##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2001

Commission file number: 0-26518

FITZGERALDS GAMING CORPORATION

(Exact name of registrant as specified in its charter)


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Nevada                                                         |  | 88-0329170                          
|(State or other jurisdiction of
incorporation or organization) |  | (IRS Employer Identification Number)

301 Fremont Street, Las Vegas NV 89101
(Address of principal executive offices) (Zip Code)

(702) 388-2400
(Registrants telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period than the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.    YES [X]    NO [   ]

Shares outstanding of each of the registrants classes of common stock as of
November 9, 2001

|                             |  |                                   
|---------------------------- |  | ----------------------------------
|Class                        |  | Outstanding as of November 9, 2001
|                             |  |                                   
|Common stock, $.01 par value |  | 5,508,082                         





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TABLE OF CONTENTS



|                             |                                                                                              |                                                                    |  |  |  |  |  | 
|---------------------------- | -------------------------------------------------------------------------------------------- | ------------------------------------------------------------------ |  |  |  |  |  | 
|PART I FINANCIAL INFORMATION
|                             | Item 1 Condensed Consolidated Financial Statements                                          
|                             |                                                                                              | Unaudited Condensed Consolidated Balance Sheets                   
|                             |                                                                                              | Unaudited Condensed Consolidated Statements of Operations         
|                             |                                                                                              | Unaudited Condensed Consolidated Statements of Cash Flows         
|                             |                                                                                              | Notes to the Unaudited Condensed Consolidated Financial Statements
|                             | Item 2 Managements Discussion and Analysis of Financial Condition and Results of Operations
|                             | Item 3 Quantitative and Qualitative Disclosures About Market Risk                           
|PART II OTHER INFORMATION   
|SIGNATURES                  
|Exhibit 10.1                



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##### Table of Contents



FITZGERALDS GAMING CORPORATION (DEBTOR-IN-POSSESSION)

FORM 10-Q

INDEX

|        |  |                       |  |                                                                                                                                            |  |   
|------- |  | --------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------ |  | --
|PART I  |  | FINANCIAL INFORMATION |  |                                                                                                                                           
|       
|        |  | Item 1                |  | CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                                                                                                |  |   
|       
|        |  |                       |  | Unaudited Condensed Consolidated Balance Sheets as of
September 30, 2001 and December 31, 2000                                             |  | 4 
|       
|        |  |                       |  | Unaudited Condensed Consolidated Statements of
Operations for the Quarters and Three Quarters Ended
September 30, 2001 and October 1, 2000 |  | 6 
|       
|        |  |                       |  | Unaudited Condensed Consolidated Statements of Cash
Flows for the Three Quarters Ended September 30, 2001
and October 1, 2000              |  | 7 
|       
|        |  |                       |  | Notes to the Unaudited Condensed Consolidated Financial
Statements                                                                         |  | 8 
|       
|        |  | Item 2                |  | Managements Discussion and Analysis of Financial Condition
and Results of Operations                                                      |  | 20
|       
|        |  | Item 3                |  | Quantitative and Qualitative Disclosures About Market
Risk                                                                                 |  | 33
|       
|PART II |  | OTHER INFORMATION     |  | 34                                                                                                                                        
|       
|        |  |                       |  | SIGNATURES                                                                                                                                 |  | 38





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##### Table of Contents






PART I

FINANCIAL INFORMATION




Item 1

Condensed Consolidated Financial Statements





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##### Table of Contents



FITZGERALDS GAMING CORPORATION (Debtor-In-Possession)




Unaudited Condensed Consolidated Balance Sheets
September 30, 2001 and December 31, 2000


---

|                            |                                                                                    |              |                      |             |                |             |               |             |           |             | 
|--------------------------- | ---------------------------------------------------------------------------------- | ------------ | -------------------- | ----------- | -------------- | ----------- | ------------- | ----------- | --------- | ----------- | 
|                            |                                                                                    |              |                      |             | Sept. 30, 2001 |             | Dec. 31, 2000
|                            |                                                                                    |              |                      |             |                |             |              
|ASSETS                      |                                                                                    |              |                      |             |                |             |               |            
|CURRENT ASSETS:             |                                                                                    |              |                      |             |                |             |               |            
|                            | Cash and cash equivalents                                                          |              | $                    | 22,211,963  |                |             | $             | 8,181,388   |          
|                            | Accounts receivable, net of allowance for doubtful
accounts of $72,882 and $64,087 |              |                      | 492,475     |                |             |               | 575,765     |          
|                            | Inventories                                                                        |              |                      | 500,278     |                |             |               | 471,913     |          
|                            | Prepaid expenses:                                                                  |              |                      |             |                |             |               |             |          
|                            |                                                                                    | Gaming taxes |                      |             | 1,796,810      |             |               |             | 993,551   |            
|                            |                                                                                    | Other        |                      |             | 1,024,867      |             |               |             | 1,394,968 |            
|                            |                                                                                    |              |                      |             |                |             |               |            
|                            |                                                                                    |              | Total current assets |             |                | 26,026,393  |               |             |           | 11,617,585  | 
|                            |                                                                                    |              |                      |             |                |             |               |            
|PROPERTY AND EQUIPMENT, net |                                                                                    |              | 52,374               |             |                |             | 79,656        |            
|                            |                                                                                    |              |                      |             |                |             |               |            
|OTHER ASSETS:               |                                                                                    |              |                      |             |                |             |               |            
|                            | Net assets held for sale                                                           |              |                      | 174,476,859 |                |             |               | 170,388,338 |          
|                            | Restricted cash                                                                    |              |                      | 4,839,822   |                |             |               | 4,489,000   |          
|                            | Other assets                                                                       |              |                      | 1,592,940   |                |             |               | 1,473,204   |          
|                            |                                                                                    |              |                      |             |                |             |               |            
|                            |                                                                                    |              | Total other assets   |             |                | 180,909,621 |               |             |           | 176,350,542 | 
|                            |                                                                                    |              |                      |             |                |             |               |            
|TOTAL                       |                                                                                    | $            | 206,988,388          |             |                | $           | 188,047,783   |            
|                            |                                                                                    |              |                      |             |                |             |               |            

(continued)

|                                                                       |             
|---------------------------------------------------------------------- | ------------
|See Notes to the Unaudited Condensed Consolidated Financial Statements | Page 4 of 38



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##### Table of Contents



FITZGERALDS GAMING CORPORATION (Debtor-In-Possession)
Unaudited Condensed Consolidated Balance Sheets (continued)
September 30, 2001 and December 31, 2000

---

|                                         |                                                                                                                                                                                                                                                                                                                           |                              |                                             |              |                |             |               |              |           |             |  
|---------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------- | ------------------------------------------- | ------------ | -------------- | ----------- | ------------- | ------------ | --------- | ----------- | -
|                                         |                                                                                                                                                                                                                                                                                                                           |                              |                                             |              | Sept. 30, 2001 |             | Dec. 31, 2000
|                                         |                                                                                                                                                                                                                                                                                                                           |                              |                                             |              |                |             |              
|LIABILITIES AND STOCKHOLDERS DEFICIENCY |                                                                                                                                                                                                                                                                                                                           |                              |                                             |              |                |             |               |             
|LIABILITIES NOT SUBJECT TO COMPROMISE    |                                                                                                                                                                                                                                                                                                                           |                              |                                             |              |                |             |               |             
|CURRENT LIABILITIES:                     |                                                                                                                                                                                                                                                                                                                           |                              |                                             |              |                |             |               |             
|                                         | Current portion of long-term debt                                                                                                                                                                                                                                                                                         |                              | $                                           | 110,519      |                |             | $             | 109,937      |          
|                                         | Accounts payable                                                                                                                                                                                                                                                                                                          |                              |                                             | 1,124,070    |                |             |               | 306,299      |          
|                                         | Accrued and other:                                                                                                                                                                                                                                                                                                        |                              |                                             |              |                |             |               |              |          
|                                         |                                                                                                                                                                                                                                                                                                                           | Payroll and related          |                                             |              | 4,189,976      |             |               |              | 2,652,200 |            
|                                         |                                                                                                                                                                                                                                                                                                                           | Progressive jackpots         |                                             |              | 70,707         |             |               |              | 63,633    |            
|                                         |                                                                                                                                                                                                                                                                                                                           | Outstanding chips and tokens |                                             |              | 200,297        |             |               |              | 187,652   |            
|                                         |                                                                                                                                                                                                                                                                                                                           | Other                        |                                             |              | 2,658,351      |             |               |              | 649,866   |            
|                                         |                                                                                                                                                                                                                                                                                                                           |                              |                                             |              |                |             |               |             
|                                         |                                                                                                                                                                                                                                                                                                                           |                              | Total current liabilities                   |              |                | 8,353,920   |               |              |           | 3,969,587   |  
|LONG-TERM DEBT, net of current portion   |                                                                                                                                                                                                                                                                                                                           |                              | 2,324,287                                   |              |                |             | 2,407,023     |             
|                                         |                                                                                                                                                                                                                                                                                                                           |                              |                                             |              |                |             |               |             
|                                         |                                                                                                                                                                                                                                                                                                                           |                              | Total liabilities not subject to compromise |              |                | 10,678,207  |               |              |           | 6,376,610   |  
|LIABILITIES SUBJECT TO COMPROMISE        |                                                                                                                                                                                                                                                                                                                           |                              | 234,706,311                                 |              |                |             | 242,869,829   |             
|                                         |                                                                                                                                                                                                                                                                                                                           |                              |                                             |              |                |             |               |             
|                                         |                                                                                                                                                                                                                                                                                                                           |                              | Total liabilities                           |              |                | 245,384,518 |               |              |           | 249,246,439 |  
|                                         |                                                                                                                                                                                                                                                                                                                           |                              |                                             |              |                |             |               |             
|CUMULATIVE REDEEMABLE PREFERRED STOCK,   |                                                                                                                                                                                                                                                                                                                           |                              |                                             |              |                |             |               |             
|                                         | $.01 par value; $25 stated value; 800,000 shares authorized,
issued and outstanding; liquidation preference $20,000,000
stated value plus accrued dividends of $26,872,971 and
$21,971,855 recorded at liquidation preference, net of
unamortized offering costs and discount of $4,949,933
and $5,565,696, respectively. |                              |                                             | 41,923,038   |                |             |               | 36,406,159   |          
|                                         |                                                                                                                                                                                                                                                                                                                           |                              |                                             |              |                |             |               |             
|STOCKHOLDERS DEFICIENCY:                |                                                                                                                                                                                                                                                                                                                           |                              |                                             |              |                |             |               |             
|                                         | Common stock, $.01 par value; 29,200,000 shares
authorized; 5,508,082 shares issued and outstanding                                                                                                                                                                                                                       |                              |                                             | 55,080       |                |             |               | 55,080       |          
|                                         | Additional paid-in capital                                                                                                                                                                                                                                                                                                |                              |                                             | 23,675,511   |                |             |               | 23,675,511   |          
|                                         | Accumulated deficit                                                                                                                                                                                                                                                                                                       |                              |                                             | (104,049,759 | )              |             |               | (121,335,406 | )        
|                                         |                                                                                                                                                                                                                                                                                                                           |                              |                                             |              |                |             |               |             
|                                         |                                                                                                                                                                                                                                                                                                                           |                              | Total stockholders deficiency              |              |                | (80,319,168 | )             |              |           | (97,604,815 | )
|                                         |                                                                                                                                                                                                                                                                                                                           |                              |                                             |              |                |             |               |             
|TOTAL                                    |                                                                                                                                                                                                                                                                                                                           | $                            | 206,988,388                                 |              |                | $           | 188,047,783   |             
|                                         |                                                                                                                                                                                                                                                                                                                           |                              |                                             |              |                |             |               |             

|                                                                       |             
|---------------------------------------------------------------------- | ------------
|See Notes to the Unaudited Condensed Consolidated Financial Statements | Page 5 of 38



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##### Table of Contents



FITZGERALDS GAMING CORPORATION (Debtor-In-Possession)




Unaudited Condensed Consolidated Statements of Operations
For the Quarters and Three Quarters Ended September 30, 2001 and October 1, 2000


