UNITED STATES

FORM 10-KSB

[ X ]  ANNUAL REPORT UNDER TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended June 30, 2003

[  ]  TRANSITION REPORT UNDER SECTION 13
OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934For the transition period from ____________ to ____________

Commission file number 0-15415

GLOBAL
CASINOS,
INC.             (Name of Small Business Issuer in its Charter)

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

5455 Spine Road, Suite C, Boulder, Colorado 80301(Address of principal executive
offices)           (Zip
Code)

Issuer's telephone number: (303) 527-2903

Securities registered under Section 12(b) of the Exchange
Act: None

Securities registered under Section 12(g) of the Exchange
Act: Common Stock, $.05 par value

Check whether the Issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the Issuer was required to file such reports), and
(2) has been subject to such filing requirements for the past 90
days.  Yes [ x ] No [  ]

Check if there is no disclosure of delinquent filers in
response to Item 405 of Regulation S-B contained in this form, and no disclosure
will be contained, to the best of Issuer'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 Issuer's revenues for the fiscal year ended June 30, 2003
were $2,770,073. As of September 29, 2003, the aggregate market value of the
Common Stock of the Issuer based upon the average bid and asked prices of such
Common Stock, held by non-affiliates of the Issuer was approximately $336,000.
As of September 29, 2003, there were 2,431,360 shares of Common Stock
outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

The Registrant incorporates by this reference the following:

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.                                      
| | 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.                                                                       
| | 12. | Incorporated by reference from the Company's Current Report on Form
      10KSB, dated October 7, 1997, as filed with the Commission on October 14,
      1997.                                                                   
| | 13. | Incorporated by reference from the Company's Amended Report on Form
      8-K, dated October 7, 1997, as filed with the Commission on October 14,
      1997.                                                                     
| | 14. | Incorporated by reference from the Company's Current Report on Form
      8-K, dated June 11, 1998, as filed with the Commission on June 15, 1998;
      as Amended June 11, 1998, and filed with the Commission on July 7, 1998. 
| | 15. | Incorporated by reference from the Company's Annual Report on Form
      10-KSB for the fiscal year ended June 30, 1998, as amended and filed with
      the Commission on December 23, 1998.                                     
| | 16. | Incorporated by reference from the Company's Current Report on Form 8-K
      as filed with the Commission on January 8, 1999, as amended on Current
      Report on Form 8-K/A as filed with the Commission on September 2, 1999.
| | 17. | Incorporated by reference from the Company's Current Report on Form 8-K
      dated December 30, 1999 as filed with the Commission on January 14, 2000.                                                                           

FORWARD LOOKING STATEMENTS

Certain statements
made in this Annual Report are "forward-looking statements" (within
the meaning of the Private Securities Litigation Reform Act of 1995) regarding
the plans and objectives of management for future operations. Such statements
involve known and unknown risks, uncertainties and other factors that may cause
actual results, performance or achievements of the Company to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements. The forward-looking statements made
in this Report are based on current expectations that involve numerous risks and
uncertainties. The Company's plans and objectives are based, in part, on
assumptions involving the growth and expansion of business. Assumptions relating
to the foregoing involve judgments with respect to, among other things, future
economic, competitive and market conditions and future business decisions, all
of which are difficult or impossible to predict accurately and many of which are
beyond the control of the Company. Although the Company believes that its
assumptions underlying the forward-looking statements are reasonable, any of the
assumptions could prove inaccurate and, therefore, there can be no assurance
that the forward-looking statements made in this Report will prove to be
accurate. In light of the significant uncertainties inherent in the
forward-looking statements made in this Report, the inclusion of such
information should not be regarded as a representation by the Company or any
other person that the objectives and plans of the Company will be achieved.

PART I

ITEM 1.

Overview

Global Casinos,
Inc. ("the Company", "Global Casinos", or
"Global") and its wholly owned subsidiaries operate in the domestic
gaming industry. The Company is organized as a holding company for the purpose
of acquiring and operating casinos, gaming properties, and other related
interests. Global was organized under the laws of the State of Utah on June 8,
1978.

As of June 30,
2003, Global had one operating subsidiary, which owns and operates the Bull
Durham Saloon & Casino ("Bull Durham") located in Black Hawk,
Colorado.

During the year
ended June 30, 2002, Global declared a stock dividend consisting of its
ownership interest in OnSource Corporation, a Delaware corporation ("OnSource").
OnSource had been formed by Global as a wholly owned subsidiary to facilitate
the transfer of certain assets to Global's shareholders.

Effective July 1,
2001, Global transferred to OnSource its interest in Global Alaska Industries
("Global Alaska"), a wholly owned subsidiary, and certain other
liabilities. Global established August 6, 2001 as the record date for
determining the shareholders entitled to receive the stock dividend. Global
stockholders will receive one share of OnSource common stock for every ten
shares of Global common stock beneficially owned as of August 6, 2001. OnSource
filed a registration statement with the U.S. Securities and Exchange Commission
("SEC") on September 26, 2002, registering the distribution of the
OnSource dividend. Amendments to the registration statement were filed on
January 13, 2003, April 16, 2003 and September 29, 2003. The shares of OnSource
will be distributed within ten days after the SEC declares the registration
statement effective, which is expected during the fourth calendar quarter of
2003. The shares of OnSource were transferred to a spin-off trust on June 13,
2002, pending completion of the distribution.

Global Alaska's
operations were conducted through its wholly owned subsidiary, Alaska Bingo
Supply, Inc. ("ABS"), an Alaska corporation. ABS is primarily engaged
in the distribution of a full line of products, supplies and equipment utilized
by licensed gaming organizations in the State of Alaska. Gaming in Alaska is
limited to qualified organizations (primarily non-profit groups and
municipalities) that operate bingo and pull-tabs games for fund raising
purposes. ABS also provides facilities management services to bingo hall
operators.

Description of Operations

Casinos U.S.A. - The Bull Durham

Background.
Casinos U.S.A. was acquired on November 19, 1993. Global Casinos acquired 100%
of the outstanding common stock of Casinos U.S.A., a Colorado corporation, and
Lincoln Corporation ("Lincoln") and Woodbine Corporation
("Woodbine"), both South Dakota corporations, in exchange for 253,500
shares of the Company's common stock. Lincoln and Woodbine operated the Last
Chance Saloon and Lillie's, respectively; both located in Deadwood, South
Dakota. The Company permanently closed the Last Chance Saloon on May 31, 1994
and Lillie's on June 30, 1995 due to unprofitable operations. Both Lincoln and
Woodbine are now inactive corporations.

In October 1995,
Casinos U.S.A. filed a voluntary petition under Chapter 11 of the United States
Bankruptcy Code as it was in default under all of its secured obligations
encumbering the Bull Durham Saloon and Casino. In January 1997, the Court
approved the Debtor's Second Amended Plan of Reorganization (the
"Plan"), and in February 1998 the bankruptcy was discharged upon being
fully administered.

Operations.
The Bull Durham is located approximately one hour from Denver, Colorado in the
mountain town of Black Hawk. The Company has operated The Bull Durham since
1993, soon after limited stakes gambling was legalized in Black Hawk in 1992.
The casino holds a retail liquor license issued by the State of Colorado and
offers limited food service in addition to beverages.

Presently, the
casino occupies approximately 7,200 square feet of space located at 110 Main
Street in Black Hawk, Colorado. Casinos U.S.A. owns the building in which the
Bull Durham operates, subject to three deeds of trust securing a total of
$2,125,000 in debt.

In October, 2002,
we removed four blackjack tables and replaced them with slot machines. As of
June 30, 2003, we operated 176 slot machines. Subsequent to June 30, 2003, we
added 5 machines, bringing the current configuration to 181 gaming devices.

New slot machine designs
are introduced every year by the equipment manufacturers.  Certain games
become more popular and older games tend to become less popular.  During
the past year, we replaced 38 machines.  The current popular trend is in the
"penny" and "nickel" machines.

The Bull Durham's
customer base consists primarily of day visitors from Denver. Many gamblers are
transported to Black Hawk on charter buses provided by the casinos. A city bus
stop is adjacent to the casino. During the past two years, we increased our
utilization of charter bus services. We contract certain bus companies to
transport guests to our casino from Denver and its surrounding communities.

