<PAGE>   1

                                 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, 1999

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

                     301 FREMONT STREET, LAS VEGAS NV 89101
               (Address of principal executive offices)(Zip Code)

                                 (702) 388-2400
              (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. [X]

As of March 15, 2000, the number of outstanding shares of the Registrant's
Common Stock was 5,508,082. As of March 15, 2000, approximately 1,395,048 shares
of the Registrant's Common Stock was 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 50



<PAGE>   2

                         FITZGERALDS GAMING CORPORATION
                         1999 ANNUAL REPORT ON FORM 10-K
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
ITEM                                                                                          PAGE
----                                                                                          ----
<S>                                                                                           <C>
PART I..........................................................................................1

   ITEM 1.  BUSINESS............................................................................1
            General.............................................................................1
            Operating Strategy..................................................................1
            Operating Properties................................................................2
            Other Operations....................................................................5
            Competition.........................................................................5
            Employees...........................................................................8
            Trade Names, Trademarks and Service Marks...........................................8
            Governmental Regulation.............................................................8
   ITEM 2.  PROPERTIES.........................................................................19
   ITEM 3.  LEGAL PROCEEDINGS..................................................................19
   ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................................20

PART II........................................................................................21

   ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS..............21
   ITEM 6.  SELECTED FINANCIAL DATA............................................................22
   ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
            OPERATIONS.........................................................................24
   ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.........................34
   ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA........................................35
   ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
            DISCLOSURE.........................................................................35

PART III.......................................................................................36

   ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES OF REGISTRANT..............36
   ITEM 11. EXECUTIVE COMPENSATION.............................................................40
   ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.....................45
   ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.....................................46

PART IV........................................................................................47

   ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K....................47

SIGNATURES.....................................................................................48


POWER OF ATTORNEY..............................................................................49
</TABLE>




<PAGE>   3

                                     PART I

ITEM 1. BUSINESS

GENERAL

Fitzgeralds Gaming Corporation (the "Company") is a diversified
multi-jurisdictional gaming holding company that owns and operates 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"). The Company markets its properties primarily to middle-market customers,
emphasizing its Fitzgeralds brand and its "Fitzgeralds Irish Luck" theme. As of
December 31, 1999, the Company operated a total of 3,741 slot machines, 93 table
games and approximately 1,500 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 and operates Fitzgeralds Las Vegas and Fitzgeralds
Tunica through wholly owned subsidiaries; and FI owns and operates Fitzgeralds
Black Hawk through wholly-owned subsidiaries, including 101 Main Street Limited
Liability Company ("101 Main").

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

OPERATING STRATEGY

The Company's ongoing operating strategy is to increase profitability by
utilizing its national gaming brand and fully integrated player tracking system
(the "Fitzgeralds Card") to further penetrate the middle-market customer base
and to capitalize on the competitive strengths of its four Fitzgeralds-brand
properties. The Company's operating strategy is characterized by several
principal elements including:

Development of National Gaming Brand

The Company has developed a national gaming brand by using a consistent Irish
Luck theme throughout the casinos, hotels, restaurants and bars at all of its
properties. 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



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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 national 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 mechanical
devices with advanced interactive electronic games. These newer games offer
greater variety, higher pay outs and longer periods of play for the casino
entertainment dollar relative to simple mechanical 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

The Company currently owns and operates 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").

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 markets to Las Vegas
tourists, numbering approximately 33.8 million in 1999 and, to a lesser extent,
to the approximately 1.3 million 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 completed in December 1996 at a cost of
approximately $19.4 million. At December 31, 1999, the facility contained a
638-room hotel (including 14 suites) and a casino offering 1,050 slot machines,
25 table games, a 55-seat keno lounge and a sports book (operated by a third
party). Fitzgeralds Las Vegas amenities include five restaurants, three bars, an
ice cream parlor, a special events center, a gift shop and an entertainment
area. Fitzgeralds Las Vegas includes a 327-space parking structure and an
adjacent surface parking area with an additional 30 spaces.

In September 1995, the Company entered into a 13-year franchise license
agreement with Holiday Hospitality Franchising, Inc., 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 has been
included in the Holiday Inn Worldwide Reservation System and has use of Holiday
Inn copyrights, trademarks and similar proprietary rights used by other Holiday
Inn licensees. The Company is the exclusive licensee of Holiday Inn-branded
hotels within the defined territory encompassing downtown Las Vegas. The Company
pays 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 pays marketing, reservation and similar
fees based on such revenues or the number of rooms.

In December 1999, the Company entered into a Chilled Water Service Agreement
(the "Agreement") with e.three Custom Energy Solutions, LLC ("E-Three"). E-Three
is constructing a facility on land



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leased from Fitzgeralds Las Vegas for producing and distributing chilled water
to various customers in downtown Las Vegas. The Agreement will become effective
upon completion of the facility in the summer of 2000.

Las Vegas continues to grow rapidly and is one of the world's largest tourist
destinations. In order to more fully participate in that growth, eight downtown
gaming companies, including the Company, opened the Fremont Street Experience in
November 1995 to revitalize the central core of the downtown Las Vegas gaming
district. The Fremont Street Experience converted five blocks of Fremont Street
into a "must see" attraction that restores and enhances the intimacy and visual
excitement of downtown Las Vegas. The Fremont Street Experience includes a
pedestrian mall, shops, restaurants and entertainment beneath an approximately
1,500-foot long, 90-foot high Space Frame, which incorporates approximately 2.1
million lights to offer a number of "Sky Parade Light Shows," as well as a
number of special events and festivals. In addition, there have been extensive
sidewalk and street improvements, and the construction of an approximately
1,400-space parking structure. In 1999, construction was started on a retail
shopping facility located on an adjacent lot; however, one of the major tenants
has filed for bankruptcy and construction has been suspended until a new tenant
can be found. With its appeal to adults, together with its location on Fremont
Street, the Fremont Street Experience is distinguishable from other Las Vegas
attractions and draws both locals and tourists who might not otherwise visit the
downtown area.

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, 121-acre Company-owned
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. At December
31, 1999, the facility included a 507-room hotel, a special events center, an
indoor swimming pool and a casino offering 1,215 slot machines and 34 table
games, two bars, four restaurants and a gift shop.

The Company has developed Fitzgeralds Tunica into a full-service entertainment
destination and has been able to increase and diversify its customer base by
attracting, in addition to its local customers, independent travelers,
tour-and-travel customers and guests for special events and conventions. In
October 1998, a new inter-casino connector road was completed which has
increased accessibility to Fitzgeralds Tunica. In February 2000, the Company
began construction on a 405-space covered parking garage. The project is
scheduled for completion in June 2000 at a cost of approximately $5.2 million.

Fitzgeralds Reno

Fitzgeralds Reno is located in downtown Reno on the corner of Virginia Street
and Commercial Row next to the landmark Reno Arch. In 1997, Fitzgeralds Reno
renovated its front entrance and continues to renovate and upgrade its hotel
rooms. At December 31, 1999, the facility consisted of a 16-story, 351-room
hotel and a casino offering 890 slot machines, 28 table games, a 110-seat keno
lounge and a sports book (operated by a third party). Amenities include three
restaurants, three bars, an entertainment lounge and a gift shop. 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



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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.

The Fitzgeralds 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. 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. At
December 31, 1999, the casino offered 586 slot machines, 6 table games, a
restaurant, a bar and an entertainment area. The second floor is mostly
unfinished and is being partially used for offices and storage. Fitzgeralds
Black Hawk also has a 400-space, all valet parking garage, adjacent to the
casino.

The Company has experienced significant delays in obtaining zoning and other
permits necessary to undertake the currently planned expansion of the
Fitzgeralds Black Hawk property. As a result, the Company is substantially
revising the expansion plans in an effort to facilitate the process of obtaining
the necessary zoning permits, licenses and construction approvals. Revised plans
will include expanding the existing casino and related administration areas. The
expansion will utilize the adjoining empty lot and two existing office buildings
owned by the Company. Construction costs for the casino expansion and additional
gaming equipment will be adjusted to reflect the design modifications. However,
no assurance can be given that the requisite permits, licenses and construction
approvals will be received.



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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

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.

Certain Hotel Operating Information

The following table on Fitzgeralds hotel operations is provided as additional
supplemental information:

<TABLE>
<CAPTION>
                                DECEMBER 31, 1999
-----------------------------------------------------------------------------------------------
                                                                                         ROOM
                            NUMBER                              AVERAGE     AVERAGE    REVENUE/
           YEAR    DATE       OF    RENOVATION     RENOVATION  OCCUPANCY     ROOM      AVAILABLE
  HOTEL    BUILT ACQUIRED   ROOMS    YEAR(S)         AMOUNT       RATE       RATE        ROOMS
---------- ----- --------- -------- ----------    ------------ ----------   -------    ---------
<S>        <C>   <C>       <C>      <C>           <C>          <C>          <C>        <C>
Las Vegas  1979  Nov. 1987   638    1996-1999     $  4,146,200    92.1%     $ 39.03     $ 36.37
Tunica     1996    N/A       507    2000-2001     $  1,255,000    92.1%     $ 46.38     $ 42.71
Reno       1978  Dec. 1986   351    1998-2004     $  2,000,000    89.8%     $ 46.30     $ 42.38
</TABLE>


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 Atlantic City, 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.

Nevada Operations

Fitzgeralds Las Vegas competes primarily with other downtown casino properties,
casino properties located near the Nevada/California state line and certain
facilities located on the Las Vegas Strip. The Company also believes that it
competes, to a lesser extent, with the local neighborhood casinos and
casino-hotels on the Boulder Strip and in the Laughlin market.





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The Las Vegas market is highly competitive. The Company has experienced
competition from new and existing Las Vegas casino-hotels which have sought to
attract some of the same "middle-market" players, and tour and travel visitors
targeted by Fitzgeralds Las Vegas. The Company anticipates continuing increased
competition for these customers. Moreover, on the Las Vegas Strip, Bellagio with
3,000 rooms opened in 1998; Mandalay Bay, Venetian and Paris with approximately
9,200 rooms all opened in 1999; and one additional mega resort with
approximately 2,600 rooms is scheduled to open in the summer of 2000. Two other
properties located off the Las Vegas Strip, the Las Vegas Regent and Lake Las
Vegas, also opened in 1999. In addition, casinos catering to local residents
also compete for business from the Company's targeted segment. These new
properties, as well as any other major additions, expansions or enhancements to
existing properties by the Company's competitors, could have a material adverse
effect on the Company's business.

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 at the
Company's Las Vegas and Reno properties 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 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
also will immediately have the right to operate "any banking or percentage card
game"; however, craps and roulette will be not available for at least a year.
The legal gambling age will be 18, while the drinking age will remain at 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





                                      -6-
<PAGE>   9

suits for patron injuries, although they will be 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 Las Vegas and 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 highly leveraged, lacks financial flexibility and is in
default on its senior secured debt, there can be no assurance that the Company
will generate sufficient funds internally or obtain sufficient additional
financing to fund such expenditures.

Mississippi Operations

Fitzgeralds Tunica competes primarily with nine other dockside gaming facilities
in the Tunica area, five of which are approximately one mile north of
Fitzgeralds Tunica and four of which are approximately four miles south of
Fitzgeralds Tunica. The latter group includes a gaming facility originally
operated by Harrah's and closed in 1997. The facility was recently acquired by
the Isle of Capri and re-opened in the summer of 1999.

In addition to the substantial competition in the immediate vicinity of
Fitzgeralds Tunica, the Company competes with other Mississippi operations and
may have to compete with surrounding areas for customers in Memphis, Tennessee
and Little Rock, Arkansas. There can be no assurance that the State of Tennessee
or the State of Arkansas will not legalize casino gaming in the future.

To maintain and enhance its competitive position, it will be necessary to incur
capital expenditures at Fitzgeralds Tunica from time to time to add to the
appeal of the property. Because the Company is highly leveraged, lacks financial
flexibility, is in default on its senior secured debt and may not generate
sufficient funds internally, there can be no assurance that the Company will be
able to fund any such expenditures.

Colorado Operations

Competition has intensified in Black Hawk with the opening of the Lodge and the
Isle of Capri in 1998. Two additional properties opened in the first quarter of
2000. All of these properties  are larger than Fitzgeralds Black Hawk, are
operated by companies with greater resources and are located at the eastern end
(closest to Denver) of Black Hawk at the first major intersection off State
Highway 119, which may give them a competitive advantage over Fitzgeralds Black
Hawk since they have the initial opportunity to capture visitors to Black Hawk
and Central City from the Denver metropolitan area. The increased competition
may have a material adverse effect on Fitzgeralds Black Hawk operations and may
continue to do so; moreover, the concentration of these properties on the south
end of the street has shifted the center of gaming activity away from
Fitzgeralds Black Hawk, which is located at the north end of the street.
Moreover, there is a fundamental issue concerning the size of the Black Hawk
market and the ability to expand the market because of its mountain location and
the availability of adequate roads and other infrastructure. Although
initiatives to expand gaming venues in Colorado have thus far been unsuccessful,
new initiatives, legislation or regulations could be introduced in the future.
The enactment of any initiative, legislation or regulation legalizing gaming
elsewhere in Colorado could and, if such legalized gaming was closer to Denver,
would have a material adverse effect on Fitzgeralds Black Hawk.

The Company will be required to make substantial capital expenditures to
increase the attractiveness of the Fitzgeralds Black Hawk property in the face
of increasing competition. See Operating Properties -




                                      -7-
<PAGE>   10

Fitzgeralds Black Hawk. Because the Company is highly leveraged, lacks financial
flexibility, is in default on its senior secured debt and may not generate
sufficient funds internally, there can be no assurance that the Company will be
able to fund any such expenditures.


EMPLOYEES

As of December 31, 1999, the Company employed approximately 3,240 people.
Fitzgeralds Las Vegas employed approximately 978 people, approximately 466 of
whom are represented by the Culinary Workers Union, Local No. 226 and the
Bartenders Union, Local No. 165, under a five-year contract expiring on May 31,
2002. In addition, five employees are represented by the United Brotherhood of
Carpenters and Joiners of America, Southern California-Nevada Regional Council
of Carpenters and Its Affiliated Local No. 1780, under a three-year contract
expiring on July 31, 2001. Fitzgeralds Tunica, Fitzgeralds Reno and Fitzgeralds
Black Hawk employed approximately 1,152, 712 and 365 people, respectively, none
of whom are represented by a union. In addition, the Company also employed 33
people in its corporate offices.

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 expends considerable effort
to conceptualize, obtain, utilize and protect its trade names, trademarks and
service marks. The Company has proprietary rights in approximately 84 registered
trade names, trademarks and service marks used in connection with its businesses
and created to enhance its Irish luck theme, its gaming activities and its
association with the Fremont Street Experience, 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 has 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.

GOVERNMENTAL REGULATION


General

The ownership and operation of the Company's casino gaming facilities are
subject to various state and local regulations in the jurisdictions where they
are located. In Nevada, the Company's gaming operations are 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. In Mississippi, the Company
must register under the Mississippi Gaming Control Act and its gaming operations
are subject primarily to the licensing and regulatory control of the Mississippi
Gaming Commission, the Mississippi State Tax Commission and various local, city
and county regulatory agencies. In Colorado, the Company's gaming operations are
subject to the Limited Gaming Act of 1991, which created the Division of Gaming
within the Colorado Department of Revenue and the Colorado Limited Gaming
Control Commission to license, implement, regulate and supervise the conduct of
limited gaming. The Company's operations are also subject to the Colorado Liquor
Code and the state and local liquor licensing authorities.

The Company holds all licenses and permits it needs to operate its gaming
facilities. Directors, officers and key employees of the Company are required to
hold individual licenses, which requirements vary




                                      -8-
<PAGE>   11

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 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 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




                                      -9-
<PAGE>   12

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 Las Vegas and 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 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





                                      -10-
<PAGE>   13

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.

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 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 Las Vegas and the City of Reno have 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.



                                      -11-
<PAGE>   14

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 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




                                      -12-
<PAGE>   15

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

Mississippi Gaming Regulation

The ownership and operation of casino gaming facilities in Mississippi are
subject to extensive state and local regulations, but primarily the licensing
and regulatory control of the Mississippi Commission (the "Mississippi
Commission") and the Mississippi State Tax Commission. The Company must register
under the Mississippi Gaming Control Act (the "Mississippi Act") and its gaming
operations are subject to the licensing and regulatory control of the
Mississippi Commission and various local, city and county regulatory agencies.
The Mississippi Act, which legalized dockside casino gaming in Mississippi, was
enacted on June 29, 1990. Although not identical, the Mississippi Act is similar
to the Nevada Act. Effective October 29, 1991, the Mississippi Commission
adopted regulations in furtherance of the Mississippi Act which are also similar
in many respects to the Nevada gaming regulations.

Under Mississippi law, gaming vessels in Tunica County must be located on the
Mississippi River or on navigable waters emptying into the Mississippi River.
Fitzgeralds Tunica was constructed on barges situated in a specially constructed
basin made a part of the Mississippi River by a navigable inlet. On May 24,
1993, the Mississippi Commission granted site approval to the Fitzgeralds Tunica
site. On April 21, 1994, FMI dba Fitzgeralds Tunica received a gaming operator's
license from the Mississippi Commission. At the same meeting, certain key
principals of FMI were found suitable. The license was most recently renewed on
March 26, 1998, effective April 23, 1998, and will expire on April 23, 2000. All
related findings of suitability have been maintained and are current. A
condition placed on this license by the Mississippi Commission is that the barge
placement continue to meet the statutory requirements of navigability.
Fitzgeralds Tunica opened on June 6, 1994.

The laws, regulations and supervisory procedures of Mississippi and the
Mississippi Commission seek to: (i) prevent unsavory or unsuitable persons from
having any direct or indirect involvement with gaming at any time or in any
capacity; (ii) establish and maintain responsible accounting practices and
procedures; (iii) maintain effective control over the financial practices of
licensees, including establishing minimum procedures for internal fiscal affairs
and safeguarding of assets and revenues, providing reliable record keeping and
making periodic reports to the Mississippi Commission; (iv) prevent cheating and
fraudulent practices; (v) provide a source of state and local revenues through
taxation and licensing fees; and (vi) ensure that gaming licensees, to the
extent practicable, employ Mississippi residents. The regulations are subject to
amendment and interpretation by the Mississippi Commission.

The Mississippi Act provides for legalized dockside gaming at the discretion of
the 14 counties that either border the Gulf Coast or the Mississippi River, but
only if the voters in such counties have not voted to prohibit gaming in that
county. As of November 20, 1997, dockside gaming was permitted in nine of the 14
eligible counties in the State and gaming operations have commenced in Adams,
Coahoma,




                                      -13-
<PAGE>   16

Hancock, Harrison, Tunica, Warren and Washington counties. The law permits
unlimited stakes gaming on permanently moored vessels on a 24-hour basis and
does not restrict the percentage of space which may be utilized for gaming.
There are no limitations on the number of gaming licenses which may be issued in
Mississippi. The legal age for gaming in Mississippi is 21.

The Company and FMI are required to submit detailed financial, operating and
other reports to the Mississippi Commission. Substantially all loans, leases,
sales of securities and similar financing transactions entered into by the
Company and FMI must be reported to or approved by the Mississippi Commission.
FMI is also required to periodically submit detailed financial and operating
reports to the Mississippi Commission and to furnish any other information
required thereby.

Each of the directors, officers and key employees of the Company who are
actively and directly engaged in the administration or supervision of gaming, or
who have any other significant involvement with the activities of the Company,
and each of the officers and directors and certain employees of FMI, must be
found suitable therefor, and may be required to be licensed, by the Mississippi
Commission. The finding of suitability is comparable to licensing, and both
require submission of detailed personal financial information followed by a
thorough investigation. In addition, any individual who is found to have a
material relationship to, or material involvement with, the Company or FMI may
be required to be investigated in order to be found suitable or to be licensed
as a business associate of the Company or FMI. Key employees, controlling
persons or others who exercise significant influence upon the management or
affairs of the Company or FMI may also be deemed to have such a relationship or
involvement. There can be no assurance that such persons will be found suitable
by the Mississippi Commission. An application for licensing may be denied for
any cause deemed reasonable by the Mississippi Commission. Changes in licensed
positions must be reported to the Mississippi Commission. In addition to its
authority to deny an application for a license, the Mississippi Commission has
jurisdiction to disapprove a change in corporate position. If the Mississippi
Commission were to find a director, officer or key employee unsuitable for
licensing or unsuitable to continue having a relationship with the Company or
FMI, the Company or FMI would have to suspend, dismiss and sever all
relationships with such person. The Company or FMI would have similar
obligations with regard to any person who refuses to file appropriate
applications. Each gaming employee must obtain a work permit which may be
revoked upon the occurrence of certain specified events.

Mississippi statutes and regulations give the Mississippi Commission the
discretion to require a suitability finding with respect to anyone who acquires
any security of the Company or FMI, regardless of the percentage of ownership.
The current practice of the Mississippi Commission is to require any individual
acquiring 5% or more and any qualifying institutional investor acquiring 15% or
more of any voting securities of a licensee or a public or private company with
a licensed subsidiary to be found suitable. If the owner of voting securities
who is required to 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.

Any owner of voting securities found unsuitable and who holds, directly or
indirectly, any beneficial ownership of equity interests in the Company or FMI
beyond such period of time as may be prescribed by the Mississippi Commission
may be guilty of a misdemeanor. 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 Mississippi Commission may be found unsuitable. The Company or FMI is
subject to disciplinary action if, after it receives notice that a person is
unsuitable to be an owner of or to have any other relationship with it, the
Company or FMI: (i) pays the unsuitable person any dividends or interest upon
any of its securities or any payments or distributions of any kind whatsoever;
(ii) recognizes the exercise, directly or indirectly, of any voting rights in
its securities by the unsuitable person; or (iii) pays the unsuitable




                                      -14-
<PAGE>   17

person any remuneration in any form for services rendered or otherwise, except
in certain limited and specific circumstances. In addition, if the Mississippi
Commission finds any owner of voting securities unsuitable, such owner must
immediately surrender all securities to the Company or FMI, as applicable, and
the Company or FMI must purchase the securities so offered for cash at fair
market value within 10 days.

