##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended December 31, 2001

|      |                                                                                         
|----- | ----------------------------------------------------------------------------------------
|[   ] | TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the Transition period from __________ to _________

Commission file number: 0-26518

FITZGERALDS GAMING CORPORATION

(Exact name of registrant as specified in its charter)


|                                                                      |  |                                                
|--------------------------------------------------------------------- |  | -----------------------------------------------
|Nevada
(State or other jurisdiction of
incorporation or organization) |  | 88-0329170
(I.R.S. Employer
Identification No.)

3097 E. Warm Springs Rd Suite 100, Las Vegas NV 89120
(Address of principal executive offices) (Zip Code)

(702) 940-2000
(Registrants telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to
Section 12(g) of the Act:
Cumulative Redeemable Preferred Stock, $.01 par value
Common Stock, $.01 par value

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 [   ]

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

As of March 15, 2002, the number of outstanding shares of the Registrants
Common Stock was 5,508,082. As of March 15, 2002, approximately 1,395,048
shares of the Registrants Common Stock were held by non-affiliates of the
Registrant. The Registrants Common Stock is not listed or traded on any
exchange. For purposes of determining the number of shares held by
non-affiliates, all directors, officers, employees and five percent or greater
owners of the Registrant are deemed to be affiliates. Such determination
should not be deemed to be an admission that such persons are, in fact,
affiliates of the Registrant.

DOCUMENTS INCORPORATED BY REFERENCE
Exhibit Index located on Page E-1





---

TABLE OF CONTENTS



|                  |                                                                                               |  |  |  |  |  |  | 
|----------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I           
|                  | Item 1. Business                                                                             
|                  | Item 2. Properties                                                                           
|                  | Item 3. Legal Proceedings                                                                    
|                  | Item 4. Submission of Matters to a Vote of Security Holders                                  
|PART II          
|                  | Item 5. Market for Registrants Common Equity and Related Stockholder Matters                
|                  | Item 6. Selected Financial Data                                                              
|                  | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                  | Item 7A. Quantitative and Qualitative Disclosures About Market Risk                          
|                  | Item 8. Financial Statements and Supplementary Data                                          
|                  | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 
|PART III         
|                  | Item 10. Directors, Executive Officers and Significant Employees of Registrant               
|                  | Item 11. Executive Compensation                                                              
|                  | Item 12. Security Ownership of Certain Beneficial Owners and Management                      
|                  | Item 13. Certain Relationships and Related Transactions                                      
|PART IV          
|                  | Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K                     
|SIGNATURES       
|Index to Exhibits
|EXHIBIT 10.(L)   
|EXHIBIT 10.(M)   
|EXHIBIT 10.(N)   
|EXHIBIT 10.(O)   
|EXHIBIT 12.1     



---



##### Table of Contents



FITZGERALDS GAMING CORPORATION
2001 ANNUAL REPORT ON FORM 10-K
TABLE OF CONTENTS

|                  |    |                                                                                       |  |     
|----------------- | -- | ------------------------------------------------------------------------------------- |  | ----
|Item              |    |                                                                                       |  | Page
|                  |    |                                                                                       |  |     
|PART I            |    |                                                                                       |  | 1   
|ITEM 1.           |    | BUSINESS                                                                              |  | 1   
|                  |    | General                                                                               |  | 1   
|                  |    | Bankruptcy                                                                            |  | 1   
|                  |    | Restructuring Agreement                                                               |  | 1   
|                  |    | Purchase Agreement                                                                    |  | 3   
|                  |    | Operating Strategy                                                                    |  | 3   
|                  |    | Operating Properties                                                                  |  | 4   
|                  |    | Other Operations                                                                      |  | 6   
|                  |    | Competition                                                                           |  | 7   
|                  |    | Employees                                                                             |  | 8   
|                  |    | Trade Names, Trademarks and Service Marks                                             |  | 8   
|                  |    | Governmental Regulation                                                               |  | 9   
|ITEM 2.           |    | PROPERTIES                                                                            |  | 14  
|ITEM 3.           |    | LEGAL PROCEEDINGS                                                                     |  | 14  
|ITEM 4.           |    | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                   |  | 17  
|PART II           |    |                                                                                       |  | 18  
|ITEM 5.           |    | MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                 |  | 18  
|ITEM 6.           |    | SELECTED FINANCIAL DATA                                                               |  | 19  
|ITEM 7.           |    | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS |  | 21  
|ITEM
7A.          |    | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                            |  | 32  
|ITEM 8.           |    | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                           |  | 32  
|ITEM 9.           |    | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE  |  | 32  
|PART III          |    |                                                                                       |  | 33  
|ITEM 10.          |    | DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES OF REGISTRANT                 |  | 33  
|ITEM 11.          |    | EXECUTIVE COMPENSATION                                                                |  | 36  
|ITEM 12.          |    | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                        |  | 40  
|ITEM 13.          |    | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                        |  | 41  
|PART IV           |    |                                                                                       |  | 42  
|ITEM 14.          |    | EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K                       |  | 42  
|SIGNATURES        |    | 43                                                                                   
|POWER OF
ATTORNEY | 44





---



##### Table of Contents






PART I




Item 1. Business

General

Fitzgeralds Gaming Corporation (the Company) is a gaming holding company that
until December 6, 2001 owned and operated four Fitzgeralds-brand casino-hotels,
located in downtown Las Vegas, Nevada (Fitzgeralds Las Vegas), Reno, Nevada
(Fitzgeralds Reno), Tunica, Mississippi (Fitzgeralds Tunica), and Black
Hawk, Colorado (Fitzgeralds Black Hawk). On December 6, 2001, the Company
sold substantially all of the assets and related liabilities of its Fitzgeralds
Las Vegas, Fitzgeralds Mississippi and Fitzgeralds Black Hawk properties to
Majestic Investor Holdings, LLC (Majestic). The Company markets its
properties primarily to middle-market customers, emphasizing its Fitzgeralds
brand and its Fitzgeralds Irish Luck theme. As of December 31, 2001, the
Company operated only its Fitzgeralds Reno property, which has a total of 868
slot machines, 25 table games and approximately 351 hotel rooms.

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 the residual assets and liabilities of Fitzgeralds
Las Vegas (FLVI) and Fitzgeralds Tunica (FMI) through wholly owned
subsidiaries; and FI owns the residual assets and liabilities of 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 3097 E. Warm Springs Rd. Suite 100, Las Vegas, Nevada 89120;
telephone (702) 940-2000; facsimile (702) 940-2207.

Bankruptcy

On December 5, 2000, the Company 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 expeditious and orderly sale of all
of the Companys operating assets and properties as going concerns.

Restructuring Agreement

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

1



---



##### Table of Contents



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,
August and November 2001, the Company distributed $1.8 million, $7.7 million
and $7.2 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 and the informal committee (the Informal Committee),
representing holders of a majority in interest of the Notes, are currently
engaged in discussions to establish a new threshold for cash reserves
subsequent to the December 6, 2001 sale to Majestic. 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 currently engaged in discussion
to amend the Restructuring Agreement to conduct the auction sale of the one
remaining operating asset, Fitzgeralds Reno, during 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 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 required
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, (the Senior Management) 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

2



---



##### Table of Contents



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).

Purchase Agreement

Pursuant to the Purchase Agreement, the Company 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.

The transactions contemplated by the Purchase Agreement were consummated on
December 6, 2001. The purchase price for the Assets was $149.0 million,
subject to certain adjustments and holdbacks specified in the Purchase
Agreement, which resulted in net proceeds prior to distributions of
approximately $146.9 million. Of such amount, $7.7 million was retained by the
Company for cash reserves, approximately $5.9 million was distributed to Senior
Management, in consideration of non-competition and sales incentives pursuant
to the Restructuring Agreement, and approximately $133.3 million was
distributed to holders of the Notes (on account of the $205.0 million aggregate
principal amount of Notes outstanding and approximately $44.8 million in
accrued pre-petition interest). In addition, during 2001 the Company
distributed approximately $16.8 million to holders of the Notes in accordance
with the provisions of the Restructuring Agreement.

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

Operating Strategy

Although it continues to operate the remainder of its business as debtor in
possession, because of the pendency of the Bankruptcy Cases, substantially all
of the Companys activities are subject to the supervision of the Bankruptcy
Court. The Company cannot assure that the Bankruptcy Court will continue to
permit it to operate, or that the Company will deem it to be appropriate to
continue to operate, in the manner described below.

Pending consummation of all of the transactions contemplated by the
Restructuring Agreement, the Companys operating strategy is to increase
profitability by utilizing its gaming brand and fully integrated player
tracking system (the Fitzgeralds Card) to further penetrate the middle-market
customer base. The Companys operating strategy is characterized by several
principal elements including:

Development of Gaming Brand

3



---



##### Table of Contents



The Company has developed a gaming brand by using a consistent Irish Luck theme
throughout the casino, hotel, restaurants and bars at its Reno property. The
Irish Luck theme incorporates various aspects of Irish folklore, such as
leprechauns, horseshoes, four-leaf clovers, the Blarney Stone and a pot of gold
at the end of a rainbow, as well as Irish music. The Company believes that its
theme creates an exciting and comfortable environment together with a
distinctive brand identity for customers. The Irish Luck theme allows the
Company to capitalize on its belief that every casino guest wants to feel lucky
and, by associating luck with the Fitzgeralds name, Fitzgeralds Irish Luck
becomes unique.

Middle Market Customer Focus

The Company provides a high-quality casino entertainment experience at an
affordable price to attract the middle market guests which it believes
constitute the largest segment of potential gaming customers whom the Company
can then identify, qualify and target for direct marketing activities. The
importance of friendly and efficient service is stressed continuously through
extensive employee training. The Companys approach to business includes
personal contact with trained hosts, moderately priced food, beverages and
lodging, and the use of the Fitzgeralds Card as part of a frequent player
recognition program. The Company believes that such an approach to business
provides a comfortable, Lucky environment designed to promote customer
loyalty, a high rate of repeat business and the basis for the further
development of its brand.

Emphasis on Slot Play

The Company emphasizes slot machine play, which it believes to be the fastest
growing and most profitable segment of the casino entertainment business. The
increasing popularity of slot machines is due, in part, to the continuing rapid
technological development that is resulting in the replacement of older devices
with advanced interactive electronic games and bill acceptors. These newer
games offer greater variety, higher pay outs and longer periods of play for the
casino entertainment dollar relative to simple older devices. Subject to the
availability of financing, as to which there can be no assurance, the Company
intends to continue investing in state-of-the-art machines and related
equipment and systems, such as bill acceptors and player tracking, and continue
replacing older models with the most current product offerings in an effort to
maximize revenue.

Operating Properties

Until December 6, 2001, the Company owned and operated two Nevada properties
(Fitzgeralds Las Vegas and Fitzgeralds Reno), one Mississippi property
(Fitzgeralds Tunica) and one Colorado property (Fitzgeralds Black Hawk)
hereinafter referred to collectively as (the Operating Properties).
Currently, the Companys only remaining gaming property is Fitzgeralds Reno,
which the Company is actively attempting to sell pursuant to the terms of the
Restructuring Agreement. Information on Fitzgeralds Las Vegas, Fitzgeralds
Tunica and Fitzgeralds Black Hawk is provided here only for historical
purposes.

Fitzgeralds Las Vegas

Fitzgeralds Las Vegas is located on the city block bounded by Fremont, Carson,
Third and Fourth Streets at the Fremont Street Experience in downtown Las
Vegas. The property is accessible via Interstate 15 and US 95 and was marketed
by the Company to Las Vegas tourists, numbering approximately 35.8 million in
2001 and, to a lesser extent, to the residents of the Las Vegas valley. The
34-story building underwent a refurbishment of the hotel and remodeling
expansion of the casino, which was substantially

4



---



##### Table of Contents



completed in December 1996 at a cost of approximately $19.4 million.
Substantially all of the assets and related liabilities of Fitzgeralds Las
Vegas were sold to Majestic on December 6, 2001.

The Company had a 13-year franchise license agreement with Holiday Inns
Franchising, Inc. (Holiday Inns), to operate the Fitzgeralds Las Vegas hotel
as a Holiday Inn commencing in July 1996. Subject to the terms and conditions
of the agreement, the Fitzgeralds Las Vegas hotel had been included in the
Holiday Inn Worldwide Reservation System and had use of Holiday Inn copyrights,
trademarks and similar proprietary rights used by other Holiday Inn licensees.
The Company had the exclusive licensee of Holiday Inn-branded hotels within the
defined territory encompassing downtown Las Vegas. The Company paid a monthly
royalty based on a percentage of Fitzgeralds Las Vegas revenues from room
rentals after deduction of sales and room taxes and a portion of complimentary
rooms. The Company also paid marketing, reservation and similar fees based on
such revenues or the number of rooms.

Majestic elected not to enter into a new franchise agreement to replace the
existing franchise agreement. As a result, the Company is subject to an
unsecured claim in the Bankruptcy Cases based upon the liquidated damages
provision of the franchise agreement, (approximately $1.6 million). The
Company is contesting the allowance of such a claim by the Bankruptcy Court,
but cannot determine at this time the ultimate resolution of such claim.

Fitzgeralds Tunica

Fitzgeralds Tunica is located in north Tunica County, Mississippi,
approximately 30 miles from downtown Memphis, Tennessee. Fitzgeralds Tunica is
designed as an Irish castle and is the focal point of a heavily wooded, 50-acre
site situated by the Mississippi River. The Fitzgeralds Tunica casino opened
in June 1994 at a cost of approximately $46.0 million. The facility was
expanded to include a hotel and related amenities. These improvements were
substantially completed in October 1996 at a cost of approximately $34.0
million. In June 2000, the Company finished construction on a 411-space covered
parking garage and 170 spaces of surface parking at a cost of $5.6 million.
Substantially all of the assets and related liabilities of Fitzgeralds Tunica
were sold to Majestic on December 6, 2001.

Fitzgeralds Reno

Fitzgeralds Reno is located in downtown Reno on the corner of Virginia Street
and Commercial Row next to the landmark Reno Arch. The facility, which was
built in 1978 was acquired by the Company in December 1986. At December 31,
2001, the facility consisted of a 16-story, 351-room hotel and a casino
offering 868 slot machines, 25 table games, an 89-seat keno lounge and a sports
book (operated by a third party). Amenities include three restaurants, four
bars, an entertainment lounge and a gift shop. During the period from
1998-2001, the Company renovated portions of Fitzgeralds Reno at a cost of
approximately $1.8 million. Historically, Fitzgeralds Reno leased parking
spaces in an adjacent 834-space parking garage on an annual basis with no
certainty that the lease would be renewed from year to year. Since available
parking in downtown Reno is limited, losing access to these spaces would
substantially impair the performance of Fitzgeralds Reno unless an alternative
site became available. Therefore, on February 1, 2000, Fitzgeralds Reno
acquired ownership of the garage for $3.0 million as well as an assignment of
the underlying ground lease on which the garage is located. The original term
of the ground lease expires on February 28, 2013, and may be extended for one
additional period of ten years.

5



---



##### Table of Contents



The Fitzgeralds Reno marketing strategy is to capitalize on the high level of
pedestrian traffic surrounding Fitzgeralds Reno, which is located in the heart
of downtown Reno adjacent to the landmark Reno Arch. Fitzgeralds Reno maintains
active sidewalk marketing programs aimed at attracting pedestrians into the
casino. To further increase Fitzgeralds Renos appeal and convenience, the
Company constructed an enclosed temperature-controlled, themed pedestrian
bridge (the Rainbow Skyway), which connects the sidewalk located across the
railroad tracks near the entrance to the Eldorado Hotel and Casino to the
upgraded second floor casino of Fitzgeralds Reno. Fitzgeralds Reno guests
entering via the Rainbow Skyway step into a themed Lucky Forest and are
greeted at the Fitzgeralds Card Center. The second floor of the casino has been
further upgraded with the addition of new slot machines, specialty table gaming
products and a renovated restaurant in anticipation of increased traffic flow
from the Rainbow Skyway. The cost of the Rainbow Skyway was approximately $2.3
million, of which $1.0 million was funded by the Union Pacific Railroad with
the balance being borne by the Company. The Rainbow Skyway was opened to the
public on February 7, 1998. The Rainbow Skyway was constructed over air rights
that were acquired by the Company from the Southern Pacific Railroad. Such air
rights may be subject to a claim of ownership (or claim of an ownership
interest) by the United States of America. Although the Company believes it is
unlikely that the United States of America would, in a manner adverse to the
Company, exercise any right, title, or interest it may hold or obtain in the
air rights parcel, no assurance can be made that such an exercise will not
occur.

The Company believes that the renovation of the front entrance and hotel rooms
has increased visibility and improved operations. In addition, the Company
continues to upgrade its slot and specialty table game products in conjunction
with its fully integrated player tracking system. During the year ended
December 31, 2001, average occupancy and average room rates were 87.6% and
$48.54, respectively. With regard to the impact of the Reno Transportation
Rail Access Corridor (ReTRAC) Project, see Item 3  Legal Proceedings.

Fitzgeralds Black Hawk

Fitzgeralds Black Hawk is located adjacent to the entrance to the downtown
gaming area of Black Hawk, Colorado, next to the Gilpin Casino and across the
street from Bullwhackers. Fitzgeralds Black Hawk consists of a two-story
building, the interior of which features high ceilings and other architectural
details which sets it apart visually from many other Black Hawk casinos.
Substantially all of the assets and related liabilities of Fitzgeralds Black
Hawk were sold to Majestic on December 6, 2001.

Other Operations

Cliff Castle Casino

Cliff Castle Casino (Cliff Castle) is a gaming facility owned and operated by
the Yavapai-Apache Nation (the Nation) located in Camp Verde, Arizona. In
May 1995, Fitzgeralds Arizona Management, Inc. (FAMI), an 85%-owned
subsidiary of the Company, entered into an exclusive agreement (the Cliff
Castle Management Agreement) to manage Cliff Castle for five years. In June
1998, FAMI entered into a termination agreement with the Nation, wherein the
parties mutually agreed to terminate the Cliff Castle Management Agreement.

Turning Stone Casino

6



---



##### Table of Contents



In consideration of work performed by the Company pursuant to an agreement with
the Oneida Indian Nation to manage Turning Stone Casino (Turning Stone)
located in Verona, New York, the Company received monthly payments of $133,333
through September 1998.

Competition

There is intense competition among companies in the gaming industry, many of
which have greater name recognition and financial and marketing resources than
the Company. In addition to the regional competitors described below, the
Company competes with gaming facilities nationwide, including land-based
casinos in Nevada and other jurisdiction, not only for customers but also for
employees and potential future gaming sites. The Company also competes, to
some extent, with other forms of gaming on both a local and a national level,
including state-sponsored lotteries, on and off-track wagering and card
parlors. The recent and continuing expansion of legalized casino gaming to new
jurisdictions throughout the United States has affected competitive conditions
faced by the Company and will continue to do so in the future. As of the date
hereof, the filing of the Bankruptcy Cases has not had a material adverse
impact on the Companys operations; however there can be no assurance that the
Company will not incur a material adverse impact in the future.

Reno Operations

Fitzgeralds Reno encounters strong competition from other hotel and casino
facilities in the Reno area as well as competition from gaming establishments
in other areas of Nevada and, to a lesser extent, other jurisdictions in the
United States where gaming has been legalized (including Indian gaming
establishments). Fitzgeralds Reno competes with other properties principally
on the basis of location and direct marketing. Additional competition may come
from the expansion or construction of other hotel and casino properties or the
upgrading of other existing facilities in the Reno area. There can be no
assurance that such growth will not adversely affect the pricing policies at
Fitzgeralds Reno, including the room pricing policies.

In addition, management believes that the introduction of casino gaming or the
expansion of presently conducted gaming operations, particularly at Indian
casinos in areas in or close to Nevada, such as California, Oregon, Washington,
Arizona and western Canada, could have an adverse effect on operations and,
depending on the nature, location and extent of such operations, such effect
could be material.

In November 1998, California voters approved Proposition 5, otherwise known as
the Indian Self-Reliance Initiative, which legalized Nevada-style games for
tribal casinos, subject to specified limitations. Provisions included that
Indian casinos: (i) may be located only on Tribal lands; (ii) may only
continue to offer games in effect prior to the adoption of Proposition 5; and
(iii) may only offer lottery-style gaming in which prizes come from a pool of
wagered money rather than the casino. Specifically, the types of casino gaming
permitted under Proposition 5 would be player-pool card games, pari-mutual
betting on horse racing and video gaming machines with lottery style prize
structures. Slot machines operated by a handle that take and dispense coins or
games such as craps, roulette and baccarat would not be permitted.

However, in August 1999, the California Supreme Court ruled that Proposition 5
was unconstitutional because the state constitution prohibits Las Vegas style
gambling. Governor Gray Davis immediately entered into negotiations with
gaming tribes that resulted in a two-part agreement: (i) to put a

7



---



##### Table of Contents



constitutional amendment (Proposition 1A) on the March 2000 primary ballot
and (ii) to sign tribal-state gaming Compacts that would go into effect if
Proposition 1A was approved by the voters.

On March 7, 2000, California voters approved Proposition 1A. The maximum
number of slots permitted for any one tribe is 2,000, with an estimated 40,000
projected statewide. Three years after any Compact is approved, the tribe may
renegotiate to request an increase in the number of its slot machines. Tribes
will immediately have the right to operate any banking or percentage card
game; however, although craps and roulette are not available as of the date
hereof, they may become available. The legal gambling age is 18, while the
drinking age is 21. Players may not sue a tribe if there is a dispute over a
bet; however, tribes did agree to waive their sovereignty concerning unions and
allow workers to unionize. Tribes are not required to waive their immunity
from suits for patron injuries, although they are required to carry at least
$5.0 million in public liability insurance for patron claims.

The Companys ability to maintain its competitive position in Reno will require
the expenditure of sufficient funds for such items as updating slot machines to
reflect changing technology, periodic refurbishing of rooms and public service
areas, and replacing obsolete equipment on an ongoing basis. Because the
Company is subject to the supervision of the Bankruptcy Court, is highly
leveraged, lacks financial flexibility by virtue of the constraints of the
Restructuring Agreement, the Bankruptcy Code and the obligation to make
Post-petition Distributions, is in default on its Notes, and may not generate
sufficient funds internally, there can be no assurance that the Company will
generate sufficient funds internally or obtain sufficient additional financing
to fund such expenditures or that any such arrangement would be approved by the
Bankruptcy Court.

Employees

As of December 31, 2001, the Company employed approximately 708 people with
Fitzgeralds Reno employing approximately 701 people and the corporate offices
employing 7 people.

Trade Names, Trademarks and Service Marks

The Company believes that its distinctive trade names, trademarks and service
marks are important to its efforts to develop a distinctive national brand
identity. Because of their importance, the Company expended considerable
effort to conceptualize, obtain, utilize and protect its trade names,
trademarks and service marks. The Company had proprietary rights in
approximately 84 registered trade names, trademarks and service marks including
the marks Fitzgeralds, Fitz and the Mr. OLucky character design.
Registered marks usually have perpetual life, provided that they are renewed on
a timely basis and continue to be used properly as marks. The Company also had
several non-exclusive licenses and supply agreements permitting it to utilize
and offer at its facilities a variety of casino games, gaming devices, and
related software and technology which are subject to certain third-party
patent, trademark and copyright rights. On December 6, 2001, the Company sold
all its rights in its trade names, trademarks and service marks to Majestic.
Fitzgeralds Reno retains the right, pursuant to a 99-year, royalty free license,
to continue utilizing the trade names, trademarks and service marks in
specified geographic areas generally comprising Northern Nevada, California,
Oregon and Washington; provided, that if such rights are not adopted and
continuously used anywhere in Oregon and Washington by December 6, 2011, their
use in such locations thereafter during the term of the license would bear a
market rate royalty to be determined. The license is subject to other
customary terms and conditions and is not transferable without the consent of
the licensor except in the event of the sale of Fitzgeralds Reno.

8



---



##### Table of Contents



Governmental Regulation

General

The ownership and operation of the Companys casino gaming facilities are
subject to state and local regulations in the jurisdictions. In Nevada, the
Companys gaming operation is subject to the Nevada Gaming Control Act, and to
the licensing and regulatory control of the Nevada Gaming Commission, the
Nevada State Gaming Control Board and various local ordinances and regulations,
including, without limitation, applicable city and county gaming and liquor
licensing authorities.

The Company holds all licenses and permits it needs to operate its gaming
facility. Directors, officers and key employees of the Company are required to
hold individual licenses, which requirements vary from jurisdiction to
jurisdiction. Licenses and permits of gaming operations and of individual
licensees are subject to revocation or non-renewal for cause. Under certain
circumstances, holders of the Companys securities are required to secure
independent licenses and permits.

Nevada Gaming Regulation

The ownership and operation of casino gaming facilities in Nevada are subject
to the Nevada Gaming Control Act and the regulations promulgated thereunder
(the Nevada Act) and to the licensing and regulatory control of the Nevada
Gaming Commission (the Nevada Commission), the Nevada State Gaming Control
Board (the Nevada Board) and various local ordinances and regulations,
including, without limitation, applicable city and county gaming and liquor
licensing authorities (collectively, the Nevada Gaming Authorities).

The laws, regulations and supervisory procedures of the Nevada Gaming
Authorities are based upon declarations of public policy which are concerned
with, among other things: (i) the prevention of unsavory or unsuitable persons
from having a direct or indirect involvement with gaming at any time or in any
capacity; (ii) the establishment and maintenance of responsible accounting
practices and procedures; (iii) the maintenance of effective controls over the
financial practices of licensees, including the establishment of minimum
procedures for internal fiscal affairs and the safeguarding of assets and
revenues, providing reliable record keeping and filing periodic reports with
the Nevada Gaming Authorities; (iv) the prevention of cheating and fraudulent
practices; and (v) providing a source of state and local revenues through
taxation and licensing fees. Change in such laws, regulations and procedures
could have an adverse effect on the Companys gaming operations.

The Companys direct and indirect subsidiaries that conduct gaming operations
are required to be licensed by the Nevada Gaming Authorities. The gaming
licenses require the periodic payment of fees and taxes and are not
transferable. The Company is registered by the Nevada Commission as a publicly
traded corporation (a Registered Corporation) and has been found suitable to
own the stock of FSI and FRI. FSI is registered as an intermediary company (an
Intermediary Company) and has been found suitable to own the stock of FLVI,
which has been licensed as a manufacturer and distributor of gaming devices and
to conduct nonrestricted gaming operations at Fitzgeralds Las Vegas. FRI has
been licensed as a manufacturer and distributor of gaming devices and to
conduct nonrestricted gaming operations at Fitzgeralds Reno. FLVI and FRI are
each a corporate gaming licensee (a Corporate Licensee or individually a
Nevada Gaming Subsidiary and collectively the Nevada Gaming Subsidiaries)
under the terms of the Nevada Act. No person may become a stockholder of, or
receive any percentage of profits from, an Intermediary Company or a Nevada
Gaming Subsidiary without first obtaining licenses and approvals from the
Nevada Gaming Authorities. The Company, FSI and the Nevada Gaming

9



---



##### Table of Contents



Subsidiaries have obtained from the Nevada Gaming Authorities the various
registrations, findings of suitability, approvals, permits and licenses
required in order to engage in gaming activities in Nevada. The following
statutory and regulatory requirements are currently applicable to the Company,
FSI and the Nevada Gaming Subsidiaries, including requirements applicable to
the Company as a Registered Corporation.

The Nevada Gaming Authorities may investigate any individual who has a material
relationship to, or material involvement with, the Company, FSI or the Nevada
Gaming Subsidiaries in order to determine whether such individual is suitable
or should be licensed as a business associate of a gaming licensee. Officers,
directors and certain key employees of the Nevada Gaming Subsidiaries must file
applications with the Nevada Gaming Authorities and may be required to be
licensed or found suitable by the Nevada Gaming Authorities. Officers,
directors and key employees of the Company or FSI who are actively and directly
involved in gaming activities of the Nevada Gaming Subsidiaries may be required
to be licensed or found suitable by the Nevada Gaming Authorities. The Nevada
Gaming Authorities may deny an application for licensing for any cause which
they deem reasonable. A finding of suitability is comparable to licensing, and
both require submission of detailed personal and financial information followed
by a thorough investigation. The applicant for licensing or a finding of
suitability must pay all the costs of the investigation. Changes in licensed
positions must be reported to the Nevada Gaming Authorities and, in addition to
their authority to deny an application for a finding of suitability or
licensure, the Nevada Gaming Authorities have jurisdiction to disapprove a
change in a corporate position.

If the Nevada Gaming Authorities were to find an officer, director or key
employee unsuitable for licensing or unsuitable to continue having a
relationship with the Company, FSI or the Nevada Gaming Subsidiaries, the
companies involved would have to sever all relationships with such person. In
addition, the Nevada Commission may require the Company, FSI or the Nevada
Gaming Subsidiaries to terminate the employment of any person who refuses to
file appropriate applications. Determinations of suitability or of questions
pertaining to licensing are not subject to judicial review in Nevada.

The Company, FSI and the Nevada Gaming Subsidiaries are required periodically
to submit detailed financial and operating reports to the Nevada Commission and
furnish any other information which the Nevada Commission may require.
Substantially all material loans, leases, sales of securities and similar
financing transactions by the Nevada Gaming Subsidiaries must be reported to or
approved by the Nevada Commission.

If it were determined that the Nevada Act was violated by FSI or any Nevada
Gaming Subsidiary, the registration or gaming licenses they hold could be
limited, conditioned, suspended or revoked, subject to compliance with certain
statutory and regulatory procedures. In addition, the Company, FSI, the Nevada
Gaming Subsidiaries and the persons involved could be subject to substantial
fines for each separate violation of the Nevada Act at the discretion of the
Nevada Commission. Further, a supervisor could be appointed by the Nevada
Commission to operate Fitzgeralds Reno and, under certain circumstances,
earnings generated during the supervisors appointment (except for reasonable
rental value of the casino) could be forfeited to the State of Nevada.
Limitation, conditioning or suspension of the gaming licenses of the Nevada
Gaming Subsidiaries or the appointment of a supervisor could (and revocation of
any gaming license would) have a material adverse effect on the Companys
gaming operations.

Any beneficial holder of a Registered Corporations voting securities (or
rights to acquire such securities), regardless of the number of shares owned,
may be required to file an application, be investigated and have his or her
suitability as a beneficial holder of the Registered Corporations voting
securities determined if the Nevada Commission has reason to believe that such
ownership would

10



---



##### Table of Contents



otherwise be inconsistent with the declared policies of the State of Nevada.
The applicant must pay all costs of investigation incurred by the Nevada Gaming
Authorities in conducting any such investigation.

The Nevada Act requires any person who acquires beneficial ownership of more
than 5% of a Registered Corporations voting securities to report the
acquisition to the Nevada Commission. The Nevada Act requires that beneficial
owners of more than 10% of a Registered Corporations voting securities apply
to the Nevada Commission for a finding of suitability within thirty days after
the Chairman of the Nevada Board mails the written notice requiring such
filing. Under certain circumstances, an institutional investor, as defined
in the Nevada Act, which acquires more than 10%, but not more than 15%, of a
Registered Corporations voting securities may apply to the Nevada Commission
for a waiver of such finding of suitability if such institutional investor
holds the voting securities for investment purposes only. An institutional
investor shall not be deemed to hold voting securities for investment purposes
unless the voting securities were acquired and are held in the ordinary course
of business as an institutional investor and not for the purpose of causing,
directly or indirectly, the election of a majority of the members of the board
of directors of the Registered Corporation, any change in the corporate
charter, bylaws, management, policies or operations of the Registered
Corporation, or any of its gaming affiliates, or any other action which the
Nevada Commission finds to be inconsistent with holding the Registered
Corporations voting securities for investment purposes only. Activities which
are not deemed to be inconsistent with holding voting securities for investment
purposes only include: (i) voting on all matters voted on by stockholders; (ii)
making financial and other inquiries of management of the type normally made by
securities analysts for informational purposes and not to cause a change in its
management, policies or operations; and (iii) such other activities as the
Nevada Commission may determine to be consistent with such investment intent.
If the beneficial holder of voting securities who must be found suitable is a
corporation, partnership or trust, it must submit detailed business and
financial information, including a list of beneficial owners. The applicant is
required to pay all costs of investigation.

The Nevada Act provides that each person who acquires, directly or indirectly,
beneficial ownership of any debt security in a Registered Corporation may be
required to be found suitable if the Nevada Commission has reason to believe
that the acquisition of such debt security would otherwise be inconsistent with
the declared policy of the State of Nevada.

The Nevada Commission may, in its discretion, require the holder of any debt
security of a Registered Corporation to file applications, be investigated and
be found suitable to own the debt security of a Registered Corporation. If the
Nevada Commission determines that a person is unsuitable to own such security,
then pursuant to the Nevada Act, he shall not hold, directly or indirectly, the
debt security of the publicly registered company, beyond the time prescribed by
the Nevada Commission. The Registered Corporation can be sanctioned, including
the loss of its approvals, if without the prior approval of the Nevada
Commission, it: (i) pays to the unsuitable person any dividend, interest, or
any distribution whatsoever; (ii) recognizes any voting rights by such
unsuitable person in connection with such securities; (iii) pays the unsuitable
person remuneration in any form; or (iv) makes any payment to the unsuitable
person by way of principal, redemption, conversion, exchange, liquidation, or
similar transaction.

Any person who fails or refuses to apply for a finding of suitability or a
license within 30 days after being ordered to do so by the Nevada Commission or
the Chairman of the Nevada Board may be found unsuitable. The same restrictions
apply to a record owner if the record owner, after request, fails to identify
the beneficial owner. Any stockholder found unsuitable and who holds, directly
or indirectly, any beneficial ownership of the common stock beyond such period
of time as may be prescribed by the Nevada Commission may be guilty of a
criminal offense. The Company will be subject to disciplinary

11



---



##### Table of Contents



action if, after it receives notice that a person is unsuitable to be a
stockholder or to have any other relationship with the Company or the Nevada
Gaming Subsidiaries, the Company (i) pays that person any dividend or interest
upon voting securities of the Company, (ii) allows that person to exercise,
directly or indirectly, any voting right conferred through securities held by
that person, (iii) pays remuneration in any form to that person for services
rendered or otherwise, or (iv) fails to pursue all lawful efforts to require
such unsuitable person to relinquish his voting securities including, if
necessary, the immediate purchase of said voting securities for cash at fair
market value. Additionally, the City of Reno had the authority to approve all
persons owning or controlling the stock of any corporation controlling a gaming
licensee.

The Nevada Commission may, in its discretion, require the holder of any debt or
similar security of a Registered Corporation to file applications, be
investigated and be found suitable to own the debt security of a Registered
Corporation if the Nevada Commission has reason to believe that such ownership
would otherwise be inconsistent with the declared policies of the State of
Nevada. If the Nevada Commission determines that a person is unsuitable to own
such security, then pursuant to the Nevada Act, the Registered Corporation can
be sanctioned, including the loss of its approvals, if without the prior
approval of the Nevada Commission, it (i) pays to the unsuitable person any
dividend, interest, or any distribution whatsoever; (ii) recognizes any voting
right by such unsuitable person in connection with such securities; (iii) pays
the unsuitable person remuneration in any form; or (iv) makes any payment to
the unsuitable person by way of principal, redemption, conversion, exchange,
liquidation, or similar transaction.