As we do not have
parking facilities available for our customers, we rely totally on
"walk-in" traffic and charter bus traffic. This traffic declines
during the winter months when the weather deteriorates. We do not have a full
service restaurant. Some of our competitors provide extensive food service,
including Las Vegas style buffets. We have not yet installed "cashless
tickets" capability on our slot machines. This technology is new and has
not yet been embraced by gaming patrons in Colorado.

Bankruptcy Plan
of Reorganization. Under the terms of the Bankruptcy Plan of Reorganization
which was confirmed in 1997, the creditors holding the three deeds of trust
encumbering the Bull Durham property also held warrants exercisable to purchase
up to 80% of the equity securities of Casinos U.S.A. The warrants were
exercisable for nominal cost, but only in the event there occurs certain
triggering events, such as a sale of the property or a substantial refinancing.
If the debts underlying the deeds of trust are amortized and paid in full, the
warrants terminate. However, the existence of the warrants restricted the
Company's ability to undertake certain transactions without the consent of the
creditors. The warrants were waived under the terms of a debt restructuring that
become effective during FY 2003.

2002
Restructuring. Beginning in approximately April 2002, the Company engaged in
a series of meetings and discussions with the Colorado Division of Gaming
surrounding the then pending application to renew the gaming license covering
the Bull Durham. The Division of Gaming expressed concern that the Company's
directors and officers, Messrs. Jennings and Neuman, had other associations with
the Company's former directors, Messrs. Calandrella and Thygesen, the latter of
whom had been the subject of an Initial Decision by an Administrative Law Judge
of the Securities and Exchange Commission finding violations of federal
securities laws. Notwithstanding the fact that Messrs. Calandrella and Thygesen
had previously resigned from the Company, the Division of Gaming requested that
Messrs. Jennings and Neuman, neither of whom were subject to the SEC
administrative action, nevertheless resign as control persons of Casinos,
U.S.A., the company that owned the Bull Durham and to which the gaming license
would be issued.

Concurrently with
the discussions with the Division of Gaming, the Company entered into
discussions with Astraea Investment Management, L.P. ("Astraea") to
restructure the Company's financial and operational obligations. In July 2002,
The Company agreed to a term sheet ("Astraea Term Sheet") covering
various interrelated transactions more fully described below. Effective
September 17, 2002, the terms of the restructuring were finalized (the
"2002 Restructuring"), resulting in the following:

| | * | Astraea agreed to waive accrued and unpaid interest and
      fees under an unsecured $500,000 note (the "Astraea Unsecured
      Note").                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | * | Astraea agreed to extend the maturity date of the
      Astraea Unsecured Note to 2009, and to reduce the rate of interest thereon
      to four percent (4%) per annum.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | * | Astraea agreed that there would be a moratorium on
      payments on the Astraea Unsecured Note for 30 months.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | * | Global Casinos and Astraea agreed that the Astraea
      Unsecured Note would be assigned to and assumed by Casinos, U.S.A. and be
      secured by one hundred percent (100%) of the outstanding shares of common
      stock of Casinos, U.S.A. (which owns the Bull Durham) and a security
      interest in the tangible and intangible assets of Casinos, U.S.A.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | * | It was agreed that Global would continue to manage the
      Bull Durham for a management fee of $10,000 per month. Global Casinos has
      agreed to provide Astraea with certain financial reporting and inspection
      rights going forward.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | * | Astraea has agreed to restructure its two mortgage
      notes against the Bull Durham to provide for interest at the rate of seven
      percent (7%) with a thirty-year amortization and an extended maturity date
      to 2009. Astraea also agreed to defer installment payments on its two
      secured promissory notes to the extent of one hundred percent (100%) of
      each such installments until an aggregate deferral totaling $100,000 is
      reached, but in no event more than one (1) year. Deferred installment
      payments will be set aside and used for working capital purposes and
      capital expenditures at the Bull Durham which are approved by Astraea. Any
      expenses incurred by Astraea in connection with the restructure of the
      indebtedness will be added to the principal balances of its secured notes
      and repaid as part of the balloon payment at the maturity date of such
      note. Debt to third parties associated with the gaming equipment located
      at the Bull Durham has been restructured with the agreement of the vendor.
| | * | junior secured mortgage notes encumbering the Bull
      Durham would be restructured to bear interest at the rate of four percent
      (4%) per annum and amortized in a straight line over a term of thirty (30)
      years, with a seven-year balloon;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | * | All debt associated with gaming equipment located at
      the Bull Durham is required to be restructured to the satisfaction of
      Astraea.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | * | All shares of Casinos, U.S.A. preferred stock properly
      issued or issuable pursuant to an accounting to be mutually agreed upon by
      Global Casinos and Astraea in connection with the building expansion
      program undertaken by the Bull Durham shall be cancelled as part of the
      restructuring of Global Casinos.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | * | Global Casinos granted to Astraea an option exercisable
      after March 17, 2005 to purchase all of the issued and outstanding shares
      of common stock of Casinos, U.S.A. for a purchase price of $100. Global
      Casinos may redeem the option by paying to Astraea an amount sufficient to
      retire in full the $500,000 promissory note held by Astraea and assumed by
      Casinos, U.S.A. together with interest at the rate of twelve percent (12%)
      per annum.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | * | The Board of Directors of Casinos, U.S.A. was
      reconstituted to consist of persons approved by Astraea and the Colorado
      Division of Gaming, and the voting shares of Casinos, U.S.A. have been
      made subject to a voting agreement to enforce this agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | * | Arrangements have been made to restructure a note
      payable from the Bull Durham to Global Casinos to permit debt service by
      Global Casinos on a note held by a third party.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | * | The warrants to purchase shares of Casinos U.S.A. and
      the participation in net cash flow provided for under Casinos U.S.A.'s
      Chapter 11 Bankruptcy Plan of Reorganization were cancelled.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

The Astraea Term
Sheet providing for the foregoing was executed by an on behalf of Global
Casinos, Casinos U.S.A., Astraea and the holders of all subordinated mortgage
notes against the Bull Durham except for the holders of approximately $200,000
in subordinated mortgage notes. With respect to those junior lienholders, the
Company nevertheless began making revised payments based upon the restructured
interest rate and maturity date provided for in the Astraea Term Sheet in the
fourth quarter of 2002, without objection or protest on the part of the holders
of those subordinated mortgage notes. The Company takes the position that by
their acquiescence, those subordinated note holders are deemed to be bound by
the terms of the Astraea Term Sheet.

Regulation.
The Bull Durham began gaming operations in 1993 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.

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. Prior to November 1, 2002, Global held a
gaming license to operate the Bull Durham. Effective November 1, 2002, the
gaming license was transferred to Casinos, U.S.A., Inc., our subsidiary that
owns the Bull Durham, as part of an overall restructuring of our business
operations under the Astraea Term Sheet. This restructuring was undertaken, in
part, at the behest of the Division of Gaming.

Because the Company
is a publicly traded corporation, each of the officers, directors and
shareholders owning 5% or more of the equity interest prior to November 1, 2002,
had to be approved by the Colorado Division of Gaming. With the transfer of the
gaming license to Casinos, U.S.A., the officers and directors of that subsidiary
must be approved by the Division of Gaming. The criteria established in
determining the suitability to conduct such operations include financial
history, criminal record and character, in addition to satisfaction of
application procedures set forth in the existing regulations.

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 issuance 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 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 or more of
the Company's common stock must notify the Division of Gaming within ten 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. The same regulations apply to any person who becomes a
beneficial owner of more than ten percent of any other class of voting
securities of the Company.

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.

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 issuable to duly licensed and operating limited stakes
gaming casinos.

The beverage
license is revocable and non-transferable. Licensing authorities may limit,
condition, suspend or revoke the license. Violation of beverage laws or
regulations can result in loss of license and may constitute a criminal offense
punishable by fines, incarceration, or both.

Net profits derived
from the operations of the Company and its subsidiaries are subject to taxation
at the federal, state and local levels. The State of Colorado imposes a variable
gaming tax on "adjusted gross proceeds" ("AGP"), which
includes the total amount of all wagers made by players less all payments
received by such players. As revised in July 1999 the progressive tax rate
ranges from 0.25% on the first $2,000,000 of AGP to 20% on AGP in excess of
$15,000,000. Local governmental units assess real and personal property taxes on
the value of many assets, including land, building and gaming equipment. In
addition, the city of Black Hawk assesses "device fees" on each gaming
device utilized in a casino.