The Company and FMI will be required to maintain current ownership ledgers in
the State of Mississippi which may be examined by the Mississippi Commission 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 Mississippi Commission. A failure to make such disclosure may be grounds
for finding the record holder unsuitable. The Company and FMI also are required
to render maximum assistance in determining the identity of the beneficial
owner. In addition, the Mississippi Commission under the Mississippi Act may, in
its discretion: (i) require holders of debt securities of registered
corporations to file applications; (ii) investigate such holders; and (iii)
require such holders to be found suitable to own such debt securities. Although
the Mississippi Commission generally does not require the individual holders of
such obligations to be investigated and found suitable, the Mississippi
Commission retains the discretion to do so for any reason, including, but not
limited to, a default, or where the holder of the debt instrument exercises a
material influence over the gaming operations of the entity in question. Any
holder of debt securities required to apply for a finding of suitability must
pay all investigation fees and costs of the Mississippi Commission in connection
with such an investigation.

The regulations provide that a change in control of the Company or FMI may not
occur without the prior approval of the Mississippi Commission. Mississippi law
prohibits the Company from making a public offering or private placement of its
securities without the approval of or waiver of approval by the Mississippi
Commission if any part of the proceeds of the offering is to be used to finance
the construction, acquisition or operation of gaming facilities in Mississippi,
or to retire or extend obligations incurred for one or more of such purposes.
Mississippi law also prohibits the Company from pledging or otherwise placing
restrictions on the stock of FMI without the prior approval of the Mississippi
Commission.

The Mississippi Act requires that certificates representing securities of the
Company or FMI bear a legend to the general effect that the securities are
subject to the Mississippi Act and regulations of the Mississippi Commission.
The Mississippi Commission, through the power to regulate licensees, has the
power to impose additional restrictions on the holders of the Company's or FMI's
securities at any time.

As Mississippi licensees, neither the Company nor FMI may engage in gaming
activities outside Mississippi without approval of the Mississippi Commission.
Such approvals were initially granted on April 21, 1994, and additional
approvals have been granted on a jurisdiction-by-jurisdiction basis.

The licenses obtained by the Company and FMI are not transferable and new
licenses must be obtained every two years. There can be no assurance that any
subsequent application will be approved. Each issuing agency may at any time
dissolve, suspend, condition, limit or restrict a license or approval to own
equity interests in the Company or FMI for any cause deemed reasonable by such
agency. Substantial fines for each violation of gaming laws or regulations may
be levied against the Company or FMI in Mississippi. A violation under any
gaming license held by the Company or FMI may be deemed a violation of all the
other licenses held by the Company or FMI. Suspension or revocation of any of
the foregoing licenses or of the approval of the Company or FMI would have a
material adverse effect upon the business of the Company.





                                      -15-
<PAGE>   18

License fees and taxes, computed in various way depending on the type of gaming
involved, are payable to the State of Mississippi and to the counties and cities
in which FMI's operations will be conducted. Depending upon the particular fee
or tax involved, these fees and taxes are payable either monthly, quarterly or
annually and are based upon: (i) the percentage of the gross gaming revenues
received by the casino operation; (ii) the number of slot machines operated by
the casino; (iii) the number of table games operated by the casino; or (iv) the
number of casino patrons. The foregoing license fees are allowed as a credit
against FMI's Mississippi income tax liability for the year paid.

In October 1994, the Mississippi Commission adopted a regulation requiring, as a
condition of licensure or license renewal, that a gaming establishment's site
development plan include an approved 500-car parking facility in close proximity
to the casino complex and infrastructure facilities which will amount to at
least 25% of the casino cost. Such facilities may include any of the following:
a 250-room hotel of at least a two-star rating (as defined by the current
edition of the Mobil Travel Guide), a theme park, a golf course, marinas, a
tennis complex, entertainment facilities or any other such facility as approved
by the Mississippi Commission as infrastructure. Parking facilities, roads,
sewage and water systems or facilities normally provided by governmental
entities are excluded. The Mississippi Commission may, in its discretion, reduce
the number of hotel rooms and parking spaces required where it is shown, to the
satisfaction of the Mississippi Commission, that sufficient rooms are available
to accommodate the anticipated visitor load. Such reduction in the number of
rooms does not impact the 25% investment requirement imposed by the regulation.
The number of parking spaces may also be reduced to accommodate smaller casinos.
The Company met such requirements with the opening of the Fitzgeralds Tunica
Hotel and related facilities in 1996. On January 21, 1999, the Mississippi
Commission amended this regulation to increase the minimum level of
infrastructure investment from 25% to 100% of the casino cost; however, the 100%
infrastructure investment amendment applies only to new casino developments and
existing casino developments that are not operating at the time of their
acquisition or purchase, and would therefore not apply to Fitzgeralds Tunica.

The sale of alcoholic beverages, including beer and wine, at Fitzgeralds Tunica
is subject to licensing, control and regulation by the Alcoholic Beverage
Control Division (the "ABC") of the Mississippi State Tax Commission. The ABC
requires that all equity owners and managers file personal record forms and
fingerprint forms for their licensing process. In addition, owners of more than
5% of FMI's equity and FMI's officers and managers must submit detailed
financial information to ABC for licensing. All such licenses are revocable and
are non-transferable. The Mississippi State Tax Commission has full power 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 Fitzgeralds Tunica.

Colorado Gaming Regulation

Colorado legalized limited gaming by constitutional amendment approved by
Colorado voters on November 6, 1990. The Colorado legislature thereafter enacted
the Limited Gaming Act of 1991 (the "Colorado Act") to implement the provisions
of the constitutional amendment and limited gaming commenced in Colorado on
October 1, 1991. The Colorado Act authorizes limited gaming only in certain
designated commercial districts of Central City, Black Hawk and Cripple Creek,
Colorado. Limited gaming consists of poker, blackjack and slot machines, all
with maximum single bets of five dollars. Only persons aged 21 or older may
participate in limited gaming, and limited gaming is prohibited between the
hours of 2:00 a.m. and 8:00 a.m. Limited gaming is only allowed on premises
licensed for that purpose, and the licensed premises of any building may not
exceed 35% of the square footage of the building and no more than 50% of any
floor of such building.




                                      -16-
<PAGE>   19

Pursuant to the Colorado Act and the rules and regulations promulgated
thereunder (collectively, the "rules"), the ownership and operation of limited
gaming facilities in Colorado, however acquired, are subject to extensive
regulation. The Colorado Act created the Division of Gaming (the "Colorado
Division") within the Colorado Department of Revenue and the Colorado Limited
Gaming Control Commission (the "Colorado Gaming Commission") to license,
implement, regulate, and supervise the conduct of limited gaming. The Director
of the Colorado Division (the "Colorado Director"), under the general
supervision of the Colorado Gaming Commission, is granted broad powers to ensure
compliance with the Colorado Act and the rules. The Colorado Act now provides
that the provisions which established the Colorado Division are repealed
effective July 1, 2003, unless continued by act of the General Assembly. If the
repeal takes effect, Colorado law provides a procedure for winding up the
affairs of the Colorado Division, public hearings, analysis and evaluation, and
for determining claims by or against the Colorado Division. The potential effect
of the possible repeal is unknown.

The Colorado Gaming Commission has authority to issue retail gaming, operator,
key employee and support licenses, and licenses for slot machine manufacturers
and distributors. The Colorado Director also has the authority to issue key
employee and support licenses. All such licenses are for renewable one-year
periods. The Colorado Gaming Commission has broad discretion to condition,
suspend, revoke, limit or restrict a license at any time. The Colorado Gaming
Commission may issue temporary licenses with a duration of up to six months. The
Colorado Gaming Commission also has authority to impose fines against licensees.

All license applicants must demonstrate to the Colorado Gaming Commission that
they are suitable for licensing and are of good moral character. Applicants who
are career offenders, have certain criminal convictions, have associations with
career offender cartels or have certain pending criminal charges are
disqualified from licensure. Licensure by the Colorado Gaming Commission or the
Colorado Director is a revocable privilege and not a vested interest or property
right. All licenses are non-transferable.

A retail gaming license is required for all persons permitting or conducting
limited gaming on their premises. In addition, an operator license is required
for all persons who permit slot machines on their premises or who engage in the
business of placing and operating slot machines on the premises of a retail
gaming licensee. No person may have an ownership interest in more than three
retail licenses. With certain exceptions for licensed operators, a slot machine
manufacturer or distributor license is required for all persons who manufacture,
import, distribute, sell or lease for a fixed or flat fee, slot machines in
Colorado.

All natural persons employed in the field of limited gaming and all gaming
employees must hold either a support or key employee license. A key employee is
an executive, employee or agent of a gaming licensee having the power to
exercise a significant influence over decisions concerning any part of the
operation of a gaming licensee. The Colorado Gaming Commission may determine
that any employee of a licensee is a key employee and, therefore, require that
such person apply for licensing as a key employee.

All applicants for Colorado gaming licenses must complete comprehensive
applications, forms, pay required fees, and provide all information required by
the Colorado Gaming Commission and the Colorado Division. The Colorado Division
conducts a thorough background investigation of each applicant or any persons or
entities associated with the applicant. The investigation may cover the
background, personal history, financial associations, character, record and
reputation of the applicant. The applicant pays the full cost of the background
investigation. There is no limit on the cost or duration of the background
investigation. Applicants who do not provide all requested information during a
background investigation may be denied a gaming license.




                                      -17-
<PAGE>   20

The practice of the Colorado Division and the Colorado Gaming Commission, which
may change at any time, is to require every officer and director, or equivalent
office holders for non-corporate applicants, and 5% or greater beneficial owners
of an applicant or licensee to complete background investigation forms, provide
comprehensive information and submit to a full background investigation
conducted by the Colorado Division and Colorado Gaming Commission. The Colorado
Division may, and sometimes does, require information from and conducts
background investigations of persons holding less than a 5% beneficial interest
in an applicant or licensee.

In addition, all persons loaning monies, goods, or real or personal property to
a licensee or applicant, or having any interest in a licensee or applicant, or
entering into any agreement with a licensee or applicant, must provide any
information requested by the Colorado Division or Colorado Gaming Commission;
and in the discretion of the Colorado Division or the Colorado Gaming
Commission, these persons must supply all information relevant to a
determination of any such person's suitability for licensure and must submit to
a full background investigation if ordered by the Colorado Gaming Commission.
Failure to promptly provide all information requested, or to submit to a
suitability or background investigation, may result in the denial of a license
application, suspension or revocation of an existing license, termination of any
lease, note arrangement, or agreement between the applicant or licensee and the
person requested to provide the information, and other sanctions. Applicants and
licensees may be required by the Colorado Gaming Commission to pay the costs of
background, suitability, or other investigations of persons associated with the
applicant or licensee. Investigations for suitability, background, or any other
reason may delay license application or the operation under any agreement with a
licensee. All agreements, contracts, leases or arrangements in violation of the
Colorado Act or the rules are void and unenforceable.

Persons found unsuitable by the Colorado Gaming Commission may be required
immediately to terminate any interest in, association or agreement with, or
relationship to a licensee. A finding of unsuitability with respect to any
officer, director, employee, associate, lender or beneficial owner of a licensee
or applicant may also jeopardize the licensee's license or applicant's license
application. Licenses may be conditioned upon termination of any relationship
with unsuitable persons.

The Colorado Act and the rules require licensees to maintain detailed books and
records which accurately account for all monies and business transactions. Books
and records must be furnished upon demand to the Colorado Gaming Commission, the
Colorado Division and other law enforcement authorities. The rules also
establish extensive playing procedures, standards, requirements and rules of
play for poker, blackjack and slot machines.

Retail gaming licensees must, in addition, adopt comprehensive internal control
procedures governing their limited gaming operations. Such procedures include
the areas of accounting, internal fiscal control, surveillance, security,
cashier operations, key control, reporting procedures, personnel procedures and
fill and drop procedures, among others. Such procedures must be approved in
advance by the Colorado Division. Licensees are prohibited from engaging in
fraudulent acts which include, among other things, misrepresenting the
probabilities of pay out, improperly canceling a bet, conducting limited gaming
without a valid license and employing an unlicensed person in a position which
requires a licensed employee. Licensees must report to the Colorado Division all
licenses, and all applications for licenses, in foreign jurisdictions.

With limited exceptions applicable to licensees that are publicly traded
entities, no person, including persons who may acquire an interest in a licensee
pursuant to a foreclosure, may sell lease, purchase,




                                      -18-
<PAGE>   21

convey or acquire any interest in a retail gaming or operator license or
business without the prior approval of the Colorado Gaming Commission.

The rules impose certain additional restrictions and reporting and filing
requirements on publicly traded entities holding gaming licenses in Colorado and
on gaming licensees in Colorado owned directly or indirectly, 5% or more, by
publicly traded entities. Such rules apply to the Company. In addition, gaming
licensees, affiliated companies, and controlling persons thereof, must comply
with notice requirements upon the filing of registration statements with the
Securities and Exchange Commission. Such entities also must include certain
provisions in their charter or other organization documents restricting the
transfer of interests in the entity except in compliance with the Colorado Act.
The Colorado Gaming Commission may require persons affiliated with, and certain
direct or indirect owners of, such transferees to apply for a finding of
suitability. If found unsuitable, such persons must terminate their relationship
with the entity and such owners must sell their interest back to the issuer or
to a suitable person approved by the Colorado Gaming Commission. Black Hawk also
imposes taxes and fees on other aspects of the businesses of gaming licensees,
such as parking, liquor license and other municipal taxes and fees. It is not
unreasonable to expect substantial increases in these fees or the imposition of
new taxes and fees.

The State of Colorado has enacted an annual tax on the adjusted gross proceeds
("AGP") from limited gaming. AGP is generally defined as the amounts wagered
minus payments to players. For poker, AGP means those sums wagered on a hand
retained by the licensee as compensation. Currently, the gaming tax on AGP
ranges between 2% and 20%. The gaming tax is paid monthly, with licensees
required to file returns by the 15th of the following month. Effective July 1 of
each year, the Colorado Gaming Commission establishes the gaming tax rates for
the following 12 months. Under the Colorado Constitution, the Colorado Gaming
Commission may increase the gaming tax rate to as much as 40% of AGP.

Violations of the Colorado Act, or any of the rules, is a criminal offense.
Persons violating the Colorado Act or the rules may, in addition to any gaming
license suspension or revocation, be subject to criminal prosecution resulting
in incarceration, fines or both.

The sale of alcoholic beverages in gaming establishments is subject to strict
licensing, control and regulation by state and local authorities. Alcoholic
beverage licenses are revocable and non-transferable. State and local licensing
authorities have full power to limit, condition, suspend or revoke any such
licenses. Violation of these state alcoholic beverage laws is a criminal
offense, and violators are subject to criminal prosecution, incarceration and
fines.

ITEM 2. PROPERTIES

Reference is made to the information contained in Part I, Item 1. Business -
Properties of 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




                                      -19-
<PAGE>   22

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 the Fitzgeralds 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 as currently proposed 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 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 said intervention, on December 22, 1999, the court
granted the City's Motion for Summary Judgment against the Sundowner which
motion was joined in by the Company. The City and the Company are currently
engaged in negotiations to resolve the pending litigation. However, barring such
a resolution, the parties have stipulated to a briefing schedule that requires
all briefs to be filed by April 3, 2000. It is anticipated that a decision on
the merits of the Company's claims will be made subsequent to the filing of
briefs, however, oral arguments may be requested.

The Company has received no assurance as to whether or when the City will
negotiate mitigation measures and whether such measures could or would fully
compensate the Company for the fair market value of its property and anticipated
operating losses.

OTHER MATTERS

The Company is a party to various lawsuits relating to routine matters
incidental to its business. 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.


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

None.



                                      -20-
<PAGE>   23

                                     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
February 24, 2000, 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 to date. The
Company intends to retain all future earnings for use in the development of its
business and does not anticipate paying cash dividends (including with respect
to its Preferred Stock) in the foreseeable future. The payment of all dividends
will be at the discretion of the Company's Board of Directors and will depend
upon, among other things, future earnings, operations, capital requirements, the
general financial condition of the Company and general business conditions. The
ability of the Company or its subsidiaries to pay dividends is restricted by the
Indenture governing the Company's senior secured debt and the terms of the
credit facility, with respect to which the Company is in default, and by the
certificate of designation for the Preferred Stock with respect to the Common
Stock. If a holder of securities is disqualified from owning such securities by
any gaming authority, such holder will not be permitted to receive any dividends
if, and when, declared by the Company's Board of Directors with respect to such
securities. See Item 1. Business - Governmental Regulation.



                                      -21-
<PAGE>   24

ITEM 6. SELECTED FINANCIAL DATA

                         FITZGERALDS GAMING CORPORATION

<TABLE>
<CAPTION>
                                                                      DECEMBER 31,
                                          ---------------------------------------------------------------------
                                             1999           1998            1997          1996           1995
                                          ---------      ---------      ---------      ---------      ---------
                                                                      (in thousands)
<S>                                       <C>            <C>            <C>            <C>            <C>
Statement of Operations Data:
      Net Operating Revenues              $ 202,398      $ 207,125      $ 179,702      $ 140,530      $ 141,397
      Income from Operations (1)             11,399         21,680         13,622          3,871         13,768
      Interest Expense, Net                  29,168         26,646         25,033         18,187         14,706
      Net Loss                              (17,954)        (8,667)       (31,542)       (13,494)        (4,255)

Other Data:
    EBITDA:(2)
      Fitzgeralds Las Vegas (3)           $   2,594      $   2,682      $   2,651      $   1,656      $   4,084
      Fitzgeralds Tunica                     11,553          8,051         11,744          3,790          9,934
      Fitzgeralds Reno                        4,588          4,805          5,462          4,596          7,009
      Fitzgeralds Black Hawk                  9,303         10,863          4,842             --             --
      Other (4)                              (2,281)         9,622          4,111          2,874          1,667
                                          ---------      ---------      ---------      ---------      ---------
         Total Properties                    25,757         36,023         28,810         12,916         22,694
      Nevada Club                               (90)          (561)        (1,282)          (148)           392
      Harolds Club                              (64)          (111)        (1,853)            --         (1,307)
                                          ---------      ---------      ---------      ---------      ---------
         Total EBITDA                        25,603         35,351         25,675         12,768         21,779
      Adjustments to EBITDA (5)               2,325         (5,328)         4,924            742          1,337
                                          ---------      ---------      ---------      ---------      ---------
         Adjusted EBITDA                  $  27,928      $  30,023      $  30,599      $  13,510      $  23,116
                                          =========      =========      =========      =========      =========

    Earnings to Fixed Charges: (6)               --             --             --             --             --

    Net Cash Provided by (Used in):
      Operating activities                $  21,089      $  12,189      $   1,287      $     759      $   8,468
      Investing activities                   (1,961)        (5,451)       (24,657)        (6,368)       (50,404)
      Financing activities                  (10,051)        (8,509)        24,830           (885)        49,894
    Depreciation and Amortization            14,203         13,671         12,054          8,897          8,010
    Capital Expenditures                      6,184          9,352          3,944         57,026         14,957

Balance Sheet Data:
    Cash                                  $  22,116      $  13,039      $  14,810      $  13,349      $  19,844
    Total Assets                            206,796        209,197        215,695        191,179        197,213
    Short-Term Debt                         203,840          4,940          7,591         27,750         11,226
    Long-Term Debt                              598        208,204        206,191        127,882        139,467
    Preferred stock, net of offering
      costs and discounts                    29,963         24,401         19,631         15,489         11,953
    Stockholders' Equity (Deficiency)       (74,496)       (51,300)       (37,863)        (2,043)        16,061
</TABLE>


---------------
(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.



                                      -22-
<PAGE>   25

(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 $0.9 million, $0.8 million, $0.8 million,
      $1.0 million and $0 for 1999, 1998, 1997, 1996 and 1995, 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. The 1999 investment was charged against earnings. See
      Note 5 "Impairment Loss" of the Notes to Consolidated Financial
      Statements.

(4)   Other includes (i) management fees from Fitzgeralds Black Hawk for 1997,
      1996 and 1995; (ii) management fees from Cliff Castle for 1998, 1997, 1996
      and 1995; (iii) payments from the Turning Stone settlement agreement for
      1998, 1997, 1996 and 1995; (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 $2.2 million of restructuring expenses
      for 1999.

(5)   Adjustments to EBITDA include (i) exclusion of EBITDA for Harolds Club and
      Nevada Club for all periods presented; (ii) exclusion of business
      development expenses for Sugar Creek, Missouri of $0.4 million for 1995;
      (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 and $0.6 million for 1996 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; and (vii)
      exclusion of restructuring expenses of $2.2 million in 1999.

(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. Earnings were insufficient to cover
      fixed charges by $18.0 million, $10.0 million, $10.6 million, $15.5
      million and $0.6 million for the years ended December 31, 1999, 1998,
      1997, 1996, and 1995, respectively.



                                      -23-
<PAGE>   26

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, 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, Fitzgeralds Las Vegas and Fitzgeralds Tunica have been owned
and operated by the Company or its affiliates since 1985, 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 1997, the Company issued $205.0 million of 12.25% Senior Secured
Notes due 2004 (the "Senior Secured Notes") secured by a lien on substantially
all of the assets of the Company. In October 1998, the Company established a
$15.0 million line of credit (the "Credit Facility") with a lending institution,
of which $5.0 million is permitted to be used for capital projects at
Fitzgeralds Black and $10.0 million of which is permitted to be used for general
corporate purposes. The Credit Facility is secured by a lien on substantially
all of the assets of the Company, which lien is senior to the lien securing the
Senior Secured Notes.