The Company is required to maintain a current stock ledger in Nevada which may
be examined by the Nevada Gaming Authorities at any time. If any securities
are held in trust by an agent or by a nominee, the record holder may be
required to disclose the identity of the beneficial owner to the Nevada Gaming
Authorities. A failure to make such disclosure may be grounds for finding the
record holder unsuitable. The Company will also be required to render maximum
assistance in determining the identity of the beneficial owner. The Nevada
Commission has the power to require the Companys stock certificates to bear a
legend indicating that the securities are subject to the Nevada Act. To date,
the Nevada Commission has not imposed such a requirement on the Company.

The Company may not make a public offering of its securities without the prior
approval of the Nevada Commission if the securities or proceeds therefrom are
intended to be used to construct, acquire or finance gaming facilities in
Nevada, or to retire or extend obligations incurred for such purposes. Such
approval, if given, does not constitute a finding, recommendation or approval
by the Nevada Commission or the Nevada Board as to the accuracy or adequacy of
the prospectus or the investment merits of the securities. Any representation
to the contrary is unlawful.

Changes in control of a Registered Corporation through merger, consolidation,
stock or asset acquisitions, management or consulting agreements, or any act or
conduct by a person whereby he obtains control, may not occur without the prior
approval of the Nevada Commission. Entities seeking to acquire control of a
Registered Corporation must satisfy the Nevada Board and Nevada Commission in a
variety of stringent standards prior to assuming control of such Registered
Corporation. The Nevada Commission may also require controlling stockholders,
officers, directors and other persons having a material relationship or
involvement with the entity proposing to acquire control, to be investigated
and licensed as part of the approval process relating to the transaction.

The Nevada legislature has declared that some corporate acquisitions opposed by
management, repurchases of voting securities and corporate defense tactics
affecting Nevada corporate gaming licensees, and Registered Corporations that
are affiliated with those operations, may be injurious to

12



---



##### Table of Contents



stable and productive corporate gaming. The Nevada Commission has established
a regulatory scheme to ameliorate the potentially adverse effects of these
business practices upon Nevadas gaming industry and to further Nevadas policy
to (i) assure the financial stability of corporate gaming licensees and their
affiliates; (ii) preserve the beneficial aspects of conducting business in the
corporate form; and (iii) promote a neutral environment for the orderly
governance of corporate affairs. Approvals are, in certain circumstances,
required from the Nevada Commission before the Registered Corporation can make
exceptional repurchases of voting securities above the current market price
thereof and before a corporate acquisition opposed by management can be
consummated. The Nevada Act also requires prior approval of a plan of
recapitalization proposed by the Registered Corporations Board of Directors in
response to a tender offer made directly to the Registered Corporations
stockholders for the purposes of acquiring control of the Registered
Corporation.

License fees and taxes, computed in various ways depending on the type of
gaming or activity involved, are payable to the State of Nevada and to the
counties and cities in which the Nevada licensees respective operations are
conducted. Depending upon the particular fee or tax involved, these fees and
taxes are payable either monthly, quarterly or annually and are based upon
either (i) a percentage of the gross revenues received; (ii) the number of
gaming devices operated; or (iii) the number of table games operated. A casino
entertainment tax is also paid by casino operations where entertainment is
furnished in connection with the selling or serving of food or refreshments or
the selling of merchandise. Nevada licensees that hold a manufacturers
license or a distributors license, such as the Nevada Gaming Subsidiaries,
also pay certain fees and taxes to the State of Nevada.

Any person who is licensed, required to be licensed, registered, required to be
registered, or is under common control with such persons (collectively,
Licensees), and who proposes to become involved in a gaming venture outside
of Nevada, is required to deposit with the Nevada Board, and thereafter
maintain, a revolving fund in the amount of $10,000 to pay the expenses of
investigation by the Nevada Board for their participation in such foreign
gaming. The revolving fund is subject to increase or decrease in the
discretion of the Nevada Commission. Thereafter, foreign Licensees are
required to comply with certain reporting requirements imposed by the Nevada
Act. Such licensees are also subject to disciplinary action by the Nevada
Commission if they knowingly violate any laws of the foreign jurisdiction
pertaining to the foreign gaming operation, fail to conduct the foreign gaming
operation in accordance with the standards of honesty and integrity required of
Nevada gaming operations, engage in activities or enter into associations that
are harmful to the State of Nevada or its ability to collect gaming taxes and
fees, or employ, contract with or associate with a person in the foreign
operation who has been denied a license or finding of suitability in Nevada on
the grounds of personal unsuitability.

The Company has established, and will be required to maintain, a Gaming
Compliance Program for the purpose of, at a minimum, performing due diligence,
determining the suitability of relationships with other entities and
individuals and to review and ensure compliance by the Company, its
subsidiaries and any affiliated entities, with the Act and Regulations and the
laws and regulations of any other jurisdiction in which the Company or its
subsidiaries or affiliates operate. The Gaming Compliance Program, any
amendments thereto, and the members, one such member which shall be
independent, shall be administratively reviewed and approved by the Chairman of
the Nevada Board. The Company shall amend the compliance program or any element
thereof, and perform such duties as may be assigned by the Chairman of the
Nevada Board or his designee, related to review of activities relevant to the
continuing qualification of the Company.

The sale of alcoholic beverages at Fitzgeralds Reno is subject to licensing,
control and regulation by the City of Reno. All licenses are revocable and are
not transferable. The agencies involved have full power

13



---



##### Table of Contents



to limit, condition, suspend or revoke any such license, and any such
disciplinary action could (and revocation would) have a material adverse effect
on the operations of the Nevada Gaming Subsidiaries.




Item 2. Properties

Reference is made to the information contained in
Part I, Item 1. Business  Propertiesof this Report on Form 10-K.




Item 3. 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. After resuming the hearing on November 29,
2001, the Reno City Council again recessed and

14



---



##### Table of Contents



continued the proceedings to January 4, 2002, at which time the hearing was
completed and the matter was submitted for decision of the Reno City Council.
On February 19, 2002, the Reno City Council voted on the matter. By a 4-3
decision, the Reno City Council concluded that the ReTRAC Project would confer
a special benefit on Fitzgeralds Reno. On a 5-2 decision, however, the Reno
City Council determined that the value of the special benefit in light of the
evidence presented was $1.00. The decisions of the Reno City Council are
subject to judicial review, a petition for which must be filed within thirty
days of the decisions.

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 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 allege 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, Fitzgeralds Reno asserts
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 filed a reply in support of its motion to
dismiss on or about November 12, 2001. On February 15, 2002, the United States
District Court held a hearing to consider the Citys motion to dismiss. At the
hearing, the Defendant FHWA and the Defendant NDOT joined the Citys motion to
dismiss. The Citys motion to dismiss was fully argued and submitted to the
Court for a ruling. On March 11, 2002, the Court issued an order dismissing
all of the Companys claims against the City. The Court ruled the ReTRAC
Project must comply with NEPA but the specific federal aid statute under which
the City is receiving funding for the ReTRAC Project does not explicitly
require the local government body to consent to suit under NEPA. Accordingly,
the Court found the City is not a proper party in the case. The Court,
however, denied the motions to dismiss by FHWA and NDOT stating the Company is
entitled to proceed on the claims against those agencies for a violation of
NEPA.

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.

15



---



##### Table of Contents



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, 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.

101 Main then obtained an order to show cause why Plaintiffs and their
attorneys should not be held in contempt. Before the hearing, Plaintiffs
amended the complaint to omit 101 Main as a defendant, and Plaintiffs filed two
motions with the Bankruptcy Court, which sought (i) leave to file a late claim
in the 101 Main bankruptcy case and (ii) relief from the automatic stay to add
101 Main as a party defendant to the amended complaint. The amended complaint
sought damages, in an amount alleged to exceed $300,000,000, against the
defendants for, among other matters, RICO and conspiracy.

At a December 10, 2001 hearing, the Bankruptcy Court found that Plaintiffs had
violated the automatic stay and denied Plaintiffs motion for leave to file a
late claim with the Bankruptcy Court. Furthermore, at this hearing the
Bankruptcy Court denied Plaintiffs motion for relief from the automatic stay
to add 101 Main as a party defendant to the amended complaint, although it did
allow Plaintiffs to obtain discovery from 101 Main, its agents and
representatives in conjunction with the prosecution of the amended complaint
against other named defendants. On March 28, 2002, the Bankruptcy Court entered
its orders in this regard, which orders are now final and non-appealable.

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.

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. The Company has not incurred any material amounts for liability
claims or workers compensation claims that would be subject to reimbursement by
Reliance. However, the statute of limitation has not expired for filing claims
and it is unclear at this time what the insurance coverage would be from
Reliance, if any, in the event that a future claim is filed that would be large
enough to result in an insurance reimbursement from Reliance, or if there is
insurance

16



---



##### Table of Contents



coverage for an existing claim that is currently under the threshold level for
reimbursement, but increases in the future to an amount eligible for
reimbursement. The reimbursement threshold per claim is $25,000 and $100,000
for liability claims and worker compensation claims, respectively. 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, 2001, the
Bankruptcy Court granted the motion. Since the transactions contemplated by
the Purchase Agreement were consummated on December 6, 2001, the Company
believes Inns will assert an unsecured claim in the Bankruptcy Cases based upon
the liquidated damages provision of the franchise agreement, (approximately
$1.6 million). 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.




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

None.

17



---



##### Table of Contents






PART II




Item 5. Market for Registrants Common Equity and Related Stockholder Matters

The Companys Common Stock is not listed or traded on any exchange. As of
April 1, 2002, the Company had 42 shareholders of record.

In December 1995, as part of a public offering of $123.0 million senior secured
notes (the 1995 Notes) and Preferred Stock, the Company issued 2,675,237
warrants, each exercisable for one share of the Companys Common Stock, at an
exercise price of $.01 per share (the Warrants). In December 1997,
concurrently with the redemption of the 1995 Notes, the Company canceled
703,402 of the Warrants.

The remaining Warrants had an expiration date of December 19, 1998. The
Warrant Agent received timely notice of exercise for 1,495,236 Warrants and
476,599 Warrants expired. The Company advised each exercising Warrant holder
that the exercise of the Warrants and issuance of the underlying Common Stock
might be subject to certain Nevada, Colorado and Mississippi gaming licensure
requirements, and that no such Common Stock would be issued without compliance
with or exemption from applicable gaming requirements. The Company was
subsequently advised by the applicable gaming authorities for each such
jurisdiction that, based on the information provided by the Warrant Agent, no
licensure was required by virtue of the exercise of the Warrants or issuance of
the underlying Common Stock.

In September 1999, a total of 1,495,236 shares of Common Stock was issued to
the exercising Warrant holders in reliance on the exemption from registration
contained in Section 4(2) of the Securities Act of 1933 on the basis that there
was no public offering of the Common Stock underlying the Warrants. The
Company received $14,952, representing the exercise price of the Warrants.

The Company has not paid any cash dividends on its Common Stock and because of
the Bankruptcy Cases, the Bankruptcy Code and the Restructuring Agreement the
Company does not anticipate paying cash dividends (including those with respect
to its Preferred Stock). For the same reasons the payment of dividends is no
longer within the discretion of the Companys Board of Directors.

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 any payment. Therefore, it is not expected
that any distribution will be made to holders of the existing capital stock of
the Company.

18



---



##### Table of Contents






Item 6. Selected Financial Data

Fitzgeralds Gaming Corporation

|                              |                                                      |                            |                           |          |                                             |        |      |         |         |        |      |         |         |        |   |         |         |        |   |         |         |        |  
|----------------------------- | ---------------------------------------------------- | -------------------------- | ------------------------- | -------- | ------------------------------------------- | ------ | ---- | ------- | ------- | ------ | ---- | ------- | ------- | ------ | - | ------- | ------- | ------ | - | ------- | ------- | ------ | -
|                              |                                                      |                            |                           |          | December 31,                               
|                              |                                                      |                            |                           |          |                                            
|                              |                                                      |                            |                           |          | 2001                                        |        | 2000 |         | 1999    |        | 1998 |         | 1997   
|                              |                                                      |                            |                           |          |                                             |        |      |         |         |        |      |         |        
|                              |                                                      |                            |                           |          | (in thousands except for per share amounts)
|Statement of Operations Data: |                                                      |                            |                           |          |                                             |        |      |         |         |        |      |         |         |        |   |         |         |        |   |        
|                              |                                                      | Net Operating Revenues     |                           | $        | 196,031                                     |        |      | $       | 200,102 |        |      | $       | 191,845 |        |   | $       | 199,993 |        |   | $       | 179,702 |       
|                              |                                                      | Income from Operations(1)  |                           |          | 9,969                                       |        |      |         | 14,481  |        |      |         | 11,399  |        |   |         | 21,680  |        |   |         | 13,622  |       
|                              |                                                      | Interest Expense, Net      |                           |          | 4,528                                       |        |      |         | 30,803  |        |      |         | 29,168  |        |   |         | 26,646  |        |   |         | 25,033  |       
|                              |                                                      | Net Income (Loss)          |                           |          | 4,317                                       |        |      |         | (16,386 | )      |      |         | (17,954 | )      |   |         | (8,667  | )      |   |         | (31,542 | )     
|                              |                                                      | Net loss per common share: |                           |          |                                             |        |      |         |         |        |      |         |         |        |   |         |         |        |   |         |         |       
|                              |                                                      |                            | Before extraordinary item |          | $                                           | (0.58  | )    |         | $       | (4.14  | )    |         | $       | (5.35  | ) |         | $       | (3.35  | ) |         | $       | (4.09  | )
|                              |                                                      |                            | Net Loss                  |          | $                                           | (0.58  | )    |         | $       | (4.14  | )    |         | $       | (5.35  | ) |         | $       | (3.35  | ) |         | $       | (4.80  | )
|Other Data:                   |                                                      |                            |                           |          |                                             |        |      |         |         |        |      |         |         |        |   |         |         |        |   |        
|                              | EBITDA:(2)                                           |                            |                           |          |                                             |        |      |         |         |        |      |         |         |        |   |         |         |        |   |         |        
|                              |                                                      | Fitzgeralds Las Vegas(3)   |                           | $        | 1,809                                       |        |      | $       | 3,692   |        |      | $       | 2,594   |        |   | $       | 2,682   |        |   | $       | 2,651   |       
|                              |                                                      | Fitzgeralds Tunica         |                           |          | 18,118                                      |        |      |         | 15,253  |        |      |         | 11,553  |        |   |         | 8,051   |        |   |         | 11,744  |       
|                              |                                                      | Fitzgeralds Reno           |                           |          | (11,748                                     | )      |      |         | 4,947   |        |      |         | 4,588   |        |   |         | 4,805   |        |   |         | 5,462   |       
|                              |                                                      | Fitzgeralds Black Hawk     |                           |          | 7,641                                       |        |      |         | 8,138   |        |      |         | 9,303   |        |   |         | 10,863  |        |   |         | 4,842   |       
|                              |                                                      | Other(4)                   |                           |          | (6,229                                      | )      |      |         | (3,521  | )      |      |         | (2,281  | )      |   |         | 9,622   |        |   |         | 4,111   |       
|                              |                                                      |                            |                           |          |                                             |        |      |         |         |        |      |         |         |        |   |         |         |        |   |        
|                              |                                                      |                            | Total Properties          |          |                                             | 9,591  |      |         |         | 28,509 |      |         |         | 25,757 |   |         |         | 36,023 |   |         |         | 28,810 |  
|                              |                                                      | Nevada Club                |                           |          | (74                                         | )      |      |         | (50     | )      |      |         | (90     | )      |   |         | (561    | )      |   |         | (1,282  | )     
|                              |                                                      | Harolds Club               |                           |          |                                            |        |      |         |        |        |      |         | (64     | )      |   |         | (111    | )      |   |         | (1,853  | )     
|                              |                                                      |                            |                           |          |                                             |        |      |         |         |        |      |         |         |        |   |         |         |        |   |        
|                              |                                                      |                            | Total EBITDA              |          |                                             | 9,517  |      |         |         | 28,459 |      |         |         | 25,603 |   |         |         | 35,351 |   |         |         | 25,675 |  
|                              |                                                      | Adjustments to EBITDA(5)   |                           |          | 19,917                                      |        |      |         | 3,401   |        |      |         | 2,325   |        |   |         | (5,328  | )      |   |         | 4,924   |       
|                              |                                                      |                            |                           |          |                                             |        |      |         |         |        |      |         |         |        |   |         |         |        |   |        
|                              |                                                      |                            | Adjusted EBITDA           |          | $                                           | 29,434 |      |         | $       | 31,860 |      |         | $       | 27,928 |   |         | $       | 30,023 |   |         | $       | 30,599 |  
|                              |                                                      |                            |                           |          |                                             |        |      |         |         |        |      |         |         |        |   |         |         |        |   |        
|                              | Earnings to Fixed Charges:(6)                        |                            |                           | 1.8x     |                                             |        |      |        |         |        |      |        |         |        |   |        |         |        |   |        |        
|                             
|                              | Net Cash Provided by (Used in):                      |                            |                           |          |                                             |        |      |         |         |        |      |         |         |        |   |         |         |        |   |         |        
|                              |                                                      | Operating activities       |                           | $        | (22,106                                     | )      |      | $       | 10,564  |        |      | $       | 21,089  |        |   | $       | 12,189  |        |   | $       | 1,287   |       
|                              |                                                      | Investing activities       |                           |          | 135,039                                     |        |      |         | (13,647 | )      |      |         | (1,961  | )      |   |         | (5,451  | )      |   |         | (24,657 | )     
|                              |                                                      | Financing activities       |                           |          | (105,617                                    | )      |      |         | (739    | )      |      |         | (10,051 | )      |   |         | (8,509  | )      |   |         | 24,830  |       
|                              | Depreciation and Amortization                        |                            |                           | 34       |                                             |        |      | 13,978  |         |        |      | 14,203  |         |        |   | 13,671  |         |        |   | 12,054  |        
|                              | Capital Expenditures                                 |                            |                           | 1,815    |                                             |        |      | 13,508  |         |        |      | 6,184   |         |        |   | 9,352   |         |        |   | 3,944   |        
|                             
|Balance Sheet Data:           |                                                      |                            |                           |          |                                             |        |      |         |         |        |      |         |         |        |   |         |         |        |   |        
|                              | Cash                                                 |                            | $                         | 25,609   |                                             |        | $    | 8,181   |         |        | $    | 22,116  |         |        | $ | 13,039  |         |        | $ | 14,810  |        
|                              | Total Assets                                         |                            |                           | 51,372   |                                             |        |      | 188,048 |         |        |      | 206,796 |         |        |   | 209,197 |         |        |   | 215,695 |        
|                              | Net Assets held for Sale                             |                            |                           | 12,000   |                                             |        |      | 170,388 |         |        |      |        |         |        |   |        |         |        |   |        |        
|                              | Short-Term Debt                                      |                            |                           | 111      |                                             |        |      | 110     |         |        |      | 203,840 |         |        |   | 4,940   |         |        |   | 7,591   |        
|                              | Long-Term Debt                                       |                            |                           | 2,296    |                                             |        |      | 2,407   |         |        |      | 598     |         |        |   | 208,204 |         |        |   | 206,191 |        
|                              | Liabilities subject to compromise                    |                            |                           | 97,335   |                                             |        |      | 242,870 |         |        |      |        |         |        |   |        |         |        |   |        |        
|                              | Preferred stock, net of offering
costs and discounts |                            |                           | 43,902   |                                             |        |      | 36,406  |         |        |      | 29,963  |         |        |   | 24,401  |         |        |   | 19,631  |        
|                              | Stockholders Deficiency                             |                            |                           | (100,783 | )                                           |        |      | (97,605 | )       |        |      | (74,496 | )       |        |   | (51,300 | )       |        |   | (37,863 | )      

19



---



##### Table of Contents





---

|(1) |  | Excludes write-off by Fitzgeralds Reno of $3.2 million inter-company debt
from Nevada Club in 1999. The Company recorded allowances of $0.2 million
and $2.2 million in 1998 and 1997, respectively, against the book value of
Nevada Club assets held for sale to write such assets down to estimated
net realizable value, and recorded expenses of $0.1 million and $1.9
million in 1998 and 1997, respectively, for the anticipated net settlement
obligation relating to certain land lease payments and property-related
costs arising out of the Companys purchase and subsequent sale of Harolds
Club in 1995. The Company acquired the remaining 78% interest in
Fitzgeralds Black Hawk in August 1997. Includes $11.4 million in gain on
sale of assets to Majestic. Also includes the write-down of assets of
$14.8 million and $13.0 million at Fitzgeralds Reno and Fitzgeralds Black
Hawk, respectively in 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | EBITDA, or earnings before interest, taxes on income, depreciation, and
amortization, 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
(Generally Accepted Accounting Principles) 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) |  | Fitzgeralds Las Vegas invested $0.8 million, $0.9 million, $0.9 million,
$0.8 million and $0.8 million for 2001, 2000, 1999, 1998 and 1997,
respectively, in the Fremont Street Experience, Limited Liability Company
(FSE). Prior to 1999, such investments were reported under the equity
method with no impact on earnings. Beginning in 1999 investment was
charged against earnings as a selling, general and administrative expense.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|   
|   
|   
|(4) |  | Other includes (i) management fees from Fitzgeralds Black Hawk for 1997;
(ii) management fees from Cliff Castle for 1998 and 1997; (iii) payments
from the Turning Stone settlement agreement for 1998 and 1997; (iv)
non-recurring revenue of $8.0 million for termination of the Cliff Castle
Management Agreement in 1998; and (v) corporate expenses not allocated to
the Operating Properties for all periods presented, which includes $3.2
million and $2.2 million of pre-petition professional fees and expenses
incurred with the Companys restructuring in 2000 and 1999, respectively,
and $3.5 million and $0.1 million of post-petition professional fees and
expenses, net of interest income included as reorganization items in 2001
and 2000, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|   
|   
|   
|(5) |  | Adjustments to EBITDA include (i) exclusion of EBITDA for Nevada Club for
all periods presented; (ii) exclusion of EBITDA for Harolds Club for 1999,
1998 and 1997; (iii) exclusion of write down of Nevada Club assets of
$0.03 million, $0.2 million and $2.2 million for 1999, 1998 and 1997,
respectively; (iv) exclusion of Harolds Club lease settlement of $0.06
million, $0.1 million and $1.9 million for 1999, 1998 and 1997,
respectively; (v) inclusion of $1.0 million for 1997 in cash received by
the Company as a result of its 22% membership in 101 Main; (vi) exclusion
of $6.0 million of the $8.0 million received in connection with the
termination of the Cliff Castle Management Agreement in 1998; (vii)
exclusion of pre-petition professional fees and expenses incurred with the
Companys restructuring of $3.2 million and $2.2 million in 2000 and 1999,
respectively; (viii) exclusion of $7.9 million which includes gain on sale
of assets to Majestic of $11.4 million offset by $3.5 million of
post-petition professional fees and expenses, net of interest income
included in reorganization items for 2001 and $0.1 million of
post-petition professional fees and expenses, net of interest income
included as reorganization items in 2000; and (ix) exclusion of write-down
of assets of $14.8 million and $13.0 million at Fitzgeralds Reno and
Fitzgeralds Black Hawk, respectively in 2001.
|   
|   
|   
|   
|(6) |  | 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 Charge Coverage Ratio was
1.8x for the year ended December 31, 2001; however, earnings were
insufficient to cover fixed charges by $16.4 million, $18.0 million, $10.0
million and $10.6 million for the years ended December 31, 2000, 1999,
1998 and 1997, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

20



---



##### Table of Contents






Item 7. 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 Companys
Consolidated Financial Statements and the Notes thereto listed in Item 14(a).
The following discussion and other material in the report on Form 10-K 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, consummation of the Restructuring Agreement
and the Purchase Agreement, the uncertainties of the Bankruptcy Cases,
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.

Overview

Fitzgeralds Reno has been owned and operated by the Company or its affiliate
since 1985, and, Fitzgeralds Las Vegas and Fitzgeralds Tunica were owned and
operated by the Company or its affiliates since 1987 and 1994, respectively.
Between December 1994 and February 1995, a business combination was effected,
resulting in the existing single ownership structure for the companies
operating Fitzgeralds-brand casinos. In May 1995, the Company, under exclusive
management contracts, opened two properties outside of Nevada, Fitzgeralds
Black Hawk and Cliff Castle, and in December 1995, the Company acquired those
portions of Fitzgeralds Tunica (20%) and Fitzgeralds Inc. (2%) which it did not
own. In August 1997, the Company acquired the remaining 78% membership
interest in 101 Main not previously owned. In December 2001, the Company sold
substantially all of the assets of Fitzgeralds Las Vegas, Fitzgeralds Black
Hawk, and Fitzgeralds Tunica, as well as the Companys interest in The Fremont
Street Experience Limited Liability Company, to Majestic for $149.0 million in
cash, subject to certain holdbacks and adjustments, plus the assumption of
certain liabilities relating to the Assets.

Bankruptcy

On December 5, 2000, the Company commenced the Bankruptcy Cases in 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 the Restructuring Agreement with the Consenting
Noteholders who hold a majority in interest of the Notes. The Restructuring
Agreement contemplates an expeditious and orderly sale of all of the Companys
operating assets and properties as going concerns.

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

21



---



##### Table of Contents



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 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.

The transactions contemplated by the Purchase Agreement were consummated on
December 6, 2001. The purchase price for the Assets was $149.0 million,
subject to certain adjustments and holdbacks specified in the Purchase
Agreement, which resulted in net proceeds prior to distributions of
approximately $146.9 million. Of such amount, $7.7 million was retained by the
Company for cash reserves, approximately $5.9 million was distributed to Senior
Management, in consideration of non-competition and sales incentives pursuant
to the Restructuring Agreement, and approximately $133.3 million was
distributed to holders of the Notes (on account of the $205.0 million aggregate
principal amount of Notes outstanding and approximately $44.8 million in
accrued pre-petition interest). In addition, during 2001 the Company
distributed approximately $16.8 million to holders of the Notes in accordance
with the provisions of the Restructuring Agreement.

As a result of the sale of Fitzgeralds Las Vegas, Fitzgeralds Tunica and
Fitzgeralds Black Hawk on December 6, 2001, operating revenue and expenses for
these three properties will not reflect a full year of operations when
comparing results for the year 2001 to the year 2000.

Unless otherwise noted, the narrative discussion below is focused on the
results of the Companys Operating Properties which are collectively referred
to as (the Properties). Unless the context otherwise indicates, the
discussion below excludes Nevada Club, which was closed in December 1997
pending completion of its sale which occurred in June 1999, and in managements
opinion, is not material to the ongoing operations of the Company. Corporate
expense of $1.0 million per year is allocated to each of the Operating
Properties. Such expenses are included in selling, general and administrative
expenses at each of the Operating Properties. The remainder of the unallocated
corporate expense is included in the selling, general and administrative
expenses of Other Operations of the Properties. See Note 3 of Statement of
Operations Data.

22



---



##### Table of Contents



Results of Operations

The following table sets forth for the periods indicated certain Statement of
Operations Data and Other Data for the Companys Properties.

|                                  |                           |      |                  |         |                         |         |   |        |   |         |   |        |   |         | 
|--------------------------------- | ------------------------- | ---- | ---------------- | ------- | ----------------------- | ------- | - | ------ | - | ------- | - | ------ | - | ------- | 
|                                  |                           |      |                  |         | Year Ended December 31,
|                                  |                           |      |                  |         |                        
|Statement of Operations Data      |                           | 2001 |                  | 2000    |                         | 1999   
|                                  |                           |      |                  |         |                         |        
|                                  |                           |      |                  |         | (in thousands)         
|Net Operating Revenues:           |                           |      |                  |         |                         |         |   |        |   |         |   |       
|                                  | Fitzgeralds Las Vegas     |      | $                | 49,440  |                         |         | $ | 52,139 |   |         | $ | 50,910 |  
|                                  | Fitzgeralds Tunica        |      |                  | 76,713  |                         |         |   | 75,062 |   |         |   | 69,582 |  
|                                  | Fitzgeralds Reno          |      |                  | 38,333  |                         |         |   | 40,241 |   |         |   | 39,068 |  
|                                  | Fitzgeralds Black Hawk    |      |                  | 31,511  |                         |         |   | 32,506 |   |         |   | 32,285 |  
|                                  | Other                     |      |                  | 34      |                         |         |   | 154    |   |         |   |       |  
|                                  |                           |      |                  |         |                         |         |   |        |   |         |   |       
|                                  |                           |      | Total            |         | $                       | 196,031 |   |        | $ | 200,102 |   |        | $ | 191,845 | 
|                                  |                           |      |                  |         |                         |         |   |        |   |         |   |       
|Income (Loss) from Operations(1): |                           |      |                  |         |                         |         |   |        |   |         |   |       
|                                  | Fitzgeralds Las Vegas     |      | $                | (24,040 | )                       |         | $ | (7     | ) |         | $ | (1,115 | )
|                                  | Fitzgeralds Tunica        |      |                  | 41,972  |                         |         |   | 9,018  |   |         |   | 5,322  |  
|                                  | Fitzgeralds Reno(2)       |      |                  | (11,796 | )                       |         |   | 2,716  |   |         |   | 2,151  |  
|                                  | Fitzgeralds Black Hawk(3) |      |                  | 7,224   |                         |         |   | 6,385  |   |         |   | 7,517  |  
|                                  | Other(4)                  |      |                  | (3,317  | )                       |         |   | (3,581 | ) |         |   | (2,322 | )
|                                  |                           |      |                  |         |                         |         |   |        |   |         |   |       
|                                  |                           |      | Total Properties |         |                         | 10,043  |   |        |   | 14,531  |   |        |   | 11,553  | 
|                                  | Nevada Club               |      |                  | (74     | )                       |         |   | (50    | ) |         |   | (90    | )
|                                  | Harolds Club              |      |                  |        |                         |         |   |       |   |         |   | (64    | )
|                                  |                           |      |                  |         |                         |         |   |        |   |         |   |       
|                                  |                           |      | Total            |         | $                       | 9,969   |   |        | $ | 14,481  |   |        | $ | 11,399  | 
|                                  |                           |      |                  |         |                         |         |   |        |   |         |   |       
|Other Data                        |                           |      |                  |         |                         |         |   |        |   |         |   |       
|EBITDA(5):                        |                           |      |                  |         |                         |         |   |        |   |         |   |       
|                                  | Fitzgeralds Las Vegas(6)  |      | $                | 1,809   |                         |         | $ | 3,692  |   |         | $ | 2,594  |  
|                                  | Fitzgeralds Tunica        |      |                  | 18,118  |                         |         |   | 15,253 |   |         |   | 11,553 |  
|                                  | Fitzgeralds Reno          |      |                  | (11,748 | )                       |         |   | 4,947  |   |         |   | 4,588  |  
|                                  | Fitzgeralds Black Hawk    |      |                  | 7,641   |                         |         |   | 8,138  |   |         |   | 9,303  |  
|                                  | Other(3)                  |      |                  | (6,229  | )                       |         |   | (3,521 | ) |         |   | (2,281 | )
|                                  |                           |      |                  |         |                         |         |   |        |   |         |   |       
|                                  |                           |      | Total Properties |         |                         | 9,591   |   |        |   | 28,509  |   |        |   | 25,757  | 
|                                  | Nevada Club               |      |                  | (74     | )                       |         |   | (50    | ) |         |   | (90    | )
|                                  | Harolds Club              |      |                  |        |                         |         |   |       |   |         |   | (64    | )
|                                  |                           |      |                  |         |                         |         |   |        |   |         |   |       
|                                  |                           |      | Total EBITDA     |         |                         | 9,517   |   |        |   | 28,459  |   |        |   | 25,603  | 
|                                  | Adjustments to EBITDA     |      |                  | 19,917  |                         |         |   | 3,401  |   |         |   | 2,325  |  
|                                  |                           |      |                  |         |                         |         |   |        |   |         |   |       
|                                  |                           |      | Adjusted EBITDA  |         | $                       | 29,434  |   |        | $ | 31,860  |   |        | $ | 27,928  | 
|                                  |                           |      |                  |         |                         |         |   |        |   |         |   |       

23



---



##### Table of Contents



|                               |  |                      |       |      |                         |      |        |   |         |   |        |   |         |   | 
|------------------------------ |  | -------------------- | ----- | ---- | ----------------------- | ---- | ------ | - | ------- | - | ------ | - | ------- | - | 
|                               |  |                      |       |      | Year Ended December 31,
|                               |  |                      |       |      |                        
|Statement of Operations Data   |  | 2001                 |       | 2000 |                         | 1999
|                               |  |                      |       |      |                         |     
|                               |  |                      |       |      | (in thousands)         
|Net Cash Provided by (Used in) |  |                      |       |      |                         |      |        |   |         |   |        |  
|                               |  | Operating Activities |       | $    | (22,106                 | )    |        | $ | 10,564  |   |        | $ | 21,089  |  
|                               |  | Investing Activities |       |      | 135,039                 |      |        |   | (13,647 | ) |        |   | (1,961  | )
|                               |  | Financing Activities |       |      | (105,617                | )    |        |   | (739    | ) |        |   | (10,051 | )
|Depreciation and Amortization  |  |                      | 34    |      |                         |      | 13,978 |   |         |   | 14,203 |  
|Capital Expenditures           |  |                      | 1,815 |      |                         |      | 13,508 |   |         |   | 6,184  |  
|Earnings to Fixed Charges(7)   |  |                      | 1.8x  |      |                         |      |       |   |         |   |       |  



---

|(1) |  | Includes loss on sale of assets of $25.3 million for Fitzgeralds Las
Vegas and a gain on sale of assets of $24.1 million and $12.7 million for
Fitzgeralds Tunica and Fitzgeralds Black Hawk, respectively, to Majestic
in 2001. Such gains are included in Reorganization items.                                                                                                                                                                                                                                                                                                                                                                
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Excludes inter-company debt write-off of $3.2 million from Nevada Club in
1999 and includes write down of property and equipment of $14.8 million in
2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|   
|   
|   
|(3) |  | Includes write-down of assets of $13.0 million in 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|   
|   
|   
|(4) |  | Other includes corporate expenses not allocated to the Operating
Properties for all periods presented, which includes $3.2 million and $2.2
million of pre-petition professional fees and expenses incurred with the
Companys restructuring for 2000 and 1999, respectively and approximately
$3.5 million and $0.1 million of post-petition professional fees and
expenses, net of interest income included as reorganization items in 2001
and 2000, respectively.                                                                                                                                                                            
|   
|   
|   
|   
|(5) |  | For a definition of EBITDA and Adjustments to EBITDA, see Notes 2 and 5
of Notes to Selected Financial Data.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|   
|   
|   
|(6) |  | Fitzgeralds Las Vegas invested $0.8 million, $0.9 million and $0.9
million for 2001, 2000 and 1999, respectively, in FSE. Such investment
was charged against earnings as a selling, general and administrative
expense.                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|   
|   
|   
|(7) |  | 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 Charge Coverage Ratio was
1.8x for the year ended December 31, 2001; however, earnings were
insufficient to cover fixed charges by $16.4 million and $18.0 million for
the years ended December 31, 2000 and 1999, respectively.

