High River is an entity controlled by Carl C. Icahn. High River
received no payments for its assignment of these rights. Payment is made
directly to the owner of the Trade Name. For the years ended December 31, 2003,
2002 and 2001, the license fee amounted to $263,000, $272,000 and $268,000,
respectively.

                                       53
<PAGE>
                       GB HOLDINGS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

       The Stratosphere Casino Hotel & Tower (the "Stratosphere"), an entity
controlled by Carl C. Icahn, allocates a portion of certain executive salaries,
including the salary of Richard P. Brown, CEO of Holdings, as well as other
charges for tax preparation and travel to GBHC. Payments for such charges
incurred from the Stratosphere for the year ended December 31, 2003 amounted to
$191,000, including $106,000 for Mr. Brown's salary. There were no similar
charges for the year ended December 31, 2002.

       On February 28, 2003, Operating entered into a two year agreement with XO
New Jersey, Inc. a long-distance phone carrier controlled by Carl C. Icahn. The
agreement can be extended beyond the minimum two year term on a month-to-month
basis. Payments for such charges incurred for the year ended December 31, 2003
amounted to $127,000.

       During the years ended December 31, 2003 and 2002, GBHC borrowed $15.4
million and $6.5 million, respectively, from Holdings. This borrowing is
eliminated in the consolidation of, and has no impact on, the accompanying
consolidated financial statements.

       On October 12, 2001, as a result of, and pursuant to the terms of, a
consent solicitation dated September 20, 2001 to holders of Existing Notes,
holders that consented were paid $17.50 for each $1,000 of principal amount of
notes held, the affiliates of Mr. Icahn were paid $1,118,6770 because they
consented to certain amendments to the Indenture, dated as of September 29,
2000, among GB Property, as issuer. Holdings and Greate Bay Hotel, as
guarantors, and Wells Fargo Bank Minnesota, National Association, as Trustee.

(6) New Jersey Regulations and Obligatory Investments

       The Sands conducts gaming operations in Atlantic City, New Jersey and
operates a hotel and several restaurants, as well as related support facilities.
The operation of an Atlantic City casino/hotel is subject to significant
regulatory control. Under the NJCCA, GBHC was required to obtain and is required
to periodically renew its operating license. A casino license is not
transferable and, after the initial licensing and two one-year renewal periods,
is issued for a term of up to four years. The plenary license issued to The
Sands was renewed by the Commission in September, 2000 and extended through
September 2004. The Commission may reopen licensing hearings at any time. If it
were determined that gaming laws were violated by a licensee, the gaming license
could be conditioned, suspended or revoked. In addition, the licensee and other
persons involved could be subject to substantial fines.

       In order to renew GBHC's casino license, the Commission must determine
that GBHC and Holdings are financially stable. In order to be found "financially
stable" under the NJCCA, GBHC and Holdings must demonstrate, among other things,
their ability to pay, exchange, or refinance debts that mature or otherwise
become due and payable during the license term, or to otherwise manage such
debts. Because the Existing Notes will become due during the period following
the renewal of the license in 2004, the Commission will require GBHC and
Holdings to indicate the efforts they will pursue or are pursuing to refinance
the Existing Notes prior to maturity and during the new license term. Currently,
the Commission is and will continue to monitor the efforts of GBHC and Holdings
to manage and refinance the Existing Notes. There has been no precedent of
non-renewal of a casino license in this situation.

                                       54
<PAGE>
                       GB HOLDINGS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

       The NJCCA requires casino licensees to pay an investment alternative tax
of 2.5% of Gross Revenue (the "2.5% Tax") or, in lieu thereof, to make quarterly
deposits of 1.25% of quarterly Gross Revenue with the CRDA (the "Deposits"). The
Deposits are then used to purchase bonds at below-market interest rates from the
CRDA or to make qualified investments approved by the CRDA. The CRDA administers
the statutorily mandated investments made by casino licensees and is required to
expend the monies received by it for eligible projects as defined in the NJCCA.
The Sands has elected to make the Deposits with the CRDA rather than pay the
2.5% Tax.

       As of December 31, 2003 and 2002, The Sands had purchased bonds totaling
$6,875,000 and $6,946,000, respectively. In addition, The Sands had remaining
funds on deposit and held in escrow by the CRDA at December 31, 2003 and 2002,
of $15,198,000 and $13,151,000, respectively. The bonds purchased and the
amounts on deposit and held in escrow are collectively referred to as
"obligatory investments" on the accompanying consolidated financial statements.

       Obligatory investments at December 31, 2003 and 2002, are net of
accumulated valuation allowances of $11,340,000 and $10,028,000, respectively,
based upon the estimated realizable values of the investments. Provisions for
valuation allowances for the years ended December 31, 2003, 2002 and 2001
amounted to $1,434,000, 1,521,000 and $1,341,000, respectively.

       The Sands has, from time to time, contributed certain amounts held in
escrow by the CRDA to fund CRDA sponsored projects. During 2003, The Sands
donated $695,000 of its escrowed funds to CRDA sponsored projects. No specific
refund or future credit has been associated with the 2003 contributions. During
2002, The Sands contributed $925,000 of its escrowed funds to CRDA sponsored
projects and received $116,000 in a cash refund. In 2001, The Sands contributed
$322,000 of its escrowed funds to CRDA sponsored projects and received $80,000
in a cash refund and $84,000 in waivers of certain future Deposit obligations.
Prior to this, the CRDA had granted The Sands both cash refunds and waivers of
certain of its future Deposit obligations in consideration of similar
contributions. Other assets aggregating $621,000 and $811,000, respectively,
have been recognized on the accompanying consolidated balance sheets at December
31, 2003 and 2002, and are being amortized over a period of ten years commencing
with the completion of the projects. Amortization of other assets totaled
$205,000, $199,000 and $202,000 for the years ended December 31, 2003, 2002 and
2001, respectively, and are included in depreciation and amortization, including
provision for obligatory investments on the accompanying statements of
operations.

        The Sands has agreed to contribute certain of its future investment
obligations to the CRDA in connection with the renovation related to the
Atlantic City Boardwalk Convention Center. The projected total contribution will
amount to $6.9 million, which will be paid through 2011 based on an estimate of
certain of The Sands' future CRDA deposit obligations. As of December 31, 2003,
The Sands had satisfied $2.1 million of this obligation.

(7) Commitments and Contingencies

    Legal Proceedings

        Tax appeals on behalf of GBHC and the City of Atlantic City challenging
the amount of GBHC's real property assessments for tax years 1996 through 2003
are pending before the NJ Tax Court.

                                       55
<PAGE>
                       GB HOLDINGS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

        In 2001, GBHC discovered certain failures relating to currency
transaction reporting which resulted in the failure of GBHC to file legally
required currency transaction reports. Following this discovery, GBHC
self-reported the situation to the applicable regulatory agencies. GBHC
conducted an internal examination of the matter and the New Jersey Division of
Gaming Enforcement conducted a separate review. There has not been an impact on
GBHC's financial reporting because of these failures, GBHC has revised internal
control processes and taken other measures to address the situation. In May
2003, GBHC was advised by the Department of the Treasury that it will not pursue
a civil penalty.

        By letter dated January 23, 2004, Sheffield Enterprises, Inc. asserted
potential claims against The Sands under the Lanham Act for permitting a show
entitled The Main Event, to run at the Sands during 2001. Sheffield also asserts
certain copyright infringement claims growing out of the Main Event
performances. It has not yet been determined whether or not the claims made by
Sheffield would, if adversely determined, materially impact the financial
position or results of operations of the Company.

        On February 26, 2003, The Sands received a letter from counsel for Mr.
Frederick H. Kraus, Executive Vice President, General Counsel and Secretary,
indicating that he had been retained to represent Mr. Kraus "in regards to a
constructive discharge, breach of contract, severance pay" and other claims.
This matter has been amicably resolved.