Competition.
Competition in the gaming industry in the United States is intense. There are
numerous competitors engaged in the same business as the Company, and the
Company's operations also compete with other forms of gaming activities, such as
Bingo, Lotto, table games, sports betting and pari-mutuel wagering. Competition
in Black Hawk, Colorado is particularly intense as competitors are in very close
proximity to the Company's operations. There are now 22 casinos operating in the
Black Hawk market. Additionally, there are 5 casinos located approximately one
mile west in Central City. The Bull Durham Casino is relatively small in
comparison to the other casinos in the market. There are currently 9,582 slot
machines in the Black Hawk market and 1,599 in the Central City market. The
9,582 slot machines represent a 13% increase in Black Hawk in the last year.
Based upon the number of slot machines in Black Hawk, The Bull Durham represents
only 1.9% of the market. The average win per device for the Bull Durham is less
then the average for all casinos in Black Hawk. As a result the Bull Durham net
win represents less than 1% of the market. The Bull Durham attempts to stay
competitive by providing personal customer service, innovative marketing
promotions and state-of-the-art gaming devices.

The 1991 referendum
that authorized gaming in Colorado limited casinos to three mountain towns,
Black Hawk, Central City, and Cripple Creek. There are two Native American
casinos in Colorado, both in the southwest region of the state. However, future
referendums could expand gaming to other locations. Other forms of legal gaming
in Colorado include lottery games, dog and horse racing, and bingo.

It is possible that
additional forms of gaming could be authorized. Colorado does not currently
allow video lottery terminals ("VLT"). VLT's are games of chance
similar to slot machines that generate a random set of numbers to be displayed
on a video screen. Winning bets are rewarded with a ticket that can be exchanged
for cash. An initiative to legalize VLT's is on the ballot for the November 2003
general election. If approved, the initiative will allow VLT's at five
racetracks, all located along the Colorado Front Range. The VLT's, if approved,
would be regulated by the Colorado Lottery, a regulatory body that is separate
from the Gaming Commission. VLT gaming could compete with slot machines

Seasonality.
Because the Bull Durham Casino is located in a small mountain community west of
Denver, it experiences its peak business during the summer months when weather
conditions are more favorable. The winter months tend to be substantially slower
when weather conditions reduce the amount of traffic through the town.

Global Central - Tollgate (discontinued)

Background.
Effective August 7, 1999, the Company entered a Lease and Option Agreement (the
"Lease") following which it leased the Tollgate Casino and Saloon in
Central City, Colorado. The Company obtained gaming and casino licenses and
opened the Tollgate for operation in August 1999. The Tollgate was closed
effective July 31, 2000 due to substantial operating losses.

Global Central also
engaged in the purchase and sale of marketable trading securities consisting
primarily of equity instruments. The Company terminated its trading activities
on April 1, 2002.

Employees

The Company's sole
executive officer is Frank L. Jennings, Chief Executive/Financial Officer.

The Bull Durham
operates with an on-site general manager. During fiscal 2003, the Bull Durham
employed a total of 36 people, including both full and part-time employees as
follows:

| |                    | Full-Time | Part-Time | Total Employees
| | ------------------ | --------- | --------- | ---------------
| | Bull Durham Casino | 26        | 10        | 36             

The company is not
part of any collective bargaining agreement. There have been no work stoppages
and the company believes its employee relations are good.

Intellectual Property

The Company does
not claim any intellectual property protection to any of its assets and does not
believe that intellectual property protection is material to its operations.

Consultants

Since July 1, 2001,
Gunpark Management LLC, has been providing us with certain management, clerical
and administrative services. Mr. Jennings, our Chief Executive/Financial
Officer, is a member of Gunpark Management LLC. Mr. Jennings and Gunpark
Management provide similar services to other companies. We are charged our
pro-rata share of the expenses associated with the services we receive.

ITEM 2.        DESCRIPTION
OF PROPERTY

Corporate Offices

The Company leases
approximately 4,200 square feet of space in Boulder, Colorado for use as its
corporate offices. The lease requires monthly payments of approximately $3,500
and expires in 2006.

Operating Subsidiaries

The facilities and
properties of the Company's operating facilities are more fully described in
Item 1 of this Report and are incorporated herein by this reference.

The Company
believes that each of its facilities is adequate for its intended purpose and
does not plan any significant investment in additional facilities during the
next year.

ITEM 3.        LEGAL
PROCEEDINGS

The Company and its
officers and directors are involved in the following material legal proceedings:

Securities and Exchange Commission

In the Matter of
Global Casinos, Inc. and William P. Martindale, Securities Act Release No.
33-7586, Exchange Act Release No. 34-40469 (September 24, 1998). On September
24, 1998, the Company and its former director, William P. Martindale,
voluntarily entered into a Voluntary Consent Decree with the Securities and
Exchange Commission, pursuant to which an Administrative Order was entered by
the Commission directing the Company and Mr. Martindale to cease and desist from
future anti-fraud violations of the federal securities laws.

Civil Litigation

Michael Jacobs
vs. Global Casinos, Inc. This matter was filed as a civil action, which has
been stayed pending mandatory arbitration. Mr. Jacobs was a former employee of
the Company in Dallas, Texas and is asserting claims for compensation for
services rendered while under the supervision of William P. Martindale at the
Company's then existing Dallas, Texas office. The Company has retained local
legal counsel and is vigorously defending the matter. The Company believes that
the likelihood of a material adverse outcome in this matter is remote.

Other Matters

Other Matters.
The Company customarily has numerous indebtedness and trade payables that have
matured and as to which the Company is currently in default. The Company
routinely engages in active dialog with each of its creditors, although from
time to time the Company is sued for collection.

At June 30, 2003
there were outstanding promissory notes held by non-affiliated third parties
totaling approximately $417,973 in principal and $417,418 in accrued and unpaid
interest. These notes are unsecured, fully matured, and in default. The Series A
preferred stock issued by Global contained a mandatory redemption requirement.
The Company is currently unable to redeem those outstanding shares in the amount
of $401,000 and is in default of that requirement. The Company has been unable
to pay the dividends on its Series C preferred stock and is in arrears in the
amount of $14,634. While the Company communicates with these creditors in an
effort to settle their claims, there can be no assurance that it will be
successful in these efforts.

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, 2003.

PART II

ITEM 5.
                 MARKET FOR COMMON EQUITY
          AND RELATED STOCKHOLDER MATTERS

The outstanding
shares of Common Stock are traded over-the-counter and quoted in the "pink
sheets" published by the OTC Electronic Bulletin Board 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, 2001 through September 30,
2003.

| |                  | Bid              | Ask  
| | ---------------- | ---------------- | -----
| |                  |                  | High 
| | 2002 Fiscal Year |                  |      
| |                  | July - Sept 2001 | $0.26
| |                  | Oct - Dec 2001   | 0.13 
| |                  | Jan - Mar 2002   | 0.21 
| |                  | Apr - June 2002  | 0.21 
| |                  |                  |      
| | 2003 Fiscal Year |                  |      
| |                  | July - Sept 2002 | $0.16
| |                  | Oct - Dec 2002   | 0.12 
| |                  | Jan - Mar 2003   | 0.10 
| |                  | Apr - June 2003  | 0.11 
| |                  |                  |      
| | 2004 Fiscal Year |                  |      
| |                  | July - Sept 2003 | $0.15

The bid and ask
prices of the Company's common stock as of September 29, 2003 were $.07 and
$.25, respectively, as reported on the Pink Sheets LLC. The Pink Sheet prices
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, 2003, there were approximately 735 record owners of the
Company's common stock and approximately 2,000 beneficial owners.

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
other than the OnSource spin-off dividend no dividends have been paid on common
stock 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.

|ITEM 6. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
      CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------------

Certain statements
in this Management's Discussion and Analysis of Financial Condition and Results
of Operations 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. The
following discussion and analysis should be read in conjunction with the
consolidated financial statements and notes thereto appearing elsewhere in this
report.

Results of Operations - Fiscal Year Ended June 30, 2003
Compared to the Fiscal Year Ended June 30, 2002

Casino
Operation. Total casino revenues for the year ended June 30, 2003 increased
by $81,693 or 3% to $2,770,073 from $2,688,380 in 2002. We attribute the
increased revenues to the increased number of slot machines in our casino. We
removed four Blackjack table games and replaced them with slot machines. We now
operate 181 slot machines, an increase of 34 over the prior year.