On May 13, 1999, the Company's Board of Directors determined that, pending a
restructuring of its indebtedness, it would not be in the best interest of the
Company to make the regularly scheduled interest payments on its Senior Secured
Notes. Accordingly, the Company has not paid the regularly scheduled interest
payments of $12.5 million that were due and payable June 15, 1999 and December
15, 1999. Under the Indenture pursuant to which the Senior Secured Notes were
issued, an Event of Default occurred on July 15, 1999, and is continuing as of
the date hereof. An additional $2.2 million of interest incurred from the
default on the Senior Secured Notes has also not been paid. No action has been
taken by either the Indenture Trustee or holders of at least 25% of the Senior
Secured Notes to accelerate the Senior Secured Notes and declare the unpaid
principal and interest to be due and payable.



                                      -24-
<PAGE>   27
An informal committee (the "Committee"), representing holders of a majority in
interest of the Senior Secured Notes, has been formed. The Committee has
retained both a financial adviser and legal counsel, certain costs of which are
being borne by the Company. The Company has initiated and is continuing
discussions with representatives of the Committee concerning a restructuring of
the Company's indebtedness and reorganization of the Company that may include
the sale of some or all of the Company's properties.

On a consolidated basis, net operating revenues (excluding Nevada Club)
decreased to $202.4 million in 1999 from $207.1 million in 1998, primarily as a
result of the termination of the Cliff Castle Management Agreement and
completion of the settlement agreement with Turning Stone which provided
revenues of $9.8 million and $1.1 million, respectively, in 1998.

Casino operations provided an average of approximately 84.9% and 78.5% of the
Company's net operating revenues during 1999 and 1998, respectively, and
substantially all of its income from operations. Slot machine income has been
the primary component of the Company's gaming revenues, providing an average of
approximately 83.9% and 82.7% of such revenues during 1999 and 1998,
respectively.

Unless otherwise noted, the narrative discussion below is focused on the results
of the Company's Operating Properties which together with Cliff Castle and
Turning Stone for 1998 and 1997 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 as an
operating expense. The remainder of the unallocated corporate expense is
included in Other Operations of the Properties. See Note 2 of Statement of
Operations Data.



                                      -25-
<PAGE>   28

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.

<TABLE>
<CAPTION>

                                           Year Ended December 31,
                                   ---------------------------------------
Statement of Operations Data         1999           1998           1997
                                   ---------      ---------      ---------
                                                (in thousands)
<S>                                <C>            <C>            <C>
Net Operating Revenues:
    Fitzgeralds Las Vegas          $  51,845      $  50,987      $  46,540
    Fitzgeralds Tunica                74,332         68,349         68,734
    Fitzgeralds Reno                  40,019         39,729         39,803
    Fitzgeralds Black Hawk (1)        36,202         36,256         12,692
    Other (2)                             --         11,742          5,695
                                   ---------      ---------      ---------
       Total Properties              202,398        207,063        173,464
    Nevada Club                           --             62          6,238
                                   ---------      ---------      ---------
       Total                       $ 202,398      $ 207,125      $ 179,702
                                   =========      =========      =========
Income (Loss) From Operations:
    Fitzgeralds Las Vegas          $  (1,115)     $    (594)     $    (498)
    Fitzgeralds Tunica                 5,322          2,063          6,013
    Fitzgeralds Reno (3)               2,151          2,400          3,211
    Fitzgeralds Black Hawk (1)         7,517          9,074          4,215
    Other (2)                         (2,322)         9,414          4,011
                                   ---------      ---------      ---------
       Total Properties               11,553         22,357         16,952
    Nevada Club                          (90)          (566)        (1,477)
    Harolds Club                         (64)          (111)        (1,853)
                                   ---------      ---------      ---------
       Total                       $  11,399      $  21,680      $  13,622
                                   =========      =========      =========
Other Data
EBITDA (4):
    Fitzgeralds Las Vegas (5)      $   2,594      $   2,682      $   2,651
    Fitzgeralds Tunica                11,553          8,051         11,744
    Fitzgeralds Reno                   4,588          4,805          5,462
    Fitzgeralds Black Hawk (1)         9,303         10,863          4,842
    Other (2)                         (2,281)         9,622          4,111
                                   ---------      ---------      ---------
       Total Properties               25,757         36,023         28,810
    Nevada Club                          (90)          (561)        (1,282)
    Harolds Club                         (64)          (111)        (1,853)
                                   ---------      ---------      ---------
       Total EBITDA                   25,603         35,351         25,675
    Adjustments to EBITDA              2,325         (5,328)         4,924
                                   ---------      ---------      ---------
       Adjusted EBITDA             $  27,928      $  30,023      $  30,599
                                   =========      =========      =========

Net Cash Provided by (Used in)
    Operating Activities           $  21,089      $  12,189      $   1,287
    Investing Activities              (1,961)        (5,451)       (24,657)
    Financing Activities             (10,051)        (8,509)        24,830
Depreciation and Amortization         14,203         13,671         12,054
Capital Expenditures                   6,184          9,352          3,944

Earnings to Fixed Charges (6)             --             --             --
</TABLE>

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

(1)     Includes Fitzgeralds Black Hawk operating results commencing August 15,
        1997.

(2)     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)



                                      -26-
<PAGE>   29

        non-recurring revenue of $8.0 million for termination of the Cliff
        Castle Management Agreement in 1998; (v) corporate expenses not
        allocated to the Operating Properties for all periods presented, which
        includes $2.2 million of restructuring expenses for 1999.

(3)     Excludes inter-company debt write-off of $3.2 million from Nevada Club
        in 1999.

(4)     For a definition of EBITDA and Adjustments to EBITDA, see Notes 2 and 5
        of Notes to Selected Financial Data.

(5)     Fitzgeralds Las Vegas invested $0.9 million, $0.8 million and $0.8
        million for 1999, 1998 and 1997, respectively, in FSE. Prior to 1999,
        such investments were reported under the equity method with no impact on
        earnings. The 1999 investment was charged against earnings. See Note 5
        "Impairment Loss" of Notes to Consolidated Financial Statements.

(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. Earnings were insufficient to
        cover fixed charges by $18.0 million, $10.0 million and $10.6 million
        for the years ended December 31, 1999, 1998 and 1997, respectively.

FISCAL 1999 COMPARISON TO FISCAL 1998

Operating Revenues

Total revenues for the Properties were $221.5 million and net operating revenues
were $202.4 million for 1999, representing decreases of 1.3% and 2.3%,
respectively, over total revenues for the Properties of $224.4 million and net
operating revenues of $207.1 million for 1998. Such decreases were largely the
result of the termination of the Cliff Castle Management Agreement and
completion of the settlement agreement with Turning Stone, which provided
revenues of $9.8 million and $1.1 million, respectively, in 1998. 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, resulting in reduced operating margins.

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 83.9% and 82.7% are derived from slot machine
revenues for 1999 and 1998, respectively) increased 5.7% to $171.7 million for
1999 from the $162.5 million recorded for 1998.

Room revenues (at 9.7% and 9.5% of total revenues for 1999 and 1998,
respectively) increased 1.6% from 1998. Fitzgeralds Las Vegas room revenues
increased 6.3% due to an increase in occupancy rates to 92.1% in 1999 from 88.8%
in 1998, while its average daily rate increased 3.7%. Fitzgeralds Reno room
revenues decreased 2.5%, as an increase in occupancy to 89.8% in 1999 from 89.7%
in 1998 was offset by a 1.0% decrease in the average daily rate. Fitzgeralds
Tunica room revenues decreased 0.4% due to a decrease in occupancy to 92.1% in
1999 from 94.3% in 1998, which was offset by a 1.9% increase in the average
daily rate.

Food and beverage revenues (at 11.1% and 11.2% of total revenues for 1999 and
1998, respectively) decreased 1.3% from 1998. Decreases in food revenues of 7.4%
and 8.1% at Fitzgeralds Las Vegas and Fitzgeralds Black Hawk, respectively, were
offset by increases of 4.2% and 4.0% at Fitzgeralds Reno and Fitzgeralds Tunica,
respectively. The decrease at Fitzgeralds Las Vegas is due to changes in
utilization



                                      -27-
<PAGE>   30

of food product as a marketing strategy to generate traffic volumes while the
decrease at Fitzgeralds Black Hawk is due to increased gaming competition in the
Black Hawk market.

Other revenues decreased $12.1 million or 76.9% for 1999, primarily due to the
termination of the Cliff Castle Management Agreement and completion of the
Turning Stone settlement agreement in 1998.

Promotional allowances showed a net increase of $1.8 million or 10.7% for 1999,
reflecting the increased level of competition in all four markets.

Operating Costs and Expenses

Total operating costs and expenses for the Properties increased 3.3%, to $190.8
million for 1999 from $184.7 million for 1998.

Casino expenses were $83.9 million for 1999, a 3.0% increase from $81.4 million
for 1998, primarily due to increases in promotional expenses associated with the
Fitzgeralds Card. Food and beverage expenses decreased 15.2% to $15.5 million
for 1999 from $18.3 million for 1998, due to improved cost controls at all of
the Operating Properties with Fitzgeralds Las Vegas and Fitzgeralds Tunica
achieving the largest improvement as expenses decreased 22.9% and 14.7%,
respectively, for 1999. Room expenses decreased 0.1% for 1999 from $12.6 million
in 1998. Selling, general and administrative expenses increased 10.7% to $62.6
million for 1999 from $56.6 million for 1998, which in 1999, includes $2.2
million of professional fees and expenses incurred in conjunction with the
ongoing development and negotiation 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 Committee.

Personnel expenses increased 3.0%, to $79.6 million for 1999 from $77.4 million
for 1998. 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 5.8% and 6.8%, respectively, from 1998.

Marketing expenses, which include advertising, promotional material and special
events, increased 2.0% for 1999. The increase reflects more intensive marketing
efforts at each property undertaken in response to increasing competition in
each of the markets in which the Company operates, particularly at Fitzgeralds
Black Hawk. 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.

Depreciation and amortization expense increased 3.9% to $14.2 million for 1999
from $13.7 million for 1998, due to the acquisition of additional property and
equipment.

Income from Operations

As a result of the foregoing, income from operations for the Properties
decreased 48.3% to $11.6 million for 1999 from $22.4 million in 1998.

Net Interest Expense

Interest expense (net of interest income) increased 10.6% to $29.2 million for
1999 from $26.4 million for 1998, due primarily to $2.2 million of additional
interest resulting from the default on the Senior Secured Notes. Failure to make
the regularly scheduled interest payment on June 15, 1999 resulted in a 1.0%
increase in the interest rate to 13.25%, effective June 16, 1999.



                                      -28-
<PAGE>   31

Net Loss

Net loss increased to $20.9 million in 1999 compared to $8.0 million in 1998.

FISCAL 1998 COMPARISON TO FISCAL 1997

During 1998, the Company experienced minimal revenue growth after taking into
account completion of the Company's acquisition of Fitzgeralds Black Hawk in
August 1997 and the non-recurring fees from termination of the Cliff Castle
Management Agreement. 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,
resulting in reduced operating margins.

Operating Revenues

Total revenues for the Properties were $224.4 million and net operating revenues
for the Properties were $207.1 million for 1998, representing increases of 19.2%
and 19.4%, respectively, over the Properties' total revenues of $188.2 million
and net operating revenues of $173.5 million for 1997. Such increases were
largely the result of the consolidation of operating results of Fitzgeralds
Black Hawk for the full year 1998.

The Company's business can be separated into four operating departments: casino,
food and beverage, rooms and other. Casino revenues for the Properties (of which
approximately 82.7% and 79.6% are derived from slot machine revenues for 1998
and 1997, respectively) increased 19.6% to $162.5 million for 1998 from the
$135.9 million recorded for 1997, primarily due to the inclusion of operating
results of Fitzgeralds Black Hawk for the full year 1998.

Room revenues for the Properties (at 9.5% and 11.3% of total revenues for the
Properties for 1998 and 1997, respectively) decreased 0.5% from 1997 as slight
revenue increases in Tunica and Reno were offset by a decrease in Las Vegas
revenues. Tunica room revenues increased 0.7% due to an increase in occupancy
rates to 94.3% in 1998 from 89.3% in 1997, while its average daily rate
decreased 6.0%. Fitzgeralds Reno room revenues increased 0.1%, as a decrease in
occupancy to 89.7% in 1998 from 90.2% in 1997 was offset by a 1.5% increase in
the average daily rate. Las Vegas room revenues decreased 2.0% due to a decrease
in occupancy to 88.8% in 1998 from 89.7% in 1997 as well as a decrease of 1.1%
in the average daily rate.

Food and beverage revenues for the Properties (at 11.2% of total revenues for
the Properties for both 1998 and 1997) increased $3.8 million or 18.2% from 1997
to 1998. This increase was the result of the inclusion of Fitzgeralds Black Hawk
revenues of approximately $1.6 million as well as increased food revenues at
Fitzgeralds Reno, Fitzgeralds Las Vegas and Fitzgeralds Tunica, which posted
gains of 9.9%, 6.5% and 18.8%, respectively.

Other revenues for the Properties increased $5.8 million or 58.0% for 1998,
primarily due to the proceeds from the termination of the Cliff Castle
Management Agreement.

Promotional allowances for the Properties showed a net increase of $2.5 million
or 17.0% for 1998. This increase resulted primarily from an increase of
approximately $1.9 million for Fitzgeralds Tunica as well as an increase in
Fitzgeralds Black Hawk promotional allowances of approximately $1.0 million.



                                      -29-
<PAGE>   32

Operating Costs and Expenses

Total operating costs and expenses for the Properties increased 18.0%, to $184.7
million for 1998 from $156.5 million for 1997, primarily due to an increase in
Fitzgeralds Black Hawk operating expenses of approximately $18.7 million.

Casino expenses for the Properties were $81.4 million for 1998, a 23.3% increase
from the $66.0 million for 1997, primarily due to increased volume and increased
personnel as well as the increase of expenses from Fitzgeralds Black Hawk for
the full year. Food and beverage expenses for the Properties increased 13.1%, to
$18.3 million for 1998 from $16.2 million for 1997, primarily as the result of
an increase in Fitzgeralds Black Hawk food and beverage expenses of
approximately $0.8 million. Room expenses for the Properties increased 0.5% to
$12.6 million for 1998 from $12.5 million for 1997. Selling, general and
administrative expense for the Properties increased 19.1% to $56.6 million for
1998 from $47.5 million for 1997, due mostly to increases in personnel and
marketing expenses as explained further below.

Personnel expenses for the Properties increased 14.1%, to approximately $77.4
million for 1998 from approximately $67.8 million for 1997. This increase
resulted primarily from the inclusion of Fitzgeralds Black Hawk personnel
expenses for the full year 1998 as well as a 12.2% increase for Fitzgeralds
Tunica.

Marketing expenses for the Properties, which include advertising, promotional
material, special events and the operations of the Fitzgeralds Card, increased
26.6% for 1998. The increase reflects more intensive marketing efforts at each
property undertaken in response to increasing competitive activity in each of
the markets in which the Company operates, particularly in Tunica, and the
inclusion of Fitzgeralds Black Hawk marketing expenses for the full year 1998.
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.

Depreciation and amortization expense of the Properties increased 15.2%, to
$13.7 million for 1998 from $11.9 million for 1997. The increase was primarily
due to the inclusion of Fitzgeralds Black Hawk depreciation and amortization for
the full year 1998.

Income from Operations

As a result of the foregoing, income from operations for the Properties
increased 31.9%, to $22.4 million for 1998 from $17.0 million in 1997.

Net Interest Expense

Interest expense for the Properties (net of interest income), increased 6.7%, to
$26.4 million for 1998 from $24.7 million for 1997, due primarily to increased
debt as a result of the acquisition of the remaining 78% membership interest in
101 Main in August 1997.

Loss Before Income Taxes and Extraordinary Item

For the reasons described above, the Properties recorded a loss before income
taxes and extraordinary item of $8.0 million in 1998 compared to an $8.4 million
loss before taxes recorded in 1997.



                                      -30-
<PAGE>   33

Extraordinary Item and Net Loss

In connection with the Company's issuance of the Senior Secured Notes in
December 1997, an extraordinary loss of $19.2 million was recorded to reflect
the cost associated with the early retirement of certain debt of the Company.
Net loss for the Properties decreased to $8.0 million in 1998 compared to $27.6
million in 1997, reflecting the impact of the extraordinary item.

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 1999, the Company had unrestricted cash of $22.1 million
compared to $13.0 million at December 31, 1998. The Company's primary sources of
liquidity and cash flows during 1999 were $21.1 million from operations and $4.2
million from the sale of assets, which was comprised primarily of Nevada Club
and Harolds Club assets. Uses of liquidity during 1999 included $5.6 million for
the acquisition of property and equipment and $9.6 million for payments on debt.
Net cash used in investing activities was $2.0 million for 1999 compared to $5.5
million for 1998. Net cash used in financing activities was $10.1 million for
1999 compared to $8.5 million for 1998.

The Company's principal sources of capital will consist of cash from operations,
the Credit Facility, to the extent the lender permits the Company to utilize the
Credit Facility while it is in default on its Senior Secured Notes, and vendor
or third party financing of gaming and other equipment. In October 1998, the
Company established the $15.0 million Credit Facility with a lending
institution, of which up to $5.0 million was permitted to be used for capital
projects at Fitzgeralds Black Hawk and up to $10.0 million of which was
permitted to be used for general corporate purposes. The Credit Facility is
secured by a lien on substantially all of the Company's assets, which lien is
senior to the lien securing the Senior Secured Notes. The Company believes that
it has adequate sources of liquidity to meet its normal operating requirements.
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. On May 13, 1999, the Company's Board of Directors determined that,
pending a restructuring of its indebtedness, it would not be in the best
interest of the Company to make the regularly scheduled interest payments on its
Senior Secured Notes. The Company has not made the regularly scheduled interest
payments of $12.5 million due and payable on June 15, 1999 and December 15,
1999. An Event of Default under the Indenture pursuant to which the Senior
Secured Notes were issued occurred on July 15, 1999, and is continuing as of the
date hereof. An additional $2.2 million of interest incurred from the default on
the Senior Secured Notes has also not been paid. No action has been taken by
either the Indenture Trustee or holders of at least 25% of the Senior Secured
Notes to accelerate the Senior Secured Notes and declare the unpaid principal
and interest to be due and payable. In the event the Senior Secured Notes are
accelerated, the Company would not have the resources available to repay such
indebtedness. The Company has initiated and is continuing discussions with
representatives of the Committee concerning a restructuring of the Company's
indebtedness and reorganization of the Company that may include the sale of
some or all of the Company's properties.

A default on the Senior Secured Notes also constitutes a default under the
Credit Facility and, although the Company believes the lending institution will
continue to have adequate security for the Company's obligations thereunder,
there can be no assurance that the lending institution will continue to make
additional advances. The Company has repaid all amounts borrowed under the
Credit Facility.

By suspending the interest payments on the Senior Secured Notes until such time
as a restructuring plan has been negotiated and implemented, the Company
believes that its liquidity and capital resources will be sufficient to maintain
all of its normal operations at current levels during the restructuring period
and



                                      -31-
<PAGE>   34

does not anticipate any adverse impact on its operations, customers or
employees. However, costs incurred and to be incurred in connection with any
restructuring plan 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
restructure its indebtedness or that its liquidity and capital resources will be
sufficient to maintain its normal operations during the restructuring period.

EBITDA AND ADJUSTED EBITDA

The Company's earnings before interest, income taxes, depreciation and
amortization ("EBITDA") was $25.6 million for 1999 and $35.4 million for 1998.
EBITDA is calculated by adding depreciation and amortization expenses to income
from operations. The Company's Adjusted EBITDA was $27.9 million for 1999 and
$30.0 for 1998. Adjusted EBITDA is determined based on the adjustments described
in Note 5 to "Statement of Operations Data." However, EBITDA should only be read
in conjunction with all of the Company's financial data summarized above and its
financial statements prepared in accordance with GAAP appearing elsewhere
herein, and should not be construed as an alternative either to income from
operations (as determined in accordance with GAAP) as an indication of the
Company's operating performance or to cash flows from operating activities (as
determined in accordance with GAAP) as a measure of liquidity. This presentation
of EBITDA may not be comparable to similarly titled measures reported by other
companies.

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.
Earnings were insufficient to cover fixed charges by $18.0 million and $10.0
million for the years ended December 31, 1999 and 1998, respectively.

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 are
generally weaker from Thanksgiving through the middle of January (except during
the week between Christmas and New Year's) and throughout the summer, and
generally stronger from mid-January through Easter and from mid-September
through Thanksgiving. At each of the three other Fitzgeralds-brand properties,
business levels are typically weaker from Thanksgiving through the end of the
winter and typically stronger from mid-June to mid-November.

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

IMPACT OF THE YEAR 2000 ON COMPUTER SYSTEMS AND APPLICATIONS

Year 2000 ("Y2K") efforts began in 1997 and involved inventory, assessment,
remediation and testing of operational and business systems. As of the date
hereof, the Company has not experienced any significant



                                      -32-
<PAGE>   35

Y2K related problems. If any residual Y2K related problems are discovered, the
Company believes that they would not have a material effect on operations.

Starting in 1997 and continuing through December 31, 1999, the Company funded
approximately $0.8 million to test applications, replace non-compliant hardware
and software and train personnel to operate new or modified systems.