        GBHC is a party in various legal proceedings with respect to the conduct
of casino and hotel operations and has received employment related claims.
Although a possible range of losses cannot be estimated, in the opinion of
management, based upon the advice of counsel, GBHC does not expect settlement or
resolution of these proceedings or claims to have a material adverse impact upon
their consolidated financial position or results of operations, but the outcome
of litigation and the resolution of claims is subject to uncertainties and no
assurances can be given. The consolidated financial statements do not include
any adjustments that might result from these uncertainties.

        From time to time, GBHC and certain of its officers, directors, agents
and employees, are subject to various legal and administrative proceedings
incidental to the business of GBHC, GBHC does not believe any proceedings
currently pending are material to the conduct of the business of GBHC.

Labor Relations

       The Sands has collective bargaining agreements with three unions that
represent approximately 818 employees, most of whom are represented by the
Hotel, Restaurant Employees and Bartenders International Union, AFL-CIO, Local
54. The collective bargaining agreement with Local 54 expires in September 2004.
The collective bargaining agreements with the Carpenters, Local 623 and
Entertainment Workers, Local 68 expire in April and July 2005, respectively.
Management considers its labor relations to be good.

                                       56
<PAGE>
                       GB HOLDINGS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(8) Acquisition of Claridge Administration Building

       In April 2000, GBHC entered into an agreement with the entities
controlling the Claridge Hotel and Casino (the "Claridge") to acquire the
Claridge Administration Building. The purchase price was $3.5 million,
consisting of $1.5 million in cash at closing and $2.0 million consideration
tendered through the elimination for 40 months of a $50,000 monthly fee paid by
the Claridge to GBHC, under an agreement between the Claridge and GBHC governing
the development and operation of the "People Mover" leading from the boardwalk
to The Sands and the Claridge. The present value of the $2.0 million
consideration has been recorded in other accrued and other noncurrent
liabilities sections of the balance sheet. GBHC reduces and adjusts the
respective liabilities as it records the People Mover license fee in other
income and interest expense at an imputed rate of 10%. In July 2003, the
remaining obligation related to the Claridge Administration Building acquisition
was satisfied in full. The following month the Claridge resumed payment of the
monthly fee at the reduced amount of $20,000 per month.

(9) Employee Retirement Savings Plan

       GBHC administers and participates in The Sands Retirement Plan, a
qualified defined contribution plan for the benefit of all of GBHC's employees,
who satisfy certain eligibility requirements.

       The Sands Retirement Plan is qualified under the requirements of Section
401(k) of the Internal Revenue Code allowing participating employees to benefit
from the tax deferral opportunities provided therein. All employees of GBHC, who
have completed one year of service, as defined, and who have attained the age of
21, are eligible to participate in the Savings Plan.

       The Sands Retirement Plan provides for a matching contribution by GBHC
based upon certain criteria, including levels of participation by GBHC's
employees. GBHC incurred matching contributions totaling $406,000, $575,000, and
$700,000, for the years ended December 31, 2003, 2002 and 2001, respectively.

       GBHC also contributes to multi-employer pension, health and welfare plans
for its union employees. For the years ended December 31, 2003 and 2002, GBHC
contributed $5,411,000 and $5,750,000, respectively.

(10) Disclosures about Fair Value of Financial Instruments

       Disclosure of the estimated fair value of financial instruments is
required under FAS No 107, "Disclosure About Fair Value of Financial
Instruments." The fair value estimates are made at discrete points in time based
on relevant market information and information about the financial instruments.
These estimates may be subjective in nature and involve uncertainties and
significant judgment and therefore cannot be determined with precision.

       Cash and cash equivalents are valued at the carrying amount. Such amount
approximates the fair value of cash equivalents because of the short maturity of
these instruments.

       Obligatory investments are valued at a carrying amount which includes an
allowance reflecting the below market interest rate associated with such
investments.

       Existing Notes are valued at the market closing price on December 31,
2003 and 2002, respectively.


                                       57
<PAGE>
                       GB HOLDINGS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

       The estimated carrying amounts and fair values of Holdings' financial
instruments at December 31, 2003 and 2002 are as follows:
<TABLE>
<CAPTION>
                                          December 31, 2003                 December 31, 2002
                                   -------------------------------  --------------------------------
                                     Carrying                          Carrying
                                      Amount         Fair Value         Amount         Fair Value
                                   --------------  ---------------  ---------------  ---------------
<S>                               <C>              <C>              <C>              <C>
Financial Assets:
    Cash and cash equivalents      $  33,454,000   $   33,454,000   $   50,645,000   $   50,645,000
    Obligatory investments, net       10,705,000       10,705,000       10,069,000       10,069,000

Financial Liabilities:
    Interest payable                   3,092,000        3,092,000        3,092,000        3,092,000
    Existing                         110,000,000       91,300,000      110,000,000       96,400,000
    Notes
</TABLE>

(11) Operating Leases

       The Company leases certain equipment and property. Total lease expense
was $2.1 million and $2.5 million for the years ended December 31, 2003 and
2002, respectively. The following table sets forth the future minimum rental
commitments for operating leases:

                   2004                 $  1,986,000
                   2005                    1,967,000
                   2006                    1,998,000
                   2007                    1,998,000
                   2008                    1,998,000
                   Thereafter              8,431,000
                                        ------------
                    Total               $ 18,378,000
                                        ============

(12) Reorganization and Other Related Costs

       Management anticipates that the exchange of Existing Notes for $110
million in 3% notes due 2008 will be accounted for as a modification of debt, as
opposed to an extinguishment of debt, in accordance with Emerging Issues Task
Force Issue No. 96-19, "Debtors Accounting for a Modification or Exchange of
Debt Instruments" ("EITF 96-19"). EITF 96-19 provides the quantitative method of
evaluating the exchange of debt as either a modification or an extinguishment of
debt, as well as the accounting treatment of related costs based on the results
of that evaluation. Guidance contained in EITF 96-19 indicates that costs
incurred with third-parties directly related to the modification of debt should
be expensed as incurred. Costs associated with the debt restructuring and
reorganization of the Company amounted to $1.8 million during the year ended
December 31, 2003. Further costs are anticipated in 2004 related to the
modification of debt.

(13) Subsequent Events

       On January 13, 2004, the Securities and Exchange Commission granted GB
Holdings application to delist the Existing Notes from trading on the American
Stock Exchange. On January 14, 2004, the American Stock Exchange halted trading
on the Existing Notes, and on January 15, 2004 the American Stock Exchange
delisted the Existing Notes.

                                       58
<PAGE>
                       GB HOLDINGS, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

       In January 2004, at the request of GB Holdings, Ealing Corp., a Nevada
corporation and an affiliate of Mr. Icahn, provided a commitment letter to GB
Holdings, dated January 30, 2004, in which Ealing agreed to provide a revolving
credit facility under which GB Holdings and its subsidiaries may borrow up to an
aggregate amount of $10 million to be used for general working capital purposes.
Under the terms of the commitment letter, the revolving credit facility will
expire on June 30, 2005, borrowings will bear interest at a rate of 10% per
annum, and obligations under the revolving credit facility will be secured by a
first lien on all of the assets of GB Holdings and its subsidiaries which will
be senior to either the liens securing the Existing Notes or the New Notes,
depending on when the loan is funded. Ealing's obligations to provide the
financing pursuant to the commitment letter is subject to the negotiation and
execution of definitive loan and security agreements and related documents and
certain customary conditions. However, there can be no assurance that the loan
agreement with Ealing will be consummated, that if the loan agreement with
Ealing is not consummated, the Company will be able to obtain financing from
another lender on terms as or more favorable than the terms of the commitment
letter, or whether the Company will need to borrow funds for working capital.