We operate a
limited food and beverage service incidental to the operation of the casino.
Food and beverage revenues approximated 2% of casino revenues in fiscal 2003 and
3% of casino revenues in fiscal 2002.

We continued to
reduce our casino operating costs, which were $2,333,540 in fiscal 2003 compared
to $2,410,325 in fiscal 2002, a decrease of $76,785 or 3%. The reduction
primarily resulted from our Bull Durham operations restructuring, whereby we
were able to reduce certain payroll costs by $188,000. The decrease is comprised
of the elimination of dealers and pit supervisors associated with table gaming.
We also saved $40,000 in table gaming supplies and expenses by eliminating the
blackjack tables. The cost reductions were partially offset by an increase in
marketing costs, primarily the $97,000 increase in direct mail program expenses
and the $26,000 increase in charter bus expense. All other operating expenses
increased by $30,000.

General and
Administrative.General and administrative expenses increased by $76,768,
from $139,517 in 2002 to $216,285 in 2003. During 2003, we incurred $20,000 of
expenses related to the Astraea debt restructuring. The remaining increase
consisted primarily of professional fees incurred in connection with the
spin-off of OnSource.

Other Items.
Interest expense declined to $223,806 in fiscal 2003 from $338,599 in 2002, a
decline of $114,793 or 34%. The reduction reflects the renegotiations of certain
debts to reduce interest expense and the normal expense reduction as outstanding
debt balances are reduced.

Our marketable
securities portfolio yielded a net gain of $125,000 in fiscal 2002. During 2002
we liquidated our securities portfolio and we do not expect to generate future
trading gains or losses.

Gain on asset
disposal in fiscal 2002 reflects the sale of our South Dakota property. The
South Dakota property had been the subject of an ownership dispute. Proceeds
from sale of the property were placed in escrow pending final resolution of the
dispute. All items were resolved in fiscal 2002 and the gain of $194,000 was
recognized.

During FY 2003, we
completed a restructuring of certain debts. This restructuring occurred late in
calendar year 2002 and is described in this report as the 2002 restructuring.
The aggregate gain of $493,941 is comprised of the waiver of accrued and unpaid
interest of $214,796 on a $500,582 note payable to an investment company and a
principal reduction of $279,145 agreed by two equipment suppliers.

During FY 2002, we
also recognized a net gain of $87,147 related to a restructuring of certain
debts. The holders of debt instruments with principal and interest balances
approximating $350,000 agreed to accept fixed monthly payments of $7,000
(including interest) and a reduction in the face amount of the debt. For
financial statement purposes, the transaction yielded a pre-tax gain of $132,147
less associated taxes of $45,000.

Discontinued
Operations. As previously announced, Global transferred certain assets and
liabilities to OnSource Corporation, a subsidiary formed by Global to facilitate
a spin-off of its Alaska operations to its shareholders. The transfer of assets
and liabilities to OnSource was effective July 1, 2001. Global declared a stock
dividend to all shareholders of record as of August 6, 2001, whereby Global's
shareholders are entitled to receive one share of OnSource for every ten shares
of Global's common stock owned by them. The accompanying financial statements
present the Alaska operations as discontinued operations for fiscal 2002.

During fiscal 2001,
we owned 100% of the Alaskan operations. Effective July 1, 2001, we transferred
our ownership interests to OnSource, our wholly owned subsidiary. Between July
1, 2001 and June 13, 2002, OnSource sold common shares to other parties,
reducing Global's ownership to 32%. On June 13, 2002, we transferred the
OnSource common stock owned by Global into a trust for the benefit of Global's
shareholders. Global's average ownership interest in OnSource for fiscal 2002
was 52.4%.

For the year ended
June 30, 2002, we reported a loss from discontinued operations of ($22,989),
representing 52.4% of OnSource's net loss of ($44,000).

Income taxes.
For tax purposes, Global has accumulated net operating losses aggregating
$7,781,000 available to offset future taxable income, if any. Taxable income
reported for 2003 has been offset by these NOL carryforwards. These net
operating losses can be carried forward for fifteen years. They will expire in
the years from 2009 to 2016. The Tax Reform Act of 1986 limits the utilization
of NOL carryforwards under certain circumstances. Therefore, the Company's
ability to fully utilize the carryforwards is not assured and this asset is not
reflected on the Company's balance sheet.

Liquidity and Capital Resources

Historically, cash
generated from operations has not been sufficient to satisfy working capital
requirements and capital expenditures. Consequently, the Company has depended on
funding through debt and equity financing to address these shortfalls. The
Company has also relied, from time to time, upon loans from affiliates to meet
immediate cash demands. There can be no assurance that these affiliates or other
related parties will continue to provide funds to the Company in the future, as
there is no legal obligation to provide such loans.

As of June 30, 2003
and for the year then ended, neither the Company nor its subsidiaries have
commercial bank credit facilities.

Consequently, we
believe that future cash needs must be internally generated through operations.
Cash flow at the Company's sole operating subsidiary has been sufficient to fund
operations at that subsidiary and we believe that cash flow will be sufficient
during the next twelve months to continue operation of the subsidiary. However,
operating cash flow is not expected to be sufficient to reduce the parent
company's debt posture or working capital deficiency. We do not expect to
generate sufficient funds to cover the deficiencies related to our debt in
default or other outstanding obligations. Should creditors initiate action
against us to collect upon their debts, it could have a material adverse effect
on our financial condition.

At June 30, 2003,
the Company continued to suffer from a lack of liquidity and working capital
deficit. Current assets were $557,343 compared to current liabilities of
$2,077,822 resulting in a working capital deficit of $1,520,479. This working
capital deficit, combined with the Company's history of losses from operations,
has led our independent auditors to qualify their audit opinion due to
substantial doubts about our ability to continue as a going concern.

The Company is in
default under several unsecured loans and loan agreements. The Company continues
to address debt currently in default by negotiating extensions and other
modifications to the terms of these debts and by conversion of debt to equity,
restructuring of amounts due and other payment terms. Management expects to
continue these negotiations into fiscal 2004.

In previous years,
the Company tried to offset its losses from operations with trading gains from
sales of its portfolio of marketable securities. During fiscal year 2002, the
Company terminated its marketable securities trading activity.

Current assets
increased from $428,009 at June 30, 2002 to $557,343 at June 30, 2003, a
increase of $129,334. Current assets increased because of increased cash flow
from operations. Current liabilities decreased from $2,313,046 at June 30, 2002
to $2,077,822 at June 30, 2003, a decrease of $235,221. The decrease resulted
primarily from the restructuring of certain debts that were in default.

Net cash provided
by operating activities increased by approximately $294,000, primarily because
if a net change in accounts payable balances of approximately $250,000.

Investing
activities used net cash of $104,342 in 2003 compared to providing $27,930 in
fiscal 2002. The net change of $132,272 is primarily explained by an increase in
capital expenditures to improve the Bull Durham. In addition to the 38 new and
used slot machines that we purchased during the year, we installed new carpet
and replaced the slot chairs.

The Company used
$174,199 in cash for financing activities during the year ended June 30, 2003
compared to $421,006 during 2002. The reduction resulted from the 2002 debt
restructuring.

As of June 30,
2003, there were 200,500 shares of Series A Convertible Preferred Stock that
remained outstanding. The preferred stock share is redeemable at a price of
$2.00 per share. The original offering comprised 1,406,250 units. Under the
original terms of the offering, the units were comprised of one share Series A
Redeemable Preferred Stock with a mandatory redemption date of May 31, 1995 and
one-half Class D common stock purchase warrant with an exercise price of $3.00
per share. On May 31, 1995, a majority of the preferred stock holders agreed to
waive the mandatory redemption in consideration for a lower conversion price
into common shares of $1.125 per share and lower warrant price of $0.50 per
share. Subsequently, 1,205,750 shares of preferred stock were converted. The
remaining outstanding Series A Redeemable Preferred Stock is in default of the
mandatory redemption feature. The conversion privileged originally included with
this unit have expired. None of the Class D warrants originally issued as part
of the unit remain outstanding.

