<PAGE>

                                   FORM 10-KSB

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

            [ X ]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
               THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended June 30, 1997

                                       OR

        [   ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ___________________ to ________________________

Commission file number 0-15415

                               GLOBAL CASINOS, INC
             ------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)

       Utah                                                87-0340206
-----------------------------                          ---------------------
(State or other jurisdiction                              I.R.S. Employer
of incorporation or organization)                      Identification number

       4465 Northpark Drive, Suite 400, Colorado Springs, Colorado  80907
     ----------------------------------------------------------------------
     (Address of Principal Offices)                              (Zip Code)

Registrant's telephone number, including area code:     (719) 590-4900

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

Securities registered pursuant to Section 12(g) of the Act: 

                         Common Stock, par value $0.005
                         ------------------------------
                                (Title of Class)

     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 that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.  Yes [ X ]  No [  ]

     Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-B (Section 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part
III of this Form 10-KSB or any amendment to this Form 10-KSB.   [ X ]

The Registrant's revenues for the year ended June 30, 199 were $9,234,097.

As of September 30, 1997, the aggregate market value of the Common Stock of
the Registrant based upon the average of the closing bid and asked prices of
the Common Stock, as quoted on NASDAQ, held by non-affiliates of the
Registrant was approximately $5,165,490.

As of September 30, 1997, 1,400,811 shares of Common Stock of the Registrant
were outstanding. <PAGE>
<PAGE>
                       DOCUMENTS INCORPORATED BY REFERENCE
                       -----------------------------------

     The Registrant incorporates by this reference the following:

     PART III
     --------
     Item 9    Directors, Executive Officers, Promoters and Control Persons,
               Compliance With Section 16(a) of the Exchange Act.

     Item 10   Executive Compensation.

     Item 11   Security Ownership of Certain Beneficial Owners and Management.

     Item 12   Certain Relationships and Related Transactions.

     The foregoing are incorporated by reference from the Registrant's
definitive Proxy Statement relating to its annual meeting of stockholders,
which will be filed in an amendment within 120 days of June 30, 1997.

     PART IV - EXHIBITS
     ------------------
     1.   Incorporated by reference from the Company's Registration Statement
          on Form 10, as amended, SEC file number 0-15415.

     2.   Incorporated by reference from the Company's Registration Statement
          on Form S-2, as amended, SEC File No. 33-46060, declared effective
          May 15, 1992.

     3.   Incorporated by reference from the Company's Registration Statement
          on Form S-8, filed with the Commission and effective December 8,
          1995.

     4.   Incorporated by reference from the Company's Registration Statement
          on Form SB-2, as amended, SEC File No. 33-76204, declared effective
          August 12, 1994.
 
     5.   Incorporated by reference from the Company's Current Report on Form
          8-K, dated July 15, 1995, as filed with the Commission on July 31,
          1995, as amended on Form 8-K/A-1 filed with the Commission on 
          August 31, 1995;

     6.   Incorporated by reference from the Company's Current Report on Form
          8-K, dated November 19, 1993, as filed with the Commission on
          December 3, 1993;

     7.   Incorporated by reference from the Company's Current Report on Form
          8-K, dated February 18, 1994, as filed with the Commission on 
          March 3, 1994;

     8.   Incorporated by reference from the Company's Current Report on Form
          8-K, dated April 29, 1994, as filed with the Commission on May 13,
          1994;

     9.   Incorporated by reference from the Company's Current Report on Form
          8-K, dated June 3, 1994, as filed with the Commission on June 10,
          1994;

     10.  Incorporated by reference from Casinos U.S.A., Inc.'s Corrected
          Second Amended Disclosure Statement, dated September 16, 1996, as
          filed with the Commission on October 31, 1996; and 

     11.  Incorporated by reference from the Company's Current Report on Form
          8-K, dated August 1, 1997, as filed with the Commission on August
          14, 1997.<PAGE>
<PAGE>
                                     PART I

ITEM 1.   DESCRIPTION OF BUSINESS
-------   -----------------------

OVERVIEW
--------
          Global Casinos, Inc. (the "Company" or "Global Casinos") and its
wholly-owned subsidiaries, operate in the rapidly developing and expanding
domestic and international gaming industry.  The Company is organized as a
holding company for the purpose of acquiring operating casinos, gaming
properties and other related interests.

          
HISTORY
-------
          Global Casinos, Inc., f/k/a Morgro Chemical Company, was organized
under the laws of the State of Utah on June 8, 1978.  From 1978 until
February, 1994, it manufactured and marketed a line of garden fertilizers and
chemicals, as well as a retail ice melter.

          In the fall of 1993, the Company embarked upon an aggressive plan to
acquire and develop casino properties both nationally and internationally.  On
September 20, 1993, the Company acquired 100% of the outstanding Common Stock
of Colorado Gaming Properties, Inc., a Colorado corporation ("CGP").  CGP
owned two (2) real estate properties located in the limited stakes gaming
district in Central City, Colorado.  The properties, known as the Nitro Club
and the Gas Light, which were never operational under the Company, were
foreclosed upon in June, 1996. (See ITEM 2.  DESCRIPTION OF PROPERTIES)

          On November 19, 1993, the Company acquired 100% of the outstanding
Common Stock of Casinos U.S.A., Inc., a Colorado corporation ("Casinos
U.S.A."), Lincoln Corporation, a South Dakota corporation ("Lincoln"), and
Woodbine Corporation, a South Dakota corporation ("Woodbine") in exchange for
253,500 of the Company's Common Stock. Casinos U.S.A. owns and operates the
Bull Durham Saloon and Casino, located in Black Hawk, Colorado.  Lincoln and
Woodbine each operated casinos located in Deadwood, South Dakota.  The Company
permanently closed the Last Chance Saloon owned and operated by Lincoln
Corporation on May 31, 1994.  Lillie's, the casino operated by Woodbine
Corporation, was closed effective June 30, 1995 due to unprofitable
operations. (See ITEM 2.  DESCRIPTION OF PROPERTIES)

          Casinos U.S.A. also held an 80% interest in a joint venture
("International Joint Venture") which developed and operated gaming casinos in
several international locations.  Through the International Joint Venture,
casinos have been developed and operated in Sochi, Russia and Bishkek,
Kyrgyzstan.  In Sochi, the International Joint Venture developed and operated
Casino Lazurnaya located in the four-star Hotel Radisson Lazurnaya.  In
Bishkek, the International Joint Venture has developed and operates the Casino
Las Vegas located on the second floor of the Restaurant Naryn.  

          In February, 1994, the Company sold to a management group all of the
assets, subject to all of the liabilities, utilized in the chemical and
fertilizer business which it formerly operated under the name "Morgro Chemical
Company." The Company received approximately $854,000 in cash and promissory
notes, and the purchasers assumed approximately $1,200,000 in liabilities. 
The purchase price represented the net book value of the assets disposed of in
excess of the liabilities assumed.  

          In April, 1994, the Company successfully purchased for $1,381,274 in
cash a 66-2/3% interest in a holding company which, through a wholly-owned
subsidiary, owns and operates Casino Masquerade located in the Radisson Aruba
Resort and Casino located on the Caribbean island of Aruba, Netherlands
Antilles. 

          By an Agreement dated June 27, 1995, and effective July 15, 1995
("Dissolution Agreement"), the International Joint Venture (the "IJV") was
dissolved.  The Company assigned its interest in the Casino Lazurnaya and
received all of the IJV's profit interest (61%) in Casino Las Vegas, the
remaining 33-1/3% interest in Casino Masquerade, and a promissory note in the
amount of two hundred thousand dollars ($200,000) secured by 20,000 shares of
the Company's common stock.  Giving effect to this transaction, the Company
owns a 61% profit interest in Casino Las Vegas, 100% of the Casino Masquerade,
and no residual interest in Casino Lazurnaya.

          In July, 1996, the Company formed a subsidiary, Global Internet
Corporation ("Global Internet"), to explore opportunities to develop and
operate one or more sites on the World Wide Web, with an initial focus on
entertainment and non-commercial gaming sites.  The Company loaned $325,000 to
Global Internet in exchange for a 10% promissory note.  At June 30, 1997, the
Company's investment Note and related interest and additional appointed
$385,000.
          
          Management became aware that internet gaming could impair the
Company's Colorado state gaming license.  As a result, the Company initiated
actions to divest itself of its investment in Global Internet.  A separate
board of directors of Global Internet was established, with no overlapping
members of the Company's board, and the Company assigned its voting rights to
a member of the Global Internet board, who is not related to the Company.  The
Company also entered into negotiations with First Entertainment, Inc. ("FEI"),
an unrelated third party, whereby FEI would acquire the Company's investment
in Global Internet.
          
          On May 11, 1997, the Company and FEI entered into an agreement
whereby the Company will sell 1,500,000 of the 1,750,000 common shares of
Global Internet owned by the Company, in exchange for 1,500,000 warrants,
which will allow the Company to purchase 1,500,000 shares of FEI common shares
at $1.25 per share for a period of five years.  The Company will also sell its
convertible promissory note, advances and interest receivable of $375,000 for
30,000 shares of FEI Class B Preferred Stock with a face value of $12.50 per
share, convertible into FEI common shares at $1.25 per share.  The agreement
was originally expected to close shortly after May 1997.  However, the FEI
shareholders have not yet approved the transaction, authorized an increase in
FEI common stock to allow for the issuance of shares underlying the
convertible preferred stock and warrants, or obtained long-term financing that
would allow Global Internet to continue to develop entertainment and gaming
sites.

          FEI is a thinly capitalized and thinly traded public entity which
does not appear to currently have resources available to continue development
of Global Internet.  In September 1997, the Company was informed that
completion of the transaction was contingent upon FEI shareholders' approval,
for which a shareholders meeting is currently scheduled for November 1997. 
These factors raised concerns about the Company's ability to realize its
investment in Global Internet.  Management determined that it would be
appropriate for the Company to fully expense its investment and allow for the
receivables in Global Internet during the quarter ended June 30, 1997,
although the sale may ultimately be consummated.
          
          FEI has represented to the Company that financing will be obtained
and the transaction will be approved by the shareholders.  Management believes
that if this is to occur, the Company may be able to recognize a gain on its
sale of Global Internet.

          Effective August 1, 1996, the Company, through its subsidiary Global
Pelican, entered into a cancelable Management and Operating Lease Agreement
(the "Pelican Agreement") with a third party, whereby Global Pelican agreed to
lease and operate the Pelican Casino, located on the island of St. Maarten. 
The original term of the lease was for five years, with its options to renew
for three additional five-year terms.  Lease payments were scheduled to be
$30,000 per month for the initial lease term beginning in November 1996.  Rent
expense in 1997 was $225,000.  The Pelican Agreement provides that Global
Pelican would also purchase the equipment utilized at the casino for $225,000
in exchange for a note payable, subject to the owner providing clear title to
the equipment.  The Pelican Agreement also states that until the equipment
liens and encumbrances are released, Global Pelican has the right to terminate
the Pelican Agreement.  At June 30, 1997, the equipment remains subject to
liens and encumbrances, and Global Pelican has therefore not purchased the
equipment.  In July 1997, Global Pelican renegotiated the terms of the Pelican
Agreement, whereby Global Pelican is to pay $20,000 per month through November
1997, of which $15,000 is to be applied as monthly rent, and $5,000 as
deferred rent pending completion of negotiations between Global Pelican and
the lessor.  Global Pelican is scheduled to continue negotiations with the
lessor by November 1997.  

          On August 1, 1997, the Company acquired 100% of the outstanding
Common Stock of Anchorage-based Alaska Bingo Supply, Inc. ("ABS") and its
related operations.  ABS will be operated by the Company's wholly-owned
subsidiary, Global Alaska Corporation ("Global Alaska").  

          The Company purchased ABS for $4,400,000, of which $400,000 was paid
in cash at closing, with the $4,000,000 balance in the form of a promissory
note, bearing interest at eight percent (8%) and to be amortized monthly over
a term of seven (7) years beginning in October, 1997.  During the term of the
note, the noteholder the option to convert up to $2,500,000 of the promissory
note into shares of the Company's Common Stock at a price of ten dollars ($10)
per share.
          
          In order to fund this acquisition, the Company borrowed $350,000
from third parties and $75,000 from an affiliate.  The promissory notes are
due in equal monthly payments from January 1998 through April 1998.  The
promissory notes to third parties are secured by a note receivable by the
Company.  Interest on $200,000 of the notes is at 24% and interest on the
remaining $225,000 (including the affiliate Note) is at 12%.  Additionally,
the holder of the $150,000, 12% note was issued warrants to purchase 15,000
shares of the Company's common stock at an exercise price of $3.00 per share. 
The warrants expire June 2000.
          
FINANCING
---------
          On May 31, 1994, the Company successfully closed a private placement
of 9% Convertible Notes in which it sold, in the aggregate, $2,812,500 in
Convertible Notes to a total of 33 accredited investors.  In June, 1994, the
Convertible Notes were automatically converted into 1,406,250 shares of
Mandatory Redeemable ("Mandatory Redeemable") and Convertible and Class A
Preferred Stock ("Preferred Stock") and Class D Common Stock Purchase Warrants
("D Warrants") which have since expired.  The Preferred Stock is convertible
into Common Stock of the Company at a conversion value of $20.00 per share
(one share of Common Stock for ten shares of Preferred Stock).  The Company
had the obligation to redeem any Preferred Stock not yet converted at the rate
of $2.00 per share on May 31, 1995.  Due to a significant decline in the
public trading price of the Company's Common Stock, none of the shares of
Preferred Stock were converted, and the Company was obligated to complete the
mandatory redemption on or before May 31, 1995, representing an aggregate
redemption price of $2,812,500.  As the Company lacked the capital necessary
to redeem the outstanding shares of Preferred Stock, the Company entered into
agreements with the holders of 1,233,000 of the outstanding shares of
Preferred Stock, modifying the redemption and conversion terms of the
Preferred Stock, such that the Company  was released from its obligation to
redeem the 1,233,000 shares of Preferred Stock, the conversion value was
reduced from $20.00 per share to $11.25 per share (approximately .1778 shares
of Common Stock for each share of Preferred Stock).  During the year ended
June 30, 1996, 544,500 shares of the modified Preferred Stock were converted
into 96,790 shares of Common Stock.  In July, 1995, the Company agreed to
issue 28,125 shares of Common Stock upon this exercise of 28,125 D Warrants at
$5.00 per share.

          The foregoing modifications are applicable only to shares of
Preferred Stock and D Warrants owned by holders who voluntarily agreed to such
modifications.  As a result, at June 30, 1995, there continued to be issued
and outstanding 173,250 shares of Preferred Stock as to which the Company
continued to be in default in its mandatory redemption obligation,
representing an aggregate redemption obligation of $346,500, all of which was
matured and in default, and 88,625 original D Warrants.  Subsequent to June
30, 1995, the holder of 125,000 shares of Preferred Stock agreed with the
Company to convert same into Common Stock at a conversion of $11.25 per share
which was completed in June, 1996.  The holder agreed to waive all interest
accrued while the Company was in default of its mandatory redemption
obligation and accepted no reduction in the exercise price of D Warrants.  In
July, 1996, 10,000 shares of the Mandatory Redeemable Preferred Stock was
converted into Common Stock at a conversion of $11.25 per share, and 7,500
shares were converted into Common Stock at a conversion of $10.00 per share. 
As a result, at June 30, 1997, 26,750 shares of the original Mandatory
Redeemable and Preferred Stock are outstanding and the Company continues to be
in default of its mandatory redemption obligation (representing an aggregate
redemption obligation of $53,500, all of which is matured and currently in
default). 

          On August 12, 1994 the Company's Registration Statement on Form SB-2
was declared effective by the Securities and Exchange Commission.  The
Registration Statement registered for sale under the Securities Act of 1933,
as amended (the "Securities Act") 42,780 shares held by existing shareholders,
195,750 shares issuable upon exercise of Class A Common Stock Purchase
Warrants ("A Warrants"), 203,375 shares issuable upon exercise of Class B
Common Stock Purchase Warrants ("B Warrants"), and 65,144 shares issuable upon
exercise of Class C Common Stock Purchase Warrants ("C Warrants").  During the
period of time that the Registration Statement was effective, A Warrants were
exercised to purchase an aggregate of 67,500 shares of Common Stock at an
exercise price of $10.00 per share, B Warrants were exercised to purchase an
aggregate of 6,500 shares of Common Stock at an exercise price of $20.00 per
share, and C Warrants were exercised to purchase an aggregate of 4,500 shares
of Common Stock at an exercise price of $30.00 per share.  As a result of
those Warrant exercises, the Company received aggregate gross proceeds of
$850,000.  The Class A Warrants, B Warrants, and C Warrants expired on
December 31, 1995.