(14) Selected Quarterly Financial Data (Unaudited)
<TABLE>
<CAPTION>
                                                                  QUARTER
                                      -----------------------------------------------------------------
                                          FIRST           SECOND           THIRD            FOURTH
                                      --------------  ---------------  ---------------  ---------------
<S>                                   <C>            <C>               <C>              <C>
Year Ended December 31, 2003
    Net revenues                      $  39,801,000   $   46,030,000   $   46,041,000   $    38,386,000
                                      =============   ==============   ==============   ===============
    Income (loss) from operations     $  (1,436,000)  $    2,468,000   $     (317,000)  $    (4,227,000)
                                      =============   ==============   ==============   ===============
    Net loss                          $  (4,401,000)  $     (507,000)  $   (3,456,000)  $    (9,349,000)
                                      =============   ==============   ==============   ===============
    Net loss per share                $       (0.44)  $        (0.05)  $        (0.35)  $         (0.93)
                                      =============   ==============   ==============   ===============
Year Ended December 31, 2002
    Net revenues                      $  53,244,000   $   49,582,000   $   49,797,000   $    40,850,000
                                      =============   ==============   ==============   ===============
    Income from operations            $   5,958,000   $      867,000   $    1,938,000   $     4,727,000
                                      =============   ==============   ==============   ===============
    Net income/(loss)                 $   2,258,000   $   (1,218,000)  $     (906,000)  $    (7,455,000)
                                      =============   ==============   ==============   ===============
    Net income (loss) per share       $        0.23   $        (0.12)  $        (0.09)  $         (0.75)
                                      =============   ==============   ==============   ===============
</TABLE>

                                       59
<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

       On March 27, 2002, the Commission entered an order prohibiting the
Company, as well as all other New Jersey casino licensees, from conducting
business with Arthur Andersen LLP after May 15, 2002.

       The Company's Board of Directors' dismissed Arthur Andersen LLP as
independent auditors and appointed KPMG LLP (KPMG) to serve as the Company's
independent auditors for the fiscal year ended December 31, 2002. The change in
auditors was effective May 16, 2002. The decision to appoint KPMG was made after
an extensive evaluation process by the Board of Directors, its Audit Committee
and management of the Company.

       None of the Registrants had disagreements with its independent
accountants to report under this item.

ITEM 9A. CONTROLS AND PROCEDURES

       The Company's senior management is responsible for establishing and
maintaining a system of disclosure controls and procedures (as defined in Rule
13a-14 and 15d-14 under the Securities Exchange Act of 1934 (the "Exchange
Act")) designed to ensure that information required to be disclosed by the
Company in the reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported, within the time periods specified
in the Securities and Exchange Commission's rules and forms. Disclosure controls
and procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by an issuer in the reports
that it files or submits under the Exchange Act is accumulated and communicated
to the issuer's management, including its principal executive officer or
officers and principal financial officer or officers, or persons performing
similar functions, as appropriate to allow timely decisions regarding required
disclosure.

       In accordance with Exchange Act Rules 13a-15 and 15d-15, the Company
carried out an evaluation, with the participation of the Chief Executive Officer
and Chief Financial Officer, as well as other key members of the Company's
management, of the effectiveness of the Company's disclosure and procedures as
of the end of the period covered by this report. Based on that evaluation, the
Company's Chief Executive Officer and Chief Financial Officer concluded that the
Company's disclosure controls and procedures were effective, as of the end of
the period covered by this report, to provide reasonable assurance that
information required to be disclosed in the Company's reports filed or submitted
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commission's rules and
forms.

       No change occurred in the Company's internal controls concerning
financial reporting during the fourth quarter of the fiscal year ended December
31, 2003 that has materially affected, or is reasonably likely to materially
affect, the Company's internal controls over financial reporting.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTS

         The Boards of Directors of Holdings, GB Property and GBHC consist of:
Carl C. Icahn, Michael L. Ashner, Martin Hirsch, Harold First, Auguste E.
Rimpel, Jr. and John P. Saldarelli. Messrs. Ashner, First and Rimpel, Jr. were
elected to the Boards of Directors of Holdings, GB Property, GBHC, Atlantic
Holdings and ACE Gaming, as independent members, and to the Audit Committee of
Holdings.

                                       60
<PAGE>

       No family relationships exist between any directors or executive officers
of GB Property, Holdings or GBHC.

       Directors and Officers

       Certain information is set forth below concerning the directors and
executive officers of each of GB Property, Holdings and GBHC.

            Name                    Age                         Position
-------------------------------     ---       ----------------------------------

Carl C. Icahn (1)                   68        Chairman of the Board of Directors

Martin Hirsch (2)                   49        Director

John P. Saldarelli (3)              62        Director

Michael L. Ashner (4)               51        Director

Harold First (5)                    67        Director

Auguste E. Rimpel, Jr. (6)          64        Director

Richard P. Brown (7)                56        Chief Executive Officer

Thomas Davis (8)                    54        Former President

George Toth (9)                     57        Interim President

Douglas S. Niethold (10)            48        Interim Vice President, Finance,
                                              Chief Financial Officer and
                                              Principal Accounting Officer

---------------
(1) Carl C. Icahn has served as Chairman of the Board and a Director of Starfire
    Holding Corporation (formerly Icahn Holding Corporation), a privately-held
    holding company, and Chairman of the Board and a Director of various
    subsidiaries of Starfire, including ACF Industries, Incorporated, a
    privately-held railcar leasing and manufacturing company, since 1984. He has
    also been Chairman of the Board and President of Icahn & Co., Inc., a
    registered broker-dealer and a member of the National Association of
    Securities Dealers Inc., since 1968. Since November 1990, Mr. Icahn has been
    Chairman of the Board of American Property Investors, Inc., the general
    partner of American Real Estate Partners, L.P., a public limited partnership
    that invests in real estate. Mr. Icahn has been a Director of Cadus
    Pharmaceutical Corporation, a firm which holds various biotechnology
    patents, since 1993. Since August 1998 he has also served as Chairman of the
    Board of Directors of Lowestfare.com, LLC, an internet travel reservations
    company. From October 1998, Mr. Icahn has been the President and a Director
    of Stratosphere Corporation which operates the Stratosphere Hotel and
    Casino. Mr. Icahn received his B.A. from Princeton University. Since
    September 29, 2000, Mr. Icahn has served as the Chairman of the Board of
    Directors of Holdings, GB Property and GBHC. Since October 31, 2003, Mr.
    Icahn has served as Chairman of the Board of Directors of Atlantic Holdings.

                                       61
<PAGE>

(2) Martin Hirsch has served as a Vice President of American Property Investors,
    Inc. since March 18, 1991, where he is involved in investing, managing and
    disposing of real estate properties and securities. Mr. Hirsch was elected
    as Executive Vice President and Director of Acquisitions of American
    Property Investors, Inc. in 2000. From January 1986 to January 1991, he was
    at Integrated Resources, Inc. as a Vice President where he was involved in
    the acquisition of commercial real estate properties and asset management.
    From 1985-1986, he was a Vice President of Hall Financial Group where he
    acquired and financed commercial and residential properties. Mr. Hirsch
    currently serves on the Board of Directors of Stratosphere Corp. He received
    his M.B.A. from The Emory University Graduate School of Business. Mr. Hirsch
    has served as a director of Holdings and GB Property since September 29,
    2000 and as a director of GBHC since February 28, 2002. Since October 31,
    2003, Mr. Hirsch has served as a member of Atlantic Holdings' Board of
    Directors.

(3) John P. Saldarelli has served as Vice President, Secretary and Treasurer of
    American Property Investors, Inc. (general partner of American Real Estate
    Partners) since March 18, 1991. Mr. Saldarelli was also President of
    Bayswater Realty Brokerage Corp. from June 1987 until November 19, 1993, and
    Vice President of Bayswater Realty & Capital Corp. from September 1979 until
    April 15, 1993. In October 1998, Mr. Saldarelli was appointed to the Board
    of Directors of Stratosphere and in June 2000, Mr. Saldarelli was given the
    additional title of Chief Financial Officer. Mr. Saldarelli has served as a
    director of Holdings, GB Property and GBHC since February 28, 2001. Since
    October 31, 2003, Mr. Saldarelli has served as a member of Atlantic
    Holdings' Board of Directors.