                                      -33-
<PAGE>   36
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, which include borrowings under its Credit Facility and
third party financing. These sources of credit, along with cash flow from
operations, are used to maintain liquidity and fund business operations. Ten
million dollars of the Credit Facility was established for enhancing the
Company's liquidity and, to the extent the lender permits the Company to utilize
the Credit Facility while it is in default on its Senior Secured Notes, could
primarily be used for fluctuations in cash flow from operations and for general
corporate purposes. 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,
1999 and 1998:

<TABLE>
<CAPTION>
      EXPECTED           EXPECTED MATURITY         WEIGHTED AVERAGE
   MATURITY DATE              AMOUNTS               INTEREST RATES             FAIR VALUE
--------------------  ------------------------  ----------------------  ------------------------
                            DECEMBER 31,              DECEMBER 31,            DECEMBER 31,
 Fixed Rate              1999         1998         1999        1998        1999         1998
                      -----------  -----------  ----------  ----------  -----------  -----------
<S>                   <C>          <C>          <C>         <C>         <C>          <C>
    1999               $       -    $   3,211           -       3.92%
    2000                 203,840          763      13.23%       8.67%
    2001                     246          286       9.76%      10.44%
    2002                     131          106       8.93%      11.22%
    2003                     129          117       9.07%      11.18%
    2004                      79            -      10.30%           -
    Thereafter                14      203,280      10.30%      12.25%
                      -----------  -----------  ----------  ----------  -----------  -----------
Total Fixed Rate       $ 204,439    $ 207,763                            $ 113,014    $ 119,648
                      -----------  -----------                          -----------  -----------
 Variable Rate

    1999               $       -    $   1,424           -      11.35%
    2000                       -          564           -      11.10%
    2001                       -           88           -      11.29%
    2002                       -            -           -           -
    2003                       -        3,000           -       7.68%
    2004                       -            -           -           -
    Thereafter                 -            -           -           -
                      -----------  -----------  ----------  ----------  -----------  -----------
Total Variable Rate    $       -    $   5,076                            $       -    $   5,076
                      -----------  -----------                          -----------  -----------
 Total                 $ 204,439    $ 212,839                            $ 113,014    $ 124,724
                      ===========  ===========                          ===========  ===========
</TABLE>


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, 1999, the Company does not consider the potential near-term losses
in




                                      -34-
<PAGE>   37

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



                                      -35-
<PAGE>   38

                                    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,
1999:

                        DIRECTORS AND EXECUTIVE OFFICERS

<TABLE>
<CAPTION>
NAME                         AGE   POSITION(s) HELD
----                         ---   ----------------
<S>                          <C>   <C>
Philip D. Griffith            54   Chairman, President and Chief Executive Officer
Philip P. Hannifin(1)         65   Director, Executive Vice President
Patricia W. Becker            48   Director
Max L. Page                   50   Director; Executive Vice President and a director of
                                   Fitzgeralds Reno, Inc., and General Manager of
                                   Fitzgeralds Reno
Michael E. McPherson          48   Executive Vice President, Chief Financial Officer,
                                   Treasurer and Secretary
</TABLE>

                              SIGNIFICANT EMPLOYEES

<TABLE>
<CAPTION>
  NAME                       AGE    POSITION(s) HELD
  ----                       ---    ----------------
<S>                          <C>    <C>
  Paul H. Manske              59    Executive Vice President of Marketing
  Cara L. Brown               37    Vice President and General Counsel
  William J. Noonan, III      48    Vice President and a director of Fitzgeralds Las
                                    Vegas, Inc., and General Manager of Fitzgeralds Las
                                    Vegas
  Domenic Mezzetta            64    Vice President and a director of Fitzgeralds
                                    Mississippi, Inc., ("FMI") and General Manager of
                                    Fitzgeralds Tunica
  Joe C. Collins              60    Vice President and a director of Fitzgeralds Black
                                    Hawk, Inc. and Fitzgeralds Black Hawk II, Inc., and
                                    General Manager of Fitzgeralds Black Hawk
</TABLE>

--------
  (1)   Mr. Hannifin was appointed to the Board of Directors effective April 29,
        1999, to fill the vacancy created by the resignation of Michael A.
        Ficaro effective April 27, 1999.

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.

PHILIP P. HANNIFIN has served as Executive Vice President since joining the
Company in 1991 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,



                                      -36-
<PAGE>   39

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.
He is also a director of American Wagering, Inc.

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, Vice 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
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. He was also a director of Nevstar Gaming & Entertainment Corporation
during 1999, but resigned in March 2000.

MICHAEL E. MCPHERSON has 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.

CARA L. BROWN has been Vice President and General Counsel since joining the
Company in May 1996. Prior thereto, she was an associate counsel at Harrah's Las
Vegas and a staff attorney at Jones, Jones, Close & Brown in Las Vegas. Ms.
Brown has a degree from the University of North Carolina at Chapel Hill and a
law degree from the Marshall-Wythe School of Law at the College of William and
Mary in Williamsburg, Virginia.



                                      -37-
<PAGE>   40
WILLIAM J. NOONAN, III has been Vice President and a director of Fitzgeralds
Las Vegas, Inc. and General Manager of Fitzgeralds Las Vegas since May 1994. He
was first employed as Vice President of FLVI in January 1994. Prior to joining
the Company, he served as city manager of Perry, Florida from January 1982 to
September 1987; Cape Coral, Florida from September 1987 to January 1991; and Las
Vegas, Nevada from February 1991 to July 1993. He was also engaged in business
and gaming consulting services from August 1993 to February 1994. Mr. Noonan has
a Master's degree in public administration from the University of Kansas and a
B.S. degree in public administration and economics from South Missouri State
University.

DOMENIC MEZZETTA has been Vice President and a director of Fitzgeralds
Mississippi, Inc. and General Manager of Fitzgeralds Tunica since joining the
Company in May 1998. Prior there to, he was Vice President & General Manager of
Hollywood Casino & Hotel in Tunica from January 1994 to May 1998; Vice President
& General Manager of Island Fantasy Casino in Tunica from August 1993 to January
1994; General Manager of El Capitan in Hawthorne, Nevada from May 1990 to August
1993; Assistant General Manager of the Stardust Hotel & Casino in Las Vegas from
May 1986 to May 1990; General Manager of Cactus Pete's Resort Hotel & Casino in
Elko, Nevada from October 1983 to May 1985. He also held various executive level
positions at Harvey's Resort Hotel and Inn Casino at Lake Tahoe, Nevada, from
July 1971 to October 1983.

JOE C. COLLINS has been Vice President and a director of Fitzgeralds Black Hawk
Inc, and General Manager of Fitzgeralds Black Hawk since January 1995. He has
also been Vice President and a director of Fitzgeralds Black Hawk II, Inc. since
July 1997. He was hotel director at Fitzgeralds Reno from April 1985 to December
1994. Mr. Collins currently serves on the executive Board of the Black Hawk
Casino Owners Association and on the Board of the Black Hawk Business
Improvement District.

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 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.



                                      -38-
<PAGE>   41

Directors who are also employees of the Company do not receive any compensation
for their services as directors. Non-employee directors are paid fees of $40,000
per year and $1,000 per Board meeting attended in person or telephonically. Ms.
Becker has received five-year options to purchase 9,000 shares of the Company's
Common Stock, exercisable at a price equal to the fair market value of the
Common Stock on the date of grant. Ms. Becker is also chairperson of the Gaming
Compliance Committee (a non-Board committee) for which she is paid an additional
fee of $40,000 per year and $1,000 per Committee meeting attended in person or
telephonically. She also participates 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 100% of the total number of meetings of the Board and the
committees on which he or she served during the fiscal year ended December 31,
1999.

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 Cara L. Brown, 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.



                                      -39-
<PAGE>   42

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, 1999, 1998 and 1997 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 1999; (ii) each person who (a) served as an executive officer at
December 31, 1999, (b) was among the four most highly paid executive officers of
the Company, not including the Chief Executive Officer, during 1999; and (c)
received over $100,000 in compensation in 1999; (iii) up to two persons who
would be included under clause (ii) above had they served as an executive
officer at December 31, 1999; 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

<TABLE>
<CAPTION>
                                                                                              LONG-TERM
                                                  ANNUAL COMPENSATION(1)                     COMPENSATION
                                  -----------------------------------------------------------------------
                                                                                   OTHER
                                                                                   ANNUAL      SECURITIES            ALL OTHER
                                  FISCAL                                        COMPENSATION   UNDERLYING          COMPENSATION
     NAME & POSITION               YEAR          SALARY($)      BONUS($)(2)        ($)(3)      OPTIONS (#)            ($)(4)
     ---------------               ----          ---------      -----------        ------      -----------            ------
<S>                               <C>            <C>            <C>             <C>            <C>                 <C>
Philip D. Griffith                 1999          541,997               --            --                --             273,715
  Chairman, President &            1998          511,125          225,000            --                --             126,877
  Chief Executive Officer          1997          510,008          225,000            --           100,000             114,448

Michael E. McPherson               1999          236,538               --            --            11,854(5)            7,714
  Executive Vice President         1998          222,115           75,000            --            11,854               3,675
  Chief Financial Officer,         1997          169,327           82,500            --            19,000               3,207
  Treasurer & Secretary

Paul H. Manske                     1999          274,038               --            --                --              19,174
  Executive Vice President         1998          249,313           75,000            --                --              11,448
  Marketing                        1997          224,192           75,000            --            19,000              10,701

Max L Page                         1999          240,500               --            --                --              21,855
  Director; Executive Vice         1998          224,423           20,000            --                --               7,575
  President of FRI &               1997          207,308           20,000            --             9,000               9,976
  General Manager of
  Fitzgeralds Reno

Domenic Mezzetta(6)                1999          195,481               --            --                --              18,535
  Vice President of FMI            1998          109,616               --            --                --               1,180
  & General Manager of
  Fitzgeralds Tunica
</TABLE>

-----------
(1)   Amounts shown include cash compensation earned for the periods reported
      whether paid or accrued in such periods.

(2)   Amounts shown in 1998 represent bonus compensation earned in 1998 and not
      calculable at the time of filing the Form 10-K for the fiscal year ending
      December 31, 1998. As of December 31, 1999, the Company has accrued
      $481,989 for payment of bonuses earned in 1999; 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 1999, 1998 and 1997 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.



                                      -40-
<PAGE>   43

(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 1999, the Company's Profit Sharing and 401(k)
      contributions were $2,400, $2,400, $2,400, $2,400 and $999 for Messrs.
      Griffith, McPherson, Manske, Page and Mezzetta, respectively. During 1999,
      the Company paid $10,415, $3,288, $5,652, $16,187; and $16,737 in medical
      benefits for Messrs. Griffith, McPherson, Manske, Page and Mezzetta,
      respectively. During 1999, the Company paid $260,900 in premiums for split
      dollar, term life insurance and long-term disability policies for Mr.
      Griffith and $2,025, $11,121, $3,268 and $798 in premiums for term life
      insurance and long-term disability policies for Messrs. McPherson, Manske,
      Page and Mezzetta, respectively. See Employment Agreements with Executive
      Officers and Key Employees.

(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 was appointed Vice President of FMI and General Manager of
      Fitzgeralds Tunica on May 25, 1998.

OPTION GRANTS TABLE

The following table sets forth, with respect to the named executive officers,
information concerning the grant of stock options during the fiscal year ended
December 31, 1999. During 1999, a total of 53,261 stock options were canceled
and a total of 53,261 were re-granted, of which 11,854 stock options were
re-granted to one of the named executive officers. The Company has never granted
stock appreciation rights.


                        OPTION GRANTS IN LAST FISCAL YEAR


<TABLE>
<CAPTION>
                             INDIVIDUAL GRANTS                                            POTENTIAL
                       ----------------------------                                       REALIZABLE
                         NUMBER OF       PERCENT OF                                    VALUE AT ASSUMED
                        SECURITIES     TOTAL OPTIONS    EXERCISE                     ANNUAL RATE OF STOCK
                        UNDERLYING      GRANTED TO      OR BASE                       PRICE APPRECIATION
                         OPTIONS       EMPLOYEES IN      PRICE     EXPIRATION         FOR OPTION TERM(1)
        NAME           GRANTED #(2)     FISCAL YEAR      ($/SH)       DATE              5%        10%
---------------------------------------------------------------------------------------------------------
<S>                    <C>             <C>              <C>         <C>                 <C>        <C>
Philip D. Griffith              0             0              -           -               $-         $-
Michael E. McPherson       11,854         22.3%           1.00        12/31/99            -          -
Paul H. Manske                  0             0              -           -                -          -
Max L. Page                     0             0              -           -                -          -
Domenic Mezzetta                0             0              -           -                -          -
</TABLE>

--------

(1)   The Company's Common Stock is not publicly traded.

(2)   In June 1999, the Board of Directors canceled 53,261 options and
      re-granted options to purchase 53,261 shares of the Company's Common Stock
      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.

OPTION EXERCISES TABLE

The following table sets forth, with respect to the named executive officers,
information concerning the exercise of stock options during the fiscal year
ended December 31, 1999, and the number of unexercised stock options held as of
December 31, 1999.



                                      -41-
<PAGE>   44

                 AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
                                                 NUMBER OF SECURITIES
                                                      UNDERLYING
                                                     UNEXERCISED              VALUE OF UNEXERCISED
                                                    OPTIONS HELD AT          IN-THE-MONEY OPTIONS
                        SHARES                    DECEMBER 31, 1999(#)       AT DECEMBER 31, 1999(1)
                     ACQUIRED ON     VALUE     --------------------------  ----------------------------
       NAME          EXERCISE(#)   REALIZED($) EXERCISABLE  UNEXERCISABLE  EXERCISABLE    UNEXERCISABLE
       ----          -----------   -----------------------  -------------  -----------    -------------
<S>                  <C>           <C>         <C>          <C>            <C>             <C>
Philip D. Griffith        -            -         100,000           0           $-              $-
Michael E. McPherson      -            -          19,000           0            -               -
Paul H. Manske            -            -          19,000           0            -               -
Max L. Page               -            -           9,000           0            -               -
Domenic Mezzetta          -            -               0           0            -               -
</TABLE>

--------
(1)   The exercise price of the unexercised options exceeds the assigned value
      of the Common Stock. The Company's Common Stock is not publicly traded.

EMPLOYMENT AGREEMENTS WITH EXECUTIVE OFFICERS AND KEY EMPLOYEES

The Company has entered into employment agreements with Messrs. Griffith,
McPherson, Manske, Page and Ms. Brown to serve in their present offices for
terms expiring June 28, 2003, July 5, 2002, September 1, 2002, September 1, 2002
and April 30, 2001, respectively. As of February 24, 2000, Messrs. Griffith,
McPherson, Manske, Page and Ms. Brown have salaries of $546,000, $250,000,
$250,000, $250,000 and $115,763, 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.

FMI has entered into an employment agreement with Mr. Mezzetta under which he
was appointed Vice President of FMI and General Manager of Fitzgeralds Tunica
for a term expiring on May 24, 2001. As of February 24, 2000, Mr. Mezzetta
receives a salary of $199,500 and is eligible to participate in FMI's bonus
plan, health plan and in any other benefit plan established by Fitzgeralds
Tunica for its executives.

Consistent with industry practice, the Company has entered into employment
agreements with certain of its other vice presidents and departmental directors.

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 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 Compensation Committee will have full
discretion concerning the payment of executive bonuses.



                                      -42-
<PAGE>   45

STOCK OPTION INCENTIVE PLAN

The Company has adopted the Stock Option Incentive Plan (the "Stock Option
Plan") which was approved by stockholders in August 1997. The following is a
description of the Stock Option Plan.

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 may receive incentive stock
options. The maximum number of shares available for issuance under the Stock
Option Plan is 1,000,000. At December 31, 1999, there were 271,000 stock options
outstanding under the Stock Option Plan.

The Stock Option Plan is administered by the Board of Directors or, in its
discretion by a committee of the Board appointed for that purpose (the "Stock
Option Plan Committee"), which, subject to the terms of the Stock Option Plan,
has the authority in its sole discretion to determine: (i) the individuals to
whom options shall be granted; (ii) the time or times at which options may be
exercised; (iii) the number of shares subject to each option; (iv) the option
price and the duration of each option granted; and (v) all of the other terms
and conditions of options granted under the Stock Option Plan.

The exercise price of incentive options granted under the Stock Option Plan must
be at least equal to the fair market value of the shares on the date of grant
(110% of the fair market value in the case of participants who own shares
possessing more than 10% of the total combined voting power of all classes of
stock of the Company) and may not have a term in excess of 10 years from the
date of grant (five years in the case of participants who own shares possessing
more than 10% of the combined voting power all classes of stock of the Company).
In no event, may the aggregate fair market value (determined at 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) are exercisable for the first time by an optionee in any
calendar year exceed $100,000.

Options granted under the Stock Option Plan are not transferable other than by
will or the laws of descent and distribution. Unless otherwise determined by the
Board of Directors or the Stock Option Plan Committee, all stock options granted
under the Stock Option Plan terminate (i) immediately upon the optionee's
termination of employment (or other relationship) with the Company for cause,
(ii) one year after the optionee's termination of employment (or other
relationship) by reason of death or permanent disability, and (iii) 90 days
after the optionee's termination of employment (or other relationship) for any
other reason (unless the optionee has resumed a continuing relationship with the
Company), but in no case later than the scheduled expiration date of the option.
Unless otherwise determined by the Board of Directors or Stock Option Plan
Committee, the number of shares with respect to which an option may be exercised
following the optionee's termination of employment or other relationship is
limited to that number of shares which could have been purchased pursuant to the
option had the option been exercised by the optionee on the date of such
termination.

Payment of the exercise price upon exercise of an option must be made in cash
or, in the discretion of the Board of Directors or the Stock Option Plan
Committee, in shares of Common Stock. Where payment is made in Common Stock,
such Common Stock shall be valued for such purpose at the fair market value of
such shares (determined as specified in the Stock Option Plan) on the date of
exercise.



                                      -43-
<PAGE>   46

If the number of outstanding shares of Common Stock is increased or decreased,
or if such shares are exchanged for a different number or kind of shares through
reorganization, merger, recapitalization, stock dividend, stock split, or other
transaction where the Board determines that an adjustment is appropriate, the
aggregate number of shares available for issuance under the Stock Option Plan,
the number of shares subject to outstanding options, the per share exercise
price of outstanding options and the aggregate number of shares with respect to
which options may be granted to a single participant will be appropriately
adjusted by the Board of Directors.

No grant of options may be made under the Stock Option Plan after June 25, 2007,
which is 10 years after its date of adoption. The Board of Directors has
authority to terminate or to amend the Stock Option Plan. Amendments may be made
without the approval of the Company's stockholders unless such approval is
required by law or stock exchange requirement. No amendment or termination may
impair the rights of any holder of outstanding options without the consent of
such holder. The terms and conditions of outstanding options may be amended by
written agreement between the optionee and the Company.

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 1999.



                                      -44-
<PAGE>   47

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, 2000 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

<TABLE>
<CAPTION>
                                                       NUMBER OF SHARES                  PERCENT
                                                      BENEFICIALLY OWNED(a)             OF CLASS
                                                      ------------------                --------
<S>                                                   <C>                               <C>
Philip D. Griffith                                         3,519,105(b)                    62.8%
    301 Fremont Street
    Las Vegas, NV 89101
Putnam Investments, Inc.
    One Post Office Square                                   384,560(c)                     7.0%
    Boston, MA 02109
Paul H. Manske                                               142,565(d)                     3.3%
Max L. Page                                                  132,565(e)                     2.4%
Philip P. Hannifin                                            25,488                          *
Patricia W. Becker                                            36,475(f)                       *
Michael E. McPherson                                          19,000                          *
Domenic Mezzetta                                                   0                          *
All directors and executive officers as a group
    (five persons)                                         3,732,633                       67.8%
</TABLE>

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

*       Indicates less than 1%

(a)     The amounts shown include rights to shares available for exercise
        pursuant to the Stock Option Plan: Mr. Griffith, 100,000 shares; Mr.
        Manske, 19,000 shares; Mr. Page, 9,000 shares; Mr. Hannifin, 1,500
        shares; Ms. Becker, 9,000 shares; Mr. McPherson, 19,000 shares. All
        options are exercisable within 60 days.

(b)     Held by the Philip D. Griffith Gaming Trust of which Mr. Griffith is a
        trustee.

(c)     Putnam Investments, Inc. ("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 216,863 shares of the
        384,560 shares held by PIM. The source of this information is a Schedule
        13G filed by PI with the Securities and Exchange Commission dated
        February 17, 1999. Ownership is reported as of December 31, 1998.

(d)     Held by the Paul H. Manske Family Trust of which Mr. Manske is a
        trustee.

(e)     Held by the Max Lynn Page 1987 Trust of which Mr. Page is a trustee.

(f)     Held by the Patricia W. Becker Family Trust of which Ms. Becker is a
        trustee.



                                      -45-
<PAGE>   48

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

A fee is payable to executive officers of the Company who agree to provide any
requested guarantee of Company borrowings and letters of credit. Such fee, which
is set by the Board of Directors on a case-by-case basis, is generally equal to
2% to 4% of the amount guaranteed not to exceed $250,000 per year as to any such
individual. During 1999, Mr. Griffith personally guaranteed letters of credit
aggregating at any one time a maximum of $305,000 for which he received fees of
$4,910. As of December 31, 1999, Mr. Griffith had no personal guarantees.

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.

All future transactions between the Company and its affiliates in excess of $1.0
million, other than transactions entered into in the ordinary course of business
on terms generally made available to third parties, will be reviewed and passed
upon by a majority of disinterested directors.



                                      -46-
<PAGE>   49

                                     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, 1999 and 1998

               Consolidated Statements of Operations for the Years Ended

                      December 31, 1999, 1998, and 1997

               Consolidated Statements of Stockholders' Deficiency for the Years
               Ended

                      December 31, 1999, 1998, and 1997

               Consolidated Statements of Cash Flows for the Years Ended

                      December 31, 1999, 1998, and 1997

               Notes to Consolidated Financial Statements

        2.     Financial Statement Schedules.

               Schedule II -- Consolidated Valuation and Qualifying Accounts.

        3.     Exhibits.  Refer to (c) below

(b)     Reports on Form 8-K. For the last quarter of the fiscal year ended
        December 31, 1999, the Company filed the following reports on Form 8-K:

           Report on Form 8-K, Item 5, filed on October 14, 1999

(c)     Exhibits.  Reference is made to the Index to Exhibits immediately
        preceding the exhibits thereto.



                                      -47-
<PAGE>   50
                                   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 March 21,
2000.


                                            Fitzgeralds Gaming Corporation


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



                                      -48-
<PAGE>   51

                                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.