---

|                                                    |                                                                                                                                              |       |            |                |            |                      |            |                |            |              |            |             |             |   |             |             |             | 
|--------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------- | ----- | ---------- | -------------- | ---------- | -------------------- | ---------- | -------------- | ---------- | ------------ | ---------- | ----------- | ----------- | - | ----------- | ----------- | ----------- | 
|                                                    |                                                                                                                                              |       |            | Quarters Ended |            | Three Quarters Ended
|                                                    |                                                                                                                                              |       |            |                |            |                     
|                                                    |                                                                                                                                              |       |            | Sept. 30, 2001 |            | Oct. 1, 2000         |            | Sept. 30, 2001 |            | Oct. 1, 2000
|                                                    |                                                                                                                                              |       |            |                |            |                      |            |                |            |             
|OPERATING REVENUES:                                 |                                                                                                                                              |       |            |                |            |                      |            |                |            |              |            |             |             |   |             |            
|                                                    | Casino                                                                                                                                       |       | $          | 50,386,116     |            |                      | $          | 46,169,470     |            |              | $          | 147,735,696 |             |   | $           | 138,786,770 |            
|                                                    | Food and beverage                                                                                                                            |       |            | 6,592,446      |            |                      |            | 6,549,984      |            |              |            | 19,534,317  |             |   |             | 19,899,881  |            
|                                                    | Rooms                                                                                                                                        |       |            | 5,530,584      |            |                      |            | 5,728,613      |            |              |            | 16,611,631  |             |   |             | 16,835,678  |            
|                                                    | Other                                                                                                                                        |       |            | 1,114,946      |            |                      |            | 1,136,748      |            |              |            | 3,524,194   |             |   |             | 3,325,231   |            
|                                                    |                                                                                                                                              |       |            |                |            |                      |            |                |            |              |            |             |             |   |             |            
|                                                    |                                                                                                                                              | Total |            |                | 63,624,092 |                      |            |                | 59,584,815 |              |            |             | 187,405,838 |   |             |             | 178,847,560 | 
|                                                    | Less promotional allowances                                                                                                                  |       |            | 9,978,874      |            |                      |            | 8,808,434      |            |              |            | 27,755,687  |             |   |             | 25,287,199  |            
|                                                    |                                                                                                                                              |       |            |                |            |                      |            |                |            |              |            |             |             |   |             |            
|                                                    |                                                                                                                                              | Net   |            |                | 53,645,218 |                      |            |                | 50,776,381 |              |            |             | 159,650,151 |   |             |             | 153,560,361 | 
|                                                    |                                                                                                                                              |       |            |                |            |                      |            |                |            |              |            |             |             |   |             |            
|OPERATING COSTS AND EXPENSES:                       |                                                                                                                                              |       |            |                |            |                      |            |                |            |              |            |             |             |   |             |            
|                                                    | Casino                                                                                                                                       |       |            | 22,308,080     |            |                      |            | 20,759,523     |            |              |            | 67,281,777  |             |   |             | 63,741,752  |            
|                                                    | Food and beverage                                                                                                                            |       |            | 3,937,306      |            |                      |            | 4,006,830      |            |              |            | 11,682,637  |             |   |             | 11,687,819  |            
|                                                    | Rooms                                                                                                                                        |       |            | 3,157,567      |            |                      |            | 3,233,529      |            |              |            | 9,512,196   |             |   |             | 9,466,856   |            
|                                                    | Other operating expense                                                                                                                      |       |            | 575,038        |            |                      |            | 522,181        |            |              |            | 1,615,819   |             |   |             | 1,631,345   |            
|                                                    | Selling, general and administrative                                                                                                          |       |            | 14,322,633     |            |                      |            | 13,823,079     |            |              |            | 42,899,657  |             |   |             | 42,428,842  |            
|                                                    | Depreciation and amortization                                                                                                                |       |            | 6,742          |            |                      |            | 3,771,422      |            |              |            | 26,276      |             |   |             | 11,124,882  |            
|                                                    | Reorganization items                                                                                                                         |       |            | 702,978        |            |                      |            |               |            |              |            | 2,276,663   |             |   |             |            |            
|                                                    |                                                                                                                                              |       |            |                |            |                      |            |                |            |              |            |             |             |   |             |            
|                                                    |                                                                                                                                              | Total |            |                | 45,010,344 |                      |            |                | 46,116,564 |              |            |             | 135,295,025 |   |             |             | 140,081,496 | 
|                                                    |                                                                                                                                              |       |            |                |            |                      |            |                |            |              |            |             |             |   |             |            
|INCOME FROM OPERATIONS                              |                                                                                                                                              |       | 8,634,874  |                |            |                      | 4,659,817  |                |            |              | 24,355,126 |             |             |   | 13,478,865  |            
|OTHER INCOME (EXPENSE):                             |                                                                                                                                              |       |            |                |            |                      |            |                |            |              |            |             |             |   |             |            
|                                                    | Interest income                                                                                                                              |       |            | 16,497         |            |                      |            | 338,742        |            |              |            | 94,162      |             |   |             | 772,314     |            
|                                                    | Interest expense (contractural interest
for the quarter and three quarters
ended Sept. 30, 2001 of $9,360,532
and $27,212,076, respectively) |       |            | (502,929       | )          |                      |            | (8,630,724     | )          |              |            | (1,518,030  | )           |   |             | (25,383,029 | )          
|                                                    | Other expense                                                                                                                                |       |            | (94,289        | )          |                      |            | (57,972        | )          |              |            | (128,732    | )           |   |             | (38,330     | )          
|                                                    |                                                                                                                                              |       |            |                |            |                      |            |                |            |              |            |             |             |   |             |            
|NET INCOME (LOSS)                                   |                                                                                                                                              |       | 8,054,153  |                |            |                      | (3,690,137 | )              |            |              | 22,802,526 |             |             |   | (11,170,180 | )          
|PREFERRED STOCK DIVIDENDS AND
ACCRETION OF DISCOUNT |                                                                                                                                              |       | (1,905,550 | )              |            |                      | (1,639,450 | )              |            |              | (5,516,879 | )           |             |   | (4,742,719  | )          
|                                                    |                                                                                                                                              |       |            |                |            |                      |            |                |            |              |            |             |             |   |             |            
|NET INCOME (LOSS) APPLICABLE TO
COMMON STOCKHOLDERS |                                                                                                                                              | $     | 6,148,603  |                |            | $                    | (5,329,587 | )              |            | $            | 17,285,647 |             |             | $ | (15,912,899 | )          
|                                                    |                                                                                                                                              |       |            |                |            |                      |            |                |            |              |            |             |             |   |             |            
|EARNINGS (LOSS) PER COMMON
SHARE  BASIC            |                                                                                                                                              | $     | 1.12       |                |            | $                    | (0.97      | )              |            | $            | 3.14       |             |             | $ | (2.89       | )          
|                                                    |                                                                                                                                              |       |            |                |            |                      |            |                |            |              |            |             |             |   |             |            
|EARNINGS (LOSS) PER COMMON
SHARE  DILUTED          |                                                                                                                                              | $     | 1.12       |                |            | $                    | (0.97      | )              |            | $            | 3.14       |             |             | $ | (2.89       | )          
|                                                    |                                                                                                                                              |       |            |                |            |                      |            |                |            |              |            |             |             |   |             |            
|WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING          |                                                                                                                                              |       | 5,508,082  |                |            |                      | 5,508,082  |                |            |              | 5,508,082  |             |             |   | 5,508,082   |            
|                                                    |                                                                                                                                              |       |            |                |            |                      |            |                |            |              |            |             |             |   |             |            

|                                                                       |             
|---------------------------------------------------------------------- | ------------
|See Notes to the Unaudited Condensed Consolidated Financial Statements | Page 6 of 38



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##### Table of Contents



FITZGERALDS GAMING CORPORATION (Debtor-In-Possession)




Unaudited Condensed Consolidated Statements of Cash Flows
For the Three Quarters Ended September 30, 2001 and October 1, 2000


---

|                                                                                    |                                       |   |                |            |              |   |            |             |  
|----------------------------------------------------------------------------------- | ------------------------------------- | - | -------------- | ---------- | ------------ | - | ---------- | ----------- | -
|                                                                                    |                                       |   | Sept. 30, 2001 |            | Oct. 1, 2000
|                                                                                    |                                       |   |                |            |             
|NET CASH PROVIDED BY OPERATING ACTIVITIES                                           |                                       | $ | 15,708,234     |            |              | $ | 22,526,997 |            
|                                                                                    |                                       |   |                |            |              |   |            |            
|CASH FLOWS FROM INVESTING ACTIVITIES:                                               |                                       |   |                |            |              |   |            |            
|                                                                                    | Proceeds from sale of assets          |   |                | 55,405     |              |   |            | 59,495      |  
|                                                                                    | Acquisition of property and equipment |   |                | (1,390,148 | )            |   |            | (10,416,625 | )
|                                                                                    | Increase in restricted cash           |   |                | (350,822   | )            |   |            |            |  
|                                                                                    | Acquisition of base stock inventory   |   |                |           |              |   |            | (141,363    | )
|                                                                                    |                                       |   |                |            |              |   |            |            
|                                                                                    | Net cash used in investing activities |   |                | (1,685,565 | )            |   |            | (10,498,493 | )
|                                                                                    |                                       |   |                |            |              |   |            |            
|CASH FLOWS FROM FINANCING ACTIVITIES:                                               |                                       |   |                |            |              |   |            |            
|                                                                                    | Repayment of long-term debt           |   |                | (296,499   | )            |   |            | (630,642    | )
|                                                                                    | Dividends to minority stockholders    |   |                |           |              |   |            | (15,000     | )
|                                                                                    |                                       |   |                |            |              |   |            |            
|                                                                                    | Net cash used in financing activities |   |                | (296,499   | )            |   |            | (645,642    | )
|                                                                                    |                                       |   |                |            |              |   |            |            
|NET INCREASE IN CASH AND CASH EQUIVALENTS                                           |                                       |   | 13,726,170     |            |              |   | 11,382,862 |            
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                      |                                       |   | 8,181,388      |            |              |   | 22,115,594 |            
|CASH AND CASH EQUIVALENTS INCLUDED IN NET ASSETS
HELD FOR SALE, BEGINNING OF PERIOD |                                       |   | 10,111,872     |            |              |   |           |            
|CASH AND CASH EQUIVALENTS INCLUDED IN NET ASSETS
HELD FOR SALE, END OF PERIOD       |                                       |   | (9,807,467     | )          |              |   |           |            
|                                                                                    |                                       |   |                |            |              |   |            |            
|CASH AND CASH EQUIVALENTS, END OF PERIOD                                            |                                       | $ | 22,211,963     |            |              | $ | 33,498,456 |            
|                                                                                    |                                       |   |                |            |              |   |            |            
|CASH PAID FOR INTEREST                                                              |                                       | $ | 9,793,090      |            |              | $ | 240,606    |            
|                                                                                    |                                       |   |                |            |              |   |            |            
|SUMMARY OF NON-CASH INVESTING AND FINANCING ACTIVITIES:                             |                                       |   |                |            |              |   |            |            
|Property and equipment acquired through issuance of debt                            |                                       | $ |               |            |              | $ | 2,618,420  |            
|Accretion of discount on preferred stock                                            |                                       |   | 615,763        |            |              |   | 512,698    |            
|Accrual of preferred stock dividends                                                |                                       |   | 4,901,116      |            |              |   | 4,230,021  |            

|                                                                       |             
|---------------------------------------------------------------------- | ------------
|See Notes to the Unaudited Condensed Consolidated Financial Statements | Page 7 of 38



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##### Table of Contents



Fitzgeralds Gaming Corporation (Debtor-In-Possession)




Notes to the Unaudited Condensed Consolidated Financial Statements



|1. |  | BASIS OF PRESENTATION
|-- |  | ---------------------

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The accompanying condensed consolidated financial statements of Fitzgeralds
Gaming Corporation (the Company) (Debtor-In-Possession) have been prepared
by the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles (GAAP) have been
condensed or omitted.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In the opinion of management, all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the interim
condensed consolidated financial statements have been included. These
condensed consolidated financial statements should be read in conjunction
with the consolidated financial statements and notes thereto included in the
Companys Annual Report on Form 10-K for the year ended December 31, 2000.
The results of operations for the Three Quarters ended September 30, 2001
are not necessarily indicative of the results to be expected for the year
ending December 31, 2001.

| |                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company utilizes a 4-4-5 (weeks) financial reporting period which
maintains a December 31 year-end. This method of reporting results in 13
weeks in each quarterly accounting period. The first and fourth accounting
periods will have a fluctuating number of days resulting from the
maintenance of a December 31 year end, whereas the second and third periods
will have the same number of days each year.

| |                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------
| | Certain amounts in the 2000 condensed consolidated financial statements have
been reclassified to conform to the 2001 method of presentation.



|2. |  | PETITION FOR RELIEF UNDER CHAPTER 11
|-- |  | ------------------------------------

| |        
| | -------
| | General

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On December 5, 2000, the Company (together with its subsidiaries) commenced
cases under Chapter 11 of the Bankruptcy Code (collectively, the Bankruptcy
Cases) in the United States Bankruptcy Court for the Northern District of
Nevada (the Bankruptcy Court). The Bankruptcy Cases are jointly
administered and coordinated under Case No. BK-N-00-33467 GWZ. The
Bankruptcy Cases were commenced in accordance with an Agreement Regarding
Pre-Negotiated Restructuring, dated as of December 1, 2000 (the
Restructuring Agreement), with the holders (the Consenting Noteholders)
of a majority in interest of the Companys 12.25% Senior Secured Notes (the
Notes) issued under an indenture dated December 30, 1997 (the
Indenture). The Restructuring Agreement contemplates an

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| |                                                                                                        
| | -------------------------------------------------------------------------------------------------------
| | expeditious and orderly sale of all of the Companys operating assets and
properties as going concerns.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Restructuring Agreement provides a vehicle for liquidating the assets of
the Company in the Bankruptcy Court through Chapter 11 of the Bankruptcy
Code. Upon execution of the Restructuring Agreement and before commencement
of the Bankruptcy Cases, the Company distributed $13.0 million in Excess
Cash (as that term is defined in the Restructuring Agreement) to the trustee
under the Indenture (the Indenture Trustee) to be applied to unpaid and
accrued Indenture Trustees fees and expenses incurred and as partial
payment of accrued and unpaid interest and principal as provided in the
Indenture. Pursuant to the Restructuring Agreement and an order entered by
the Bankruptcy Court, the Company is required to distribute unrestricted
cash (which includes cash in net assets held for sale) in excess of $24.8
million to holders of its Notes within 45 days after the end of each
quarter. In May and August 2001, the Company distributed $1.8 million and
$7.7 million, respectively, in Excess Cash to the Indenture Trustee to be
applied to accrued and unpaid interest and principal as provided in the
Indenture. As part of the Restructuring Agreement, the Consenting
Noteholders and Indenture Trustee agree to forbear from exercising certain
of their rights otherwise allowable under the Notes and the Indenture.
|
| | The parties to the Restructuring Agreement have each concluded that the fair
market value of the Companys real and personal property given as collateral
for the Notes is less than the total outstanding principal and interest due
under the Notes, and that the fair market value of the real and personal
property not securing the Notes is less than the amount of the unsecured
deficiency claim of the holders of the Notes. As a result, it is not
expected that any distribution will be made to holders of the existing
capital stock of the Company. The Restructuring Agreement requires that as
part of the liquidation process, all of the existing common stock and
preferred stock of the Company is to be canceled and extinguished without
payment therefor.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| | In accordance with the Restructuring Agreement, an auction sale was to be
scheduled for no later than June 15, 2001 in the Bankruptcy Court with
respect to those operating assets and properties not sold pursuant to
negotiated sales agreements such as the Purchase Agreement, as referred to
below. With the consent of the Consenting Noteholders, the auction sale was
not conducted and the Company and the Consenting Noteholders are preparing
an amendment to the Restructuring Agreement to conduct the auction sale
during the first half of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | Under the terms of the Restructuring Agreement, upon the closing of each
sale of the Companys assets, the net proceeds of the collateral for the
Notes, less certain reserves for management incentives and other
liabilities, must be distributed to the Indenture Trustee for the benefit of
and distribution to the holders of the Notes in accordance with the
Indenture. All of the Companys assets remaining after such sales,
including any notes received as part of the consideration for the sales of
the Companys assets and payment of remaining liabilities of the Company,
will be transferred to a liquidating trust created for the benefit of the
holders                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

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| |                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------
| | of the Notes and others under a plan of reorganization to be consistent with
the terms of the Restructuring Agreement.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In light of the regulatory approvals needed to accomplish the liquidations,
and recognizing the need to retain senior management in order to insure
continuity and compliance with all gaming regulations and licensing
requirements in the Companys operations during the process, the
Restructuring Agreement requires implementation of a senior management
incentive and retention program. After obtaining Bankruptcy Court approval
in December 2000, this program was adopted by the Company in order to retain
Philip D. Griffith, Michael E. McPherson, Max L. Page and Paul H. Manske,
each an officer, director and/or senior executive of the Company, as key
executives and to compensate them for their continued employment with the
Company during the process.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On March 19, 2001, as part of the restructuring contemplated in the
Restructuring Agreement, the Company, as debtor in possession, received the
Bankruptcy Court approval to: (i) sell free and clear of liens pursuant to
Section 363 of the Bankruptcy Code substantially all of its assets; and (ii)
assume and assign pursuant to Section 365 of the Bankruptcy Code contracts
used in its operations in Las Vegas, Nevada, Black Hawk, Colorado and
Tunica, Mississippi to an affiliate of The Majestic Star Casino, LLC, an
Indiana limited liability company (Majestic), pursuant to the Purchase and
Sale Agreement dated as of November 22, 2000, as amended on December 4, 2000
and November 1, 2001 (the Purchase Agreement).