(4) Michael L. Ashner has served as Chairman, President and CEO of Winthrop
    Associates, a real estate consulting firm, since 1995. Mr. Ashner has also
    served as General Partner of Cecil Associates, a limited liability company
    which owns twenty Comfort Inns, since 1996. Mr. Ashner has been CEO of
    Newkirk Associates, a limited liability company which owns and manages more
    than 28 million square feet of office and retail space, since 1997. Mr.
    Ashner has also been Managing Director of AP-USX, LLC, a limited liability
    company which owns a 2.4 million square foot office tower, since 1998. Since
    1999, Mr. Ashner has served as President and CEO of Presidio Capital
    Corporation, an investment banking firm. Mr. Ashner has been President and
    CEO since 2000 of GFB-AP Fort, LLC, a limited liability company involved in
    independent and assisted living communities. Mr. Ashner has been President
    and sole shareholder since 1981 of Exeter Capital Corporation, which
    provides real estate consulting to real estate investors. Mr. Ashner
    currently serves as a director of NBTY, Inc., a publicly traded company that
    is a manufacturer, marketer and retailer of nutritional supplements. Mr.
    Ashner is the President and CEO and a director of Shelbourne Properties I,
    Shelbourne Properties II and Shelbourne Properties III, three separate
    publicly traded real estate investment trusts that are listed on the
    American Stock Exchange and are currently liquidating. Since December 31,
    2003, Mr. Ashner has been the President and CEO of First Union Real Estate
    Equity and Mortgage Investment, an unincorporated business trust engaged in
    the business of owning and managing and lending to, real estate and related
    investments which is publicly traded and listed on the New York Stock
    Exchange. Mr. Ashner has served as a director of Holdings and GB Property
    since September 29, 2000, as a member of the Audit Committee of Holdings
    since October 3, 2000, and as a member of the Board of Directors of GBHC
    since June 6, 2001. Since March 12, 2003, Mr. Ashner has been a member of
    the Special Committee. Since October 31, 2003, Mr. Ashner has served as a
    member of Atlantic Holdings' Board of Directors.

                                       62
<PAGE>

(5) Harold First has been a financial consultant since 1993. From December 1990
    through January 1993, Mr. First served as Chief Financial Officer of Icahn
    Holding Corp., a privately held holding company. He has served as a director
    of Taj Mahal Holding Corporation, a public casino and gaming corporation,
    Trump Taj Mahal Realty Corporation, a privately held real estate company,
    Memorex Telex N.V., a public technology company, Trans World Airlines, Inc.,
    a public airline company, ACF Industries, Inc., a privately held railcar
    leasing and manufacturing company, Cadus Pharmaceutical Corporation, a
    biotech research company, Talkamerica, Inc., a public long distance
    telephone service company, Marvel Entertainment Group, Inc., a public
    entertainment company, Toy Biz, Inc., a public toy company and Vice Chairman
    of the Board of Directors of American Property Investors, Inc., the general
    partner of American Real Estate Partners, L.P., a public limited partnership
    that invests in real estate. Mr. First currently serves on the Boards of
    Directors of Panaco Inc., an oil and gas drilling company, and was a
    director of Philip Services Corporation, a privately held company that is a
    leading integrated provider of industrial and metals services. He is a
    Certified Public Accountant and holds a B.S. from Brooklyn College. He has
    served as a member of the Audit Committee of Holdings and the Board since
    April 25, 2001, and as a director of GB Property and GBHC since June 6,
    2002. Since March 12, 2003, Mr. First has been a member of the Special
    Committee. Since October 31, 2003, Mr. First has served as a member of
    Atlantic Holdings' Board of Directors.

(6) Auguste E. Rimpel, Jr. has been a retired partner of PricewaterhouseCoopers
    LLP ("PwC") since 2000. He was with PwC and its predecessor firm, Price
    Waterhouse, since 1983, most recently as Managing Partner of International
    Consulting services for the Washington Consulting Practice of the firm.
    Prior to his tenure at PwC, he served as a Partner with Booz Allen &
    Hamilton, Inc., a management consulting firm and as a Vice President of
    Arthur D. Little International, Inc., a management consulting firm. Dr.
    Rimpel currently serves as Chairman of the Board of Trustees of the
    University of the Virgin Islands. Dr. Rimpel received a Ph.D. in chemical
    engineering from Carnegie Institute of Technology and was an International
    Fellow at Columbia University Graduate School of Business. He has served as
    a member of the Audit Committee and Board of Directors of Holdings since
    April 25, 2001, and as a director of GB Property and GBHC since June 6,
    2001. Since March 12, 2003, Mr. Rimpel has been a member of the Special
    Committee. Since October 31, 2003, Mr. Rimpel has served as a member of
    Atlantic Holdings' Board of Directors.

(7) Richard P. Brown, serves as President and Chief Executive Officer for Carl
    C. Icahn's Nevada gaming properties, the Stratosphere Casino Hotel and
    Tower, Arizona Charlie's Decatur and Arizona Charlie's Boulder. All three
    properties are located in Las Vegas. In addition, Brown serves as Chief
    Executive Officer of GBHC, Holdings and GB Property. Brown reports directly
    to Icahn and oversees strategic planning, operating, financial and capital
    investment direction for the Icahn gaming properties. His role also
    encompasses development of new business opportunities and company policies.
    Brown joined the Icahn gaming properties in March 2000 as Executive Vice
    President of Marketing for the Stratosphere and both Arizona Charlie's
    properties while also serving as one of three key executives responsible for
    overall operations of the Stratosphere. In January 2002 he was promoted to
    Chief Operating Officer, responsible for the operations of all three
    properties. Brown was promoted to the position of President and Chief
    Executive Officer of the Icahn gaming properties in Nevada in June 2002. In
    addition, he was promoted to the role of Chief Executive Officer of GBHC,
    Holdings and GB Property in September 2002. Prior to joining the
    Stratosphere, Brown held executive positions with Harrah's Entertainment
    (1994-2000) and the Hilton Corporation (1992-1994). In addition, he has held
    vice president positions with the New York Racing Association, the Travelers
    Companies of Hartford, Connecticut and the J. Walter Thompson Company in New
    York, New York. Mr. Brown earned a bachelor's degree in business economics
    from Southern Connecticut State College.

                                       63
<PAGE>

(8) Thomas Davis, served as President of Holdings, GB Property, GBHC and
    Atlantic Holdings from February 2003 until February 2004. Previously, Mr.
    Davis served as Vice President of Business Development at Stratosphere
    Corporation from November 2002 until February 2003. Prior to joining the
    Stratosphere Corporation, Mr. Davis served as General Manager of Little
    River Casino Resort from 1999, General Manager at Chinook Winds
    Resort-Casino from 1998 to 1999 and General Manager of Pioneer Gambling Hall
    & Hotel from 1996 to 1998.

(9) George Toth was appointed Interim President of the GBHC in February 2004.
    Prior to that, Mr. Toth was Vice President of Hotel Operations and Security
    for GBHC and has held various positions in the company since 1994, including
    Vice President of Construction and Operations and Executive Director of
    Support Services. Mr. Toth received his MBA from Monmouth University in 1996

(10) Douglas S. Niethold was appointed Vice President, Finance of GBHC, Interim
    Vice President, Finance, Chief Financial Officer and Principal Accounting
    officer of Holdings, GB Property and Atlantic Holdings in January 2004. Mr.
    Niethold has also served as Treasurer of Brighton Park Maintenance
    Corporation since 1996. Previously, Mr. Niethold served as Executive
    Director, Finance from 2000 to 2003 and Director, Financial Planning from
    1994 to 2000 for GBHC. Mr. Niethold received his Bachelors degree from
    Northeastern University and his MSBA from Temple University.