          In June, 1995, the Company consummated the purchase of an aggregate
of $937,204 in subordinated secured promissory notes held by sixteen (16)
creditors of Casinos U.S.A..  Pursuant to the terms of the Promissory Note
Purchase Agreements, the Company purchased the promissory notes and collateral
security in consideration for the issuance of an aggregate of 124,961 shares
of the Company's Common Stock, valued at $7.50 per share.  The shares of
Common Stock were issued by the Company in reliance upon an exemption from the
registration requirements of the Securities Act contained in Section 4(2)
thereof.  In connection with the Promissory Note Purchase Agreements, the
Company has agreed to  register for resale under the Securities Act the shares
of Common Stock issued in consideration of the Casinos U.S.A. Debt Purchase. 
The Registration Statement filed by the Company with the Securities and
Exchange Commission on Form S-3 was declared effective on December 13, 1995.  

          In October, 1996, the Company raised $630,250 through an offering of
Units ("Units"), each Unit consisting of one (1) eight percent (8%) $1,000
convertible Promissory Note ("Promissory Note"), 200 Class E Common Stock
Purchase Warrants ("E Warrants"), 200 Class F Common Stock Purchase Warrants
("F Warrants"), and 200 Class G Common Stock Purchase Warrants ("G Warrants"). 
The Promissory Note is convertible to common stock at $5.00 per $1.00 loaned
and the Promissory Notes are due October 31, 1998.  The Class E Warrants, F
Warrants and G Warrants are exercisable at $6,00, $7.00, and $8.00,
respectively.

          In January, 1997, the Company borrowed $32,000 in 10% notes, $21,000
of which was from related parties, which were due in September, 1997.  The
Company is currently in default on these notes.


INTERNATIONAL GAMING INTERESTS
------------------------------
          CASINO LAS VEGAS: BISHKEK, KYRGYZSTAN
          -------------------------------------
          Through the International Joint Venture, the Company's subsidiary,
Global International, developed and operated the Casino Las Vegas located in
the Naryn Restaurant, in Bishkek, Kyrgyzstan.  Global International held an
eighty percent (80%) interest in the International Joint Venture which in turn
held a sixty-one percent (61%) profit interest in the Casino Las Vegas. 
Casino Las Vegas is operated under a lease with the Naryn Restaurant pursuant
to which the restaurant owner retains the remaining thirty-nine percent (39%)
profit interest.  Under the terms of the Dissolution Agreement, Global Casino
Group, Inc. and Global International both assigned their interests in Casino
Las Vegas and the lease under which the casino operates to the Company.  As a
result, the Company held a net sixty-one percent (61%) profit interest in
Casino Las Vegas.  At September, 1996, pursuant to the terms of the Joint
Venture Agreement, the Company's profit interest was reduced to fifty percent
(50%).

          CASINO MASQUERADE:  ARUBA, NETHERLAND ANTILLES
          ----------------------------------------------
          In April, 1994, the Company purchased a sixty-six and two-thirds
percent (66-2/3%) interest in a holding company which, through a wholly-owned
subsidiary, owns and operates a casino located in the Radisson Aruba Resort
and Casino located on the Caribbean island of Aruba, Netherlands Antilles. 
Casino Masquerade is open and operational, and the Company has upgraded many
of the gaming devices on location and invested in additional leasehold
improvements.  Pursuant to the Dissolution Agreement, the Company acquired the
remaining thirty-three and one-third percent (33-1/3%) interest in Casino
Masquerade.  As a result, the Company presently owns 100% of the Casino
Masquerade.

          PELICAN CASINO:  ST. MAARTEN, NETHERLANDS ANTILLES 
          --------------------------------------------------
          The Company leases the Casino Las Vegas facility from the minority
joint venture partner ("JVP") in the Casino Las Vegas.  The Company paid 39%
of the net casino profits, as defined, to the JVP until the Company recouped
its original investment plus interest, which occurred in September 1996. 
Beginning in September 1996, the Company began paying 50% of the net casino
profits to the JVP.  In addition, the Company has an agreement with an
unrelated entity whereby after the Company has received $500,000 in profits,
it shall pay 10% of its share of the net profits to this entity     

          In order to fund this project, the Company borrowed $165,000 from an
affiliate, which the Company used to establish the casino's bankroll of
$165,000.


DOMESTIC GAMING INTERESTS
-------------------------
          BULL DURHAM SALOON AND CASINO: BLACK HAWK, COLORADO
          ---------------------------------------------------
          The Company, through its wholly-owned subsidiary Casinos U.S.A.,
owns the Bull Durham Saloon and Casino (the "Bull Durham").  The Bull Durham
is located in Black Hawk, Colorado and currently operates as a Class B Gaming
Casino, which limits the casino to four (4) gaming tables and fewer than two
hundred fifty (250) slot machines.  Under limited stakes gaming regulations in
Colorado, maximum wagers are limited to $5.00 per bet.  The Bull Durham
commenced gaming operations in February, 1993.  The Bull Durham operates under
a gaming license issued to the Company.  Casinos U.S.A. ("Debtor") was in
default under all of its secured obligations encumbering the Bull Durham
Saloon and Casino.  The efforts of the Company to negotiate restructured terms
for the repayment of the secured obligations were unsuccessful.  As a result,
on October 18, 1995, Casinos U.S.A. filed a voluntary petition under Chapter
11 of the United States Bankruptcy Code.  Since October 18, 1995, Casinos
U.S.A. continued to operate the Bull Durham as debtor-in-possession.  The
Court confirmed the Debtor's Second Amended Plan of Reorganization (the
"Plan") on December 18, 1996.  The effective date of the Plan is thirty (30)
days after confirmation.  (See ITEM 2.  DESCRIPTION OF PROPERTIES)

          NITRO CLUB - GAS LIGHT: CENTRAL CITY, COLORADO
          ----------------------------------------------
          The Nitro Club and Gas Light properties are located in the limited
stakes gaming district in Central City, Colorado.  Owned by the Company's
subsidiary, CGP, the Nitro Club and the Gas Light were never operated as
gaming facilities by the Company.  

          The Nitro Club was developed and operated by its prior owners as a
gaming casino from February, 1992 until January, 1993, when it ceased
operations due to lack of working capital resulting from unprofitable
operations, and non-renewal of its gaming license due to delinquent filing of
gaming tax  reports and payment of gaming taxes.  The Gas Light was operated
as a restaurant until 1991, and had never been developed as a gaming casino.  

          On January 25, 1996 the Company reached an agreement with the first
note holder on the Gas Light property to stay the foreclosure that was
initiated by the note holder.  On March 7, 1996 a second mortgage holder on
the Nitro Club property initiated a foreclosure action.  The Company was
unsuccessful in its attempts to settle this obligation and the note holder
foreclosed and assumed the obligations of the first mortgage holder.  Because
the Company was unable to settle the Nitro Club obligations it ceased to make
the mortgage payments on the Gas Light notes payable.  The statutory periods
within which the Company had the right to redeem the Gas Light and Nitro Club
out of foreclosure expired in June, 1996.  (See ITEM 2.  DESCRIPTION OF
PROPERTY)


EMPLOYEES
---------
          The Company presently has six (6) full time employees: Stephen G.
Calandrella, Interim President; Peter Bloomquist, Chief Financial Officer;
George C. Garman, General Manager of Casino Masquerade; Dale Sterner, General
Manager of Casino Las Vegas; Daniel Scherer, General Manager of Bull Durham
Saloon and Casino; and one clerical staff.

          Mr. Martindale was employed by the Company pursuant to the terms of
a three-year employment contract, which expired in November, 1996 and which
was not renewed by the Company.  Mr. Martindale's contract provided for
payment of base salary in the amount of $8,000 per month, subject to certain
increases of up to $10,000 per month.  Mr. Martindale was also entitled to
receive further incentive compensation based upon the Company's net income
from international gaming operations.  

          In consideration for his services as Interim President, the Company
resolved to grant and issue to Mr. Calandrella the following:  1) For each
month of service, beginning October 1, 1995 and ending June 30, 1996, a number
of shares of the Company's Common Stock, $0.05 par value, which, when
multiplied by the closing bid price of the Company's Common Stock as quoted on
NASDAQ on the date of issuance, equals $5,000; that such shares of Common
Stock shall be "restricted securities" under the Securities Act of 1933, as
amended; and 2) Incentive stock options granted under the Company's Stock
Incentive Plan, exercisable for a period of five (5) years to purchase, in the
aggregate, 150,000 shares of the Company's Common Stock at an exercise price
of $0.50 per share.  Of such incentive stock options, 50,000 shall be
immediately vested and exercisable, and the remaining 100,000 incentive stock
options shall vest ratably over two (2) years, subject to Mr. Calandrella
continuing to serve as an executive officer or key employee of the Company,
with 50,000 incentive stock options vesting on October 13, 1996 and 50,000
incentive stock options vesting on October 13, 1997.  Effective January 1,
1997, the Company resolved to pay base compensation to Mr. Calandrella in the
amount of $4,000 per month.

          Mr. Bloomquist is employed by the Company pursuant to the terms of a
three (3) year employment contract which expired in July, 1997 and provided
for payment of base compensation in the amount of $7,500 per month.  Mr.
Bloomquist is also eligible to receive incentive stock options, subject to
vesting, under the Company's 1993 Stock Incentive Plan.

          Mr. Garman is employed by the Company as General Manager of Casino
Masquerade pursuant to a three (3) year employment contract, expiring in May,
1998, which provides for payment of a base  annual compensation of $6,000 per
month.  In addition, Mr. Garman is also entitled to receive a bonus equal to
(i) five percent (5%) of the net operating income of Casino Masquerade up to
$1,000,000, (ii) ten percent (10%) of the net operating income of Casino
Masquerade in excess of $1,000,000 and up to $1,500,000, and (iii) fifteen
percent (15%) of net operating income of Casino Masquerade in excess of
$1,500,000.  Mr. Garman is also eligible to receive incentive stock options
subject to vesting, under the Company's 1993 Stock Incentive Plan.  

          Mr. Sterner is employed by the Company as General Manager of Casino
Las Vegas pursuant to a three (3) year employment contract, expiring in
November, 1998, which provides for payment of base compensation in the amount
of $6,250 per month.  Mr. Sterner is also eligible to receive incentive stock
options subject to vesting, under the Company's 1993 Stock Incentive Plan.  In
addition, Mr. Sterner shall be paid a quarterly bonus equal to five percent
(5%) of the consolidated net income of Casino Las Vegas.

          Mr. Scherer is employed by the Company as General Manager of the
Bull Durham Saloon and Casino pursuant to a one (1) year employment contract,
which automatically renews for two (2) successive years and provides for
payment of base compensation in the amount of $5,000 per month.  Mr. Scherer
is also eligible to receive incentive stock options subject to vesting, under
the Company's 1993 Stock Incentive Plan.  In addition, Mr. Scherer shall be
paid an annual bonus equal to two and one-half percent (2-1/2%) of the net
income of the Bull Durham Saloon and Casino in excess of $150,000.

          Ms. Rose was employed by the Company as Director of Marketing of
Casino Masquerade pursuant to a three (3) year employment contract which would
expire in December, 1998, which provided for payment of a base annual
compensation of $37,500.  Ms. Rose resigned her position with the Company in
November, 1996.

          Casino Masquerade currently operates with a total of 70 employees. 
Because of the requirements of Aruban law, the staffing levels cannot be
decreased during the slower summer season, and as a result the company expects
the size of the labor force to remain relatively constant year round. 

          Pelican Casino currently operates with a total of 50 full-time
employees.

          The Bull Durham currently employs 20 persons.  During the peak
summer season, employment typically increases by a total of 15 employees.

          Casino Las Vegas currently employs 48 persons.


CONSULTANTS
-----------
          The Company relies upon the services of independent consultants,
including its local accountants and local attorneys in the jurisdictions in
which the Company holds or plans to develop its international gaming
interests.


COMPETITION
-----------
          INTERNATIONAL
          -------------
          There are numerous national and international corporations and
entities engaged in the business of attempting to develop casinos throughout
the world.  There are currently eleven (11) casinos on the island of Aruba,
Netherlands Antilles and eight (8) casinos on the island of St. Maarten,
Netherlands Antilles.  These Caribbean resort islands have few barriers to
entry of new participants in the gaming business.  The Company is aware of
four other operating casinos in Bishkek, Kyrgyzstan.  The Company expects that
it will have to operate competitively in these markets and to respond to
challenges from competitors that have substantially greater financial and
personnel resources than the Company.

          DOMESTIC
          --------
          Competition in the gaming industry in the United States is intense. 
The Company presently estimates that gaming is permitted in most states in
some form.  There are numerous competitors engaged in the same or similar
business as the Company, and competition has increased substantially in recent
years with more competitors entering the market.  Competition from these
entities will continue to affect the operations of the Company and other
operators in the gaming industry.  Competition in Central City and Black Hawk,
Colorado is particularly intense with numerous competitors in very close
proximity and new competitors entering the market.  There can be no assurance
that the Company can obtain the resources necessary to compete successfully in
the industry or that the Company can operate profitably given the existing
level of competition. 

          The Company's operations also compete with other forms of gaming
conducted throughout the United States and the world.  Other gaming activities
include Bingo, Lotto, table games, sports betting and pari-mutuel wagering.


REGULATION
----------
          INTERNATIONAL
          -------------
          Ownership and operation of gaming establishments in each foreign
jurisdiction where the Company has operations are regulated by local
authorities.  In virtually all jurisdictions in which the Company plans to
operate casinos, the Company will be required to obtain a Certificate of
Authority to conduct business in that jurisdiction, as well as numerous
licenses, including gaming licenses, tax licenses, liquor licenses and the
like.  Each jurisdiction maintains its separate regulatory environment with
discrete requirements and approvals necessary.

          In each jurisdiction in which the Company has an opportunity to
develop a casino, the Company has consulted with local officials as well as
local advisors, including attorneys, accountants, bankers and other
professionals whose services are or will be retained in order to ensure that
the Company complies with all applicable regulatory requirements.  The Company
will, of necessity, rely upon the consultation of such advisors in order to
ensure compliance.

          DOMESTIC: FEDERAL AND STATE LAW
          -------------------------------
          Ownership and operation of gaming establishments are extensively
regulated by states in which such activities are permitted.  Colorado has
adopted numerous statutes and regulations covering limited stakes gaming
operations.  Existing regulation includes various aspects of the gaming
industry, including ownership, operation and employment in all limited stakes
gaming operations, taxation of revenues and regulation of equipment utilized
in connection with such activities.  Virtually all aspects of ownership and
operation of gaming facilities require licensing by the state.  Operators,
machine manufacturers and distributors, employees and retailers are all
subject to extensive investigation and regulation prior to licensing to engage
in gaming activities.  The procedure for obtaining these licenses is time
consuming and costly.

          Because the Company is a publicly traded corporation, each of the
officers, directors and shareholders owning 5% or more of the equity interest
must be approved under existing statutes and regulations.  The criteria
established in determining fitness to conduct such operations include
financial history, criminal record and character, in addition to satisfaction
of application procedures set forth in the existing regulations.  As a result
of these regulations, any investor in the company who becomes a holder of 5%
or more of the Company's Common Shares may be required to submit to a
background investigation, provide financial statements and respond to
inquiries from gaming regulators in accordance with licensing procedures. 
Such restrictions may discourage acquisition of large blocks of the Company's
Common Shares and depress the price of the Company's Common Shares in any
market which has or may develop.