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Pursuant to the Purchase Agreement, the Company has agreed to: (i) sell free
and clear of liens pursuant to Section 363 of the Bankruptcy Code
substantially all of the Companys assets including Fitzgeralds Las Vegas,
Fitzgeralds Black Hawk and Fitzgeralds Tunica; and (ii) assume and assign
pursuant to Section 365 of the Bankruptcy Code contracts used in its
operations at Fitzgeralds Las Vegas, Fitzgeralds Black Hawk, and Fitzgeralds
Tunica, as well as the Companys interest in The Fremont Street Experience
Limited Liability Company (collectively, the Assets) to Majestic for
$149.0 million in cash, subject to certain holdbacks and adjustments, plus
the assumption of certain liabilities relating to the Assets. Majestic has
deposited into an escrow account $2.0 million of the cash portion of the
purchase price as an earnest money deposit. The Purchase Agreement contains
customary representations, warranties, conditions and covenants, that
provides for a dollar-for-dollar purchase price adjustment based on changes
in each of the target properties working capital and long-term debt,
excluding debt related to the Notes, at closing, and adjustment if the
Companys earnings before interest, income taxes, depreciation and
amortization for the 12-month period prior to closing vary by 5% or more
from a target earnings amount for such period and adjustments as may apply
in the event that the Company fails to obtain certain consents. The closing
is contingent upon, among other things, Majestic obtaining financing of up
to $137.0 million. Majestic has advised the Company that it is
currently seeking to raise such funds through the offering of debt
securities, although the Company can give no assurance that Majestic
will be successful in doing so.

| |                                                                                                                                                                                         
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | For further information concerning the Purchase Agreement, please refer to
our Current Report on Form 8-K, dated December 5, 2000, as filed with the
Securities and Exchange Commission.

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| |                     
| | --------------------
| | Reorganization Items

| |                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| | For the Quarter and the Three Quarters Ended September 30, 2001, the Company
incurred the following expenses subsequent to the filing of the Bankruptcy
Cases:

|                      |                                                                               |   |                |          |                |   |           |           |  
|--------------------- | ----------------------------------------------------------------------------- | - | -------------- | -------- | -------------- | - | --------- | --------- | -
|                      |                                                                               |   | Quarter        |          | Three Quarters
|                      |                                                                               |   | Ended          |          | Ended         
|                      |                                                                               |   | Sept. 30, 2001 |          | Sept. 30, 2001
|                      |                                                                               |   |                |          |               
|Reorganization Items: |                                                                               |   |                |          |                |   |           |          
|                      | Post petition professional fees                                               |   | $              | 664,084  |                |   | $         | 2,430,592 |  
|                      | U.S. trustee fees                                                             |   |                | 48,725   |                |   |           | 181,000   |  
|                      | Other                                                                         |   |                | 132,605  |                |   |           | 132,605   |  
|                      | Interest earned on accumulated cash resulting from the
bankruptcy proceedings |   |                | (142,436 | )              |   |           | (467,534  | )
|                      |                                                                               |   |                |          |                |   |           |          
|                      |                                                                               | $ | 702,978        |          |                | $ | 2,276,663 |          
|                      |                                                                               |   |                |          |                |   |           |          

| |                                  
| | ---------------------------------
| | Liabilities Subject to Compromise

| |                                                                                                          
| | ---------------------------------------------------------------------------------------------------------
| | At September 30, 2001 and December 31, 2000 liabilities subject to
compromise consisted of the following:

|                                   |                                  |   |                |             |               |   |             |             |  
|---------------------------------- | -------------------------------- | - | -------------- | ----------- | ------------- | - | ----------- | ----------- | -
|                                   |                                  |   | Sept. 30, 2001 |             | Dec. 31, 2000
|                                   |                                  |   |                |             |              
|Liabilities subject to compromise: |                                  |   |                |             |               |   |             |            
|                                   | Notes                            |   | $              | 205,000,000 |               |   | $           | 205,000,000 |  
|                                   | Discount on the Notes            |   |                | (1,312,202  | )             |   |             | (1,549,855  | )
|                                   | Accrued interest on the Notes    |   |                | 35,251,340  |               |   |             | 44,813,080  |  
|                                   | Debt offering costs on the Notes |   |                | (4,457,740  | )             |   |             | (5,513,521  | )
|                                   | Unsecured creditors              |   |                | 224,913     |               |   |             | 120,125     |  
|                                   |                                  |   |                |             |               |   |             |            
|                                   |                                  | $ | 234,706,311    |             |               | $ | 242,869,829 |            
|                                   |                                  |   |                |             |               |   |             |            



|3. |  | RECENTLY ISSUED ACCOUNTING STANDARDS
|-- |  | ------------------------------------

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On June 30, 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities.This statement establishes accounting
and reporting standards for derivative instruments and hedging activities
and is effective for the Companys fiscal year ending December 31, 2001.
Adoption of this statement did not have a material impact on the Companys
financial condition or results of operations.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On January 1, 2001, the Company implemented Emerging Issues Task Force
(EITF) No. 00-14 Accounting for Certain Sales Incentives, EITF No. 00-21
Accounting for Multiple-Element Revenue Arrangements, EITF No. 00-22
Accounting for Points and Certain Other Time-Based or Volume-Based Sales
Incentive Offers, and Offers for Free Products or Services to Be Delivered
in the Futureand EITF No. 00-25 Accounting for Consideration

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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | from a Vendor to a Retailer in Connection with the Purchase or Promotion of
the Vendors Productsrequiring cash coupons or rebates to be classified as
a reduction of revenue. Prior to this ruling, the Company had expensed the
cash coupons, players club reward program and other cash back programs as a
casino or marketing expense. In 2001, the Company reclassified its 2000
income statement to reflect such expenses as promotional expense thereby
reducing net revenue.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In June 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 141 (SFAS 141), Business
Combinations, which requires the purchase method of accounting for business
combination initiated after June 30, 2001 and prohibits the use of the
pooling-of-interest method. The Company does not believe that the adoption
of SFAS 141 will have a significant impact on its financial statements.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In June 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 142 (SFAS 142) Goodwill
and Other Intangible Assets, which is effective January 1, 2002. SFAS 142
requires that goodwill and other intangible assets with indefinite useful
lives no longer be amortized, but instead tested for impairment at least
annually. As of September 30, 2001 the Company had goodwill, net of
accumulated amortization, of approximately $13.0 million which is currently
included in net assets held for sale. The Company discontinued amortizing
the goodwill subsequent to filing the Bankruptcy Cases. Amortization
expense related to goodwill was $0.3 million for the Three Quarters ended
October 1, 2000. The Company is currently assessing but has not yet
determined the impact of SFAS 142 on its financial position and results of
operations.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Also in June 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 143, Accounting for Asset
Retirement Obligations, which is effective for financial statements issued
for fiscal years beginning after June 15, 2002. This statement establishes
accounting standards for recognition and measurement of a liability for an
asset retirement obligation and the associated asset retirement cost. The
Company is currently evaluating the impact that this standard will have on
the its financial condition and results of operations.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In August 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 144 Accounting for the
Impairment or Disposal of Long-Lived Assets, which is effective for
financial statements issued for fiscal years beginning after December 15,
2001, and the interim periods within those fiscal years. This statement
addresses financial accounting and reporting for the impairment of
long-lived assets and for long-lived assets to be disposed of, and
supersedes Statement of Financial Accounting Standards No. 121, Accounting
for the Impairment of Long-Lived Assets and For Long-Lived Assets to be
Disposed of. The Company is currently evaluating the impact that this
standard will have on its financial condition and results of operation.

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|4. |  | NET ASSETS HELD FOR SALE
|-- |  | ------------------------

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In December 2000, the Company entered into the Restructuring Agreement with
the Consenting Noteholders. The Restructuring Agreement contemplates an
expeditious and orderly sale of all of the Companys operating assets and
properties. Assets not included in net assets held for sale of $32.5
million consist mainly of cash not transferable upon the close of a sale
with Majestic and assets of Fitzgeralds Reno excluding property and
equipment. On March 19, 2001 the Company received Bankruptcy Court approval
to sell substantially all of its Assets to Majestic pursuant to the Purchase
Agreement for $149.0 million in cash. The closing is contingent upon, among
other things Majestic obtaining financing of up to $137.0 million.
Majestic has advised the Company that it is
currently seeking to raise such funds through the offering of debt
securities, although the Company can give no assurance that Majestic
will be successful in doing so. The
components of Net Assets Held for Sale relating to the Majestic sale are
subject to change at the closing of the sale upon mutual agreement between
Majestic and the Company. The Company is actively seeking a buyer for the
Fitzgeralds Reno property.

The components of the net assets held for sale as of September 30, 2001
are as follows:

|                                                                       |                              |   |             |   |             |   |             |          |             |   |             |          |       |   |            |          |   |   |            |   |  |   |             |            |  
|---------------------------------------------------------------------- | ---------------------------- | - | ----------- | - | ----------- | - | ----------- | -------- | ----------- | - | ----------- | -------- | ----- | - | ---------- | -------- | - | - | ---------- | - |  | - | ----------- | ---------- | -
|                                                                       |                              |   | Fitzgeralds |   | Fitzgeralds |   | Fitzgeralds |          | Fitzgeralds |   |             |          |       |   |            |          |  
|                                                                       |                              |   | Reno        |   | Las Vegas   |   | Tunica      |          | Black Hawk  |   | Elimination |          | Total
|                                                                       |                              |   |             |   |             |   |             |          |             |   |             |          |      
|Assets:                                                                |                              |   |             |   |             |   |             |          |             |   |             |          |       |   |            |          |   |   |            |   |  |   |             |           
|Cash and cash equivalents                                              |                              | $ |            |   |             | $ | 2,777,991   |          |             | $ | 5,274,598   |          |       | $ | 1,754,878  |          |   | $ |           |   |  | $ | 9,807,467   |           
|Account receivable, net of
allowance for doubtful
accounts of $226,051 |                              |   |            |   |             |   | 589,939     |          |             |   | 312,499     |          |       |   | 244,730    |          |   |   |           |   |  |   | 1,147,168   |           
|Inventories                                                            |                              |   |            |   |             |   | 371,593     |          |             |   | 458,773     |          |       |   | 164,252    |          |   |   |           |   |  |   | 994,618     |           
|Prepaid insurance                                                      |                              |   |            |   |             |   | 212,820     |          |             |   | 226,121     |          |       |   | 86,458     |          |   |   |           |   |  |   | 525,399     |           
|Other current assets                                                   |                              |   |            |   |             |   | 1,261,256   |          |             |   | 397,531     |          |       |   | 76,617     |          |   |   |           |   |  |   | 1,735,404   |           
|Property and equipment, net (1)                                        |                              |   | 29,363,541  |   |             |   | 37,228,090  |          |             |   | 63,335,271  |          |       |   | 24,887,701 |          |   |   | (1,904,147 | ) |  |   | 152,910,456 |           
|Goodwill, net of accumulated
amortization of $1,173,579                |                              |   |            |   |             |   |            |          |             |   |            |          |       |   | 13,005,582 |          |   |   |           |   |  |   | 13,005,582  |           
|Restricted cash                                                        |                              |   |            |   |             |   | 500,000     |          |             |   |            |          |       |   |           |          |   |   |           |   |  |   | 500,000     |           
|Other non-current assets                                               |                              |   |            |   |             |   | 342,771     |          |             |   | 470,680     |          |       |   | 141,363    |          |   |   |           |   |  |   | 954,814     |           
|Current portion of long term debt                                      |                              |   |            |   |             |   | (130,313    | )        |             |   |            |          |       |   |           |          |   |   |           |   |  |   | (130,313    | )         
|Accounts payable                                                       |                              |   |            |   |             |   | (1,039,019  | )        |             |   | (1,048,014  | )        |       |   | (507,808   | )        |   |   |           |   |  |   | (2,594,841  | )         
|Accrued expenses and other:                                            |                              |   |             |   |             |   |             |          |             |   |             |          |       |   |            |          |   |   |            |   |  |   |             |           
|                                                                       | Payroll and related          |   |             |  |             |   |             | (416,325 | )           |   |             | (986,608 | )     |   |            | (163,200 | ) |   |            |  |  |   |             | (1,566,133 | )
|                                                                       | Progressive jackpots         |   |             |  |             |   |             | (203,970 | )           |   |             | (360,059 | )     |   |            | (655,597 | ) |   |            |  |  |   |             | (1,219,626 | )
|                                                                       | Outstanding chips and tokens |   |             |  |             |   |             | (69,415  | )           |   |             | (7,801   | )     |   |            | (43,153  | ) |   |            |  |  |   |             | (120,369   | )
|                                                                       | Other                        |   |             |  |             |   |             | (73,244  | )           |   |             | (576,127 | )     |   |            | (533,702 | ) |   |            |  |  |   |             | (1,183,073 | )
|Long term debt                                                         |                              |   |            |   |             |   | (289,694    | )        |             |   |            |          |       |   |           |          |   |   |           |   |  |   | (289,694    | )         
|                                                                       |                              |   |             |   |             |   |             |          |             |   |             |          |       |   |            |          |   |   |            |   |  |   |             |           
|                                                                       |                              | $ | 29,363,541  |   |             | $ | 41,062,480  |          |             | $ | 67,496,864  |          |       | $ | 38,458,121 |          |   | $ | (1,904,147 | ) |  | $ | 174,476,859 |           
|                                                                       |                              |   |             |   |             |   |             |          |             |   |             |          |       |   |            |          |   |   |            |   |  |   |             |           

|                                                                                                | 
|----------------------------------------------------------------------------------------------- | 
|(1) The elimination entry is for the inter-company purchase and sale of
property and equipment.