<TABLE>
<CAPTION>
            SIGNATURE                                TITLE                        DATE
            ---------                                -----                        ----
<S>                                     <C>                                   <C>
      /s/ Philip P. Griffith            Chairman, President, Chief            March 10, 2000
    ------------------------            Executive Officer and Director
    Philip P. Griffith                  (Principal Executive Officer)


      /s/ Michael E. McPherson          Executive Vice President, Chief       March 10, 2000
    --------------------------          Financial Officer, Treasurer and
    Michael E. McPherson                Secretary (Principal Financial
                                        and Accounting Officer)


      /s/ Philip P. Hannifin            Director                              March 10, 2000
    ------------------------
    Philip P. Hannifin


      /s/ Patricia W. Becker            Director                              March 10, 2000
    ------------------------
    Patricia W. Becker


      /s/ Max L. Page                   Director                              March 10, 2000
    -----------------
    Max L. Page
</TABLE>



                                      -49-
<PAGE>   52

                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>
                                                                                            SEQUENTIALLY
EXHIBIT                                                                                     NUMBERED
NUMBER       DOCUMENT                                                                       PAGE
------------ ------------------------------------------------------------------------------ -------------
<S>          <C>                                                                            <C>
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)
</TABLE>



                                      -50-
<PAGE>   53

<TABLE>
<CAPTION>
                                                                                            SEQUENTIALLY
EXHIBIT                                                                                     NUMBERED
NUMBER       DOCUMENT                                                                       PAGE
------------ ------------------------------------------------------------------------------ -------------
<S>          <C>                                                                            <C>
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) Agreement for Wastewater Service and (ii) Agreement for Water Service,
             each dated March 15, 1994, and (iii) Amendment to Agreements for Water and
             Wastewater Services, dated June 27, 1994, each between Fitzgeralds
             Mississippi, Inc. and River Bend Environmental Energy, Inc.(1)

10(b)        (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)
</TABLE>



                                      -51-
<PAGE>   54

<TABLE>
<CAPTION>
                                                                                            SEQUENTIALLY
EXHIBIT                                                                                     NUMBERED
NUMBER       DOCUMENT                                                                       PAGE
------------ ------------------------------------------------------------------------------ -------------
<S>          <C>                                                                            <C>
10(c)        (i) Lease Agreement and Interim Agreement Regarding Lease Agreement and (ii)
             Lease Agreement, dated September 5, 1995, both between John A. Kramer, Sr.,
             Trustee, Helen M. Kramer, Elizabeth Thatcher Brooks and Betty Bennett,
             Executrix of the estate of John David Kramer, as Lessor, and Fitzgeralds Las
             Vegas, Inc., as Lessee.(1)

10(d)        Lease Agreement, dated September 1, 1978, between Jewel F. Nolan and Julie
             L. Nolan, David Kramer and Betty Bennett and Richard J. Tinkler, as Lessor,
             and M.B. Dalitz, as Lessee. Amendment, dated December 20, 1982, between
             Julie L. Nolan, David Kramer, Betty Bennett and Richard J. Tinkler, as
             Lessor, and M.B. Dalitz, as Lessee. Lease Amendment, Estoppel Certificate
             and Consent to Assignment, dated October 18, 1987, to the named recipients
             and between Julie L. Nolan, David Kramer, Betty Bennett and Richard J.
             Tinkler, as Lessor, and M.B. Dalitz, as Lessee.(1)

10(e)        Lease Agreement, dated July 21, 1954, between Las Vegas Lodge No. 32, Free &
             Accepted Masons, as Lessor, and H. John Gluskin, as Lessee. Amendment to
             Lease Agreement, dated July 26, 1954, between Las Vegas Lodge No. 32, Free &
             Accepted Masons, as Lessor, and H. John Gluskin, as Lessee.  Assignments,
             dated July 27, 1954, February 2, 1955, August 7, 1972 and September 1, 1973.
             Supplemental Agreement of October 14, 1994, between Las Vegas Lodge No. 32,
             Free & Accepted Masons and H. John Gluskin. Articles of Amendment, dated
             June 7, 1973, between Las Vegas Lodge No. 32, Free & Accepted Masons, as
             Lessor, and Frederic N. Richman and The Pullman Company, d/b/a Nevada
             Building Company. Amendment to Masonic Lodge Ground Lease, dated December
             20, 1982. Lease Amendment, Estoppel Certificate and Consent to Assignment,
             dated October 23, 1987, to the named recipients and between Las Vegas Lodge
             No. 32, Free & Accepted Masons, as Lessor, and H. John Gluskin, as Lessee.(1)

10(f)        Lease, dated March 4, 1976, between A.W. Ham, Jr., Trustee, under wills of
             A.W. Ham and Alta M. Ham, as Lessor, and Nevada Building Company, as Lessee,
             Amendments to Lease, dated December 20, 1982 and December 30, 1982, between
             A.W. Ham, Jr., Trustee, as Lessor, and M.B. Dalitz, as Lessee. Lease
             Amendment, Estoppel Certificate and Consent to Assignment, dated October 18,
             1987, to the named recipients and between A.W. Ham, Jr., Trustee, and M.B.
             Dalitz.(1)

10(g)        Amended and Restated Operating Agreement of The Fremont Street Experience
             Limited Liability Company, a Nevada Limited Liability Company, dated June 6,
             1995.(1)

10(h)        Fitzgeralds Gaming Corporation Stock Option Incentive Plan, amended and
             restated as of May 1, 1998.(4)

10(i)        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(j)        Fitzgeralds Gaming Corporation Executive Bonus Plan, amended and restated as
             of January 1, 1999.(6)
</TABLE>



                                      -52-
<PAGE>   55

<TABLE>
<CAPTION>
                                                                                            SEQUENTIALLY
EXHIBIT                                                                                     NUMBERED
NUMBER       DOCUMENT                                                                       PAGE
------------ ------------------------------------------------------------------------------ -------------
<S>          <C>                                                                            <C>
10(k)        License Agreement, dated September 11, 1995, between Holiday Inns
             Franchising, Inc. and Fitzgeralds Las Vegas, Inc.(1)

10(l)        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(m)        Shareholders' Agreement, dated December 19, 1995, among the
             Shareholders listed therein, Fitzgeralds Gaming Corporation and
             First Interstate Bank of Nevada, N.A.(6)

10(n)        (i) Loan and Security Agreement dated as of October 29, 1998 and
             (ii) First Amendment to Loan and Security Agreement dated as of
             December 9, 1999, each between Fitzgeralds Gaming Corporation and
             Foothill Capital Corporation.(5)(9)

10(o)        Intercreditor Agreement dated as of October 29, 1998, by and between The
             Bank of New York and Foothill Capital Corporation.(5)

10(p)        Stock Pledge Agreement dated as of October 29, 1998, by and between
             Fitzgeralds Gaming Corporation and Foothill Capital Corporation.(5)

10(q)        General Continuing Guaranty dated as of October 29, 1998, by and
             among certain Subsidiaries of Fitzgeralds Gaming Corporation in
             favor of Foothill Capital Corporation.(5)

10(r)        Pledge Agreement dated as of October 29, 1998, by and among the
             Subsidiaries of Fitzgeralds Gaming Corporation party to the General
             Guaranty and Foothill Capital Corporation.(5)

10(s)        Security Agreement dated as of October 29, 1998, by and among the
             Subsidiaries of Fitzgeralds Gaming Corporation party to the General
             Continuing Guaranty and Foothill Capital Corporation.(5)

10(t)        Trademark Security Agreement dated as of October 29, 1998, by and
             among Fitzgeralds Gaming Corporation, its Subsidiaries party to the
             General Continuing Guaranty and Foothill Capital Corporation.(5)

10(u)        Copyright Security Agreement dated as of October 29, 1998, by and
             among Fitzgeralds Gaming Corporation, its Subsidiaries party to the
             General Continuing Guaranty and Foothill Capital Corporation.(5)

10(v)        Environmental Indemnity as of October 29, 1998, by Fitzgeralds
             Gaming Corporation, its Subsidiaries party to the General
             Continuing Guaranty in favor of Foothill Capital Corporation.(5)

10(w)        Deed of Trust, Security Agreement and Fixture Filing with Assignment of
             Rents, dated as of October 29, 1998 (Fitzgeralds Las Vegas).(5)

10(x)        Deed of Trust, Security Agreement and Fixture Filing with Assignment of
             Rents, dated as of October 29, 1998 (Fitzgeralds Reno).(5)

10(y)        Deed of Trust, Security Agreement and Fixture Filing with Financing
             Statement and Assignment of Rents, dated as of October 29, 1998 (101 Main
             Street).(5)
</TABLE>



                                      -53-
<PAGE>   56

<TABLE>
<CAPTION>
                                                                                            SEQUENTIALLY
EXHIBIT                                                                                     NUMBERED
NUMBER       DOCUMENT                                                                       PAGE
------------ ------------------------------------------------------------------------------ -------------
<S>          <C>                                                                            <C>
10(z)        Deed of Trust, Security Agreement and Fixture Filling with Assignment of
             Rents, dated as of October 29, 1998 (Fitzgeralds Mississippi).(5)

10(aa)       First Preferred Vessel Mortgage on the Whole of the Fitzgeralds Tunica,
             dated as of October 29, 1998 (Fitzgeralds Mississippi).(5)

10(bb)       Subordination Agreement dated as of October 29, 1998, by and among
             Fitzgeralds Gaming Corporation, its Subsidiaries party to the
             General Continuing Guaranty and Foothill Capital Corporation.(5)

10(cc)       Self Insurer's Surety Bond, dated as of September 10, 1998,
             executed by Frontier Insurance Company for $2.5 million, for
             Fitzgeralds Gaming Corporation to act as a self-insured employer in
             the State of Nevada.(6)

10(dd)       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(ee)       Agreement, dated February 25, 1999, between Fitzgeralds Las Vegas, Inc. and
             Culinary Workers Union Local  No. 226 and Bartenders Union Local No. 165.(6)

10(ff)       Labor Agreement, dated February March 1, 1999, between Fitzgeralds Las
             Vegas, Inc. and the United Brotherhood of Carpenters and Joiners of America,
             Southern California-Nevada Regional Council of Carpenters and its Affiliated
             Local Union No. 1780, for the period August 1, 1998 through July 31, 2001.(6)

10(gg)       Non-Disburbance and Attornment Agreement dated as of December 10, 1999, by
             and between e.three Custom Energy Solutions, LLC, Fitzgeralds Las Vegas,
             Inc. and Foothill Capital Corporation.(9)

10(hh)       (i) Lease Agreement and (ii) Chilled Water Service Agreement, each
             dated as of December 10, 1999, between e.three Custom Energy
             Solutions, LLC and Fitzgeralds Las Vegas, Inc.(9)

10(ii)       Construction Agreement dated as of February 8, 2000, by and between the Las
             Vegas Valley Water District, Fitzgeralds Las Vegas, Inc. and e.three Custom
             Energy Solutions, LLC.(9)

21           List of subsidiaries of the Company.(3)

27(c)        Financial data schedule.(9)
</TABLE>

--------

(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.



                                      -54-
<PAGE>   57

(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)     Filed herewith.



                                      -55-
<PAGE>   58
FITZGERALDS GAMING CORPORATION

TABLE OF CONTENTS
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                                                      PAGE
                                                                                      ----
<S>                                                                                   <C>
ITEM 8.  FINANCIAL STATEMENTS

  Independent Auditor's Report                                                        F - 2

  Consolidated Balance Sheets as of December 31, 1999 and 1998                        F - 3

  Consolidated Statements of Operations for the Years Ended December 31, 1999,
    1998 and 1997                                                                     F - 5

  Consolidated Statements of Stockholders' Deficiency for the Years Ended
    December 31, 1999, 1998 and 1997                                                  F - 6

  Consolidated Statements of Cash Flows for the Years Ended December 31, 1999,        F - 7
    1998 and 1997

  Notes to Consolidated Financial Statements                                          F - 9
</TABLE>



<PAGE>   59

INDEPENDENT AUDITORS' REPORT

Fitzgeralds Gaming Corporation:

We have audited the accompanying consolidated balance sheets of Fitzgeralds
Gaming Corporation and subsidiaries (the "Company") as of December 31, 1999 and
1998, and the related consolidated statements of operations, stockholders'
deficiency, and cash flows for each of the three years in the period ended
December 31, 1999. 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 the financial statements and
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 the Company and subsidiaries as of
December 31, 1999 and 1998, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1999 in conformity
with accounting principles generally accepted in the United States of America.
Also, in our opinion, such financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.

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
financial statements, the Company's event of default on its Senior Secured
Notes, along with its recurring losses from operations, negative working capital
and stockholder's capital deficiency, raise substantial doubt about its ability
to continue as a going concern. Management's plans concerning these matters are
also described in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.


DELOITTE & TOUCHE LLP


Las Vegas, Nevada
February 24, 2000


                                      F-2
<PAGE>   60

FITZGERALDS GAMING CORPORATION

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
ASSETS                                                       1999           1998
                                                         ------------   ------------
<S>                                                      <C>            <C>
CURRENT ASSETS:
    Cash and cash equivalents                            $ 22,115,594   $ 13,038,589
    Restricted cash                                                --        537,179
    Accounts receivable, net of allowance for doubtful
      accounts of $405,003 and $345,540                     1,416,795      1,440,249
    Inventories                                             1,771,327      1,375,443
    Prepaid expenses:
      Gaming taxes                                          1,379,589      1,209,825
      Other                                                 2,858,118      2,487,170
                                                         ------------   ------------

        Total current assets                               29,541,423     20,088,455
                                                         ------------   ------------

PROPERTY AND EQUIPMENT, net                               152,017,061    159,714,663
                                                         ------------   ------------

OTHER ASSETS:
    Estimated realizable value of Nevada Club assets
      held for sale                                                --      4,122,842
    Restricted cash                                         2,203,978      1,659,000
    Debt offering costs                                     7,394,649      8,727,796
    Goodwill, net of accumulated amortization
      of $843,796 and $497,865                             13,335,365     13,681,296
    Other assets                                            2,304,014      1,203,412
                                                         ------------   ------------

        Total other assets                                 25,238,006     29,394,346
                                                         ------------   ------------

TOTAL                                                    $206,796,490   $209,197,464
                                                         ============   ============
</TABLE>

See notes to consolidated financial statements                       (Continued)


                                      F-3
<PAGE>   61

FITZGERALDS GAMING CORPORATION

CONSOLIDATED BALANCE SHEETS (CONTINUED)
DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' DEFICIENCY                                             1999            1998
                                                                                 ------------    ------------
<S>                                                                              <C>             <C>
CURRENT LIABILITIES:
   Debt accelerated due to default                                               $203,166,582    $         --
   Current portion of long-term debt                                                  673,619       4,634,747
   Notes payable - related parties                                                         --         304,638
   Accounts payable                                                                 4,552,807       8,139,478
   Accrued and other:
     Payroll and related                                                            4,619,366       5,010,169
     Progressive jackpots                                                           1,230,036       1,311,074
     Outstanding chips and tokens                                                     864,263         728,254
     Interest                                                                      28,456,467       1,131,466
     Other                                                                          7,168,493       6,632,472
                                                                                 ------------    ------------

       Total current liabilities                                                  250,731,633      27,892,298

LONG-TERM DEBT, net of current portion and debt accelerated due to default            598,478     208,204,024
                                                                                 ------------    ------------

       Total liabilities                                                          251,330,111     236,096,322
                                                                                 ------------    ------------

COMMITMENTS AND CONTINGENCIES (Notes 8 and 11)

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 $16,224,779 and $11,264,632 recorded at liquidation
     preference, net of unamortized offering costs and discount of $6,262,268
     and $6,863,461, respectively                                                  29,962,511      24,401,171
                                                                                 ------------    ------------
STOCKHOLDERS' DEFICIENCY
   Common stock, $.01 par value; 29,200,000 shares authorized;
     5,508,082 and 4,012,846 shares issued and outstanding                             55,080          40,128
   Additional paid-in-capital                                                      23,954,220      23,649,582
   Accumulated deficit                                                            (98,505,432)    (74,989,739)
                                                                                 ------------    ------------

       Total stockholders' deficiency                                             (74,496,132)    (51,300,029)
                                                                                 ------------    ------------

TOTAL                                                                            $206,796,490    $209,197,464
                                                                                 ============    ============
</TABLE>

See notes to consolidated financial statements


                                      F-4
<PAGE>   62

FITZGERALDS GAMING CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                            1999            1998            1997
                                                        ------------    ------------    ------------
<S>                                                     <C>             <C>             <C>
OPERATING REVENUES:
  Casino                                                $171,739,693    $162,506,030    $141,215,071
  Food and beverage                                       24,603,925      24,936,289      22,499,113
  Rooms                                                   21,551,208      21,213,266      21,318,538
  Other                                                    3,627,150      15,745,882       9,965,508
                                                        ------------    ------------    ------------
   Total                                                 221,521,976     224,401,467     194,998,230
  Less promotional allowances                             19,123,882      17,276,879      15,296,497
                                                        ------------    ------------    ------------
   Net                                                   202,398,094     207,124,588     179,701,733
                                                        ------------    ------------    ------------

OPERATING COSTS AND EXPENSES:
  Casino                                                  83,895,369      81,538,490      69,674,986
  Food and beverage                                       15,504,787      18,295,526      17,214,885
  Rooms                                                   12,563,589      12,579,464      12,512,496
  Other operating expense                                  2,046,933       2,162,019       1,681,063
  Selling, general and administrative                     62,687,856      56,856,342      48,933,178
  Depreciation and amortization                           14,202,957      13,670,796      12,053,777
  Write-down of assets and lease settlement                   97,759         341,728       4,009,832
                                                        ------------    ------------    ------------
   Total                                                 190,999,250     185,444,365     166,080,217
                                                        ------------    ------------    ------------

INCOME FROM OPERATIONS                                    11,398,844      21,680,223      13,621,516

OTHER INCOME (EXPENSE):
  Interest income                                            535,730         527,378         383,469
  Interest income - stockholders                                  --              --          78,708
  Interest expense                                       (29,703,969)    (27,154,145)    (25,368,844)
  Interest expense - stockholders                                 --         (19,009)       (126,259)
  Impairment loss                                                 --        (798,607)             --
  Other expense                                             (184,959)     (2,902,667)       (882,182)
                                                        ------------    ------------    ------------
LOSS BEFORE EXTRAORDINARY ITEM                           (17,954,354)     (8,666,827)    (12,293,592)

EXTRAORDINARY ITEM - Loss on early retirement of debt             --              --     (19,247,928)
                                                        ------------    ------------    ------------
NET LOSS                                                 (17,954,354)     (8,666,827)    (31,541,520)

PREFERRED STOCK DIVIDENDS                                 (5,561,339)     (4,769,775)     (4,142,615)
                                                        ------------    ------------    ------------
NET LOSS APPLICABLE TO COMMON STOCK                     $(23,515,693)   $(13,436,602)   $(35,684,135)
                                                        ============    ============    ============

NET LOSS PER COMMON SHARE:
  Before extraordinary item                             $      (5.35)   $      (3.35)   $      (4.09)
  Extraordinary item                                              --              --           (4.80)
                                                        ------------    ------------    ------------

NET LOSS PER COMMON SHARE                               $      (5.35)   $      (3.35)   $      (8.89)
                                                        ============    ============    ============

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING                 4,393,824       4,012,846       4,012,846
                                                        ============    ============    ============
</TABLE>

See notes to consolidated financial statements


                                      F-5
<PAGE>   63

FITZGERALDS GAMING CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY
FOR YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                COMMON STOCK            ADDITIONAL                            TOTAL
                                         ------------------------        PAID-IN          RETAINED        STOCKHOLDERS'
                                           SHARES         AMOUNT         CAPITAL          EARNINGS          DEFICIENCY
                                         ----------       -------      -----------     ------------        ------------
<S>                                       <C>             <C>          <C>             <C>                 <C>
BALANCE, JANUARY 1, 1997                  4,012,846       $40,128      $23,785,603     $(25,869,002)       $ (2,043,271)
    Net loss                                     --            --               --      (31,541,520)        (31,541,520)
    Preferred stock dividends                    --            --               --       (4,142,615)         (4,142,615)
    Adjustment to purchase price of
       treasury stock                            --            --         (136,021)              --            (136,021)
                                         ----------       -------      -----------     ------------        ------------
BALANCE, DECEMBER 31, 1997                4,012,846        40,128       23,649,582      (61,553,137)        (37,863,427)
    Net loss                                     --            --               --       (8,666,827)         (8,666,827)
    Preferred stock dividends                    --            --               --       (4,769,775)         (4,769,775)
                                         ----------       -------      -----------     ------------        ------------
BALANCE, DECEMBER 31, 1998                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)
                                         ==========       =======      ===========     ============        ============
</TABLE>

See notes to consolidated financial statements


                                      F-6
<PAGE>   64

FITZGERALDS GAMING CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                   1999            1998            1997
                                                               ------------    ------------    ------------
<S>                                                            <C>             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss                                                  $(17,954,354)   $ (8,666,827)   $(31,541,520)
     Adjustments to reconcile net loss to net
        cash provided by operating activities, net
        of effects of acquisition:
        Depreciation and amortization                            14,202,957      13,670,796      12,053,777
        Amortization of note discount and offering costs          1,753,845       1,154,276       3,062,020
        Write down of assets and lease settlement                    97,759         281,250       3,982,000
        Impairment loss                                                  --         798,607              --
        Recovery of bad debt from related party                          --              --        (510,439)
        Loss on early retirement of debt                                 --              --      17,537,928
        Equity in net loss of unconsolidated affiliates                  --       1,352,693         680,023
        Minority interest in (income) loss of subsidiaries           92,803       1,760,932         (44,393)
        Other                                                        27,674        (489,709)           (637)
        (Increase) decrease in restricted cash                      537,179      (1,196,179)             --
        Decrease in accounts receivable, net                         20,300         622,950          92,655
        (Increase) decrease in advances to
          affiliated companies                                     (797,791)        133,019         (74,173)
        (Increase) decrease in inventories                         (395,884)        (61,832)        345,880
        (Increase) decrease in prepaid expenses                    (555,473)       (799,467)        283,887
        (Increase) decrease in other assets                      (1,263,781)        160,201         204,922
        Increase (decrease) in accounts payable                  (3,452,879)        902,623      (4,369,705)
        Increase (decrease) in accrued and other liabilities     28,776,343       2,565,616        (414,968)
                                                               ------------    ------------    ------------

         Net cash provided by operating activities               21,088,698      12,188,949       1,287,257
                                                               ------------    ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Proceeds from sale of assets                                 4,223,144         485,208         129,948
     Repayments from related parties                                     --              --       2,518,805
     Acquisition of property and equipment                       (5,639,294)     (5,151,859)     (3,642,878)
     Acquisition of assets - held for sale                               --        (374,865)             --
     (Increase) decrease in restricted cash                        (544,978)        393,987       1,860,336
     Purchase of business, net of cash acquired                          --              --     (25,747,169)
     Other                                                               --        (803,488)        224,406
                                                               ------------    ------------    ------------

        Net cash used in investing activities                    (1,961,128)     (5,451,017)    (24,656,552)
                                                               ------------    ------------    ------------
</TABLE>

See notes to consolidated financial statements                       (Continued)


                                      F-7
<PAGE>   65

FITZGERALDS GAMING CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                              1999            1998             1997
                                          ------------    ------------    -------------
<S>                                       <C>             <C>             <C>
CASH FLOWS FROM FINANCING
     ACTIVITIES:
     Proceeds from line of credit         $         --    $  3,000,000    $          --
     Proceeds from 1997 Offering                    --              --      202,634,300
     Payment of debt offering costs           (305,424)     (1,537,826)     (11,308,428)
     Proceeds from issuance of stock            14,952              --       38,221,811
     Repayment of long-term debt            (6,623,763)     (8,128,144)    (202,573,620)
     Repayment of line of credit            (3,000,000)             --               --
     Dividends to minority stockholders       (136,330)     (1,842,990)        (337,393)
     Repayments to related parties                  --              --       (1,807,255)
                                          ------------    ------------    -------------
     Net cash provided by (used in)
       financing activities                (10,050,565)     (8,508,960)      24,829,415
                                          ------------    ------------    -------------

NET INCREASE (DECREASE) IN CASH
  AND CASH EQUIVALENTS                       9,077,005      (1,771,028)       1,460,120

CASH AND CASH EQUIVALENTS
  BEGINNING OF YEAR                         13,038,589      14,809,617       13,349,497
                                          ------------    ------------    -------------

CASH AND CASH EQUIVALENTS
  END OF YEAR                             $ 22,115,594    $ 13,038,589    $  14,809,617
                                          ============    ============    =============
</TABLE>

See notes to consolidated financial statements


                                      F-8
<PAGE>   66

FITZGERALDS GAMING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
--------------------------------------------------------------------------------

1.   ORGANIZATION

     Fitzgeralds Gaming Corporation (the "Company") is a diversified
     multi-jurisdictional gaming holding company that owns and operates four
     Fitzgeralds-brand casino-hotels, in downtown Las Vegas, Nevada
     ("Fitzgeralds Las Vegas"), Reno, Nevada ("Fitzgeralds Reno"), Tunica,
     Mississippi ("Fitzgeralds Tunica"), and Black Hawk, Colorado ("Fitzgeralds
     Black Hawk"), collectively referred to as (the "Operating Properties").