          Under current regulations promulgated by the Colorado Limited Gaming
Commission (the "Gaming Commission"), no gaming licensee may issue shares
except in accordance with Colorado gaming laws and regulations; and any such
issuances will be ineffective and such stock shall not be deemed issued until
compliance is obtained; no shares of the licensee may be transferred except in
accordance with Colorado Gaming Laws and regulations; and if the Gaming
Commission determines that a holder of a licensee's securities is unsuitable,
the licensee or a suitable person must, within sixty (60) days, purchase such
securities at the lesser of the unsuitable person's investment or the current
market price of such securities.  Any person who becomes a beneficial owner of
five percent (5%) or more of the Company's Common Stock must notify the
Division of Gaming within ten (10) days after such person acquires such
securities and must provide such additional information and be subject to a
finding of suitability as required by the Division of Gaming Commission.  The
Company must notify each person who is subject to this regulation of its
requirements as soon as it becomes aware of the acquisition.  Further, each
person who becomes a beneficial owner of more than ten percent (10%) of any
class of voting securities of the Company must apply to the Commission for a
finding of suitability within ten (10) days after acquiring such securities. 
The Company must notify each person who is subject to this regulation and its
requirements as soon as it becomes aware of the acquisition. 

          Existing federal and state regulations may also impose civil and
criminal sanctions for various activities prohibited in connection with gaming
operations.  State statutes and regulations also prohibit various acts in
connection with gaming operations, including false statements on applications
and failure or refusal to obtain necessary licenses described in such
regulations.  Violation of any of these existing or newly adopted regulations
may have a substantial adverse effect on the operations of the Company and its
subsidiaries.


          DOMESTIC: LIQUOR LICENSE
          ------------------------
          The Company has been granted a casino tavern license issued under
the Colorado Liquor Code for the Bull Durham.  As revised in 1993, the
Colorado Liquor Code now includes a casino tavern license which is issuable to
duly licensed and operating limited gaming casinos. 


TAXATION
--------
          INTERNATIONAL
          -------------
          All jurisdictions in which the Company has the opportunity to
develop casino operations impose tax on revenues and income generated as a
permitted gaming licensee.  The Company has consulted extensively with tax
experts in each jurisdiction, as well as international tax experts in the
United States, for the purpose of familiarizing itself with the tax laws of
each such jurisdiction, as well as developing plans to take advantage of any
and all opportunities available to companies which operate foreign businesses
on a multi-jurisdictional basis.  It is possible that the Company may form and
organize controlled corporations under the laws of foreign jurisdictions in
order to maximize the advantages available under the circumstances.

          DOMESTIC
          --------
          The operations of the Company and its subsidiaries will be subject
to taxation at both the Federal and State level.  Any net profits derived from
the operations of the Company or its subsidiaries will be subject to United
States Federal Income Tax and state income tax imposed by states in which they
operate.  These provisions regarding Federal and state income tax are
generally applicable to all entities.

          The operations of the Company and its gaming subsidiaries in the
gaming industry will also be subject to special taxes imposed by the states
which permit such activities.  Colorado imposes a variable tax on "adjusted
gross proceeds" obtained within its boundaries.  Adjusted gross proceeds is
defined to include the total amount of all wagers made by players on limited
stakes gaming, less all payments received by such players.  With regard to
games of poker, adjusted gross proceeds means any sums wagered in the poker
hand, which may be retained by the operator of the gaming establishment.  The
tax ranges from two percent (2%) of all adjusted gross proceeds up to
$2,000,000; eight percent (8%) for all adjusted gross proceeds from $2,000,001
up to $4,000,000; fifteen percent (15%) on all adjusted gross proceeds from
$4,000,001 to $5,000,000; and eighteen percent (18%) on all adjusted gross
proceeds in excess of $5,000,000.  In addition, the Cities of Black Hawk and
Central City, as well as the State of Colorado, assess annual taxes, called
"device fees", on each gaming unit utilized in a casino.

          The cumulative impact of all the taxes, fees and assessments is
substantial, and there can be no assurance that future increases in those
taxes will not have a material adverse effect on the Company's gaming
interests and operations.

          All regulations affecting the operations of the Company's limited
gaming properties and businesses are subject to change by the respective
regulatory authorities.  Accordingly, there can be no assurance that there
will not be enacted future amendments to those regulations which materially
and adversely affect the business and profitability of the Company.

                  
SERVICE MARKS
-------------
          The Company has received a Certificate of Registration from the
United States Patent and Trademark Office of its Service Mark "Global Casinos,
Inc.", which includes both the name and the Company's logo as federally
protected service marks for use in connection with the Company's business.  

          The Company has filed an application in the United States Patent and
Trademark Office to register "Casino Masquerade", including both the name and
the casino's logo, as a federally protected service mark for use in connection
with the Company's business.

          The Company may seek to register or file intent to use applications
for additional service marks or trademarks in the future.  Although the
Company regards its service marks as valuable assets and intends to vigorously
defend its service marks against infringements, the Company does not believe
that the failure to obtain the service mark registrations for which it may
apply, or the infringement by another entity of its service marks, would have
a material adverse effect on the Company at the present time.


SEASONALITY
-----------
          INTERNATIONAL
          -------------
          Bishkek is the capital city of the newly independent State of
Kyrgyzstan, located on the western border of the Peoples' Republic of China. 
Bishkek has a population of approximately 900,000, with local economy based
primarily on agriculture and natural resource development, including mining
and oil and gas exploration.  The local economy is experiencing the same
difficulties shared with its other Communist Independent States ("CIS")
members in evolving from a predominantly socialist economy to a free market
economy, including low productivity and high inflation.  Management
anticipates that the principal clientele of the casino will be drawn largely
from the local population without any significant dependence upon tourism. 
Moreover, the restaurant Naryn is a large entertainment facility located in
the central business district of Bishkek.  Therefore, the Company does not
expect Casino Las Vegas to experience significant seasonal fluctuations in
business or revenues.

          Aruba and St. Maarten are independent nations comprising part of the
Netherlands Antilles along with Curacao and Bonnaire.  The islands have
experienced accelerated international recognition as a premier Caribbean
resort destination, hosting millions of tourists each winter season.  An
advantage to be gained by the Company acquiring the Casinos in the Caribbean
is the counter-cyclic effect that its high winter season would have with the
Company's domestic operations.  Typically, Caribbean destination resorts
experience the highest concentration of tourism from December through April of
each year.

          DOMESTIC
          --------
          The Company's casino in Colorado, while not seasonal in the
conventional sense, experiences a significant increase in tourist traffic
which occurs from May through September.  The Bull Durham Saloon and Casino
("Bull Durham") will generally realize more of its annual revenues during the
tourist season.  Based on historical precedent, the Bull Durham should not be
expected to perform better than on a "break-even" basis during the winter
months.


ITEM 2.   DESCRIPTION OF PROPERTIES
-------   -------------------------

          CORPORATE OFFICES: COLORADO SPRINGS, COLORADO
          ---------------------------------------------
          The Company's corporate headquarters were relocated to 4465
Northpark Drive, Suite 400, Colorado Springs, Colorado 80907, where the
Company is sharing office space with an affiliate.  These facilities are
believed by the Company to be suitable and adequate to meet the Company's
needs for the foreseeable future.  The Company is currently not paying rent,
but is negotiating lease terms with the affiliate.

          CASINO LAS VEGAS: BISHKEK, KYRGYZSTAN
          -------------------------------------
          The Company's right to operate the Casino Las Vegas in the Naryn
Restaurant located in the City of Bishkek, Kyrgyzstan, is derived from an
agreement initially entered into in 1992 (the "Naryn Contract") between
Corporation Restaurant Naryn and Aztec-Talas-Four Star, Inc., a Nevada
corporation ("ATF").  The Naryn Contract was assigned by ATF, with the consent
of Corporation Restaurant Naryn, to Global Group, the Company's international
joint venture partner.  Global Group, in turn, assigned the Naryn Contract to
the International Joint Venture.  Pursuant to the Dissolution Agreement,
effective July 15, 1995, the International Joint Venture assigned all rights
in Casino Las Vegas and the Naryn Contract with Corporation Restaurant Naryn
to the Company.

          The Company operates the Casino Las Vegas on the second floor of the
Restaurant Naryn in Bishkek under a joint venture agreement with the Joint
Stock Company Naryn.  The casino opened in July, 1994.  Casino Las Vegas
occupies approximately 4,000 square feet, and contains eighteen (18) slot
machines, three (3) black jack tables, three (3) Caribbean Stud poker tables,
one (1) Let it Ride table, and two (2) roulette wheels.  The Agreement has a
term of twenty (20) years, expiring on April 12, 2013.

          Net income generated from gaming operations at the casino was
divided sixty-one percent (61%) to the Company and thirty-nine percent (39%)
to the Corporation Restaurant Naryn through September 1996, and 50%.

          CASINO MASQUERADE:  ARUBA, NETHERLAND ANTILLES
          ----------------------------------------------
          On April 29, 1994, the Company closed upon a definitive Stock
Purchase Agreement purchasing a net sixty-six and two-thirds percent (66-2/3%)
interest in the Casino Masquerade which is located in the recently renovated
Radisson Aruba Caribbean Resort and Casino on the Caribbean resort island of
Aruba, Netherlands Antilles.  The Aruba Caribbean Resort and Casino (the
"Hotel") is owned by the Dutch Hotel and Casino Development Corporation N.V.,
an Aruba corporation ("Dutchco") and operates under an October 11, 1992
Management Agreement with Radisson Hotel Corporation.  Dutchco holds a gaming
permit issued by the Nation of Aruba which authorizes it to operate a gaming
casino on the premises.  Under the authority of its Gaming License, Dutchco
has leased the casino to Global Entertainment Group N.V., an Aruba corporation
("Global Entertainment") which, since 1993, has operated the casino under an
exclusive lease which has a term of five (5) years with automatic one (1) year
extensions thereafter.

          Global Entertainment is wholly-owned by BPJ Holding N.V., a Curacao
corporation.  The definitive Stock Purchase Agreement provided for the
purchase by the Company of sixty-six and two-thirds percent (66-2/3%) of the
issued and outstanding shares of the capital stock of BPJ Holding N.V.  Until
July 15,  1995, the remaining thirty-three and one-third percent (33-1/3%) of
BPJ Holding N.V. was owned by Broho Holding N.V., an unaffiliated company
controlled by Kenneth D. Brown.  Effective July 15, 1995, Broho Holding N.V.
assigned its interest to the Company.  The Company presently holds one hundred
percent (100%) of the issued and outstanding stock of BPJ Holding N.V.

          The Company leases the Casino Masquerade facility under an operating
lease which expires in December, 2002 with an option to renew for 10 years. 
The Casino occupies approximately 8,500 square feet in the Hotel under the
lease agreement between Dutchco and Global Entertainment.  As rent under the
January 18, 1993 lease agreement, Global Entertainment was obligated to pay
Dutchco percentage rent based upon the gross gaming revenues (net of all
government taxes and fees) of the casino equal to ten percent (10%) of the
gross gaming revenues for the year ended December, 1995, fifteen percent (15%)
for the year ended December, 1996, and thereafter twenty percent (20%) of
gross gaming revenues.  Under the lease, "gross gaming revenue" is defined to
mean (i) the net win from gaming activities, which is the difference between
gaming wins and losses before deducting cost and expenses which shall include
all markers, promises to pay and checks received, less (ii) the Aruba gaming
tax and the expenditures related to the employment of government inspectors
for the casino operation.  During December, 1995, the Company reached an
agreement to modify the terms of the lease agreement whereby beginning January
1, 1996, the rent was calculated as $400,000 per year plus fifteen percent
(15%) of the gross gaming revenue over $4,000,000.

          The Casino has been fully operational since December, 1993, when
extensive renovations to the Hotel were completed.  Operations at the casino
currently consist of one hundred fifty-five (155) slot machines, six (6) black
jack tables, two (2) roulette wheels, two (2) Caribbean Stud tables, three (3)
Let it Ride tables, and one (1) craps table.  The casino also serves liquor
and provides a limited food service.  In September, 1997, the Company was
informed that Dutchco contemplates closing the property from March, 1998
through December, 1998 to conduct extensive renovations.  The Company and
Dutchco are currently negotiating the Company's rights under the operating
lease agreement.
          
          PELICAN CASINO:  ST. MAARTEN, NETHERLANDS ANTILLES
          --------------------------------------------------
           Effective August 1, 1996, the Company, through its subsidiary
Global Pelican, entered into a cancelable Management and Operating Lease
Agreement (the "Pelican Agreement") with a third party, whereby Global Pelican
agreed to lease and operate the Pelican Casino, located on the island of St.
Maarten.  The original term of the lease was for five years, with its options
to renew for three additional five-year terms.  Lease payments were scheduled
to be $30,000 per month for the initial lease term beginning in November 1996. 
Rent expense in 1997 was $225,000.  The Pelican Agreement provides that Global
Pelican would also purchase the equipment utilized at the casino for $225,000
in exchange for a note payable, subject to the owner providing clear title to
the equipment.  The Pelican Agreement also states that until the equipment
liens and encumbrances are released, Global Pelican has the right to terminate
the Pelican Agreement.  At June 30, 1997, the equipment remains subject to
liens and encumbrances, and Global Pelican has therefore not purchased the
equipment.  In July 1997, Global Pelican renegotiated the terms of the Pelican
Agreement, whereby Global Pelican is to pay $20,000 per month through November
1997, of which $15,000 is to be applied as monthly rent, and $5,000 as
deferred rent pending completion of negotiations between Global Pelican and
the lessor.  Global Pelican is scheduled to continue negotiations with the
lessor by November 1997.

          BULL DURHAM SALOON AND CASINO: BLACK HAWK, COLORADO
          ---------------------------------------------------
          The Bull Durham Saloon and Casino ("Bull Durham") was acquired by
Casinos U.S.A., Inc. ("Casinos U.S.A.") in 1992 for a purchase price of $3.5
million.  Casinos U.S.A. owns the real property and improvements subject to
numerous security interests.  The Bull Durham consists of approximately 4,700
square feet and currently operates one hundred and thirteen (113) slot
machines and two (2) black jack tables.  The casino also holds a retail liquor
license issued by the State of Colorado, and offers a limited food service in
addition to beverages.  The Company is currently exploring options to expand
this property. 


ITEM 3.   LEGAL PROCEEDINGS
-------   -----------------

          The Company is currently involved in the following pending legal
proceeding:
          
          SECURITIES AND EXCHANGE COMMISSION INVESTIGATION.
          -------------------------------------------------
          During 1995 and through 1997, the Company and certain officers and
          directors of the Company received requests for information from the
          U.S. Securities and Exchange Commission ("SEC") related to an
          investigation begun by the SEC during 1994 into various matters,
          including certain transactions in securities by the Company and one
          of its officers and directors.  On January 13, 1997, the Company was
          notified that the SEC staff intended to recommend initiation of
          administrative procedures for a Cease and Desist Order against the
          Company and two of its former officers and directors with violations
          of certain provisions of federal securities laws.  The Company has
          engaged in negotiations with the SEC staff concerning possible
          disposition of this matter.  Based upon the content of these
          discussions, management believes that the outcome of this matter
          will not have a material adverse effect on the business of the
          Company, however, there can be no assurance that such will be the
          case.
    

<PAGE>
<PAGE>
ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
-------   ---------------------------------------------------

          No matters were submitted to a vote of the Company's shareholders
during the quarter ended June 30, 1997.



                                     PART II

ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
-------   --------------------------------------------------------
          The outstanding shares of Common Stock are traded over-the-counter
and traded on the NASDAQ SmallCap Market under the symbol "GBCS".  The
reported high and low bid and ask prices for the Common Stock are shown below
for the period from July 1, 1996 through September 30, 1997:

<TABLE>
<CAPTION>
                                       Bid                        Ask
                                       ---                        ---
                                  High       Low            High        Low
                                  ----       ---            ----        ---
<S>                              <C>        <C>            <C>         <C>
     1996 Fiscal Year
          First Quarter          7.50        4.06           7.81        5.31
          Second Quarter         6.25       1.88            6.88       2.50
          Third Quarter          4.06       1.88            4.69       2.19
          Fourth Quarter         13.44      3.13             13.44     3.13

     1997 Fiscal Year
          First Quarter          7.50        3.75           8.125       4.375
          Second Quarter         4.688      3.125           5.00       3.438
          Third Quarter          4.25       2.25            4.75       2.75
          Fourth Quarter         3.625      2.625            3.875     2.875
</TABLE>

          The bid and ask prices of the Company's Common Stock as of September
30, 1997 were 3.625 and 3.75 respectively, as reported on NASDAQ.  The prices
represented above are bid and ask prices which represent prices between
broker-dealers and do not include retail mark-ups and mark-downs or any
commissions to the broker-dealer.  The prices do not reflect prices in actual
transactions.  As of September 30, 1997, there were approximately 917 record
owners of the Company's Common Stock.