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| |                                                                                       
| | --------------------------------------------------------------------------------------
| | The components of the net assets held for sale as of December 31, 2000 are
as follows:

|                                                                       |                              |   |             |   |             |   |             |            |             |   |             |            |       |   |            |            |   |   |            |   |  |   |             |            |  
|---------------------------------------------------------------------- | ---------------------------- | - | ----------- | - | ----------- | - | ----------- | ---------- | ----------- | - | ----------- | ---------- | ----- | - | ---------- | ---------- | - | - | ---------- | - |  | - | ----------- | ---------- | -
|                                                                       |                              |   | Fitzgeralds |   | Fitzgeralds |   | Fitzgeralds |            | Fitzgeralds |   |             |            |       |   |            |            |  
|                                                                       |                              |   | Reno        |   | Las Vegas   |   | Tunica      |            | Black Hawk  |   | Elimination |            | Total
|                                                                       |                              |   |             |   |             |   |             |            |             |   |             |            |      
|Assets:                                                                |                              |   |             |   |             |   |             |            |             |   |             |            |       |   |            |            |   |   |            |   |  |   |             |           
|Cash and cash equivalents                                              |                              | $ |            |   |             | $ | 3,082,396   |            |             | $ | 5,274,598   |            |       | $ | 1,754,878  |            |   | $ |           |   |  | $ | 10,111,872  |           
|Account receivable, net of
allowance for doubtful
accounts of $210,586 |                              |   |            |   |             |   | 696,054     |            |             |   | 539,510     |            |       |   | 55,420     |            |   |   |           |   |  |   | 1,290,984   |           
|Inventories                                                            |                              |   |            |   |             |   | 445,572     |            |             |   | 445,722     |            |       |   | 153,204    |            |   |   |           |   |  |   | 1,044,498   |           
|Prepaid gaming taxes                                                   |                              |   |            |   |             |   | 566,788     |            |             |   |            |            |       |   | 48,052     |            |   |   |           |   |  |   | 614,840     |           
|Other current assets                                                   |                              |   |            |   |             |   | 1,506,705   |            |             |   | 366,376     |            |       |   | 109,802    |            |   |   |           |   |  |   | 1,982,883   |           
|Property and equipment, net (1)                                        |                              |   | 28,949,595  |   |             |   | 37,162,537  |            |             |   | 62,708,013  |            |       |   | 24,789,132 |            |   |   | (1,904,147 | ) |  |   | 151,705,130 |           
|Goodwill, net of accumulated
amortization of $1,173,579                |                              |   |            |   |             |   |            |            |             |   |            |            |       |   | 13,005,582 |            |   |   |           |   |  |   | 13,005,582  |           
|Restricted cash                                                        |                              |   |            |   |             |   | 500,000     |            |             |   |            |            |       |   |           |            |   |   |           |   |  |   | 500,000     |           
|Other non-current assets                                               |                              |   |            |   |             |   | 320,251     |            |             |   | 461,361     |            |       |   | 141,363    |            |   |   |           |   |  |   | 922,975     |           
|Current portion of long term debt                                      |                              |   |            |   |             |   | (167,273    | )          |             |   | (73,015     | )          |       |   |           |            |   |   |           |   |  |   | (240,288    | )         
|Accounts payable                                                       |                              |   |            |   |             |   | (514,831    | )          |             |   | (809,013    | )          |       |   | (227,676   | )          |   |   |           |   |  |   | (1,551,520  | )         
|Accrued expenses and other:                                            |                              |   |             |   |             |   |             |            |             |   |             |            |       |   |            |            |   |   |            |   |  |   |             |           
|                                                                       | Payroll and related          |   |             |  |             |   |             | (1,336,852 | )           |   |             | (2,349,516 | )     |   |            | (667,094   | ) |   |            |  |  |   |             | (4,353,462 | )
|                                                                       | Progressive jackpots         |   |             |  |             |   |             | (269,561   | )           |   |             | (322,665   | )     |   |            | (387,602   | ) |   |            |  |  |   |             | (979,828   | )
|                                                                       | Outstanding chips and tokens |   |             |  |             |   |             | (104,175   | )           |   |             | (91,247    | )     |   |            | (39,152    | ) |   |            |  |  |   |             | (234,574   | )
|                                                                       | Other                        |   |             |  |             |   |             | (788,550   | )           |   |             | (1,095,992 | )     |   |            | (1,152,148 | ) |   |            |  |  |   |             | (3,036,690 | )
|Long term debt                                                         |                              |   |            |   |             |   | (394,064    | )          |             |   |            |            |       |   |           |            |   |   |           |   |  |   | (394,064    | )         
|                                                                       |                              |   |             |   |             |   |             |            |             |   |             |            |       |   |            |            |   |   |            |   |  |   |             |           
|                                                                       |                              | $ | 28,949,595  |   |             | $ | 40,704,997  |            |             | $ | 65,054,132  |            |       | $ | 37,583,761 |            |   | $ | (1,904,147 | ) |  | $ | 170,388,338 |           
|                                                                       |                              |   |             |   |             |   |             |            |             |   |             |            |       |   |            |            |   |   |            |   |  |   |             |           

| |                                                                                                
| | -----------------------------------------------------------------------------------------------
| | (1) The elimination entry is for the inter-company purchase and sale of
property and equipment.

| |                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------
| | Net property and equipment held for sale consists of the following at
September 30, 2001 and December 31, 2000:

|                                               |  |                |             |               |  |   |             |  
|---------------------------------------------- |  | -------------- | ----------- | ------------- |  | - | ----------- | -
|                                               |  | Sept. 30, 2001 |             | Dec. 31, 2000
|                                               |  |                |             |              
|Land used in casino operations                 |  | $              | 17,618,066  |               |  | $ | 18,204,843  |  
|Buildings and improvements                     |  |                | 122,807,576 |               |  |   | 122,789,471 |  
|Site improvements                              |  |                | 20,584,411  |               |  |   | 20,960,324  |  
|Barge and improvements                         |  |                | 12,920,531  |               |  |   | 12,896,235  |  
|Furniture, fixtures and equipment              |  |                | 66,733,389  |               |  |   | 67,330,488  |  
|Other                                          |  |                | 832,710     |               |  |   |            |  
|                                               |  |                |             |               |  |   |             |  
|                                               |  |                | 241,496,683 |               |  |   | 242,181,361 |  
|Less accumulated depreciation
and amortization |  |                | (89,478,015 | )             |  |   | (91,240,929 | )
|                                               |  |                |             |               |  |   |             |  
|                                               |  |                | 152,018,668 |               |  |   | 150,940,432 |  
|Construction in progress                       |  |                | 891,788     |               |  |   | 764,698     |  
|                                               |  |                |             |               |  |   |             |  
|Total                                          |  | $              | 152,910,456 |               |  | $ | 151,705,130 |  
|                                               |  |                |             |               |  |   |             |  



|5. |  | LONG-TERM DEBT
|-- |  | --------------

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Notes bear interest at a fixed annual rate of 12.25% payable on June 15
and December 15 of each year, commencing June 15, 1998. The Notes will
mature on December 15, 2004. The Company has not paid the regularly
scheduled interest payments of $12.5 million that were due and payable June
15, 1999, 2000 and 2001 and December 15, 1999 and 2000. Under the Note
Indenture, an Event of Default occurred on July 15, 1999. Failure to make
the scheduled interest payment on June 15, 1999 resulted in a 1.0% increase
in the interest

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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | rate to 13.25%, effective June 16, 1999 until the Company filed the
Bankruptcy Cases. In accordance with the Indenture, the Company began
accruing interest on the unpaid interest at 13.25% effective June 16, 1999
until the filing of the Bankruptcy Cases. Upon execution of the
Restructuring Agreement and before commencement of the Bankruptcy Cases, the
Company distributed $13.0 million in Excess Cash (as that term is defined in
the Restructuring Agreement) to the Indenture Trustee to be applied to
accrued and unpaid Indenture Trustees fees and expenses incurred and as
partial payment of accrued and unpaid interest as provided in the Indenture.
In May and August 2001, the Company distributed $1.8 million and $7.7
million, respectively, in Excess Cash to the Indenture Trustee to be applied
to accrued and unpaid interest and principal as provided in the Indenture.
The Company stopped accruing interest on the Notes on December 5, 2000 with
the commencement of the Bankruptcy Cases.

| |                                                                                                                                                                                                                                                                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In February 2000, Fitzgeralds Reno purchased an adjacent 834-space parking
garage for $3.0 million. The seller-financed acquisition required a $0.75
million down payment, with the balance financed at an interest rate of 10.0%
with monthly principal and interest payments based on a 20-year amortization
schedule. The note matures in ten years with a lump sum principal payment
due of approximately $1.7 million.



|6. |  | EARNINGS PER SHARE
|-- |  | ------------------

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | During the quarters ended September 30, 2001 and October 1, 2000, there were
no outstanding convertible securities and warrants that would result in
dilutive potential to the common shares and, as such, diluted earnings per
share are not applicable. Options to purchase 267,000 shares of common stock
at prices ranging from $1.00 to $1.10 per share were outstanding at October
1, 2000. Such options are not included in the computation of diluted
earnings per share because to do so would have been antidilutive. No
options were outstanding at September 30, 2001.



|7. |  | CONTINGENCIES
|-- |  | -------------

| |                        
| | -----------------------
| | Central City Litigation

| |                                                                                                                                                                                                                                                                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On or about May 25, 2001, City of Central, Colorado (Central City), and
certain businesses claiming to do business in Central City commenced an
action, Civil Action No. 01-D-0964, in the United States District Court for
the District of Colorado against the City of Black Hawk, Colorado
(Blackhawk), certain companies alleged to do business in or about
Blackhawk and various individuals.

| |                                                                                                                                                                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 101 Main Street Limited Liability Company (101 Main), a wholly owned
subsidiary of Fitzgeralds Black Hawk, Inc.-II, was named defendant in the
action. The claims against all defendants, including 101 Main, are
predicated on 15 U.S.C. section 1 (Restraint of Trade), 15 U.S.C. section 2
(Monopolization), 15 U.S.C. section 2 (Attempted Monopolization),

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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Colorado Revised Statute section 6-4-104 (Restraint of Trade), violation of
Colorado Revised Statute section 6-4-105 (Monopolization), Colorado Revised
Statute section 6-4-105 (Attempted Monopolization), 18 U.S.C. section 1962
(Racketeering), Colorado Revised Statute section 18-17-104 (Colorado
Organized Crime Control Act), intentional interference with prospective
economic advantage, civil conspiracy, tortious interference with contractual
relations and inducing breach of contract. The plaintiffs in the action are
seeking judgment by jury against all defendants for an amount in excess of
$100.0 million. The principal cause of the action relating to 101 Main is
that the defendants, including 101 Main Street Limited Liability Company,
engaged in certain conduct to prevent the construction of a highway defined
as the Southern Access Road that would provide access to travelers
directly to Central City from Interstate 70 instead of requiring passage
through Blackhawk.

| |                                                                                                                                                                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The complaint was filed after the commencement of the Bankruptcy Cases, and
101 Main has asserted that the action was commenced in violation of the
automatic stay, Section 362(a) of the Bankruptcy Code. On June 21, 2001,
the Company filed a Notice of Pending Bankruptcy Cases and Existence of the
Automatic Stay.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Subsequently, the plaintiffs filed a First Amended Complaint and Demand for
Jury Trial in the action. 101 Main is no longer named as a defendant. On
October 8, 2001, plaintiffs attorneys also filed a motion with the
Bankruptcy Court seeking formal relief from the bankruptcy stay. The
Company will object to plaintiffs efforts to obtain relief from the stay in
the bankruptcy proceeding. If plaintiffs are successful in obtaining relief
from the bankruptcy stay, the plaintiffs plan to file a further amended
complaint in the District Court again naming 101 Main as a defendant. The
Company believes that the claims asserted against 101 Main are without
merit.

| |         
| | --------
| | Reliance

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | From April 1, 1998 through September 30, 1999, the Companys general
liability insurance and workers compensation insurance carrier was Reliance
Insurance Company (Reliance). On May 29, 2001, a Pennsylvania court
placed Reliance under the control of the Pennsylvania Insurance Department
for rehabilitation. Thereafter, on October 3, 2001, the Reliance Insurance
Company was declared insolvent and placed under an order of liquidation by
the Pennsylvania Commonwealth Court at the request of the Pennsylvania
Insurance Department. At the present time, the Company is unable to
determine what effect this action may have on liability and workers
compensation claims which arose during the coverage period for which
Reliance was the Companys insurance carrier or whether any limitations on
coverage would have a material adverse effect on the Companys financial
condition.

| |            
| | -----------
| | Holiday Inn

| |                                                                                                                                                                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Upon notification by Majestic of its intent to not enter into a new
franchise agreement with Holiday Inn Franchising, Inc. (Inns), the Company
filed a motion with the Bankruptcy Court on October 26, 2001 to remove its
pre-petition franchise and other agreements with Inns from the list of
agreements to be assumed and assigned to Majestic. On October 26,

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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2001, the Bankruptcy Court granted the motion. Assuming the Majestic
Purchase Agreement is consummated, the Company believes Inns will assert an
unsecured claim in the Bankruptcy Cases based upon the liquidated damages
provision of the franchise agreement with Inns which refers to a lump sum
early termination payment equal to the last 36 months of fees paid pursuant
to the franchise agreement (approximately $1.6 million as of the date
hereof). While the Company would contest the allowance of such a claim by
the Bankruptcy Court, the Company cannot predict the Bankruptcy Courts
ultimate resolution of such a claim.



|8. |  | SEGMENT INFORMATION
|-- |  | -------------------

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The accounting policies of each business segment are the same as those
described in the summary of significant accounting policies in the Companys
Annual Report on Form 10-K for the year ended December 31, 2000. There are
minimal inter-segment sales. The Company continues to evaluate its business
segment performance based on the Companys earnings before interest, income
taxes, depreciation and amortization (EBITDA). The Company has not
changed its basis of segmentation from the year ended December 31, 2000.