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

     Fitzgeralds Arizona Management, Inc. ("FAMI"), a subsidiary 85% owned by
     FI, had an exclusive agreement (the "Cliff Castle Management Agreement") to
     manage the Cliff Castle Casino ("Cliff Castle") a gaming facility in Camp
     Verde, Arizona, owned and operated by the Yavapai-Apache Indian Nation (the
     "Nation"). In June 1998, FAMI entered into a termination agreement with the
     Nation wherein the parties mutually agreed to terminate the Cliff Castle
     Management Agreement, in consideration for which FAMI received $8.0
     million. In addition, through its 85%-owned subsidiary, Fitzgeralds New
     York, Inc ("FNYI"), FI had received monthly payments through September 1998
     in consideration of work performed prior and subsequent to the opening of
     the Turning Stone Casino ("Turning Stone") in Verona, New York, owned by
     the Oneida Indian Nation.

     Nevada Club, Inc. ("NCI"), a wholly owned subsidiary of the Company, owned
     and operated the Nevada Club in Reno, Nevada. The Nevada Club was closed in
     December 1997, pending completion of its sale, which occurred in June 1999.

     The Company incurred net losses of $18.0 million, $8.7 million and $31.5
     million in 1999, 1998 and 1997 respectively. The Company is also highly
     leveraged as total indebtedness was $204.4 million and $212.8 million at
     December 31, 1999 and 1998, respectively. The Company's stockholders'
     deficiency was $74.5 million and $51.3 million at December 31, 1999 and
     1998, respectively. Earnings before interest, taxes on income, depreciation
     and amortization ("EBITDA") decreased from $35.4 million for the year ended
     December 31, 1998 to $25.6 million for the year ended December 31, 1999.
     The decrease in EBITDA is primarily as a result of the termination of the
     Cliff Castle Management Agreement and completion of the settlement
     agreement with the Turning Stone, which provided revenues of $9.8 million
     and $1.1 million, respectively, in 1998. In addition, the Company incurred
     $2.2 million and $0.2 million of professional fees and expenses in
     conjunction with the ongoing development and negotiation of the Company's
     restructuring during 1999 and 1998, respectively. Adjusted EBITDA decreased
     from $30.0 million for the year ended December 31, 1998 to $27.9 million
     for the year ended December 31, 1999 for the reasons stated above, except
     for the exclusion of $2.2 million in restructuring costs. Moreover, to
     maintain market share in each of its four existing markets, the Company has
     found it necessary to increase promotional and complimentary expenses to
     meet the challenges of intense competition. Substantial expansion and new
     development activity is occurring in each of the Company's markets which
     may be expected to intensify competitive pressures.

     On May 13, 1999, the Company's Board of Directors determined that, pending
     a restructuring of its indebtedness, it would not be in the best interest
     of the Company to make the regularly scheduled interest payments on its
     $205.0 million aggregate principal amount of 12.25% Senior Secured Notes
     due December 15, 2004 (the "Senior Secured Notes"). Accordingly, the
     Company has not paid the regularly scheduled interest payments of $12.5
     million that were due and payable June 15, 1999 and December 15, 1999.
     Under the indenture pursuant to which the Senior Secured Notes were issued
     (the "Note Indenture"), an Event of Default occurred on July 15, 1999, and
     is continuing as of the date hereof. No action has been taken by either the
     Note Indenture Trustee or holders of at least 25% of the Senior Secured
     Notes to accelerate the Senior Secured Notes and declare the unpaid
     principal and interest to be due and payable. 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. In accordance with the
     Note Indenture, the Company began accruing interest on the unpaid interest
     at 13.25% effective June 16, 1999. An additional $2.2 million of interest
     incurred from the default on the Senior Secured Notes has also not been
     paid.


                                      F-9

<PAGE>   67
     In the event the Senior Secured Notes are accelerated, the Company would
     not have the resources available to repay such indebtedness. The Company
     has initiated and is continuing discussions with an informal committee
     representing holders of a majority interest in the Senior Secured Notes
     concerning a restructuring of the Company's indebtedness and reorganization
     of the Company that may include the sale of some or all of the Company's
     properties. Costs associated with restructuring were $2.2 million in 1999
     and $0.2 million in 1998. Such costs are reported in the selling, general
     and administrative expenses in the Consolidated Statements of Operations.
     Costs incurred and to be incurred in connection with restructuring 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 restructure its
     indebtedness.

     The Company has expended substantial amounts in recent years to expand and
     improve its properties and to enhance its competitive position, but it is
     anticipated that it will be necessary to continue to do so to remain
     competitive and there can be no assurance that the Company will have
     adequate resources for such purposes without restructuring the Company's
     indebtedness. The central strategic component of the Company's proposed
     restructuring plan involves making substantial capital expenditures at
     both its Fitzgerald Tunica and Fitzgeralds Black Hawk properties.

     A default on the Senior Secured Notes also constitutes a default under the
     $15.0 million loan and security agreement (the "Credit Facility") and,
     although the Company believes the lending institution will continue to have
     adequate security for the Company's obligations thereunder, there can be no
     assurance that the lending institution will continue to make additional
     advances. The Company has repaid all amounts borrowed under the Credit
     Facility.

2.   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 original maturities of ninety days or less.

     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.

     DEBT OFFERING COSTS - Costs associated with the issuance of the Senior
     Secured Notes and securing the Credit Facility are deferred and amortized
     over the life of the related indebtedness using the effective interest
     method.

     RESTRICTED CASH - At December 31, 1999 and 1998, restricted cash represents
     certificates of deposit with a bank securing letters of credit for various
     workers' compensation and insurance plans (see Note 11) and 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, 1998, the
     current portion of restricted cash represented funds held by the United
     States Bankruptcy Court for a litigation settlement in Tunica, Mississippi.


                                      F-10

<PAGE>   68

     GOODWILL - represents the cost in excess of fair value of the net assets
     acquired in purchase transactions. Goodwill is being amortized using the
     straight-line method over 40 years and is recorded net of accumulated
     amortization.

     CASINO REVENUE - is the net win from gaming activities, which is the
     difference between gaming wins and losses.

     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:

<TABLE>
<CAPTION>
                                           1999          1998          1997
                                        -----------   -----------   -----------

     <S>                                <C>           <C>           <C>
     Hotel                              $ 2,987,383   $ 2,498,405   $ 2,104,907
     Food and beverage                   12,595,908    11,383,379    10,684,329
     Other                                  280,998       283,482       223,949
                                        -----------   -----------   -----------
     Total                              $15,864,289   $14,165,266   $13,013,185
                                        ===========   ===========   ===========
</TABLE>

     FEDERAL INCOME TAXES - The Company accounts for income taxes in accordance
     with Statement of 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 Senior Secured Notes were trading at approximately 55% and
     56% of the face value at December 31, 1999 and December 31, 1998,
     respectively. 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 and notes payable - related parties approximates their 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.

     STOCK-BASED COMPENSATION - The Company utilizes SFAS No. 123, Accounting
     for Awards of Stock-Based Compensation to account for stock-based employee
     compensation plans and for transactions where equity securities are issued
     for goods and services. This statement defines a fair


                                      F-11

<PAGE>   69

     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. Management believes that adoption of this statement will not have
     a material impact on its financial condition or results of operation.

     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.

     RECLASSIFICATIONS - Certain amounts in the 1998 and 1997 consolidated
     financial statements have been reclassified to conform to the 1999 method
     of presentation.

3.   STATEMENTS OF CASH FLOWS INFORMATION

     The following supplemental disclosures are provided as part of the
     consolidated statements of cash flows for the years ended December 31,
     1999, 1998 and 1997:

     Cash paid for interest, net of amounts capitalized, during the years ended
     December 31, 1999, 1998 and 1997 was $682,217, $25,043,835 and $22,590,718,
     respectively.

     Long-term contracts payable of $545,079 in 1999, $4,159,447 in 1998 and
     $300,863 in 1997, were incurred with the acquisition of new equipment.

     During 1999, 1998 and 1997, accumulated deficit was increased by
     $5,561,339, $4,769,775 and $4,142,615 for preferred stock dividends
     consisting of $4,960,147, $4,280,969 and $3,694,790 accrued dividends and
     $601,193, $488,806 and $447,825 accretion of discount on preferred stock.

     During 1999, additional paid-in-capital increased and an amount due to
     stockholders decreased by $304,638 (see Note 9). In 1997 additional
     paid-in-capital decreased and the note payable to a former stockholder
     increased by $136,021, pursuant to an adjustment to the purchase price of
     treasury stock.

     In 1999 and 1998, additional offering costs of $169,590 and $455,966 were
     incurred in connection with the 1997 Offering of the Senior Secured Notes
     and the Credit Facility.


                                      F-12

<PAGE>   70

     During 1997, the Company acquired the remaining 78% membership interest in
     101 Main (see Note 6) with the allocation of the purchase price as follows:

<TABLE>
     <S>                                                           <C>
     Working capital other than cash                                $(3,218,233)
     Property and equipment                                          19,591,964
     Goodwill                                                        14,179,918
     Long-term debt                                                  (4,806,480)
                                                                    -----------
     Total                                                          $25,747,169
                                                                    ===========
</TABLE>

4.   PROPERTY AND EQUIPMENT

Property and equipment consists of the following at December 31,

<TABLE>
<CAPTION>
                                                                                 ESTIMATED
                                                                                  SERVICE
                                                       1999           1998         LIFE
                                                   ------------   ------------  -----------
     <S>                                           <C>            <C>           <C>
     Land used in casino operations                $ 17,736,900   $ 17,736,900         --
     Buildings and improvements                     119,134,393    118,379,468   7-40 years
     Site improvements                               15,299,870     15,445,901   20 years
     Barge and improvements                          12,896,235     12,896,235   15 years
     Furniture, fixtures and equipment               65,379,739     61,997,703   3-12 years
                                                   ------------   ------------

                                                    230,447,137    226,456,207
     Less accumulated depreciation and
       amortizaton                                  (79,476,431)   (67,241,809)
                                                   ------------   ------------
                                                    150,970,706    159,214,398
     Construction in progress                         1,046,355        500,265
                                                   ------------   ------------
     Total                                         $152,017,061   $159,714,663
                                                   ============   ============
</TABLE>

     Substantially all property and equipment are pledged as collateral on
     long-term debt. On February 1, 2000, Fitzgeralds Reno acquired ownership of
     a parking garage for $3.0 million.

5.   IMPAIRMENT LOSS

     In 1998, the Company recorded an impairment loss related to its 17.65%
     ownership interest in the Fremont Street Experience, Limited Liability
     Company ("FSE"). This impairment loss was principally due to significant
     levels of operating losses reported by FSE. Management expected this trend
     to continue and, therefore, did not expect to recover its investment in
     this entity.

 6.  ACQUISITION OF 101 MAIN

     Effective February 16, 1996, the Company, through Fitzgeralds Black Hawk,
     Inc., ("FBHI"), a wholly owned subsidiary of FI, purchased a 22% membership
     interest in 101 Main, a limited liability company formed to construct,
     develop and operate a casino in Gilpin County, Colorado. In addition, FBHI
     entered into a Management Agreement with 101 Main to manage the casino
     operations for a period of 10 years and retained an option to purchase the
     remaining 78% interest in 101 Main. The first floor of the casino opened on
     May 23, 1995.


                                      F-13

<PAGE>   71

     On August 15, 1997, the Company acquired the 78% membership interest in 101
     Main not previously owned by FBHI, at a purchase price of approximately
     $27.3 million. Because of certain restrictions on the Company, as issuer,
     and FBHI, as a subsidiary guarantor, contained in existing loan documents,
     FBHI formed Fitzgeralds Black Hawk II, Inc. ("FBHI-II") as a wholly-owned
     subsidiary of FBHI. FBHI then contributed substantially all of its assets
     including its 22% membership interest in 101 Main, its option to acquire
     the remaining 78% membership interest in 101 Main and the Management
     Agreement between FBHI and 101 Main, to FBHI-II. At the same time, 101 Main
     loaned approximately $27.3 million of the proceeds of its $38.0 million 13%
     First Mortgage Notes due 2000 (the "101 Main Notes") to FBHI-II for use in
     acquiring the additional 78% membership interest in 101 Main. FBHI-II, as
     the owner of all of the membership interests in 101 Main, and the
     Management Agreement, guaranteed the obligations of 101 Main under the 101
     Main Notes. The remainder of the proceeds from the 101 Main Notes was used
     to retire certain existing indebtedness secured by assets of 101 Main and
     for general corporate purposes.

     The acquisition of the 78% membership interest in 101 Main has been
     recorded as a purchase. Prior to the acquisition, the Company's 22%
     membership interest in 101 Main was accounted for using the equity method.
     From August 15, 1997, the financial statements of 101 Main have been
     consolidated with those of the Company.

     Condensed statement of operations information for 101 Main for the period
     from January 1, 1997 through August 15, is summarized below:

<TABLE>
<CAPTION>
                                                                    PERIOD ENDED
                                                                      AUGUST 15,
                                                                         1997
                                                                    ------------
<S>                                                                  <C>
     Summarized Statement of Operations Information
          Revenues                                                  $21,295,752
          Operating income                                            5,398,745
          Income before extraordinary item                            4,378,932
          Net income                                                  4,130,769
</TABLE>

     The table below reflects pro forma condensed financial information for the
     Company as if the 78% membership interest in 101 Main was acquired on
     January 1, 1997:

<TABLE>
<CAPTION>
                                                                    YEAR ENDED
                                                                   DECEMBER 31,
                                                                       1997
                                                                   ------------
     <S>                                                           <C>
     Net revenues                                                  $200,454,134
     Loss before extraordinary item                                  (8,735,241)
     Net loss                                                       (28,231,332)
     Net loss applicable to common stock                            (32,373,947)
     Net loss per common share                                            (8.07)
</TABLE>


                                      F-14

<PAGE>   72

7.   LONG-TERM DEBT

     The Senior Secured Notes bear interest at a fixed annual rate of 12.25%
     payable on June 15 and December 15 of each year, commencing June 15, 1998.
     The Notes will mature on December 15, 2004. The Senior Secured Notes are
     secured by a lien on substantially all of the assets of the Company,
     including a pledge of the stock of the Company's subsidiaries and a lien on
     substantially all of the assets of the Company's subsidiaries (other than
     FAMI, FNYI and NCI), except for certain excluded assets, as defined in the
     Note Indenture.

     Upon a Change of Control as defined in the Note Indenture, the Company will
     be required to offer to repurchase all of the outstanding Senior Secured
     Notes at a cash price equal to 101% of the principal amount thereof, plus
     accrued and unpaid interest to the date of repurchase.

     The Note Indenture contains covenants which, among other things, restrict
     the Company's ability to (i) make certain payments to, or investments in,
     third parties; (ii) incur additional indebtedness or liens on any assets;
     (iii) enter into transactions with affiliates; and (iv) sell assets or
     subsidiary stock. At December 31, 1999, the Company was not in compliance
     with certain covenants (see Note 1).

     In October 1998, the Company established the Credit Facility with a lending
     institution, subject to certain exceptions, secured by a first priority
     lien on substantially all of the assets of the Company, including a pledge
     of the stock of the Company's subsidiaries, a lien on substantially all of
     the assets of the Company's subsidiaries excluding FAMI, FNYI and NCI, and
     except certain excluded assets. The obligations under the Credit Facility
     bear interest at an annual rate equal to the designated bank's prime rate
     (8.50% and 7.75% at December 31, 1999 and 1998, respectively) minus seven
     basis points. The Company is charged a nominal fee for amounts available
     under the Credit Facility. Full payment of any outstanding balance under
     the Credit Facility is due upon termination of the loan agreement in
     October 2003. At December 31, 1999 and 1998, $5.0 million was available for
     capital expenditures at Fitzgeralds Black Hawk and $10.0 million and $7.0
     million, respectively, were available for general corporate purposes. At
     December 31, 1999, the Company was not in compliance with certain covenants
     as stated in the Credit Facility (See Note 1).


                                      F-15

<PAGE>   73

Long-term debt outstanding at December 31 is as follows:

<TABLE>
<CAPTION>
                                                                        1999            1998
                                                                   -------------    ------------
     <S>                                                           <C>              <C>
     The Senior Secured Notes; (net of unamortized
        discount of $1,833,418 and $2,084,611)                     $ 203,166,582    $202,915,389

     Credit Facility                                                          --       3,000,000

     Contracts payable secured by certain equipment due
        in maximum aggregate monthly installments of
        $83,158, with varying maturity dates through 2005              1,272,097       3,877,434

     Note payable to a trust to acquire land used in casino
        operations; collateralized by deed of trust on the land;
        due in monthly installments of $32,681, including
        interest at 7.5% remaining principal and interest due
        December 6, 2000; retired in June 1999                                --         782,004

     Other                                                                    --       2,263,944
                                                                   -------------    ------------
     Total debt                                                      204,438,679     212,838,771
     Less debt accelerated due to default                           (203,166,582)             --
     Less current portion                                               (673,619)     (4,634,747)
                                                                   -------------    ------------
     Long term debt                                                $     598,478    $208,204,024
                                                                   =============    ============
</TABLE>

     The scheduled maturities of long-term debt are as follows:

<TABLE>
     <S>                                                            <C>
     Year Ending December 31,
     2000                                                           $203,840,201
     2001                                                                248,003
     2002                                                                128,524
     2003                                                                128,622
     2004                                                                 79,298
     Thereafter                                                           14,031
                                                                    ------------
     Total                                                          $204,438,679
                                                                    ============
</TABLE>

     EXTRAORDINARY ITEM - In December 1997, the Company recorded an
     extraordinary loss on early retirement of debt of $19,247,928 consisting of
     the net write-off of unamortized discount and debt offering costs and early
     payment premium on debt retired with the proceeds of the Senior Secured
     Notes.


                                      F-16

<PAGE>   74

8.   COMMITMENTS

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

<TABLE>
     <S>                                                             <C>
     YEAR ENDING DECEMBER 31,
     2000                                                            $ 2,362,337
     2001                                                              1,705,724
     2002                                                              1,617,978
     2003                                                              1,510,014
     2004                                                              1,235,004
     Thereafter                                                        9,058,381
                                                                     ------------
     Total                                                           $17,489,438
                                                                     ============
</TABLE>

     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, 1999, 1998 and 1997
     was $2,845,668, $1,719,876 and $2,211,745, respectively.

     During 1997, the Company recorded an expense of $1,852,832 for the
     anticipated net lease settlement obligation for Harolds Club, including
     related legal fees. In anticipation of the Nevada Club transaction, the
     Company recorded an allowance of $2,157,000 against the book value of the
     assets held for sale to write such assets down to the estimated net
     realizable value for the year ended December 31, 1997. An additional
     write-down of $231,250 was taken during 1998 upon a reduction of the sales
     price of the Nevada Club. The Company recorded an additional write-down of
     $33,448 at the close of the transaction in June 1999.