       The Board of Directors has determined that Harold First qualifies as an
"audit committee financial expert" as defined in ITEM 401(h) of Regulation S-K
of the Exchange Act, and that Mr. First is independent of management as that
term is used in Item 7(d)(3)(iv) of Schedule 14A under the Exchange Act.

       Code of Ethics

       The Company has adopted a code of ethics that applies to its chief
executive officer and senior financial officers, a copy of which is filed as an
exhibit herewith.

       Section 16(A) Beneficial Ownership Reporting Compliance

       Section 16(a) of the Securities Exchange Act of 1934 requires Holdings'
officers and directors, and persons who own more than ten percent of a
registered class of Holdings' equity securities, to file reports of ownership
and changes in ownership with the Securities and Exchange Commission (the "SEC")
and the American Stock Exchange. Officers, directors and greater than ten
percent shareholders are required by SEC regulation to furnish Holdings with
copies of all Section 16(a) forms they file. Based solely on a review of the
copies of such forms furnished by the Company, or written representations that
no Forms 5 were required, Holdings believes that during the fiscal year ended
December 31, 2003, all Section 16(a) filing requirements applicable to its
officers, directors and greater than ten-percent beneficial owners were
satisfied.

         Other Matters

         On January 5, 2001, Reliance Group Holdings, Inc. ("Reliance")
commenced an action in the United States District Court for the Southern
District of New York against Carl C. Icahn, Icahn Associates Corp. and High
River alleging that High River's tender offer for Reliance 9% senior notes
violated Section 14(e) of the Exchange Act of 1934. Reliance sought a temporary
restraining order and preliminary and permanent injunctive relief to prevent
defendants from purchasing the notes. The Court initially imposed a temporary
restraining order. Defendants then supplemented the tender offer disclosures.
The Court conducted a hearing on the disclosures and other matters raised by
Reliance. The Court then denied Reliance's motion for a preliminary injunction
and ordered dissolution of the temporary restraining order following
dissemination of the supplement. Reliance took an immediate appeal to the United
States Court of Appeals for the Second Circuit and sought a stay to restrain
defendants from purchasing notes during the pendency of the appeal. On January
30, 2001, the Court of Appeals denied plaintiffs' stay application. On January
30, 2001, Reliance also sought a further temporary restraining order from the
District Court. The Court considered the matter and reimposed its original
restraint until noon the next day, at which time the restraint against Mr. Icahn
and his affiliates was dissolved. On March 22, 2001, the Court of Appeals ruled
in favor of Mr. Icahn by affirming the judgment of the District Court.

                                       64
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION

       Summary of Cash and Certain Other Compensation

       Neither Holdings nor GB Property pays any compensation to any employee,
executive officer or director. GBHC pays the compensation of the independent
directors (see "Compensation of Directors" below). The following table provides
certain summary information concerning compensation paid or accrued by GBHC, to
or on behalf of (i) GBHC's Chief Executive Officer; (ii) each of the other
executive officers of GBHC determined as of the end of the last fiscal year; and
(iii) additional individuals who would have qualified as among the executive
officers of GBHC but for the fact that the individual was not serving as an
executive officer at the end of the last year (hereafter referred to as the
named executive officers), for the years ended December 31, 2003, 2002 and 2001.
<TABLE>
<CAPTION>
                                                       Annual Compensation
                                      -----------------------------------------------------
                                                                               Other Annual         All Other
Name and Principal Position           Year        Salary          Bonus        Compensation      Compensation (1)
---------------------------           ----      ---------         -----        ------------      ----------------
<S>                                   <C>      <C>                <C>          <C>                 <C>
Richard P. Brown                      2003     $ 106,252          $   -        $         -         $       -
    Chief Executive Officer           2002             -              -                  -                 -
                                      2001             -              -                  -                 -


Timothy A. Ebling                     2003       278,106              -              7,700             4,534
    Executive Vice President,         2002       250,000              -              8,400             4,500
    Chief Financial Officer           2001       250,000              -              8,400             4,250
    Principal Accounting
    Officer


Thomas Davis                           2003      247,067              -                  -                 -
    President                          2002            -              -                  -                 -
                                       2001            -              -                  -                 -


William Cooney (2)                     2003      159,374          2,000                  -             2,721
    Senior Vice President              2002      180,654(4)           -                  -                 -
    Customer Development               2001      210,000              -                  -             4,463

Carmen Hirst (3)                       2003      143,402          6,000                  -                 -
    Vice President Information         2002       74,996              -                  -                 -
    Technology, CIO                    2001            -              -                  -                 -
</TABLE>

                                       65
<PAGE>


(1) Includes matching contributions by GBHC to The Sands Retirement Savings Plan
    on behalf of the named executive officer.

(2) William Cooney has served GBHC as Senior Vice President, Customer
    Development since February 2003. Prior to that, Mr. Cooney was Vice
    President, Player Development at Tropicana Casino from May 2002 until
    February 2003. Mr. Cooney had previously served GBHC as Executive Vice
    President, Marketing Operations from February 2001 until May 2002 and Vice
    President Marketing from March 2000 until February 2001 and Vice President,
    Player Development from September 1999 until March 2000. Prior to that, Mr.
    Cooney served as Executive Director of Player Development.

(3) Carmen Hirst has served GBHC as Vice President/CIO since April 2003 and
    served as Executive Assistant to the President/CIO from August 2002 until
    April 2003 and Executive Assistant to the President beginning in June 2002.
    Prior to that, Ms. Hirst served as Executive Director of Information
    Technology at Resorts Casino from December 2001 until May 2002 and Director
    of Information Services at Showboat Casino from May 1991 until December
    2001.

(4) Includes severance compensation.

       Option Grants in Last Fiscal Year

       The Company does not have a stock option plan.

       Employment Contracts

       Timothy A. Ebling, formerly Executive Vice President, Chief Financial
Officer and Principal Accounting Officer of GBHC, and appointed Interim Chief
Operating Officer beginning January 2002 and ending March 18, 2002 and as
President from October 2002 until January 10, 2003, was under an employment
agreement, amended as of March 11, 1998, through November 30, 2003. The terms of
the agreement provide for an annual base salary of $190,000, subject to annual
increases on each anniversary date of the agreement equal to no less than the
change in the Consumer Price Index, as defined, and no more than five percent.
In October 2000, Mr. Ebling's base salary was increased to $250,000. Mr.
Ebling's contract was not renewed and he left the employ of the Company as of
November 30, 2003. Mr. Ebling received a payment of $265,338 and provided
Holdings a general release.

       Frederick H. Kraus, Executive Vice President, General Counsel and
Secretary of GBHC, was under an employment agreement, amended as of March 11,
1998, in such capacities continuing through December 31, 2003. Mr. Kraus left
the employ of the Company as of March 26, 2003.

       The Company currently has no individual employees under employment
contracts.

       Employee Retirement Savings Plan

       GBHC administers and participates in the Sands Retirement Plan, a
qualified defined contribution plan for the benefit of all of GBHC's employees,
who satisfy certain eligibility requirements.

       The Sands Retirement Plan is qualified under the requirements of Section
401(k) of the Internal Revenue Code allowing participating employees to benefit
from the tax deferral opportunities provided therein. All employees of GBHC, who
have completed one year of service, as defined, and who have attained the age of
21, are eligible to participate in the Sands Retirement Plan.

                                       66
<PAGE>

       The Sands Retirement Plan provides for a matching contribution by GBHC
based upon certain criteria, including levels of participation by GBHC's
employees. GBHC incurred matching contributions totaling $406,000, $575,000 and
$700,000 for the years ended December 31, 2003, 2002 and 2001, respectively.

       GBHC also contributes to multi-employer pension, health and welfare plans
for its union employees. For the years ended December 31, 2003 and 2002, GBHC
contributed $5,411,000 and $5,750,000, respectively.