|                        |                        |   |                        |        |              |   |        |        | 
|----------------------- | ---------------------- | - | ---------------------- | ------ | ------------ | - | ------ | ------ | 
|                        |                        |   | For the Quarters Ended
|                        |                        |   |                       
|                        |                        |   | Sept. 30, 2001         |        | Oct. 1, 2000
|                        |                        |   |                        |        |             
|                        |                        |   | (in thousands)        
|Net operating revenues: |                        |   |                        |        |              |   |        |       
|                        | Fitzgeralds Las Vegas  |   | $                      | 12,675 |              |   | $      | 11,782 | 
|                        | Fitzgeralds Tunica     |   |                        | 21,113 |              |   |        | 19,360 | 
|                        | Fitzgeralds Reno       |   |                        | 10,342 |              |   |        | 10,903 | 
|                        | Fitzgeralds Black Hawk |   |                        | 9,525  |              |   |        | 8,677  | 
|                        | Other                  |   |                        | (10    | )            |   |        | 54     | 
|                        |                        |   |                        |        |              |   |        |       
|Total                   |                        | $ | 53,645                 |        |              | $ | 50,776 |       
|                        |                        |   |                        |        |              |   |        |       

|                               |                        |                  |       |                        |       |              |       |        |       | 
|------------------------------ | ---------------------- | ---------------- | ----- | ---------------------- | ----- | ------------ | ----- | ------ | ----- | 
|                               |                        |                  |       | For the Quarters Ended
|                               |                        |                  |       |                       
|                               |                        |                  |       | Sept. 30. 2001         |       | Oct. 1, 2000
|                               |                        |                  |       |                        |       |             
|                               |                        |                  |       | (in thousands)        
|Income (loss) from operations: |                        |                  |       |                        |       |              |       |       
|                               | Fitzgeralds Las Vegas  |                  | $     | (186                   | )     |              | $     | (700   | )    
|                               | Fitzgeralds Tunica     |                  |       | 5,249                  |       |              |       | 3,028  |      
|                               | Fitzgeralds Reno       |                  |       | 1,636                  |       |              |       | 1,595  |      
|                               | Fitzgeralds Black Hawk |                  |       | 2,649                  |       |              |       | 1,858  |      
|                               | Other                  |                  |       | (715                   | )     |              |       | (1,109 | )    
|                               |                        |                  |       |                        |       |              |       |       
|                               |                        | Total Properties |       |                        | 8,633 |              |       |        | 4,672 | 
|                               | Nevada Club            |                  |       | 2                      |       |              |       | (12    | )    
|                               |                        |                  |       |                        |       |              |       |       
|Total                          |                        | $                | 8,635 |                        |       | $            | 4,660 |       
|                               |                        |                  |       |                        |       |              |       |       

| |                                                                                                               
| | --------------------------------------------------------------------------------------------------------------
| | Reconciliation of total business segment operating income to consolidated
net income (loss) before income tax:

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|                               |                                                 |   |                        |         |              |   |        |        |  
|------------------------------ | ----------------------------------------------- | - | ---------------------- | ------- | ------------ | - | ------ | ------ | -
|                               |                                                 |   | For the Quarters Ended
|                               |                                                 |   |                       
|                               |                                                 |   | Sept. 30, 2001         |         | Oct. 1, 2000
|                               |                                                 |   |                        |         |             
|                               |                                                 |   | (in thousands)        
|Total segment operating income |                                                 | $ | 9,348                  |         |              | $ | 5,781  |       
|                               | Nevada Club                                     |   |                        | 2       |              |   |        | (12    | )
|                               | Other                                           |   |                        | (716    | )            |   |        | (2,104 | )
|                               | Eliminations                                    |   |                        | (12,362 | )            |   |        | 1,267  |  
|                               | Interest income                                 |   |                        | 16      |              |   |        | 339    |  
|                               | Interest income  shareholder and intercompany  |   |                        |        |              |   |        | 7,938  |  
|                               | Interest expense                                |   |                        | (503    | )            |   |        | (8,631 | )
|                               | Interest expense  shareholder and intercompany |   |                        |        |              |   |        | (7,919 | )
|                               | Other income (expense)                          |   |                        | 12,270  |              |   |        | (349   | )
|                               |                                                 |   |                        |         |              |   |        |       
|Net income (loss)              |                                                 | $ | 8,055                  |         |              | $ | (3,690 | )     
|                               |                                                 |   |                        |         |              |   |        |       

|                        |                        |   |                              |        |              |   |         |        | 
|----------------------- | ---------------------- | - | ---------------------------- | ------ | ------------ | - | ------- | ------ | 
|                        |                        |   | For the Three Quarters Ended
|                        |                        |   |                             
|                        |                        |   | Sept. 30, 2001               |        | Oct. 1, 2000
|                        |                        |   |                              |        |             
|                        |                        |   | (in thousands)              
|Net operating revenues: |                        |   |                              |        |              |   |         |       
|                        | Fitzgeralds Las Vegas  |   | $                            | 40,600 |              |   | $       | 39,604 | 
|                        | Fitzgeralds Tunica     |   |                              | 63,176 |              |   |         | 57,191 | 
|                        | Fitzgeralds Reno       |   |                              | 29,933 |              |   |         | 31,624 | 
|                        | Fitzgeralds Black Hawk |   |                              | 25,916 |              |   |         | 25,087 | 
|                        | Other                  |   |                              | 25     |              |   |         | 54     | 
|                        |                        |   |                              |        |              |   |         |       
|Total                   |                        | $ | 159,650                      |        |              | $ | 153,560 |       
|                        |                        |   |                              |        |              |   |         |       

|                               |                        |                  |        |                              |        |              |        |        |        | 
|------------------------------ | ---------------------- | ---------------- | ------ | ---------------------------- | ------ | ------------ | ------ | ------ | ------ | 
|                               |                        |                  |        | For the Three Quarters Ended
|                               |                        |                  |        |                             
|                               |                        |                  |        | Sept. 30, 2001               |        | Oct. 1, 2000
|                               |                        |                  |        |                              |        |             
|                               |                        |                  |        | (in thousands)              
|Income (loss) from operations: |                        |                  |        |                              |        |              |        |       
|                               | Fitzgeralds Las Vegas  |                  | $      | 2,318                        |        |              | $      | 300    |       
|                               | Fitzgeralds Tunica     |                  |        | 15,579                       |        |              |        | 7,210  |       
|                               | Fitzgeralds Reno       |                  |        | 2,928                        |        |              |        | 2,960  |       
|                               | Fitzgeralds Black Hawk |                  |        | 6,245                        |        |              |        | 5,228  |       
|                               | Other                  |                  |        | (2,670                       | )      |              |        | (2,185 | )     
|                               |                        |                  |        |                              |        |              |        |       
|                               |                        | Total Properties |        |                              | 24,400 |              |        |        | 13,513 | 
|                               | Nevada Club            |                  |        | (45                          | )      |              |        | (34    | )     
|                               |                        |                  |        |                              |        |              |        |       
|Total                          |                        | $                | 24,355 |                              |        | $            | 13,479 |       
|                               |                        |                  |        |                              |        |              |        |       

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| |                                                                                                               
| | --------------------------------------------------------------------------------------------------------------
| | Reconciliation of total business segment operating income to consolidated
net income (loss) before income tax:

|                               |                                                 |   |                              |         |              |   |         |         |  
|------------------------------ | ----------------------------------------------- | - | ---------------------------- | ------- | ------------ | - | ------- | ------- | -
|                               |                                                 |   | For the Three Quarters Ended
|                               |                                                 |   |                             
|                               |                                                 |   | Sept. 30, 2001               |         | Oct. 1, 2000
|                               |                                                 |   |                              |         |             
|                               |                                                 |   | (in thousands)              
|Total segment operating income |                                                 | $ | 27,069                       |         |              | $ | 15,698  |        
|                               | Nevada Club                                     |   |                              | (45     | )            |   |         | (34     | )
|                               | Other                                           |   |                              | (2,670  | )            |   |         | (5,246  | )
|                               | Eliminations                                    |   |                              | (30,144 | )            |   |         | 7,358   |  
|                               | Interest income                                 |   |                              | 94      |              |   |         | 772     |  
|                               | Interest income  shareholder and intercompany  |   |                              |        |              |   |         | 23,984  |  
|                               | Interest expense                                |   |                              | (1,518  | )            |   |         | (25,383 | )
|                               | Interest expense  shareholder and intercompany |   |                              |        |              |   |         | (23,930 | )
|                               | Other income (expense)                          |   |                              | 30,017  |              |   |         | (4,389  | )
|                               |                                                 |   |                              |         |              |   |         |        
|Net income (loss)              |                                                 | $ | 22,803                       |         |              | $ | (11,170 | )      
|                               |                                                 |   |                              |         |              |   |         |        

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Item 2

Managements Discussion and Analysis of

Financial Condition and Results of Operations

The Private Securities Litigation Reform Act of 1995 provides a safe harbor
for forward-looking statements. The following discussion should be read in
conjunction with, and is qualified in its entirety by, the Condensed
Consolidated Financial Statements and the Notes thereto included in this
report. The following discussion and other material in this Quarterly Report
on Form 10-Q contain certain forward-looking statements. The forward-looking
statements are necessarily based upon a number of estimates and assumptions
that, while considered reasonable, are inherently subject to significant
business, economic and competitive uncertainties and contingencies, many of
which are beyond the control of the Company, and upon assumptions with respect
to future business decisions which are subject to change. Risks to which the
Company is subject include, but are not necessarily limited to, its efforts to
restructure its indebtedness and capital structure, competition, high level of
indebtedness, the need for additional financing, development and construction
risks, market fluctuations, gaming, liquor and other regulatory matters,
taxation, the availability and retention of key management, environmental
matters and other factors discussed in the Companys other filings with the
Securities and Exchange Commission. Accordingly, actual results could differ
materially from those contemplated by such forward-looking statements.

General

The Company is a diversified multi-jurisdictional gaming holding company that
owns and operates four Fitzgeralds-brand casino-hotels, in downtown Las Vegas,
Nevada (Fitzgeralds Las Vegas), Reno, Nevada (Fitzgeralds Reno), Tunica,
Mississippi (Fitzgeralds Tunica), and Black Hawk, Colorado (Fitzgeralds
Black Hawk), collectively referred to as the Operating Properties. The
Company markets its properties primarily to middle-market customers,
emphasizing its Fitzgeralds brand and its Fitzgeralds Irish Luck theme.

The Company currently conducts substantially all of its business through
wholly-owned subsidiaries; Fitzgeralds Reno, Inc. (FRI); Fitzgeralds South,
Inc. (FSI); and Fitzgeralds Incorporated (FI). FRI directly owns and
operates Fitzgeralds Reno; FSI owns and operates Fitzgeralds Las Vegas and
Fitzgeralds Tunica through wholly-owned subsidiaries; and FI owns and operates
Fitzgeralds Black Hawk through wholly-owned subsidiaries, including 101 Main
Street Limited Liability Company (101 Main).

Unless the context otherwise requires, the Company refers to Fitzgeralds
Gaming Corporation and its subsidiaries. The Company was incorporated in
Nevada in 1994 to serve as a holding company. The executive office of the
Company is located at 301 Fremont Street, Las Vegas, Nevada 89101; telephone
(702) 388-2400; facsimile (702) 382-5562.

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On December 5, 2000, the Company commenced the Bankruptcy Cases in the
Bankruptcy Court. For further information concerning the Bankruptcy Cases and
related matters, see Note 2 to the Notes to the Unaudited Condensed
Consolidated Financial Statements.

In the narrative discussion below, the 2001 Q3 Period is defined as the
quarter ended September 30, 2001 and the 2000 Q3 Period is defined as the
quarter ended October 1, 2000. The Cumulative 2001 Period is defined as the
Three Quarters ended September 30, 2001 and the Cumulative 2000 Period is
defined as the Three Quarters ended October 1, 2000. Unless otherwise noted,
the narrative discussion below is focused on the Companys Operating
Properties, which together with unallocated corporate and restructuring
expenses are referred to as the Properties. Corporate expenses of $0.25
million for each of the Three Quarters presented are allocated to each of the
four Operating Properties as an operating expense. The remainder of the
unallocated corporate and restructuring expenses is included in
Other. See
Note 1 of Statement of Operations Data.

Quarter Ended September 30, 2001 Comparison to Quarter Ended October 1, 2000

The events of September 11, 2001 significantly impacted the Fitzgeralds Las
Vegas and Fitzgeralds Reno properties. Business volumes at Fitzgeralds Las
Vegas declined, with hotel occupancy declining to the mid 70 percent levels for
the subsequent two weeks before returning to more normal levels the last week
of September. Fitzgeralds Reno also experienced declines in business volumes
with hotel occupancy declining to the mid 70 percent levels for a week before
returning to more normal levels. Business volume at Fitzgeralds Tunica and Fitzgeralds
Black Hawk
had minimal impact by the events of September 11, 2001. There can be no
assurance as to the effect of such events on future operations at the
Fitzgeralds Properties.

The table below sets forth Net Operating Revenues, Income (Loss) from
Operations, EBITDA, Adjusted EBITDA and other financial data for the 2001 Q3
Period and the 2000 Q3 Period. EBITDA for the Properties was $8.0 million and
$8.4 million for the 2001 and 2000 Q3 Periods, respectively. Adjusted EBITDA,
which the Company uses as a reasonable measure of its ability to generate cash
from operating activities and as a means to compare the Companys performance
with that of its competitors, decreased from $9.6 million for the 2000 Q3
Period to $9.1 million for the 2001 Q3 Period. For a definition of EBITDA and
Adjustments to EBITDA, see Notes 2 and 3, respectively, of Statement of
Operations Data.

|                             |                        |       |   |                        |        |              |   |        |        | 
|---------------------------- | ---------------------- | ----- | - | ---------------------- | ------ | ------------ | - | ------ | ------ | 
|                             |                        |       |   | For the Quarters Ended
|                             |                        |       |   |                       
|                             |                        |       |   | Sept. 30, 2001         |        | Oct. 1, 2000
|                             |                        |       |   |                        |        |             
|                             |                        |       |   | (in thousands)        
|Statement of Operations Data |                        |       |   |                        |        |              |   |       
|Net Operating Revenues:      |                        |       |   |                        |        |              |   |       
|                             | Fitzgeralds Las Vegas  |       | $ | 12,675                 |        |              | $ | 11,782 |       
|                             | Fitzgeralds Tunica     |       |   | 21,113                 |        |              |   | 19,360 |       
|                             | Fitzgeralds Reno       |       |   | 10,342                 |        |              |   | 10,903 |       
|                             | Fitzgeralds Black Hawk |       |   | 9,525                  |        |              |   | 8,677  |       
|                             | Other                  |       |   | (10                    | )      |              |   | 54     |       
|                             |                        |       |   |                        |        |              |   |       
|                             |                        | Total |   | $                      | 53,645 |              |   | $      | 50,776 | 
|                             |                        |       |   |                        |        |              |   |       