Fiscal 2001 Comparison to Fiscal 2000

Operating Revenues

Total revenues for the Properties were $231.2 and net operating revenue were
$196.0 for 2001, representing decreases of 1.3% and 2.0%, respectively, over
total revenues for the Properties of $234.1 million and net operating revenues
of $200.1 million for 2000. Such decreases were largely the result of the sale
of Fitzgeralds Las Vegas, Fitzgeralds Tunica and Fitzgeralds Black Hawk to
Majestic on December 6, 2001.

24



---



##### Table of Contents



The Companys business can be separated into four operating departments:
casino, food and beverage, rooms (except for Fitzgeralds Black Hawk) and other.
Casino revenues (of which approximately 86.9% and 85.1% are derived from slot
machine revenues for 2001 and 2000, respectively) increased 0.2% to $182.1
million for 2001 from the $181.7 million recorded for 2000.

Room revenues (at 8.9% and 9.4% of total revenues for 2001 and 2000,
respectively) decreased 7.1% from $22.1 million in 2000 to $20.5 million in
2001. Fitzgeralds Las Vegas room revenues decreased 11.7% from $8.5 million in
2000 to $7.5 million in 2001, as its average daily rate decreased 7.4%, and the
average occupancy rate decreased to 91.9% in 2001 from 92.1% in 2000.
Fitzgeralds Reno room revenues decreased 0.9%, from $5.5 million in 2000 to
$5.4 million in 2001, as a decrease in the average occupancy rate to 87.6% in
2001 from 88.9% in 2000 was primarily offset by a 0.5% increase in the average
daily rate. Fitzgeralds Tunica room revenues decreased 6.5%, from $8.1 million
for 2000 to $7.6 million in 2001, as an increase in the average occupancy rate
to 94.5% in 2001 from 92.5% in 2000 was offset by a 2.2% decrease in the
average daily rate.

Food and beverage revenues (at 10.5% and 11.0% of total revenues for 2001 and
2000, respectively) decreased 6.3%, from $25.8 million in 2000 to $24.2 million
in 2001 primarily due to the sale of assets to Majestic.

Other revenues decreased from $4.6 million in 2000 to $4.4 million in 2001, a
3.3% decrease for 2001.

Promotional allowances showed a net increase of 3.3% to $35.2 million for 2001
from $34.0 million for 2000, reflecting the increased level of competition in
all four markets.

Operating Costs and Expenses

Total operating costs and expenses for the Properties increased 0.2%, to $186.0
million for 2001 from $185.6 million for 2000. After excluding the $11.4
million gain on sale of asset to Majestic and $14.8 million and $13.0 million
for the write-down of Fitzgerald Reno and Fitzgeralds Black Hawk assets,
operating costs and expenses decreased 8.6% to $169.6 million. Such decreases
were largely the result of the sale of Fitzgeralds Las Vegas, Fitzgeralds
Tunica and Fitzgeralds Black Hawk to Majestic on December 6, 2001.

Casino expenses were $85.7 million for 2001, a 1.2% increase from $84.7 million
for 2000. Food and beverage expenses decreased 6.3% to $14.4 million for 2001
from $15.4 million for 2000. Room expenses decreased 8.2% to $11.7 million for
2001 from $12.8 million in 2000. Selling, general and administrative expenses
decreased 7.4% to $52.2 million for 2001 from $56.4 million for 2000, which
includes $3.2 million for 2000 of pre-petition professional fees and expenses
incurred in conjunction with the ongoing development, negotiation and
implementation of the Companys restructuring. Such expenses also include
professional fees and expenses paid by the Company for the financial and legal
advisors to the informal committee (the Committee) representing holders of a
majority in interest of the Notes.

Personnel expenses decreased 9.1%, to $75.0 million for 2001 from $82.5 million
for 2000 as a result of the December 6, 2001 sale. Such expenses are included
in the operating departmental expense to which they relate on the consolidated
statements of operations.

Marketing expenses, which include advertising, promotional material and special
events, decreased 11.1%, to $13.4 million for 2001 from $15.1 million for 2000.
The Companys strategy is to utilize its expanded and renovated facilities as
additional marketing elements and to continue to adjust marketing

25



---



##### Table of Contents



expense levels as needed to respond to competition. Such expenses are included
in selling, general and administrative expenses on the consolidated statements
of operations.

Depreciation and amortization expense decreased 99.8% to $0.034 million for
2001 from $14.0 million for 2000, 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 in December
2000.

Income from Operations

As a result of the foregoing, income from operations for the Properties
decreased from $14.5 million for 2000 to $10.0 million for 2001. The decrease
in results is primarily due to the $14.8 million and $13.0 million write-down in assets of Fitzgeralds
Reno and Fitzgeralds Black Hawk, respectively, offset by the
$11.4 million gain on sale of assets to
Majestic and a $13.9 million
decrease in depreciation and amortization expense resulting from the
discontinuation of recording substantially all depreciation and amortization
expense for assets held for sale in 2001.

Net Interest Expense

Interest expense (net of interest income) decreased 85.3% to $4.5 million for
2001 from $30.8 million for 2000, due to the discontinuation of accruing
interest on the Notes on December 5, 2000 with the commencement of the
Bankruptcy Cases.

Net Income

Net income for the Properties increased to $4.2 million for 2001 compared to a
net loss of $16.4 million in 2000.

Fiscal 2000 Comparison to Fiscal 1999

Operating Revenues

Total revenues for the Properties were $234.1 million and net operating
revenues were $200.1 million for 2000, representing increases of 5.7% and 4.3%,
respectively, over total revenues for the Properties of $221.5 million and net
operating revenues of $191.8 million for 1999. Such increases were largely the
result of the improved performance of Fitzgeralds Tunica, which opened a
411-space covered parking garage in June 2000. To maintain market share in
each of its four existing markets, the Company has found it necessary to
increase its promotional and complimentary expenses to meet the challenges of
the intense competition.

The Companys business can be separated into four operating departments:
casino, food and beverage, rooms (except for Fitzgeralds Black Hawk) and other.
Casino revenues (of which approximately 85.1% and 83.9% are derived from slot
machine revenues for 2000 and 1999, respectively) increased 5.8% to $181.7
million for 2000 from the $171.7 million recorded for 1999.

Room revenues (at 9.4% and 9.7% of total revenues for 2000 and 1999,
respectively) increased 2.4%, to $22.1 million for 2000 from $21.6 million in
1999. Fitzgeralds Las Vegas room revenues decreased 0.2%, to $8.5 million for
2000 from $8.5 million in 1999, as its average daily rate decreased 0.8%, while
occupancy rates remained the same at 92.1% for 2000 and 1999. Fitzgeralds Reno
room revenues

26



---



##### Table of Contents



increased 3.9%, to $5.5 million for 2000 from $5.3 million in 1999, as a
decrease in occupancy to 88.9% in 2000 from 89.8% in 1999 was offset by a 3.1%
increase in the average daily rate. Fitzgeralds Tunica room revenues increased
4.1%, to $8.1 million for 2000 from $7.8 million in 1999, due to a 3.2%
increase in the average daily rate while occupancy rates increased to 92.5% in
2000 from 92.1% in 1999.

Food and beverage revenues (at 11.0% and 11.1% of total revenues for 2000 and
1999, respectively) increased 4.9% to $25.8 million for 2000 from $24.6 million
in 1999. There were increases in food revenues of 0.4%, 4.2%, 5.9% and 9.1% at
Fitzgeralds Las Vegas, Fitzgeralds Black Hawk, Fitzgeralds Reno and Fitzgeralds
Tunica, respectively. The food revenue increase at Fitzgeralds Tunica was due
primarily to an increase in volumes, while the food revenues increases at
Fitzgeralds Las Vegas, Fitzgeralds Black Hawk and Fitzgeralds Reno were due to
pricing increases.

Other revenues increased 25.4% to $4.6 million for 2000 from $3.6 million in
1999, primarily due to the acquisition of the parking garage in Reno which
generated an additional $0.4 million in revenue and an additional $0.2 million
of revenue generated from E-Three lease income and management fees.

Promotional allowances showed a net increase of 14.7% to $34.0 million for 2000
from $29.7 million in 1999, reflecting the increased level of competition in
all four markets.

Operating Costs and Expenses

Total operating costs and expenses for the Properties increased 2.9%, to $185.6
million for 2000 from $180.4 million for 1999.

Casino expenses were $84.7 million for 2000, a 6.8% increase from $79.3 million
for 1999, primarily due to increases in expenses associated directly with
increased casino revenues, particularly personnel expenses and gaming taxes.
Food and beverage expenses decreased 0.7% to $15.4 million for 2000 from $15.5
million for 1999. Room expenses increased 1.8% for 2000 from $12.6 million in
1999. Selling, general and administrative expenses decreased 0.4% to $56.4
million for 2000 from $56.7 million for 1999, which includes $3.2 million and
$2.2 million for 2000 and 1999, respectively, of professional fees and expenses
incurred in conjunction with the ongoing development, negotiation and
implementation of the Companys restructuring. Such expenses also include
professional fees and expenses paid by the Company for the financial and legal
advisors to the informal committee (the Committee) representing holders of a
majority in interest of the Notes.

Personnel expenses increased 3.7%, to $82.5 million for 2000 from $79.6 million
for 1999. The increase is due to continued competitive pressures in the Tunica
and Black Hawk markets as personnel expenses at Fitzgeralds Tunica and
Fitzgeralds Black Hawk increased 4.9% and 9.0%, respectively, from 1999. Such
expenses are included in the operating departmental expense to which they
relate on the consolidated statements of operations.

Marketing expenses, which include advertising, promotional material and special
events, decreased 5.6% to $15.1 million for 2000 from $16.0 million in 1999.
The Companys strategy is to utilize its expanded and renovated facilities as
additional marketing elements and to continue to adjust marketing expense
levels as needed to respond to competition. Such expenses are included in
selling, general and administrative expenses on the consolidated statements of
operations.

Depreciation and amortization expense decreased 1.6% to $14.0 million for 2000
from $14.2 million for 1999, due to the discontinuation of recording
depreciation and amortization expense for property and

27



---



##### Table of Contents



equipment included in net assets held for sale subsequent to filing the
Bankruptcy Cases in December 2000.

Income from Operations

As a result of the foregoing, income from operations for the Properties
increased 25.8% to $14.5 million for 2000 from $11.6 million in 1999.

Net Interest Expense

Interest expense (net of interest income) increased 5.6% to $30.8 million for
2000 from $29.2 million for 1999, due primarily to $6.6 million of additional
interest resulting from the default on the Notes. The Company stopped accruing
interest on the Notes on December 5, 2000 with the commencement of the
Bankruptcy Cases.

Net Loss

Net loss for the Properties decreased to $16.4 million in 2000 compared to
$20.9 million in 1999.

Liquidity and Capital Resources

At December 31, 2001, the Company had unrestricted cash of $25.6 million
compared to $18.3 million (which amount includes $10.1 million of cash
classified in net assets held for sale) at December 31, 2000. The Companys net
cash used in operating activities during 2001 was $22.1 million. Net cash
provided by investing activities was $135.0 million for 2001 compared to net
cash used of $13.6 million for 2000 which included the construction of a
parking garage and surface parking lot at Fitzgeralds Tunica at a cost of $5.6
million as well as $5.3 million for the acquisition of other property and
equipment. In 2001 net cash provided by investing activities included proceeds
from the sale of assets to Majestic on December 6, 2001. Net cash used in
financing activities was $105.6 million for 2001 compared to $0.7 million for
2000. In 2001, with the proceeds from the sale of the assets, the Company
repaid a portion of the Notes in accordance with the Restructuring Agreement.

The Companys principal sources of capital have historically consisted of cash
from operations and vendor or third party financing of gaming and other
equipment. However, its relatively high degree of leverage has 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 indebtedness. An Event of Default under the Indenture pursuant to
which the Notes were issued occurred on July 15, 1999. The Company believes
that it has adequate sources of liquidity to meet the normal operating
requirements of its reduced activities following the sale of Fitzgeralds Las
Vegas, Fitzgeralds Tunica and Fitzgeralds Black Hawk.

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 was required to distribute unrestricted cash (which includes
cash in net assets held for sale) in excess of

28



---



##### Table of Contents



$24.8 million to holders of its Notes within 45 days after the end of each
quarter until the closure of its sale to Majestic. In May, August and November
2001, the Company distributed $1.8 million, $7.7 million and $7.2 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
and the Informal Committee are currently engaged in discussions to establish a
new threshold for cash reserves subsequent to the December 6, 2001 sale to
Majestic. 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.

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 Item 1. Business  Bankruptcy  Restructuring Agreement,
and  Purchase Agreement.

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 remainder 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 normal
operations at Fitzgeralds Reno at current levels during the pendency of the
Bankruptcy Cases and does not anticipate any adverse impact on operations,
customers or employees at Fitzgeralds Reno. 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 normal operations at Fitzgeralds Reno during the
pendency of the Bankruptcy Cases.

EBITDA and Adjusted EBITDA

The Companys EBITDA was $9.5 million for 2001 and $28.5 million for 2000.
EBITDA is calculated by adding depreciation and amortization expenses to income
from operations. The Companys Adjusted EBITDA was $29.4 million for 2001 and
$31.9 million for 2000. Adjusted EBITDA is determined based on the adjustments
described in Note 5 to Selected Financial 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.

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 1.8x for the year ended December
31, 2001. However, earnings were insufficient to cover fixed charges by $16.4
million and $18.0 million for the years ended December 31, 2000 and 1999,
respectively.

29



---



##### Table of Contents



Business Seasonality

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
were 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 Fitzgeralds-brand properties,
business levels were 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, was, and the Fitzgeralds Reno site, located in the foothills of the
Sierra Nevada mountains in Nevada, is, 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 Fitzgeralds Reno facility.

Significant Accounting Policies

A summary of our significant accounting policies can be found in Note 3 of the
Notes to Consolidated Financial Statements. Our preparation of financial
statements in conformity with accounting principles generally accepted in the
United States of America requires us to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period.
Significant among those estimates are the useful lives and potential impairment
of long-term assets, such as investments, buildings, equipment and goodwill,
the adequacy of our allowance for uncollectible receivables, and the amount of
litigation and self insurance reserves. These estimated amounts are based on
our best judgments using both historical information and known trends in our
company and in our industry. Because of the uncertainty inherent in any
estimate, it is likely that the actual results will differ from the initial
estimates, and the differences could be material.

Recently Issued Accounting Standards

On June 30, 1998, the Financial Accounting Standards Board (FASB) issued SFAS
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 its financial condition or results of operation.

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 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 and 1999 income statement to reflect
such expenses as promotional expense thereby reducing net revenue. This
reclassification did not have any effect on the Companys income from operation
and net income for the current year and previously reported net loss.

30



---



##### Table of Contents



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
combinations 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. The
Company discontinued recording the amortization of its goodwill included in net
assets held for sale subsequent to filing the Bankruptcy Cases. Amortization
expense related to goodwill was $0.3 million for 2000. As of December 6, 2001,
the Company wrote-down $13.0 million of its goodwill due to the sale of
Fitzgeralds Black Hawk to Majestic.

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.

31



---



##### Table of Contents






Item 7A. Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to changes in interest rates primarily as a result of
its borrowing activities and third party financing. These sources of credit,
along with cash flow from operations, are used to maintain liquidity and fund
business operations. The Company typically replaces borrowings under its third
party vendor financing, as necessary, with shorter termed variable rate
financing generally secured by the assets being acquired. The nature and
amount of the Companys debt may vary as a result of future business
requirements, market conditions and other factors. The definitive extent of
the Companys interest rate risk is not quantifiable or predictable because of
the variability of future interest rates and business financing requirements,
but the Company does not believe such risk is material. The Company does not
currently use derivative instruments to adjust the Companys interest rate risk
profile.

The table below presents principal amounts and related weighted-average
interest rates by year of maturity for the Companys debt obligations at
December 31, 2001 and 2000:

|                 |            |                   |              |                  |              |            |              |         |  |      |  |       |   |  |  |       |   |   |        |  |  |   |         |  | 
|---------------- | ---------- | ----------------- | ------------ | ---------------- | ------------ | ---------- | ------------ | ------- |  | ---- |  | ----- | - |  |  | ----- | - | - | ------ |  |  | - | ------- |  | 
|Expected         |            | Expected Maturity |              | Weighted Average |              |            |              |         |  |      |  |      
|Maturity Date    |            | Amounts           |              | Interest Rates   |              | Fair Value
|                 |            |                   |              |                  |              |           
|                 |            |                   | December 31, |                  | December 31, |            | December 31,
|                 |            |                   |              |                  |              |            |             
|Fixed Rate       |            | 2001              |              | 2000             |              | 2001       |              | 2000    |  | 2001 |  | 2000 
|                 |            |                   |              |                  |              |            |              |         |  |      |  |      
|                 | 2001       |                   | $            |                 |              |            | $            | 350     |  |      |  |      |   |  |  | 13.24 | % |   |        |  |  |   |         |  | 
|                 | 2002       |                   |              | 111              |              |            |              | 244     |  |      |  | 10.18 | % |  |  | 10.01 | % |   |        |  |  |   |         |  | 
|                 | 2003       |                   |              | 116              |              |            |              | 255     |  |      |  | 10.17 | % |  |  | 10.14 | % |   |        |  |  |   |         |  | 
|                 | 2004       |                   |              | 128              |              |            |              | 218     |  |      |  | 10.17 | % |  |  | 10.88 | % |   |        |  |  |   |         |  | 
|                 | 2005       |                   |              | 87               |              |            |              | 112     |  |      |  | 10.09 | % |  |  | 10.71 | % |   |        |  |  |   |         |  | 
|                 | 2006       |                   |              | 67               |              |            |              |        |  |      |  | 4.07  | % |  |  |      |   |   |        |  |  |   |         |  | 
|                 | Thereafter |                   |              | 1,898            |              |            |              | 1,972   |  |      |  | 10.00 | % |  |  | 10.01 | % |   |        |  |  |   |         |  | 
|                 | Unknown    |                   |              | 99,120           |              |            |              | 203,450 |  |      |  | 13.25 | % |  |  | 13.25 | % |   |        |  |  |   |         |  | 
|                 |            |                   |              |                  |              |            |              |         |  |      |  |       |   |  |  |       |   |   |        |  |  |   |         | 
|Total Fixed Rate |            | $                 | 101,527      |                  |              | $          | 206,601      |         |  |      |  |       |   |  |  |       |   | $ | 51,899 |  |  | $ | 115,049 | 
|                 |            |                   |              |                  |              |            |              |         |  |      |  |       |   |  |  |       |   |   |        |  |  |   |         | 

The Company does not utilize financial instruments for trading or other
speculative purposes, nor does it utilize leveraged financial instruments. On
the basis of the fair value of the Companys market sensitive instruments at
December 31, 2001, the Company does not consider the potential near-term losses
in future earnings, fair values and cash flows from reasonably possible
near-term changes in interest rates to be material.




Item 8. Financial Statements and Supplementary Data

The information required by this item is listed under Item 14 of Part IV of
this Report on Form 10-K.




Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None

32



---



##### Table of Contents






PART III




Item 10. Directors, Executive Officers and Significant Employees of Registrant

The following tables set forth certain information with respect to directors,
executive officers and significant employees of the Company as of December 31,
2001:

Directors and Executive Officers

|                     |  |     |    |                  |  |                                                                                                                     
|-------------------- |  | --- | -- | ---------------- |  | --------------------------------------------------------------------------------------------------------------------
|Name                 |  | Age |    | Position(s) Held
|                     |  |     |    |                 
|Philip D. Griffith   |  |     | 56 |                  |  | Chairman, President and Chief Executive Officer                                                                     
|Philip P. Hannifin   |  |     | 67 |                  |  | Director                                                                                                            
|Patricia W. Becker   |  |     | 50 |                  |  | Director                                                                                                            
|Max L. Page          |  |     | 52 |                  |  | Director; Executive Vice President and a director
of Fitzgeralds Reno, Inc., and General Manager of
Fitzgeralds Reno
|Michael E. McPherson |  |     | 50 |                  |  | Executive Vice President, Chief Financial Officer,
Treasurer and Secretary                                          
|Paul Manske          |  |     | 61 |                  |  | Executive Vice President of Marketing                                                                               

Philip D. Griffith, one of the Companys founders, has been President, Chief
Executive Officer and a director of the Company and certain of its subsidiary
companies since its inception in 1984 and has been Chairman of the Board since
August 1997. Prior to his involvement with the Fitzgeralds group, Mr. Griffith
was active in the gaming industry holding a variety of positions, including
Chief Financial Officer and later President of Harolds Club in Reno from 1973
to 1984 and President of the Sands Hotel & Casino in Las Vegas with the Howard
Hughes organization from 1982 to 1984. From 1968 to 1973, Mr. Griffith was a
Certified Public Accountant with the St. Louis, Missouri and Las Vegas offices
of Deloitte Haskins & Sells. He is also a director of Federal Liaison
Services, Inc.

Philip P. Hannifinserved as Executive Vice President since joining the Company
in 1991 until resigning on December 31, 2000 and was a director of certain
subsidiaries of the Company from 1986 to 1995. He has been active in the
gaming industry holding a variety of positions, including a director of Riviera
Holdings Corp. from 1993 to 1998, Executive Vice President and a director of
MGM Grand, Inc. from 1987 to 1991, President of Harrahs West from 1984 to 1986
and Executive Vice President and a director of Summa Corporation from 1977 to
1984. He is a past Chairman of the Nevada State Gaming Control Board. He
holds a degree in psychology from the University of Nevada at Reno. Mr.
Hannifin has been a director of the Company since April 1999. He is Chairman
of the Audit Committee of the Board of Directors and a member of the
Compensation Committee of the Board of Directors.

Patricia W. Becker. Ms. Becker has been Senior Vice President of Corporate
Affairs & Legal of Aladdin Gaming LLC since May 1998. From October 1993 to
January 1995, she served as Chief of Staff to Nevada Governor Bob Miller. From
September 1984 to October 1993, Ms. Becker was Senior Vice President, General
Counsel and Secretary for Harrahs Casino Hotels, where she was responsible for
all legal affairs. She was also a member of the senior strategic management
group. From January 1983 to September 1984, Ms. Becker was a member of the
Nevada State Gaming Control Board and from July 1979 to January 1983, she was a
Deputy and Chief Deputy Attorney General assigned to the Nevada Gaming
Division. She is President of Patricia Becker & Associates which provides
consulting services to the gaming industry, a Vice Chair for the Gaming Law
Section of the American Bar Association, past President of the International
Association of Gaming Attorneys and a past president of the Nevada Trial
Lawyers Association. Ms. Becker has been a director of the Company since
December 1995. She is

33



---



##### Table of Contents



Chairperson of the Compensation Committee of the Board of Directors and a
member of the Audit Committee of the Board of Directors.

Max L. Page, one of the Companys founders, has served as Executive Vice
President and a director of certain subsidiaries of the Company since September
1986 and as General Manager of Fitzgeralds Reno since November 1994. He has a
B.A. in political science and a Masters in public administration from Brigham
Young University. Mr. Page has been a director of the Company since January
1998.

Michael E. McPhersonhas been Executive Vice President since July 1999,
Secretary since September 1997 and Chief Financial Officer and Treasurer since
August 1997. Prior thereto he was Senior Vice President. He has served in
various executive and financial positions since joining the Company in March
1985, including Senior Vice President of Operations from September 1995 to July
1997, Vice President of Finance from November 1994 to September 1995, Vice
President and Treasurer for certain subsidiaries of the Company and Director of
Finance for Fitzgeralds Reno. Mr. McPherson has a degree in business
administration from the University of Nevada at Reno and is an associate member
of the Nevada Society of Certified Public Accountants.

Paul H. Manske, one of the Companys founders, has been Executive Vice
President of Marketing since September 1999. Prior thereto he was Senior Vice
President of Marketing and Executive Vice President of certain subsidiaries of
the Company. He was Vice President of Marketing for Harolds Club and the Sands
Hotel & Casino with the Howard Hughes organization in Las Vegas from 1978 to
1984 and a marketing executive with the Ford Motor Company from 1964 to 1978.
Mr. Manske has a degree in business administration from Jacksonville
University.

Board of Directors

Directors are elected at the annual meeting of stockholders and each director
is elected to serve until a successor is elected and qualified. The Company
has not held an annual meeting of stockholders since August 1998. The number
of directors may not be less than three or more than nine. In cases where all
of the common shares of the Company are owned beneficially or of record by
either one or two stockholders, the number may be less than three but not less
than the number of stockholders. The current Board of Directors consists of
four directors.

The Board of Directors has two standing committees: Audit and Compensation.

The Audit Committee reviews reports of the Companys independent certified
public accountants and makes recommendations to the full Board on matters
concerning the Companys audits and the selection of independent certified
public accountants. The Audit Committee does not have a formal written Audit
Committee charter. The members of the Audit Committee are Patricia W. Becker
and Philip P. Hannifin, as Chairman. Although the Companys Common Stock is
not listed on any stock exchange or quoted on NASDAQ, only Ms. Becker would be
deemed independent under current NASDAQ rules.

The Audit Committee has reviewed and discussed the audited financial statements
with management. The Audit Committee has discussed with the independent
certified public accountants the matters required to be discussed by SAS 61
(Codification of Statements on Auditing Standards, AU380). The Audit Committee
has reviewed the written disclosures and the letter from the independent
certified public accountants required by Independence Standards Board Standard
No. 1 (Independence Standards Board Standard No. 1, Independence Discussions
with Audit Committees), and has discussed with the independent certified public
accountants the independent certified public accountants independence.

34



---



##### Table of Contents



Based on the review and discussions referred to above, the Audit Committee
recommended to the Board of Directors that the audited financial statements be
included in the Companys Annual Report on Form 10-K for the year ended
December 31, 2001. The Companys unaudited financial statements included in
Forms 10-Q subsequent to the date of this Annual Report on Form 10-K will be
reviewed by the Companys independent certified public accountants in
accordance with the procedure set forth in Statement on Accounting Standards
No. 71.

The Compensation Committee reviews and makes recommendations to the Board of
Directors with respect to salaries, bonuses and other compensation of the
Companys executive officers. The members of the Compensation Committee are
Philip P. Hannifin and Patricia W. Becker, as Chairperson.

Directors who are also employees of the Company do not receive any compensation
for their services as directors. A non-employee director is paid fees of
$40,000 per year and $1,000 per Board meeting attended in person or
telephonically. Ms. Becker is also chairperson of the Gaming Compliance
Committee (a non-Board committee) for which she is paid an additional fee of
$48,000 per year and $1,000 per Committee meeting attended in person or
telephonically. Mr. Hannifin is also chairman of the Audit Committee (a
non-Board committee) for which he is paid an additional fee of $25,000 per year
and $1,000 per Committee meeting attended in Person or telephonically. Ms.
Becker and Mr. Hannifin also participate in all health insurance plans
generally available to the Companys employees. The Company reimburses each
director for reasonable out-of-pocket expenses incurred in his or her capacity
as a member of the Board of Directors. No payments are made for actions taken
in writing. Each director attended all of the meetings of the Board and the
committees on which he or she served during the fiscal year ended December 31,
2001.

The Company has no nominating committee or other committee performing similar
functions.

Non-Board Committees

The Executive Committee, comprised of Michael E. McPherson, Max L. Page and
Philip D. Griffith, as Chairman, provides a forum for interaction and
discussion among its senior executives.

The Gaming Compliance Committee, comprised of Kathleen Bryant, Philip P.
Hannifin, Michael E. McPherson and Patricia W. Becker, as Chairperson,
establishes procedures for and monitors compliance with gaming regulations.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires officers and
directors of the Company and persons who own more than ten percent of a
registered class of the Companys equity securities (collectively, Insiders)
to file initial reports of ownership and changes in ownership with the
Securities and Exchange Commission (the Commission) and to furnish the
Company with copies of all forms filed.

To the Companys knowledge, based solely on its review of the copies of such
forms furnished to the Company and written representation that no other reports
were required, during the past fiscal year all Section 16(a) filing
requirements applicable to the Companys Insiders were met.

35



---



##### Table of Contents






Item 11. Executive Compensation

The following table sets forth a summary of the compensation paid by the
Company in the three fiscal years ended December 31, 2001, 2000 and 1999 to the
Companys Chief Executive Officer and each of its other most highly compensated
executive officers (collectively the named executive officers). The named
executive officers include: (i) each person who served as Chief Executive
Officer during 2001; (ii) each person who (a) served as an executive officer at
December 31, 2001, (b) was among the four most highly paid executive officers
of the Company, not including the Chief Executive Officer, during 2001; and (c)
received over $100,000 in compensation in 2001; (iii) up to two persons who
would be included under clause (ii) above had they served as an executive
officer at December 31, 2001; and (iv) certain persons who served as executive
officers of a subsidiary of the Company. Titles refer to the Company unless
otherwise indicated.

Summary Compensation Table

|                     |                                         |      |                        |           |              |             |         |         |  |             |   |         |              |  |            |   |              |  |           |        |     |  |           |         | 
|-------------------- | --------------------------------------- | ---- | ---------------------- | --------- | ------------ | ----------- | ------- | ------- |  | ----------- | - | ------- | ------------ |  | ---------- | - | ------------ |  | --------- | ------ | --- |  | --------- | ------- | 
|                     |                                         |      |                        |           |              |             |         |         |  |             |   |         |              |  |            |   |              |  | Long-Term |        |     |  |          
|                     |                                         |      | Annual Compensation(1) |           | Compensation |             |         |         | 
|                     |                                         |      |                        |           |              |             |         |         | 
|                     |                                         |      |                        |           |              |             |         |         |  |             |   |         |              |  | Other      |   |              |  |           |        |     |  |          
|                     |                                         |      |                        |           |              |             |         |         |  |             |   |         |              |  | Annual     |   | Securities   |  | All Other
|                     |                                         |      | Fiscal                 |           |              |             |         |         |  |             |   |         | Compensation |  | Underlying |   | Compensation
|Name & Position      |                                         | Year |                        | Salary($) |              | Bonus($)(2) |         | ($)(3)  |  | Options (#) |   | ($)(4) 
|                     |                                         |      |                        |           |              |             |         |         |  |             |   |        
|Philip D. Griffith   |                                         |      | 2001                   |           |              |             | 604,546 |         |  |             |  |         |              |  |           |   |              |  |          |        |     |  | 3,789,495 |        
|                     | Chairman, President &                   |      |                        | 2000      |              |             |         | 576,715 |  |             |   | 320,000 |              |  |            |  |              |  |           |       |     |  |           | 180,723 | 
|                     | Chief Executive Officer                 |      |                        | 1999      |              |             |         | 541,997 |  |             |   | 225,000 |              |  |            |  |              |  |           |       |     |  |           | 273,715 | 
|Michael E. McPherson |                                         |      | 2001                   |           |              |             | 268,440 |         |  |             |  |         |              |  |           |   |              |  |          |        |     |  | 798,364   |        
|                     | Executive Vice President,               |      |                        | 2000      |              |             |         | 255,673 |  |             |   | 105,000 |              |  |            |  |              |  |           |       |     |  |           | 13,942  | 
|                     | Chief Financial Officer,                |      |                        | 1999      |              |             |         | 236,538 |  |             |   | 75,000  |              |  |            |  |              |  |           | 11,854 | (5) |  |           | 7,714   | 
|                     | Treasurer & Secretary                   |      |                        |           |              |             |         |         |  |             |   |         |              |  |            |   |              |  |           |        |     |  |           |         | 
|Paul H. Manske       |                                         |      | 2001                   |           |              |             | 266,308 |         |  |             |  |         |              |  |           |   |              |  |          |        |     |  | 811,516   |        
|                     | Executive Vice President                |      |                        | 2000      |              |             |         | 254,478 |  |             |   | 105,000 |              |  |            |  |              |  |           |       |     |  |           | 25,285  | 
|                     | Marketing                               |      |                        | 1999      |              |             |         | 274,038 |  |             |   | 75,000  |              |  |            |  |              |  |           |       |     |  |           | 19,174  | 
|Max L. Page          |                                         |      | 2001                   |           |              |             | 266,562 |         |  |             |  |         |              |  |           |   |              |  |          |        |     |  | 793,469   |        
|                     | Director; Executive Vice                |      |                        | 2000      |              |             |         | 253,846 |  |             |   | 95,000  |              |  |            |  |              |  |           |       |     |  |           | 16,472  | 
|                     | President of FRI & General              |      |                        | 1999      |              |             |         | 240,500 |  |             |   | 68,000  |              |  |            |  |              |  |           |       |     |  |           | 21,855  | 
|                     | Manager of Fitzgeralds
Reno             |      |                        |           |              |             |         |         |  |             |   |         |              |  |            |   |              |  |           |        |     |  |           |         | 
|Domenic Mezzetta(6)  |                                         |      | 2001                   |           |              |             | 203,735 |         |  |             |   |         |              |  |           |   |              |  |          |        |     |  | 8,960     |        
|                     | Vice President of FMI                   |      |                        | 2000      |              |             |         | 205,255 |  |             |   | 24,700  |              |  |            |  |              |  |           |       |     |  |           | 5,783   | 
|                     | & General Manager of
Fitzgeralds Tunica |      |                        | 1999      |              |             |         | 195,481 |  |             |   | 23,300  |              |  |            |   |              |  |           |        |     |  |           | 18,535  | 



---

|(1) |  | Amounts shown include cash compensation earned for the periods reported
whether paid or accrued in such periods.                                                                                                                                                                                                                                                                                                                                                                 
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Amounts shown in 2000 represent bonus compensation earned in 2000 and not
calculable at the time of filing the Form 10-K for the fiscal year ending
December 31, 2000. As of December 31, 2001, the Company has accrued
$570,000 for payment of bonuses earned in 2001; however, individual
amounts have not yet been determined and approved by the Compensation
Committee.                                                                                                     
|   
|   
|   
|   
|(3) |  | Other Annual Compensation for perquisites for each individual named above
for 2001, 2000 and 1999 aggregated less than (a) 10% of the total annual
salary and bonus for each individual or (b) $50,000, whichever is lower;
therefore, no such amounts are included.                                                                                                                                                                                                             
|   
|   
|   
|   
|(4) |  | Amounts represent premiums for life insurance and long-term disability
policies, medical benefits and the Companys Profit Sharing and 401(k)
contributions. In fiscal 2001, the Companys Profit Sharing and 401(k)
contributions were $2,503, $2,550, $2,550, $2,496 and $2,037 for Messrs.
Griffith, McPherson, Manske, Page and Mezzetta, respectively. During
2001, the Company paid $15,601, $12,163, $18,435, $7,662; and $5,293 in
medical benefits for Messrs. Griffith,

36



---



##### Table of Contents



|    |  | McPherson, Manske, Page and Mezzetta, respectively. During 2001, the
Company paid $170,245 in premiums for split dollar, term life insurance and
long-term disability policies for Mr. Griffith and $3,773, $10,653, $3,433
and $1,630 in premiums for term life insurance and long-term disability
policies for Messrs. McPherson, Manske, Page and Mezzetta, respectively.
Pursuant to the Restructuring Agreement, Messrs. Griffith, McPherson,
Manske and Page received additional compensation of $3,601,147, $779,878,
$779,878 and $779,878, respectively upon the close of the sale to Majestic.
See Executive Compensation  Senior Management Incentive Program,
Employment Agreements with Executive Officers and Key Employees and
Business Restructuring Agreement.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(5) |  | Options that would have normally expired on June 30, 1998 were cancelled
and re-granted with an expiration date of June 30, 1999. The term of the
options was later extended to December 31, 1999, at which time they
expired unexercised.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|   
|   
|   
|(6) |  | Mr. Mezzetta resigned as Vice President of FMI and General Manager of
Fitzgeralds Tunica on December 6, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

Option Grants

The Company did not grant any stock options during the fiscal year ended
December 31, 2001. During 2000, a total of 271,000 stock options expired. The
Company has never granted stock appreciation rights.