     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.

9.   RELATED PARTY TRANSACTIONS

     Notes payable-related parties consists of unsecured demand notes from
     shareholders that bear interest at 6.24%. Such notes were retired and
     treated as additional paid-in-capital in 1999.


                                      F-17

<PAGE>   75

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.

     Effective January 1, 1989, 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 $332,155, $329,217 and $277,941 for the years
     ended December 31, 1999, 1998 and 1997.

     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 $537,998, $430,071 and $386,975 for the
     years ended December 31, 1999, 1998 and 1997.

11.  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 $155,000 that expires on November 1, 2000 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 $155,000.

     The Company has an investment with an insurance company in the amount of
     $200,000. Such investment, which expires on September 30, 2000, serves as
     collateral for a $2.5 million surety bond that was posted in September
     1998, enabling the Company to remain a participant in the State of Nevada
     self-insured workers' compensation program.

     The Company has irrevocable letters of credit with a bank in the amount of
     $480,000 and $250,000. Such letters, which expire on March 31, 2000 and
     September 30, 2000, respectively, may be drawn by an insurance company in
     the event that Fitzgeralds Tunica or Fitzgeralds Black Hawk fails to pay
     workers' compensation benefits to its employees. The letters of credit are
     secured with certificates of deposit for $480,000 and $250,000.

     The Company has an irrevocable letter of credit with a bank in the amount
     of $105,000 that expires on December 31, 2000 and may be drawn upon by
     certain individuals in the event that Fitzgeralds Reno is unable to make
     certain rental payments on leased property. The letter of credit is secured
     with a certificate of deposit for $105,000.

     At December 31, 1999, 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.


                                      F-18

<PAGE>   76

     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 the Fitzgeralds 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 as currently proposed 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 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 said intervention, on December
     22, 1999, the court granted the City's Motion for Summary Judgment against
     the Sundowner which motion was joined in by the Company. The City and the
     Company are currently engaged in negotiations to resolve the pending
     litigation. However, barring such a resolution, the parties have stipulated
     to a briefing schedule that requires all briefs to be filed by April 3,
     2000. It is anticipated that a decision on the merits of the Company's
     claims will be made subsequent to the filing of briefs, however, oral
     arguments may be requested.

     The Company has received no assurance as to whether or when the City will
     negotiate mitigation measures and whether such measures could or would
     fully compensate the Company for the fair market value of its property and
     anticipated operating losses.

     Other Matters - The Company is a party to various lawsuits relating to
     routine matters incidental to its business. 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.

12.  STOCKHOLDERS' DEFICIENCY

     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 dollars ($25 per share), plus accrued
     and unpaid dividends. Cash dividends on the Preferred Stock will be 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 if not paid (whether or not declared) will be
     cumulative from December 19, 1995 and will be compounded quarterly. The
     Note Indenture


                                      F-19

<PAGE>   77

     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 may be redeemed 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 Note Indenture and Credit Facility. The Company is
     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 consummates 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 will be
     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.

     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 Senior Secured 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 Warrants are not included in the
     computation of diluted earnings per share for years ended December 31, 1998
     and 1997.

     The Company has not paid any cash dividends on its Common Stock to date.
     The Company intends to retain all future earnings for use in the
     development of its business and does not anticipate paying cash dividends
     (including with respect to its Preferred Stock) in the foreseeable future.
     The payment of all dividends will be at the discretion of the Company's
     Board of Directors and will depend upon, among other things, future
     earnings, operations, capital requirements, the general financial condition
     of the Company and general business conditions. The ability of the Company
     or its subsidiaries to pay dividends is restricted by the terms of the Note
     Indenture and the Credit Facility with respect to which the Company is in
     default, and, with respect to the Common Stock, the certificate of
     designation for the Preferred Stock. If a holder of securities is
     disqualified by any gaming authorities from owning such securities, such
     holder will not be permitted to receive any dividends if, and when,
     declared by the Company's Board of Directors with respect to such
     securities.

     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 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,
     1999.


                                      F-20

<PAGE>   78

     STOCK OPTIONS

     In February 1995, the Company granted options to purchase 87,140 shares of
     common stock of the Company at $1.00 per share to certain employees of the
     Company. All options granted vested as of June 30, 1996.

     In December 1995, the Company granted options to purchase 75,000 shares to
     each of two officers and 50,000 shares to each of two additional officers.
     In addition, approximately 193,000 options were granted to Company
     employees concurrently with the closing of the 1995 Offering. In connection
     with the election of two non-employee directors concurrently with the 1995
     Offering, the Company granted options to purchase 5,000 shares to each of
     such non-employee directors. These options were exercisable at $4.50 per
     share, with the options vesting ratably over three years. In March 1997,
     the exercise price of all options then outstanding was reduced, to reflect
     the then current fair market value, from $4.50 per share to $1.00 per
     share, except for options granted to two controlling stockholders, the
     exercise price of which was reduced to $1.10 per share.

     On August 1, 1997, the Company adopted and the stockholders approved a new
     Stock Option Incentive Plan (the "Stock Option Plan"), to replace the prior
     plans. The Stock Option Plan, as amended, provides for the grant of options
     to purchase shares of Common Stock that are either intended to qualify as
     "incentive stock options" within the meaning of Section 422 of the Internal
     Revenue Code of 1986, as amended, or that are not intended to so qualify
     ("non-qualified options"). All officers, directors, employees, consultants,
     advisors, independent contractors and agents of the Company and its
     subsidiaries are eligible to receive options under the Stock Option Plan,
     except that only employees may receive incentive stock options. The Stock
     Option Plan also permits a one-time grant of options to certain former
     employees in substitution for options previously granted to them and having
     substantially the same terms and conditions. The maximum number of shares
     available for issuance under the Stock Option Plan is 1,000,000.

     In October 1997 the Board of Directors granted options to purchase 660,974
     shares under the Stock Option Plan in full replacement of previously
     granted options. All of such options were granted subject to the optionee's
     agreement to the cancellation of all previously granted options. The
     replacement options were for the same number of shares with substantially
     the same terms and conditions as the previously issued options.

     In February 1998 the Board of Directors authorized an amendment to the
     Stock Option Plan to eliminate the 100,000-share cap on the number of
     options which may be granted to a single option holder during any calendar
     year. In May 1998, the Board of Directors authorized a one-year extension
     for 55,524 stock options that were to expire on June 30, 1998. In 1999, the
     Board of Directors authorized a six-month extension of 53,261 stock options
     that were to expire on June 30, 1999. The extension is reflected as a
     cancellation and re-grant of new options in like amount. No options had
     been exercised as of December 31, 1999.

     The Stock Option Plan is 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, has 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.


                                      F-21

<PAGE>   79

     The exercise price of incentive stock options granted under the Stock
     Option Plan must 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 may not 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 may 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) are exercisable for the first time by an optionee
     in any calendar year exceed $100,000.

     A summary of the status of the Company's stock option grants as of December
     31, 1999, 1998 and 1997 and changes during the years then ended is
     presented below:

<TABLE>
<CAPTION>
                                                                           WEIGHTED
                                                                           AVERAGE
                                                                           EXERCISE
                                                             SHARES         PRICE
                                                            --------       --------
     <S>                                                    <C>            <C>
     Outstanding at January 1, 1997                          450,051       $   3.98
     Granted                                                 981,974           1.03
     Canceled                                               (660,974)          1.03
     Forfeited                                               (94,077)          1.67
                                                            --------       --------

     Outstanding at December 31, 1997                        676,974           1.03
     Canceled                                                (55,524)          1.00
     Re-granted                                               55,524           1.00
     Forfeited                                              (112,450)          1.00
                                                            --------       --------

     Outstanding at December 31, 1998                        564,524           1.04
     Canceled                                               (321,138)          1.02
     Re-granted                                               53,261           1.00
     Forfeited                                               (25,647)          1.00
                                                            --------       --------

     Outstanding and excercisable at December 31, 1999       271,000       $   1.04
                                                            ========       ========
</TABLE>

     Such options are not included in the computation of diluted earnings per
     share for the years ended December 31, 1999, 1998 and 1997. As of December
     31, 1999, the 271,000 options outstanding under the Stock Option Plan have
     exercise prices of $1.00 and $1.10 and a weighted-average remaining
     contractual life of one year.

     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 1999, 1998 and 1997.
     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 amounts
     indicated below:


                                      F-22

<PAGE>   80

<TABLE>
<CAPTION>
                                                  1999            1998           1997
                                               ------------    -----------    ------------
     <S>                                       <C>             <C>            <C>
     Net loss                  As reported     $(17,954,354)   $(8,666,827)   $(31,541,520)
                               Proforma         (17,954,354)    (8,669,735)    (31,598,880)

     Loss per common share     As reported          $ (5.35)       $ (3.35)        $ (8.89)
                               Proforma               (5.35)         (3.35)          (8.91)
</TABLE>

     The fair value of each option grant for the pro forma disclosure was
     estimated on the date of grant using the minimum value method with the
     following weighted-average assumptions used for grants in 1999, 1998 and
     1997; risk-free interest rates of 5.84%, 5.38% and 6.2%, respectively. It
     is uncertain at this time what the impact of the Company's attempted
     restructuring of its Senior Secured Notes will have on the weighted-average
     fair value or expected lives of the options previously granted and the
     Company considers the options to have no fair market value as of December
     31, 1999. The weighted average fair value of options granted during 1998
     and 1997 was $1.00.

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:

<TABLE>
<CAPTION>
                                             1999          1998           1997
                                          -----------   -----------   ------------

     <S>                                  <C>           <C>           <C>
     Tax benefit at U.S. statutory rate   $ 6,284,023   $ 3,033,390   $ 11,073,695
     Increase in valuation allowance       (5,481,709)   (2,696,503)   (10,981,971)
     Other                                   (802,314)     (336,887)       (91,724)
                                          -----------   -----------   ------------
     Total                                $        --   $        --   $         --
                                          ===========   ===========   ============
</TABLE>

     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 liability as of
     December 31, 1999 are as follows:

<TABLE>
<CAPTION>
                                                CURRENT     NONCURRENT       TOTAL
                                              -----------   -----------   -----------
     Deferred tax assets:
     <S>                                      <C>           <C>           <C>
       Accrued and other liabilities          $   932,984   $        --   $   932,984
       Bad debt reserve                           141,750            --       141,750
       FICA credits not utilized                       --       623,755       623,755
       NOL carryforward                                --    31,741,121    31,741,121
       Differences from flow through entity            --       126,503       126,503
       Other                                           --        61,788        61,788
                                              -----------   -----------   -----------
                                              $ 1,074,734   $32,553,167   $33,627,901
                                              -----------   -----------   -----------
</TABLE>


                                      F-23

<PAGE>   81

<TABLE>
<CAPTION>
                                        CURRENT     NONCURRENT        TOTAL
                                       --------    ------------    ------------
     <S>                               <C>         <C>             <C>
     Deferred tax liabilities:
       Difference between book and
         tax basis of property         $     --    $  8,524,349    $  8,524,349
       Intangibles                           --         272,246         272,246
       Prepaid expenses                 976,571              --         976,571
                                       --------    ------------    ------------
                                        976,571       8,796,595       9,773,166
                                       --------    ------------    ------------
                                         98,163      23,756,572      23,854,735
     Less:  valuation allowance         (98,163)    (23,756,572)    (23,854,735)
                                       --------    ------------    ------------
     Net deferred tax liability        $     --    $         --    $         --
                                       ========    ============    ============
</TABLE>

     The tax items comprising the Company's net deferred tax liability as of
     December 31, 1998 are as follows:

<TABLE>
<CAPTION>
                                                 CURRENT       NONCURRENT        TOTAL
                                              ------------    ------------    ------------
     <S>                                      <C>             <C>             <C>
     Deferred tax assets:
       Intangibles                            $         --    $    577,696    $    577,696
       Accrued and other liabilities             1,088,867              --       1,088,867
       Bad debt reserve                            120,939              --         120,939
       FICA credits not utilized                        --         507,427         507,427
       NOL carryforward                                 --      25,569,101      25,569,101
       Differences from flow through entity             --         406,016         406,016
       Other                                            --          32,548          32,548
                                              ------------    ------------    ------------
                                              $  1,209,806    $ 27,092,788    $ 28,302,594
                                              ============    ============    ============

     Deferred tax liabilities:
       Difference between book and
         tax basis of property                $         --    $  9,090,253    $  9,090,253
       Prepaid expenses                            839,315              --         839,315
                                              ------------    ------------    ------------
                                                   839,315       9,090,253       9,929,568
                                              ------------    ------------    ------------
                                                   370,491      18,002,535      18,373,026
     Less:  valuation allowance                   (370,491)    (18,002,535)    (18,373,026)
                                              ------------    ------------    ------------
     Net deferred tax liability               $         --    $         --    $         --
                                              ============    ============    ============
</TABLE>

     Due to the uncertainty of the realization of certain tax carry forward
     items, a valuation allowance has been established in the amount of $23.9
     million at December 31, 1999. 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, 1999, the Company had a consolidated net operating loss
     carry forward of approximately $90.7 million and a tax credit carry forward
     of $0.6 million, which are available to offset future tax through 2019. Of
     the loss carry forwards, $3.7 million is available only to offset


                                      F-24

<PAGE>   82

     future  taxable  income  of FMI.  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.  SEGMENT INFORMATION

     The Company is a diversified multi-jurisdictional gaming holding company
     that owns and operates four Fitzgeralds 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, property and equipment,
     goodwill related to the acquisition of the remaining 78% membership
     interest in 101 Main and debt offering cost related to the issuance of
     debt. No single customer accounts for more than 10% of revenue.

     A summary of the Company's operations by business segment for 1999, 1998
     and 1997 is presented below:


                                      F-25

<PAGE>   83

<TABLE>
<CAPTION>
                                                   YEAR ENDED DECEMBER 31,
                                            -----------------------------------
                                               1999         1998         1997
                                            ---------    ---------    ---------
                                                      (IN THOUSANDS)
     <S>                                    <C>          <C>          <C>
     Net operating revenues:
         Fitzgeralds Las Vegas              $  51,845    $  50,987    $  46,540
         Fitzgeralds Tunica                    74,332       68,349       68,734
         Fitzgeralds Reno                      40,019       39,729       39,803
         Fitzgeralds Black Hawk(1)             36,202       36,256       12,692
         Other(2)                                  --       11,742        5,695
                                            ---------    ---------    ---------
           Total Properties                   202,398      207,063      173,464

         Nevada Club                               --           62        6,238
                                            ---------    ---------    ---------

     Total                                  $ 202,398    $ 207,125    $ 179,702
                                            =========    =========    =========

     Income (loss) from operations:
         Fitzgeralds Las Vegas              $  (1,115)   $    (594)   $    (498)
         Fitzgeralds Tunica                     5,322        2,063        6,013
         Fitzgeralds Reno(3)                    2,151        2,400        3,211
         Fitzgeralds Black Hawk(1)              7,517        9,074        4,215
         Other(2)                              (2,322)       9,414        4,011
                                            ---------    ---------    ---------
           Total Properties                    11,553       22,357       16,952

         Nevada Club                              (90)        (566)      (1,477)
         Harolds Club                             (64)        (111)      (1,853)
                                            ---------    ---------    ---------
     Total(2)                               $  11,399    $  21,680    $  13,622
                                            =========    =========    =========
</TABLE>


                                      F-26

<PAGE>   84
     Reconciliation of total business segment operating income to consolidated
     net loss before income tax and extraordinary item:

<TABLE>
<CAPTION>
                                                                  YEAR ENDED DECEMBER 31,
                                                             --------------------------------
                                                               1999        1998        1997
                                                             --------    --------    --------
                                                                      (IN THOUSANDS)
     <S>                                                     <C>         <C>         <C>
          Total segment operating income                     $ 13,875    $ 12,943    $ 12,941
          Nevada Club                                             (90)       (566)     (1,477)
          Harolds Club                                            (64)       (111)     (1,853)
          Other(2)                                             (6,320)      9,414       4,011
          Eliminations                                         17,240       9,112       9,407
          Interest Income                                         536         527         383
          Interest income - shareholder and inter-company      31,879      32,110      17,636
          Interest expense                                    (29,704)    (27,154)    (25,368)
          Interest expense - shareholder and inter-company    (31,808)    (32,057)    (17,614)
          Other expense                                       (13,498)    (12,885)    (10,360)
                                                             --------    --------    --------

     Net loss before income tax and extraordinary item       $(17,954)   $ (8,667)   $(12,294)
                                                             ========    ========    ========
</TABLE>

<TABLE>
<CAPTION>
                                                   YEAR ENDED DECEMBER 31,
                                              --------------------------------
                                                1999        1998        1997
                                              --------    --------    --------
                                                       (IN THOUSANDS)
     <S>                                      <C>         <C>         <C>
     EBITDA(4):
         Fitzgeralds Las Vegas(5)             $  2,594    $  2,682    $  2,651
         Fitzgeralds Tunica                     11,553       8,051      11,744
         Fitzgeralds Reno                        4,588       4,805       5,462
         Fitzgeralds Black Hawk(1)               9,303      10,863       4,842
         Other(2)                               (2,281)      9,622       4,111
                                              --------    --------    --------

           Total Properties                     25,757      36,023      28,810
         Nevada Club                               (90)       (561)     (1,282)
         Harolds Club                              (64)       (111)     (1,853)
                                              --------    --------    --------

           Total EBITDA                         25,603      35,351      25,675
         Adjustments to EBITDA(6)                2,325      (5,328)      4,924
                                              --------    --------    --------

           Adjusted EBITDA                    $ 27,928    $ 30,023    $ 30,599
                                              ========    ========    ========

     Segment depreciation and amortization:
         Fitzgeralds Las Vegas                $  3,709    $  3,276    $  3,149
         Fitzgeralds Tunica                      6,231       5,987       5,731
         Fitzgeralds Reno                        2,437       2,405       2,251
         Fitzgeralds Black Hawk(1)               1,786       1,789         627
         Other                                      40         214         296
                                              --------    --------    --------

     Total                                    $ 14,203    $ 13,671    $ 12,054
                                              ========    ========    ========


     Segment assets:
         Fitzgeralds Las Vegas                $ 46,788    $ 48,535    $ 50,486
         Fitzgeralds Tunica                     69,869      72,470      75,375
         Fitzgeralds Reno                       32,030      37,302      35,038
         Fitzgeralds Black Hawk(1)              40,371      41,019      42,480
         Other                                  17,749       9,871      12,316
                                              --------    --------    --------

     Total                                    $206,797    $209,197    $215,695
                                              ========    ========    ========

</TABLE>


                                      F-27

<PAGE>   85

<TABLE>
<CAPTION>
                                                             YEAR ENDED DECEMBER 31,
                                                        --------------------------------
                                                          1999        1998        1997
                                                        --------    --------    --------
                                                                 (IN THOUSANDS)
     <S>                                                <C>         <C>         <C>
     Expenditures for additions to long-lived assets:
         Fitzgeralds Las Vegas                          $  1,635    $  1,832    $  1,920
         Fitzgeralds Tunica                                2,393       2,903         928
         Fitzgeralds Reno                                  1,387       3,260         833
         Fitzgeralds Black Hawk (1)                          687       1,312         187
         Other                                                82           8          76
                                                        --------    --------    --------
     Total                                              $  6,184    $  9,315    $  3,944
                                                        ========    ========    ========
</TABLE>

     ---------

       (1) Includes Fitzgeralds Black Hawk operating results commencing August
           15, 1997.

       (2) 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; (v) corporate expenses
           not allocated to the Operating Properties for all periods presented,
           which includes $2.2 million and $0.2 million of restructuring
           expenses for 1999 and 1998, respectively.


                                      F-28

<PAGE>   86

       (3) Excludes inter-company debt write-off of $3.2 million from Nevada
           Club in 1999.

       (4) 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 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.

       (5) Fitzgeralds Las Vegas invested $0.9 million, $0.8 million and $0.8
           million for 1999, 1998 and 1997, respectively, in FSE. Prior to 1999,
           such investments were reported under the equity method with no impact
           on earnings. The 1999 investment was charged against earnings. See
           Note 5 "Impairment Loss" of Notes to Consolidated Financial
           Statements.

       (6) Adjustments to EBITDA include (i) exclusion of EBITDA for Harolds
           Club and Nevada Club for all periods presented; (ii) 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; (iii) exclusion
           of Harolds Club lease settlements of $0.06 million, $0.1 million and
           $1.9 million for 1999, 1998 and 1997, respectively; (iv) inclusion of
           $1.0 million for 1997 in cash received by the Company as a result of
           its 22% membership in 101 Main; (v) exclusion of $6.0 million of the
           $8.0 million received in connection with the termination of the Cliff
           Castle Management Agreement in 1998; and (vii) exclusion of $2.2
           million of restructuring expenses for 1999.

15.  GUARANTEE OF THE SENIOR SECURED NOTES AND CREDIT FACILITY

     The Company's obligations under the Senior Secured Notes and Credit
     Facility are fully and unconditionally guaranteed, jointly and severally,
     by all subsidiaries of the Company (other than FAMI, FNYI, and NCI).
     Subject to certain exceptions, the guarantee of the Senior Secured Notes is
     secured by a lien, subject to the lien securing the guarantee of the Credit
     Facility, on substantially all assets of the Guarantor Subsidiaries other
     than certain excluded assets, as defined. Such excluded assets include,
     among other thing, (i) cash, deposit accounts and other cash equivalents of
     $22,010,057 and $12,792,707 at December 31, 1999 and 1998, respectively;
     (ii) furniture, fixtures and equipment with a net book value of $1,343,984
     and $8,181,527 at December 31, 1999 and 1998, 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 does 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. The Company is currently in default on its Senior Secured Notes and
     its Credit Facility (see Note 1).