       Compensation of Directors

       Prior to the Effective Date, independent directors of Holdings, GB
Property and GBHC received an annual fee of $10,000 for service on the Boards of
Directors and a fee of $500 for each meeting attended. Independent directors of
the Board of Directors of Holdings are entitled to receive an annual fee of
$22,500. The Board of Directors of Holdings held 7 meetings either in person or
by unanimous consent during the year ended December 31, 2003. All directors
attended at least 75% of all meetings of the Board of Directors and committees
thereof for which they were eligible to serve.

       The Board of Directors of Holdings also has an Audit Committee. As of the
Effective Date, compensation for members of the Audit Committee is included in
the compensation described above.

       Compensation Committee Interlocks and Insider Participation

       On October 3, 2000, Holdings established a Compensation Committee
consisting of Messrs. Hirsch and Ashner.

       Mr. Icahn (including certain related entities) is actively involved in
the gaming industry and currently owns 77.49% of Holdings' New Common Stock (see
Item 12). Casinos owned or managed by Mr. Icahn may directly or indirectly
compete with the Company. In addition, the potential for conflicts of interest
exists among the Company and Mr. Icahn for future business opportunities. Mr.
Icahn may pursue other business opportunities and there is no agreement
requiring that such additional business opportunities be presented to Holdings.

       Audit and Special Committees

       The Audit Committee has the duty to (i) review the engagement and
performance of the independent auditors, including the remuneration to be paid;
(ii) recommend annually to the Board of Directors the independent public
accountants to be engaged to audit the books, records and accounts of the
Company for the ensuing year; (iii) review with the Company's independent
auditors, as well as the Company's management, the Company's system of internal
control including the programs and policies of the Company designed to ensure
compliance with applicable laws and regulations as well as monitoring results of
these compliance efforts; (iv) review with financial management and the
independent auditors the Company's annual financial statements and any financial
reports or other financial information submitted to any governmental body or the
public by either the Company or its independent auditors and the review of the
Forms 10-Q and 10-K prepared by the financial management and the independent
auditors of the Company prior to their filing and release; discuss any
significant changes to the Company's accounting principles; (v) review of any
significant disagreement among management of the Company and the independent
auditors in connection with the preparation of the financial reports of the
companies and prior to releasing the year-end earnings, discuss with the
independent auditors matters required to be communicated to audit committees in
accordance with SAS 61 and (vi) make such reports and recommendations to the
Board of Directors in connection with the foregoing as it shall deem appropriate
or as the Board of Directors may request, and take such action thereon as the
Board of Directors may direct it to take. As of the Effective Date, the Audit
Committee was comprised of Mr. Ashner and Ms. Barbara Lang. Mr. Ashner does not
receive any additional compensation for his participation on the Audit
Committee. Effective February 28, 2001, Holdings adopted a charter for the Audit
Committee conforming to the listing requirements of the American Stock Exchange.
Messrs. Harold First and Auguste E. Rimpel, Jr. have served as members of the
Board of Directors and the Audit committee, of Holdings since April 25, 2001, at
which time Ms. Lang resigned as a member of the Audit Committee. Messrs First
and Rimpel, Jr. have also served as Directors of GB Property and GBHC since June
6, 2001.

                                       67
<PAGE>

       On March 27, 2002, the Commission entered an order prohibiting the
Company, as well as all other New Jersey casino licensees, from conducting
business with Arthur Andersen LLP after May 15, 2002. The Companies' Board of
Directors dismissed Arthur Andersen LLP as independent auditors and appointed
KPMG LLP (KPMG) to serve as the Company's independent auditors for the fiscal
year ended December 31, 2002. The change in auditors was effective May 16, 2002.
The decision to appoint KPMG was made after an extensive evaluation process by
the Board of Directors, its Audit Committee and management of the Company.
During 2003, a special committee of the GB Holdings Board of Directors was
formed to recommend refinancing alternatives related to the Existing Notes ("the
Special Committee"). The Special Committee is comprised of Messrs. Ashner, First
and Rimpel, Jr. During 2003, each member of the Special Committee received
$35,000 for their services therein.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         In a Securities and Exchange Commission Form 13D filed by Carl C. Icahn
and certain entities controlled by Carl C. Icahn (collectively, "Icahn"), Icahn
has reported that it holds an aggregate beneficial ownership of approximately
77.49% of the New Common Stock and approximately 58% of the Existing Notes.

         The following table sets forth as of March 1, 2004, certain information
regarding the beneficial ownership of shares of New Common Stock by each
director of the Company, each of the executive officers listed in the Summary
Compensation Table, each person known to the Company to be the beneficial owner
of more than 5% of the outstanding shares and all directors and executive
officers as a group.

                                             Number
Name                                        of Shares             Percent
----                                        ---------             -------
HMC Investors, L.L.C.(1)                      795,771                 8%
c/o International Fund Services
3rd Floor, Bishops Square
Redmonds Hill
Dublin, Ireland

Carl C. Icahn (2)                           7,748,744             77.49%
Martin Hirsch                                       -                 -
John P. Saldarelli                                  -                 -
Michael L. Ashner                                   -                 -
Harold First                                        -                 -
Auguste E. Rimpel, Jr.                              -                 -
Carmen Hirst                                        -                 -
William Cooney                                      -                 -
Richard P. Brown                                    -                 -
Thomas Davis                                        -                 -
All Directors and officers                  7,748,744             77.49%

                                       68
<PAGE>

(1) Includes 772,996 shares held by Harbert Distressed Investment Master Fund
    Ltd. (the "Fund"). HMC Investors, L.L.C. is the managing member of the
    investment manager of the Fund. Phillip Falcone, portfolio manager of the
    Fund, and Raymond Harbert and Michael D. Luce, members of HMC Investors,
    L.L.C., may be deemed to share beneficial ownership of the shares of common
    stock of GB Holdings held by HMC Investors, L.L.C. Information concerning
    HMC Investors, L.L.C. and its affiliates is derived from a Statement of
    Changes in Beneficial Ownership on Form 4 filed with the SEC on October 23,
    2003.

(2) As of July 14, 2003, Cyprus LLC ("Cyprus"), an entity controlled by Mr.
    Icahn, directly beneficially owned 4,121,033 shares of common stock GB
    Holdings and American Real Estate Holdings Limited Partnership, a limited
    partnership controlled by Mr. Icahn, directly beneficially owned 3,627,711
    shares of common stock of GB Holdings. Mr. Icahn owns 100% of Barberry Corp.
    ("Barberry"), Starfire Holding Corporation ("Starfire") and Beckton Corp.
    ("Beckton"). Barberry is the managing member of Cyprus. Mr. Icahn is (i) the
    sole director and the Chairman of the Board, President and Secretary of
    Barberry, (ii) the sole director, Chairman of the Board and president of
    Starfire and (iii) the sole director, Chairman of the Board, President and
    Secretary of Beckton. American Property Investors, Inc. ("API") is the
    general partner of both American Real Estate Holdings Limited Partnership
    ("AREH") and American Real Estate Partners, L.P. ("AREP"), and AREP is a
    limited partner of AREH owning a 99% limited partnership interest therein.
    API is 100% owned by Beckton. As a result of Mr. Icahn's ownership of the
    position(s) with Barberry, Starfire and Beckton, Mr. Icahn is in a position
    to directly and indirectly determine the investment and voting decisions
    made by the entities named above.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

       Prior to the effectiveness of the Modified Fifth Amended Joint Plan of
Reorganization Under Chapter 11 of the Bankruptcy Code Proposed by the Official
Committee of Unsecured Creditors and High River Limited Partnership and its
affiliates (the "Plan"), neither Mr. Icahn nor any of his affiliates owned
equity securities of GB Holdings or its predecessors. At the time of the
effectiveness of the Plan, Cyprus LLC and Larch LLC were entities indirectly
owned and affiliated with Mr. Icahn. Each of Cyprus and Larch held $31,416,500
principal amount of the Old Notes which, under the Plan, were canceled, and on
or about November 1, 2000, each of Cyprus and Larch received in respect thereof
$18,935,337 principal amount of Existing Notes and 925,280.50 shares of common
stock of GB Holdings. In addition, and pursuant to the Plan (effective September
29, 2000), Cyprus purchased 4,625,000 shares of common stock of GB Holdings for
$65 million. The consideration for the purchase of the shares was described in a
bankruptcy court approved joint plan of reorganization of GB Holdings, which was
filed with the SEC on November 29, 2000 as Exhibit 99.2 to GB Holding's Current
Report on Form 8-K.