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|                               |                           |                  |   |                        |       |              |   |        |       | 
|------------------------------ | ------------------------- | ---------------- | - | ---------------------- | ----- | ------------ | - | ------ | ----- | 
|                               |                           |                  |   | For the Quarters Ended
|                               |                           |                  |   |                       
|                               |                           |                  |   | Sept. 30, 2001         |       | Oct. 1, 2000
|                               |                           |                  |   |                        |       |             
|                               |                           |                  |   | (in thousands)        
|Other Data                     |                           |                  |   |                        |       |              |   |       
|Income (Loss) from Operations: |                           |                  |   |                        |       |              |   |       
|                               | Fitzgeralds Las Vegas     |                  | $ | (186                   | )     |              | $ | (700   | )    
|                               | Fitzgeralds Tunica        |                  |   | 5,249                  |       |              |   | 3,028  |      
|                               | Fitzgeralds Reno          |                  |   | 1,636                  |       |              |   | 1,595  |      
|                               | Fitzgeralds Black Hawk    |                  |   | 2,649                  |       |              |   | 1,858  |      
|                               | Other (1)                 |                  |   | (715                   | )     |              |   | (1,109 | )    
|                               |                           |                  |   |                        |       |              |   |       
|                               |                           | Total Properties |   |                        | 8,633 |              |   |        | 4,672 | 
|                               | Nevada Club               |                  |   | 2                      |       |              |   | (12    | )    
|                               |                           |                  |   |                        |       |              |   |       
|                               |                           | Total            |   | $                      | 8,635 |              |   | $      | 4,660 | 
|                               |                           |                  |   |                        |       |              |   |       
|EBITDA (2):                    |                           |                  |   |                        |       |              |   |       
|                               | Fitzgeralds Las Vegas     |                  | $ | (148                   | )     |              | $ | 299    |      
|                               | Fitzgeralds Tunica        |                  |   | 5,200                  |       |              |   | 4,742  |      
|                               | Fitzgeralds Reno          |                  |   | 1,674                  |       |              |   | 2,182  |      
|                               | Fitzgeralds Black Hawk    |                  |   | 2,641                  |       |              |   | 2,319  |      
|                               | Other (1)                 |                  |   | (1,323                 | )     |              |   | (1,099 | )    
|                               |                           |                  |   |                        |       |              |   |       
|                               |                           | Total Properties |   |                        | 8,044 |              |   |        | 8,443 | 
|                               | Nevada Club               |                  |   | 2                      |       |              |   | (12    | )    
|                               |                           |                  |   |                        |       |              |   |       
|                               |                           | Total EBITDA     |   |                        | 8,046 |              |   |        | 8,431 | 
|                               | Adjustments to EBITDA (3) |                  |   | 1,038                  |       |              |   | 1,143  |      
|                               |                           |                  |   |                        |       |              |   |       
|                               |                           | Adjusted EBITDA  |   | $                      | 9,084 |              |   | $      | 9,574 | 
|                               |                           |                  |   |                        |       |              |   |       



---

|(1) |  | Other includes corporate expenses not allocated to the Operating
Properties for the 2000 and 2001 Q3 Periods, which include $1.1 million of
pre-petition professional fees and expenses incurred with the Companys
restructuring in the 2000 Q3 Period which are included in selling, general
and administrative expenses, $0.7 million of post-petition professional
fees and expenses, excluding interest income of $0.1 million and an
adjustment of $0.4 million included in reorganization items for the 2001
Period.                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | EBITDA is a supplemental financial measurement used by the Company in the
evaluation of its gaming business and by many gaming industry analysts.
EBITDA is calculated by adding depreciation and amortization expense to
income from operations. At any property, EBITDA is calculated after the
allocation of corporate costs. However, EBITDA should only be read in
conjunction with all of the Companys financial data summarized above and
its financial statements prepared in accordance with GAAP appearing
elsewhere herein, and should not be construed as an alternative either to
income from operations (as determined in accordance with GAAP) as an
indication of the Companys operating performance or to cash flows from
operating activities (as determined in accordance with GAAP) as a measure
of liquidity. This presentation of EBITDA may not be comparable to
similarly titled measures reported by other companies.
|   
|   
|   
|   
|(3) |  | Adjustments to EBITDA include (i) exclusion of EBITDA for Nevada Club for
both periods presented; (ii) exclusion of pre-petition professional fees
and expenses incurred with the Companys restructuring of $1.1 million in
the 2000 Period, which are included in selling, general and administrative
expenses and; (iii) exclusion of $0.7 million of post-petition
professional fees and expenses, excluding interest income of $0.1
million and an adjustment of $0.4 million included as reorganization items
in the 2001 Period.                                                                                                                                                                                                                                                                                                                                                                                                         

Operating Revenues

Total revenues for the Operating Properties were $63.6 million and net
operating revenues were $53.6 million for the 2001 Q3 Period, representing 6.8%
and 5.6% increases, respectively, over total revenues of $59.6 million and net
operating revenues of $50.8 million for the 2000 Q3

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Period. Fitzgeralds Tunica, Fitzgeralds Black Hawk and Fitzgeralds Las Vegas
net operating revenue increased 9.1%, 9.8% and 7.6%, respectively, while
Fitzgeralds Reno net operating revenue declined 5.1% for the 2001 Q3 Period.

The Companys business can be separated into four operating departments:
casino, food and beverage, rooms and other. Casino revenues for the Operating
Properties represented 79.2% and 77.5% of total revenues for the Operating
Properties for the 2001 and 2000 Q3 Periods, respectively. Casino revenues for
the Operating Properties (of which approximately 87.4% and 85.4% were derived
from slot machine revenues for the 2001 and 2000 Q3 Periods, respectively)
increased 9.1% to $50.4 million for the 2001 Q3 Period from $46.2 million for
the 2000 Q3 Period. Casino revenues increased 15.3%, 10.2% and 9.4% at
Fitzgeralds Tunica, Fitzgeralds Black Hawk and Fitzgeralds Las Vegas,
respectively. Fitzgeralds Reno casino revenue decreased 4.7%, primarily as a
result of adverse economic conditions in its target market and the events of
September 11, 2001.

Room revenues for the Operating Properties (8.7% and 9.6% of total revenues for
the Operating Properties for the 2001 and 2000 Q3 Periods, respectively)
decreased 3.5% from the 2000 Q3 Period. Fitzgeralds Reno room revenues
decreased 5.8% due to a combination of a lower average daily rate of 1.2% for
the 2001 Q3 Period along with a decrease in the average occupancy rate to 92.4%
for the 2001 Q3 Period from 96.3% for the 2000 Q3 Period. Room revenues
decreased 1.7% at Fitzgeralds Las Vegas due to a lower average daily rate which
decreased 9.6% for the 2001 Q3 Period, partially offset by an increase in the
average occupancy rate to 95.6% for the 2001 Q3 Period from 92.7% for the 2000
Q3 Period. At Fitzgeralds Tunica, room revenues decreased 3.1% due to the
combination of a lower average daily rate which decreased 4.9%, partially
offset by an increase in the average occupancy rate to 95.6% for the 2001 Q3
Period from 92.7% for the 2000 Q3 Period.

Food and beverage revenues for the Operating Properties (10.4% and 11.0% of
total revenues for the Operating Properties for the 2001 and 2000 Q3 Periods,
respectively) increased 0.6% for the 2001 Q3 Period. Fitzgeralds Tunica and
Fitzgeralds Black Hawk experienced revenue increases of 6.8% and 6.3%,
respectively for the 2001 Q3 Period. Food and beverage revenues at Fitzgeralds
Reno and Fitzgeralds Las Vegas decreased 7.7% and 0.6%, respectively.

Promotional allowances for the Operating Properties increased $1.2 million or
13.3% for the 2001 Q3 Period primarily as a result of a 33.9% increase at
Fitzgeralds Tunica.

Operating Costs and Expenses

Total operating costs and expenses for the Operating Properties decreased 2.4%
to $45.0 million for the 2001 Q3 Period from $46.1 million for the 2000 Q3
Period due primarily to the decrease in depreciation and amortization as
discussed below.

Casino expenses for the Operating Properties were $22.3 million for the 2001 Q3
Period, a 7.5% increase from $20.8 million for the 2000 Q3 Period,primarily
due to increases in expenses

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relating to the leasing and the rental of slot machines and costs associated
with increases in casino volume. Food and beverage expenses for the Operating
Properties decreased 1.7% to $3.9 million for the 2001 Q3 Period from $4.0
million for the 2000 Q3 Period. Room expenses for the Operating Properties
decreased 2.3% or $0.08 million from the 2000 Q3 Period. Selling, general and
administrative expenses for the Operating Properties increased 3.7% to $14.3
million for the 2001 Q3 Period from $13.8 million for the 2000 Q3 Period.
Professional fees and expenses incurred in conjunction with the ongoing
development, negotiation and implementation of the Companys restructuring were
$0.7 million excluding interest income of $0.1 million and other adjustments of
$0.1 million for the 2001 Q3 Period and $1.1 million for the 2000 Q3 Period.
Such expenses also include professional fees and expenses paid by the Company
for the financial and legal advisors to the Committee, the Indenture Trustee,
and the administrative fees paid to the U.S. Trustee in connection with the
Bankruptcy Cases. The $1.1 million of pre-petition professional fees and
expenses incurred with the Companys restructuring in the 2000 Q3 Period are
included in selling, general and administrative expenses.

Personnel expenses for the Operating Properties increased 2.0% to approximately
$21.1 million for the 2001 Q3 Period from approximately $20.7 million for the
2000 Q3 Period. Fitzgeralds Las Vegas, Fitzgeralds Tunica and Fitzgeralds
Black Hawk incurred increases in personnel expenses of 6.1%, 0.7% and 3.3%,
respectively. Fitzgeralds Reno had a decrease of 2.7% in personnel expenses.

Marketing expenses for the Operating Properties, which include advertising,
promotional material, special events and the operations of the Fitzgeralds
player-tracking card, decreased 19.9% for the 2001 Q3 Period primarily as a
result of 51.4% decrease at Fitzgeralds Tunica.

Depreciation and amortization expenses for the Operating Properties decreased
99.8% to approximately $.007 million for the 2001 Q3 Period from $3.8 million
for the 2000 Q3 Period due to the discontinuation of recording depreciation and
amortization expense for the property and equipment included in net assets held
for sale, subsequent to filing the Bankruptcy Cases.

Income from Operations

Income from operations for the Operating Properties increased 84.8% to $8.6
million for the 2001 Q3 Period from $4.7 million for the 2000 Q3 Period. The
increase is due to the discontinuation of recording substantially all
depreciation and amortization expense during the 2001 Q3 Period as discussed
above.

Net Interest Expense

Interest expense for the Operating Properties (net of interest income),
decreased 94.1% to $0.5 million for the 2001 Q3 Period from $8.3 million for
the 2000 Q3 Period. Section 506(b) of the Bankruptcy Code permits the allowance
of interest on an allowed secured claim secured by property, the value of which
is greater than the amount of the claim. Inasmuch as the parties to

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the Restructuring Agreement have concluded that the fair market value of the
collateral securing the Notes is less than the outstanding principal of the
Notes, concurrently with the filing of the Bankruptcy Cases on December 5, 2000
the Company ceased accruing interest on the Notes.

Net Income

Net income for the Properties increased $11.5 million to $7.8 million in the
2001 Q3 Period compared to a net loss of $3.7 million in the 2000 Q3 Period
primarily as a result of the decrease in depreciation and amortization expense
and interest expense.

Three Quarters Ended September 30, 2001 Comparison to Three Quarters Ended October 1, 2000

The table below sets forth Net Operating Revenues, Income (Loss) from
Operations, EBITDA, Adjusted EBITDA and other financial data for the Cumulative
2001 Period and the Cumulative 2000 Period. EBITDA for the Properties was
$23.8 million and $24.6 million for the Cumulative 2001 and 2000 Periods,
respectively. Adjusted EBITDA, which the Company uses as a reasonable measure
of its ability to generate cash from operating activities and as a means to
compare the Companys performance with that of its competitors, decreased from
$26.6 million for the Cumulative 2000 Period to $26.4 million for the
Cumulative 2001 Period. For a definition of EBITDA and Adjustments to EBITDA,
see Notes 2 and 3, respectively, of Statement of Operations Data.

|                               |                        |                  |   |                              |         |              |   |        |         | 
|------------------------------ | ---------------------- | ---------------- | - | ---------------------------- | ------- | ------------ | - | ------ | ------- | 
|                               |                        |                  |   | For the Three Quarters Ended
|                               |                        |                  |   |                             
|                               |                        |                  |   | Sept. 30, 2001               |         | Oct. 1, 2000
|                               |                        |                  |   |                              |         |             
|                               |                        |                  |   | (in thousands)              
|Statement of Operations Data   |                        |                  |   |                              |         |              |   |       
|Net Operating Revenues:        |                        |                  |   |                              |         |              |   |       
|                               | Fitzgeralds Las Vegas  |                  | $ | 40,600                       |         |              | $ | 39,604 |        
|                               | Fitzgeralds Tunica     |                  |   | 63,176                       |         |              |   | 57,191 |        
|                               | Fitzgeralds Reno       |                  |   | 29,933                       |         |              |   | 31,624 |        
|                               | Fitzgeralds Black Hawk |                  |   | 25,916                       |         |              |   | 25,087 |        
|                               | Other                  |                  |   | 25                           |         |              |   | 54     |        
|                               |                        |                  |   |                              |         |              |   |       
|                               |                        | Total            |   | $                            | 159,650 |              |   | $      | 153,560 | 
|                               |                        |                  |   |                              |         |              |   |       
|Income (Loss) from Operations: |                        |                  |   |                              |         |              |   |       
|                               | Fitzgeralds Las Vegas  |                  | $ | 2,318                        |         |              | $ | 300    |        
|                               | Fitzgeralds Tunica     |                  |   | 15,579                       |         |              |   | 7,210  |        
|                               | Fitzgeralds Reno       |                  |   | 2,928                        |         |              |   | 2,960  |        
|                               | Fitzgeralds Black Hawk |                  |   | 6,245                        |         |              |   | 5,228  |        
|                               | Other (1)              |                  |   | (2,670                       | )       |              |   | (2,185 | )      
|                               |                        |                  |   |                              |         |              |   |       
|                               |                        | Total Properties |   |                              | 24,400  |              |   |        | 13,513  | 
|                               | Nevada Club            |                  |   | (45                          | )       |              |   | (34    | )      
|                               |                        |                  |   |                              |         |              |   |       
|                               |                        | Total            |   | $                            | 24,355  |              |   | $      | 13,479  | 
|                               |                        |                  |   |                              |         |              |   |       