As of June 30,
2003, there were 39,101 shares of Series C Preferred Stock that remained
outstanding. The stock has a stated value of $1.20 and is convertible into one
share of common stock. Holders of Series C preferred stock are entitled to vote
and to receive dividends at the annual rate of 7% based on the stated value per
share. The dividends are cumulative, with any outstanding unpaid dividends
bearing interest at an annual rate of 10%.

During the year
ended June 30, 2002, the holders of 448,070 shares of Series C Preferred Stock
exchanged their stock holdings for unsecured promissory notes with an aggregate
principal balance of $641,000, bearing interest at 7% per annum and maturing in
October 2003. All of these notes were assumed by OnSource Corporation.

As previously
disclosed, Astraea holds a $500,000 promissory note which under the 2002
Restructuring was assigned by Global Casinos to Casinos, U.S.A. and is currently
the obligation of Casinos, U.S.A. The principal amount of the note, together
with interest at the rate of 4% per annum, is due and payable in September 2009.
The note is secured by a pledge of 100% of the shares of Casinos, U.S.A. owned
by Global Casinos and the assets of Casinos U.S.A. Global Casinos has granted to
Astraea the option to purchase all of the shares of Casinos, U.S.A. owned by
Global Casinos for $100, exercisable any time after March 17, 2005. Global
Casinos can purchase the option from Astraea by repaying the principal and
interest due under the note. Global Casinos does not have the capital with which
to repay the note and does not anticipate being able to generate the capital
through operations. As a result, the only way that Global Casinos could purchase
the Astraea option by retiring the $500,000 promissory note would be through a
refinancing of its debt. There currently exist no agreements, understanding or
arrangements with respect to any such debt refinancing.

Further as part of
the 2002 Restructuring, Astraea as holder of the first two mortgages against the
Bull Durham agreed to a 12-month moratorium on monthly payments and to an
extension of the maturity date of those mortgages from 2004 to 2009. In
addition, junior mortgage holders holding all of the subordinated debt against
the Bull Durham except for the holders of approximately $200,000 in subordinated
mortgages also agreed to reduce the interest rate of their mortgage notes to 4%
per annum and agreed to extend the maturity date of those notes from 2004 to
2009. Since September 2002, the Company has been paying the holders of the
junior mortgages who did not agree to accept the Astraea Term Sheet on the basis
of the reduced interest rate and extended maturity date provided for in that
Term Sheet. Since that time, the holders of those junior mortgages have been
acquiescing and accepting the modified payment without objection. The Company
has taken the position that such acquiescence and acceptance without objection
constitutes a legally enforceable modification by estoppel.

The Company's
common stock is neither listed nor traded on NASDAQ or a national securities
exchange. Information about the Company's stock can be found at Pink Sheets LLC,
a quotation service that provides quotes, last-sale price, and volume
information in over-the-counter (OTC) securities.

Outlook

The Company
continues its efforts to formulate plans and strategies to address the Company's
financial condition and increase profitability. Management will continue to
address debt currently in default by negotiating with creditors to convert debt
to equity, extend maturity dates of debt, and accept reduced payment terms. The
Company will continue to explore acquisition opportunities and improve operating
efficiencies at its existing properties. Management believes that these plans
will result in increased liquidity and future profitability, however, there is
no assurance that management actions will achieve the desired results.

The Company has
streamlined its operations by closing unprofitable casinos and by transferring
ownership of Alaskan operations to OnSource Corporation. The Company's
operations consist solely of the Bull Durham. We believe this operation can be
self-sustaining. However, it is not expected to be sufficiently profitable to
relieve our debt posture or working capital deficiency. These conditions make it
unlikely that we could take advantage of future opportunities without a
significant capital infusion.

Subsequent to June
30, 2002, the Company completed a restructuring of certain debts and obligations
(the 2002 restructuring). Among other terms and conditions, the Company agreed
to grant an option to the senior creditor to purchase 100% of the common stock
of Casinos USA for $100. The option can be exercised any time after March 17,
2005. Global can redeem the option by paying in full the principal and interest
balance on the $501,000 promissory note. Global does not currently have the
capital resources to retire the $501,000 promissory note payable. It will
attempt to generate the funds internally or through a capital infusion. Should
it fail to retire the debt before March 17, 2005, the creditor will be able to
purchase Casinos USA, including the assets and operations of the Bull Durham for
$100. As the Bull Durham constitutes all of the Company's operations, such an
event would have a material adverse effect on the Company and its ability to
retire its obligations.

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, 2003                                                  
| | 3. | Audited Statements of Operations for the Years Ended
      June 30, 2003 and 2002          
| | 4. | Audited Statements of Stockholders' Equity for the
      Years Ended June 30, 2003 and 2002
| | 5. | Audited Statements of Cash Flows for the Years Ended
      June 30, 2003 and 2002          
| | 6. | Notes to Financial Statements                                                              

Report of Independent Auditors

Board of Directors and Shareholders
Global Casinos, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheet
of Global Casinos, Inc. and Subsidiaries as of June 30, 2003 and the related
consolidated statements of operations, stockholders' (deficit), and cash flows
for the years ended June 30, 2003 and 2002. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with auditing standards
generally accepted in the United States of America. Those standards require that
we plan and perform the audits 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 consolidated
financial position of Global Casinos, Inc. and Subsidiaries as of June 30, 2003,
and the consolidated results of their operations and their cash flows for the
years ended June 30, 2003 and 2002, in conformity with accounting principles
generally accepted in the United States of America.

The accompanying consolidated financial statements have been
prepared assuming that the Company will continue as a going concern. As
discussed in Note 2 to the financial statements, the Company has both working
capital and stockholder's deficiencies as of June 30, 2003. These conditions
raise substantial doubt about the Company's ability to continue as a going
concern. Management's plans in regard to these matters are also described in
Note 2. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

Stark Winter Schenkein & Co., LLP

Denver, Colorado
October 11, 2003

|GLOBAL CASINOS, INC. AND SUBSIDIARIES
      CONSOLIDATED BALANCE SHEETas of June 30, 2003
|-----------------------------------------------------------------------------------------
|                                                                                         
|                                                                                         
|CURRENT ASSETS                                                                           
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Land, building and improvements, and equipment:                                          
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Current liabilities:                                                                     
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Mandatory redeemable preferred stock  in default                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Long-term debt, less current portion                                                     
|                                                                                         
|Commitments and contingencies                                                            
|                                                                                         
|Stockholders' (deficit):                                                                 
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|See accompanying notes to the
      consolidated financial statements.                   
|                                                                                         
|GLOBAL CASINOS, INC. AND SUBSIDIARIES                                                    
|CONSOLIDATED STATEMENTS OF OPERATIONS                                                    
|for the years ended June 30, 2003 and 2002                                               
|                                                                                         
|                                                                                         
|                                                                                         
|Revenues:                                                                                
|                                                                                         
|                                                                                         
|Expenses:                                                                                
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Income from operations                                                                   
|                                                                                         
|Other income (expense):                                                                  
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Income before income taxes                                                               
|                                                                                         
|                                                                                         
|                                                                                         
|Income from continuing operations                                                        
|                                                                                         
|Discontinued operations:                                                                 
|                                                                                         
|                                                                                         
|                                                                                         
|Income before extraordinary item                                                         
|                                                                                         
|Extraordinary item:                                                                      
|                                                                                         
|Net income                                                                               
|                                                                                         
|Preferred dividends                                                                      
|Net income attributable to common stockholders                                           
|                                                                                         
|Earnings (loss) per common share - basic and diluted:                                    
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         

See accompanying notes to the consolidated financial
statements.