                                      F-29

<PAGE>   87

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, 1999:

<TABLE>
<CAPTION>
                                            FITZGERALDS                          NON
                                              GAMING         GUARANTOR        GUARANTOR       ELIMINATING       CONSOLIDATED
                                            CORPORATION     SUBSIDIARIES    SUBSIDIARIES        ENTRIES             TOTAL
                                           ------------     ------------    ------------     -------------      ------------
<S>                                        <C>              <C>             <C>              <C>                <C>
ASSETS

CURRENT ASSETS:
   Cash and cash equivalents               $  9,204,431     $ 12,805,626      $ 105,537      $          --      $ 22,115,594
   Accounts and notes receivable, net             3,261        1,413,534             --                 --         1,416,795
   Inventories                                       --        1,771,327             --                 --         1,771,327
   Prepaid and other current assets             396,037        3,841,670             --                 --         4,237,707
                                           ------------     ------------      ---------      -------------      ------------
     Total current assets                     9,603,729       19,832,157        105,537                 --        29,541,423

PROPERTY AND EQUIPMENT, NET                     110,789      151,906,272             --                 --       152,017,061
OTHER ASSETS                                196,521,739       26,022,397             --       (197,306,130)(b)    25,238,006
                                           ------------     ------------      ---------      -------------      ------------
TOTAL                                      $206,236,257     $197,760,826      $ 105,537      $(197,306,130)     $206,796,490
                                           ============     ============      =========      =============      ============

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES:
   Debt accelerated due to default         $203,166,582     $         --      $      --      $          --      $203,166,582
   Current portion of long-term debt            178,470          495,149             --                 --           673,619
   Accounts payable, accrued and other       31,236,099       17,199,789         31,854         (1,576,310)(c)    46,891,432
                                           ------------     ------------      ---------      -------------      ------------
     Total current liabilities              234,581,151       17,694,938         31,854         (1,576,310)      250,731,633
                                           ------------     ------------      ---------      -------------      ------------

LONG TERM DEBT, Net of current portion       16,977,829      247,677,421             22       (264,056,794)(a)       598,478
                                           ------------     ------------      ---------      -------------      ------------
   Total liabilities                        251,558,980      265,372,359         31,876       (265,633,104)      251,330,111

CUMULATIVE REDEEMABLE
   PREFERRED STOCK                           29,962,511               --             --                 --        29,962,511
STOCKHOLDERS' EQUITY (DEFICIENCY)           (75,285,234)     (67,611,533)        73,661         68,326,974 (d)   (74,496,132)
                                           ------------     ------------      ---------      -------------      ------------
TOTAL                                      $206,236,257     $197,760,826      $ 105,537      $(197,306,130)     $206,796,490
                                           ============     ============      =========      =============      ============
</TABLE>

--------

(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.

(d)  To eliminate investment in subsidiaries, other capitalized costs and
     inter-company deferred interest income.



                                      F-30

<PAGE>   88

Condensed consolidating balance sheet information as of December 31, 1998:

<TABLE>
<CAPTION>
                                            FITZGERALDS                          NON
                                              GAMING         GUARANTOR        GUARANTOR       ELIMINATING       CONSOLIDATED
                                            CORPORATION     SUBSIDIARIES    SUBSIDIARIES        ENTRIES             TOTAL
                                           ------------     ------------    ------------     -------------      ------------
<S>                                        <C>              <C>             <C>              <C>                <C>
ASSETS

CURRENT ASSETS:
   Cash and cash equivalents               $  1,832,514     $ 10,960,193     $  245,882      $          --      $ 13,038,589
   Accounts and notes receivable, net            34,243        1,406,006             --                 --         1,440,249
   Inventories                                       --        1,375,443             --                 --         1,375,443
   Prepaid and other current assets             973,686        3,175,892         84,596                 --         4,234,174
                                           ------------     ------------     ----------      -------------      ------------

     Total current assets                     2,840,443       16,917,534        330,478                 --        20,088,455

PROPERTY AND EQUIPMENT, NET                      66,827      159,647,836             --                 --       159,714,663
OTHER ASSETS                                194,914,141       36,178,996      3,313,449       (205,012,240)(b)    29,394,346
                                           ------------     ------------     ----------      -------------      ------------

TOTAL                                      $197,821,411     $212,744,366     $3,643,927      $(205,012,240)     $209,197,464
                                           ============     ============     ==========      =============      ===============

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES:
   Current portion of long-term debt       $         --     $  4,939,384     $       --      $          --      $  4,939,384
   Accounts payable, accrued and other        4,287,831       20,254,990         58,574         (1,648,481)(c)    22,952,914
                                           ------------     ------------     ----------      -------------      ------------

      Total current liabilities               4,287,831       25,194,374         58,574         (1,648,481)       27,892,298
                                           ------------     ------------     ----------      -------------      ------------

LONG TERM DEBT, Net of current portion      220,836,221      224,282,483      6,279,298       (243,193,978)(a)   208,204,024
                                           ------------     ------------     ----------      -------------      ------------

    Total liabilities                       225,124,052      249,476,857      6,337,872       (244,842,459)      236,096,322

CUMULATIVE REDEEMABLE
    PREFERRED STOCK                          24,401,171               --             --                 --        24,401,171
STOCKHOLDERS' DEFICIENCY                    (51,703,812)     (36,732,491)    (2,693,945)        39,830,219 (d)   (51,300,029)
                                           ------------     ------------     ----------      -------------      ------------

TOTAL                                      $197,821,411     $212,744,366     $3,643,927      $(205,012,240)     $209,197,464
                                           ============     ============     ==========      =============      ============
</TABLE>

--------

(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.

(d)  To eliminate investment in subsidiaries, other capitalized costs and
     inter-company deferred interest income.


                                      F-31

<PAGE>   89

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

<TABLE>
<CAPTION>
                                            FITZGERALDS                          NON
                                              GAMING         GUARANTOR        GUARANTOR       ELIMINATING       CONSOLIDATED
                                            CORPORATION     SUBSIDIARIES    SUBSIDIARIES        ENTRIES             TOTAL
                                           ------------     ------------    ------------     -------------      ------------
<S>                                        <C>              <C>             <C>              <C>                <C>
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                        --       19,123,882             --                 --        19,123,882
                                           ------------     ------------     ----------      -------------      ------------
   Net revenue                                       --      202,398,049             45                 --       202,398,094
                                           ------------     ------------     ----------      -------------      ------------

OPERATING COSTS AND
   EXPENSES:
  Casino                                             --       83,895,369             --                 --        83,895,369
  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       60,368,306         60,235         (4,000,000)(g)    62,687,856
  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      188,641,960         59,351         (4,000,000)      190,999,250
                                           ------------     ------------     ----------      -------------      ------------

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)
                                           ============     ============     ==========      =============      ============
</TABLE>

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

(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-32

<PAGE>   90

Condensed consolidating statement of operations information for the year ended
December 31, 1998:

<TABLE>
<CAPTION>
                                            FITZGERALDS                          NON
                                              GAMING         GUARANTOR        GUARANTOR       ELIMINATING       CONSOLIDATED
                                            CORPORATION     SUBSIDIARIES    SUBSIDIARIES        ENTRIES             TOTAL
                                           ------------     ------------    ------------     -------------      ------------
<S>                                        <C>              <C>             <C>              <C>                <C>
OPERATING REVENUES:
  Casino                                   $         --     $162,506,030    $        --      $          --      $162,506,030
  Food and beverage                                  --       24,936,289             --                 --        24,936,289
  Rooms                                              --       21,213,266             --                 --        21,213,266
  Other                                              --        4,639,429     11,106,453                 --        15,745,882
                                           ------------     ------------    -----------      -------------      ------------
   Total                                             --      213,295,014     11,106,453                 --       224,401,467
  Less promotional allowances                        --       17,276,879             --                 --        17,276,879
                                           ------------     ------------    -----------      -------------      ------------
   Net revenue                                       --      196,018,135     11,106,453                 --       207,124,588
                                           ------------     ------------    -----------      -------------      ------------

OPERATING COSTS AND
   EXPENSES:
  Casino                                             --       81,439,540         98,950                 --        81,538,490
  Food and beverage                                  --       18,290,363          5,163                 --        18,295,526
  Rooms                                              --       12,579,464             --                 --        12,579,464
  Other operating expense                            --        2,162,019             --                 --         2,162,019
  Selling, general and administrative         5,470,096       55,150,699        308,729         (4,073,182)(g)    56,856,342
  Depreciation and amortization                  23,502       13,456,510        190,784                 --        13,670,796
  Write-down of assets and lease
    settlement                                     (260)         110,738        231,250                 --           341,728
                                           ------------     ------------    -----------      -------------      ------------
   Total                                      5,493,338      183,189,333        834,876         (4,073,182)      185,444,365
                                           ------------     ------------    -----------      -------------      ------------

INCOME (LOSS) FROM OPERATIONS                (5,493,338)      12,828,802     10,271,577          4,073,182        21,680,223

OTHER INCOME (EXPENSE):
  Interest income                            32,352,261          194,057         80,266        (32,099,206)(h)        527,378
  Interest expense                          (26,250,515)     (32,675,237)      (274,438)        32,027,036 (e)   (27,173,154)
  Other income (expense)                     (7,772,650)      16,415,898       (866,903)       (11,477,619)(f)    (3,701,274)
                                           ------------     ------------    -----------      -------------      ------------

  Income (loss)                              (7,164,242)      (3,236,480)     9,210,502         (7,476,607)       (8,666,827)
  Income tax (provision) benefit               (185,715)              --        185,715                 --                --
                                           ------------     ------------    -----------      -------------      ------------

NET INCOME (LOSS)                          $ (7,349,957)    $ (3,236,480)   $ 9,396,217      $  (7,476,607)     $ (8,666,827)
                                           ============     ============    ===========      =============      ============
</TABLE>

-----------

(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, deferred interest income, and other inter-company income.


                                      F-33

<PAGE>   91

Condensed consolidating statement of operations information for the year ended
December 31, 1997:

<TABLE>
<CAPTION>
                                            FITZGERALDS                          NON
                                              GAMING         GUARANTOR        GUARANTOR       ELIMINATING       CONSOLIDATED
                                            CORPORATION     SUBSIDIARIES    SUBSIDIARIES        ENTRIES             TOTAL
                                           ------------     ------------    ------------     -------------     -------------
<S>                                        <C>              <C>             <C>              <C>                <C>
OPERATING REVENUES:
  Casino                                   $         --     $135,895,642    $ 5,319,429       $         --      $141,215,071
  Food and beverage                                  --       21,094,261      1,404,852                 --        22,499,113
  Rooms                                              --       21,318,538             --                 --        21,318,538
  Other                                              --        4,774,324      5,191,184                 --         9,965,508
                                           ------------     ------------    -----------       ------------      ------------
   Total                                             --      183,082,765     11,915,465                 --       194,998,230
  Less promotional allowances                        --       14,770,306        526,191                 --        15,296,497
                                           ------------     ------------    -----------       ------------      ------------
   Net revenue                                       --      168,312,459     11,389,274                 --       179,701,733
                                           ------------     ------------    -----------       ------------      ------------

OPERATING COSTS AND
  EXPENSES:
  Casino                                             --       66,046,542      3,628,444                 --        69,674,986
  Food and beverage                                  --       16,178,476      1,036,409                 --        17,214,885
  Rooms                                              --       12,512,496             --                 --        12,512,496
  Other operating expense                            --        1,681,063             --                 --         1,681,063
  Selling, general and administrative         4,354,305       46,909,116      1,804,025         (4,134,268)(g)    48,933,178
  Depreciation and amortization                  20,794       11,757,606        275,377                 --        12,053,777
  Write-down of assets and lease
  settlement                                     27,832        2,580,000      1,402,000                 --         4,009,832
                                           ------------     ------------    -----------       ------------      ------------
   Total                                      4,402,931      157,665,299      8,146,255         (4,134,268)      166,080,217
                                           ------------     ------------    -----------       ------------      ------------

INCOME (LOSS) FROM OPERATIONS                (4,402,931)      10,647,160      3,243,019          4,134,268        13,621,516

OTHER INCOME (EXPENSE):
  Interest income                            17,438,078          349,823         11,163        (17,336,887)(h)       462,177
  Interest expense                          (19,712,305)     (22,729,426)      (319,105)        17,265,733 (e)   (25,495,103)
  Other income (expense)                     (9,184,622)       2,693,840       (207,980)         5,816,580 (f)      (882,182)
                                           ------------     ------------    -----------       ------------      ------------

  Income (loss) before income taxes and
   extraordinary item                       (15,861,780)      (9,038,603)     2,727,097          9,879,694       (12,293,592)
  Income tax (provision) benefit              3,075,065       (1,413,031)    (1,662,034)                --                --
                                           ------------     ------------    -----------       ------------      ------------

  Income (loss) before extraordinary item   (12,786,715)     (10,451,634)     1,065,063          9,879,694       (12,293,592)
  Extraordinary item-
   Loss on early retirement of debt         (18,683,651)        (564,277)            --                 --       (19,247,928)
                                           ------------     ------------    -----------       ------------      ------------

NET INCOME (LOSS)                          $(31,470,366)    $(11,015,911)   $ 1,065,063       $  9,879,694      $(31,541,520)
                                           ============     ============    ===========       ============      ============
</TABLE>

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


(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, deferred interest income, and other inter-company income.



                                      F-34

<PAGE>   92

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

<TABLE>
<CAPTION>
                                            FITZGERALDS                          NON
                                              GAMING         GUARANTOR        GUARANTOR       ELIMINATING       CONSOLIDATED
                                            CORPORATION     SUBSIDIARIES    SUBSIDIARIES        ENTRIES             TOTAL
                                           ------------     ------------    ------------     -------------     -------------
<S>                                        <C>              <C>             <C>              <C>                <C>
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 provided by (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 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
                                            ===========     ============    ===========          =========      ============
</TABLE>

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

(b)  To eliminate inter-company advances.


                                      F-35

<PAGE>   93

Condensed consolidating statement of cash flows information for the year ended
December 31, 1998:

<TABLE>
<CAPTION>
                                              FITZGERALDS                         NON
                                                GAMING        GUARANTOR        GUARANTOR      ELIMINATING         CONSOLIDATED
                                              CORPORATION    SUBSIDIARIES    SUBSIDIARIES       ENTRIES               TOTAL
                                             ------------    ------------    ------------    -------------       -------------
<S>                                          <C>             <C>             <C>             <C>                  <C>
NET CASH PROVIDED BY (USED IN)
  OPERATING ACTIVITIES                        $(3,363,058)    $ 2,186,708    $13,365,299      $         --        $ 12,188,949
                                              -----------     -----------    -----------      ------------        ------------

CASH FLOWS FROM INVESTING
  ACTIVITIES:
  Proceeds from sale of assets                         --          81,910        403,298                --             485,208
  Acquisition of property and equipment            (7,920)     (5,143,939)            --                --          (5,151,859)
  Acquisition of assets to be held for sale            --        (374,865)            --                --            (374,865)
  Decrease in restricted cash                     355,572          38,415             --                --             393,987
  Dividends received                            1,000,000      10,443,616             --       (11,443,616)(a)              --
  Other                                                --        (803,488)            --                --            (803,488)
                                              -----------     -----------    -----------      ------------        ------------

    Net cash provided by (used in)
      investing activities                      1,347,652       4,241,649        403,298       (11,443,616)         (5,451,017)
                                              -----------     -----------    -----------      ------------        ------------

CASH FLOWS FROM FINANCING
  ACTIVITIES:
    Proceeds from line of credit                3,000,000              --             --                --           3,000,000
    Payment of debt offering costs             (1,537,826)             --             --                --          (1,537,826)
    Repayment of long-term debt                        --      (5,419,788)    (2,708,356)               --          (8,128,144)
    Repayment of dividends                             --      (1,000,000)   (12,286,606)       11,443,616 (a)      (1,842,990)
                                              -----------     -----------    -----------      ------------        ------------
    Net cash provided by (used in)
      financing activities                      1,462,174      (6,419,788)   (14,994,962)       11,443,616          (8,508,960)
                                              -----------     -----------    -----------      ------------        ------------

NET INCREASE (DECREASE) IN CASH
  AND CASH EQUIVALENTS                           (553,232)          8,569     (1,226,365)               --          (1,771,028)

CASH AND CASH EQUIVALENTS
  BEGINNING OF YEAR                             2,385,746      10,951,622      1,472,249                --          14,809,617
                                              -----------     -----------    -----------      ------------        ------------

CASH AND CASH EQUIVALENTS
  END OF YEAR                                 $ 1,832,514     $10,960,191    $   245,884      $         --        $ 13,038,589
                                              ===========     ===========    ===========      ============        ============
</TABLE>

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

(a)  To eliminate inter-company dividends.


                                      F-36

<PAGE>   94

Condensed consolidating statement of cash flows information for the year ended
December 31, 1997:

<TABLE>
<CAPTION>
                                                    FITZGERALDS                         NON
                                                      GAMING        GUARANTOR        GUARANTOR      ELIMINATING       CONSOLIDATED
                                                    CORPORATION    SUBSIDIARIES    SUBSIDIARIES       ENTRIES             TOTAL
                                                   ------------    ------------    ------------    -------------     -------------
<S>                                                <C>             <C>             <C>             <C>               <C>
NET CASH PROVIDED BY (USED IN)
    OPERATING ACTIVITIES                          $  (6,529,107)   $  4,074,467     $ 3,741,897     $         --      $  1,287,257
                                                  -------------    ------------     -----------     ------------      ------------

CASH FLOWS FROM INVESTING
  ACTIVITIES:
    Proceeds from sale of assets                             --         109,012          20,936               --           129,948
    Repayments from related parties                          --       2,518,805              --               --         2,518,805
    Acquisition of property and equipment               (22,025)     (3,566,861)        (53,992)              --        (3,642,878)
    Advances to related parties                     (61,500,446)             --              --       61,500,446 (b)            --
    (Increase) decrease in restricted cash             (355,572)      2,215,908              --               --         1,860,336
    Purchase of business, net of cash acquired               --     (25,747,169)             --               --       (25,747,169)
    Dividends received                                2,896,714       1,911,893              --       (4,808,607)(a)            --
    Other                                                    --         224,406              --               --           224,406
                                                  -------------    ------------     -----------     ------------      ------------

       Net cash provided by (used in)
        investing activities                        (58,981,329)    (22,334,006)        (33,056)      56,691,839       (24,656,552)
                                                  -------------    ------------     -----------     ------------      ------------

CASH FLOWS FROM FINANCING
  ACTIVITIES:
    Proceeds from 1997 Offering                     202,634,300              --              --               --       202,634,300
    Payment of debt offering costs                   (9,225,656)     (2,082,772)             --               --       (11,308,428)
    Advance from related parties                             --      61,500,446              --      (61,500,446)(b)            --
    Proceeds from issuance of debt                           --      38,221,811              --                         38,221,811
    Repayment of long-term debt                    (128,399,735)    (73,757,422)       (416,463)              --      (202,573,620)
    Dividends                                                --      (2,896,714)     (2,249,286)       4,808,607 (a)      (337,393)
    Repayments to related parties                            --      (1,807,255)             --               --        (1,807,255)
                                                  -------------    ------------     -----------     ------------      ------------
      Net cash provided by (used in)
        financing activities                         65,008,909      19,178,094      (2,665,749)     (56,691,839)       24,829,415
                                                  -------------    ------------     -----------     ------------      ------------

NET INCREASE (DECREASE) IN CASH
  AND CASH EQUIVALENTS                                 (501,527)        918,555       1,043,092               --         1,460,120

CASH AND CASH EQUIVALENTS
  BEGINNING OF YEAR                                   2,887,273      10,033,067         429,157               --        13,349,497
                                                  -------------    ------------     -----------     ------------      ------------

CASH AND CASH EQUIVALENTS
  END OF YEAR                                     $   2,385,746    $ 10,951,622     $ 1,472,249     $         --      $ 14,809,617
                                                  =============    ============     ===========     ============      ============
</TABLE>

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

(a)  To eliminate inter-company dividends.

(b)  To eliminate inter-company advances.


                                      F-37

<PAGE>   95

FITZGERALDS GAMING CORPORATION                                       SCHEDULE II

CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS
--------------------------------------------------------------------------------


ALLOWANCE FOR DOUBTFUL ACCOUNTS RECEIVABLE

<TABLE>
<CAPTION>
                                     ADDITIONS
                                     CHARGED TO
                   BEGINNING         COSTS AND                                         ENDING
      FYE           BALANCE           EXPENSES            DEDUCTIONS(1)               BALANCE
      ---          ---------         ---------            -------------               -------
    <S>            <C>               <C>                  <C>                         <C>
    12/31/97       $ 253,942         $ 560,462             $ (402,523)               $ 411,881
    12/31/98         411,881           388,573               (454,914)                 345,540
    12/31/99         345,540           493,568               (434,105)                 405,003
</TABLE>


ALLOWANCE FOR DOUBTFUL RELATED PARTY NOTES RECEIVABLE

<TABLE>
<CAPTION>
                                     ADDITIONS
                                     CHARGED TO
                   BEGINNING         COSTS AND                                       ENDING
      FYE           BALANCE           EXPENSES            RECOVERIES                BALANCE
      ---          ---------         ---------            ----------                -------
    <S>            <C>               <C>                  <C>                       <C>
    12/31/97       $ 510,439            $  --             $ (510,439)                $  --
    12/31/98              --               --                     --                    --
    12/31/99              --               --                     --                    --
</TABLE>


ALLOWANCE TO WRITE ASSETS HELD FOR SALE TO ESTIMATED REALIZABLE VALUE

<TABLE>
<CAPTION>
                                     ADDITIONS
                                     CHARGED TO
                   BEGINNING         COSTS AND                                       ENDING
      FYE           BALANCE           EXPENSES             DISPOSAL                 BALANCE
      ---          ---------         ----------            --------                ----------
    <S>           <C>                <C>                  <C>                      <C>
    12/31/97      $      --          $2,157,000           $        --              $2,157,000
    12/31/98       2,157,000            231,250                    --               2,388,250
    12/31/99       2,388,250             97,759            (2,486,009)(2)                  --
</TABLE>

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