          The Company's Board of Directors may declare and pay dividends on
outstanding shares of Common Stock out of funds legally available therefor in
its sole discretion; however, to date no dividends have been paid and the
Company does not anticipate the payment of dividends in the foreseeable
future.  Further, under the terms of the Convertible Preferred Stock issued by
the Company, the Company is restricted from paying cash dividends on Common
Stock during the period that the Convertible Preferred Stock is outstanding. 
The Company was obligated to redeem any outstanding shares of Convertible
Preferred Stock on or before May 31, 1995, and the Company is in default on
this obligation with holders of Preferred Stock representing an aggregate
redemption value of $53,500, such holders having not entered into letter
agreements with the Company in May, 1995 as described elsewhere in this
report.  (See ITEM 1. DESCRIPTION OF BUSINESS, Financing.)


ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS
-------   ---------------------------------------------------------
          The following discussion and analysis should be read in conjunction
with the Financial Statements and Notes thereto appearing elsewhere in this
Report.


LIQUIDITY AND CAPITAL RESOURCES - JUNE 30, 19965 COMPARED TO JUNE 30, 1997
-------------------------------------------------------------------------
          The Company has continued its efforts to formulate plans and
strategies to address the Company's financial condition and increase
profitability.  In December 1996, the Bankruptcy Court approved Casinos
U.S.A.'s Second Amended Plan of Reorganization (See Note 3).  As a result, a
significant amount of the Company's debt has been extinguished and/or
restructured.  Management continues to negotiate with creditors of debt that
remains in default.  The Company also continues to explore acquisition
opportunities, such as the acquisition of ABS which occurred in August 1997
(See Note 14).  Management believes that these plans will result in to
increased liquidity and future profitability.  On October 18, 1995, Casinos
U.S.A. filed a voluntary petition under Chapter 11 of the United States
Bankruptcy Code.  On December 18, 1996, the Bankruptcy Court confirmed the
Company's Second Amended Plan of Reorganization (the "Plan"). 

          As a result the Company reported an extraordinary gain on debt
          extinguishment $1,285,765.  In addition, the Senior Secured Debt
          Holders and the Junior Secured Debt Holders shall receive warrants
          that permit their holders to purchase from the reorganized Debtor an
          amount of common stock so that immediately after exercise, the
          Warrant holders will own eighty percent (80%) of the common stock of
          the Debtor.  The Warrants shall be exercisable at any time from one
          year after the Effective Date and before seven (7) years after the
          Effective Date, but only subsequent to a sale of substantially all
          of the Debtor's assets, merger, recapitalization, refinance or other
          restructuring.  The Warrants shall terminate after all of the
          indebtedness to that holder of the Warrant has been paid, even where
          seven (7) years from the Effective Date have not passed, so long as
          there has been no merger, recapitalization, restructuring, refinance
          or sale of substantially all of the assets of the Debtor prior to
          the payment of such indebtedness.

          In October, 1996, the Company raised $630,250 through an offering of
Units ("Units"), each Unit consisting of one (1) eight percent (8%) $1,000
convertible Promissory Note ("Promissory Note"), 200 Class E Common Stock
Purchase Warrants ("E Warrants"), 200 Class F Common Stock Purchase Warrants
("F Warrants"), and 200 Class G Common Stock Purchase Warrants ("G Warrants"). 
The Promissory Note is convertible to common stock at $5.00 per $1.00 loaned
and the Promissory Notes are due October 31, 1998.  The Class E Warrants, F
Warrants and G Warrants are exercisable at $6.00, $7.00, and $8.00,
respectively.

          By Letter Agreement dated July 31, 1996, the Company was able to
renegotiate the terms of a $750,000 Convertible Note.  The restructured terms
call for the conversion price to be lowered from $30.00 per $1.00 loaned to
$10.00 per $1.00 loaned.  Interest on the Convertible Note was reduced from
nine percent (9%) to seven percent (7%) and all prior accrued interest was
waived which resulted in an extraordinary gain of $164,627 from debt
restructuring.  In addition, the Company shall assign its secured indebtedness
on Casinos in the amount of $249,418 to the holder of the $750,000 Convertible
Note as a principal reduction of this note.  This Letter Agreement is
effective upon the Effective Date of Casinos U.S.A.'s Bankruptcy Plan.

          On November 18, 1996, the Company effected a one-for-ten (1-for-10)
reverse split of its securities pursuant to the prior authorization of its
shareholders and Board of Directors.

          The Company performs an annual assessment to determine whether there
has been an impairment in the carrying values of its land, buildings,
equipment and leasehold and contract rights.  In performing this assessment,
management considers available appraisal information, current and projected
sales, operating income, and annual cash flows on an undiscounted basis.  If
management determines that an impairment has occurred, an impairment loss is
recognized, based on the difference between the assets' carrying values over
the estimated fair values.  Based on its annual review, the Company does not
believe that any impairments have occurred on its land, buildings, equipment,
leasehold and contract rights during 1997.

          During the year ended June 30, 1997, the Company made advances to a
related company (evidenced by a convertible promissory note bearing interest
at 10%, "Convertible Note") that was formed to explore opportunities related
to entertainment and gaming sites on the Internet.  In May 1997, the Company
entered into an agreement to exchange the Convertible Note for 30,000 shares
of Convertible Preferred Stock to First Entertainment, Inc. ("FEI").  The
agreement is contingent upon FEI shareholders' approval, for which a
shareholders meeting is currently scheduled for November 1997.  Based upon the
financial resources of FEI and the financial condition of the maker of the
convertible note, the Company recorded an impairment of the convertible note
in the amount of $385,418 at June 30, 1997. 

          The Company's balance sheet reflects an increase in current assets,
a decrease in total assets, and an increase in working capital.  Specifically,
during the year ended June 30, 1997, current assets increased from $1,067,962
at June 30, 1996, to $1,318,717 at June 30, 1997, an increase of $250,755 or
23.5%.  Increases in cash of $160,997, or 18.1%, current portion of notes
receivable of $3,911, or 7.3%, and prepaid and other of $109,333, or 371.1%,
the majority of which is due to deferred rent and other prepaid expenses at
Global Pelican.  These were offset by decreases in receivables from related
parties of $12,312, or 52.4%, and accounts receivable of $11,174, or 15.1%.

          The Company's net investment in land, buildings and equipment
increased by $541,423, or 8.4%.  The increase is primarily attributed to the
purchase of equipment for the Pelican Casino.

          Current liabilities decreased from $2,890,708 at June 30, 1996, to
$2,043,024 at June 30, 1997.  This decrease is comprised of a reduction in
accounts payable of $417,238, mandatory redeemable preferred stock of $35,000,
and current portion of long term debt including debt in default of $492,729. 
The majority of the decreases in the current portion of long-term debt of
$492,729 was from the renegotiation of a $750,000 convertible debt that was in
default.  These decreases were offset by an increase in accrued expenses of
$97,283.

          Long-term debt less current portion increased from $52,266 at June
30, 1996 to $4,052,900 at June 30, 1997.  This increase is comprised of
$2,590,457 of debt issued pursuant to the Plan of Reorganization as confirmed
by the Bankruptcy Court, restructuring of $500,581 of debt previously regarded
as current portion of long-term debt, and new net long-term debt borrowing of
$909,596, the majority of which was the issuance of $630,250 of convertible
debt.

          As a result of the foregoing increase in current assets and decrease
in current liabilities, the Company's working capital increased from
$(1,822,746) on June 30, 1996, to $(724,307) on June 30, 1997, or a 57.7%
increase.  Approximately $482,000 is comprised of debt in default included in
the current portion of long-term debt and Aruban controller costs.  The
Company is attempting to negotiate these debts.  The current ratio increased
from .37 to .65.

          During the fiscal year ended June 30, 1997, the Company was able to
negotiate $109,279 of debt to accept an aggregate of 21,261 shares of Common
Stock in satisfaction of this debt.  During the year ended June 30, 1997, the
Company reported net income of $386,016.  As a result of the foregoing, 
stockholders' equity increased from $2,540,964 at June 30, 1996 to $3,036,258
at June 30, 1997, or a 19.5% increase. 

          As a result of a net loss during the year ended June 30, 1996, of
$2,011,078, together with non-cash net expenses of $2,234,386 (comprised of
amortization of $366,300, depreciation of $459,815, stock for services of
$86,648, impairment of gaming facility of $1,225,000, and minority interest of
$205,437, provision for uncollectible receivables of $113,000, gain from
extinguishment of debt of $221,814), and increases in operating assets and
liabilities totaling $499,095 (primarily due to increases in accounts payable
and accrued expenses), at the year ended June 30, 1996, the Company reported
net cash provided by operations of $722,403.  This compares with net cash
provided in operations of $278,719 for the year ended June 30, 1997, based on
a net income of $386,016, net non-cash items of $44,955 (comprised of $378,829
of amortization, $490,867 of depreciation,  reserve for receivables of
$79,600, minority interest of $171,819, loss on investment, loan and advances
to affiliate of $385,418, offset by $1,551,488 of gain on extinguishment of
debt and a  decrease in operating assets and liabilities of $62,342).

          Net cash used by investing activities for the year ended June 30,
1997 was $1,035,170.  This compares with net cash used by investing activities
of $264,921 for the year ended June 30, 1996.  For the year ended June 30,
1997, the Company used $543,422 for the purchase of equipment, $8,643 for
additions to other assets, and $385,418 for the investment, loan and advances
to affiliates.  This compares to $165,709 for the purchase of equipment for
the year ended June 30, 1996.  Offset against this, the Company received
$53,735 of principal payments on its notes receivable for the year ended
June 30, 1997. This compares with principal payments on its notes receivable
of $70,361 and a reduction of other assets of $14,985 for the year ended June
30, 1996.  At June 30, 1996 the Company had proceeds from the sale of
equipment of $3,410.  This compares to proceeds from the sale of equipment of
$1,999 at June 30, 1997.  For the year ended June 30, 1997 the Company had
distribution to minority interest of $153,421 compared to $187,968 for the
year ended June 30, 1996.

          Net cash provided by financing activities for the year ended
June 30, 1997 was $917,448.  This compares with net cash used by financing
activities of $135,104 for the year ended June 30, 1996.  Specifically, cash
provided by financing activities from borrowings against notes payable was
$1,580,177 for the year ended June 30, 1997.  Offset against the cash provided
by financing activities were promissory note principal reduction payments in
the amount of $662,729.  This compares to proceeds from the issuance of Common
Stock of $140,639 for the year ended June 30, 1996.  This was offset by debt
payments of $267,743 and payment of $8,000 to retire Mandatory Redeemable
Preferred Stock for the year ended June 30, 1996.

          Neither the Company nor any of its subsidiaries have any commercial
bank credit facilities.


SUBSEQUENT EVENTS
-----------------
          On August 1, 1997, the Company acquired 100% of the outstanding
Common Stock of Anchorage-based Alaska Bingo Supply, Inc. ("ABS") and its
related operations.  ABS will be operated by the Company's wholly-owned
subsidiary, Global Alaska Corporation ("Global Alaska").  

          The Company purchased ABS for $4,400,000, of which $400,000 was paid
in cash at closing, with the $4,000,000 balance in the form of a promissory
note to be held by ABS, bearing interest at eight percent (8%) and to be
amortized monthly over a term of seven (7) years beginning in October, 1997. 
During the term of the note, the stockholder has the option to convert up to
$2,500,000 of the promissory note into shares of the Company's Common Stock at
a price of ten dollars ($10) per share.

          In order to fund this acquisition, the Company borrowed $350,000
from third parties and $75,000 from an affiliate.  The promissory notes are
due in equal monthly payments from January 1998 through April 1998.  The
promissory notes to third parties are secured by a note receivable by the
Company.  Interest on $200,000 of the notes is at 24% and interest on the
remaining $225,000 (including the affiliate Note) is at 12%.  Additionally,
the holder of the $150,000, 12% note was issued warrants to purchase 15,000
shares of the Company's common stock at an exercise price of $3.00 per share. 
The warrants expire June 2000.

          Other than the foregoing, Management knows of no other trends,
events or uncertainties that have or are reasonably likely to have a material
impact on the Company's short-term or long-term liquidity.


RESULTS OF OPERATIONS - YEAR ENDED JUNE 30, 1997 COMPARED TO YEAR ENDED 
JUNE 30, 1996
--------------------------------------------------------------------------
     A comparison of the results of operations of the Company for the year
ended June 30, 1996 with the results of operations for the year ended June 30,
1997 demonstrates the Company's concentration on improving operating results. 
For the year ended June 30, 1996, the Bull Durham Saloon and Casino in Black
Hawk, Colorado, Casino Las Vegas in Bishkek, Kyrgyzstan, and Casino Masquerade
in Aruba operated for the entire twelve-month period.  For the year ended June
30, 1997, the Bull Durham, Casino Las Vegas and Casino Masquerade operated for
the entire twelve-month period, and the Pelican Casino in St. Maarten began
operations in August, 1996.  

     Net revenues for the year ended June 30, 1997 were $9,234,097 based on
casino revenues of $8,978,720, revenues from the sale of food of $195,550, and
other income of $59,827.  Net revenues for the year ended June 30, 1996 were
$7,476,699 comprised of casino revenues of $7,315,497, food and beverage of
$150,743, and other revenues of $10,459.  

     More specifically, revenues at Casino Las Vegas and Casino Masquerade
decreased from $5,491,763 at June 30, 1996 to $4,675,507 at June 30, 1997.  It
is believed this decrease is a result of increased competition in these
markets.  At June 30, 1997, net revenues from domestic operations were
$2,248,645 comprised of $2,229,645 from Bull Durham and other domestic income
of $19,000, compared to net revenues at June 30, 1996 of $1,958,349 from Bull
Durham and $2,102 in other revenue from domestic operations.  In addition, at
June 30, 1997 the Company had net revenues of $2,309,945 from Pelican Casino.

     The foregoing changes in operations also resulted in an increase in
operating, general and administrative expenses which increased from $6,925,559
for the year ended June 30, 1996 to $8,698,312 for the year ended June 30,
1997, an increase of 25.6%.  The Pelican Casino added $2,412,062 in operating,
general and administrative expenses.  Therefore, the Company was able to
reduce operating expenses by $639,309 from the prior year.  Depreciation
increased 6.8% and amortization increased 3.4% over the same period.  

     Total operating expenses increased from $8,976,674 for the year ended
June 30, 1996 to $9,568,008 for the year ended June 30, 1997, an increase of
6.6%.

     As a result of the increase in net revenues, and an increase in operating
expenses, losses from operations were reduced 77.7% to a loss of $333,911 for
the year ended June 30, 1997, from a loss of $1,499,975 for the year ended
June 30, 1996.  Interest income decreased 67.8% while interest expense
decreased 50.3% over the same period due to the Chapter 11 proceedings of
Casinos U.S.A.  During the year ended June 30, 1997, the Company reported a
loss on investment of $385,418.  Losses before reorganization items, minority
interest, and extraordinary items decreased 50.4% from a loss of $1,995,006
for the year ended June 30, 1996, to a loss of $990,150 for the year ended
June 30, 1997. 

     For the year ended June 30, 1997, the Company had net expenses from
reorganization of $3,503  and an extraordinary gain from reorganization of
$1,285,765.  The Company reported a gain from debt restructuring of $265,723
for the year ended June 30, 1997, compared to a gain from debt restructuring
of $221,814 for the year ended June 30, 1996.  Due to a decrease in the
operating results of Casino Las Vegas, the Company reported minority interest
expense of $171,819 for the year ended June 30, 1997, compared to a minority
interest expense of $205,437 for the year ended June 30, 1996.  