|GLOBAL CASINOS, INC. AND SUBSIDIARIES
      CONSOLIDATED STATEMENTS OF CASH FLOWSfor the years ended June 30, 2003 and
      2002
|---------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                 
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                                                            
|                                                                                                                                 
|                                                                                                                                 
|                                                                                                                                 
|                                                                                                                                 
|                                                                                                                                 
|                                                                                                                                 
|                                                                                                                                 
|                                                                                                                                 
|                                                                                                                                 
|                                                                                                                                 
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|                                                                                                                                 
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|                                                                                                                                 
|                                                                                                                                 
|                                                                                                                                 
|                                                                                                                                 
|                                                                                                                                 
|                                                                                                                                 
|                                                                                                                                 
|CASH FLOWS FROM INVESTING ACTIVITIES                                                                                             
|                                                                                                                                 
|                                                                                                                                 
|                                                                                                                                 
|                                                                                                                                 
|                                                                                                                                 
|                                                                                                                                 
|CASH FLOWS FROM FINANCING ACTIVITIES                                                                                             
|                                                                                                                                 
|                                                                                                                                 
|                                                                                                                                 
|Net increase (decrease) in cash                                                                                                  
|Cash at beginning of period                                                                                                      
|Cash at end of period                                                                                                            
|                                                                                                                                 
|SUPPLEMENTAL CASH FLOW INFORMATION:                                                                                              
|                                                                                                                                 
|                                                                                                                                 

|                                               |                                                                        |                                
|---------------------------------------------- | ---------------------------------------------------------------------- | -------------------------------
|SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND |                                                                        |                                
|FINANCING ACTIVITIES:                          |                                                                        |                                
|                                               | Debt issued in exchange for Series C preferred stock                   | $       
                    - 
|                                               | Equipment financing obligations                                        | $        
        127,605      
|                                               | Common stock issued in exchange for notes payable and accrued interest | $         
                   -
|                                               | Common stock issued in exchange for accrued wages                      | $         
                   -
|                                               | Capital contribution from transfer of net liabilities to an affiliate  | $         
                   -
|                                               | Accrued and unpaid dividends on preferred stock                        | $         
           3,284    
|                                               |                                                                        |                                

See accompanying notes to the consolidated financial
statements.

|GLOBAL CASINOS, INC. AND SUBSIDIARIES
      CONSOLIDATED STATEMENT OF STOCKHOLDERS' (DEFICIT)July 1, 2001 through June
      30, 2003
|-------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                     
|                                                                                                                                     
|                                                                                                                                     
|                                                                                                                                     
|                                                                                                                                     
|                                                                                                                                     
|Balance as of July 1, 2001                                                                                                           
|                                                                                                                                     
|OnSource stock dividend                                                                                                              
|Conversion
      of Series C preferred stock into notes payable                                                                      
|Common shares issued in exchange for debt                                                                                            
|Common shares issued for accrued wages                                                                                               
|Capital contribution by stockholder                                                                                                  
|Dividends on Series C preferred stock                                                                                                
|Net income                                                                                                                           
|                                                                                                                                     
|Balance as of June 30, 2002                                                                                                          
|                                                                                                                                     
|Dividends on Series C preferred stock                                                                                                
|Net income                                                                                                                           
|                                                                                                                                     
|Balance as of June 30, 2003                                                                                                          

See accompanying notes to the consolidated financial
statements.

GLOBAL CASINOS, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS

1.     ORGANIZATION AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES

Organization and Consolidation

Global Casinos, Inc. (the
"Company or "Global"), a Utah corporation, develops and operates
gaming casinos. The consolidated financial statements of the Company include the
accounts of the following wholly owned subsidiaries. All significant
inter-company accounts and transactions have been eliminated in consolidation.

> CASINOS USA, INC. ("Casinos USA"), 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.
>     GLOBAL CENTRAL CORPORATION, a Colorado corporation,
>     operated the Tollgate Saloon & Casino located in the limited stakes
>     gaming district in Central City, Colorado. The casino closed in July 2000.
>     The subsidiary's only activity between July 2000 and March 2002 involved
>     trading marketable securities. Since March 31, 2002, the subsidiary has been
>     inactive.

Use of Estimates and Assumptions

The preparation
of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods. Significant estimates included herein relate to the
recoverability of assets, the value of long-lived assets, the long-term
viability of the business, the future impact of gaming regulations, and future
obligations under various tax statutes. Actual results may differ from
estimates.

Risk Considerations

We operate in a
highly regulated environment subject to the political process. Our retail gaming
license is subject to annual renewal by the Colorado Division of Gaming. Changes
to existing statutes and regulations could have a negative effect on our
operations. The Colorado general election scheduled for November 2003 will
include a ballot initiative regarding video lottery terminals. Passage of the
initiative could have a material adverse effect on our operations.

Fair Value of Financial Instruments

Fair value
estimates discussed herein are based upon certain market assumptions and
pertinent information available to management. The Company's financial
instruments include accounts payable, accrued expenses, other current
liabilities and long-term debt. Except for long-term debt, the carrying value of
financial instruments approximated fair value due to their short maturities.

The carrying
value of long-term debt approximated fair value because stated interest rates on
these instruments are similar to quoted rates for instruments with similar
risks.

Cash and Cash Equivalents

Cash consists
of demand deposits and vault cash used in casino operations. The Company
considers all highly liquid investments with an original maturity of three
months or less to be cash equivalents. As of June 30, 2003, the Company had
deposits in excess of the Federal Deposit Insurance Corporation limit of
$100,000 at one financial institution. The balance in the Company accounts
totaled $230,211.

Inventories

Inventories primarily consist
of food and beverage supplies and are stated at the lower of cost or market.
Cost is determined by the specific-cost method.

Land, Building and Improvements, and Equipment

Land, building
and improvements, and equipment are carried at cost. Depreciation is computed
using the straight-line method over the estimated useful lives. The building is
depreciated over 31 years, and improvements and equipment are depreciated over
five to seven years.

Impairment of Long-Lived Assets

In accordance
with Statement of Financial Accounting Standards ("SFAS") No. 144, Accounting
for the Impairment or Disposal of Long-Lived Assets, the Company evaluates
its long-lived assets for impairment when events or changes in circumstances
indicate, in management's judgment, that the carrying value of such assets may
not be recoverable. Recoverability of assets to be held and used is measured by
a comparison of the carrying value to future undiscounted cash flows expected to
be generated by the asset. If such assets are considered impaired, the
impairment to be recognized is determined as the amount by which the carrying
value exceeds the fair value of the assets. The reported amount for assets to be
disposed represent the lower of either the carrying value or the estimated fair
value less the cost to sell.

On August 1, 1997, Global
Alaska acquired Alaska Bingo Supply from an individual. The acquisition was
recorded using the purchase accounting rules required by APB Opinion 16. The
purchase price consisted of a cash down payment of $400,000, a promissory note
of $4,000,000 due in monthly installments, and other costs and liabilities
assumed of $262,763, resulting in a total purchase price of $4,662,763. The
purchase price was allocated to the assets acquired based upon their fair market
value and included $1,770,9585 allocated to leasehold interests and contract
rights (the identifiable intangibles) and a residual goodwill value of
$2,164,504.

Revenues and profitability for
Alaska Bingo declined significantly after the acquisition. The Company evaluated
the carrying values of the identified intangibles and goodwill acquired in the
Alaska Bingo Supply transaction and determined that the value of those assets
had been impaired. Recognition of that impairment for accounting purposes was
recorded prior to the spin-off of OnSource (see Note 3.)

Revenue Recognition

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.
Marketable trading securities are accounted for on a trade date basis. Where
possible, realized gains and losses on the sales of marketable trading
securities are determined using the specific identification method. If the
specific identification method cannot be utilized, realized gains and losses are
determined using the first-in, first-out method.

Advertising Costs

The Company expenses all
advertising costs as they are incurred. Advertising costs were $19,855 and
$18,413 for the years ended June 30, 2003 and 2002, respectively.

Income Taxes

The Company
uses the liability method of accounting for income taxes. Accordingly, deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
assets and their respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax
rates resulting from new legislation is recognized in income in the period of
enactment. A valuation allowance is established against deferred tax assets when
management concludes that the "more likely than not" realization
criteria has not been met.

Earnings (Loss) Per Common Share

Earnings (or loss) per share
("eps") are calculated in accordance with the provisions of SFAS No.
128, Earnings Per Share. SFAS No. 128 requires the Company to
report both basic earnings per share, which is based on the weighted-average
number of common shares outstanding, and diluted earnings per share, which is
based on the weighted-average number of common shares outstanding plus all
dilutive potential common shares outstanding, except where the effect of their
inclusion would be anti-dilutive (i.e., in a loss period). Potentially dilutive
shares of 528,150 were not included in the calculation of diluted earnings per
share for the year ended June 30, 2003, as their inclusion would have been anti-dilutive.