Option Exercises

No named executive officers exercised stock options during the fiscal year
ended December 31, 2001 or held unexercised stock options as of December 31,
2001.

Employment Agreements with Executive Officers and Key Employees

The Company has entered into employment agreements with Messrs. Griffith,
McPherson, Manske and Page to serve in their present offices for terms expiring
June 28, 2003, July 5, 2002, September 1, 2002, and September 1, 2002,
respectively. As of April 8, 2002, Messrs. Griffith, McPherson, Manske and
Page have salaries of $603,000, $275,700, $275,700 and $275,700, respectively,
and their respective employment agreements generally provide for annual merit
increases. The employment agreements also provide that such persons will
participate in the Companys executive compensation plans, health plan and any
other benefit plan established for selected officers of the Company and that in
the event of a termination of employment without good cause (as defined in
the agreements), such persons will be entitled to any unpaid salary in a
specified percentage through the remainder of the term of their respective
agreement.

Consistent with industry practice, the Company has entered into employment
agreements with certain of its other vice presidents and departmental
directors. In accordance with the Restructuring Agreement, the Company has
agreed not to assume these employment agreements as provided for in Section 365
of the Bankruptcy Code.

Executive Bonus Plan

The Company has established an Executive Bonus Plan to provide the senior
executive officers of the Company with a performance-based compensation
program. Effective January 1, 1999, the Company revised the threshold
established for bonus consideration to take into account the termination of
management and consulting services provided to Indian operations in Arizona and
New York. The new

37



---



##### Table of Contents



threshold is $25.0 million in EBITDA, prior to accruing bonus expense and
adjusted for extraordinary, non-recurring items that are deemed non-operational
in nature (Adjusted EBITDA). The bonus amount will start at 1.4% of Adjusted
EBITDA at the $25.0 million level and increase by one-tenth of one percent for
each $1.0 million of Adjusted EBITDA above $25.0 million up to a maximum of 3%.
Each percentage increase achieved would be on a first dollar basis and
computed on the entire adjusted EBITDA. The Bankruptcy Court has entered an
order to the effect that the Executive Bonus Plan will remain in place during
the Bankruptcy Cases. The Compensation Committee will have discretion
concerning the payment of executive bonuses.

Stock Option Incentive Plan

Prior to the commencement of the Bankruptcy Cases, the Company had adopted a
Stock Option Incentive Plan (the Stock Option Plan) which was approved by
stockholders in August 1997. The Stock Option Plan provides for the grant of
options to purchase Common Stock of the Company that are intended either to
qualify as incentive stock options within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the Code), or not intended to
qualify (non-qualified stock options). All officers, directors, employees,
consultants, advisers, independent contractors and agents are eligible to
receive options under the Stock Option Plan, except that only employees could
receive incentive stock options. The maximum number of shares available for
issuance under the Stock Option Plan is 1,000,000. At December 31, 2001,
there were no stock options outstanding under the Stock Option Plan. Since
there are no options outstanding under the Stock Option Plan, no options will
be granted and the Stock Option Plan will be terminated in connection with the
Bankruptcy Cases, a description of the Stock Option Plan would not be
meaningful.

Compensation Committee Interlocks and Insider Participation

The Compensation Committee of the Board of Directors of the Company is
comprised of Philip P. Hannifin and Patricia W. Becker, as Chairperson. Ms.
Becker was not an officer or employee of the Company during or prior to 2001.
Mr. Hannifin was not an officer or employee of the Company during 2001.

Senior Management Incentive Program

On December 21, 2000, the Bankruptcy Court approved a senior management
incentive program (the Incentive Program) as contemplated by the
Restructuring Agreement. In accordance with the Restructuring Agreement,
Messrs. Philip D. Griffith, Paul H. Manske, Michael E. McPherson and Max L.
Page (collectively referred to as Senior Management) agreed, subject to the
Restructuring Agreement not being terminated, that their pre-petition
employment agreements with the Company would not be assumed pursuant to Section
365 of the Bankruptcy Code. In consideration of the Incentive Program, senior
management further agreed to forego alternative employment opportunities in
favor of remaining with the Company through December 31, 2001 in order to
maintain the stability of operations, maintain the Companys existing gaming
licenses pending the sale of its operating properties and to ensure a more
orderly liquidation process. Pursuant to the terms of the First Amendment,
Senior Management continues to be employed by the Company until the sale of the
Reno property.

In consideration of their services to the Company, the Incentive Program
provides for Senior Management to receive: (i) the compensation and benefits
provided for in their respective pre-petition employment agreements through at
least December 31, 2001; (ii) an incentive cash distribution generally

38



---



##### Table of Contents



computed as a percentage of the net proceeds from the sale of certain of the
Companys assets distributed to the holders of the Notes in excess of $115.0
million; (iii) a retention and severance payment equal to an aggregate of $2.4
million; and (iv) payments of up to $2.0 million in consideration for entering
into non-competition agreements.

39



---



##### Table of Contents






Item 12. Security Ownership of Certain Beneficial Owners and Management

The table below sets forth to the best of the Companys knowledge certain
information regarding the beneficial ownership of the Common Stock as of
February 24, 2002 by (i) each person who beneficially owned more that 5% of the
outstanding Common Stock; (ii) each director of the Company; (iii) each other
person named in the Summary Compensation Table (See Item 11  Executive
Compensation); and (iv) all executive officers and directors of the Company as
a group.

Name and address of Beneficial Owner

|                                                                |  |                    |           |          |  |  |      |  
|--------------------------------------------------------------- |  | ------------------ | --------- | -------- |  |  | ---- | -
|                                                                |  | Number of Shares   |           | Percent 
|                                                                |  | Beneficially Owned |           | of Class
|                                                                |  |                    |           |         
|Philip D. Griffith
301 Fremont Street
Las Vegas, NV 89101       |  |                    | 3,419,105 | (a)      |  |  | 62.1 | %
|Putnam Investments, LLC
One Post Office Square
Boston, MA 02109 |  |                    | 392,628   | (b)      |  |  | 7.1  | %
|Paul H. Manske                                                  |  |                    | 123,565   | (c)      |  |  | 2.2  | %
|Max L. Page                                                     |  |                    | 123,565   | (d)      |  |  | 2.2  | %
|Philip P. Hannifin                                              |  |                    | 23,988    |          |  |  | *    |  
|Patricia W. Becker                                              |  |                    | 27,475    | (e)      |  |  | *    |  
|Michael E. McPherson                                            |  |                    | 0         |          |  |  | *    |  
|All directors and executive officers as a group (six persons)   |  |                    | 4,102,258 |          |  |  | 74.5 | %



---

|*   |  | Indicates less than 1%                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(a) |  | Held by the Philip D. Griffith Gaming Trust of which Mr. Griffith is a
trustee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|   
|   
|   
|(b) |  | Putnam Investments, LLC (PI) is a holding company organized under
Massachusetts law. Filing on behalf of itself and its wholly-owned
subsidiary, Putnam Investment Management, Inc. (PIM), an investment
advisor registered under Section 203 of the Investment Advisors Act of
1940, PI and PIM have reported beneficial ownership with shared
dispositive power over the shares listed. As part of the Putnam family of
mutual funds, Putnam Diversified Income Trust has reported beneficial
ownership with shared dispositive power over 223,713 shares of the 392,628
shares held by PIM. The source of this information is a Schedule 13G/A
filed by PI with the Securities and Exchange Commission on February 13,
2002. Ownership is reported as of December 31, 2001. The number
of shares listed in the schedule 13G/A filed by PI does not
agree with the 384,560 shares reflected in our records as held by
PI.
|   
|   
|   
|   
|(c) |  | Held by the Paul H. Manske Family Trust of which Mr. Manske is a trustee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|   
|   
|   
|(d) |  | Held by the Max Lynn Page 1987 Trust of which Mr. Page is a trustee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|   
|   
|   
|(e) |  | Held by the Patricia W. Becker Family Trust of which Ms. Becker is a
trustee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

40



---



##### Table of Contents






Item 13. Certain Relationships and Related Transactions

The Company provided executive and administrative services to each of its
significant subsidiaries and allocated a portion of its corporate overhead to
each such significant subsidiary. This allocation does not necessarily reflect
the costs incurred by the Company in connection with such support and
accordingly, such allocation does not necessarily reflect that which could be
obtained from an unaffiliated party.
In connection with the Bankruptcy Cases all transactions other than
transactions entered into in the ordinary course of business on terms generally
made available to third parties, will be subject to review and approval by the
Bankruptcy Court.

In conjunction with the winding down of its affairs, as well as the orderly
liquidation of assets and liabilities of the Company pursuant to the filing of
its bankruptcies, and after obtaining the Bankruptcy Court approval, the
Company entered into a contract with Meritage Employer Services, LLC
(Meritage) on June 1, 2001 to assist in certain areas of that process.
Meritage agreed to hire the 16 employees of the Companys risk management
department and to provide (1) health benefits design, claims processing and
administration services, (2) liability claims investigation and administration
services, (3) property and casualty insurance consulting and (4) workers
compensation claims processing and administration. The amount of fees paid by
the Company to Meritage for 2001 totaled $604,800 plus reimbursable expenses
and deposits. Meritage ownership is comprised of Senior Management, one
outside director and a former executive of the Company.

41



---



##### Table of Contents






PART IV




Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

|    |  |  |                                                                                                                                             |  |  |                                                                                                          
|--- |  |  | ------------------------------------------------------------------------------------------------------------------------------------------- |  |  | ---------------------------------------------------------------------------------------------------------
|(a) |  |  | 1.                                                                                                                                          |  |  | Financial Statements. The following financial statements are attached:                                   
|    |  |  |                                                                                                                                             |  |  | Independent Auditors Report                                                                             
|    |  |  |                                                                                                                                             |  |  | Consolidated Balance Sheets as of December 31, 2001 and 2000                                             
|    |  |  |                                                                                                                                             |  |  | Consolidated Statements of Operations for the Years Ended
December 31, 2001, 2000, and 1999              
|    |  |  |                                                                                                                                             |  |  | Consolidated Statements of Stockholders Deficiency for the Years
Ended December 31, 2001, 2000, and 1999
|    |  |  |                                                                                                                                             |  |  | Consolidated Statements of Cash Flows for the Years Ended
December 31, 2001, 2000, and 1999              
|    |  |  |                                                                                                                                             |  |  | Notes to Consolidated Financial Statements                                                               
|    |  |  | 2.                                                                                                                                          |  |  | Financial Statement Schedules.                                                                           
|    |  |  |                                                                                                                                             |  |  | Schedule II  Consolidated Valuation and Qualifying Accounts.                                            
|    |  |  |                                                                                                                                             |  |  | Other Financial Statement Schedules are not required.                                                    
|    |  |  | 3.                                                                                                                                          |  |  | Exhibits. Refer to (c) below                                                                             
|(b) |  |  | Reports on Form 8-K. For the last quarter of the fiscal year  ended December 31, 2001, the Company filed the following reports on Form 8-K:
|    |  |  |                                                                                                                                             |  |  | Report on Form 8-K, Item 2 and 5, filed on December 19, 2001                                             
|    |  |  |                                                                                                                                             |  |  | Report on Form 8-K, Item 2 and 5, filed on February 19, 2002                                             
|(c) |  |  | Exhibits. Reference is made to the Index to Exhibits immediately preceding
the exhibits thereto.                                           

42



---



##### Table of Contents






SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, on April 12, 2002.

| |  |  |  |                                                                                                
| |  |  |  | -----------------------------------------------------------------------------------------------
| |  |  |  | Fitzgeralds Gaming Corporation                                                                 
|
| |  |  |  | By: /s/ Michael E. McPherson                                                                   
| |  |  |  |                                                                                                
| |  |  |  | Michael E. McPherson
Executive Vice President,
Chief Financial Officer,
Treasurer and Secretary

43



---



##### Table of Contents



POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENT, that each person whose signature appears
below constitutes and appoints Philip D. Griffith and Michael E. McPherson, and
each of them, his or her own attorneys-in-fact, each with the power of
substitution, for him or her in any and all capacities, to sign any amendments
to this Report on Form 10-K and to file the same, with exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that each of said
attorneys-in-fact, or his substitute or substitutes, may do or cause to be done
by virtue hereof.
Pursuant to the requirements of Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the date indicated.

|                                               |  |                                                                                                                         |  |              
|---------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------- |  | -------------
|SIGNATURE                                      |  | TITLE                                                                                                                   |  | DATE         
|                                               |  |                                                                                                                         |  |              
|/s/ Philip D. Griffith

Philip D. Griffith     |  | Chairman, President, Chief Executive
Officer and Director (Principal
Executive Officer)                                 |  | April 8, 2002
|                                              
|/s/ Michael E. McPherson

Michael E. McPherson |  | Executive Vice President, Chief
Financial Officer, Treasurer and
Secretary (Principal Financial and
Accounting Officer) |  | April 8, 2002
|                                              
|/s/ Philip P. Hannifin

Philip P. Hannifin     |  | Director                                                                                                                |  | April 8, 2002
|                                              
|/s/ Patricia W. Becker

Patricia W. Becker     |  | Director                                                                                                                |  | April 8, 2002
|                                              
|/s/ Max L. Page

Max L. Page                   |  | Director                                                                                                                |  | April 8, 2002

44



---



##### Table of Contents



FITZGERALDS GAMING CORPORATION (Debtor-In-Possession)

TABLE OF CONTENTS

|                                                                                                         |  |     
|-------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                         |  | Page
|                                                                                                         |  |     
|ITEM 8. FINANCIAL STATEMENTS                                                                             |  |     
|Independent Auditors Report                                                                             |  | F-2 
|Consolidated Balance Sheets as of December 31, 2001 and 2000                                             |  | F-3 
|Consolidated Statements of Operations for the Years Ended December 31, 2001,
2000 and 1999               |  | F-5 
|Consolidated Statements of Stockholders Deficiency for the Years Ended
December 31, 2001, 2000 and 1999 |  | F-6 
|Consolidated Statements of Cash Flows for the Years Ended December 31, 2001,
2000 and 1999               |  | F-7 
|Notes to Consolidated Financial Statements                                                               |  | F-9 





---



##### Table of Contents



INDEPENDENT AUDITORS REPORT

Fitzgeralds Gaming Corporation:

We have audited the accompanying consolidated balance sheets of Fitzgeralds
Gaming Corporation and subsidiaries (the Company) (Debtor-in-Possession) as
of December 31, 2001 and 2000, and the related consolidated statements of
operations, stockholders deficiency, and cash flows for each of the three
years in the period ended December 31, 2001. Our audits also included the
financial statement schedule listed in the Index at Item 14(a)(2). These
financial statements and financial statement schedule are the responsibility of
the Companys management. Our responsibility is to express an opinion on these
financial statements and the financial statement schedule based on our audits.

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

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Fitzgeralds Gaming Corporation and
subsidiaries as of December 31, 2001 and 2000, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2001 in conformity with accounting principles generally accepted
in the United States of America. Also, in our opinion, such financial
statement schedule taken as a whole, presents fairly in all material respects
the information set forth therein.

As discussed in Note 2, the Company has filed for reorganization under Chapter
11 of the Federal Bankruptcy Code. The accompanying consolidated financial
statements do not purport to reflect or provide for the consequences of the
bankruptcy proceedings. In particular, such consolidated financial statements
do not purport to show (a) as to assets, their realizable value on a
liquidation basis or their availability to satisfy liabilities; (b) as to
prepetition liabilities, the amounts that may be allowed for claims or
contingencies, or the status and priority thereof; (c) as to stockholder
accounts, the effect of any changes that may be made in the capitalization of
the Company; or (d) as to operations, the effect of any changes that may be
made in its business.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to
the consolidated financial statements, the Companys event of default on its
Senior Secured Notes, along with its recurring losses from operations, negative
working capital and stockholders capital deficiency raise substantial doubt
about its ability to continue as a going concern. Managements plans
concerning these matters are discussed in Note 2. The consolidated financial
statements do not include adjustments that might result from the outcome of
this uncertainty.

DELOITTE & TOUCHE LLP

Las Vegas, Nevada
April 8, 2002

F-2



---



##### Table of Contents



FITZGERALDS GAMING CORPORATION (Debtor-In-Possession)

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2001 AND 2000

|                            |                                                                                    |              |                      |            |           |            |             |             |           |             | 
|--------------------------- | ---------------------------------------------------------------------------------- | ------------ | -------------------- | ---------- | --------- | ---------- | ----------- | ----------- | --------- | ----------- | 
|ASSETS                      |                                                                                    | 2001         |                      | 2000      
|                            |                                                                                    |              |                      |           
|CURRENT ASSETS:             |                                                                                    |              |                      |            |           |            |             |            
|                            | Cash and cash equivalents                                                          |              | $                    | 25,609,012 |           |            | $           | 8,181,388   |          
|                            | Accounts receivable, net of allowance for doubtful
accounts of $49,000 and $64,087 |              |                      | 455,759    |           |            |             | 575,765     |          
|                            | Inventories                                                                        |              |                      | 493,020    |           |            |             | 471,913     |          
|                            | Prepaid expenses:                                                                  |              |                      |            |           |            |             |             |          
|                            |                                                                                    | Gaming taxes |                      |            | 1,316,804 |            |             |             | 993,551   |            
|                            |                                                                                    | Other        |                      |            | 1,628,389 |            |             |             | 1,394,968 |            
|                            |                                                                                    |              |                      |            |           |            |             |            
|                            |                                                                                    |              | Total current assets |            |           | 29,502,984 |             |             |           | 11,617,585  | 
|                            |                                                                                    |              |                      |            |           |            |             |            
|PROPERTY AND EQUIPMENT, net |                                                                                    |              | 55,397               |            |           |            | 79,656      |            
|                            |                                                                                    |              |                      |            |           |            |             |            
|OTHER ASSETS:               |                                                                                    |              |                      |            |           |            |             |            
|                            | Net assets held for sale                                                           |              |                      | 12,000,000 |           |            |             | 170,388,338 |          
|                            | Restricted cash                                                                    |              |                      | 8,184,732  |           |            |             | 4,489,000   |          
|                            | Other assets                                                                       |              |                      | 1,629,020  |           |            |             | 1,473,204   |          
|                            |                                                                                    |              |                      |            |           |            |             |            
|                            |                                                                                    |              | Total other assets   |            |           | 21,813,752 |             |             |           | 176,350,542 | 
|                            |                                                                                    |              |                      |            |           |            |             |            
|TOTAL                       |                                                                                    | $            | 51,372,133           |            |           | $          | 188,047,783 |            
|                            |                                                                                    |              |                      |            |           |            |             |            

(Continued)

See notes to consolidated financial statements

F-3



---



##### Table of Contents



FITZGERALDS GAMING CORPORATION (Debtor-In-Possession)

CONSOLIDATED BALANCE SHEETS (CONTINUED)
DECEMBER 31, 2001 AND 2000

|                                               |                                                                                                                                                                                                                                                                                                                          |                              |                                             |              |           |              |             |              |           |             |  
|---------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------- | ------------------------------------------- | ------------ | --------- | ------------ | ----------- | ------------ | --------- | ----------- | -
|LIABILITIES AND STOCKHOLDERS' DEFICIENCY       |                                                                                                                                                                                                                                                                                                                          | 2001                         |                                             | 2000        
|                                               |                                                                                                                                                                                                                                                                                                                          |                              |                                             |             
|LIABILITIES NOT SUBJECT TO COMPROMISE          |                                                                                                                                                                                                                                                                                                                          |                              |                                             |              |           |              |             |             
|CURRENT LIABILITIES:                           |                                                                                                                                                                                                                                                                                                                          |                              |                                             |              |           |              |             |             
|                                               | Current portion of long-term debt                                                                                                                                                                                                                                                                                        |                              | $                                           | 110,791      |           |              | $           | 109,937      |          
|                                               | Accounts payable                                                                                                                                                                                                                                                                                                         |                              |                                             | 1,248,228    |           |              |             | 306,299      |          
|                                               | Accrued and other:                                                                                                                                                                                                                                                                                                       |                              |                                             |              |           |              |             |              |          
|                                               |                                                                                                                                                                                                                                                                                                                          | Payroll and related          |                                             |              | 2,567,982 |              |             |              | 2,652,200 |            
|                                               |                                                                                                                                                                                                                                                                                                                          | Progressive jackpots         |                                             |              | 73,458    |              |             |              | 63,633    |            
|                                               |                                                                                                                                                                                                                                                                                                                          | Outstanding chips and tokens |                                             |              | 170,835   |              |             |              | 187,652   |            
|                                               |                                                                                                                                                                                                                                                                                                                          | Other                        |                                             |              | 638,193   |              |             |              | 649,866   |            
|                                               |                                                                                                                                                                                                                                                                                                                          |                              |                                             |              |           |              |             |             
|                                               |                                                                                                                                                                                                                                                                                                                          |                              | Total current liabilities                   |              |           | 4,809,487    |             |              |           | 3,969,587   |  
|DUE TO MAJESTIC                                |                                                                                                                                                                                                                                                                                                                          |                              | 3,812,945                                   |              |           |              |            |             
|LONG-TERM DEBT, net of current portion         |                                                                                                                                                                                                                                                                                                                          |                              | 2,295,588                                   |              |           |              | 2,407,023   |             
|                                               |                                                                                                                                                                                                                                                                                                                          |                              |                                             |              |           |              |             |             
|                                               |                                                                                                                                                                                                                                                                                                                          |                              | Total liabilities not subject to compromise |              |           | 10,918,020   |             |              |           | 6,376,610   |  
|LIABILITIES SUBJECT TO COMPROMISE              |                                                                                                                                                                                                                                                                                                                          |                              | 97,335,321                                  |              |           |              | 242,869,829 |             
|                                               |                                                                                                                                                                                                                                                                                                                          |                              |                                             |              |           |              |             |             
|                                               |                                                                                                                                                                                                                                                                                                                          |                              | Total liabilities                           |              |           | 108,253,341  |             |              |           | 249,246,439 |  
|                                               |                                                                                                                                                                                                                                                                                                                          |                              |                                             |              |           |              |             |             
|COMMITMENTS AND CONTINGENCIES (Notes 8 and 14) |                                                                                                                                                                                                                                                                                                                          |                              |                                             |              |           |              |             |             
|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 $28,630,707 and $21,971,855 recorded at
liquidation preference, net of unamortized offering costs and discount
of $4,728,546 and $5,565,696, respectively |                              |                                             | 43,902,161   |           |              |             | 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                                                                                                                                                                                                                                                                                                      |                              |                                             | (124,513,960 | )         |              |             | (121,335,406 | )        
|                                               |                                                                                                                                                                                                                                                                                                                          |                              |                                             |              |           |              |             |             
|                                               |                                                                                                                                                                                                                                                                                                                          |                              | Total stockholders deficiency              |              |           | (100,783,369 | )           |              |           | (97,604,815 | )
|                                               |                                                                                                                                                                                                                                                                                                                          |                              |                                             |              |           |              |             |             
|TOTAL                                          |                                                                                                                                                                                                                                                                                                                          | $                            | 51,372,133                                  |              |           | $            | 188,047,783 |             
|                                               |                                                                                                                                                                                                                                                                                                                          |                              |                                             |              |           |              |             |             

See notes to consolidated financial statements

F-4



---



##### Table of Contents



FITZGERALDS GAMING CORPORATION (Debtor-In-Possession)

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999

|                                           |                                                                                                        |       |            |             |             |      |             |             |             |   |             |             |             | 
|------------------------------------------ | ------------------------------------------------------------------------------------------------------ | ----- | ---------- | ----------- | ----------- | ---- | ----------- | ----------- | ----------- | - | ----------- | ----------- | ----------- | 
|                                           |                                                                                                        |       |            | 2001        |             | 2000 |             | 1999       
|                                           |                                                                                                        |       |            |             |             |      |             |            
|OPERATING REVENUES:                        |                                                                                                        |       |            |             |             |      |             |             |             |   |             |            
|                                           | Casino                                                                                                 |       | $          | 182,099,883 |             |      | $           | 181,724,286 |             |   | $           | 171,739,693 |            
|                                           | Food and beverage                                                                                      |       |            | 24,192,643  |             |      |             | 25,809,006  |             |   |             | 24,603,925  |            
|                                           | Rooms                                                                                                  |       |            | 20,497,604  |             |      |             | 22,060,254  |             |   |             | 21,551,208  |            
|                                           | Other                                                                                                  |       |            | 4,398,948   |             |      |             | 4,549,683   |             |   |             | 3,627,150   |            
|                                           |                                                                                                        |       |            |             |             |      |             |             |             |   |             |            
|                                           |                                                                                                        | Total |            |             | 231,189,078 |      |             |             | 234,143,229 |   |             |             | 221,521,976 | 
|                                           | Less promotional allowances                                                                            |       |            | 35,158,058  |             |      |             | 34,041,653  |             |   |             | 29,677,305  |            
|                                           |                                                                                                        |       |            |             |             |      |             |             |             |   |             |            
|                                           |                                                                                                        | Net   |            |             | 196,031,020 |      |             |             | 200,101,576 |   |             |             | 191,844,671 | 
|                                           |                                                                                                        |       |            |             |             |      |             |             |             |   |             |            
|OPERATING COSTS AND EXPENSES:              |                                                                                                        |       |            |             |             |      |             |             |             |   |             |            
|                                           | Casino                                                                                                 |       |            | 85,714,549  |             |      |             | 84,739,719  |             |   |             | 79,328,307  |            
|                                           | Food and beverage                                                                                      |       |            | 14,432,471  |             |      |             | 15,398,511  |             |   |             | 15,504,787  |            
|                                           | Rooms                                                                                                  |       |            | 11,745,026  |             |      |             | 12,793,036  |             |   |             | 12,563,589  |            
|                                           | Other operating expense                                                                                |       |            | 2,001,112   |             |      |             | 2,115,389   |             |   |             | 2,046,933   |            
|                                           | Selling, general and administrative                                                                    |       |            | 52,292,223  |             |      |             | 56,446,676  |             |   |             | 56,701,495  |            
|                                           | Depreciation and amortization                                                                          |       |            | 33,886      |             |      |             | 13,977,855  |             |   |             | 14,202,957  |            
|                                           | Write-down of assets and lease settlement                                                              |       |            | 27,769,923  |             |      |             |            |             |   |             | 97,759      |            
|                                           | Reorganization items                                                                                   |       |            | (7,927,561  | )           |      |             | 149,536     |             |   |             |            |            
|                                           |                                                                                                        |       |            |             |             |      |             |             |             |   |             |            
|                                           |                                                                                                        | Total |            |             | 186,061,629 |      |             |             | 185,620,722 |   |             |             | 180,445,827 | 
|                                           |                                                                                                        |       |            |             |             |      |             |             |             |   |             |            
|INCOME FROM OPERATIONS                     |                                                                                                        |       | 9,969,391  |             |             |      | 14,480,854  |             |             |   | 11,398,844  |            
|OTHER INCOME (EXPENSE):                    |                                                                                                        |       |            |             |             |      |             |             |             |   |             |            
|                                           | Interest income                                                                                        |       |            | 154,210     |             |      |             | 1,039,946   |             |   |             | 535,730     |            
|                                           | Interest expense (contractual interest for 2001 and
2000 of $35,274,245 and $33,699,003, respectively) |       |            | (4,682,388  | )           |      |             | (31,842,584 | )           |   |             | (29,703,969 | )          
|                                           | Loss on sale of assets                                                                                 |       |            | (1,125,130  | )           |      |             | (50,316     | )           |   |             |            |            
|                                           | Other income (expense)                                                                                 |       |            | 1,365       |             |      |             | (14,226     | )           |   |             | (184,959    | )          
|                                           |                                                                                                        |       |            |             |             |      |             |             |             |   |             |            
|NET INCOME (LOSS)                          |                                                                                                        |       | 4,317,448  |             |             |      | (16,386,326 | )           |             |   | (17,954,354 | )          
|PREFERRED STOCK DIVIDENDS                  |                                                                                                        |       | (7,496,002 | )           |             |      | (6,443,648  | )           |             |   | (5,561,339  | )          
|                                           |                                                                                                        |       |            |             |             |      |             |             |             |   |             |            
|NET LOSS APPLICABLE TO COMMON STOCK        |                                                                                                        | $     | (3,178,554 | )           |             | $    | (22,829,974 | )           |             | $ | (23,515,693 | )          
|                                           |                                                                                                        |       |            |             |             |      |             |             |             |   |             |            
|NET LOSS PER COMMON SHARE                  |                                                                                                        | $     | (0.58      | )           |             | $    | (4.14       | )           |             | $ | (5.35       | )          
|                                           |                                                                                                        |       |            |             |             |      |             |             |             |   |             |            
|WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |                                                                                                        |       | 5,508,082  |             |             |      | 5,508,082   |             |             |   | 4,393,824   |            
|                                           |                                                                                                        |       |            |             |             |      |             |             |             |   |             |            

See notes to consolidated financial statements

F-5



---



##### Table of Contents



FITZGERALDS GAMING CORPORATION (Debtor-In-Possession)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS DEFICIENCY
FOR YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999

|                           |                            |  |              |           |            |   |             |        |               |   |            |          |   |   |              |             |   |   |              |             |  
|-------------------------- | -------------------------- |  | ------------ | --------- | ---------- | - | ----------- | ------ | ------------- | - | ---------- | -------- | - | - | ------------ | ----------- | - | - | ------------ | ----------- | -
|                           |                            |  | Common Stock |           | Additional |   |             |        |               |   | Total     
|                           |                            |  |              |           | Paid-In    |   | Accumulated |        | Stockholders'
|                           |                            |  | Shares       |           | Amount     |   | Capital     |        | Deficit       |   | Deficiency
|                           |                            |  |              |           |            |   |             |        |               |   |           
|BALANCE, JANUARY 1, 1999   |                            |  | 4,012,846    |           |            | $ | 40,128      |        |               | $ | 23,649,582 |          |   | $ | (74,989,739  | )           |   | $ | (51,300,029  | )          
|                           | Net loss                   |  |              |          |            |   |             |       |               |   |            |         |   |   |              | (17,954,354 | ) |   |              | (17,954,354 | )
|                           | Preferred stock dividends  |  |              |          |            |   |             |       |               |   |            |         |   |   |              | (5,561,339  | ) |   |              | (5,561,339  | )
|                           | Issuance of stock          |  |              | 1,495,236 |            |   |             | 14,952 |               |   |            |         |   |   |              |            |   |   |              | 14,952      |  
|                           | Additional paid-in-capital |  |              |          |            |   |             |       |               |   |            | 304,638  |   |   |              |            |   |   |              | 304,638     |  
|                           |                            |  |              |           |            |   |             |        |               |   |            |          |   |   |              |             |   |   |              |            
|BALANCE, DECEMBER 31, 1999 |                            |  | 5,508,082    |           |            |   | 55,080      |        |               |   | 23,954,220 |          |   |   | (98,505,432  | )           |   |   | (74,496,132  | )          
|                           | Net loss                   |  |              |          |            |   |             |       |               |   |            |         |   |   |              | (16,386,326 | ) |   |              | (16,386,326 | )
|                           | Preferred stock dividends  |  |              |          |            |   |             |       |               |   |            |         |   |   |              | (6,443,648  | ) |   |              | (6,443,648  | )
|                           | Expired stock options      |  |              |          |            |   |             |       |               |   |            | (278,709 | ) |   |              |            |   |   |              | (278,709    | )
|                           |                            |  |              |           |            |   |             |        |               |   |            |          |   |   |              |             |   |   |              |            
|BALANCE, DECEMBER 31, 2000 |                            |  | 5,508,082    |           |            |   | 55,080      |        |               |   | 23,675,511 |          |   |   | (121,335,406 | )           |   |   | (97,604,815  | )          
|                           | Net income                 |  |              |          |            |   |             |       |               |   |            |         |   |   |              | 4,317,448   |   |   |              | 4,317,448   |  
|                           | Preferred stock dividends  |  |              |          |            |   |             |       |               |   |            |         |   |   |              | (7,496,002  | ) |   |              | (7,496,002  | )
|                           |                            |  |              |           |            |   |             |        |               |   |            |          |   |   |              |             |   |   |              |            
|BALANCE, DECEMBER 31, 2001 |                            |  | 5,508,082    |           |            | $ | 55,080      |        |               | $ | 23,675,511 |          |   | $ | (124,513,960 | )           |   | $ | (100,783,369 | )          
|                           |                            |  |              |           |            |   |             |        |               |   |            |          |   |   |              |             |   |   |              |            

See notes to consolidated financial statements

F-6



---



##### Table of Contents



FITZGERALDS GAMING CORPORATION (Debtor-In-Possession)