     As a result of the foregoing, the Company reported net income for the
year ended June 30, 1997 of $386,016, from the net loss for the year ended
June 30, 1996 of $2,011,078, which translates into net income per share of
$0.29 based on 1,350,418 weighted average shares outstanding for the year
ended June 30, 1997, and a net loss per share of $1.81, based on 1,110,671
weighted average shares outstanding for the year ended June 30, 1996.

     Other than the foregoing, management knows of no trends, or other
demands, commitments, events or uncertainties that will result in, or that are
reasonably likely to result in, a material impact on the income and expenses
of the Company.


PRIVATE SECURITIES LITIGATION REFORM ACT
----------------------------------------
     Certain statements in this Annual Report on Form 10-KSB which are not
historical facts are forward looking statements, such as statements relating
to future operating results, existing and expected competition, financing and
refinancing sources and availability and plans for future development or
expansion activities and capital expenditures.  Such forward looking
statements involve a number of risks and uncertainties that may significantly
affect the Company's liquidity and results in the future and, accordingly,
actual results may differ materially from those expressed in any forward
looking statements.  Such risks and uncertainties include, but are not limited
to, those related to effects of competition, leverage and debt service
financing and refinancing efforts, general economic conditions, changes in
gaming laws or regulations (including the legalization of gaming in various
jurisdictions) and risks related to development and construction activities.


RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
-----------------------------------------
     Global Casinos, Inc. (the "Company"), a Utah corporation, develops and
operates gaming casinos domestically and internationally.  At June 30, 1997,
the consolidated financial statements of the Company include the accounts of
the following wholly-owned subsidiaries.  All significant intercompany
accounts and transactions have been eliminated in consolidation.

          BPJ HOLDINGS N.V. ("BPJ"), a Curacao Limited Liability Company,
          which operates the Casino Masquerade on the Caribbean resort island
          of Aruba.

          GLOBAL PELICAN N.V. ("Global Pelican"), a St. Maarten Limited
          Liability Company which began operating the Pelican Casino located
          on the island of St. Maarten in the Netherlands Antilles on August
          1, 1996.  Global Pelican operates the casino under a Management and
          Operating Lease Agreement (See Note 8).

          GLOBAL ALASKA CORPORATION ("Global Alaska"), an Anchorage
          corporation, which acquired Alaska Bingo Supply, Inc. ("ABS")
          located in Anchorage, Alaska on August 1, 1997 (See Note 14).

          CASINOS U.S.A., INC. ("Casinos U.S.A."), a Colorado corporation,
          which owns and operates the Bull Durham Saloon and Casino ("Bull
          Durham"), located in the limited stakes gaming district in Black
          Hawk, Colorado (See Note 3).

          GLOBAL CASINOS INTERNATIONAL, INC. ("Global International"), a
          Delaware corporation, which through July 15, 1995, owned an 80%
          interest in an International Joint Venture ("IJV") which held
          certain rights to develop and operate gaming casinos in several
          international locations.  Through the IJV, the Company opened Casino
          Lazurnaya in Sochi, Russia and Casino Las Vegas in Bishkek,
          Kyrgyzstan.  Effective July 15, 1995, the Company exchanged its
          interest in Global International and Casino Lazurnaya for an
          additional interest in BPJ and the Casino Las Vegas.  Through this
          transaction, the Company now owns 100% of BPJ and a 61% profits
          interest in the Casino Las Vegas (See Note 2).

          COLORADO GAMING PROPERTIES, INC. ("CGP"), a Colorado corporation,
          which through June, 1996, owned two non-operating real estate
          properties, the Nitro Club and Gas Light properties located in
          Central City, Colorado (See Note 4).

          LINCOLN CORPORATION ("Lincoln"), a South Dakota corporation, which
          operated the Last Chance Saloon ("Last Chance") in Deadwood, South
          Dakota under a lease agreement.  Last Chance was closed effective 
          May 31, 1994, and the lease agreement was terminated.

          WOODBINE CORPORATION ("Woodbine"), a South Dakota corporation, which
          operated Lillie's Casino ("Lillie's") in Deadwood, South Dakota
          through June 30, 1995.  Beginning in July 1996, Woodbine began
          leasing this property and related equipment to a third party.  These
          leasing activities are immaterial to the financial statements.


ITEM 7.   FINANCIAL STATEMENTS
-------   --------------------
          The following financial statements are filed as part of this report:

          1.   Report of Independent Auditors;

          2.   Audited Balance Sheet as of June 30, 1997;

          3.   Audited Statements of Operations as of June 30, 1997 and 1996;

          4.   Audited Statements of Changes in Stockholders' Equity for the
               years ended June 30, 1997 and 1996; 

          5.   Audited Statements of Cash Flows for the years ended June 30,
               1997 and 1996; and 

          6.   Notes to Financial Statements.

          All schedules are omitted since the required information is not
present or is not in amounts sufficient to require submission of the schedule,
or because the information required is included in the financial statements
and notes thereto.


                                    PART III

          Part III, Items 9, 10, 11 and 12, are incorporated herein by
reference from the Registrant's definitive proxy statement relating to its
Annual Meeting of Shareholders which will be filed in an amendment within 120
days of June 30, 1997.

<PAGE>
                                     PART IV

ITEM 13.  EXHIBITS, FINANCIAL STATEMENTS AND REPORTS ON FORM 8-K
--------  ------------------------------------------------------

          FINANCIAL STATEMENTS
          --------------------
          The following financial statements are filed as part of this report:

          1.   Report of Independent Auditors;

          2.   Audited Balance Sheet as of June 30, 1997;

          3.   Audited Statements of Operations as of June 30, 1997 and 1996;

          4.   Audited Statements of Changes in Stockholders' Equity for the
               years ended June 30, 1997 and 1996; 

          5.   Audited Statements of Cash Flows for the years ended June 30,
               1997 and 1996; and 

          6.   Notes to Financial Statements.

          
          EXHIBITS
          --------
          a.   The following Exhibits are filed as part of this Report
pursuant to Item 601 of Regulation S-B:

Exhibit No.                Title
-----------                -----
*    1.0    Articles of Amendment to the Articles of Incorporation dated
            June 22, 1994

*    3.1    Amended and Restated Articles of Incorporation

*    3.2    Bylaws

*    3.3    Certificate of Designations, Preferences, and Rights of Series A
            Convertible Preferred Stock

*    4.1    Specimen Certificate of Common Stock 

*    4.2    Specimen Class A Common Stock Purchase Warrant
 
*    4.3    Specimen Class B Common Stock Purchase Warrant

*    4.4    Specimen Class C Common Stock Purchase Warrant

*    4.5    Warrant Agreement

*    5.0    Opinion of Neuman & Drennen, LLC regarding the legality of the
            securities being registered

*    10.1   Selling Agent Agreement

*    10.2   The Casino-Global Venture I Joint Venture Agreement

*    10.3   Assignment of Casino-Global Joint Venture Agreement dated 
            January 31, 1994

*    10.4   Nonresidential Lease Agreement between Russian-Turkish Joint
            Venture Partnership with Hotel Lazurnaya and Global Casino Group,
            Inc. dated September 22, 1993

*    10.5   Contract by and between Aztec-Talas-Four Star, Inc. and Global
            Casinos Group, Inc. dated April 12, 1993, and Addendum to
            Agreement by and between Aztec-Talas-Four Star, Inc., Global
            Casinos Group, Inc. and Restaurant "Naryn" dated June 29, 1993.

*    10.6   Agreement and Plan of Reorganization among Silver State Casinos,
            Inc., Colorado Gaming Properties, Inc. and Morgro Chemical
            Company, dated September 8, 1993, incorporated by reference from
            the Company's Current Report on Form 8-K, dated September 20,
            1993

*    10.7   Agreement and Plan of Reorganization among Casinos U.S.A.,
            Lincoln Corporation, Woodbine Corporation and Morgro Chemical
            Company, dated October 15, 1993, incorporated by reference from
            the Company's Current Report on Form 8-K, dated November 19, 1993

*    10.8   Stock Pooling and Voting Agreement, incorporated by reference
            from the Company's Current Report on Form 8-K, dated November 19,
            1993

*    10.9   Employment Agreement, dated September 28, 1993, between Morgro
            Chemical Company and Nathan Katz, incorporated by reference from
            the Company's Current Report on Form 8-K, dated November 19, 1993

*    10.10  Employment Agreement, dated October 15, 1993, between Morgro
            Chemical Company and William P. Martindale, incorporated by
            reference from the Company's Current Report on Form 8-K, dated
            November 19, 1993

*    10.11  Asset Acquisition Agreement by and among Global Casinos, Inc.,
            Morgro, Inc. and MDO, L.L.C., dated as of February 18, 1994,
            incorporated by reference from the Company's Current Report on
            Form 8-K, dated February 18, 1994

*    10.12  Stock Purchase Agreement, dated March 25, 1994, incorporated by
            reference from the Company's Current Report on Form 8-K, dated
            April 29, 1994

*    10.13  Articles of Incorporation of BPJ Holding N.V., incorporated by
            reference from the Company's Current Report on Form 8-K, dated
            April 29, 1994

*    10.14  Aruba Caribbean Resort and Casino Lease Agreement, dated 
            January 18, 1993, incorporated by reference from the Company's
            Current Report on Form 8-K, dated April 29, 1994

*    10.15  Aruba Gaming Permit issued to Dutch Hotel and Casino Development
            Corporation, incorporated by reference from the Company's Current
            Report on Form 8-K, dated April 29, 1994 

*    10.16  Letter Agreement between Astraea Investment Management, L.P. and
            Global Casinos, Inc. dated May 11, 1994

*    10.17  Guaranty from Global Casinos, Inc. to Astraea Investment
            Management, L.P. dated May 19, 1994

*    10.18  Secured Convertible Promissory Note in favor of
            Global Casinos, Inc. from Astraea Investment
            Management, L.P. dated May 19, 1994

*    10.19  Registration Rights Agreement between Global Casinos,
            Inc. and Astraea Investment Management, L.P. dated 
            May 11, 1994

*    10.20  Employment Agreement, dated July 1,1994 , between Global Casinos,
            Inc. and Peter Bloomquist

**   10.21  Letter of Agreement, dated September 16, 1994 between Astraea
            Management Services, L.P., Casinos U.S.A., Inc. and Global
            Casinos, Inc.

***  10.23  Letter of Agreement dated June 27, 1995, between Global Casinos,
            Inc., Global Casinos International, Inc., Global Casinos Group,
            Inc., Broho Holding, N.V., and Kenneth D. Brown individually.

*    10.24   Secured Amended Plan of Reorganization of Casinos USA, Inc., and
            Order Confirming Plan

*    10.25   Warrant Agreement
________________________________

*    Incorporated by reference to the Registrant's Registration Statement on
     Form SB-2, Registration No. 33-76204, on file with the Commission on
     August 11, 1994.

**   Incorporated by reference to the Registrant's Annual Report on Form 10-
     KSB for year ended June 30, 1994.

***  Incorporated by reference to the Registrant's Current Report on Form 8-K
     dated July 15, 1995.


          REPORTS ON FORM 8-K
          -------------------
          The Registrant did not file any Current Reports on Form 8-K during
the Fourth Quarter ended June 30, 1997.
<PAGE>
<PAGE>
                      GLOBAL CASINOS, INC. AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS
                               FOR THE YEARS ENDED
                             JUNE 30, 1997 AND 1996

<PAGE>
<PAGE>
                          INDEX TO FINANCIAL STATEMENTS


<TABLE>
<CAPTION>
                                                                           PAGE
                                                                           ----
<S>                                                                         <C>
Report of Independent Auditors (Gelfond Hochstadt Pangburn & Co.)  . . . .   F-

Consolidated Balance Sheet - June 30, 1997 . . . . . . . . . . . . . . . .   F-

Consolidated Statements of Operations - For Years 
Ended June 30, 1997 and 1996 . . . . . . . . . . . . . . . . . . . . . . .   F-

Consolidated Statements of Stockholders' Equity - For 
Years Ended June 30, 1997 and 1996 . . . . . . . . . . . . . . . . . . . .   F-

Consolidated Statements of Cash Flows - For Years 
Ended June 30, 1997 and 1996 . . . . . . . . . . . . . . . . . . . . . . .   F-

Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . .   F-

</TABLE>
<PAGE>
<PAGE>

                         REPORT OF INDEPENDENT AUDITORS



Board of Directors and Stockholders
Global Casinos, Inc.

We have audited the accompanying consolidated balance sheet of Global Casinos,
Inc. and subsidiaries as of June 30, 1997, and the related consolidated
statements of operations, stockholders' equity and cash flows for each of the
years in the two-year period ended June 30, 1997.  These financial statements
are the responsibility of the Company's management.  Our responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Global
Casinos, Inc. and subsidiaries as of June 30, 1997, and the results of their
operations and their cash flows for each of the years in the two-year period
ended June 30, 1997, in conformity with generally accepted accounting
principles.


GELFOND HOCHSTADT PANGBURN & CO.

Denver, Colorado
September 30, 1997

<PAGE>
<PAGE>
<TABLE>
                      GLOBAL CASINOS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                  June 30, 1997


<S>                                                          <C>         
ASSETS
------
Current assets: 
     Cash                                                $    1,048,371  
     Receivables, related parties                                11,199       
     Receivables, net of allowance for doubtful
          accounts of $14,750                                    62,710  
     Prepaid expenses and other                                 138,792  
     Current portion of notes receivable                         57,645  
                                                         ---------------
Total current assets                                          1,318,717  

Land, buildings and equipment:
     Land                                                       531,715  
     Buildings                                                3,913,510  
     Equipment                                                2,539,837  
                                                         ---------------
                                                              6,985,062  
     Accumulated depreciation                                (1,615,751) 
                                                         ---------------
Net land, buildings and equipment                             5,369,311  

Other assets, net of amortization of $17,000                     60,486  
Leasehold and contract rights, net of
     amortization of $1,077,424                               2,050,976  
Notes receivable, net of current portion,
     including receivables in default                           369,059  

Total assets                                             $    9,168,549  
                                                         ===============
</TABLE>
<PAGE>
<PAGE>
<TABLE>
                      GLOBAL CASINOS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                  June 30, 1997



<S>                                                            <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
     Accounts payable, includes related
          party payables of $31,421                            $     318,199  
     Accrued expenses                                                958,880  
     Accrued interest                                                154,995  
     Current portion of long-term debt,
          includes debt in default and
          $68,000 to related parties                                 557,450  
     Mandatory redeemable convertible 
          Class A preferred stock, in default                         53,500  
                                                               --------------
Total current liabilities                                          2,043,024  

Long-term debt, less current portion,
     includes $187,500 to related parties                          4,052,900  
                                                               --------------
Total liabilities                                                  6,095,924  
                                                               --------------
Minority interest                                                     36,367  
                                                               --------------
Commitments and Contingencies

Stockholders' equity:
     Class A preferred stock - Convertible nonvoting,
          $2 par value:  Authorized - 10,000,000 shares
          Issued and outstanding - 147,750 shares                    268,538  
     Common stock - $.005 par value: 
          Authorized - 50,000,000 shares                                      
          Issued and outstanding - 1,400,811 shares                    7,004  
     Additional paid-in capital                                    8,969,045  
     Accumulated deficit                                          (6,208,329) 
                                                               --------------
Total stockholders' equity                                         3,036,258  
                                                               --------------
Total liabilities and stockholders' equity                     $   9,168,549  
                                                               ==============
</TABLE>
                             See accompanying notes.