Stock-Based Compensation

The Company accounts for
stock-based compensation in accordance with Statement of Financial Accounting
Standards ("SFAS") No. 123, Accounting for Stock-Based
Compensation. The provisions of SFAS No. 123 allow companies to either
expense the estimated fair value of stock options or to continue to follow the
intrinsic value method set forth in Accounting Principles Board Opinion 25, Accounting
for Stock Issued to Employees ("APB 25"), but disclose the pro
forma effects on net income (loss) had the fair value of the options been
expensed. The Company has elected to continue to measure compensation costs for
stock-based compensation as prescribed by APB 25 in accounting for its stock
option incentive plans.

Comprehensive Income

SFAS No. 130, Reporting
Comprehensive Income, established standards for reporting and display of
comprehensive income, its components and accumulated balances. For the years
ended June 30, 2003 and 2002, there were no differences between reported net
income and comprehensive income.

Derivative Instruments and Hedging Activities

SFAS No. 133, Accounting
for Derivative Instruments and Hedging Activities, established requirements
for disclosure of derivative instruments and hedging activities. During the
periods covered by the financial statements the Company did not have any
derivative financial instruments and did not participate in hedging activities.

Segment Information

The Company
currently operates in one business segment as determined in accordance with SFAS
No. 131, Disclosure about Segments of an Enterprise and Related Information.
The determination of reportable segments is based on the way management
organizes financial information for making operating decisions and assessing
performance. All operations are located in the United States of America.

Recent Pronouncements

In October 2001, the FASB issued
SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets.This statement replaces SFAS No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of.However,
it retains the fundamental provisions of SFAS No. 121 for recognition and
measurement of the impairment of long-lived assets to be held and used and for
measurement of long-lived assets to be disposed of by sale. This statement
applies to all long-lived assets, including discontinued operations, and
replaces the provisions of APB Opinion No. 30, Reporting Results of
Operations-Reporting the Effects of Disposal of a Segment of a Business,for
the disposal of segments of a business.  This statement requires that those
long-lived assets be measured at the lower of carrying amount or fair value less
cost to sell, whether reported in continuing operations or in discontinued
operations. The Company adopted this statement. (See Note 1- Impairment of
Long-Lived Assets.)

In June 2001,
the Financial Accounting Standards Board (FASB) issued SFAS No. 143, Accounting
for Asset Retirement Obligations, which addresses financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. The standard applies to legal
obligations associated with the retirement of long-lived assets that result from
the acquisition, construction, development and/or normal use of the asset. SFAS
No. 143 requires that the fair value of a liability for an asset retirement
obligation be recognized in the period in which it is incurred if a reasonable
estimate of fair value can be made. The fair value of the liability is added to
the carrying amount of the associated asset and this additional carrying amount
is depreciated over the life of the asset. The liability is accreted at the end
of each period through charges to operating expense. If the obligation is
settled for the other than the carrying amount of the liability, a gain or loss
is recognized on settlement. The provisions of this statement are effective for
fiscal years beginning after June 15, 2002. The adoption of SFAS No. 143 did not
have an impact on the results of operation or financial position.

In April 2002,
the FASB issued SFAS No. 145, Rescission of SFAS Nos. 4, 44 and 64; Amendment
of SFAS No. 13; and Technical Corrections, which is generally
effective for transactions occurring after May 15, 2002. Through the rescission
of SFAS Nos. 4 and 64, SFAS No. 145 eliminates the requirement that gains and
losses from extinguishments of debt be aggregated and, if material, be
classified as an extraordinary item net of any income tax effect. SFAS No. 145
made several other technical corrections to existing pronouncements that may
change accounting practices. The adoption of SFAS No. 145 did not have an impact
on the results of operations or financial position.

In June 2002,
the FASB issued SFAS No. 146, Accounting for Costs Associated with Exit or
Disposal Activities. SFAS No. 146 is effective for exit or disposal
activities that are initiated after December 31, 2002. This Statement addresses
financial accounting and reporting for costs associated with exit or disposal
activities and nullifies EITF Issue No. 94-3, Liability Recognition for
Certain Employee Termination Benefits and other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring). The adoption of SFAS
No. 146 did not have a material impact on the results of operations or financial
position.

In November
2002, FASB Interpretation No. 45, Guarantor's Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of
Others (FIN 45), was issued. The accounting recognition provisions of FIN 45
are effective January 1, 2003 on a prospective basis. They require that a
guarantor recognize, at the inception of a guarantee, a liability for the fair
value of the obligation undertaken in issuing the guarantee. Under prior
accounting principles a guarantee would not have been recognized as a liability
until a loss was probable and reasonably estimable. As FIN 45 only applies to
prospective transactions, it is difficult to determine the impact, if any, that
adoption of the accounting recognition provisions of FIN 45 would have on the
future financial position or results of operations.

In December
2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
Compensation-Transition and Disclosure--an amendment of FASB Statement No. 123.SFAS
No. 148 amends SFAS No. 123, Accounting for Stock-Based Compensation, to
provide alternative methods of transition for a voluntary change to the fair
value based method of accounting for stock-based employee compensation. In
addition, this Statement amends the disclosure requirements of Statement 123 to
require prominent disclosures in both annual and interim financial statements
about the method of accounting for stock-based employee compensation and the
effect of the method used on reported results. The amendments to Statement 123
contained in SFAS No. 148 are effective for financial statements for fiscal
years ending after December 15, 2002. The Company does not currently anticipate
adopting the disclosure
requirements of SFAS No. 148.

In January of
2003, the FASB issued Interpretation No. 46, Consolidation of Variable
Interest Entities, an Interpretation of ARB No. 51 (FIN 46), which requires
the consolidation of certain variable interest entities, as defined. FIN 46 is
effective immediately for variable interest entities created after January 31,
2003, and on July 1, 2003 for investments in variable interest entities acquired
before February 1, 2003; however, disclosures are required currently if a
company expects to consolidate any variable interest entities. The Company does
not have investments in any variable interest entities, and therefore, the
adoption of FIN 46 is not expected to have an impact on the results of
operations, financial position or cash flows.

In April 30,
2003, the FASB issued SFAS No. 149, Amendment of Statement No. 133 on
Derivatives Instruments and Hedging Activities. The Statement amends and
clarifies accounting for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities under SFAS
No. 133. This Statement is effective for contracts entered into or modified
after June 30, 2003, except as stated below, and for hedging relationships
designated after June 30, 2003. The guidance should be applied prospectively.
The provisions of this Statement that relate to Statement No. 133 Implementation
Issues that have been effective for fiscal quarters beginning prior to June 15,
2003, should continue to be applied in accordance with the respective effective
dates. In addition, certain provisions relating to forward purchases or sales of
"when-issued securities" that do not yet exist, should be applied to
existing contracts as well as new contracts entered into after June 30, 2003.
The adoption of this standard did not have an impact on the consolidated
financial statements.

In May 2003,
the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments
with Characteristics of Both Liabilities and Equities, which establishes
standards for how an issuer classifies and measures certain financial
instruments with characteristics of both liabilities and equities. SFAS No. 150
applies specifically to a number of financial instruments that issuers have
historically presented in their financial statements as equity, or between the
liabilities and equity sections of the balance sheet, rather than as
liabilities. Generally, SFAS No. 150 is effective for financial instruments
issued or modified after May 31, 2003 and is otherwise effective for interim
periods beginning after June 15, 2003. The adoption of SFAS No. 150 caused the
Company to reclassify certain mandatory redeemable preferred stock to current
liabilities.

2.      GOING CONCERN

The accompanying
financial statements have been prepared assuming that the Company will continue
as a going concern. Although the Company reported net income for the year ended
June 30, 2003, it had net losses for several of the last fiscal years and has
suffered from a lack of working capital. As of June 30, 2003, it had an
accumulated deficit of $12,763,525 and a working capital deficiency of
$1,520,479. The Company is in default on various loan agreements, is delinquent
on payments to certain creditors and has ceased operating all but one of its
casinos. These conditions raise substantial doubt about the Company's ability to
continue as a going concern.

The Company
continues its efforts to formulate plans and strategies to address its financial
condition and increase profitability. Operating expenses have been reduced and
management will continue to address debt currently in default by negotiating
with creditors to convert debt to equity, extend maturity dates and reduce
payment amounts. The Company continues to explore methods to increase
profitability; however, there can be no assurances that management will be
successful in their efforts.

The financial
statements do not include any adjustments to reflect the possible future effects
on the recoverability and classification of assets or the amounts or
classification of liabilities that may result from the possible inability of the
Company to continue as a going concern.