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999

|                                                                                                   |                                                                                                 |   |           |             |      |   |             |            |   |   |             |            |  
|-------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------- | - | --------- | ----------- | ---- | - | ----------- | ---------- | - | - | ----------- | ---------- | -
|                                                                                                   |                                                                                                 |   | 2001      |             | 2000 |   | 1999       
|                                                                                                   |                                                                                                 |   |           |             |      |   |            
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                              |                                                                                                 |   |           |             |      |   |             |            |   |   |             |           
|Net income (loss)                                                                                  |                                                                                                 | $ | 4,317,448 |             |      | $ | (16,386,326 | )          |   | $ | (17,954,354 | )         
|Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities: |                                                                                                 |   |           |             |      |   |             |            |   |   |             |           
|                                                                                                   | Depreciation and amortization                                                                   |   |           | 33,886      |      |   |             | 13,977,855 |   |   |             | 14,202,957 |  
|                                                                                                   | Amortization of note discount and offering costs                                                |   |           | 544,625     |      |   |             | 2,164,691  |   |   |             | 1,753,845  |  
|                                                                                                   | Write down of assets and lease settlement                                                       |   |           | 27,769,923  |      |   |             |           |   |   |             | 97,759     |  
|                                                                                                   | Minority interest in loss of subsidiaries                                                       |   |           |            |      |   |             |           |   |   |             | 92,803     |  
|                                                                                                   | Loss on sale of assets                                                                          |   |           | 1,125,132   |      |   |             | 50,316     |   |   |             |            |  
|                                                                                                   | Gain on sale of assets to Majestic                                                              |   |           | (11,397,357 | )    |   |             |           |   |   |             |           |  
|                                                                                                   | Reorganization items incurred in connection with
chapter 11 and related legal proceedings       |   |           | 3,469,796   |      |   |             | 149,536    |   |   |             |           |  
|                                                                                                   | Write down of deferred stock options                                                            |   |           |            |      |   |             | (278,709   | ) |   |             |           |  
|                                                                                                   | Other                                                                                           |   |           |            |      |   |             |           |   |   |             | 27,674     |  
|                                                                                                   | Changes in working capital, net of assets sold and
liabilities assumed:                         |   |           |             |      |   |             |            |   |   |             |            |  
|                                                                                                   | Decrease in restricted cash                                                                     |   |           |            |      |   |             |           |   |   |             | 537,179    |  
|                                                                                                   | (Increase) decrease in accounts receivable, net                                                 |   |           | 303,430     |      |   |             | (436,719   | ) |   |             | 20,300     |  
|                                                                                                   | (Increase) decrease in advances to
affiliated companies                                         |   |           | (5,200,369  | )    |   |             | 97,774     |   |   |             | (797,791   | )
|                                                                                                   | (Increase) decrease in inventories                                                              |   |           | 23,971      |      |   |             | 254,916    |   |   |             | (395,884   | )
|                                                                                                   | (Increase) decrease in prepaid expenses                                                         |   |           | 371,095     |      |   |             | (758,532   | ) |   |             | (555,473   | )
|                                                                                                   | Increase in other assets                                                                        |   |           | (194,834    | )    |   |             | (81,422    | ) |   |             | (1,263,781 | )
|                                                                                                   | Increase (decrease) in accounts payable                                                         |   |           | 1,016,653   |      |   |             | (2,792,761 | ) |   |             | (3,452,879 | )
|                                                                                                   | Increase in due to Majestic                                                                     |   |           | 3,812,945   |      |   |             |           |   |   |             |           |  
|                                                                                                   | Increase in liabilities subject to compromise                                                   |   |           | 149,835     |      |   |             | 120,125    |   |   |             |           |  
|                                                                                                   | Decrease in accrued interest                                                                    |   |           | (44,813,080 | )    |   |             |           |   |   |             |           |  
|                                                                                                   | Increase in accrued and other liabilities                                                       |   |           | 30,235      |      |   |             | 14,632,357 |   |   |             | 28,776,343 |  
|                                                                                                   |                                                                                                 |   |           |             |      |   |             |            |   |   |             |           
|                                                                                                   | Net cash provided by (used in) operating activities
before reorganization items                 |   |           | (18,636,666 | )    |   |             | 10,713,101 |   |   |             | 21,088,698 |  
|Reorganization items:                                                                              |                                                                                                 |   |           |             |      |   |             |            |   |   |             |           
|                                                                                                   | Interest received on cash accumulated because of
the bankruptcy proceedings                     |   |           | 650,835     |      |   |             |           |   |   |             |           |  
|                                                                                                   | Professional fees paid for services rendered in
connection with the bankruptcy proceedings      |   |           | (3,278,095  | )    |   |             |           |   |   |             |           |  
|                                                                                                   | Other reorganization items incurred in connection
with chapter 11 and related legal proceedings |   |           | (842,536    | )    |   |             | (149,536   | ) |   |             |           |  
|                                                                                                   |                                                                                                 |   |           |             |      |   |             |            |   |   |             |           
|                                                                                                   | Net cash provided by (used in) operating activities                                             |   |           | (22,106,462 | )    |   |             | 10,563,565 |   |   |             | 21,088,698 |  
|                                                                                                   |                                                                                                 |   |           |             |      |   |             |            |   |   |             |           



| | See notes to consolidated financial statements | (Continued)
| | ---------------------------------------------- | -----------

F-7



---



##### Table of Contents



FITZGERALDS GAMING CORPORATION (Debtor-In-Possession)

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999

|                                                                                  |                                       |                                                     |            |              |             |      |             |             |             |   |            |             |            |  
|--------------------------------------------------------------------------------- | ------------------------------------- | --------------------------------------------------- | ---------- | ------------ | ----------- | ---- | ----------- | ----------- | ----------- | - | ---------- | ----------- | ---------- | -
|                                                                                  |                                       |                                                     |            | 2001         |             | 2000 |             | 1999       
|                                                                                  |                                       |                                                     |            |              |             |      |             |            
|CASH FLOWS FROM INVESTING ACTIVITIES:                                             |                                       |                                                     |            |              |             |      |             |             |             |   |            |            
|                                                                                  | Proceeds from sale of assets          |                                                     |            | 141,049,970  |             |      |             | 41,971      |             |   |            | 4,223,144   |           
|                                                                                  | Acquisition of property and equipment |                                                     |            | (1,814,797   | )           |      |             | (10,889,665 | )           |   |            | (5,639,294  | )         
|                                                                                  | Increase in restricted cash           |                                                     |            | (4,195,732   | )           |      |             | (2,799,000  | )           |   |            | (544,978    | )         
|                                                                                  |                                       |                                                     |            |              |             |      |             |             |             |   |            |            
|                                                                                  |                                       | Net cash provided by (used in) investing activities |            |              | 135,039,441 |      |             |             | (13,646,694 | ) |            |             | (1,961,128 | )
|                                                                                  |                                       |                                                     |            |              |             |      |             |             |             |   |            |            
|CASH FLOWS FROM FINANCING
ACTIVITIES:                                             |                                       |                                                     |            |              |             |      |             |             |             |   |            |            
|                                                                                  | Payment of debt offering costs        |                                                     |            |             |             |      |             |            |             |   |            | (305,424    | )         
|                                                                                  | Proceeds from issuance of stock       |                                                     |            |             |             |      |             |            |             |   |            | 14,952      |           
|                                                                                  | Repayment of Senior Secured Notes     |                                                     |            | (105,266,358 | )           |      |             |            |             |   |            |            |           
|                                                                                  | Repayment of long-term debt           |                                                     |            | (350,869     | )           |      |             | (739,205    | )           |   |            | (6,623,763  | )         
|                                                                                  | Repayment of line of credit           |                                                     |            |             |             |      |             |            |             |   |            | (3,000,000  | )         
|                                                                                  | Dividends to minority stockholders    |                                                     |            |             |             |      |             |            |             |   |            | (136,330    | )         
|                                                                                  |                                       |                                                     |            |              |             |      |             |             |             |   |            |            
|                                                                                  | Net cash used in financing activities |                                                     |            | (105,617,227 | )           |      |             | (739,205    | )           |   |            | (10,050,565 | )         
|                                                                                  |                                       |                                                     |            |              |             |      |             |             |             |   |            |            
|NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS                              |                                       |                                                     | 7,315,752  |              |             |      | (3,822,334  | )           |             |   | 9,077,005  |            
|CASH AND CASH EQUIVALENTS
BEGINNING OF YEAR                                       |                                       |                                                     | 8,181,388  |              |             |      | 22,115,594  |             |             |   | 13,038,589 |            
|CASH AND CASH EQUIVALENTS INCLUDED IN
NET ASSETS HELD FOR SALE, BEGINNING OF YEAR |                                       |                                                     | 10,111,872 |              |             |      |             |             |             |   |            |            
|CASH AND CASH EQUIVALENTS INCLUDED IN
NET ASSETS HELD FOR SALE, END OF YEAR       |                                       |                                                     |           |              |             |      | (10,111,872 | )           |             |   |           |            
|                                                                                  |                                       |                                                     |            |              |             |      |             |             |             |   |            |            
|CASH AND CASH EQUIVALENTS
END OF YEAR                                             |                                       | $                                                   | 25,609,012 |              |             | $    | 8,181,388   |             |             | $ | 22,115,594 |            
|                                                                                  |                                       |                                                     |            |              |             |      |             |             |             |   |            |            

See notes to consolidated financial statements

F-8



---



##### Table of Contents



FITZGERALDS GAMING CORPORATION (Debtor-In-Possession)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999

1. ORGANIZATION AND FINANCIAL STATEMENT PRESENTATION

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Fitzgeralds Gaming Corporation (the Company) is a gaming holding company
that until December 6, 2001 owned and operated 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). On December 6, 2001, the
Company sold substantially all of the assets and related liabilities of its
Fitzgeralds Las Vegas, Fitzgeralds Mississippi and Fitzgeralds Black Hawk
properties to Majestic Investors Holding, LLC (Majestic).

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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 the residual assets and liabilities
of Fitzgeralds Las Vegas (FLVI) and Fitzgeralds Tunica (FMI) through
wholly owned subsidiaries; and FI owns the residual assets and liabilities
of Fitzgeralds Black Hawk through wholly-owned subsidiaries, including 101
Main Street Limited Liability Company (101 Main).

| |                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Nevada Club, Inc. (NCI), a wholly owned subsidiary of the Company, owned
and operated the Nevada Club in Reno, Nevada. The Nevada Club was sold in
June 1999.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company incurred net income of $4.3 million in 2001 and net losses of
$16.4 million in 2000. The Company is highly leveraged as total
indebtedness including the 12.25% Senior Secured Notes which mature December
15, 2004 (the Notes) was $101.5 million at December 31, 2001 and $206.6
million at December 31, 2000. The Companys stockholders deficiency was
$100.8 million and $97.6 million at December 31, 2001 and 2000,
respectively. However, earnings before interest, taxes on income,
depreciation and amortization (EBITDA) decreased from $28.5 million for
the year ended December 31, 2000 to $9.5 million for the year ended December
31, 2001. Adjusted EBITDA decreased from $31.9 million for the year ended
December 31, 2000 to $29.4 million for the year ended December 31, 2001.
Adjustments to EBITDA include (i) exclusion of EBITDA for Nevada Club for
2001, 2000 and 1999; (ii) exclusion of EBITDA of Harolds Club for 1999;
(iii) exclusion of write-down of Nevada Club assets of $0.03 million for
1999; (iv) exclusion of Harolds Club lease settlement of $0.06 million for
1999; (v) exclusion of pre-petition professional fees and expenses incurred
with the Companys restructuring of $3.2 million and $2.2 million for 2000
and 1999, respectively; (vi) exclusion of $0.1 million of post-petition
professional fees and expenses, net of interest income included in
reorganization items for 2000; (vii) exclusion of $7.9 million which
includes gain on sale of assets to Majestic of $11.4 million offset by $3.5
million of post-petition professional fees and expenses, net of interest
income included in reorganization items for 2001; and (viii) exclusion of
write down of assets of $14.8 million and $13.0 million at Fitzgeralds Reno
and Fitzgeralds Black Hawk, respectively, for 2001.
|
| | The accompanying financial statements have been prepared on a going concern
basis. At December 31, 2001, liabilities exceeded assets by approximately
$56.9 million and stockholders deficiency was $100.8 million. The
Companys inability to meet the interest payment on the Notes, along with
its recurring losses from operations in prior years, negative working capital and
stockholders capital deficiency, raise substantial doubt about its ability
to continue as a going concern.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

F-9



---



##### Table of Contents



2. PETITION FOR RELIEF UNDER CHAPTER 11

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

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On December 5, 2000, the Company 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
Notes issued under an indenture dated December 30, 1997 (the Indenture).
The Restructuring Agreement contemplates an 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 was 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, August and November 2001, the Company distributed $1.8 million, $7.7
million and $7.2 million, respectively, in Excess Cash to the Indenture
Trustee to be applied to accrued and unpaid interest and principal as
provided in the Indenture. On December 6, 2001, approximately $133.3
million was distributed to the Indenture Trustee from the proceeds of the
December 6, 2001 sale to Majestic. The Company and the Informal Committee
are currently engaged in discussions to establish a new threshold for cash
reserves subsequent to the December 6, 2001 sale to Majestic. 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 of
the one remaining operating asset, Fitzgeralds Reno, during 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,                                                                                                                                                               

F-10



---



##### Table of Contents



| |                                                                                                                                                                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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 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 required 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,
(the Senior Management) 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 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 Ftizgeralds 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.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The transactions contemplated by the Purchase Agreement were consummated on
December 6, 2001. The purchase price for the Assets was $149.0 million,
subject to certain adjustments and holdbacks specified in the Purchase
Agreement, which resulted in net proceeds prior to distributions of
approximately $146.9 million. Of such amount, $7.7 million was retained by
the Company for cash reserves, approximately $5.9 million was distributed to
Senior Management, in consideration of non-competition and sales incentives
pursuant to the Restructuring Agreement, and approximately $133.3 million
was distributed to holders of the Notes (on account of the $205.0 million
aggregate principal amount of Notes outstanding and approximately $44.8
million in accrued pre-petition interest). In addition, during 2001 the
Company distributed approximately $16.8 million to holders of the Notes in
accordance with the provisions of the Restructuring Agreement.

| |                                                                                                                                                                                         
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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.

F-11



---



##### Table of Contents



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

| |                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------
| | As of December 31, 2001 and 2000, the Company incurred the following
expenses subsequent to the filing of the Bankruptcy Cases:

|                      |                                                                               |   |            |             |      |   |         |         |  
|--------------------- | ----------------------------------------------------------------------------- | - | ---------- | ----------- | ---- | - | ------- | ------- | -
|                      |                                                                               |   | 2001       |             | 2000
|                      |                                                                               |   |            |             |     
|Reorganization items: |                                                                               |   |            |             |      |   |         |        
|                      | Post-petition professional fees                                               |   | $          | 3,278,095   |      |   | $       | 163,597 |  
|                      | Pre-petition expenses recorded post-petition                                  |   |            |            |      |   |         | 38,967  |  
|                      | U. S. trustee fees                                                            |   |            | 206,750     |      |   |         |        |  
|                      | Other                                                                         |   |            | 635,786     |      |   |         |        |  
|                      | Gain on sale of asset to Majestic                                             |   |            | (11,397,357 | )    |   |         |        |  
|                      | Interest earned on accumulated cash resulting from the
bankruptcy proceedings |   |            | (650,835    | )    |   |         | (53,028 | )
|                      |                                                                               |   |            |             |      |   |         |        
|                      |                                                                               | $ | (7,927,561 | )           |      | $ | 149,536 |        
|                      |                                                                               |   |            |             |      |   |         |        

Liabilities Subject to Compromise

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

|                                   |                                  |   |            |            |      |   |             |             |  
|---------------------------------- | -------------------------------- | - | ---------- | ---------- | ---- | - | ----------- | ----------- | -
|                                   |                                  |   | 2001       |            | 2000
|                                   |                                  |   |            |            |     
|Liabilities subject to compromise: |                                  |   |            |            |      |   |             |            
|                                   | Notes                            |   | $          | 99,733,642 |      |   | $           | 205,000,000 |  
|                                   | Discount on the Notes            |   |            | (613,709   | )    |   |             | (1,549,855  | )
|                                   | Accrued interest on the Notes    |   |            |           |      |   |             | 44,813,080  |  
|                                   | Debt offering costs on the Notes |   |            | (2,054,572 | )    |   |             | (5,513,521  | )
|                                   | Unsecured creditors              |   |            | 269,960    |      |   |             | 120,125     |  
|                                   |                                  |   |            |            |      |   |             |            
|                                   |                                  | $ | 97,335,321 |            |      | $ | 242,869,829 |            
|                                   |                                  |   |            |            |      |   |             |            

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

| |                                                                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Consolidation- The consolidated financial statements of the Company include
the accounts of its wholly owned and majority owned subsidiaries. All
inter-company balances and transactions have been eliminated in the
consolidation.

| |                                                                                                                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Cash and Cash Equivalents- Cash includes cash required for gaming
operations. The Company considers cash equivalents to include short-term
investments with maturities of ninety days or less at the date of purchase.

| |                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------
| | Inventories- consisting principally of food and beverage and operating
supplies are stated at the lower of first-in, first-out cost or market.

| |                                                                                                                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The estimated cost of normal operating quantities (base stock) of china,
silverware, glassware, linen, uniforms and utensils has been recorded as an
asset and is not being depreciated. Costs of base stock replacements are
expensed as incurred.

| |                                                                                                                                                                                                                                                                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Property and Equipment- are stated at cost. Depreciation and amortization
are computed using the straight-line method over the estimated service lives
of the assets. Costs of major improvements are capitalized; costs of normal
repairs and maintenance are charged to expenses as incurred. Gains or losses
on disposals are recognized. Certain of the assets of the Operating
Properties were classified as held for

F-12



---



##### Table of Contents



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | sale upon consummation of the Purchase Agreement with Majestic in accordance
with Statement of Financial Accounting Standards (SFAS) No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed of. This standard requires that assets to be disposed of
shall be reported at the lower of carrying amount or fair value less costs
to sell and shall not be depreciated or amortized while they are held for
disposal. The Company discontinued recording depreciation and amortization
expense for property and equipment included in net assets held for sale
subsequent to the filing of the Bankruptcy Cases and consummation of the
Purchase Agreement with Majestic based on the requirements of SFAS No. 121.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Debt Offering Costs- Costs associated with the issuance of the Notes and
securing the loan and security agreement (the Credit Facility) are
deferred and amortized over the life of the related indebtedness using the
effective interest method. In 2001, the Company wrote-off the cost
associated with the issuance of the Notes in proportion with the amount paid
on the Notes.                                                                                                                                                                                                                                                                                                                                                                                                 
|
| | Restricted Cash- At December 31, 2001 and 2000, restricted cash represents
interest bearing certificates of deposit with a bank securing letters of credit
for various workers compensation and insurance plans (see Note 14). At
December 31, 2000 the Company had U.S. Treasury Notes of $1,000,000 held in an
escrow account for the benefit of certain land lessors related to Fitzgeralds
Las Vegas. At December 31, 2001 and 2000 a deposit of $2,400,000 is held in an
escrow account for the benefit of the Company related to the implementation of
a senior management incentive and retention program in conjunction with the
Restructuring Agreement (see Note 2). At December 31, 2001 $3,761,166 of cash
is held in an escrow in compliance with the Purchase Agreement.
|
| | Goodwill- represents the cost in excess of fair value of the net assets
acquired in purchase transactions. Goodwill was amortized using the
straight-line method over 40 years and recorded net of accumulated
amortization. The Company discontinued recording the amortization of its
goodwill included in net assets held for sale subsequent to the filing of
the Bankruptcy Cases on December 5, 2000. Furthermore, the Company wrote
down $13.0 million of the asset as of December 6, 2001 due to the sale of
Fitzgeralds Black Hawk to Majestic.                                                                                                                                                                                                                               

| |                                                                                                                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Casino Revenue- is the net win from gaming activities, which is the
difference between gaming wins and losses. Food and beverage and room
revenue includes the aggregate amounts generated by those departments at the
each of the Operating Properties.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Promotional Allowances- Operating revenues include the retail value of
rooms, food and beverage provided to customers without charge; corresponding
charges have been deducted from revenue in the accompanying consolidated
statements of operations as promotional allowances in the determination of
net operating revenues. The estimated costs of providing the complimentary
services are charged to the casino department and are as follows:

|                  |  |      |            |      |  |      |            |  |  |   |            | 
|----------------- |  | ---- | ---------- | ---- |  | ---- | ---------- |  |  | - | ---------- | 
|                  |  | 2001 |            | 2000 |  | 1999
|                  |  |      |            |      |  |     
|Hotel             |  | $    | 3,502,458  |      |  | $    | 3,067,565  |  |  | $ | 2,987,383  | 
|Food and beverage |  |      | 13,199,027 |      |  |      | 13,389,226 |  |  |   | 12,595,908 | 
|Other             |  |      | 572,390    |      |  |      | 524,426    |  |  |   | 280,998    | 
|                  |  |      |            |      |  |      |            |  |  |   |            | 
|Total             |  | $    | 17,273,875 |      |  | $    | 16,981,217 |  |  | $ | 15,864,289 | 
|                  |  |      |            |      |  |      |            |  |  |   |            | 

| |                                                                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Advertising Costs- Advertising expenditures are expensed in the period the
advertising initially takes place. Advertising costs included in selling,
general and administrative expenses were $4,696,846, $5,308,556 and
$5,491,110 for the years ended December 31, 2001, 2000 and 1999,
respectively.
|
| | Federal Income Taxes- The Company accounts for income taxes in accordance
with Statement of                                                                                                                                                                                                            

F-13



---



##### Table of Contents



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Financial Accounting Standards (SFAS) No. 109,
Accounting for Income Taxes, which requires recognition of deferred tax
assets and liabilities for the expected future tax consequences of events
that have been included in the financial statements or tax returns.
Deferred income taxes reflect the net tax effects of (a) temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes,
and (b) operating loss and tax credit carry forwards.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Financial Reporting Period- The Company has adopted 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.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Fair Value of Financial Instruments- The Company believes, based on current
information, that the carrying value of the Companys cash and cash
equivalents, restricted cash, accounts receivable, advances, and accounts
payable approximates fair value because of the short maturity of those
instruments. The Notes were trading at approximately 55% of the face value
at December 31, 2001 and December 31, 2000. The Company is unable to
estimate the fair value of its Preferred Stock since no market quotes for
such securities are readily available. The Company estimates that the fair
value of all other long-term debt approximates its carrying value because
interest rates on the debt approximate market rates.

| |                                                                                                                                                                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Impairment of Long Lived Assets- The Company reviews long-lived assets and
certain identifiable intangibles for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be
recoverable. During the 2001 year, Fitzgeralds Reno wrote-down $14.8
million in property and equipment to its estimated fair value.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Stock-Based Compensation- The Company utilizes SFAS No. 123, Accounting for
Awards of Stock-Based Compensationto account for stock-based employee
compensation plans and for transactions where equity securities are issued
for goods and services. This statement defines a fair value based method of
accounting for an employee stock option or similar equity instrument and
encourages all entities to adopt that method of accounting for all of their
employee stock compensation plans. However, it also allows an entity to
continue to measure compensation cost for those plans using the intrinsic
value based method of accounting prescribed by Accounting Principles Board
(APB) Opinion No. 25, Accounting for Stock Issued to Employees. In
accounting for stock based employee compensation plans, the Company applies
APB Opinion No. 25, and adopted only the disclosure requirement of SFAS No.
123.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Recently Issued Accounting Standards
-On June 30, 1998, the Financial
Accounting Standards Board (FASB) issued SFAS 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 its
financial condition or results of operation.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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 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 and 1999 income statement to reflect such expenses as promotional
expense thereby reducing net revenue. This reclassification did not have
any effect on the Companys income from operation and net income for the
current year and previously reported net losses.

F-14



---



##### Table of Contents



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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
combinations 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. The Company discontinued recording the amortization of its
goodwill included in net assets held for sale subsequent to filing the
Bankruptcy Cases. Amortization expense related to goodwill was $0.3 million
for 2000. As of December 6, 2001, the Company wrote-down $13.0 million of
its goodwill due to the sale of Fitzgeralds Black Hawk to Majestic.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Bankruptcy Related Accounting- The Company has accounted for all
transactions related to the Bankruptcy Cases in accordance with Statement of
Position 90-7 (SOP 90-7), Financial Reporting by Entities in
Reorganization Under the Bankruptcy Code,which was issued by the American
Institute of Certified Public Accountants in November 1990. Accordingly,
liabilities subject to compromise under the Bankruptcy Cases have been
segregated on the Consolidated Balance Sheet and are recorded for the
amounts that is expected to be allowed under the Restructuring Agreement
(see Note 2). In addition, the Consolidated Statements of Operations and
Consolidated Statements of Cash Flows for the period ended December 31, 2001
and December 31, 2000 disclose expenses related to the Bankruptcy Cases
under Reorganization Items. The Company will continue to present its Cash
Flow using the indirect method.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Use of Estimates- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of certain assets
and liabilities at the date of the financial statements. These estimates
also affect the disclosure of contingent liabilities at the date of the
financial statement and the reported amounts of certain revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
|
| | Reclassification- Certain amounts in the 2000 and 1999 consolidated
financial statements have been reclassified to conform to the 2001 method of
presentation.                                                                                                                                                                                                                                                                                                                                                                              

F-15



---



##### Table of Contents



4. STATEMENTS OF CASH FLOWS INFORMATION

| |                                                                                                                                                             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The following supplemental disclosure is provided as part of the
consolidated statements of cash flows for the years ended December 31, 2001,
2000 and 1999:

| |                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Cash paid for interest, net of amounts capitalized, during the years ended
December 31, 2001, 2000 and 1999 was $45,046,705, $13,343,195 and $682,217,
respectively.

| |                                                                                
| | -------------------------------------------------------------------------------
| | Certain non-cash operating, investing and financing activities were as
follows:

| |                                                                                                                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Long-term contracts payable of $2,618,420 in 2000 and $545,079 in 1999,
were incurred with the acquisition of new equipment for all years presented
and a parking garage in 2000. In 2001, no additional new equipment was
acquired through long-term contracts payable.

| |                                                                                                                                                                                                                                                                                         
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | During 2001, 2000 and 1999, accumulated deficit was increased by $7,496,002,
$6,443,648 and $5,561,339 for preferred stock dividends consisting of
$6,658,852, $5,747,076 and $4,960,147 accrued dividends and $837,150,
$696,572 and $601,193 accretion of discount on preferred stock.

| |                                                                                                                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | During 2000, additional paid-in-capital decreased by $278,709 due to the
expiration of the stock options. In 1999, additional paid-in-capital
increased and an amount due to stockholders decreased by $304,638.

| |                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------
| | In 1999, additional offering costs of $169,590 were incurred in connection
with the Notes and the Credit Facility.

| |                                                                                                  
| | -------------------------------------------------------------------------------------------------
| | See Note 2 and Note 6 for a summary of Assets Held for Sale and Liabilities
Subject to Compromise

5. PROPERTY AND EQUIPMENT

Property and equipment consists of the following at December 31,

|                                               |  |      |             |      |  |      |              |   |  |            |   | 
|---------------------------------------------- |  | ---- | ----------- | ---- |  | ---- | ------------ | - |  | ---------- | - | 
|                                               |  |      |             |      |  |      |              |   |  | Estimated 
|                                               |  |      |             |      |  |      |              |   |  | Service   
|                                               |  | 2001 |             | 2000 |  | Life
|                                               |  |      |             |      |  |     
|Land used in casino operations                 |  | $    | 4,555,894   |      |  | $    | 18,204,843   |   |  |            |  | 
|Buildings and improvements                     |  |      | 28,207,276  |      |  |      | 122,789,471  |   |  | 7-40 years
|Site improvements                              |  |      | 29,427      |      |  |      | 20,960,324   |   |  | 20 years  
|Barge and improvements                         |  |      |            |      |  |      | 12,896,235   |   |  | 15 years  
|Furniture, fixtures and equipment              |  |      | 14,675,080  |      |  |      | 67,566,143   |   |  | 3-12 years
|                                               |  |      |             |      |  |      |              |   |  |            |   | 
|                                               |  |      | 47,467,677  |      |  |      | 242,417,016  |   |  |            |   | 
|Less write-down of assets                      |  |      | (14,764,341 | )    |  |      |             |   |  |            |   | 
|Less accumulated depreciation and amortization |  |      | (20,672,939 | )    |  |      | (91,396,928  | ) |  |            |   | 
|                                               |  |      |             |      |  |      |              |   |  |            |   | 
|                                               |  |      | 12,030,397  |      |  |      | 151,020,088  |   |  |            |   | 
|Construction in progress                       |  |      | 25,000      |      |  |      | 764,698      |   |  |            |   | 
|                                               |  |      |             |      |  |      |              |   |  |            |   | 
|                                               |  |      | 12,055,397  |      |  |      | 151,784,786  |   |  |            |   | 
|Less net assets held for sale                  |  |      | (12,000,000 | )    |  |      | (151,705,130 | ) |  |            |   | 
|                                               |  |      |             |      |  |      |              |   |  |            |   | 
|Total                                          |  | $    | 55,397      |      |  | $    | 79,656       |   |  |            |   | 
|                                               |  |      |             |      |  |      |              |   |  |            |   | 

| |                                                                                                                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Total property and equipment at December 31, 2001 and December 31, 2000 is
compromised of furniture and fixtures for the Companys corporate offices.
Substantially all property and equipment is pledged as collateral on
long-term debt.

F-16



---



##### Table of Contents



6. NET ASSETS HELD FOR SALE

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On December 1, 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. The transactions contemplated by the Purchase Agreement were
consummated on December 6, 2001. The purchase price for the Assets was
$149.0 million, subject to certain adjustments and holdbacks specified in
the Purchase Agreement, which resulted in net proceeds prior to
distributions of approximately $146.9 million. The Company is actively
seeking a buyer for the Fitzgeralds Reno property.

| |                                                                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | As of December 31, 2001 assets included in net assets held for sale of $12.0
million consist mainly of property and equipment transferable upon the close
of Fitzgerald Reno.

| |                                                                                       
| | --------------------------------------------------------------------------------------
| | 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:                                       |                                                                        |   |             |   |             |   |             |            |             |   |             |            |       |   |            |            |   |   |            |   |  |   |             |           
|                                                        | 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 intercompany purchase and sale of property and equipment.
|--- |  | ------------------------------------------------------------------------------------------

F-17



---



##### Table of Contents



| |                                                                                   
| | ----------------------------------------------------------------------------------
| | Net property and equipment held for sale consists of the following at
December 31,

|                                               |  |      |             |      |  |              |             |   |  |            |   | 
|---------------------------------------------- |  | ---- | ----------- | ---- |  | ------------ | ----------- | - |  | ---------- | - | 
|                                               |  |      |             |      |  |              |             |   |  | Estimated 
|                                               |  | 2001 |             | 2000 |  | Service Life
|                                               |  |      |             |      |  |             
|Land used in casino operations                 |  | $    | 4,555,894   |      |  | $            | 18,204,843  |   |  |            |  | 
|Buildings and improvements                     |  |      | 28,207,276  |      |  |              | 122,789,471 |   |  | 7-40 years
|Site improvements                              |  |      | 29,427      |      |  |              | 20,960,324  |   |  | 20 years  
|Barge and improvements                         |  |      |            |      |  |              | 12,896,235  |   |  | 15 years  
|Furniture, fixtures and equipment              |  |      | 14,452,856  |      |  |              | 67,330,488  |   |  | 3-12 years
|                                               |  |      |             |      |  |              |             |   |  |            |   | 
|                                               |  |      | 47,245,453  |      |  |              | 242,181,361 |   |  |            |   | 
|Write-down of asset                            |  |      | (14,764,341 | )    |  |              |            |   |  |            |   | 
|Less accumulated depreciation and amortization |  |      | (20,506,112 | )    |  |              | (91,240,929 | ) |  |            |   | 
|                                               |  |      |             |      |  |              |             |   |  |            |   | 
|                                               |  |      | 11,975,000  |      |  |              | 150,940,432 |   |  |            |   | 
|Construction in progress                       |  |      | 25,000      |      |  |              | 764,698     |   |  |            |   | 
|                                               |  |      |             |      |  |              |             |   |  |            |   | 
|Total                                          |  | $    | 12,000,000  |      |  | $            | 151,705,130 |   |  |            |   | 
|                                               |  |      |             |      |  |              |             |   |  |            |   | 

7. 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 stated
maturity date is 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. Under the Note Indenture, an Event of Default
occurred on July 15, 1999, and continued until the Company filed the
Bankruptcy Cases. Failure to make the scheduled interest payment on June
15, 1999 resulted in a 1.0% increase in the interest rate to 13.25%,
effective June 16, 1999 until the Company filed 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 unpaid and accrued Indenture Trustees fees and
expenses incurred and as partial payment of accrued and unpaid interest as
provided in the Indenture. Pursuant to the Restructuring Agreement and an
order entered by the Bankruptcy Court, the Company was 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, August and November 2001, the
Company distributed $1.8 million, $7.7 million and $7.2 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 and the Informal Committee are currently engaged in discussions to
establish a new threshold for cash reserves subsequent to the December 6,
2001 sale to Majestic. On December 6, 2001, approximately $133.3 million
was distributed to the Indenture Trustee from the proceeds of the December
6, 2001 sale to Majestic.

| |                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On February 1, 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.

| |                                                                                         
| | ----------------------------------------------------------------------------------------
| | In December 2000, the Company terminated its Credit Facility with a lending
institution.

F-18



---



##### Table of Contents



| |                                           
| | ------------------------------------------
| | Long-term debt outstanding at December 31,

|                                                                                                                                                                                    |  |   |             |   |      |   |              |   | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | ----------- | - | ---- | - | ------------ | - | 
|                                                                                                                                                                                    |  |   | 2001        |   | 2000
|                                                                                                                                                                                    |  |   |             |   |     
|The Notes; (net of unamortized discount of $613,709
in 2001 and $1,549,855 in 2000)                                                                                                 |  | $ | 99,119,933  |   |      | $ | 203,450,145  |  
|Note payable to acquire a parking garage secured by
the parking garage; monthly installments of $21,713,
including interest at 10.0% with final balloon payment
due February 2010   |  |   | 2,175,225   |   |      |   | 2,216,014    |  
|Contracts payable secured by certain equipment due
in maximum aggregate monthly installments of $5,500
and $40,792, with varying maturity dates through 2005 and 2006, respectively |  |   | 231,154     |   |      |   | 935,298      |  
|                                                                                                                                                                                    |  |   |             |   |      |   |              |  
|Total debt                                                                                                                                                                          |  |   | 101,526,312 |   |      |   | 206,601,457  |  
|Less liabilities subject to compromise                                                                                                                                              |  |   | (99,119,933 | ) |      |   | (203,450,145 | )
|Less net assets held for sale                                                                                                                                                       |  |   |            |   |      |   | (634,352     | )
|Less current portion                                                                                                                                                                |  |   | (110,791    | ) |      |   | (109,937     | )
|                                                                                                                                                                                    |  |   |             |   |      |   |              |  
|                                                                                                                                                                                    |  | $ | 2,295,588   |   |      | $ | 2,407,023    |  
|                                                                                                                                                                                    |  |   |             |   |      |   |              |  

The scheduled maturities of long-term debt are as follows for the year ending December 31,

|           |  |   |             |  | 
|---------- |  | - | ----------- |  | 
|2002       |  | $ | 110,791     | 
|2003       |  |   | 115,801     | 
|2004       |  |   | 128,148     | 
|2005       |  |   | 87,000      | 
|2006       |  |   | 67,113      | 
|Thereafter |  |   | 1,897,526   | 
|Unknown    |  |   | 99,119,933  | 
|           |  |   |             | 
|Total      |  | $ | 101,526,312 | 
|           |  |   |             | 

8. COMMITMENTS

| |                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------
| | Future minimum rental payments under operating leases with non-cancelable
lease terms in excess of one year are as follows:

|                              |  |   |            |  | 
|----------------------------- |  | - | ---------- |  | 
|Year Ending December 31, 2002 |  | $ | 770,625    | 
|2003                          |  |   | 673,454    | 
|2004                          |  |   | 550,770    | 
|2005                          |  |   | 457,193    | 
|Thereafter                    |  |   | 7,835,396  | 
|                              |  |   |            | 
|Total                         |  | $ | 10,287,438 | 
|                              |  |   |            | 

F-19



---



##### Table of Contents



| |                                                                                                                                                                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Such operating lease commitments primarily relate to equipment, signs,
warehouses and ground leases on which the Companys buildings and equipment
reside. Rent expense for the years ended December 31, 2001, 2000 and 1999
was $2,133,291, $2,797,177 and $2,845,668, respectively.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Employment Agreements The Company has entered into employment agreements
with certain senior executives of the Company. In addition to their
respective salaries, the employment agreements also provide that such senior
executives will participate in the Companys executive compensation plans,
health plan and any other benefit plan established for selected officers of
the Company and that in the event of a termination of employment without
good cause (as defined in the agreements), such persons will be entitled
to any unpaid salary in a specified percentage through the remainder of the
term of their respective agreement.

| |                                                                                                                                                                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Consistent with industry practice, the Company has entered into employment
agreements with certain of its other vice presidents and departmental
directors. In accordance with the Restructuring Agreement, the Company has
agreed not to assume these employment agreements as provided in Section 365
of the Bankruptcy Code.