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|                                    |                          |                  |       |                              |        |              |        |         |        | 
|----------------------------------- | ------------------------ | ---------------- | ----- | ---------------------------- | ------ | ------------ | ------ | ------- | ------ | 
|                                    |                          |                  |       | For the Three Quarters Ended
|                                    |                          |                  |       |                             
|                                    |                          |                  |       | Sept. 30, 2001               |        | Oct. 1, 2000
|                                    |                          |                  |       |                              |        |             
|                                    |                          |                  |       | (in thousands)              
|Statement of Operations Data        |                          |                  |       |                              |        |              |        |        
|Other Data                          |                          |                  |       |                              |        |              |        |        
|EBITDA (2):                         |                          |                  |       |                              |        |              |        |        
|                                    | Fitzgeralds Las Vegas    |                  | $     | 2,356                        |        |              | $      | 3,249   |       
|                                    | Fitzgeralds Tunica       |                  |       | 15,530                       |        |              |        | 12,163  |       
|                                    | Fitzgeralds Reno         |                  |       | 2,965                        |        |              |        | 4,758   |       
|                                    | Fitzgeralds Black Hawk   |                  |       | 6,238                        |        |              |        | 6,621   |       
|                                    | Other (1)                |                  |       | (3,258                       | )      |              |        | (2,153  | )     
|                                    |                          |                  |       |                              |        |              |        |        
|                                    |                          | Total Properties |       |                              | 23,831 |              |        |         | 24,638 | 
|                                    | Nevada Club              |                  |       | (45                          | )      |              |        | (34     | )     
|                                    |                          |                  |       |                              |        |              |        |        
|                                    |                          | Total EBITDA     |       |                              | 23,786 |              |        |         | 24,604 | 
|                                    | Adjustments to EBITDA(3) |                  |       | 2,657                        |        |              |        | 1,968   |       
|                                    |                          |                  |       |                              |        |              |        |        
|                                    |                          | Adjusted EBITDA  |       | $                            | 26,443 |              |        | $       | 26,572 | 
|                                    |                          |                  |       |                              |        |              |        |        
|Net Cash Provided by (Used in) (4): |                          |                  |       |                              |        |              |        |        
|                                    | Operating Activities     |                  | $     | 15,708                       |        |              | $      | 22,527  |       
|                                    | Investing Activities     |                  |       | (1,686                       | )      |              |        | (10,498 | )     
|                                    | Financing Activities     |                  |       | (296                         | )      |              |        | (646    | )     
|Depreciation and Amortization       |                          |                  | 26    |                              |        |              | 11,125 |        
|Capital Expenditures                |                          |                  | 1,390 |                              |        |              | 10,417 |        
|Earnings to Fixed Charges (5):      |                          |                  | 10.0  |                              |        |              |       |        



---

|(1) |  | Other includes corporate expenses not allocated to the Operating
Properties for the Cumulative 2000 and 2001 Periods, which include $1.9
million of pre-petition professional fees and expenses incurred with the
Companys restructuring in the Cumulative 2000 Period which are included
in selling, general and administrative expenses and $2.6 million of
post-petition professional fees and expenses, excluding interest income of
$0.5 million and other adjustment of $0.1 million included in
reorganization items for the Cumulative 2001 Period.                                                                                                                                                                                                                                                                                                                                                                                    
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | EBITDA is a supplemental financial measurement used by the Company in the
evaluation of its gaming business and by many gaming industry analysts.
EBITDA is calculated by adding depreciation and amortization expense to
income from operations. At any property, EBITDA is calculated after the
allocation of corporate costs. However, EBITDA should only be read in
conjunction with all of the Companys financial data summarized above and
its financial statements prepared in accordance with GAAP appearing
elsewhere herein, and should not be construed as an alternative either to
income from operations (as determined in accordance with GAAP) as an
indication of the Companys operating performance or to cash flows from
operating activities (as determined in accordance with GAAP) as a measure
of liquidity. This presentation of EBITDA may not be comparable to
similarly titled measures reported by other companies.
|   
|   
|   
|   
|(3) |  | Adjustments to EBITDA include (i) exclusion of EBITDA for Nevada Club for
both periods presented; (ii) exclusion of pre-petition professional fees
and expenses incurred with the Companys restructuring of $1.9 million in
the Cumulative 2000 Period which are included in selling, general and
administrative expenses and; (iii) exclusion of $2.6 million of
post-petition professional fees and expenses, excluding interest income
of $0.5 million and other adjustment of $0.1 million included as
reorganization items in the Cumulative 2001 Period.                                                                                                                                                                                                                                                                                                                                                                                 
|   
|   
|   
|   
|(4) |  | Includes financial results of Nevada Club for both periods presented.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|   
|   
|   
|(5) |  | For the Ratio of Earnings to Fixed Charges, earnings are defined as
earnings before income taxes, interest on indebtedness, imputed interest
on capital lease obligations and the portion of rent expense deemed to
represent interest. Fixed charges consist of interest on indebtedness,
imputed interest on capital lease obligations and the portion of rent
expense deemed to represent interest. The Fixed Charged Coverage Ratio
was 10.0 for the Cumulative 2001 Period, primarily as a result of the
reduction in depreciation and amortization and interest expense; however,
earnings were insufficient to cover fixed charges by $11.2 million for the
Cumulative 2000 Period.                                                                                                                                                                                                                                                      

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Operating Revenues

Total revenues for the Operating Properties were $187.4 million and net
operating revenues were $159.7 million for the Cumulative 2001 Period,
representing 4.8% and 4.0% increases, respectively, over total revenues of
$178.8 million and net operating revenues of $153.6 million for the Cumulative
2000 Period. The increase is primarily due to the improved performance at the
Fitzgeralds Tunica property.

The Companys business can be separated into four operating departments:
casino, food and beverage, rooms and other. Casino revenues for the Operating
Properties represented 78.8% and 77.6% of total revenues for the Operating
Properties for the Cumulative 2001 and 2000 Periods, respectively. Casino
revenues for the Operating Properties (of which approximately 86.8% and 85.0%
were derived from slot machine revenues for the Cumulative 2001 and 2000
Periods, respectively) increased 6.4% to $147.7 million for the Cumulative 2001
Period from $138.8 million for the Cumulative 2000 Period. Casino revenues
increased 15.5%, 3.3% and 2.8% respectively, at Fitzgeralds Tunica, Fitzgeralds
Las Vegas and Fitzgeralds Black Hawk. Casino revenue decreased 5.3% at
Fitzgeralds Reno casino primarily as a result of adverse economic conditions in
its target market and to a lesser extent the events of September 11, 2001.

Room revenues for the Operating Properties (8.9% and 9.4% of total revenues for
the Operating Properties for the Cumulative 2001 and 2000 Periods,
respectively) decreased 1.3% from the Cumulative 2000 Period. Fitzgeralds Reno
room revenues decreased 1.7% as the average occupancy rate decreased to 89.6%
for the Cumulative 2001 Period from 91.4% for the Cumulative 2000 Period, which
was offset by a 1.2% increase in the average daily rate. Room revenues
decreased 1.3% at Fitzgeralds Las Vegas due to a decrease in the average daily
rate of 0.7% offset by an increase in the occupancy rate to 93.6% for the
Cumulative 2001 Period, from 91.9% for the Cumulative 2000 Period. At
Fitzgeralds Tunica, room revenues decreased 1.1% due to a combination of a
higher average occupancy rate, which increased to 96.3% for the Cumulative 2001
Period from 94.0% for the Cumulative 2000 Period, offset by lower average daily
rate, which decreased 0.6% for the Cumulative 2000 Period.

Food and beverage revenues for the Operating Properties (10.4% and 11.1% of
total revenues for the Operating Properties for the Cumulative 2001 and 2000
Periods, respectively) decreased 1.8% for the Cumulative 2001 Period.
Fitzgeralds Tunica food and beverage revenue increased 4.0% while Fitzgeralds
Reno, Fitzgeralds Las Vegas and Fitzgeralds Black Hawk experienced revenue
decreases of 6.9%, 4.1%, and 1.1%, respectively.

Promotional allowances for the Operating Properties increased $2.5 million or
9.8% for the Cumulative 2001 Period primarily as a result of a 24.0% increase
at Fitzgeralds Tunica, while Fitzgeralds Reno, Fitzgeralds Las Vegas and
Fitzgeralds Black Hawk had decreases of 3.0%, 2.3% and 1.1%, respectively.

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Operating Costs and Expenses

Total operating costs and expenses for the Operating Properties decreased 3.4%
to $135.3 million for the Cumulative 2001 Period from $140.0 million for the
Cumulative 2000 Period primarily due to the decrease in depreciation and
amortization expense.

Casino expenses for the Operating Properties were $67.3 million for the
Cumulative 2001 Period, a 5.6% increase from $63.7 million for the Cumulative
2000 Period,primarily due to increases in expenses relating to the leasing and
the rental of slot machines and cost associated with increases in casino
volume. Food and beverage expenses for the Operating Properties remained
approximately the same at $11.7 million for both the Cumulative 2001 and 2000
Periods. Room expenses for the Operating Properties remained approximately the
same at $9.5 million for the Cumulative 2001 and 2000 Periods. Selling,
general and administrative expenses for the Operating Properties increased 1.1%
to $42.9 million for the Cumulative 2001 Period from $42.4 million for the
Cumulative 2000 Period. Professional fees and expenses incurred in conjunction
with the ongoing development, negotiation and implementation of the Companys
restructuring were $2.6 million excluding interest income of $0.5 million and
other adjustment of $0.1 million for the Cumulative 2001 Period and $1.9
million for the Cumulative 2000 Period. Such expenses also include
professional fees and expenses paid by the Company for the financial and legal
advisors to the Committee and the Indenture Trustee, and administrative
expenses paid to the U.S. Trustee in connection with the Bankruptcy Cases. The
$1.9 million of pre-petition professional fees and expenses incurred with the
Companys restructuring in the Cumulative 2000 Period are included in selling,
general and administrative expenses.

Personnel expenses for the Operating Properties increased 1.9% to approximately
$63.2 million for the Cumulative 2001 Period from approximately $62.0 million
for the Cumulative 2000 Period. Personnel expenses increased 2.7%, 2.7% and
3.2%, respectively for Fitzgeralds Tunica, Fitzgeralds Black Hawk and
Fitzgeralds Las Vegas, while personnel expenses at Fitzgeralds Reno decreased
1.6%.

Marketing expenses for the Operating Properties, which include advertising,
promotional material, special events and the operations of the Fitzgeralds
player-tracking card, decreased $0.8 million or 6.8% for the Cumulative 2001
Period primarily as a result of a 21.1% decrease at Fitzgeralds Tunica.

Depreciation and amortization expenses for the Operating Properties decreased
99.8% to $0.026 million for the Cumulative 2001 Period from $11.1 million for
the Cumulative 2000 Period, due to the discontinuation of recording
depreciation and amortization expense for property and equipment included in
net assets held for sale, subsequent to filing the Bankruptcy Cases.

Income from Operations

Income from operations for the Operating Properties increased 80.6% to $24.4
million for the Cumulative 2001 Period from $13.5 million for the Cumulative
2000 Period. The increase is

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primarily due to the discontinuation of recording substantially all
depreciation and amortization expense during the Cumulative 2001 Period.

Net Interest Expense

Interest expense for the Operating Properties (net of interest income),
decreased 94.2% to $1.4 million for the Cumulative 2001 Period from $24.6
million for the Cumulative 2000 Period. Section 506(b) of the Bankruptcy Code
permits the allowance of interest on an allowed secured claim secured by
property, the value of which is greater than the amount of the claim. Inasmuch
as the parties to the Restructuring Agreement have concluded that the fair
market value of the collateral securing the Notes is less than the outstanding
principal of the Notes, concurrently with the filing of the Bankruptcy Cases on
December 5, 2000 the Company ceased accruing interest on the Notes.

Net Income

Net Income for the Properties increased $33.9 million to $22.7 million in the
Cumulative 2001 Period compared to a net loss of $11.1 million in the
Cumulative 2000 Period primarily as a result of the decrease in depreciation
and amortization expense and interest expense.

Liquidity and Capital Resources

At September 30, 2001, the Company had unrestricted cash of $32.0 million
compared to $18.3 million at December 31, 2000, which amounts include $9.8
million and $10.1 million, respectively, of cash classified in net assets held
for sale. The Companys primary sources of liquidity and cash flows during the
Cumulative 2001 Period were operations of $15.7 million. Net cash used in
investing activities was $1.7 million for the Cumulative 2001 Period compared
to net cash used in investing activities of $10.5 million for the Cumulative
2000 Period. Cash uses in the Cumulative 2000 Period included $5.5 million for
the parking garage expansion at Fitzgeralds Tunica, $0.75 million for the
acquisition of the parking garage at Fitzgeralds Reno, $0.75 million for
acquisition of property adjacent to Fitzgeralds Black Hawk and approximately
$3.0 million for maintenance capital expenditures at the Operating Properties.
Net cash used in financing activities was $0.3 million and $0.6 million for the
Cumulative 2001 and 2000 Periods, respectively.

The Companys principal sources of capital will consist of cash from
operations, and vendor or third party financing of gaming and other equipment.
The Company believes that it has adequate sources of liquidity to meet its
normal operating requirements. However, its relatively high degree of leverage
had prevented it from making the level of capital expenditures required to
maintain and enhance the competitive position of its properties. Management
and the Board of Directors did not see any way to resolve this problem without
restructuring the Companys

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indebtedness. An Event of Default under the Indenture pursuant to which the
Notes were issued occurred on July 15, 1999.

Upon execution of the Restructuring Agreement and before commencement of the
Bankruptcy Cases, the Company distributed $13.0 million in Excess Cash (as that
term is defined in the Restructuring Agreement) to the Indenture Trustee to be
applied to accrued and unpaid interest and principal as provided in the
Indenture. Pursuant to the Restructuring Agreement and an order entered by the
Bankruptcy Court, the Company is required to distribute unrestricted cash
(which includes cash in net assets held for sale) in excess of $24.8 million to
holders of its Notes within 45 days after the end of each quarter. In May and
August 2001, the Company distributed $1.8 million and $7.7 million in Excess
Cash to the Indenture Trustee to be applied to accrued and unpaid interest and
principal as provided in the Indenture.

On December 5, 2000, the Company commenced the Bankruptcy Cases in the
Bankruptcy Court. For further information concerning the Bankruptcy Cases and
related matters, see Note 2 to the Notes to the Unaudited Condensed
Consolidated Financial Statements.

By suspending the interest payments on the Notes other than the post-petition
distributions and sales proceeds of collateral for the Notes until such time as
the liquidation of the Companys assets contemplated by the Restructuring
Agreement has been completed, the Company believes that its liquidity and
capital resources will be sufficient to maintain all of its normal operations
at current levels during the pendency of the Bankruptcy Cases and does not
anticipate any adverse impact on its operations, customers or employees.
However, costs incurred and to be incurred in connection with the Bankruptcy
Cases have been and will continue to be substantial and, in any event, there
can be no assurance that the Company will be able to successfully consummate
the Restructuring Agreement and the Purchase Agreement or that its liquidity
and capital resources will be sufficient to maintain its normal operations
during the pendency of the Bankruptcy Cases.

EBITDA and Adjusted EBITDA

The Companys EBITDA was $23.8 million for the Cumulative 2001 Period and $24.6
million for the Cumulative 2000 Period. EBITDA is calculated by adding
depreciation and amortization expenses to income from operations. The
Companys Adjusted EBITDA was $26.4 million for the Cumulative 2001 Period and
$26.6 million for the Cumulative 2000 Period. Adjusted EBITDA is determined
based on the adjustments described in Note 3 to Statement of Operations Data.
However, EBITDA should only be read in conjunction with all of the Companys
financial data summarized above and its financial statements prepared in
accordance with GAAP appearing elsewhere herein, and should not be construed as
an alternative either to income from operations (as determined in accordance
with GAAP) as an indication of the Companys operating performance or to cash
flows from operating activities (as determined in accordance with GAAP) as a
measure of liquidity. This presentation of EBITDA may not be comparable to
similarly titled measures reported by other companies.