       GBHC's rights to the trade name "The Sands" (the "Trade Name") were
derived from a license agreement between Greate Bay Casino Corporation and an
unaffiliated third party. Amounts payable by GBHC for these rights being 3% of
the Gross Room Charges, as defined, at the hotel were equal to the amounts paid
to the unaffiliated third party. On September 29, 2000, High River Limited
partnership assigned to GBHC the rights under a certain agreement with the owner
of the Trade Name as of September 29, 2000 through may 19, 2086, subject to
paying sums equal to 3% of the Gross Room Charges, as defined, at the hotel to
the owner of the Trade Name and also subject to termination rights for a fee
after a certain minimum term. High River is an entity controlled by Carl C.
Icahn. High River received no payments for its assignment of these rights.
Payment is made directly to the owner of the Trade Name. Such charges amounted
to $263,000, $272,000 and $268,000, respectively.

                                       69
<PAGE>

       On October 12, 2001, as a result of, and pursuant to the terms of, a
consent solicitation dated September 20, 2001, to holders of the Existing Notes,
holders that consented were paid $17.50 for each $1,000 of principal amount of
notes held, thus affiliates of Mr. Icahn were paid $1,118,670 because they
consented to certain amendments to the Indenture, dated as of September 29,
2000, among GB Property, as issuer, GB Holdings and Greate Bay Hotel, as
guarantors, and Wells Fargo Bank Minnesota, National Association, as Trustee.

       The Stratosphere, an entity affiliated with Carl C. Icahn, allocates a
portion of certain executive salaries, including the salary of Richard P. Brown,
as well as other charges for tax preparation, legal fees, travel and
entertainment to Greate Bay Hotel. Payments for such charges incurred from the
Stratosphere for the year ended December 31, 2003 amounted to $191,000,
including $106,000 for Mr. Brown's salary. There were no similar charges for the
year ended December 31, 2002.

       On February 28, 2003, Greate Bay Hotel entered into a two year agreement
with XO New Jersey, Inc. an entity affiliated with Carl C. Icahn. The agreement,
pursuant to which XO provides long-distance telephone service to Holdings and
its subsidiaries, can be extended beyond the minimum two year term on a
month-to-month basis. Payments for such charges incurred for the year ended
December 31, 2003 amounted to $127,000.

       At the request of Holdings, Ealing Corp., a Nevada corporation and an
affiliate of Mr. Icahn provided a commitment letter to Holdings, dated January
30, 2004, under which Ealing has agreed to provide a revolving credit facility
under which Holdings and its subsidiaries may borrow up to an aggregate amount
of $10 million to be used for general working capital purposes. Under the terms
of the commitment letter the revolving credit will expire on December 31, 2004,
and borrowings will bear interest at a rate of 10% per annum, and obligations
under the revolving credit facility will be secured by a first lien on all of
the assets of Holdings and its subsidiaries which will be senior to either the
liens securing the Existing Notes or the New Notes, depending on when the loan
is funded. Ealing's obligations to provide the financing pursuant to the
commitment letter is subject to the negotiation and execution of a definitive
loan agreement and related documents and certain customary conditions. However,
there can be no assurance that the loan agreement with Ealing will be
consummated, that if the loan agreement with Ealing is not consummated, the
Company will be able to obtain financing from another lender on terms as or more
favorable than the terms of the commitment letter, or whether the Company will
need to borrow funds for working capital.

       During the years ended December 31, 2003 and 2002, GBHC borrowed $15.4
million and $6.5 million, respectively, from Holdings. This borrowing is
eliminated in the consolidation of, and has no impact on, the accompanying
consolidated financial statements.



                                       70
<PAGE>

Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

           Summary of KPMG LLP Fees For Professional Services Rendered
                     Years Ended December 31, 2003 and 2002

Audit fees (1)                                   $ 410,000          $ 192,400
Audit related fees (2)                           $  18,000          $  28,500
Tax fees                                         $  14,300          $  14,000
All other fees                                   $       -          $       -
                                                 ---------          ---------
      Total fees                                 $ 442,300          $ 234,900
                                                 =========          =========

(1) Services relating to audit of the annual consolidated financial statements,
    review of quarterly financial statements, Casino Control Commission audit,
    consents, and assistance with the review of documents filed with the SEC.

(2) Services relating to employee benefit plan audits and coordination of
    workpaper review by the Division of Gaming Enforcement.

        All non-audit services must be pre-approved by the Audit committee prior
to their commencement. The fees described above under "Tax Fees" were so
pre-approved.

                                     PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) The following documents are filed as a part of this report:

       1.     Financial Statements

              The financial statements filed as part of this report are listed
       on the Index to Financial Statements on page 36.

       2.     Financial Statement Schedule

       --     Report of Independent Public Accountants

       --     Schedule II; Valuation and Qualifying Accounts

       All other schedules for which provision is made in the applicable
       accounting regulation of the Securities and Exchange Commission are not
       required under the related instructions and are inapplicable and
       therefore have been omitted.

                                       71
<PAGE>
<TABLE>
<CAPTION>
       3. Exhibits
<S>                         <C>
            +++2.1    --     Order Confirming Modified Fifth Amended Joint Plan of Reorganization under Chapter
                             11 of The Bankruptcy Code Proposed by The Official Committee of Unsecured Creditors
                             and High River
              +3.1    --     Restated Certificate of Incorporation of GB Property.
        +++++++3.2    --     Restated Certificate of Incorporation, of GBHC.
             ++3.3    --     Restated Certificate of Incorporation of Holdings.
              +3.4    --     Amended and Restated Bylaws of GB Property.
        +++++++3.5    --     Amended and Restated Bylaws of GBHC.
             ++3.6    --     Amended and Restated Bylaws of Holdings.
          +++++3.12   --     Amended  License  Agreement  by and between  Hughes  Properties, Inc. and Pratt Hotel
                             Corporation (now known as GBCC) dated May 19, 1987.
           ++++4.1    --     Indenture, dated as of September 29, 2000, among GB Property, as Issuer, Holdings
                             and GBHC, as Guarantors, and Wells Fargo Bank Minnesota, N.A., as Trustee.
        +++++++4.2    --     Mortgage, Fixture Filing and Security Agreement dated September 29, 2000, by GBHC in
                             favor of Wells Fargo Bank Minnesota, N.A., as Mortgagee.
        +++++++4.3    --     Security Agreement dated September 29, 2000, made by GB Property Corp., GBHC, and GB
                             Holdings, Inc., to Wells Fargo Bank Minnesota, N.A., as Trustee.
        +++++++4.4    --     Collateral Assignment of Leases dated as of September 29, 2000, by GBHC, in favor of
                             Wells Fargo Bank Minnesota, N.A., as Assignee.
       ++++++++4.5    --     Amended and Restated  Indenture, dated October 12, 2001 among GB Property as Issuer,
                             Holdings and GBHC, as Guarantors, and Wells Fargo Bank Minnesota, N.A. as Trustee.
        ++++++10.1    --     First and Second Amendments to Employment Agreement dated as of January 1, 1998 and
                             march 11, 1998, respectively, between GBHC and Frederick H. Kraus.
        ++++++10.2    --     First and Second Amendments to Employment Agreement dated as of January 1, 1998 and
                             March 11, 1998, respectively, between GBHC and Timothy A. Ebling.
              14.1    --     Code of Ethics
              31.1    --     Chief Executive officer's Certificate, pursuant to Section 302 of the Sarbanes-Oxley
                             Act of 2002.
              31.2    --     Chief Financial Officer's Certificate, pursuant to Section 302 of the Sarbanes-Oxley
                             Act of 2002.
              32.1    --     Certification of Chief  Executive Officer  pursuant to 18 U.S.C. Section 1350, as
                             adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
              32.2    --     Certification of Chief  Financial Officer  pursuant to 18 U.S.C. Section 1350, as
                             adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
              99.1    --     Holdings Letter to the Securities and Exchange Commission Pursuant to Temporary
                             Note 3T.
</TABLE>
-------------------------

               +      Filed as an exhibit to GB Property's Registration
                      Statement on Form 8-A, filed with the Securities and
                      Exchange Commission on March 23, 2002, and incorporated
                      herein by reference.