9. RELATED PARTY TRANSACTIONS

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In order to facilitate the winding down of its affairs, as well as the
orderly liquidation of assets and liabilities of the Company pursuant to the
filing of its bankruptcies, and after obtaining the Bankruptcy Court
approval the Company entered into a contract with Meritage Employer
Services, LLC (Meritage) on June 1, 2001 to assist in that process.
Meritage agreed to hire the 16 employees of the Companys risk management
department and to provide (1) health benefits design, claims processing and
administration services, (2) liability claims investigation and
administration services, (3) property and casualty insurance consulting and
(4) workers compensation claims processing and administration. The amount
of fees paid by the Company to Meritage for 2001 totaled $604,800 plus
reimbursable expenses and deposits. Meritage ownership is comprised of
Senior Management, one outside director and a former executive of the
Company.

10. PROFIT SHARING PLAN

| |                                                                                                                                                                                                                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company has contributory profit-sharing plans for eligible employees.
The Companys contribution to the plans for any year, as determined by the
Board of Directors, is discretionary. Contributions to the plan are
allocated among eligible participants in the proportion of their salaries to
the total salaries of all participants.

| |                                                                                                                                                                                                                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company amended the plans to include a 401(k) savings plan whereby
eligible employees may contribute up to 20% of their salary, which is
matched by the Company at 25 cents per employee dollar contributed, up to a
maximum of 6% of their salary. The Companys matching contributions were
$340,674, $346,377 and $332,155 for the years ended December 31, 2001, 2000
and 1999.

| |                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Each employee age 21 or older completing 1,000 or more hours of service
during the twelve-month period preceding the entry dates, January 1, April
1, July 1 or October 1, is eligible to participate in the plans.

| |                                                                                                                                                                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In addition, the Company contributes to multi-employer defined contribution
pension plans under various union agreements. Contributions, based on wages
paid to covered employees, were $342,172, $351,847 and $537,998 for the
years ended December 31, 2001, 2000 and 1999.

F-20



---



##### Table of Contents



11. STOCKHOLDERS DEFICIENCY

| |                                                                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Restructuring Agreement requires that all of the existing Common
Stock and Preferred Stock of the Company to be canceled and extinguished
without payment therefor. It is not expected that any distribution will be
made to holders of the existing capital stock of the Company.

| |                
| | ---------------
| | Preferred Stock

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | As part of a public offering of $123.0 million senior secured notes (the
1995 Notes), the Company issued 800,000 shares of Preferred Stock with a
liquidation preference of $20 million ($25 per share), plus accrued and
unpaid dividends. Cash dividends on the Preferred Stock were payable out of
funds legally available therefor (when and if declared by the Companys
Board of Directors) in an amount equal to 15% of the liquidation preference.
Dividends not paid (whether or not declared) are cumulative from December
19, 1995 and compounded quarterly. The Indenture restricts the Companys
ability to pay dividends on the Preferred Stock, and the Company has no
current intention to pay any dividends on the Preferred Stock. The Preferred
Stock was redeemable by the Company at any time at a redemption price equal
to 100% of the liquidation preference plus accrued and unpaid dividends on
the date of redemption subject to restrictions in the Indenture. The Company
was obligated to redeem all of the Preferred Stock on December 31, 2005 at a
redemption price equal to 100% of the liquidation preference plus accrued
and unpaid dividends on the date of redemption. In the event that the
Company consummated a Qualified Public Offering (Qualified Public Offering
means a firm commitment underwritten public offering of Common Stock of the
Company for which the Company receives net proceeds of at least $25 million,
and after which the Common Stock is traded on a national securities exchange
or quoted on the Nasdaq National Market), it would have been required to
offer to repurchase 35% of the Preferred Stock at a price equal to 100% of
the liquidation preference on the date of repurchase. The Company has not
paid any cash dividends on its Preferred Stock and because of the Bankruptcy
Cases, the Bankruptcy Code and the Restructuring Agreement, the Company does
not anticipate paying any cash dividends. The Restructuring Agreement
requires that as part of the bankruptcy process, all of the existing
Preferred Stock is to be canceled and extinguished without any payment. It
is not expected that any distribution will be made to the holders of the
Preferred Stock.
|
| | Warrants and Common Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| | As part of the offering of the 1995 Notes, the Company issued 2,675,237
warrants, each exercisable for one share of the Companys Common Stock at an
exercise price of $.01 per share (the Warrants). In connection with the
offering of the Notes and the repayment of the 1995 Notes, the Company
canceled 703,402 of the Warrants. The remaining Warrants had an expiration
date of December 19, 1998. The Warrant Agent timely received notice of
exercise for 1,495,236 Warrants and 476,599 Warrants expired. In September
1999, the Company issued 1,495,236 shares of Common Stock to exercising
Warrant holders in reliance on the exemption from registration requirements
contained in Section 4(2) of the Securities Act of 1933 and on the basis
that there was no public offering of the Common Stock underlying the
Warrants. The Company received $14,952, representing the exercise price of
the Warrants.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company has not paid any cash dividends on its Common Stock and because
of the Bankruptcy Cases, the Bankruptcy Code and the Restructuring Agreement
the Company does not anticipate paying any cash dividends. The
Restructuring Agreement requires that as part of the bankruptcy process, all
of the existing Common Stock is to be cancelled and extinguished without any
payment. It is not expected that any distribution will be made to the
holders of the Common Stock.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In March 1994, as part of the issuance of $36 million of 13% senior secured
notes due 1996, FSI issued warrants (the FSI Warrants) to purchase 100,559
shares of its common stock. No value was ascribed to
the FSI Warrants. The FSI Warrants were exercisable at $.01 per share,
expired five years from the closing of the offering for these notes and were
subject to certain anti-dilution adjustments. FSI Warrants to

F-21



---



##### Table of Contents



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | purchase
54,384 shares of common stock of FSI were also issued to the sales agent.
These FSI Warrants were exercisable at $32.18 per share and expired five
years from the closing of the offering. All FSI Warrants issued in
connection with this note offering were exercisable only for shares of
common stock of FSI. The notes issued in 1994 by FSI were repaid from a
portion of the proceeds from the offering of the 1995 Notes, at which time
the Company repurchased approximately 59% of the $.01 FSI Warrants, leaving
73,250 FSI Warrants outstanding. The warrant agent timely received notice
of exercise for 8,500 shares of common stock of FSI and 64,750 FSI Warrants
expired. No additional shares of common stock of FSI were issued as of
December 31, 2001 and December 31, 2000.                                                                                                                                                                                                                                                                              
|
| | Stock Options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| | Prior to the commencement of the Bankruptcy Cases, the Stock Option Plan was
administered by the Board of Directors or, at its discretion, by a committee
of the Board of Directors appointed for that purpose (the Stock Option Plan
Committee), which, subject to the terms of the Stock Option Plan, had the
authority in its sole discretion to interpret the Plan and to determine: (a)
the individuals to whom options shall be granted; (b) the time or times at
which options may be exercised; (c) the number of shares subject to each
option; (d) the option price and the duration of each option granted; and
(e) all of the other terms and conditions of options granted under the Stock
Option Plan. As of December 31, 2001 and December 31, 2000, no options were
outstanding under the Stock Option Plan. In accordance with the Bankruptcy
Cases, the Bankruptcy Code and the Restructuring Agreement, no additional
options will be granted under the Stock Option Plan and the Stock Option
Plan will be terminated during the pendency of the Bankruptcy Cases.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The exercise price of incentive stock options granted under the Stock Option
Plan was required to be at least equal to the fair market value of the
shares on the date of grant (110% of fair market value in the case of
participants possessing more than 10% of the combined voting power of the
Company or any of its subsidiaries) and was not permitted to have a term in
excess of 10 years from the date of grant (five years in the case of
participants possessing more than 10% of the combined voting power of the
Company). In no event could the aggregate fair market value (determined as
of the time the option is granted) of the shares with respect to which
incentive stock options (granted under the Stock Option Plan and all other
plans of the Company or any of its subsidiaries) were exercisable for the
first time by an optionee in any calendar year exceed $100,000.

| |                                                                                                       
| | ------------------------------------------------------------------------------------------------------
| | All stock options issued in prior years expired on December 31, 2000, with
no stock options exercised.

F-22



---



##### Table of Contents



| |                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
| | A summary of the status of the Companys stock option grants as of December
31, 2001, 2000 and 1999 and changes during the years then ended is presented
below:

|                                                          |  |        |          |       |  |          |      | 
|--------------------------------------------------------- |  | ------ | -------- | ----- |  | -------- | ---- | 
|                                                          |  |        |          |       |  | Weighted
|                                                          |  |        |          |       |  | Average 
|                                                          |  |        |          |       |  | Exercise
|                                                          |  | Shares |          | Price
|                                                          |  |        |          |      
|Outstanding at January 1, 1999                            |  |        | 564,524  |       |  | $        | 1.04 | 
|Canceled                                                  |  |        | (321,138 | )     |  |          | 1.02 | 
|Re-granted                                                |  |        | 53,261   |       |  |          | 1.00 | 
|Forfeited                                                 |  |        | (25,647  | )     |  |          | 1.00 | 
|                                                          |  |        |          |       |  |          |      | 
|Outstanding at December 31, 1999                          |  |        | 271,000  |       |  |          | 1.04 | 
|Canceled                                                  |  |        | (271,000 | )     |  |          | 1.00 | 
|                                                          |  |        |          |       |  |          |      | 
|Outstanding and exercisable at December 31, 2001 and 2000 |  |        |         |       |  | $        |     | 
|                                                          |  |        |          |       |  |          |      | 

| |                                                                                                                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Such options are not included in the computation of diluted earnings per
share for the years ended December 31, 1999. As of December 31, 2001 and
2000, no options were outstanding under the Stock Option Plan.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company applies APB Opinion No. 25 and related interpretations in
accounting for its plans. The Company did not have any compensation cost
that has been charged against income for its plans in 2001, 2000 and 1999.
Had compensation cost for the Companys stock-based compensation plans been
determined based on the fair value at the grant dates for awards under those
plans consistent with the method of SFAS No. 123, the Companys pro forma
net loss and loss per common share-basic would have been the same as
reported.

13. INCOME TAXES

| |                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | A reconciliation of the income tax benefit with amounts determined by
applying the statutory U.S. Federal income tax rate to consolidated loss
before taxes is as follows:

|                                             |  |      |            |      |  |      |            |   |  |   |            |  
|-------------------------------------------- |  | ---- | ---------- | ---- |  | ---- | ---------- | - |  | - | ---------- | -
|                                             |  | 2001 |            | 2000 |  | 1999
|                                             |  |      |            |      |  |     
|Tax benefit (expense) at U.S. statutory rate |  | $    | (1,511,107 | )    |  | $    | 6,399,031  |   |  | $ | 6,284,023  |  
|(Increase) decrease in valuation allowance   |  |      | 1,479,599  |      |  |      | (6,387,636 | ) |  |   | (5,481,709 | )
|Other                                        |  |      | 31,508     |      |  |      | (11,395    | ) |  |   | (802,314   | )
|                                             |  |      |            |      |  |      |            |   |  |   |            |  
|Total                                        |  | $    |           |      |  | $    |           |   |  | $ |           |  
|                                             |  |      |            |      |  |      |            |   |  |   |            |  

F-23



---



##### Table of Contents



| |                                                                                                                                                                                                                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The following summarizes the effect of deferred income tax items and the
impact of temporary differences between amounts of assets and liabilities
for financial reporting purposes and such amounts as measured by tax laws.
The tax items comprising the Companys net deferred tax asset as of December
31, 2001 are as follows:

|                          |                                                   |   |          |         |            |   |             |            |  |   |             |            | 
|------------------------- | ------------------------------------------------- | - | -------- | ------- | ---------- | - | ----------- | ---------- |  | - | ----------- | ---------- | 
|                          |                                                   |   | Current  |         | Noncurrent |   | Total      
|                          |                                                   |   |          |         |            |   |            
|Deferred tax assets:      |                                                   |   |          |         |            |   |             |            |  |   |             |           
|                          | Accrued and other liabilities                     |   | $        | 236,070 |            |   | $           |           |  |   | $           | 236,070    | 
|                          | Bad debt reserve                                  |   |          | 17,150  |            |   |             |           |  |   |             | 17,150     | 
|                          | Difference between book and tax
basis of property |   |          |        |            |   |             | 2,323,718  |  |   |             | 2,323,718  | 
|                          | AMT/FICA credits not utilized                     |   |          |        |            |   |             | 715,015    |  |   |             | 715,015    | 
|                          | NOL carryforward                                  |   |          |        |            |   |             | 24,276,346 |  |   |             | 24,276,346 | 
|                          | Bond discount                                     |   |          |        |            |   |             | 1,929,495  |  |   |             |            | 
|                          | Other                                             |   |          |        |            |   |             | 55,948     |  |   |             | 55,948     | 
|                          |                                                   |   |          |         |            |   |             |            |  |   |             |           
|                          |                                                   |   | 253,220  |         |            |   | 29,300,522  |            |  |   | 29,553,742  |           
|                          |                                                   |   |          |         |            |   |             |            |  |   |             |           
|Deferred tax liabilities: |                                                   |   |          |         |            |   |             |            |  |   |             |           
|                          | Prepaid expenses                                  |   |          | 772,360 |            |   |             |           |  |   |             | 772,360    | 
|                          |                                                   |   |          |         |            |   |             |            |  |   |             |           
|                          |                                                   |   | 772,360  |         |            |   |            |            |  |   | 772,360     |           
|                          |                                                   |   |          |         |            |   |             |            |  |   |             |           
|                          |                                                   |   | (519,140 | )       |            |   | 29,300,522  |            |  |   | 28,781,382  |           
|Less: valuation allowance |                                                   |   | 519,140  |         |            |   | (29,300,522 | )          |  |   | (28,781,382 | )         
|                          |                                                   |   |          |         |            |   |             |            |  |   |             |           
|Net                       |                                                   | $ |         |         |            | $ |            |            |  | $ |            |           
|                          |                                                   |   |          |         |            |   |             |            |  |   |             |           

The tax items comprising the Companys net deferred tax asset as of December
31, 2000 are as follows:

|                          |                                                   |   |           |           |            |   |             |            |  |   |             |            | 
|------------------------- | ------------------------------------------------- | - | --------- | --------- | ---------- | - | ----------- | ---------- |  | - | ----------- | ---------- | 
|                          |                                                   |   | Current   |           | Noncurrent |   | Total      
|                          |                                                   |   |           |           |            |   |            
|Deferred tax assets:      |                                                   |   |           |           |            |   |             |            |  |   |             |           
|                          | Accrued and other liabilities                     |   | $         | 650,280   |            |   | $           |           |  |   | $           | 650,280    | 
|                          | Bad debt reserve                                  |   |           | 53,715    |            |   |             |           |  |   |             | 53,715     | 
|                          | FICA credits not utilized                         |   |           |          |            |   |             | 614,868    |  |   |             | 614,868    | 
|                          | NOL carryforward                                  |   |           |          |            |   |             | 39,029,518 |  |   |             | 39,029,518 | 
|                          | Other                                             |   |           |          |            |   |             | 372,814    |  |   |             | 372,814    | 
|                          |                                                   |   |           |           |            |   |             |            |  |   |             |           
|                          |                                                   |   | 703,995   |           |            |   | 40,017,200  |            |  |   | 40,721,195  |           
|                          |                                                   |   |           |           |            |   |             |            |  |   |             |           
|Deferred tax liabilities: |                                                   |   |           |           |            |   |             |            |  |   |             |           
|                          | Difference between book and
tax basis of property |   |           |          |            |   |             | 8,441,062  |  |   |             | 8,441,062  | 
|                          | Intangibles                                       |   |           |           |            |   |             | 710,827    |  |   |             | 710,827    | 
|                          | Prepaid expenses                                  |   |           | 1,228,452 |            |   |             |           |  |   |             | 1,228,452  | 
|                          | Differences from flow through entity              |   |           |          |            |   |             | 98,482     |  |   |             | 98,482     | 
|                          |                                                   |   |           |           |            |   |             |            |  |   |             |           
|                          |                                                   |   | 1,228,452 |           |            |   | 9,250,371   |            |  |   | 10,478,823  |           
|                          |                                                   |   |           |           |            |   |             |            |  |   |             |           
|                          |                                                   |   | (524,457  | )         |            |   | 30,766,829  |            |  |   | 30,242,372  |           
|Less: valuation allowance |                                                   |   | 524,457   |           |            |   | (30,766,829 | )          |  |   | (30,242,372 | )         
|                          |                                                   |   |           |           |            |   |             |            |  |   |             |           
|Net                       |                                                   | $ |          |           |            | $ |            |            |  | $ |            |           
|                          |                                                   |   |           |           |            |   |             |            |  |   |             |           

F-24



---



##### Table of Contents



| |                                                                                                                                                                                                                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Due to the uncertainty of the realization of certain tax carry forward
items, a valuation allowance has been
established in the amount of $28.8 million at December 31, 2001.
Realization of a significant portion of the assets offset by the valuation
allowance is dependent on the Company generating sufficient taxable income
prior to expiration of the loss and credit carry forwards.

| |                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | As of December 31, 2001, the Company had a consolidated net operating loss
carry forward of approximately $69.4 million and a tax credit carry forward
of $0.7 million, which are available to offset future tax through 2021. The
availability of the loss and credit carry forwards may be subject to
limitations under sections 382 and 383 of the Internal Revenue Code in the
event of a significant change of ownership.

14. CONTINGENCIES

| |                                                                                                                                                                                                                                         
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Financial Instruments With Off-Balance Sheet Risk-In the normal course of
business, the Company is a party to financial instruments with off-balance
sheet risk which are not reflected in the accompanying consolidated balance
sheets.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company has an irrevocable letter of credit with a bank in the amount of
$164,000 that expires on November 1, 2002 and may be drawn upon by the State
of Nevada Insurance Division in the event that Fitzgeralds Reno, Nevada Club
or Fitzgeralds Las Vegas fails to pay workers compensation benefits to its
employees under a self-insurance program. The letter of credit is secured
with a certificate of deposit for $164,000.

| |                                                                                                                                                                                                                                                                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company has an irrevocable letter of credit with an insurance company in
the amount of $600,000 which expires on October 13, 2002 and serves as
collateral for a $2.5 million surety bond, enabling the Company to remain a
participant in the State of Nevada self-insured workers compensation
program. The letter of credit is secured with a certificate of deposit for
$600,000.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company has irrevocable letters of credit with a bank in the amount of
$430,000 and $640,822. Such letters, which expire on March 31, 2002 and
April 1, 2002, respectively, may be drawn by an insurance company in the
event that Fitzgeralds Tunica or Fitzgeralds Black Hawk fails to pay
workers compensation benefits to its employees. The letters of credit are
secured with certificates of deposit for $430,000 and $640,822.

| |                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | At December 31, 2001, no amounts were drawn on the above investment or
letters of credit, and management does not expect any adverse effects on the
Companys operating results.

| |              
| | -------------
| | Legal Matters

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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

F-25



---



##### Table of Contents



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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. After resuming the hearing on
November 29, 2001, the Reno City Council again recessed and continued the
proceedings to January 4, 2002, at which time the hearing was completed and
the matter was submitted for decision of the Reno City Council. On February
19, 2002, the Reno City Council voted on the matter. By a 4-3 decision, the
Reno City Council concluded that the ReTRAC Project would confer a special
benefit on Fitzgeralds Reno. On a 5-2 decision, however, the Reno City
Council determined that the value of the special benefit in light of the
evidence presented was $1.00. The decisions of the Reno City Council are
subject to judicial review, a petition for which must be filed within thirty
days of the decisions.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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 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 allege 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, Fitzgeralds Reno asserts 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 filed a reply in
support of its motion to dismiss on or about November 12, 2001. On February
15, 2002,
the United States District Court held a hearing to consider the Citys
motion to dismiss. At the hearing,

F-26



---



##### Table of Contents



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | the Defendant FHWA and the Defendant
NDOT joined the Citys motion to dismiss. The Citys motion to dismiss was
fully argued and submitted to the Court for a ruling. On March 11, 2002,
the Court issued an order dismissing all of the Companys claims against the
City. The Court ruled the ReTRAC Project must comply with NEPA but the
specific federal aid statute under which the City is receiving funding for
the ReTRAC Project does not explicitly require the local government body to
consent to suit under NEPA. Accordingly, the Court found the City is not a
proper party in the case. The Court, however, denied the motions to dismiss
by FHWA and NDOT stating the Company is entitled to proceed on the claims
against those agencies for a violation of NEPA.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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 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.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 101 Main then obtained an order to show cause why Plaintiffs and their
attorneys should not be held in contempt. Before the hearing, Plaintiffs
amended the complaint to omit 101 Main as a defendant, and Plaintiffs filed
two motions with the Bankruptcy Court, which sought (i) leave to file a late
claim in the 101 Main bankruptcy case and (ii) relief from the automatic
stay to add 101 Main as a party defendant to the amended complaint. The
amended complaint sought damages, in an amount alleged to exceed
$300,000,000, against the defendants for, among other matters, RICO and
conspiracy.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | At a December 10, 2001 hearing, the Bankruptcy Court found that Plaintiffs
had violated the automatic stay and denied Plaintiffs motion for leave to
file a late claim with the Bankruptcy Court. Furthermore, at this hearing
the Bankruptcy Court denied Plaintiffs motion for relief from the automatic
stay to add 101 Main as a party defendant to the amended complaint, although
it did allow Plaintiffs to obtain discovery from 101 Main, its agents and
representatives in conjunction with the prosecution of the amended complaint
against other named defendants. On March 28, 2002, the Bankruptcy Court
entered its orders in this regard, which orders are now final and
non-appealable.

F-27



---



##### Table of Contents



| |                                                                                                                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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. The Company has not incurred any material
amounts for liability claims or workers compensation claims that would be
subject to reimbursement by Reliance. However, the statute of limitation
has not expired for filing claims and it is unclear at this time what the
insurance coverage would be from Reliance, if any, in the event that a
future claim is filed that would be large enough to result in an insurance
reimbursement from Reliance, or if there is insurance coverage for an
existing claim that is currently under the threshold level for
reimbursement, but increases in the future to an amount eligible for
reimbursement. The reimbursement threshold per claim is $25,000 and
$100,000 for liability claims and worker compensation claims, respectively.
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,
2001, the Bankruptcy Court granted the motion. Since the transactions
contemplated by the Purchase Agreement were consummated on December 6, 2001,
the Company believes Inns will assert an unsecured claim in the Bankruptcy
Cases based upon the liquidated damages provision of the franchise
agreement, (approximately $1.6 million). 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.

15. SEGMENT INFORMATION

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company is a gaming holding company that until December 6, 2001 owned
and operated four Fitzgeralds-brand casino-hotels, in downtown Las Vegas,
Nevada, Reno, Nevada, Tunica, Mississippi, and Black Hawk, Colorado. The
Company identifies its business in four segments based on geographic
location. The Company markets in each of its segments primarily to
middle-market customers, emphasizing its Fitzgeralds brand and its
Fitzgeralds Irish Luck theme. The major products offered in each segment
are: casino and hotel (except for Fitzgeralds Black Hawk) and food and
beverage.

| |                                                                                                                                                                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The accounting policies of each business segment are the same as those
described in the summary of significant accounting policies. There are
minimal inter-segment sales. The Company evaluates business segment
performance based on EBITDA. Corporate costs are allocated to the business
segments through management fees.

| |                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------
| | Assets are principally cash and cash equivalents and property and equipment.
No single customer accounts for more than 10% of revenue.

| |                                                                                                      
| | -----------------------------------------------------------------------------------------------------
| | A summary of the Companys operations by business segment for 2001, 2000 and
1999 is presented below:

F-28



---



##### Table of Contents



|                        |                        |   |                         |        |      |   |         |        |  |   |         |        | 
|----------------------- | ---------------------- | - | ----------------------- | ------ | ---- | - | ------- | ------ |  | - | ------- | ------ | 
|                        |                        |   | Year Ended December 31,
|                        |                        |   |                        
|                        |                        |   | 2001                    |        | 2000 |   | 1999   
|                        |                        |   |                         |        |      |   |        
|                        |                        |   | (in thousands)         
|Net operating revenues: |                        |   |                         |        |      |   |         |        |  |   |         |       
|                        | Fitzgeralds Las Vegas  |   | $                       | 49,440 |      |   | $       | 52,139 |  |   | $       | 50,910 | 
|                        | Fitzgeralds Tunica     |   |                         | 76,713 |      |   |         | 75,062 |  |   |         | 69,582 | 
|                        | Fitzgeralds Reno       |   |                         | 38,333 |      |   |         | 40,241 |  |   |         | 39,068 | 
|                        | Fitzgeralds Black Hawk |   |                         | 31,511 |      |   |         | 32,506 |  |   |         | 32,285 | 
|                        | Other                  |   |                         | 34     |      |   |         | 154    |  |   |         |       | 
|                        |                        |   |                         |        |      |   |         |        |  |   |         |       
|Total                   |                        | $ | 196,031                 |        |      | $ | 200,102 |        |  | $ | 191,845 |       
|                        |                        |   |                         |        |      |   |         |        |  |   |         |       

|                                  |                           |                  |       |                         |        |      |        |        |        |   |        |        |        | 
|--------------------------------- | ------------------------- | ---------------- | ----- | ----------------------- | ------ | ---- | ------ | ------ | ------ | - | ------ | ------ | ------ | 
|                                  |                           |                  |       | Year Ended December 31,
|                                  |                           |                  |       |                        
|                                  |                           |                  |       | 2001                    |        | 2000 |        | 1999  
|                                  |                           |                  |       |                         |        |      |        |       
|                                  |                           |                  |       | (in thousands)         
|Income (loss) from operations(1): |                           |                  |       |                         |        |      |        |        |        |   |        |       
|                                  | Fitzgeralds Las Vegas     |                  | $     | (24,040                 | )      |      | $      | (7     | )      |   | $      | (1,115 | )     
|                                  | Fitzgeralds Tunica        |                  |       | 41,972                  |        |      |        | 9,018  |        |   |        | 5,322  |       
|                                  | Fitzgeralds Reno(2)       |                  |       | (11,796                 | )      |      |        | 2,716  |        |   |        | 2,151  |       
|                                  | Fitzgeralds Black Hawk(3) |                  |       | 7,224                   |        |      |        | 6,385  |        |   |        | 7,517  |       
|                                  | Other                     |                  |       | (3,317                  | )      |      |        | (3,581 | )      |   |        | (2,322 | )     
|                                  |                           |                  |       |                         |        |      |        |        |        |   |        |       
|                                  |                           | Total Properties |       |                         | 10,043 |      |        |        | 14,531 |   |        |        | 11,553 | 
|                                  | Nevada Club               |                  |       | (74                     | )      |      |        | (50    | )      |   |        | (90    | )     
|                                  | Harolds Club              |                  |       |                        |        |      |        |       |        |   |        | (64    | )     
|                                  |                           |                  |       |                         |        |      |        |        |        |   |        |       
|Total                             |                           | $                | 9,969 |                         |        | $    | 14,481 |        |        | $ | 11,399 |       
|                                  |                           |                  |       |                         |        |      |        |        |        |   |        |       

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

|                                    |                                                  |   |       |         |   |   |         |         |   |   |         |         |   | 
|----------------------------------- | ------------------------------------------------ | - | ----- | ------- | - | - | ------- | ------- | - | - | ------- | ------- | - | 
|                                    | Total segment operating income                   |   | $     | 13,356  |   |   | $       | 18,112  |   |   | $       | 13,875  |  
|                                    | Nevada Club                                      |   |       | (74     | ) |   |         | (50     | ) |   |         | (90     | )
|                                    | Harolds Club                                     |   |       |        |   |   |         |        |   |   |         | (64     | )
|                                    | Other (4)                                        |   |       | (7,313  | ) |   |         | (7,581  | ) |   |         | (6,320  | )
|                                    | Eliminations                                     |   |       | (11,773 | ) |   |         | 11,572  |   |   |         | 17,240  |  
|                                    | Interest income                                  |   |       | 155     |   |   |         | 1,040   |   |   |         | 536     |  
|                                    | Interest income  shareholder and inter-company  |   |       | 1,504   |   |   |         | 29,659  |   |   |         | 31,879  |  
|                                    | Interest expense                                 |   |       | (4,682  | ) |   |         | (31,843 | ) |   |         | (29,704 | )
|                                    | Interest expense  shareholder and inter-company |   |       |        |   |   |         | (29,586 | ) |   |         | (31,808 | )
|                                    | Loss on sale of assets                           |   |       | (3,030  | ) |   |         | (50     | ) |   |         |        |  
|                                    | Other income (expense)                           |   |       | 16,174  |   |   |         | (7,659  | ) |   |         | (13,498 | )
|                                    |                                                  |   |       |         |   |   |         |         |   |   |         |        
|Net income (loss) before income tax |                                                  | $ | 4,317 |         |   | $ | (16,386 | )       |   | $ | (17,954 | )      
|                                    |                                                  |   |       |         |   |   |         |         |   |   |         |        

F-29



---



##### Table of Contents



|                                                 |                          |                        |        |                         |        |      |         |        |        |   |         |        |        | 
|------------------------------------------------ | ------------------------ | ---------------------- | ------ | ----------------------- | ------ | ---- | ------- | ------ | ------ | - | ------- | ------ | ------ | 
|                                                 |                          |                        |        | Year Ended December 31,
|                                                 |                          |                        |        |                        
|                                                 |                          |                        |        | 2001                    |        | 2000 |         | 1999  
|                                                 |                          |                        |        |                         |        |      |         |       
|                                                 |                          |                        |        | (in thousands)         
|EBITDA (5):                                      |                          |                        |        |                         |        |      |         |        |        |   |         |       
|                                                 | Fitzgeralds Las Vegas(6) |                        | $      | 1,809                   |        |      | $       | 3,692  |        |   | $       | 2,594  |       
|                                                 | Fitzgeralds Tunica       |                        |        | 18,118                  |        |      |         | 15,253 |        |   |         | 11,553 |       
|                                                 | Fitzgeralds Reno         |                        |        | (11,748                 | )      |      |         | 4,947  |        |   |         | 4,588  |       
|                                                 | Fitzgeralds Black Hawk   |                        |        | 7,641                   |        |      |         | 8,138  |        |   |         | 9,303  |       
|                                                 | Other(2)                 |                        |        | (6,229                  | )      |      |         | (3,521 | )      |   |         | (2,281 | )     
|                                                 |                          |                        |        |                         |        |      |         |        |        |   |         |       
|                                                 |                          | Total Properties       |        |                         | 9,591  |      |         |        | 28,509 |   |         |        | 25,757 | 
|                                                 | Nevada Club              |                        |        | (74                     | )      |      |         | (50    | )      |   |         | (90    | )     
|                                                 | Harolds Club             |                        |        |                        |        |      |         |       |        |   |         | (64    | )     
|                                                 |                          |                        |        |                         |        |      |         |        |        |   |         |       
|                                                 |                          | Total EBITDA           |        |                         | 9,517  |      |         |        | 28,459 |   |         |        | 25,603 | 
|                                                 | Adjustments to EBITDA(7) |                        |        | 19,917                  |        |      |         | 3,401  |        |   |         | 2,325  |       
|                                                 |                          |                        |        |                         |        |      |         |        |        |   |         |       
|                                                 |                          | Adjusted EBITDA        |        | $                       | 29,434 |      |         | $      | 31,860 |   |         | $      | 27,928 | 
|                                                 |                          |                        |        |                         |        |      |         |        |        |   |         |       
|                                                
|Segment depreciation and amortization:           |                          |                        |        |                         |        |      |         |        |        |   |         |       
|                                                 |                          | Fitzgeralds Las Vegas  |        | $                       |       |      |         | $      | 3,698  |   |         | $      | 3,709  | 
|                                                 |                          | Fitzgeralds Tunica     |        |                         |       |      |         |        | 6,235  |   |         |        | 6,231  | 
|                                                 |                          | Fitzgeralds Reno       |        |                         |       |      |         |        | 2,231  |   |         |        | 2,437  | 
|                                                 |                          | Fitzgeralds Black Hawk |        |                         |       |      |         |        | 1,755  |   |         |        | 1,786  | 
|                                                 |                          | Other                  |        |                         | 34     |      |         |        | 59     |   |         |        | 40     | 
|                                                 |                          |                        |        |                         |        |      |         |        |        |   |         |       
|Total                                            |                          | $                      | 34     |                         |        | $    | 13,978  |        |        | $ | 14,203  |       
|                                                 |                          |                        |        |                         |        |      |         |        |        |   |         |       
|Segment assets:                                  |                          |                        |        |                         |        |      |         |        |        |   |         |       
|                                                 |                          | Fitzgeralds Las Vegas  |        | $                       | 1,530  |      |         | $      | 42,657 |   |         | $      | 46,788 | 
|                                                 |                          | Fitzgeralds Tunica     |        |                         | 764    |      |         |        | 65,943 |   |         |        | 69,869 | 
|                                                 |                          | Fitzgeralds Reno       |        |                         | 18,007 |      |         |        | 34,579 |   |         |        | 32,020 | 
|                                                 |                          | Fitzgeralds Black Hawk |        |                         | 1,027  |      |         |        | 38,728 |   |         |        | 40,371 | 
|                                                 |                          | Other                  |        |                         | 30,044 |      |         |        | 6,141  |   |         |        | 17,749 | 
|                                                 |                          |                        |        |                         |        |      |         |        |        |   |         |       
|Total                                            |                          | $                      | 51,372 |                         |        | $    | 188,048 |        |        | $ | 206,797 |       
|                                                 |                          |                        |        |                         |        |      |         |        |        |   |         |       
|Expenditures for additions to long-lived
assets: |                          |                        |        |                         |        |      |         |        |        |   |         |       
|                                                 |                          | Fitzgeralds Las Vegas  |        | $                       | 249    |      |         | $      | 1,619  |   |         | $      | 1,635  | 
|                                                 |                          | Fitzgeralds Tunica     |        |                         | 627    |      |         |        | 6,199  |   |         |        | 2,393  | 
|                                                 |                          | Fitzgeralds Reno       |        |                         | 730    |      |         |        | 4,103  |   |         |        | 1,387  | 
|                                                 |                          | Fitzgeralds Black Hawk |        |                         | 178    |      |         |        | 1,518  |   |         |        | 687    | 
|                                                 |                          | Other                  |        |                         | 31     |      |         |        | 25     |   |         |        | 82     | 
|                                                 |                          |                        |        |                         |        |      |         |        |        |   |         |       
|Total                                            |                          | $                      | 1,815  |                         |        | $    | 13,464  |        |        | $ | 6,184   |       
|                                                 |                          |                        |        |                         |        |      |         |        |        |   |         |       



---

|(1) |  | Includes loss on sale of assets of $25.3 million for Fitzgeralds
Las Vegas and $24.1 million and $12.7 million for Fitzgeralds Tunica
and Fitzgeralds Black Hawk, respectively to Majestic in 2001. Such
gains are included in Reorganization items.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Includes write down of assets of $14.8 million in 2001 at
Fitzgeralds Reno and excludes inter-company debt write-off of $3.2
million from Nevada Club in 1999.                                                                                      

F-30



---



##### Table of Contents



|(3) |  | Includes write down of assets of $13.0 million in 2001 at
Fitzgeralds Black Hawk.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(4) |  | Other includes (i) corporate expenses not allocated to the
Operating Properties for all periods presented, which includes $3.2
million and $2.2 million of pre-petition professional fees and
expenses incurred with the Companys restructuring for 2000 and 1999,
respectively and $3.5 million and $0.1 million of post-petition
professional fees and expenses, net of interest income included in
reorganization items for 2001 and 2000, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|   
|   
|   
|(5) |  | 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 generally accepted accounting principles
(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.                                             
|   
|   
|   
|   
|(6) |  | Fitzgeralds Las Vegas invested $0.8 million, $0.9 million and
$0.9 million for 2001, 2000 and 1999, respectively, in FSE. Such
investment was charged against earnings as a selling, general and
administrative expense.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|   
|   
|   
|(7) |  | Adjustments to EBITDA include (i) exclusion of EBITDA for Nevada
Club for all periods presented; (ii) exclusion of EBITDA for Harolds
Club for 1999 (iii) exclusion of write down of Nevada Club assets of
$0.03 million in 1999; (iv) exclusion of Harolds Club lease
settlements of $0.06 million in 1999 (v) exclusion of pre-petition
professional fees and expenses incurred with the Companys
restructuring of $3.2 million and $2.2 million for 2000 and 1999,
respectively; (vi) exclusion of $0.1 million of post-petition
professional fees and expenses, net of interest income included in
reorganization items for 2000; (vii) exclusion of $7.9 million which
includes gain on sale of assets to Majestic of $11.4 million offset by
$3.5 million of post-petition professional fees and expenses, net of
interest income included in reorganization items for 2001; and (viii)
exclusion of write down of assets of $14.8 million and $13.0 million
at Fitzgeralds Reno and Fitzgeralds Black Hawk, respectively for 2001.