<PAGE>
<PAGE>
<TABLE>
                      GLOBAL CASINOS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
                                                  For Years Ended June 30,
                                                -----------------------------
                                                     1997           1996
                                                 -------------  -------------
<S>                                              <C>             <C>          
Revenues:
  Casino                                         $  8,978,720    $ 7,315,497 
  Food and beverage                                   195,550        150,743 
  Other                                                59,827         10,459 
                                                 ------------    ------------
                                                    9,234,097      7,476,699 
                                                 ------------    ------------
Expenses:
  Operating, general and administrative             8,698,312      6,925,559 
  Depreciation                                        490,867        459,815 
  Amortization                                        378,829        366,300 
  Impairment of gaming facility                             -      1,225,000 
                                                 ------------    ------------
                                                    9,568,008      8,976,674 
                                                 ------------    ------------
Loss from operations                                 (333,911)    (1,499,975)
                                                 ------------    ------------
Other income (expense):
  Interest income                                      46,743        144,952 
  Interest expense, includes $25,000
    to related parties                               (317,564)      (639,983)
  Loss on investment, loan and advances
     to Global Internet Corporation                  (385,418)             - 
                                                 ------------    ------------
                                                     (656,239)      (495,031)
                                                 ------------    ------------
Loss before reorganization items, minority
  interest and extraordinary item                    (990,150)    (1,995,006)
                                                 ------------    ------------
Reorganization items:
  Interest earned on accumulated cash
     resulting from Chapter 11 proceedings              7,608              - 
  Professional fees                                   (11,111)       (32,449)
                                                 ------------    ------------
                                                       (3,503)       (32,449)
                                                 ------------    ------------
Loss before minority interest
  and extraordinary item                             (993,653)    (2,027,455)

Minority interest in income of subsidiaries          (171,819)      (205,437)
                                                 ------------    ------------
Loss before extraordinary item                     (1,165,472)    (2,232,892)

Extraordinary item:
  Gain from debt restructuring                      1,551,488        221,814 
                                                  ------------   ------------
Net income (loss)                                $    386,016    $(2,011,078)
                                                  ============   ============
Loss per share before extraordinary item         $      (0.86)   $     (2.01)

Extraordinary item                                       1.15           0.20 
                                                 ------------    ------------
Net income (loss) per share                      $       0.29    $     (1.81)
                                                 ============    ============
Weighted average number of shares
  outstanding (restated to reflect
  1-for-10 reverse split of stock
  effected on November 18, 1996)                     1,350,418     1,110,671 
                                                 =============   ============
/TABLE
<PAGE>
<PAGE>
<TABLE>
                                       GLOBAL CASINOS, INC. AND SUBSIDIARIES
                                  CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                      For Years Ended June 30, 1996 and 1997


<CAPTION>
                               Preferred Stock          Common Stock       Additional
                            ---------------------   --------------------     Paid-in     Accumulated
                               Shares     Amount      Shares*     Amount     Capital       Deficit        Total
                             ---------- ----------  -----------   -------  -----------  ------------   ----------
<S>                         <C>         <C>          <C>          <C>      <C>          <C>           <C>       
Balances at July 1,1995      1,233,000  $2,241,000       955,108  $ 48,081 $5,390,437   ($4,583,267)  $3,096,251
  Shares issued upon exer-
    cise of D warrants                                    28,125    1,406     139,233                   140,639 
  Shares issued in debt 
    conversion                                           185,386    9,268   1,219,236                 1,228,504 
  Shares issued for 
    services                                              18,000      900      85,748                    86,648 
  Shares in conversion 
    of preferred stock 
    to common stock          (544,500)   (989,639)        96,800    4,839     984,800
  Net Loss                                                                               (2,011,078) (2,011,078)
                            ----------  -----------  ------------  -------  ---------    -----------  ----------
Balances at June 30, 1996     688,500    1,251,361     1,283,419   64,494   7,819,454    (6,594,345)   2,540,964

  1-for-10 reverse stock 
    split                                                         (58,076)     58,076
  Shares issued in con-
    version of preferred 
    stock to common stock    (540,750)    (982,823)        96,131      480    982,343                           
  Shares issued in debt
    conversions                                            21,261      106    109,172                   109,278 
  Net Income                                                                                386,016     386,016 
                            ----------  -----------  ------------  -------  ---------    -----------  ----------
Balances at June 30, 1997     147,750   $  268,538      1,400,811  $ 7,004 $8,969,045   $(6,208,329)  $3,036,258
                              =======   ==========      =========  ======= ==========   ============  ==========

*Shares of common Stock have been restated for 1996, to reelect the 1997 1-for-10 reverse stock split
</TABLE>


                                              See accompanying notes.
<PAGE>
<PAGE>
<TABLE>
                       GLOBAL CASINOS, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF CASH FLOWS

<CAPTION>
                                                  For Years Ended June 30,
                                                -----------------------------
                                                     1997           1996
                                                 -------------  -------------
<S>                                              <C>            <C>          
CASH FLOWS FROM OPERATING ACTIVITIES
------------------------------------
Net income (loss)                                $    386,016   $ (2,011,078)
 Adjustments to reconcile net income (loss) 
  to net cash provided by operating activities:
   Extraordinary gain from extinguishment of 
   debt                                          (1,551,488)    (221,814)
  Loss on investment, loan and advances to 
    Global Internet Company                           385,418              - 
   Amortization                                       378,829        366,300 
   Depreciation                                       490,867        459,815 
   Provision for uncollectible receivables             79,600        113,000 
   Stock and warrants issued as compensation                          86,648 
   Impairment of gaming facility                                   1,225,000 
   Minority interest                                  171,819        205,437 
   Changes in operating assets and liabilities:
     Receivables                                       18,840       (105,012)
     Prepaid expenses and other                      (109,333)        (3,483)
     Accounts payable                                (248,363)        65,162 
     Accrued expenses and interest                    276,514        542,428 
                                                 -------------  -------------
Net cash provided by operating activities             278,719        722,403 
                                                 -------------  -------------
CASH FLOWS FROM INVESTING ACTIVITIES
------------------------------------
Other assets                                           (8,643)        14,985 
Purchase of equipment                                (543,422)      (165,709)
Investment, loan and advances to Global 
 Internet Corp.                                      (385,418)             - 
Proceeds from sale of equipment                         1,999          3,410 
Collections on notes receivable                        53,735         70,361 
Distribution to minority interest                    (153,421)      (187,968)
                                                 -------------  -------------
Net cash used in investing activities              (1,035,170)      (264,921)
                                                 -------------  -------------
CASH FLOWS FROM FINANCING ACTIVITIES
------------------------------------
Principal payments on notes                          (662,729)      (267,743)
Borrowings against notes payable                    1,580,177              - 
Proceeds from issuance of common stock                     -         140,639 
Redemption of mandatory preferred stock                               (8,000)
                                                 -------------  -------------
Net cash provided by (used in) financing 
 activities                                           917,448       (135,104)
                                                 -------------  -------------
Net increase in cash                                  160,997        322,378 

Cash at beginning of year                             887,374        564,996 
                                                 -------------  -------------
Cash at end of year                              $  1,048,371   $    887,374 
                                                 =============  =============
Supplemental cash flow information:
 Cash paid for interest                          $    122,717   $     99,196 
                                                 =============  =============
/TABLE
<PAGE>
<PAGE>
<TABLE>
                       GLOBAL CASINOS, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    (Continued)


Supplemental disclosure of non-cash investing and financing activities:

<CAPTION>
                                                  For Year Ended June 30,
                                                ---------------------------
                                                     1997           1996
                                                 -------------   -----------
<S>                                               <C>              <C>       
Debt converted to common stock:
  Mandatory redeemable preferred stock 
     (Note 9)                                   $      35,000    $   250,000 
  Accrued expenses, related parties 
     (Note 10)                                         74,279        126,000 
  Notes payable and accrued interest 
     (Note 6)                                                        852,504 
Accounts payable                                                           - 
                                                 -------------   -------------
                                                $     109,279    $ 1,228,504 
                                                =============    =============
Acquisition of additional interest in 
  BPJ Holdings, N.V. and Casino Las 
  Vegas in exchange for the Company's 
  interest in Casino Lazurnaya (Note 2):
  Assets and liabilities exchanged:
     Accounts receivable                                         $   (55,753)
     Equipment, net                                                 (515,262)
     Leasehold and contract rights                                  (516,832)
     Accrued expenses                                                 17,388 
  Assets acquired and liability released:
     Note receivable                                                 200,000 
     Accounts payable                                                 45,459 
                                                                 -------------
     Leasehold and contract rights                               $ (825,000) 
                                                                 =============
Extinguishment of debt (Notes 3 and 6):
  Liabilities released:
     Capital lease obligation                                    $   198,778 
     Note payable                               $     101,335         38,129 
     Accounts payable                                                 20,000 
     Accrued interest                                 164,627                
     Net debt relieved in Chapter 11 proceeding     2,503,114                

  Assets relinquished:
     Note receivable and equipment, 
       respectively, net                           (1,217,588)       (35,093)
                                                 -------------   -------------
  Extraordinary gain                            $   1,551,488    $   221,814 
                                                =============    =============
Property foreclosure (Note 4):
  Liabilities released:
     Notes payable                                               $   759,532 
     Accounts payable and accrued expenses                            91,789 
  Assets relinquished:
     Land and building, net                                         (836,874)
     Miscellaneous current assets                                    (14,447)
                                                                 -------------
                                                                           - 
                                                                 =============
  Note receivable acquired in Chapter 11
     proceeding, assigned to creditor as
     payment on note to creditor                $    (249,418)               

  Reduction in note payable by
     assignment of note receivable
     acquired in Chapter 11 proceeding                249,418                
                                                 -------------   
                                                $           -                
                                                ===============              
</TABLE>
                              See accompanying notes.<PAGE>
<PAGE>
                       GLOBAL CASINOS, INC. AND SUBSIDIARIES
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   JUNE 30, 1997

1.   ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     ORGANIZATION AND CONSOLIDATION
     ------------------------------
     Global Casinos, Inc. (the "Company"), a Utah corporation, develops and
operates gaming casinos domestically and internationally.  At June 30, 1997,
the consolidated financial statements of the Company include the accounts of
the following wholly-owned subsidiaries.  All significant intercompany accounts
and transactions have been eliminated in consolidation.

          BPJ HOLDINGS N.V. ("BPJ"), a Curacao Limited Liability Company, which
          operates the Casino Masquerade on the Caribbean resort island of
          Aruba.

          GLOBAL PELICAN N.V. ("Global Pelican"), a St. Maarten Limited
          Liability Company which began operating the Pelican Casino located on
          the island of St. Maarten in the Netherlands Antilles on August 1,
          1996.  Global Pelican operates the casino under a Management and
          Operating Lease Agreement (See Note 8).

          GLOBAL ALASKA CORPORATION ("Global Alaska"), an Anchorage
          corporation, which acquired Alaska Bingo Supply, Inc. ("ABS") located
          in Anchorage, Alaska on August 1, 1997 (See Note 14).

          CASINOS U.S.A., INC. ("Casinos U.S.A."), a Colorado corporation,
          which owns and operates the Bull Durham Saloon and Casino ("Bull
          Durham"), located in the limited stakes gaming district in Black
          Hawk, Colorado (See Note 3).

          GLOBAL CASINOS INTERNATIONAL, INC. ("Global International"), a
          Delaware corporation, which through July 15, 1995, owned an 80%
          interest in an International Joint Venture ("IJV") which held certain
          rights to develop and operate gaming casinos in several international
          locations.  Through the IJV, the Company opened Casino Lazurnaya in
          Sochi, Russia and Casino Las Vegas in Bishkek, Kyrgyzstan.  Effective
          July 15, 1995, the Company exchanged its interest in Global
          International and Casino Lazurnaya for an additional interest in BPJ
          and the Casino Las Vegas.  Through this transaction, the Company now
          owns 100% of BPJ and a 61% profits interest in the Casino Las Vegas
          (See Note 2).

          COLORADO GAMING PROPERTIES, INC. ("CGP"), a Colorado corporation,
          which through June, 1996, owned two non-operating real estate
          properties, the Nitro Club and Gas Light properties located in
          Central City, Colorado (See Note 4).

          LINCOLN CORPORATION ("Lincoln"), a South Dakota corporation, which
          operated the Last Chance Saloon ("Last Chance") in Deadwood, South
          Dakota under a lease agreement.  Last Chance was closed effective 
          May 31, 1994, and the lease agreement was terminated.

          WOODBINE CORPORATION ("Woodbine"), a South Dakota corporation, which
          operated Lillie's Casino ("Lillie's") in Deadwood, South Dakota
          through June 30, 1995.  Beginning in July 1996, Woodbine began
          leasing this property and related equipment to a third party.  These
          leasing activities are immaterial to the financial statements.

     MANAGEMENT'S PLANS
     ------------------
     The Company has continued its efforts to formulate plans and strategies to
address the Company's financial condition and increase profitability.  In
December 1996, the Bankruptcy Court approved Casinos U.S.A.'s Second Amended
Plan of Reorganization (See Note 3).  As a result, a significant amount of the
Company's debt has been extinguished and/or restructured.  Management continues
to negotiate with creditors of debt that remains in default.  The Company also
continues to explore acquisition opportunities, such as the acquisition of ABS
which occurred in August 1997 (See Note 14).  Management believes that these
plans will result in to increased liquidity and future profitability.

     USE OF ESTIMATES IN FINANCIAL STATEMENT PREPARATION
     ---------------------------------------------------
     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 assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods.  Actual results could differ from those estimates.

     CASH
     ----
     Cash consists of demand deposits and vault cash used in casino operations.

     CASINO REVENUES
     ---------------
     In accordance with industry practice, the Company recognizes as casino
revenues the net win from gaming activities, which is the difference between
gaming wins and losses.

     PROMOTIONAL ALLOWANCES
     ----------------------
     Food and beverage revenue does not include the retail amount of food and
beverage provided gratuitously to customers, which was $145,230 and $224,155 in
1996 and 1997.  The cost of food and beverages provided on a complimentary
basis to customers and other promotional allowances are charged to operating
expenses.  The cost of complimentary food and beverages and other promotional
allowances was $107,190 and $150,788 for the years ended June 30, 1996 and
1997.

     RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
     -----------------------------------------
     The Financial Accounting Standards Board ("FASB") recently issued
Statement of Financial Accounting Standards No. 128, EARNINGS PER SHARE ("SFAS
No. 128"), which is effective for fiscal years ending after December 15, 1997. 
This statement replaces the presentation of primary earnings per share ("EPS")
with a presentation of basic EPS.  It also requires dual presentation of basic
and diluted EPS on the face of the income statement for all entities with
complex capital structures and requires reconciliation of the numerator and
denominator of the basic EPS computation to the numerator and denominator of
the diluted EPS computation.  Basic EPS excludes dilution.  Diluted EPS
reflects the potential dilution that could occur if securities or other
contracts to issue common stock were exercised or converted into common stock
or resulted in the issuance of common stock that then shared the earnings of
the entity.  Diluted EPS is computed similar to fully diluted EPS.  SFAS No.
128 requires restatement of all EPS data that was presented in previously filed
reports.  Management believes that implementation of SFAS 128 will not have a
material effect on earnings per share.

     The FASB also recently issued SFAS No. 130, REPORTING COMPREHENSIVE
INCOME, which establishes requirements for disclosure of comprehensive income
and is effective for fiscal years beginning after December 15, 1997. 
Reclassification of earlier financial statements for comparative purposes is
required.  Management believes that implementation of SFAS 130 will not
materially effect the Company's financial statements.

     FAIR VALUE OF FINANCIAL INSTRUMENTS
     -----------------------------------
     The carrying values of the Company's financial instruments classified as
current assets and liabilities approximate fair values primarily because of the
short maturities of these instruments.  The carrying values of notes receivable
approximate fair values because interest on these notes is similar to returns
management believes are currently available to the Company for instruments with
similar risks.  The fair value of long-term debt, carried at $4,610,350 is
estimated by management to be approximately $4,350,000 at June 30, 1997, which
has been determined using interest rates management believes are available to
the Company for similar instruments with similar terms. 

     LEASEHOLD AND CONTRACT RIGHTS
     -----------------------------
     Leasehold and contract rights represent the excess of the purchase price
over the net assets of the acquired investments in the Casino Las Vegas and
Casino Masquerade.  These costs are amortized over the ten-year terms of the
agreements.  The Company annually assesses the carrying value of its leasehold
and contact rights as discussed below.

     LAND, BUILDINGS AND EQUIPMENT
     -----------------------------
     Land, buildings and equipment are carried at cost.  Depreciation is
computed using the straight-line method over the estimated useful lives. 
Buildings are depreciated over 31 years and equipment is depreciated over five
to seven years.

     The Company performs an annual assessment to determine whether there has
been an impairment in the carrying values of its land, buildings, equipment and
leasehold and contract rights.  In performing this assessment, management
considers available appraisal information, current and projected sales,
operating income, and annual cash flows on an undiscounted basis.  If
management determines that an impairment has 
occurred, an impairment loss is recognized, based on the difference between the
assets' carrying values over the estimated fair values.  Based on management's
annual review, the Company does not believe that any  impairments have occurred
on land, buildings, equipment and leasehold and contract rights during 1997.