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Ratio of Earnings to Fixed Charges

The ratio of earnings to fixed charges measures the extent by which earnings,
as defined, exceed certain fixed charges. Earnings are defined as earnings
before income taxes, interest on indebtedness, imputed interest on capital
lease obligations and the portion of rent expense deemed to represent interest.
Fixed charges consist of interest on indebtedness, imputed interest on capital
lease obligations and the portion of rent expense deemed to represent interest.
The Fixed Charge Coverage Ratio was 10.0 for the Cumulative 2001 Period,
primarily as a result of the reduction in depreciation and amortization and
interest expense; however, earnings were insufficient to cover fixed charges by
$11.2 million for the Cumulative 2000 Period.

Business Seasonality and Severe Weather

The gaming operations of the Company in certain locations may be seasonal and,
depending on the location and other circumstances, the effects of such
seasonality could be significant. At Fitzgeralds Las Vegas, business levels
are generally weaker from Thanksgiving through the middle of January (except
during the week between Christmas and New Years) and throughout the summer,
and generally stronger from mid-January through Easter and from mid-September
through Thanksgiving. At each of the three other Operating Properties,
business levels are typically weaker from Thanksgiving through the end of the
winter and typically stronger from mid-June to mid-November.

The Companys results are also affected by inclement weather in relevant
markets. The Fitzgeralds Black Hawk site, located in the Rocky Mountains of
Colorado, and the Fitzgeralds Reno site, located in the foothills of the Sierra
Nevada mountains in Nevada, are subject to snow and icy road conditions during
the winter months. Any such severe weather conditions may discourage potential
customers from visiting the Companys facilities.

Recently Issued Accounting Standards

On June 30, 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities.This statement establishes accounting and reporting
standards for derivative instruments and hedging activities and is effective
for the Companys fiscal year ending December 31, 2001. Adoption of this
statement did not have a material impact on the Companys financial condition
or results of operations.

On January 1, 2001, the Company implemented Emerging Issues Task Force (EITF)
No. 00-14 Accounting for Certain Sales Incentives, EITF
No. 00-21 Accounting
for Multiple-Element Revenue Arrangements, EITF No. 00-22 Accounting for
Points and Certain Other Time-Based or Volume-Based Sales Incentive Offers,
and Offers for Free Products or Services to Be Delivered in the Futureand EITF
No. 00-25 Accounting for Consideration from a Vendor to a Retailer in
Connection with the Purchase or Promotion of the Vendors Productsrequiring
cash

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coupons or rebates to be classified as a reduction of revenue. Prior to this
ruling, the Company had expensed the cash coupons, players club reward program
and other cash back programs as a casino or marketing expense. In 2001, the
Company reclassified its 2000 income statement to reflect such expenses as
promotional expense thereby reducing net revenue.

In June 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 141 (SFAS 141), Business
Combinations, which requires the purchase method of accounting for business
combination initiated after June 30, 2001 and prohibits the use of the
pooling-of-interest method. The Company does not believe that the adoption of
SFAS 141 will have a significant impact on its financial statements.

In June 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 142 (SFAS 142) Goodwill and
Other Intangible Assets, which is effective January 1, 2002. SFAS 142 requires
that goodwill and other intangible assets with indefinite useful lives no
longer be amortized, but instead tested for impairment at least annually. As
of September 30, 2001 the Company had goodwill, net of accumulated
amortization, of approximately $13.0 million which is currently included in net
assets held for sale. The Company discontinued amortizing the goodwill
subsequent to filing the Bankruptcy Cases. Amortization expense related to
goodwill was $0.3 million for the Three Quarters ended October 1, 2000. The
Company is currently assessing but has not yet determined the impact of SFAS
142 on its financial position and results of operations.

Also in June 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 143, Accounting for Asset
Retirement Obligations, which is effective for financial statements issued for
fiscal years beginning after June 15, 2002. This statement establishes
accounting standards for recognition and measurement of a liability for an
asset retirement obligation and the associated asset retirement cost. The
Company is currently evaluating the impact that this standard will have on the
its financial condition and results of operations.

In August 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 144 Accounting for the
Impairment or Disposal of Long-Lived Assets, which is effective for financial
statements issued for fiscal years beginning after December 15, 2001, and the
interim periods within those fiscal years. This statement addresses financial
accounting and reporting for the impairment of long-lived assets and for
long-lived assets to be disposed of, and supersedes Statement of Financial
Accounting Standards No. 121, Accounting for the Impairment of Long-Lived
Assets and For Long-Lived Assets to be Disposed of. The Company is currently
evaluating the impact that this standard will have on its financial condition
and results of operation.

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Item 3

Quantitative and Qualitative Disclosures About Market Risk

The fair market value of the Companys fixed debt obligations has decreased to
approximately $104.7 million at September 30, 2001 compared to $115.0 million
at December 31, 2000.

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PART II
OTHER INFORMATION

Item 1. Legal Proceedings.

Reno Transportation Rail Access Corridor (ReTRAC) Project

In October 1998, the Reno City Council approved a special assessment district
to finance a portion of the costs to lower the railroad tracks that run through
downtown Reno, Nevada (the ReTRAC Project). Preliminary plans for the ReTRAC
Project provide for the construction of a temporary rail bypass that will be
used to divert rail traffic around the main railroad during construction. The
City of Reno (the City) estimates that a period of approximately two and one
half years will be required to complete the ReTRAC Project. The southern
boundary of the bypass will extend out into the middle of Commercial Row, the
street where Fitzgeralds Reno hotel entrance, valet parking area and hotel
loading zone are situated.

On November 30, 1998, the Company filed a lawsuit against the City to challenge
the method by which the special assessment to be levied against the Company was
determined. Based on preliminary plans prepared by the City, Fitzgeralds Reno
would expect to lose several parking spaces, the current valet parking area, an
outdoor billboard structure advertising available rooms and a building used to
house administrative offices, and be required to relocate the hotel entrance
currently on Commercial Row. The City has also subsequently indicated that the
ReTRAC Project might require the demolition of the Fitzgeralds Reno Rainbow
Skyway. Implementation of the ReTRAC Project under these circumstances would
cause the Company to suffer significant and permanent loss in business revenue
and income; certain operating efficiencies from demolished or impaired physical
structures; and a portion of its existing customer base as a result of the
construction and operation of the proposed rail bypass.

The City of Reno filed an answer to the Companys lawsuit on January 19, 1999.
Subsequent thereto, George Karadanis and Robert Maloff d/b/a Sundowner Hotel
and Casino (the Sundowner) were permitted by court order to file a Complaint
in Intervention. Notwithstanding that intervention, on December 22, 1999, the
court granted the City of Renos Motion for Summary Judgment against the
Sundowner which motion was joined in by the Company.

After hearing oral arguments and considering the parties briefs, the Court
concluded that there was insufficient evidence before the Reno City Council to
support a finding that the ReTRAC Project confers a special benefit on
Fitzgeralds Reno as is required by statute before a special assessment may be
imposed. The Court remanded the matter to the Reno City Council and directed
the council to conduct a new hearing to consider evidence as to whether
Fitzgeralds Reno would receive a special benefit from the proposed project. On
June 20, 2001, the Reno City Council commenced a public hearing in compliance
with the remand order of the Court. That public hearing was recessed and
continued to November 29, 2001.

On February 27, 2001, the Reno City Council voted to continue the process of
determining the actual cost of construction of the ReTRAC Project, which has
previously been estimated to be $218 million. It is anticipated that the
construction cost analysis will be completed in April

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2002. On May 24, 2001, Fitzgeralds Reno commenced an action,
CV-N-01-0329-PMP-RAM, in the United States District Court for the District of
Nevada, against the Federal Highway Administration (FHWA), the Nevada
Department of Transportation (NDOT), and the City (collectively, the
Defendants) for violations of the National Environmental Policy Act (NEPA),
codified at 42 U.S.C. §§ 4321-4327. The claims against all Defendants
constitute a violation of 42 U.S.C. § 4332 (Violation of NEPA: Failure to
Consider Reasonable Alternatives & Failure to Consider and Provide Adequate
Mitigation Measures). Specifically, the Defendants failed to consider the
Partial Cover and Cut Tunnel Alternative and the use of the Feather River Route
on a temporary basis, and failed to include a plan for mitigating the adverse
environmental impacts, including construction disruption, loss of operating
facilities, noise and vibration impacts, that will be caused by the ReTRAC
Project and incurred by Fitzgeralds Reno and others.

On or about June 12, 2001, NDOT filed a motion to dismiss the Companys NEPA
complaint based on a claim of sovereign immunity and the Company moved to amend
its complaint to substitute as a defendant the Director of NDOT, Thomas E.
Stephens, for the Defendant NDOT, in lieu of considering NDOTs Eleventh
Amendment immunity claim. This unopposed motion was granted by the Court on
August 17, 2001, and the Company filed its amended complaint on August 23,
2001. Defendant FHWA filed its answer to the Complaint on September 6, 2001
and Defendant Stephens filed his answer on October 3, 2001. The City filed a
motion to dismiss the amended complaint so far as it named the City as
defendant on September 6, 2001. The Company filed an opposition to that motion
on October 24, 2001, and the City has until November 13, 2001, to respond in
support of its motion to dismiss.

Central City Litigation

On or about May 25, 2001, City of Central, Colorado (Central City), and
certain businesses claiming to do business in Central City commenced an action,
Civil Action No. 01-D-0964, in the United States District Court for the
District of Colorado against the City of Black Hawk, Colorado (Blackhawk),
certain companies alleged to do business in or about Blackhawk and various
individuals.

101 Main Street Limited Liability Company (101 Main), a wholly owned
subsidiary of Fitzgeralds Black Hawk, Inc.-II, was named defendant in the
action. The claims against all defendants, including 101 Main, are predicated
on 15 U.S.C. section 1 (Restraint of Trade), 15 U.S.C. section 2
(Monopolization), 15 U.S.C. section 2 (Attempted Monopolization), Colorado
Revised Statute section 6-4-104 (Restraint of Trade), violation of Colorado
Revised Statute section 6-4-105 (Monopolization), Colorado Revised Statute
section 6-4-105 (Attempted Monopolization), 18 U.S.C. section 1962
(Racketeering), Colorado Revised Statute section 18-17-104 (Colorado Organized
Crime Control Act), intentional interference with prospective economic
advantage, civil conspiracy, tortious interference with contractual relations
and inducing breach of contract. The plaintiffs in the action are seeking
judgment by jury against all defendants for an amount in excess of $100.0
million. The principal cause of the action relating to 101 Main is that the
defendants, including 101 Main Street Limited Liability Company, engaged in
certain conduct to prevent the construction of a highway defined as the
Southern

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Access Road that would provide access to travelers directly to Central City
from Interstate 70 instead of requiring passage through Blackhawk.

The complaint was filed after the commencement of the Bankruptcy Cases, and 101
Main has asserted that the action was commenced in violation of the automatic
stay, Section 362(a) of the Bankruptcy Code. On June 21, 2001, the Company
filed a Notice of Pending Bankruptcy Cases and Existence of the Automatic Stay.

Subsequently, the plaintiffs filed a First Amended Complaint and Demand for
Jury Trial in the action. 101 Main is no longer named as a defendant. On
October 8, 2001, plaintiffs attorneys also filed a motion with the Bankruptcy
Court seeking formal relief from the bankruptcy stay. The Company will object
to plaintiffs efforts to obtain relief from the stay in the bankruptcy
proceeding. If plaintiffs are successful in obtaining relief from the
bankruptcy stay, the plaintiffs plan to file a further amended complaint in the
District Court again naming 101 Main as a defendant. The Company believes that
the claims asserted against 101 Main are without merit.

Other Litigation

The Company is a party to various lawsuits relating to routine matters
incidental to its business. Except as noted below, the Company does not believe
that the outcome of such litigation, individually or in the aggregate, will
have any material adverse effect on its financial condition.

From April 1, 1998 through September 30, 1999, the Companys general liability
insurance and workers compensation insurance carrier was Reliance Insurance
Company (Reliance). On May 29, 2001, a Pennsylvania court placed Reliance
under the control of the Pennsylvania Insurance Department for rehabilitation.
Thereafter, on October 3, 2001, the Reliance Insurance Company was declared
insolvent and placed under an order of liquidation by the Pennsylvania
Commonwealth Court at the request of the Pennsylvania Insurance Department. At
the present time, the Company is unable to determine what effect this action
may have on liability and workers compensation claims which arose during the
coverage period for which Reliance was the Companys insurance carrier or
whether any limitations on coverage would have a material adverse effect on the
Companys financial condition.

Item 2. Changes in Securities and Use of Proceeds.

Not Applicable

Item 3. Defaults Upon Senior Securities.



|(a) |  | As previously reported in its Report on Form 8-K filed July 22, 1999 and
elsewhere in this Form 10-Q, the Company is in default on its $205.0
million Senior Secured Notes.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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Item 4. Submission of Matters to a Vote of Security Holders.

Not Applicable

Item 5. Other Information.

The Company files monthly operating statements with the Bankruptcy Court.
These filings are available for public inspection at the office of the clerk of
the Bankruptcy Court at 300 Booth Street, Reno, Nevada 89509 or on the internet
at www.nvb.uscourts.gov.

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



|(a) |  | Exhibits
|--- |  | --------



| | 10.1 |  | Second Amendment to the Purchase and Sale Agreement dated
as of November 1, 2001 by and among Majestic Investor Holdings, LLC,
a Delaware limited liability company; Majestic Investor, LLC, a
Delaware limited liability company; Barden Nevada Gaming, LLC, a
Nevada limited liability company; Barden Mississippi Gaming, LLC, a
Mississippi limited liability company; Barden Colorado Gaming, LLC,
a Colorado limited liability company; Fitzgeralds Las Vegas, Inc., a
Nevada Corporation; 101 Main Street Limited Liability Company, a
Colorado limited liability company; Fitzgeralds Mississippi, Inc., a
Mississippi corporation; Fitzgeralds Gaming Corporation, a Nevada
corporation; and certain affiliates of the foregoing parties with
respect to the assets of Fitzgeralds Las Vegas, Fitzgeralds Black
Hawk and Fitzgeralds Tunica.
| | ---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) |  | Reports on Form 8-K
|--- |  | -------------------

None

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SIGNATURES

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



|Dated: November 9, 2001 | 
|----------------------- | 



| | FITZGERALDS GAMING CORPORATION
(DEBTOR-IN-POSSESSION)
| | -----------------------------------------------------



| | /s/ Michael E. McPherson
Michael E. McPherson
Executive Vice President and
Chief Financial Officer
(Duly Authorized Officer, Principal
Financial Officer and Principal
Accounting Officer)
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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