16. GUARANTEE OF THE NOTES

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Companys obligations under the Notes are fully and unconditionally
guaranteed, jointly and severally, by all subsidiaries of the Company (other
than NCI). Subject to certain exceptions, the guarantee of the Notes is
secured by a lien on substantially all assets of the Guarantor Subsidiaries
other than certain excluded assets, as defined. Such excluded assets
include, among other things, (i) cash, deposit accounts and other cash
equivalents of $25,608,202 and $18,282,751 at December 31, 2001 and 2000,
respectively; (ii) property and equipments with a net book value of
$3,203,237 and $3,978,522 at December 31, 2001 and 2000, respectively,
securing certain non-recourse indebtedness; and (iii) any agreements,
permits, licenses or the like that cannot be subjected to a lien without the
consent of third parties, which consent is not obtainable by the Company
(including all gaming licenses of the Company and its restricted
subsidiaries as defined), provided that excluded assets do not include the
proceeds of the assets under clauses (ii) or (iii) or any other collateral
to the extent such proceeds do not constitute excluded assets under clause
(i) above. On December 5, 2000, the Company commenced the Bankruptcy Cases.
(see Note 2).

F-31



---



##### Table of Contents



| |                                                                                                                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Condensed consolidating financial statement information for Fitzgeralds
Gaming Corporation, the Guarantor Subsidiaries, the Non-Guarantor
Subsidiaries and Eliminating Entries (which consist principally of the
elimination of inter-company loan and investment accounts) follows:
|
| | Condensed consolidating balance sheet information as of December 31, 2001:                                                                                                                                                                                                          

|                                         |                                     |                           |             |             |            |              |             |              |           |             |        |              |       |   |              |              |             |   |              |             |            | 
|---------------------------------------- | ----------------------------------- | ------------------------- | ----------- | ----------- | ---------- | ------------ | ----------- | ------------ | --------- | ----------- | ------ | ------------ | ----- | - | ------------ | ------------ | ----------- | - | ------------ | ----------- | ---------- | 
|                                         |                                     |                           |             | Fitzgeralds |            |              |             |              |           | Non         |        |              |       |   |              |              |             |  
|                                         |                                     |                           |             | Gaming      |            | Guarantor    |             | Guarantor    |           | Eliminating |        | Consolidated
|                                         |                                     |                           |             | Corporation |            | Subsidiaries |             | Subsidiaries |           | Entries     |        | Total       
|                                         |                                     |                           |             |             |            |              |             |              |           |             |        |             
|ASSETS                                   |                                     |                           |             |             |            |              |             |              |           |             |        |              |       |   |              |              |             |   |              |            
|                                        
|                                        
|                                        
|                                        
|                                        
|CURRENT ASSETS:                          |                                     |                           |             |             |            |              |             |              |           |             |        |              |       |   |              |              |             |   |              |            
|                                         | Cash and cash equivalents           |                           | $           | 20,401,627  |            |              | $           | 5,206,575    |           |             | $      | 810          |       |   | $            |             |             |   | $            | 25,609,012  |           
|                                         | Accounts and notes receivable,
net  |                           |             | 16,091      |            |              |             | 439,668      |           |             |        |             |       |   |              |             |             |   |              | 455,759     |           
|                                         | Inventories                         |                           |             |            |            |              |             | 493,020      |           |             |        |             |       |   |              |             |             |   |              | 493,020     |           
|                                         | Prepaid and other current assets    |                           |             | 65,612      |            |              |             | 2,879,581    |           |             |        |             |       |   |              |             |             |   |              | 2,945,193   |           
|                                         |                                     |                           |             |             |            |              |             |              |           |             |        |              |       |   |              |              |             |   |              |            
|                                         |                                     | Total current assets      |             |             | 20,483,330 |              |             |              | 9,018,844 |             |        |              | 810   |   |              |              |            |   |              |             | 29,502,984 | 
|PROPERTY AND EQUIPMENT, NET              |                                     |                           | 55,397      |             |            |              |            |              |           |             |       |              |       |   |             |              |             |   | 55,397       |            
|NET ASSETS HELD FOR SALE                 |                                     |                           |            |             |            |              | 12,000,000  |              |           |             |       |              |       |   |              |              |             |   | 12,000,000   |            
|OTHER ASSETS                             |                                     |                           | 55,671,963  |             |            |              | 34,679,361  |              |           |             |       |              |       |   | (80,537,572  | )(b)         |             |   | 9,813,752    |            
|                                         |                                     |                           |             |             |            |              |             |              |           |             |        |              |       |   |              |              |             |   |              |            
|TOTAL                                    |                                     | $                         | 76,210,690  |             |            | $            | 55,698,205  |              |           | $           | 810    |              |       | $ | (80,537,572  | )            |             | $ | 51,372,133   |            
|                                         |                                     |                           |             |             |            |              |             |              |           |             |        |              |       |   |              |              |             |   |              |            
|LIABILITIES AND STOCKHOLDERS
DEFICIENCY |                                     |                           |             |             |            |              |             |              |           |             |        |              |       |   |              |              |             |   |              |            
|                                        
|                                        
|                                        
|                                        
|                                        
|CURRENT LIABILITIES:                     |                                     |                           |             |             |            |              |             |              |           |             |        |              |       |   |              |              |             |   |              |            
|                                         | Current portion of long-term
debt   |                           | $           |            |            |              | $           | 110,791      |           |             | $      |             |       |   | $            |             |             |   |              | 110,791     |           
|                                         | Accounts payable, accrued
and other |                           |             | 18,005,758  |            |              |             | 8,165,835    |           |             |        | 4,066        |       |   |              | (17,664,018  | )(a)        |   |              | 8,511,641   |           
|                                         |                                     |                           |             |             |            |              |             |              |           |             |        |              |       |   |              |              |             |   |              |            
|                                         |                                     | Total current liabilities |             |             | 18,005,758 |              |             |              | 8,276,626 |             |        |              | 4,066 |   |              |              | (17,664,018 | ) |              |             | 8,622,432  | 
|                                         |                                     |                           |             |             |            |              |             |              |           |             |        |              |       |   |              |              |             |   |              |            
|LIABILITIES SUBJECT TO
COMPROMISE        |                                     |                           | 112,447,753 |             |            |              | 104,314,069 |              |           |             |       |              |       |   | (119,426,501 | )(a)         |             |   | 97,335,321   |            
|LONG TERM DEBT, Net of
current portion   |                                     |                           |            |             |            |              | 2,295,588   |              |           |             |       |              |       |   |             |              |             |   | 2,295,588    |            
|                                         |                                     |                           |             |             |            |              |             |              |           |             |        |              |       |   |              |              |             |   |              |            
|                                         | Total liabilities                   |                           |             | 130,453,511 |            |              |             | 114,886,283  |           |             |        | 4,066        |       |   |              | (137,090,519 | )           |   |              | 108,253,341 |           
|CUMULATIVE REDEEMABLE
PREFERRED STOCK    |                                     |                           | 43,902,161  |             |            |              |            |              |           |             |       |              |       |   |             |              |             |   | 43,902,161   |            
|STOCKHOLDERS DEFICIENCY                 |                                     |                           | (98,144,982 | )           |            |              | (59,188,078 | )            |           |             | (3,256 | )            |       |   | 56,552,947   | (c)          |             |   | (100,783,369 | )           |           
|                                         |                                     |                           |             |             |            |              |             |              |           |             |        |              |       |   |              |              |             |   |              |            
|TOTAL                                    |                                     | $                         | 76,210,690  |             |            | $            | 55,698,205  |              |           | $           | 810    |              |       | $ | (80,537,572  | )            |             | $ | 51,372,133   |            
|                                         |                                     |                           |             |             |            |              |             |              |           |             |        |              |       |   |              |              |             |   |              |            



---

|(a) |  | To eliminate inter-company accounts and notes payable.                                                           
|--- |  | -----------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(b) |  | To eliminate inter-company accounts and notes receivable, investment in
subsidiaries and other capitalized costs.
|   
|   
|   
|   
|(c) |  | To eliminate investment in subsidiaries, other capitalized costs and
company deferred interest income.           

F-32



---



##### Table of Contents



Condensed consolidating balance sheet information as of December 31, 2000:

|                                         |                                     |                           |             |             |           |              |             |              |           |             |         |              |        |   |              |              |            |   |             |             |            | 
|---------------------------------------- | ----------------------------------- | ------------------------- | ----------- | ----------- | --------- | ------------ | ----------- | ------------ | --------- | ----------- | ------- | ------------ | ------ | - | ------------ | ------------ | ---------- | - | ----------- | ----------- | ---------- | 
|                                         |                                     |                           |             | Fitzgeralds |           |              |             |              |           | Non         |         |              |        |   |              |              |            |  
|                                         |                                     |                           |             | Gaming      |           | Guarantor    |             | Guarantor    |           | Eliminating |         | Consolidated
|                                         |                                     |                           |             | Corporation |           | Subsidiaries |             | Subsidiaries |           | Entries     |         | Total       
|                                         |                                     |                           |             |             |           |              |             |              |           |             |         |             
|ASSETS                                   |                                     |                           |             |             |           |              |             |              |           |             |         |              |        |   |              |              |            |   |             |            
|                                        
|                                        
|                                        
|                                        
|                                        
|CURRENT ASSETS:                          |                                     |                           |             |             |           |              |             |              |           |             |         |              |        |   |              |              |            |   |             |            
|                                         | Cash and cash equivalents           |                           | $           | 2,168,037   |           |              | $           | 6,002,842    |           |             | $       | 10,509       |        |   | $            |             |            |   | $           | 8,181,388   |           
|                                         | Accounts and notes
receivable, net  |                           |             | 289,432     |           |              |             | 286,333      |           |             |         |             |        |   |              |             |            |   |             | 575,765     |           
|                                         | Inventories                         |                           |             |            |           |              |             | 471,913      |           |             |         |             |        |   |              |             |            |   |             | 471,913     |           
|                                         | Prepaid and other current
assets    |                           |             | 404,944     |           |              |             | 1,983,575    |           |             |         |             |        |   |              |             |            |   |             | 2,388,519   |           
|                                         |                                     |                           |             |             |           |              |             |              |           |             |         |              |        |   |              |              |            |   |             |            
|                                         |                                     | Total current assets      |             |             | 2,862,413 |              |             |              | 8,744,663 |             |         |              | 10,509 |   |              |              |           |   |             |             | 11,617,585 | 
|PROPERTY AND EQUIPMENT, NET              |                                     |                           | 77,030      |             |           |              | 2,626       |              |           |             |        |              |        |   |             |              |            |   | 79,656      |            
|NET ASSETS HELD FOR SALE                 |                                     |                           |            |             |           |              | 170,388,338 |              |           |             |        |              |        |   |              |              |            |   | 170,388,338 |            
|OTHER ASSETS                             |                                     |                           | 197,871,465 |             |           |              | 16,386,529  |              |           |             | 10,000  |              |        |   | (208,305,790 | )(b)         |            |   | 5,962,204   |            
|                                         |                                     |                           |             |             |           |              |             |              |           |             |         |              |        |   |              |              |            |   |             |            
|TOTAL                                    |                                     | $                         | 200,810,908 |             |           | $            | 195,522,156 |              |           | $           | 20,509  |              |        | $ | (208,305,790 | )            |            | $ | 188,047,783 |            
|                                         |                                     |                           |             |             |           |              |             |              |           |             |         |              |        |   |              |              |            |   |             |            
|LIABILITIES AND STOCKHOLDERS
DEFICIENCY |                                     |                           |             |             |           |              |             |              |           |             |         |              |        |   |              |              |            |   |             |            
|                                        
|                                        
|                                        
|                                        
|                                        
|CURRENT LIABILITIES:                     |                                     |                           |             |             |           |              |             |              |           |             |         |              |        |   |              |              |            |   |             |            
|                                         | Current portion of
long-term debt   |                           | $           |            |           |              | $           | 109,937      |           |             | $       |             |        |   | $            |             |            |   | $           | 109,937     |           
|                                         | Accounts payable, accrued
and other |                           |             | 2,842,743   |           |              |             | 2,507,968    |           |             |         | 13,015       |        |   |              | (1,504,076   | )(c)       |   |             | 3,859,650   |           
|                                         |                                     |                           |             |             |           |              |             |              |           |             |         |              |        |   |              |              |            |   |             |            
|                                         |                                     | Total current liabilities |             |             | 2,842,743 |              |             |              | 2,617,905 |             |         |              | 13,015 |   |              |              | (1,504,076 | ) |             |             | 3,969,587  | 
|                                         |                                     |                           |             |             |           |              |             |              |           |             |         |              |        |   |              |              |            |   |             |            
|LIABILITIES SUBJECT TO
COMPROMISE        |                                     |                           | 258,255,041 |             |           |              | 259,654,258 |              |           |             | 88,240  |              |        |   | (275,127,710 | )(a)         |            |   | 242,869,829 |            
|LONG TERM DEBT,
Net of current portion   |                                     |                           |            |             |           |              | 2,407,023   |              |           |             |        |              |        |   |             |              |            |   | 2,407,023   |            
|                                         |                                     |                           |             |             |           |              |             |              |           |             |         |              |        |   |              |              |            |   |             |            
|                                         | Total liabilities                   |                           |             | 261,097,784 |           |              |             | 264,679,186  |           |             |         | 101,255      |        |   |              | (276,631,786 | )          |   |             | 249,246,439 |           
|CUMULATIVE REDEEMABLE
PREFERRED STOCK    |                                     |                           | 36,406,159  |             |           |              |            |              |           |             |        |              |        |   |             |              |            |   | 36,406,159  |            
|STOCKHOLDERS DEFICIENCY                 |                                     |                           | (96,693,035 | )           |           |              | (69,157,030 | )            |           |             | (80,746 | )            |        |   | 68,325,996   | (d)          |            |   | (97,604,815 | )          
|                                         |                                     |                           |             |             |           |              |             |              |           |             |         |              |        |   |              |              |            |   |             |            
|TOTAL                                    |                                     | $                         | 200,810,908 |             |           | $            | 195,522,156 |              |           | $           | 20,509  |              |        | $ | (208,305,790 | )            |            | $ | 188,047,783 |            
|                                         |                                     |                           |             |             |           |              |             |              |           |             |         |              |        |   |              |              |            |   |             |            



---

|(a) |  | To eliminate inter-company accounts and notes payable.                                                           
|--- |  | -----------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(b) |  | To eliminate inter-company accounts and notes receivable, investment in subsidiaries and other capitalized costs.
|   
|   
|   
|   
|(c) |  | To eliminate inter-company deferred interest income.                                                             
|   
|   
|   
|   
|(c) |  | To eliminate investment in subsidiaries, other capitalized costs and
inter-company deferred interest income.     

F-33



---



##### Table of Contents



Condensed consolidating statement of operations information for the year ended
December 31, 2001:

|                                    |             |   |             |           |              |   |              |             |             |   |              |        |  |   |             |            |   |   |             |             | 
|----------------------------------- | ----------- | - | ----------- | --------- | ------------ | - | ------------ | ----------- | ----------- | - | ------------ | ------ |  | - | ----------- | ---------- | - | - | ----------- | ----------- | 
|                                    |             |   | Fitzgeralds |           |              |   |              |             | Non         |   |              |        |  |   |             |            |  
|                                    |             |   | Gaming      |           | Guarantor    |   | Guarantor    |             | Eliminating |   | Consolidated
|                                    |             |   | Corporation |           | Subsidiaries |   | Subsidiaries |             | Entries     |   | Total       
|                                    |             |   |             |           |              |   |              |             |             |   |             
|OPERATING REVENUES                  |             |   |             |           |              |   |              |             |             |   |              |        |  |   |             |            |   |   |             |            
|Casino                              |             | $ |            |           |              | $ | 182,099,883  |             |             | $ |             |        |  | $ |            |            |   | $ | 182,099,883 |            
|Food and beverage                   |             |   |            |           |              |   | 24,192,643   |             |             |   |             |        |  |   |            |            |   |   | 24,192,643  |            
|Rooms                               |             |   |            |           |              |   | 20,497,604   |             |             |   |             |        |  |   |            |            |   |   | 20,497,604  |            
|Other                               |             |   | 34,435      |           |              |   | 4,364,513    |             |             |   |             |        |  |   |            |            |   |   | 4,398,948   |            
|                                    |             |   |             |           |              |   |              |             |             |   |              |        |  |   |             |            |   |   |             |            
|                                    | Total       |   |             | 34,435    |              |   |              | 231,154,643 |             |   |              |       |  |   |             |           |   |   |             | 231,189,078 | 
|Less promotional allowances         |             |   |            |           |              |   | 35,158,058   |             |             |   |             |        |  |   |            |            |   |   | 35,158,058  |            
|                                    |             |   |             |           |              |   |              |             |             |   |              |        |  |   |             |            |   |   |             |            
|                                    | Net revenue |   |             | 34,435    |              |   |              | 195,996,585 |             |   |              |       |  |   |             |           |   |   |             | 196,031,020 | 
|                                    |             |   |             |           |              |   |              |             |             |   |              |        |  |   |             |            |   |   |             |            
|OPERATING COSTS AND
EXPENSES:       |             |   |             |           |              |   |              |             |             |   |              |        |  |   |             |            |   |   |             |            
|Casino                              |             |   |            |           |              |   | 85,714,549   |             |             |   |             |        |  |   |            |            |   |   | 85,714,549  |            
|Food and beverage                   |             |   |            |           |              |   | 14,432,471   |             |             |   |             |        |  |   |            |            |   |   | 14,432,471  |            
|Rooms                               |             |   |            |           |              |   | 11,745,026   |             |             |   |             |        |  |   |            |            |   |   | 11,745,026  |            
|Other operating expense             |             |   |            |           |              |   | 2,001,112    |             |             |   |             |        |  |   |            |            |   |   | 2,001,112   |            
|Selling, general and
administrative |             |   | 4,524,689   |           |              |   | 51,693,628   |             |             |   | 73,906       |        |  |   | (4,000,000  | )(g)       |   |   | 52,292,223  |            
|Depreciation and
amortization       |             |   | 33,083      |           |              |   | 803          |             |             |   |             |        |  |   |            |            |   |   | 33,886      |            
|Write down of assets                |             |   |            |           |              |   | 27,769,923   |             |             |   |             |        |  |   |            |            |   |   | 27,769,923  |            
|Reorganization items                |             |   | 2,788,952   |           |              |   | (10,716,513  | )           |             |   |             |        |  |   |            |            |   |   | (7,927,561  | )          
|                                    |             |   |             |           |              |   |              |             |             |   |              |        |  |   |             |            |   |   |             |            
|                                    | Total       |   |             | 7,346,724 |              |   |              | 182,640,999 |             |   |              | 73,906 |  |   |             | (4,000,000 | ) |   |             | 186,061,629 | 
|                                    |             |   |             |           |              |   |              |             |             |   |              |        |  |   |             |            |   |   |             |            
|INCOME (LOSS) FROM
OPERATIONS       |             |   | (7,312,289  | )         |              |   | 13,355,586   |             |             |   | (73,906      | )      |  |   | 4,000,000   |            |   |   | 9,969,391   |            
|OTHER INCOME EXPENSE                |             |   |             |           |              |   |              |             |             |   |              |        |  |   |             |            |   |   |             |            
|Interest income                     |             |   | 1,621,596   |           |              |   | 36,690       |             |             |   |             |        |  |   | (1,504,076  | )(h)       |   |   | 154,210     |            
|Interest expense                    |             |   | (4,394,492  | )         |              |   | (287,896     | )           |             |   |             |        |  |   |            |            |   |   | (4,682,388  | )          
|Gain on sale of asset               |             |   |            |           |              |   | (3,029,280   | )           |             |   |             |        |  |   | 1,904,150   | (e)        |   |   | (1,125,130  | )          
|Other income (expense)              |             |   | 16,129,242  |           |              |   | (106,148     | )           |             |   | 151,396      |        |  |   | (16,173,125 | )(f)       |   |   | 1,365       |            
|                                    |             |   |             |           |              |   |              |             |             |   |              |        |  |   |             |            |   |   |             |            
|NET
INCOME                          |             | $ | 6,044,057   |           |              | $ | 9,968,952    |             |             | $ | 77,490       |        |  | $ | (11,773,051 | )          |   | $ | 4,317,448   |            
|                                    |             |   |             |           |              |   |              |             |             |   |              |        |  |   |             |            |   |   |             |            



---

|(e) |  | To eliminate inter-company loss on sale of asset.                                                                                                       
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(f) |  | To eliminate interest in loss of subsidiaries and inter-company management
fee expense.                                                                 
|   
|   
|   
|   
|(g) |  | To eliminate inter-company management fee expense.                                                                                                      
|   
|   
|   
|   
|(h) |  | To eliminate inter-company interest income, inter-company management fee
income, inter-company deferred interest
income, and other inter-company income.

F-34



---



##### Table of Contents



Condensed consolidating statement of operations information for the year ended
December 31, 2000:

|                                    |             |   |             |           |              |   |              |             |             |   |              |        |  |   |             |            |   |   |             |             | 
|----------------------------------- | ----------- | - | ----------- | --------- | ------------ | - | ------------ | ----------- | ----------- | - | ------------ | ------ |  | - | ----------- | ---------- | - | - | ----------- | ----------- | 
|                                    |             |   | Fitzgeralds |           |              |   |              |             | Non         |   |              |        |  |   |             |            |  
|                                    |             |   | Gaming      |           | Guarantor    |   | Guarantor    |             | Eliminating |   | Consolidated
|                                    |             |   | Corporation |           | Subsidiaries |   | Subsidiaries |             | Entries     |   | Total       
|                                    |             |   |             |           |              |   |              |             |             |   |             
|OPERATING
REVENUES:                 |             |   |             |           |              |   |              |             |             |   |              |        |  |   |             |            |   |   |             |            
|Casino                              |             | $ |            |           |              | $ | 181,724,286  |             |             | $ |             |        |  | $ |            |            |   | $ | 181,724,286 |            
|Food and beverage                   |             |   |            |           |              |   | 25,809,006   |             |             |   |             |        |  |   |            |            |   |   | 25,809,006  |            
|Rooms                               |             |   |            |           |              |   | 22,060,254   |             |             |   |             |        |  |   |            |            |   |   | 22,060,254  |            
|Other                               |             |   | 153,571     |           |              |   | 4,396,112    |             |             |   |             |        |  |   |            |            |   |   | 4,549,683   |            
|                                    |             |   |             |           |              |   |              |             |             |   |              |        |  |   |             |            |   |   |             |            
|                                    | Total       |   |             | 153,571   |              |   |              | 233,989,658 |             |   |              |       |  |   |             |           |   |   |             | 234,143,229 | 
|Less promotional allowances         |             |   |            |           |              |   | 34,041,653   |             |             |   |             |        |  |   |            |            |   |   | 34,041,653  |            
|                                    |             |   |             |           |              |   |              |             |             |   |              |        |  |   |             |            |   |   |             |            
|                                    | Net revenue |   |             | 153,571   |              |   |              | 199,948,005 |             |   |              |       |  |   |             |           |   |   |             | 200,101,576 | 
|                                    |             |   |             |           |              |   |              |             |             |   |              |        |  |   |             |            |   |   |             |            
|OPERATING COSTS AND
EXPENSES:       |             |   |             |           |              |   |              |             |             |   |              |        |  |   |             |            |   |   |             |            
|Casino                              |             |   |            |           |              |   | 84,739,719   |             |             |   |             |        |  |   |            |            |   |   | 84,739,719  |            
|Food and beverage                   |             |   |            |           |              |   | 15,398,511   |             |             |   |             |        |  |   |            |            |   |   | 15,398,511  |            
|Rooms                               |             |   |            |           |              |   | 12,793,036   |             |             |   |             |        |  |   |            |            |   |   | 12,793,036  |            
|Other operating expense             |             |   |            |           |              |   | 2,115,389    |             |             |   |             |        |  |   |            |            |   |   | 2,115,389   |            
|Selling, general and
administrative |             |   | 7,564,174   |           |              |   | 52,831,618   |             |             |   | 50,884       |        |  |   | (4,000,000  | )(g)       |   |   | 56,446,676  |            
|Depreciation and amortization       |             |   | 58,259      |           |              |   | 13,919,596   |             |             |   |             |        |  |   |            |            |   |   | 13,977,855  |            
|Reorganization items                |             |   | 110,569     |           |              |   | 38,967       |             |             |   |             |        |  |   |            |            |   |   | 149,536     |            
|                                    |             |   |             |           |              |   |              |             |             |   |              |        |  |   |             |            |   |   |             |            
|                                    | Total       |   |             | 7,733,002 |              |   |              | 181,836,836 |             |   |              | 50,884 |  |   |             | (4,000,000 | ) |   |             | 185,620,722 | 
|                                    |             |   |             |           |              |   |              |             |             |   |              |        |  |   |             |            |   |   |             |            
|INCOME (LOSS) FROM
OPERATIONS       |             |   | (7,579,431  | )         |              |   | 18,111,169   |             |             |   | (50,884      | )      |  |   | 4,000,000   |            |   |   | 14,480,854  |            
|OTHER
INCOME (EXPENSE):             |             |   |             |           |              |   |              |             |             |   |              |        |  |   |             |            |   |   |             |            
|Interest income                     |             |   | 30,528,357  |           |              |   | 168,070      |             |             |   | 2,150        |        |  |   | (29,658,631 | )(h)       |   |   | 1,039,946   |            
|Interest expense                    |             |   | (31,531,365 | )         |              |   | (29,897,611  | )           |             |   |             |        |  |   | 29,586,392  | (e)        |   |   | (31,842,584 | )          
|Other income (expense)              |             |   | (7,691,360  | )         |              |   | (1,711       | )           |             |   | (15,851      | )      |  |   | 7,644,380   | (f)        |   |   | (64,542     | )          
|                                    |             |   |             |           |              |   |              |             |             |   |              |        |  |   |             |            |   |   |             |            
|NET
LOSS                            |             | $ | (16,273,799 | )         |              | $ | (11,620,083  | )           |             | $ | (64,585      | )      |  | $ | 11,572,141  |            |   | $ | (16,386,326 | )          
|                                    |             |   |             |           |              |   |              |             |             |   |              |        |  |   |             |            |   |   |             |            



---

|(e) |  | To eliminate inter-company interest expense.                                                                                                            
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(f) |  | To eliminate interest in loss of subsidiaries and inter-company management fee expense.                                                                 
|   
|   
|   
|   
|(g) |  | To eliminate inter-company management fee expense.                                                                                                      
|   
|   
|   
|   
|(h) |  | To eliminate inter-company interest income, inter-company management fee
income, inter-company deferred interest
income, and other inter-company income.

F-35



---



##### Table of Contents



Condensed consolidating statement of operations information for the year ended
December 31, 1999:

|                              |                                           |             |             |             |           |              |             |              |             |             |           |              |        |   |            |             |            |   |             |             |             | 
|----------------------------- | ----------------------------------------- | ----------- | ----------- | ----------- | --------- | ------------ | ----------- | ------------ | ----------- | ----------- | --------- | ------------ | ------ | - | ---------- | ----------- | ---------- | - | ----------- | ----------- | ----------- | 
|                              |                                           |             |             | Fitzgeralds |           |              |             |              |             | Non         |           |              |        |   |            |             |            |  
|                              |                                           |             |             | Gaming      |           | Guarantor    |             | Guarantor    |             | Eliminating |           | Consolidated
|                              |                                           |             |             | Corporation |           | Subsidiaries |             | Subsidiaries |             | Entries     |           | Total       
|                              |                                           |             |             |             |           |              |             |              |             |             |           |             
|OPERATING REVENUES:           |                                           |             |             |             |           |              |             |              |             |             |           |              |        |   |            |             |            |   |             |            
|                              | Casino                                    |             | $           |            |           |              | $           | 171,739,693  |             |             | $         |             |        |   | $          |            |            |   | $           | 171,739,693 |            
|                              | Food and beverage                         |             |             |            |           |              |             | 24,603,925   |             |             |           |             |        |   |            |            |            |   |             | 24,603,925  |            
|                              | Rooms                                     |             |             |            |           |              |             | 21,551,208   |             |             |           |             |        |   |            |            |            |   |             | 21,551,208  |            
|                              | Other                                     |             |             |            |           |              |             | 3,627,105    |             |             |           | 45           |        |   |            |            |            |   |             | 3,627,150   |            
|                              |                                           |             |             |             |           |              |             |              |             |             |           |              |        |   |            |             |            |   |             |            
|                              |                                           | Total       |             |             |          |              |             |              | 221,521,931 |             |           |              | 45     |   |            |             |           |   |             |             | 221,521,976 | 
|                              | Less promotional
allowances               |             |             |            |           |              |             | 29,677,305   |             |             |           |             |        |   |            |            |            |   |             | 29,677,305  |            
|                              |                                           |             |             |             |           |              |             |              |             |             |           |              |        |   |            |             |            |   |             |            
|                              |                                           | Net revenue |             |             |          |              |             |              | 191,844,626 |             |           |              | 45     |   |            |             |           |   |             |             | 191,844,671 | 
|                              |                                           |             |             |             |           |              |             |              |             |             |           |              |        |   |            |             |            |   |             |            
|OPERATING COSTS AND
EXPENSES: |                                           |             |             |             |           |              |             |              |             |             |           |              |        |   |            |             |            |   |             |            
|                              | Casino                                    |             |             |            |           |              |             | 79,328,307   |             |             |           |             |        |   |            |            |            |   |             | 79,328,307  |            
|                              | Food and beverage                         |             |             |            |           |              |             | 15,505,671   |             |             |           | (884         | )      |   |            |            |            |   |             | 15,504,787  |            
|                              | Rooms                                     |             |             |            |           |              |             | 12,563,589   |             |             |           |             |        |   |            |            |            |   |             | 12,563,589  |            
|                              | Other operating expense                   |             |             |            |           |              |             | 2,046,933    |             |             |           |             |        |   |            |            |            |   |             | 2,046,933   |            
|                              | Selling, general and
administrative       |             |             | 6,259,315   |           |              |             | 54,381,945   |             |             |           | 60,235       |        |   |            | (4,000,000  | )(g)       |   |             | 56,701,495  |            
|                              | Depreciation and
amortization             |             |             | 38,624      |           |              |             | 14,164,333   |             |             |           |             |        |   |            |            |            |   |             | 14,202,957  |            
|                              | Write-down of assets
and lease settlement |             |             |            |           |              |             | 97,759       |             |             |           |             |        |   |            |            |            |   |             | 97,759      |            
|                              |                                           |             |             |             |           |              |             |              |             |             |           |              |        |   |            |             |            |   |             |            
|                              |                                           | Total       |             |             | 6,297,939 |              |             |              | 178,088,537 |             |           |              | 59,351 |   |            |             | (4,000,000 | ) |             |             | 180,445,827 | 
|                              |                                           |             |             |             |           |              |             |              |             |             |           |              |        |   |            |             |            |   |             |            
|INCOME (LOSS) FROM
OPERATIONS |                                           |             | (6,297,939  | )           |           |              | 13,756,089  |              |             |             | (59,306   | )            |        |   | 4,000,000  |             |            |   | 11,398,844  |            
|OTHER INCOME (EXPENSE):       |                                           |             |             |             |           |              |             |              |             |             |           |              |        |   |            |             |            |   |             |            
|                              | Interest income                           |             |             | 32,278,886  |           |              |             | 129,862      |             |             |           | 5,807        |        |   |            | (31,878,825 | )(h)       |   |             | 535,730     |            
|                              | Interest expense                          |             |             | (29,391,019 | )         |              |             | (32,119,599  | )           |             |           |             |        |   |            | 31,806,649  | (e)        |   |             | (29,703,969 | )          
|                              | Other income
(expense)                    |             |             | (13,341,248 | )         |              |             | (3,195,441   | )           |             |           | 3,022,714    |        |   |            | 13,329,016  | (f)        |   |             | (184,959    | )          
|                              |                                           |             |             |             |           |              |             |              |             |             |           |              |        |   |            |             |            |   |             |            
|NET INCOME (LOSS)             |                                           | $           | (16,751,320 | )           |           | $            | (21,429,089 | )            |             | $           | 2,969,215 |              |        | $ | 17,256,840 |             |            | $ | (17,954,354 | )          
|                              |                                           |             |             |             |           |              |             |              |             |             |           |              |        |   |            |             |            |   |             |            



---

|(e) |  | To eliminate inter-company interest expense.                                                                                                            
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(f) |  | To eliminate interest in loss of subsidiaries and inter-company
management fee expense.                                                                 
|   
|   
|   
|   
|(g) |  | To eliminate inter-company management fee expense.                                                                                                      
|   
|   
|   
|   
|(h) |  | To eliminate inter-company interest income, inter-company management fee
income, inter-company deferred interest
income, and other inter-company income.