     In 1996, management's assessment of certain non-operating real property
located in Central City, Colorado, indicated that the property was impaired. 
The events and circumstances providing this indication included a continuing
decline in actual and listed sales prices of comparable real estate in the area
and a general decline during the year in gaming revenues related to similar
gaming properties.  In addition, based on the Company's inability to refinance
certain debt secured by these properties, the creditors initiated foreclosure
proceedings.  Based on these factors, management determined that the fair value
of the properties approximated the related debt secured by these assets, and
the Company recognized an impairment loss of approximately $1,225,000.

     STOCK-BASED COMPENSATION
     ------------------------
     Statement of Financial Accounting Standards No. 123, ACCOUNTING FOR STOCK-
BASED COMPENSATION, defines a fair-value-based method of accounting for stock-
based employee compensation plans and transactions in which an entity issues
its equity instruments to acquire goods or services from non-employees, and
encourages but does not require companies to record compensation cost for
stock-based employee compensation plans at fair value.  The Company has chosen
to continue to account for stock-based compensation using the intrinsic value
method prescribed in Accounting Principles Board Opinion No. 25, ACCOUNTING FOR
STOCK ISSUED TO EMPLOYEES ("APB No. 25") and related interpretations. 
Accordingly, compensation cost for stock options is measured as the excess, if
any of the quoted market price of the Company's stock at the date of the grant
over the amount an employee must pay to acquire the stock.

     INCOME TAXES
     ------------
     Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases.  Deferred tax assets and liabilities are measured using enacted tax
rates expected to be recovered or settled.  The effect on deferred tax assets
and liabilities of a change in tax rates is recognized in the consolidated
statement of operations in the period that includes the enactment date.

     COMMON STOCK SPLIT
     ------------------
     On November 18, 1996, the Company effected a one-for-ten reverse split of
its common stock.  All references in the financial statements to number of
shares and per share amounts have been restated to reflect the stock split.

     NET INCOME (LOSS) PER SHARE
     ---------------------------
     Net income (loss) per share of common stock is computed based on the
weighted average number of common shares outstanding during the year.   Stock
options and warrants and convertible promissory notes are not considered in the
calculations, as they would be antidilutive in 1996 and 1997.  During 1997,
117,392 shares of common stock were issued upon conversion of preferred shares
and debt.  Had these conversions occurred on July 1, 1996,the loss per share
before the extraordinary item, the extraordinary gain per share and net income
per share would have been ($.0.83), $1.11 and $0.28, respectively.

     FOREIGN CURRENCY TRANSACTIONS
     -----------------------------
     Gaming operations in Kyrgyzstan, Aruba, and St. Maarten are primarily
conducted in U.S. dollars.  As a result, the U.S. dollar is considered the
functional currency for these operations.  Payments for payroll and certain
other expenses are made in the local currency.  Gains and losses from foreign
currency transactions are included in determining net earnings and were
immaterial for the years ended June 30, 1996 and 1997.

     RISK CONSIDERATIONS
     -------------------
     Casino Las Vegas, Casino Masquerade, and the Pelican Casino (the
"Casinos") are located in Kyrgyzstan, Aruba, and St. Maarten respectively;
therefore, they are subject to special considerations and significant risks not
typically associated with investments in North American companies.  These
include risks associated with, among others, the political, economic and legal
environments and expropriation matters, and are described further in the
following paragraphs:

     a.   POLITICAL ENVIRONMENT
          ---------------------
          The Casinos' results may be adversely affected by changes in the
          political and social conditions in Kyrgyzstan, Aruba, and St. Maarten
          and by changes in governmental policies with respect to laws and
          regulations, inflationary measures, currency conversion and
          remittance abroad, and rates and methods of taxation, among other
          things.  While the Kyrgyzstanian government is expected to continue
          its economic reform policies, many of the reforms are new or
          experimental and may be refined or changed.  It is also possible that
          a change in leadership in Kyrgyzstan could lead to changes in
          economic policy.  The political environment in Aruba and St. Maarten
          has been stable for a sustained period of time.  As a result, the
          Company does not anticipate significant risks related to Aruba and
          St. Maarten in the immediate future.

     b.   ECONOMIC ENVIRONMENT
          --------------------
          The economies in Kyrgyzstan, Aruba, and St. Maarten differ
          significantly from the economy in the United States in many respects,
          including their structures, levels of development and capital
          reinvestment, growth rates, government involvement, resource
          allocation, employment policy, self-sufficiency, rates of inflation
          and balance of payments positions.  

          In Kyrgyzstan, the adoption of economic reform policies since 1991
          has resulted in a significant reduction in the role of state economic
          plans in the allocation of resources, pricing and management of such
          assets, and increased emphasis on the utilization of market forces
          and growth in Kyrgyzstan's economy.  However, such growth has been
          uneven among various regions of the country and among various sectors
          of the economy.  The economic environment in Aruba and St. Maarten
          has remained stable for a sustained period of time.

     c.   LEGAL ENVIRONMENT
          -----------------
          Ownership and operation of casinos in Kyrgyzstan, Aruba, and St.
          Maarten are regulated by local authorities.  Each jurisdiction
          maintains its separate regulatory environment which requires various
          licenses, approvals and certificates to operate in these
          jurisdictions.  In Kyrgyzstan, considerable progress has been made in
          the promulgation of laws and regulations dealing with economic
          matters such as corporate organization and governance, foreign
          investment, commerce, taxation and trade.  This has enhanced the
          protection afforded to foreign investors.  However, experience with
          respect to the implementation, interpretation and enforcement of such
          laws is limited.  As the Kyrgyzstan legal system develops, the
          promulgation of new laws, changes to existing laws and the preemption
          of local regulations by national laws may adversely affect foreign
          investors, such as the Company. 

     d.   EXPROPRIATION OF FUNDS
          ------------------------
          The Company is currently able to remit funds from its operations in
          Kyrgyzstan, Aruba, and St. Maarten to the U.S., to meet certain
          intercompany obligations, without significant local government
          approvals, restrictions or taxation.  However, the remittance of
          funds to the U.S. for other means (including profit distribution)
          would be subject to certain restrictions and taxation.  Changes in
          the local legal and economic environments may adversely affect the
          expropriation of funds from the Casinos to the U.S.


2.   ACQUISITION OF ADDITIONAL CASINO INTERESTS
     ------------------------------------------
     Effective July 15, 1995, the Company exchanged its 80% interest in Casino
Lazurnaya, Sochi, Russia, valued at approximately $1,070,000 for (a) the
remaining one-third interest in BPJ, (b) an additional 12.2% interest in Casino
Las Vegas, Bishkek, Kyrgyzstan, and (c) a $200,000 promissory note receivable
from a third party and release of approximately $45,000 due to the third party. 
These acquisitions resulted in an increase in leasehold and contract rights of
$825,000, which is being amortized over the terms of the existing agreements.

     The acquisitions of the additional interests have been accounted for as
purchases; and accordingly, the results of operations have been included in the
consolidated statements of operations from the date of the transaction.  


3.   CASINOS U.S.A. REORGANIZATION
     -----------------------------
     In October 1995, Casinos U.S.A. ("Debtor") filed a voluntary petition
under Chapter 11 of the United States Bankruptcy Code, and until December 18,
1996, operated under the protection of the Bankruptcy Court.  The Bankruptcy
Court confirmed the Company's Second Amended Plan of Reorganization (the
"Plan") on December 18, 1996.  The effective date of the Plan was thirty days
after confirmation (the "Effective Date").  The confirmed Plan allowed the
Debtor to retain its property and assets and continue its business.  The Plan's
provisions resulted in the restructuring and/or extinguishment of creditor
claims filed during the bankruptcy proceedings and the cancellation of a note
and interest receivable of approximately $1,217,000.  As a result, the Company
recognized an extraordinary gain on the extinguishment of debt of $1,285,765
during the year ended June 30, 1997.

     In accordance with the provisions of the Plan, certain creditors received
warrants that permit the holders thereof to purchase from the reorganized
Debtor an amount of common stock, so that immediately after exercise, the
warrant holders would own 80% of the common stock of the Debtor.  The warrants
are exercisable at any time from one year after the Plan's Effective Date
through the earlier of seven years after the Effective Date, or when the
indebtedness to the warrant holders has been paid, but only subsequent to a
sale of substantially all of the Debtor's assets, merger, recapitalization,
refinance or other restructuring all of which, management is not considering
likely.

     After one year from the Plan's Effective Date, the warrant holders are
entitled to call a vote as to whether any merger, recapitalization,
restructuring, refinance, or sale of the assets of the Debtor should be made or
effectuated.  The warrant holders shall be entitled to vote their warrants as
though each warrant was one share of common stock. 


4.   COLORADO GAMING PROPERTIES FORECLOSURE
     --------------------------------------
     In March 1996, creditors of Colorado Gaming Properties, which held notes
secured by the Nitro Club and Gas Light properties located in Central City,
Colorado, commenced foreclosure proceedings on these properties.  The Company
was unsuccessful in its attempts to renegotiate the terms of the debt, and the
statutory periods within which the Company had the right to redeem the Nitro
Club and Gas Light out of foreclosure expired in June 1996.  As a result, the
foreclosure sales occurred in June 1996.  The carrying value of the assets
foreclosed upon of approximately $850,000, after recognition of the $1,225,000
impairment loss discussed in Note 1, approximated the carrying value of the
debt extinguished.


5.   NOTES RECEIVABLE
     ----------------
     At June 30, 1997, notes receivable consist of the following:

<TABLE>
<S>  <C>                                                          <C>
     6.5% note receivable, monthly interest
         and principal payments of $6,569 until
         January 2009, at which time the unpaid
         balance is due; the note is collateralized
         by a deed of trust on real property,
         fixtures and improvements                                $     356,704 

     Non-interest bearing note, due December
         1995, in default; the note is
         collateralized by 20,000 shares 
         of the Company's common stock                                  200,000 

     Allowance for doubtful collections                                (130,000)
                                                                   -------------
                                                                        426,704 

     Less current portion                                               (57,645)
                                                                   -------------
                                                                  $      369,059
                                                                   =============
</TABLE>

     The allowance for doubtful collections is maintained at estimated amounts
necessary to cover losses on receivables based on management's assessment of
the borrowers' financial condition and the underlying value of collateral. 
During the year ended June 30, 1997, the Company increased the allowance for
doubtful collections by $75,000.  Management also periodically evaluates
receivable balances to determine if impairments are evident based on available
information and events.

6.   LONG-TERM DEBT

     At June 30, 1997, long-term debt consists of the following:

<TABLE>
<S>  <C>                                                          <C>
     Unsecured loans, $68,158 to related parties, interest
         at 10% to 15%, past due and in default or due 
         on demand                                                $     292,891 

     Mortgage payable to a third party, collateralized
         by real estate, interest at 10%, semiannual
         payments with maturity in 2000                                 52,266  

     Secured convertible note, interest at 7%, reduced from
         9% in July 1996, payments of interest only due 
         quarterly; principal and unpaid interest due May 1999; 
         original principal balance of $750,000 reduced by 
         $249,419 through an assignment of its interest in 
         senior secured debt on Casinos U.S.A. the Note is 
         convertible in whole or in part at the option of the
         holder at any time prior to its maturity to common 
         stock at a conversion price of $10.00 per share                500,581 

     Unsecured convertible notes, $187,500 to related 
         parties, interest at 8%, principal and unpaid
         interest due October 1998; notes are convertible 
         in whole or in part at the option of the holder 
         at any time beginning in October 1997, to common 
         stock at a conversion price of $5.00 per 
         share,upon the effective date of a registration
         statement, registering the underlying shares of 
         common stock, notes will automatically convert                 630,250 

     Mortgages payable to third parties, collateralized by 
         real estate, includes $249,419 assigned from the 
         Company to a third party, interest at 7%, monthly 
         payments of $7,329 plus annual payment of, 
         37.5% of available Bull Durham net cash flow, 
         as defined, due in 2004                                      1,097,121 

     Secured notes, interest at 10% and 12%, monthly
         payments of $18,088, secured by certain
         gaming equipment, due through 2000, $154,756
         in default                                                     276,494 

     Mortgages payable to third parties,
         collateralized by real estate, interest at
         9.2%, monthly payments of $10,225 plus annual
         payments of 12.5% of available Bull Durham net 
         cash flow, as defined, due in 2004                           1,245,033 

     Unsecured obligation, non-interest bearing, minimum
         monthly payments of $6,086, due through
         November 2004                                                  515,714 
                                                                   -------------
                                                                      4,610,350 

     Less current portion, including debt in default                   (557,450)
                                                                  --------------------
                                                                  $   4,052,900 
                                                                  =============
</TABLE>

     Scheduled maturities of long-term debt are as follows:

<PAGE>
<TABLE>
<CAPTION>
                   For Year Ending         
                      June 30,             
                   ---------------
<S>                    <C>                 <C>
                       1998                 $     557,450
                       1999                     1,301,759
                       2000                       159,327
                       2001                        98,425
                       2002                       100,536
                       Thereafter               2,392,853
                                            -------------
                       Total                $   4,610,350
                                            =============
</TABLE>

     In 1997, the Company was able to negotiate the exchange and/or
restructuring of $375,002 of certain accounts payable and short-term debt for
21,261 shares of common stock, as satisfaction of these obligations.  These
transactions resulted in an extraordinary gain from debt extinguishment of
$265,723, in addition to the extraordinary gain discussed in Note 3.

     In 1996, the Company entered into various agreements, which resulted in
the extinguishment of certain debt in exchange for assets securing the debt or 
for accelerated payments on the debt.  The transactions resulted in an
extraordinary gain from debt extinguishment of $221,814.

     Effective December 13, 1995, the Company purchased promissory notes held
by creditors of Casinos U.S.A. with principal and interest owing of $597,500
and $255,004, respectively.  The promissory notes were secured by a collateral
assignment against the Bull Durham.  In consideration of the assignment of the
notes and collateral security, the Company issued to the Casinos U.S.A.
noteholders an aggregate of 124,961 shares of common stock, valued at $7.50 per
share.

     At June 30, 1997, the Company reserved 176,000 shares of common stock for
debt conversions.


7.   INCOME TAXES
     ------------
     The Company and its subsidiaries are subject to income taxes on income
arising in, or derived from the tax jurisdictions in which they are domiciled. 
BPJ and Global Pelican are subject to Aruban and St. Maarten tax provisions
which provide for utilization of prior years cumulative net operating losses to
offset current and future taxable income.  At June 30, 1997, the Company has
net operating loss carryforwards related to its Aruban and St. Maarten
operations of approximately $200,000 and $100,000, respectively, available to
reduce future taxable income.  

     Under the Foreign Investment Act of Kyrgyzstan, qualified joint ventures
are exempt from income tax for a two-year period, beginning in the first year
of operations.  Thereafter, income is subject to tax.  The two-year tax exempt
period expires in 1998.

     Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.  Significant components
of the deferred tax assets at June 30, 1997, are as follows:

<TABLE>
<S>     <C>                                                 <C>                                                     
        Deferred tax assets:

        Compensated absences and other accruals             $     43,000 
        Net operating loss carryforwards                       2,143,000 
                                                            -----------
        Total gross deferred tax assets                        2,186,000 

        Valuation allowance                                   (2,186,000)
                                                            ------------
        Net deferred tax assets                             $          - 
                                                            ============
</TABLE>

      The valuation allowance decreased by $522,000 during the year.  The
reconciliation between the statutory federal tax rate and the effective tax
rate as a percentage is as follows:

<TABLE>
<CAPTION>
                                                         1997      1996
                                                        ------    ------
<S>                                                       <C>       <C>
     Statutory federal income tax rate                    34%       34%
     Effect of net operating loss not utilized           (34)      (34)
                                                         -----     -----
                                                          - %       - %
                                                          ===       ===
</TABLE>

     At June 30, 1997, the Company has available domestic net operating loss
carryforwards available to reduce future taxable income of approximately
$6,428,000 expiring in years 2008 through 2011 as follows:

<TABLE>
<CAPTION>
                                                   Net
                        Year                 Operating Loss  
                       ------                --------------
<S>                     <C>                    <C>
                        2008                   $   920,000 
                        2009                     1,676,000 
                        2010                     1,217,000 
                        2011                     2,615,000 
                                               ------------
                                               $ 6,428,000 
                                               ============
</TABLE>


<PAGE>
8.   COMMITMENTS AND CONTINGENCIES
     -----------------------------

     OPERATING LEASES
     ----------------
     The Company leases the Casino Masquerade facility under an operating lease
that expires in December 2002, with an option to renew for 10 years.  Until
December 1995, rent expense was contingent solely upon a percentage of casino
win, as defined, adjusted for certain gaming taxes and license fees.  In
December 1995, the Company reached an agreement to modify the terms of the
lease whereby beginning January 1, 1996, rent expense is calculated as $400,000
per year plus 15% of the adjusted annual casino win over $4,000,000.  Rent
expense was $370,558, which includes contingent rent of $170,558, and $400,000
for the years ended June 30, 1996 and 1997, respectively.  In September 1997,
the Company was informed that the casino lessor is contemplating closure of the
property from March 1998 through December 1998 to perform renovations.  The
Company and the lessor are currently negotiating the Company's rights under the
lease.

     The Company leases the Casino Las Vegas facility from the minority joint
venture partner ("JVP") in the Casino Las Vegas.  The Company paid 39% of the
net casino profits, as defined, to the JVP until the Company recouped its
original investment plus interest, which occurred in September 1996.  Beginning
in September 1996, the Company began paying 50% of the net casino profits to
the JVP.  In addition, the Company has an agreement with an unrelated entity
whereby after the Company has received $500,000 in profits, it shall pay 10% of
its share of the net profits to this entity.

     Effective August 1, 1996, the Company, through its subsidiary Global
Pelican, entered into a cancelable Management and Operating Lease Agreement
(the "Pelican Agreement") with a third party, whereby Global Pelican agreed to
lease and operate the Pelican Casino, located on the island of St. Maarten. 
The original term of the lease was for five years, with its options to renew
for three additional five-year terms.  Lease payments were scheduled to be
$30,000 per month for the initial lease term beginning in November 1996.  Rent
expense in 1997 was $225,000.  The Pelican Agreement provides that Global
Pelican would also purchase the equipment utilized at the casino for $225,000
in exchange for a note payable, subject to the owner providing clear title to
the equipment.  The Pelican Agreement also states that until the equipment
liens and encumbrances are released, Global Pelican has the right to terminate
the Pelican Agreement.  At June 30, 1997, the equipment remains subject to
liens and encumbrances, and Global Pelican has therefore not purchased the
equipment.  In July 1997, Global Pelican renegotiated the terms of the Pelican
Agreement, whereby Global Pelican is to pay $20,000 per month through November
1997, of which $15,000 is to be applied as monthly rent, and $5,000 as deferred
rent pending completion of negotiations between Global Pelican and the lessor. 
Global Pelican is scheduled to continue negotiations with the lessor by
November 1997.

     During the year ended June 30, 1995, the Company entered into a
noncancelable operating lease for corporate office space expiring in September
1999, as well as various operating leases for equipment.  Lease expense under
these leases was $41,088 and $44,496 for the years ended June 30, 1996 and
1997, respectively.

     Future minimum lease payments, by year and in the aggregate, under non-
cancelable operating leases with initial or remaining terms of one year or more
consist of the following (exclusive of contingent rentals and Global Pelican):

<TABLE>
<S>                     <C>                   <C>
                        1998                  $   444,496 
                        1999                      444,496 
                        2000                      411,124 
                        2001                      400,000 
                        2002                      400,000 
                                              ------------
                                              $ 2,100,116 
                                              ============
</TABLE>

     SEC MATTER
     ----------
     During 1995 and through 1997, the Company and certain officers and
directors of the Company received requests for information from the U.S.
Securities and Exchange Commission ("SEC") related to an investigation begun by
the SEC during 1994 into various matters, including certain transactions in
securities by the Company and one of its officers and directors.  On January
13, 1997, the Company was notified that the SEC staff intended to recommend
initiation of administrative procedures for a Cease and Desist Order against
the Company and two of its former officers and directors regarding violations
of certain provisions of federal securities laws.  The Company has engaged in
negotiations with the SEC staff concerning possible disposition of this matter. 
Based upon the content of these discussions, management believes that the
outcome of this matter will not have a material adverse effect on the business
of the Company, however, there can be no assurance that such will be the case.

     ARUBAN CONTROLLER COSTS
     -----------------------
     The Aruban government provides "Government Controllers" for each gaming
property operating on the island.  The Aruban government recoups the expenses
of these controllers through a monthly charge per square meter of casino space. 
The Casino Masquerade and other Aruban casinos are disputing the charges.  The
Aruban casinos argue that the rate charged by the government exceeds the cost
of providing the controllers.  The Company has recorded 1996 and 1997
government controller expense of $64,800 and $66,200, respectively, at the same
rate paid as of December 31, 1994.  The cumulative difference in the controller
cost, based on the rate charged by the government and that accrued by the
Company is approximately $236,000 as of June 30, 1997.

     ST. MAARTEN AND CONTROLLER COST
     -------------------------------
     The Pelican Casino is charged a St. Maarten Government Controller and a
casino license fee of $36,500 per month.  The Company has accrued $401,500 of
license and controller expense as of and for the year ended June 30, 1997. 
Although the government has been assessing the Pelican Casino the monthly fees,
Global Pelican has not yet been granted a license, which it applied for in
October 1996.  In July, Global Pelican met with government representatives and
proposed to pay a one-time license issuance fee of $112,000, of which the
casino lessor has agreed to pay 1/2, pay license and controller fees accrued
through May 31, 1997, of $365,000 over a five-year term, and continuing to pay
monthly fees from June 1, 1997 and thereafter.


<PAGE>
9.   STOCKHOLDERS' EQUITY
     --------------------
     MANDATORY REDEEMABLE CONVERTIBLE PREFERRED STOCK
     ------------------------------------
     At June 30, 1997, 26,750 shares of Series A Mandatory Redeemable
Convertible Preferred Stock are outstanding.  The Series A Convertible
Preferred Stock had a mandatory redemption date of May 31, 1995, and the
Company is currently in default.  The Series A Preferred Stock has a redemption
price of $20.00 per share, subject to adjustment for certain events such as
splits and dividends.  Holders of the Series A Preferred Stock have the option
to convert each share of the preferred stock into one-tenth of one share of the
Company's Common Stock.

     WARRANTS
     --------
     During 1996, 28,125 Class D Warrants were exercised at $5.00 per share. 
In May 1997, the remaining Class D Warrants expired.  Prior to 1995, the
Company issued to an underwriter a warrant to purchase 2,813 units, which
consist of one share of Series A Preferred Stock and one-half Class D Warrant
at an exercise price of $24.00 per unit.  This warrant expires in April 1999. 

     In October 1996, in connection with a private placement of convertible
debt, the Company issued 126,100 Class E Warrants exercisable at $6.00, 126,100
Class F Warrants exercisable at $7.00, and 126,100 Class G Warrants exercisable
at $8.00.  The Class E, F, and G Warrants expire the earlier of 30, 90, and 120
days, respectively, after a registration statement covering the stock
underlying the Warrants is declared effective by the Securities and Exchange
Commission, or in October 1997.


10.  RELATED PARTIES
     ---------------
     At June 30, 1997, the Company had receivables from employees and officers
of $11,199 unsecured 12% notes payable to officers, shareholders and directors
of $68,158, due on demand, and secured 8% convertible Notes payable to officers
and an affiliate of $175,000 due in 1998.  In August 1996, the Company borrowed
$270,000 from an affiliate in exchange for 12% Notes, which were repaid in the
second quarter of the year ended June 30, 1997.  During 1997, the Company
converted $74,279 of legal fees due to firms of which directors of an affiliate
are employed into 14,586 shares of common stock.  During 1996, the Company
converted $126,000 of accrued salaries due to former officers and directors of
the Company into common stock valued at $5.00 per share.    

     In consideration of services performed by certain employees, officers and
directors of the Company, the Company issued 18,000 shares of common stock and
recorded compensation expense of $86,648 for the year ended June 30, 1996,
based on the market price of the Company's common stock on the dates of
issuance.


11.  STOCK INCENTIVE PLAN
     --------------------
     The Company has a Stock Incentive Plan (the "Incentive Plan"), that allows
the Company to grant incentive stock options and/or purchase rights
(collectively "Rights") to officers, employees, former employees and
consultants of the Company and its subsidiaries.  The Company has reserved
75,000 shares of common stock for issuance under the Incentive Plan.  In
October 1995, the Company granted 81,000 options to purchase common stock at a
weighted average exercise price of $5.00 per share, of which 38,000 are subject
to future vesting requirements.  In October 1995, the Company also granted
90,000 options to be divided among four of its directors, which entitle the
directors to purchase common stock at a weighted average exercise price of
$5.00 per share.  Of the 90,000 options, 60,000 are subject to future vesting
requirements.  The options expire five years from the date of grant.  Had
compensation cost for the Company's Incentive Plan been determined based on the
fair value at the grant date for awards in 1996, consistent with the provisions
of SFAS No. 123, the Company's net income (loss) per share would have changed
to the pro forma amounts indicated below:

<TABLE>
<CAPTION>
                                                    1997            1996    
                                                 ----------    --------------
<S>  <C>                                         <C>           <C>
     Net income (loss) - as reported             $  386,016    $ (2,011,078)
     Net income (loss) - pro forma                  328,016      (2,069,078)
     Income (loss) per share - as reported             0.29           (1.81)
     Income (loss) per share - pro forma         $     0.24    $      (1.86)
</TABLE>


12.  FOREIGN AND DOMESTIC OPERATIONS
     -------------------------------
     The Company owns, operates, and develops domestic and international
casino projects in several geographical areas.  The following table sets forth
financial information for the Company's foreign and domestic segments as of and
for the years ended June 30, 1996 and 1997:


<TABLE>
<CAPTION>

                              Kyrgyzstan     Russia *       Caribbean**      Domestic         Total
                              ----------    -----------     -----------    ------------   ------------
<S>                           <C>            <C>            <C>            <C>            <C>         
1996
----
Net revenue                    1,033,123        24,485       4,458,640       1,960,451      7,476,699 
Depreciation                      59,675                       158,140         242,000        459,815 
Amortization                       3,000                        67,500         295,800        366,300 
Income (loss) from 
  operations                     402,832        (6,639)        504,530      (2,400,698)    (1,499,975)
Identifiable assets              293,010                     1,804,676       8,489,926     10,587,612 
Capital expenditures              12,858                       117,190          35,661        165,709 

1997
----
Net revenue                      787,181                     6,198,271       2,248,645      9,234,097 
Depreciation                      55,670                       175,182         260,015        490,867 
Amortization                       7,360                        75,669         295,800        378,829 
Income (loss) from
  operations                     354,701                      (109,213)       (579,399)      (333,911)
Identifiable assets              238,445                     2,361,146       6,568,958      9,168,549 
Capital expenditures               9,361                       413,924         120,137        543,422 
</TABLE>

*    The Casino Lazurnaya operations ceased, effective July 15, 1995.

**   Caribbean includes Aruba and St. Maarten operations.


13.  GLOBAL INTERNET CORPORATION
     ---------------------------
     In July 1996, the Company and other investors formed Global Internet
Corporation ("Global Internet"), to explore opportunities related to
developing entertainment and gaming sites on the Internet.  The Company owns
58% of the outstanding common stock of Global Internet.  During the year ended
June 30, 1997, the Company loaned $325,000 to Global Internet in exchange for
a 10% promissory note receivable, convertible into common shares of Global
Internet and due October 31, 1997.  At June 30, 1997, the Company's
investment, promissory note and related interest, and additional advances due
from Global Internet totaled approximately $385,000.

     Management became aware that internet gaming could impair the Company's
Colorado state gaming license.  As a result, the Company initiated actions to
divest itself of its investment in Global Internet.  A separate board of
directors of Global Internet was established, with no overlapping members of
the Company's board, and the Company assigned its voting rights to a member of
the Global Internet board, who is not related to the Company.  The Company
also entered into negotiations with First Entertainment, Inc. ("FEI"), an
unrelated third party, whereby FEI would acquire the Company's investment in
Global Internet.

     On May 11, 1997, the Company and FEI entered into an agreement whereby
the Company will sell 1,500,000 of the 1,750,000 common shares of Global
Internet owned by the Company, in exchange for 1,500,000 warrants, which will
allow the Company to purchase 1,500,000 shares of FEI common shares at $1.25
per share for a period of five years.  The Company will also sell its
convertible promissory note, advances and interest receivable of $375,000 for
30,000 shares of FEI Class B Preferred Stock with a face value of $12.50 per
share, convertible into FEI common shares at $1.25 per share.  The agreement
was originally expected to close shortly after May 1997.  However, the FEI
shareholders have not yet approved the transaction, authorized an increase in
FEI common stock to allow for the issuance of shares underlying the
convertible preferred stock and warrants, or obtained long-term financing that
would allow Global Internet to continue to develop entertainment and gaming
sites.

     FEI is a thinly capitalized and thinly traded public entity which does
not appear to currently have resources available to continue development of
Global Internet.  In September 1997, the Company was informed that completion
of the transaction was contingent upon FEI shareholders' approval, for which a
shareholders meeting is currently scheduled for November 1997.  These factors
raised concerns about the Company's ability to realize its investment in
Global Internet.  Management determined that it would be appropriate for the
Company to fully expense its investment and allow for the receivables in
Global Internet during the quarter ended June 30, 1997, although the sale may
ultimately be consummated.

     FEI has represented to the Company that financing will be obtained and
the transaction will be approved by the shareholders.  Management believes
that if this is to occur, the Company may be able to recognize a gain on its
sale of Global Internet.


<PAGE>
14.  SUBSEQUENT EVENTS
     -----------------
     On August 1, 1997, the Company acquired 100% of the outstanding common
stock of Alaska Bingo Supply, Inc., an Alaska corporation ("ABS").  The
purchase price of $4,400,000 consisted of $400,000 cash, and a $4,000,000
convertible promissory note, secured by shares of ABS' common stock held by
the Company.  The promissory note bears interest at 8%, due in 2004, with
monthly payments of principal and interest beginning in October 1997.  The
Noteholder has the option to convert up to $2,500,000 of the Note into shares
of the Company's common stock at per share.  This acquisition will be
accounted for as a purchase.

     In order to fund this acquisition, the Company borrowed $350,000 from
third parties and $75,000 from an affiliate.  The promissory notes are due in
equal monthly payments from January 1998 through April 1998.  The promissory
notes to third parties are secured by a note receivable by the Company. 
Interest on $200,000 of the notes is at 24% and interest on the remaining
$225,000 (including the affiliate Note) is at 12%.  Additionally, the holder
of the $150,000, 12% note was issued warrants to purchase 15,000 shares of the
Company's common stock at an exercise price of $3.00 per share.  The warrants
expire June 2000.

<PAGE>
<PAGE>
                                   SIGNATURES
     
     Pursuant to the requirements of Section 13 or 15(d) of the
Securities
Exchange Act of 1934, the Registrant has duly caused this Annual Report
to
be signed on its behalf by the undersigned, thereunto duly authorized.

                                    GLOBAL CASINOS, INC.



Date:     10/14/97                  By:   /s/ Stephen G. Calandrella        
      ----------------                    -----------------------------
                                          Stephen G. Calandrella,
President

     

     Pursuant to the requirements of the 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 dates indicated.


Signature                                 Position               Date
---------                                 --------               ----


/s/ Stephen G. Calandrella          President, Director        10/14/97 
----------------------------                                   --------
Stephen G. Calandrella                        



/s/ Pete Bloomquist               Chief Financial Officer,     10/14/97   
---------------------------       Chief Accounting Officer,    --------
Pete Bloomquist                           Director



/s/ Gerald Jacobs                         Director             10/14/97   
---------------------------                                    --------
Gerald Jacobs



/s/ Clifford C. Thygesen                  Director             10/14/97   
---------------------------                                    --------
Clifford C. Thygesen