              ++      Filed as an exhibit to Holdings' Registration Statement on
                      Form 8-A filed with the Securities and Exchange Commission
                      on September 29, 2000, and incorporated herein by
                      reference.

             +++      Filed as an exhibit to Holdings' Current Report on Form
                      8-K, filed with the Securities and Exchange Commission on
                      August 21, 2000, and incorporated herein by reference.

                                       72
<PAGE>

            ++++      Filed as an exhibit to GB Property's Amended Current
                      Report on Form 8-K/A, filed with the Securities and
                      Exchange Commission on October 2, 2000, and incorporated
                      herein by reference.

           +++++      Filed as an exhibit to Hollywood Casino Corporation's
                      Registration Statement on Form S-1 (Registration No.
                      33-58732), filed with the Securities and Exchange
                      Commission on February 26, 1993, and incorporated herein
                      by reference.

          ++++++      Filed as an exhibit to GB Property's Quarterly Report on
                      Form 10-Q for the quarter ended September 30, 1998, and
                      incorporated herein by reference.

         +++++++      Filed as an exhibit to the Company's Annual Report on Form
                      10K for the year ended December 31, 2000, and incorporated
                      herein by reference.

        ++++++++      Filed as an exhibit to the Company's Annual Report on Form
                      10K for the year ended December 31, 2001, and incorporated
                      herein by reference.

(b)     Reports on Form 8-K

         During the quarter ended December 31, 2003, the Registrants filed one
Current Report on Form 8-K: (Items 5 and 7), on November 14, 2003.



                                       73
<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, thereunto duly authorized, in the City of
Atlantic City, State of New Jersey on March 19, 2004.

                                                    GB HOLDINGS, INC.
                                                GB PROPERTY FUNDING CORP.
                                            GREATE BAY HOTEL AND CASINO, INC.

                                  By: /s/         Douglas S. Niethold
                                     -------------------------------------------
                                                  Douglas S. Niethold
                                         Interim Vice President of Finance and
                                                Chief Financial Officer

       Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant in
the capacities and on the dates indicated:
<TABLE>
<CAPTION>
              Signature                               Title                                   Date
              ---------                               -----                                   ----
<S>                                          <C>                                      <C>
/s/         Carl C. Icahn                    Chairman of the Board of,                March 19, 2004
------------------------------------         GB Holdings, Inc.                        --------------------------------
            Carl C. Icahn                    GB Property Funding Corp. and
                                             Greate Bay Hotel and Casino, Inc.

/s/         Martin Hirsch                    Director of                              March 19, 2004
------------------------------------         GB Holdings, Inc.                        --------------------------------
            Martin Hirsch                    GB Property Funding Corp. and
                                             Greate Bay Hotel and Casino, Inc.

/s/      John P. Saldarelli                  Director of                              March 19, 2004
------------------------------------         GB Holdings, Inc.                        --------------------------------
         John P. Saldarelli                  GB Property Funding Corp. and
                                             Greate Bay Hotel and Casino, Inc.

/s/       Michael L. Ashner                  Director of                              March 19, 2004
------------------------------------         GB Holdings, Inc.                        --------------------------------
          Michael L. Ashner                  GB Property Funding Corp. and
                                             Greate Bay Hotel and Casino, Inc.

/s/         Harold First                     Director of                              March 19, 2004
------------------------------------         GB Holdings, Inc.                        --------------------------------
            Harold First                     GB Property Funding Corp. and
                                             Greate Bay Hotel and Casino, Inc.

/s/     August E. Rimpel, Jr.                Director of                              March 19, 2004
------------------------------------         GB Holdings, Inc.                        --------------------------------
        August E. Rimpel, Jr.                GB Property Funding Corp. and
                                             Greate Bay Hotel and Casino, Inc.
</TABLE>

                                       74
<PAGE>

                     INDEX TO FINANCIAL STATEMENT SCHEDULE

GB Holdings, Inc. And Subsidiaries

        -   Report of Independent Public Accountants

        -   Schedule II; Valuation and Qualifying Accounts



                                       75
<PAGE>

INFORMATION REGARDING PREDECESSOR INDEPENDENT PUBLIC ACCOUNTANTS' REPORT

THE FOLLOWING REPORT IS A COPY OF A PREVIOUSLY ISSUED REPORT BY ARTHUR ANDERSEN
LLP ("ANDERSEN"). THE REPORT HAS NOT BEEN REISSUED BY ANDERSEN NOR HAS ANDERSEN
CONSENTED TO ITS INCLUSION IN THIS ANNUAL REPORT ON FORM 10-K.

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders of GB Holdings, Inc.:

We have audited in accordance with auditing standards generally accepted in the
United States, the consolidated financial statements of GB Holdings, Inc. and
subsidiaries included in this Form 10-K and have issued our report thereon dated
March 8, 2002. Our audit was made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The schedule listed in the index to
financial statement schedule is the responsibility of the Company's management
and is presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial statements. This
schedule has been subjected to the auditing procedures applied in the audit of
the basic financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.

                                                   ARTHUR ANDERSEN LLP



Roseland, New Jersey
March 8, 2002



                                       76
<PAGE>
                                                                     SCHEDULE II

                       GB HOLDINGS, INC. AND SUBSIDIARIES

                        Valuation and Qualifying Accounts
<TABLE>
<CAPTION>
                                                               Additions
                                                            ----------------
                                                                Amounts
                                            Balance of         Charged to                               Balance
                                             Beginning         Costs and                                At End
                                             Of Period          Expenses          Deductions           of Period
                                          ---------------  -----------------   ---------------      --------------
<S>                                      <C>               <C>                 <C>                 <C>
Year Ended December 31, 2003:
     Allowance for doubtful
        accounts receivable               $    11,301,000   $      1,040,000   $    (6,423,000)(1)  $    5,918,000
     Allowance for obligatory
        investments                            10,028,000          1,434,000          (122,000)(2)      11,340,000
                                          ---------------   ----------------   ---------------      --------------
                                          $    21,329,000   $      2,474,000   $    (6,545,000)     $   17,258,000
                                          ===============   ================   ===============      ==============

Year Ended December 31, 2002:
     Allowance for doubtful
        accounts receivable               $    14,406,000   $      1,586,000   $    (4,691,000)(1)  $   11,301,000
     Allowance for obligatory
        investments                             9,290,000          1,521,000          (783,000)(2)      10,028,000
                                          ---------------   ----------------   ---------------      --------------
                                          $    23,696,000   $      3,107,000   $    (5,474,000)     $   21,329,000
                                          ===============   ================   ===============      ==============

Year Ended December 31, 2001:
     Allowance for doubtful
        accounts receivable               $    11,408,000   $      4,991,000   $    (1,993,000)(1)  $   14,406,000
     Allowance for obligatory
        investments                             8,418,000          1,341,000          (469,000)(2)       9,290,000
                                          ---------------   ----------------   ---------------      --------------
                                          $    19,826,000   $      6,332,000   $    (2,462,000)     $   23,696,000
                                          ===============   ================   ===============      ==============
</TABLE>

----------
(1)    Represents net write-offs of uncollectible accounts.

(2)    Represents write-offs of obligatory investments in connection with the
       contribution of certain obligatory investments to CRDA approved projects.


                                       77