F-36



---



##### Table of Contents



Condensed consolidating statement of cash flows information for the year ended
December 31, 2001:

|                                                                      |                                                     |                                       |             |              |              |              |             |              |          |             |        |               |   |   |   |   |   |   |             |              |              |  
|--------------------------------------------------------------------- | --------------------------------------------------- | ------------------------------------- | ----------- | ------------ | ------------ | ------------ | ----------- | ------------ | -------- | ----------- | ------ | ------------- | - | - | - | - | - | - | ----------- | ------------ | ------------ | -
|                                                                      |                                                     |                                       |             | Fitzgeralds  |              |              |             |              |          | Non         |        |               |   |   |   |   |   |  
|                                                                      |                                                     |                                       |             | Gaming       |              | Guarantor    |             | Guarantor    |          | Eliminating |        | Consolidating
|                                                                      |                                                     |                                       |             | Corporation  |              | Subsidiaries |             | Subsidiaries |          | Entries     |        | Total        
|                                                                      |                                                     |                                       |             |              |              |              |             |              |          |             |        |              
|NET CASH USED IN OPERATING
ACTIVITIES                                 |                                                     | $                                     | (13,291,137 | )            |              | $            | (8,805,626  | )            |          | $           | (9,699 | )             |   | $ |  |   |   | $ | (22,106,462 | )           
|                                                                      |                                                     |                                       |             |              |              |              |             |              |          |             |        |               |   |   |   |   |   |   |             |             
|CASH FLOWS FROM INVESTING
ACTIVITIES:                                 |                                                     |                                       |             |              |              |              |             |              |          |             |        |               |   |   |   |   |   |   |             |             
|                                                                      | Proceeds from sale of assets                        |                                       |             | 141,017,544  |              |              |             | 32,426       |          |             |        |              |   |   |   |  |   |   |             | 141,049,970  |             
|                                                                      | Acquisition of property and
equipment               |                                       |             | (30,727      | )            |              |             | (1,784,070   | )        |             |        |              |   |   |   |  |   |   |             | (1,814,797   | )           
|                                                                      | Increase in restricted cash                         |                                       |             | (4,195,732   | )            |              |             |             |          |             |        |              |   |   |   |  |   |   |             | (4,195,732   | )           
|                                                                      |                                                     |                                       |             |              |              |              |             |              |          |             |        |               |   |   |   |   |   |   |             |             
|                                                                      | Net cash provided by (used in)
investing activities |                                       |             | 136,791,085  |              |              |             | (1,751,644   | )        |             |        |              |   |   |   |  |   |   |             | 135,039,441  |             
|                                                                      |                                                     |                                       |             |              |              |              |             |              |          |             |        |               |   |   |   |   |   |   |             |             
|CASH FLOWS FROM FINANCING
ACTIVITIES:                                 |                                                     |                                       |             |              |              |              |             |              |          |             |        |               |   |   |   |   |   |   |             |             
|                                                                      | Repayment of Senior Notes                           |                                       |             | (105,266,358 | )            |              |             |             |          |             |        |              |   |   |   |  |   |   |             | (105,266,358 | )           
|                                                                      | Repayment of long-term debt                         |                                       |             |             |              |              |             | (350,869     | )        |             |        |              |   |   |   |  |   |   |             | (350,869     | )           
|                                                                      |                                                     |                                       |             |              |              |              |             |              |          |             |        |               |   |   |   |   |   |   |             |             
|                                                                      |                                                     | Net cash used in financing
activities |             |              | (105,266,358 | )            |             |              | (350,869 | )           |        |               |  |   |   |   |  |   |             |              | (105,617,227 | )
|                                                                      |                                                     |                                       |             |              |              |              |             |              |          |             |        |               |   |   |   |   |   |   |             |             
|NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS                  |                                                     |                                       | 18,233,590  |              |              |              | (10,908,139 | )            |          |             | (9,699 | )             |   |   |  |   |   |   | 7,315,752   |             
|CASH AND CASH EQUIVALENTS
BEGINNING OF YEAR                           |                                                     |                                       | 2,168,037   |              |              |              | 6,002,842   |              |          |             | 10,509 |               |   |   |  |   |   |   | 8,181,388   |             
|CASH AND CASH EQUIVALENTS
NET ASSETS HELD FOR SALE,
BEGINNING OF YEAR |                                                     |                                       |            |              |              |              | 10,111,872  |              |          |             |       |               |   |   |  |   |   |   | 10,111,872  |             
|                                                                      |                                                     |                                       |             |              |              |              |             |              |          |             |        |               |   |   |   |   |   |   |             |             
|CASH AND CASH EQUIVALENTS
END OF YEAR                                 |                                                     | $                                     | 20,401,627  |              |              | $            | 5,206,575   |              |          | $           | 810    |               |   | $ |  |   |   | $ | 25,609,012  |             
|                                                                      |                                                     |                                       |             |              |              |              |             |              |          |             |        |               |   |   |   |   |   |   |             |             

F-37



---



##### Table of Contents



Condensed consolidating statement of cash flows information for the year ended
December 31, 2000:

|                                                               |                                       |                                       |            |             |          |              |             |              |          |             |         |               |         |   |   |         |        |   |             |             |          |  
|-------------------------------------------------------------- | ------------------------------------- | ------------------------------------- | ---------- | ----------- | -------- | ------------ | ----------- | ------------ | -------- | ----------- | ------- | ------------- | ------- | - | - | ------- | ------ | - | ----------- | ----------- | -------- | -
|                                                               |                                       |                                       |            | Fitzgeralds |          |              |             |              |          | Non         |         |               |         |   |   |         |        |  
|                                                               |                                       |                                       |            | Gaming      |          | Guarantor    |             | Guarantor    |          | Eliminating |         | Consolidating
|                                                               |                                       |                                       |            | Corporation |          | Subsidiaries |             | Subsidiaries |          | Entries     |         | Total        
|                                                               |                                       |                                       |            |             |          |              |             |              |          |             |         |              
|NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES            |                                       | $                                     | (4,034,421 | )           |          | $            | 14,603,192  |              |          | $           | (5,206  | )             |         | $ |  |         |        | $ | 10,563,565  |            
|                                                               |                                       |                                       |            |             |          |              |             |              |          |             |         |               |         |   |   |         |        |   |             |            
|CASH FLOWS FROM INVESTING
ACTIVITIES:                          |                                       |                                       |            |             |          |              |             |              |          |             |         |               |         |   |   |         |        |   |             |            
|                                                               | Proceeds from sale of assets          |                                       |            |            |          |              |             | 41,971       |          |             |         |              |         |   |   |        |        |   |             | 41,971      |         
|                                                               | Acquisition of property and
equipment |                                       |            | (24,500     | )        |              |             | (10,865,165  | )        |             |         |              |         |   |   |        |        |   |             | (10,889,665 | )       
|                                                               | Decrease in restricted cash           |                                       |            | (2,799,000  | )        |              |             |             |          |             |         |              |         |   |   |        |        |   |             | (2,799,000  | )       
|                                                               | Dividend received                     |                                       |            |            |          |              |             | 89,827       |          |             |         |              |         |   |   | (89,827 | )(a)   |   |             |            |         
|                                                               |                                       |                                       |            |             |          |              |             |              |          |             |         |               |         |   |   |         |        |   |             |            
|                                                               | Net cash used in investing
activities |                                       |            | (2,823,500  | )        |              |             | (10,733,367  | )        |             |         |              |         |   |   | (89,827 | )      |   |             | (13,646,694 | )       
|                                                               |                                       |                                       |            |             |          |              |             |              |          |             |         |               |         |   |   |         |        |   |             |            
|CASH FLOWS FROM FINANCING
ACTIVITIES:                          |                                       |                                       |            |             |          |              |             |              |          |             |         |               |         |   |   |         |        |   |             |            
|                                                               | Repayment of long-term debt           |                                       |            | (178,470    | )        |              |             | (560,735     | )        |             |         |              |         |   |   |        |        |   |             | (739,205    | )       
|                                                               | Repayment of long-term debt           |                                       |            |            |          |              |             |             |          |             |         | (89,827       | )       |   |   | 89,827  | (a)    |   |             |            |         
|                                                               |                                       |                                       |            |             |          |              |             |              |          |             |         |               |         |   |   |         |        |   |             |            
|                                                               |                                       | Net cash used in financing
activities |            |             | (178,470 | )            |             |              | (560,735 | )           |         |               | (89,827 | ) |   |         | 89,827 |   |             |             | (739,205 | )
|                                                               |                                       |                                       |            |             |          |              |             |              |          |             |         |               |         |   |   |         |        |   |             |            
|NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS           |                                       |                                       | (7,036,391 | )           |          |              | 3,309,090   |              |          |             | (95,033 | )             |         |   |  |         |        |   | (3,822,334  | )          
|CASH AND CASH EQUIVALENTS
BEGINNING OF YEAR                    |                                       |                                       | 9,204,428  |             |          |              | 12,805,624  |              |          |             | 105,542 |               |         |   |  |         |        |   | 22,115,594  |            
|CASH AND CASH EQUIVALENTS INCLUDED
IN NET ASSETS HELD FOR SALE |                                       |                                       |           |             |          |              | (10,111,872 | )            |          |             |        |               |         |   |  |         |        |   | (10,111,872 | )          
|                                                               |                                       |                                       |            |             |          |              |             |              |          |             |         |               |         |   |   |         |        |   |             |            
|CASH AND CASH EQUIVALENTS
END OF YEAR                          |                                       | $                                     | 2,168,037  |             |          | $            | 6,002,842   |              |          | $           | 10,509  |               |         | $ |  |         |        | $ | 8,181,388   |            
|                                                               |                                       |                                       |            |             |          |              |             |              |          |             |         |               |         |   |   |         |        |   |             |            



---

|(a) |  | To eliminate inter-company advances.
|--- |  | ------------------------------------

F-38



---



##### Table of Contents



Condensed consolidating statement of cash flows information for the year ended
December 31, 1999:

|                                                     |                                       |                                                     |            |             |            |              |            |              |            |             |            |               |          |   |         |          |          |   |            |            |             |  
|---------------------------------------------------- | ------------------------------------- | --------------------------------------------------- | ---------- | ----------- | ---------- | ------------ | ---------- | ------------ | ---------- | ----------- | ---------- | ------------- | -------- | - | ------- | -------- | -------- | - | ---------- | ---------- | ----------- | -
|                                                     |                                       |                                                     |            | Fitzgeralds |            |              |            |              |            | Non         |            |               |          |   |         |          |          |  
|                                                     |                                       |                                                     |            | Gaming      |            | Guarantor    |            | Guarantor    |            | Eliminating |            | Consolidating
|                                                     |                                       |                                                     |            | Corporation |            | Subsidiaries |            | Subsidiaries |            | Entries     |            | Total        
|                                                     |                                       |                                                     |            |             |            |              |            |              |            |             |            |              
|NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES  |                                       | $                                                   | 11,220,021 |             |            | $            | 11,943,668 |              |            | $           | (2,379,626 | )             |          | $ | 304,635 | (b)      |          | $ | 21,088,698 |           
|                                                     |                                       |                                                     |            |             |            |              |            |              |            |             |            |               |          |   |         |          |          |   |            |           
|CASH FLOWS FROM INVESTING
ACTIVITIES:                |                                       |                                                     |            |             |            |              |            |              |            |             |            |               |          |   |         |          |          |   |            |           
|                                                     | Proceeds from sale of assets          |                                                     |            |            |            |              |            | 1,847,530    |            |             |            | 2,375,614     |          |   |         |         |          |   |            | 4,223,144  |            
|                                                     | Acquisition of property and
equipment |                                                     |            | (14,301     | )          |              |            | (5,624,993   | )          |             |            |              |          |   |         |         |          |   |            | (5,639,294 | )          
|                                                     | Decrease in restricted cash           |                                                     |            | (544,978    | )          |              |            |             |            |             |            |              |          |   |         |         |          |   |            | (544,978   | )          
|                                                     |                                       |                                                     |            |             |            |              |            |              |            |             |            |               |          |   |         |          |          |   |            |           
|                                                     | Net cash used in investing
activities |                                                     |            | (559,279    | )          |              |            | (3,777,463   | )          |             |            | 2,375,614     |          |   |         |         |          |   |            | (1,961,128 | )          
|                                                     |                                       |                                                     |            |             |            |              |            |              |            |             |            |               |          |   |         |          |          |   |            |           
|CASH FLOWS FROM FINANCING
ACTIVITIES:                |                                       |                                                     |            |             |            |              |            |              |            |             |            |               |          |   |         |          |          |   |            |           
|                                                     | Payment of debt offering costs        |                                                     |            | (305,424    | )          |              |            |             |            |             |            |              |          |   |         |         |          |   |            | (305,424   | )          
|                                                     | Proceeds from issuance of stock       |                                                     |            | 319,587     |            |              |            |             |            |             |            |              |          |   |         | (304,635 | )(b)     |   |            | 14,952     |            
|                                                     | Repayment of long-term debt           |                                                     |            | (302,991    | )          |              |            | (6,320,772   | )          |             |            |              |          |   |         |         |          |   |            | (6,623,763 | )          
|                                                     | Repayment of line of credit           |                                                     |            | (3,000,000  | )          |              |            |             |            |             |            |              |          |   |         |         |          |   |            | (3,000,000 | )          
|                                                     | Dividends to minority
stockholders    |                                                     |            |            |            |              |            |             |            |             |            | (136,330      | )        |   |         |         |          |   |            | (136,330   | )          
|                                                     |                                       |                                                     |            |             |            |              |            |              |            |             |            |               |          |   |         |          |          |   |            |           
|                                                     |                                       | Net cash provided by (used in)
financing activities |            |             | (3,288,828 | )            |            |              | (6,320,772 | )           |            |               | (136,330 | ) |         |          | (304,635 | ) |            |            | (10,050,565 | )
|                                                     |                                       |                                                     |            |             |            |              |            |              |            |             |            |               |          |   |         |          |          |   |            |           
|NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS |                                       |                                                     | 7,371,914  |             |            |              | 1,845,433  |              |            |             | (140,342   | )             |          |   |        |          |          |   | 9,077,005  |           
|CASH AND CASH EQUIVALENTS
BEGINNING OF YEAR          |                                       |                                                     | 1,832,514  |             |            |              | 10,960,191 |              |            |             | 245,884    |               |          |   |        |          |          |   | 13,038,589 |           
|                                                     |                                       |                                                     |            |             |            |              |            |              |            |             |            |               |          |   |         |          |          |   |            |           
|CASH AND CASH EQUIVALENTS
END OF YEAR                |                                       | $                                                   | 9,204,428  |             |            | $            | 12,805,624 |              |            | $           | 105,542    |               |          | $ |        |          |          | $ | 22,115,594 |           
|                                                     |                                       |                                                     |            |             |            |              |            |              |            |             |            |               |          |   |         |          |          |   |            |           



---

|(b) |  | To eliminate inter-company advances.
|--- |  | ------------------------------------

F-39



---



##### Table of Contents



17. CONDENSED QUARTERLY RESULTS (Unaudited)

|     |                               |         |   |            |      |         |   |            |      |         |   |            |      |  |   |             |       |  
|---- | ----------------------------- | ------- | - | ---------- | ---- | ------- | - | ---------- | ---- | ------- | - | ---------- | ---- |  | - | ----------- | ----- | -
|     |                               |         |   | First      |      | Second  |   | Third      |      | Fourth 
|     |                               |         |   | Quarter    |      | Quarter |   | Quarter    |      | Quarter
|     |                               |         |   |            |      |         |   |            |      |        
|2001 |                               |         |   |            |      |         |   |            |      |         |   |            |      |  |   |            
|     | Net operating revenue         |         | $ | 52,129,477 |      |         | $ | 53,875,456 |      |         | $ | 53,645,218 |      |  | $ | 36,380,869  |      
|     | Income (loss) from operations |         |   | 7,762,173  |      |         |   | 7,958,079  |      |         |   | 8,634,874  |      |  |   | (14,385,735 | )    
|     | Net income (loss)             |         |   | 7,304,552  |      |         |   | 7,443,821  |      |         |   | 8,054,153  |      |  |   | (18,485,078 | )    
|     | Net income (loss) per share:  |         |   |            |      |         |   |            |      |         |   |            |      |  |   |             |      
|     |                               | Basic   |   | $          | 1.00 |         |   | $          | 1.02 |         |   | $          | 1.12 |  |   | $           | (3.72 | )
|     |                               | Diluted |   | $          | 1.00 |         |   | $          | 1.02 |         |   | $          | 1.12 |  |   | $           | (3.72 | )

|     |                        |         |   |            |       |         |   |            |       |         |   |            |       |   |   |            |       |  
|---- | ---------------------- | ------- | - | ---------- | ----- | ------- | - | ---------- | ----- | ------- | - | ---------- | ----- | - | - | ---------- | ----- | -
|     |                        |         |   | First      |       | Second  |   | Third      |       | Fourth 
|     |                        |         |   | Quarter    |       | Quarter |   | Quarter    |       | Quarter
|     |                        |         |   |            |       |         |   |            |       |        
|2000 |                        |         |   |            |       |         |   |            |       |         |   |            |       |   |   |           
|     | Net operating revenue  |         | $ | 50,852,584 |       |         | $ | 51,931,396 |       |         | $ | 50,776,381 |       |   | $ | 46,541,215 |      
|     | Income from operations |         |   | 4,175,486  |       |         |   | 4,643,562  |       |         |   | 4,659,817  |       |   |   | 1,001,989  |      
|     | Net loss               |         |   | (4,025,552 | )     |         |   | (3,454,491 | )     |         |   | (3,690,137 | )     |   |   | (5,216,146 | )    
|     | Net loss per share:    |         |   |            |       |         |   |            |       |         |   |            |       |   |   |            |      
|     |                        | Basic   |   | $          | (1.01 | )       |   | $          | (0.91 | )       |   | $          | (0.97 | ) |   | $          | (0.95 | )
|     |                        | Diluted |   | $          | (1.01 | )       |   | $          | (0.91 | )       |   | $          | (0.97 | ) |   | $          | (0.95 | )
|    
|    
|    
|    
|    
|1999 |                        |         |   |            |       |         |   |            |       |         |   |            |       |   |   |           
|     | Net operating revenue  |         | $ | 51,748,724 |       |         | $ | 49,745,800 |       |         | $ | 49,229,272 |       |   | $ | 41,120,875 |      
|     | Income from operations |         |   | 4,289,515  |       |         |   | 3,868,730  |       |         |   | 3,210,235  |       |   |   | 30,364     |      
|     | Net loss               |         |   | (2,810,619 | )     |         |   | (3,204,626 | )     |         |   | (4,030,788 | )     |   |   | (7,908,321 | )    
|     | Net loss per share:    |         |   |            |       |         |   |            |       |         |   |            |       |   |   |            |      
|     |                        | Basic   |   | $          | (1.03 | )       |   | $          | (1.14 | )       |   | $          | (1.36 | ) |   | $          | (1.80 | )
|     |                        | Diluted |   | $          | (1.03 | )       |   | $          | (1.14 | )       |   | $          | (1.36 | ) |   | $          | (1.80 | )

F-40



---



##### Table of Contents



SCHEDULE II

FITZGERALDS GAMING CORPORATION (DEBTOR-IN-POSSESSION)

CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS

ALLOWANCE FOR DOUBTFUL ACCOUNTS RECEIVABLE

|         |  |           |         |           |  |               |         |         |  |        |          |   |  |  |         | 
|-------- |  | --------- | ------- | --------- |  | ------------- | ------- | ------- |  | ------ | -------- | - |  |  | ------- | 
|         |  |           |         |           |  | Additions     |         |         |  |        |          |   |  | 
|         |  |           |         |           |  | Charged to    |         |         |  |        |          |   |  | 
|         |  | Beginning |         | Costs and |  |               |         |         |  | Ending
|FYE      |  | Balance   |         | Expenses  |  | Deductions(1) |         | Balance
|         |  |           |         |           |  |               |         |        
|12/31/99 |  |           | 345,540 |           |  |               | 493,568 |         |  |        | (434,105 | ) |  |  | 405,003 | 
|12/31/00 |  |           | 405,003 |           |  |               | 147,640 |         |  |        | (277,970 | ) |  |  | 274,673 | 
|12/31/01 |  |           | 274,673 |           |  |               | 72,882  |         |  |        | (298,555 | ) |  |  | 49,000  | 

ALLOWANCE TO WRITE ASSETS HELD FOR SALE TO ESTIMATED REALIZABLE VALUE

|         |  |           |           |           |  |            |            |         |  |        |            |      |  |  |            | 
|-------- |  | --------- | --------- | --------- |  | ---------- | ---------- | ------- |  | ------ | ---------- | ---- |  |  | ---------- | 
|         |  |           |           |           |  | Additions  |            |         |  |        |            |      |  | 
|         |  |           |           |           |  | Charged to |            |         |  |        |            |      |  | 
|         |  | Beginning |           | Costs and |  |            |            |         |  | Ending
|FYE      |  | Balance   |           | Expenses  |  | Deductions |            | Balance
|         |  |           |           |           |  |            |            |        
|12/31/99 |  |           | 2,388,250 |           |  |            | 97,759     |         |  |        | (2,486,009 | )(2) |  |  |           | 
|12/31/00 |  |           |          |           |  |            |           |         |  |        |           |      |  |  |           | 
|12/31/01 |  |           |          |           |  |            | 14,764,341 |         |  |        |           |      |  |  | 14,764,341 | 



---

|(1) |  | Write-offs of uncollectible accounts receivable, net of recoveries.
|--- |  | -------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Represents assets disposed of during the year.                     

F-41



---



##### Table of Contents






Index to Exhibits

|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |              |  | 
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ |  | 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  | Sequentially
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  | Numbered    
|Exhibit |  | Document                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | Page        
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |             
|2(a)    |  | (i) Recapitalization Agreement, dated March 14, 1994, among Fitzgeralds South,
Inc. (formerly Fitzgeralds Gaming Corporation), Fitzgeralds Las Vegas, Inc. and
certain stockholders thereof; (ii) Plan of Reorganization and Stockholders
Agreement, dated December 5, 1994, among Fitzgeralds Gaming Corporation and
stockholders of Fitzgeralds Reno, Inc., Fitzgeralds South, Inc., Fitzgeralds Inc.,
Nevada Club, Inc.; and (iii) Supplement to Plan of Reorganization and Stockholders
Agreement, dated December 30, 1994, between Fitzgeralds Gaming Corporation and the
stockholders of Fitzgeralds Reno, Inc. and Nevada Club, Inc.(1)
|3(a)    |  | (i) Articles of Incorporation, as amended, and (ii) By-Laws of Fitzgeralds Gaming
Corporation, as amended.(1)(8)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|3(b)    |  | (i) Articles of Incorporation, as amended, and (ii) By-Laws of Fitzgeralds South,
Inc.(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|3(c)    |  | (i) Articles of Incorporation, as amended, and (ii) By-Laws of Fitzgeralds Reno,
Inc., as amended.(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|3(d)    |  | (i) Articles of Incorporation, as amended, and (ii) By-Laws of Fitzgeralds
Incorporated.(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|3(e)    |  | (i) Articles of Incorporation, as amended, and (ii) By-Laws of Nevada Club, Inc.(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|3(f)    |  | (i) Articles of Incorporation, as amended, and (ii) By-Laws of Fitzgeralds Las
Vegas, Inc.(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|3(g)    |  | (i) Articles of Incorporation, as amended, and (ii) By-Laws of Fitzgeralds Fremont
Experience Corporation.(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|3(h)    |  | (i) Articles of Incorporation, as amended, and (ii) By-Laws of Fitzgeralds
Mississippi, Inc.(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|3(i)    |  | (i) Articles of Incorporation, as amended, and (ii) By-Laws of Fitzgeralds Black
Hawk, Inc.(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|3(j)    |  | (i) Articles of Incorporation, as amended, and (ii) By-Laws of Fitzgeralds Black
Hawk II, Inc.(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|3(k)    |  | (i) Certificate of Organization, as amended and (ii) Second Amended and Restated
Operating Agreement of 101 Main Street Limited Liability Company.(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4(a)    |  | Form of Indenture dated as of December 30, 1997, by and among Fitzgeralds Gaming
Corporation, Fitzgeralds South, Inc., Fitzgeralds Reno, Inc., Fitzgeralds
Incorporated, Fitzgeralds Las Vegas, Inc., Fitzgeralds Fremont Experience
Corporation, Fitzgeralds Mississippi, Inc., Fitzgeralds Black Hawk, Inc.,
Fitzgeralds Black Hawk II, Inc. and 101 Main Street Limited Liability Company, and
The Bank of New York, as trustee.(2)                                                                                                                                                                                                        

E-1



---



##### Table of Contents



|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |              |  | 
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ |  | 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | Sequentially
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | Numbered    
|Exhibit |  | Document                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | Page        
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |             
|4(b)    |  | Form of Registration Rights Agreement dated as of December 30, 1997, by and among
Fitzgeralds Gaming Corporation, Fitzgeralds South, Inc., Fitzgeralds Reno, Inc.,
Fitzgeralds Incorporated, Fitzgeralds Las Vegas, Inc., Fitzgeralds Fremont
Experience Corporation, Fitzgeralds Mississippi, Inc., Fitzgeralds Black Hawk,
Inc., Fitzgeralds Black Hawk II, Inc. and 101 Main Street Limited Liability
Company, and Jefferies & Company, Inc. and Merrill Lynch, Merrill, Lynch, Pierce,
Fenner and Smith Incorporated, as initial purchasers.(2)
|4(c)    |  | Form of Security and Pledge Agreement dated as of December 30, 1997, by and among
Fitzgeralds Gaming Corporation, Fitzgeralds South, Inc., Fitzgeralds Reno, Inc.,
Fitzgeralds Incorporated, Fitzgeralds Las Vegas, Inc., Fitzgeralds Fremont
Experience Corporation, Fitzgeralds Mississippi, Inc., Fitzgeralds Black Hawk,
Inc., Fitzgeralds Black Hawk II, Inc., and 101 Main Street Limited Liability
Company, as grantors, and The Bank of New York, as collateral agent.(2)                                                                  
|4(d)    |  | Forms of Deed of Trust, Security Agreement and Fixture Filing with Assignment of
Rents, dated as of December 30, 1997, by each of Fitzgeralds Las Vegas, Inc.,
Fitzgeralds Mississippi, Inc., and Fitzgeralds Reno, Inc., as trustor, the trustee
named therein, as trustee, and The Bank of New York, as beneficiary.(2)                                                                                                                                                                                                                          
|4(e)    |  | Form of First Preferred Vessel Mortgage on the Whole of the Fitzgeralds Tunica
dated as of December 30, 1997, by and between Fitzgeralds Mississippi, Inc., as
owner and mortgagor and The Bank of New York, as trustee.(2)                                                                                                                                                                                                                                                                                                                        
|4(f)    |  | Form of Assignment of Rents, Leases and Property dated as of December 30, 1997, by
each of Fitzgeralds Mississippi, Inc. and 101 Main Street Limited Liability
Company, each as an assignor, and The Bank of New York, as assignee.(2)                                                                                                                                                                                                                                                                                                             
|4(g)    |  | Form of Certificate of Designation of Preferences and Rights for the Preferred
Stock.(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|4(h)    |  | Form of Warrant Agreement between the Company and The Bank of New York, as
successor in interest to First Interstate Bank of Nevada, N.A., as warrant
agent.(1)                                                                                                                                                                                                                                                                                                                                                                                    
|4(i)    |  | Form of First Amendment to Warrant Agreement by and between Fitzgeralds Gaming
Corporation and The Bank of New York, as warrant agent.(2)                                                                                                                                                                                                                                                                                                                                                                                                          
|10(a)   |  | (i) Lease, dated December 31, 1974, between Santino Oppio, as Lessor, and Center
Street Properties Corp., as Lessee, and (ii) Sublease and Agreement, dated
December 31, 1986, by Meta K. Fitzgerald, as Sublessor, and Lincoln Investments,
Inc. (now known as Fitzgeralds Reno, Inc.), as Sublessee.(1)                                                                                                                                                                                                                                          
|10(b)   |  | Fitzgeralds Gaming Corporation Stock Option Incentive Plan, amended and restated
as of May 1, 1998.(4)                                                                                                                                                                                                                                                                                                                                                                                                                                             
|10(c)   |  | Employment Agreements between Fitzgeralds Gaming Corporation and (i) Philip D.
Griffith dated June 28, 1999; (ii) Michael E. McPherson dated July 5, 1999; and
(iii) each of Paul H. Manske and Max L. Page dated September 1, 1999.(7)(8)                                                                                                                                                                                                                                                                                                         
|10(d)   |  | Fitzgeralds Gaming Corporation Executive Bonus Plan, amended and restated as of
January 1, 1999.(6)                                                                                                                                                                                                                                                                                                                                                                                                                                                

E-2



---



##### Table of Contents



|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |              |  | 
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------ |  | 
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  | Sequentially
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  | Numbered    
|Exhibit |  | Document                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  | Page        
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |             
|10(e)   |  | License Agreement, dated September 11, 1995, between Holiday Inns Franchising,
Inc. and Fitzgeralds Las Vegas, Inc.(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|10(f)   |  | Indemnification Agreements, each dated July 14, 1995, between Fitzgeralds Gaming
Corporation and each of Philip D. Griffith, Jerome H. Turk, Terrance W. Oliver,
Fernando Bensuaski, Michael E. McPherson and Gerald C. Heetland.(1)                                                                                                                                                                                                                                                                                                                                                                  
|10(g)   |  | Shareholders Agreement, dated December 19, 1995, among the Shareholders listed
therein, Fitzgeralds Gaming Corporation and First Interstate Bank of Nevada,
N.A.(6)                                                                                                                                                                                                                                                                                                                                                                                                                                  
|10(h)   |  | Self Insurers Surety Bond, dated as of October 19, 2000, executed by Western
Bonding Company for $2.5 million, for Fitzgeralds Gaming Corporation to act as a
self-insured employer in the State of Nevada.(11)                                                                                                                                                                                                                                                                                                                                                                                      
|10(i)   |  | Form of Management Agreement, dated March 17, 1999, between Fitzgeralds Gaming
Corporation and each of Fitzgeralds Las Vegas, Inc., Fitzgeralds Mississippi,
Inc., Fitzgeralds Reno, Inc. and 101 Main Street Limited Liability Company.(6)                                                                                                                                                                                                                                                                                                                                                           
|10(j)   |  | Agreement Regarding Pre-Negotiated Restructuring dated December 1, 2000.(10)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|10(k)   |  | Purchase and Sale Agreement, as amended dated as of November 22, 2000 by and among
Majestic Investor, LLC, a Delaware limited liability company; Fitzgeralds Las
Vegas, Inc., a Nevada Corporation; 101 Main Street Limited Liability, a Colorado
limited liability company doing business as Fitzgeralds Casino Black Hawk;
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.(10)
|10(l)   |  | Consulting contract, dated June 1, 2001, between Fitzgeralds Gaming Corporation on
behalf of itself and each of its operating subsidiaries: Fitzgeralds Mississippi,
Inc., Fitzgeralds Reno, Inc., Fitzgeralds Las Vegas, Inc. and 101 Main Street,
LLC, and Meritage Employer Services, LLC.                                                                                                                                                                                                                                                                                                         
|10(m)   |  | Service Agreement for Workers Compensation Self-Insurance Program, dated June 1,
2001 between Fitzgeralds Gaming Corporation on behalf of itself and each of its
operating subsidiaries: Fitzgeralds Mississippi, Inc., Fitzgeralds Reno, Inc.,
Fitzgeralds Las Vegas, Inc. and 101 Main Street, LLC, and Meritage Employer
Services, LLC.                                                                                                                                                                                                                                                           
|10(n)   |  | The Liability Claims Investigation, Adjustment and Management Agreement, dated
June 1, 2001 between Fitzgeralds Gaming Corporation on behalf of itself and each
of its operating subsidiaries: Fitzgeralds Mississippi, Inc., Fitzgeralds Reno,
Inc., Fitzgeralds Las Vegas, Inc. and 101 Main Street, LLC, and Meritage Employer
Services, LLC.                                                                                                                                                                                                                                                      
|10(o)   |  | The Claims Processing and Managed Care Services Contract, dated June 1, 2001
between Fitzgeralds Gaming Corporation on behalf of itself and each of its
operating subsidiaries: Fitzgeralds Mississippi, Inc., Fitzgeralds Reno, Inc.,
Fitzgeralds Las Vegas, Inc. and 101 Main Street, LLC, and Meritage Employer
Services, LLC.                                                                                                                                                                                                                                                                     
|12.1    |  | Computation of Ratio of Earnings to Fixed Charges                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

E-3



---



##### Table of Contents



|        |  |                                         |  |              |  | 
|------- |  | --------------------------------------- |  | ------------ |  | 
|        |  |                                         |  | Sequentially
|        |  |                                         |  | Numbered    
|Exhibit |  | Document                                |  | Page        
|        |  |                                         |  |             
|21      |  | List of subsidiaries of the Company.(3)



---

|(1)  |  | Incorporated by reference to the Companys Registration Statement
on Form S-1, File No. 33-94624, which became effective on December
13, 1995.
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------
|    
|    
|    
|    
|(2)  |  | Incorporated by reference to the Companys Report on Form 8-K, SEC
File No. 0-26518, filed January 12, 1998.                                  
|    
|    
|    
|    
|(3)  |  | Incorporated by reference to the Companys Report on Form 10-K, SEC
File No. 0-26518, filed March 31, 1998.                                   
|    
|    
|    
|    
|(4)  |  | Incorporated by reference to the Companys Report on Form 10-Q,
SEC. File No. 0-26518, filed June 28, 1998.                                   
|    
|    
|    
|    
|(5)  |  | Incorporated by reference to the Companys Report on Form 8-K, SEC.
File No. 0-26518, filed December 4, 1998.                                 
|    
|    
|    
|    
|(6)  |  | Incorporated by reference to the Companys Report on Form 10-K, SEC
File No. 0-26518, filed March 30, 1999.                                   
|    
|    
|    
|    
|(7)  |  | Incorporated by reference to the Companys Report on Form 10-Q, SEC
File No. 0-26518, filed August 17, 1999.                                  
|    
|    
|    
|    
|(8)  |  | Incorporated by reference to the Companys Report on Form 10-Q, SEC
File No. 0-26518, filed November 10, 1999.                                
|    
|    
|    
|    
|(9)  |  | Incorporated by reference to the Companys Report on Form 10-K, SEC
File No. 0-26518, filed March 21, 2000.                                   
|    
|    
|    
|    
|(10) |  | Incorporated by reference to the Companys Report on Form 8-K, SEC
File No. 0-26518, filed December 7, 2000.                                  
|    
|    
|    
|    
|(11) |  | Incorporated by reference to the Companys Report on Form 8-K, SEC
File No. 0-26518, filed December 19, 2001.                                 
|    
|    
|    
|    
|(12) |  | Filed herewith.                                                                                                                               

E-4