3.     ONSOURCE CORPORATION AND
DISCONTINUED OPERATIONS

OnSource
Corporation ("OnSource"), a Delaware corporation, was organized by
Global as a wholly owned subsidiary. The Company formed OnSource to affect a
spin-off of its Alaska operations. Global transferred its ownership of the
Alaskan operations to OnSource effective July 1, 2001. Global declared a stock
dividend under which Global shareholders would receive their pro-rata share of
OnSource common stock.

Global
established August 6, 2001 as the record date for determining the shareholders
entitled to receive the stock dividend. Global stockholders will receive one
share of OnSource common stock for every ten shares of Global common stock
beneficially owned as of August 6, 2001. On June 13, 2002, the shares of
OnSources owned by Global were transferred into a spin-off trust for the benefit
of Global's shareholders. OnSource has filed the appropriate registration
documents with the US Securities and Exchange Commission ("SEC") such
that the shares of OnSource can be freely traded. Upon receipt of approval from
the SEC, the OnSource shares will be distributed from the trust to the
shareholders.

Effective July
1, 2001, Global transferred to OnSource its interest in Global Alaska Industries
("Global Alaska"), a wholly owned subsidiary.

The following is a
summarized listing of items transferred to OnSource:

| | Cash                             | $     53,000 
| | -------------------------------- | -------------
| | Trade receivables                | 159,000      
| | Inventory                        | 311,000      
| | Property and equipment           | 93,000       
| | Other assets                     | 32,000       
| | Total assets of Global Alaska    | 648,000      
| | Liabilities of Global Alaka      | (2,762,000)  
| | Net liabilities of Global Alaska | (2,114,000)  
| | Promissory notes payable         | (641,000)    
| | Net value of items transferred   | $ (2,755,000)

Since the liabilities assumed
by OnSource exceeded the assets transferred to OnSource, the net effect of the
transfer was recorded as additional paid-in capital of approximately $2,755,000.

For accounting
purposes, Global has determined that its Alaska operations should be presented
as discontinued operations. Furthermore, the operating results of Global for the
year ended June 30, 2002 should include the pro-rata portion of OnSource owned
by Global during the period. Global's ownership interest in OnSource terminated
on June 13, 2002, the day that the OnSource shares were transferred into trust.
Global's pro-rata ownership of OnSource for the year ended June 30, 2002 was
52.4% primarily because OnSource issued common stock to investors in addition to
Global.

Summarized
operating information of Global Alaska for the year ended June 30, 2002 is
presented below.

|                            |  | June 30, 2002 | 
|--------------------------- |  | ------------- | 
|Revenues                    |  | $2,301,000    | 
|Cost of Revenues            |  | 1,231,000     | 
|Gross profit                |  | 1,070,000     | 
|Operating expenses          |  | 912,000       | 
|Interest expense            |  | 202,000       | 
|Net income (loss)           |  | (44,000)      | 
|Global's pro-rata ownership |  | 52.4%         | 
|Discontinued operations     |  | $   (23,000)  | 

4.     MARKETABLE SECURITIES TRADING ACTIVITIES

Until March 31,
2002, Global actively traded marketable securities. The net realized and
unrealized gains (and losses) were included in earnings.

On April 1,
2002, the Company transferred their portfolio of marketable securities along
with related assets and liabilities to a shareholder. The transfer was made to
satisfy amounts due to the shareholder. On the date of the transfer the fair
market value of the portfolio was $67,000. The liabilities and amounts due to
the shareholder aggregated $201,000. The net effect of the transfer has been
recorded as an additional contribution to capital in the amount of approximately
$134,000.

The gross
realized gains on sales of marketable securities were $124,853 in 2002 and the
gross proceeds from the sale of marketable securities were $856,097 in 2002.

5.     GAIN FROM DEBT RESTRUCTURING

During the year
ended June 30, 2003, the Company finalized restructuring certain long-term
obligations. An investment company, holding a note with a principal balance of
$500,582 agreed to waive accrued and unpaid interest in the amount of $214,796.
Two equipment suppliers holding debt with an aggregated principal balance of
$356,525 agreed to reduce the balance to $77,380, resulting in a gain of
$279,145.

During the year
ended June 30, 2002, the Company reached an agreement with a note holder to
decrease the face amount of a promissory note. The restructuring resulted in an
extraordinary gain of $87,147, net of income tax benefit of $45,000.

6.     NOTES PAYABLE AND
LONG-TERM DEBT

At June 30, 2003, notes payable and
long-term debt consisted of the following:

|Installment Notes Payable: |                                                                                                                                                                                                                                                                                                                                                                     
|-------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                           | Installment notes payable to private lenders, bearing interest at prime
      plus 2% (6.5% at June 30, 2003), due in monthly installments approximating
      $5,000 through 2004.                                                                                                                                                                                 
|                           | Installment notes payable to equipment suppliers, bearing interest at
      various rates from 4% to 12%, due in monthly installments approximating
      $16,000, through 2004.                                                                                                                                                                                    
|                           | Sub-total                                                                                                                                                                                                                                                                                                                                                           
|Mortgages Payable:         |                                                                                                                                                                                                                                                                                                                                                                     
|                           | Senior mortgages payable to an investment company, collateralized by
      real estate, interest at 7%, monthly payments of $6,768 through September
      2009. Final payment of $943,000.                                                                                                                                                                         
|                           | Junior mortgages payable to private lenders, collateralized by real
      estate, interest at 4%, monthly payments of $4,723 through September 2009.
      Final payment of $956,000.                                                                                                                                                                               
|                           | Sub-total                                                                                                                                                                                                                                                                                                                                                           
|Investment Company Debt:   |                                                                                                                                                                                                                                                                                                                                                                     
|                           | Note payable to an investment company, collateralized by the Company's
      interest in Casino USA, interest at 4%. Due in September 2009.                                                                                                                                                                                                                         
|Debt in Default:           |                                                                                                                                                                                                                                                                                                                                                                     
|                           | Unsecured convertible notes, in default, default interest at 12%. Notes
      are convertible in whole or in part, at the option of the holder, 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.
|                           | Unsecured loans, interest at 10% to 15%, in default.                                                                                                                                                                                                                                                                                                                
|                           | Sub-total                                                                                                                                                                                                                                                                                                                                                           
|                           | Total Notes payable and long-term debt                                                                                                                                                                                                                                                                                                                              
|                           | Less current portion of notes payable and long-term debt                                                                                                                                                                                                                                                                                                            
|                           | Less debt in default                                                                                                                                                                                                                                                                                                                                                
|                           | Long-term debt, net                                                                                                                                                                                                                                                                                                                                                 

Scheduled maturities of notes
payable and long-term debt for the years ending June 30 are as follows:

| |  |  | 2004       |  | $   675,213
| |  |  | ---------- |  | -----------
| |  |  | 2005       |  | 37,265     
| |  |  | 2006       |  | 34,191     
| |  |  | 2007       |  | 35,963     
| |  |  | Thereafter |  | 2,495,447  
| |  |  | Total      |  | $ 3,278,079
| |  |  |            |  |            

During the year
ended June 30, 2003, the Company entered into installment note agreements with
two equipment suppliers for the acquisition of gaming equipment having an
aggregate purchase price of $127,605. The notes bear interest at rates ranging
from 4% to 12% and have terms ranging from six months to twelve months. The
equipment suppliers retain a security interest in the gaming equipment until the
notes are paid in full.  These notes are included in the preceding tables
under the caption "Installment notes payable to equipment suppliers"
with a balance of $174,836 at June 30, 2003.

During the year
ended June 30, 2003, the Company finalized a restructuring of certain notes
payable and long-term debt (the "2002 Restructuring"). The Term Sheet
providing for the foregoing was executed by Global Casinos, Casinos USA, and the
holders of all debt instruments except for the holders of approximately $200,000
in subordinated mortgage notes. With respect to those junior leinholders, the
Company nevertheless began making revised payments based upon the restructured
interest of those subordinated mortgage notes. The Company takes the position
that by their acquiescence, those subordinated note holder are deemed to be
bound by the terms of the Term Sheet.

7.     STOCKHOLDERS' (DEFICIT)

Preferred Stock

The Company has authorized
10,000,000 shares of preferred stock. These shares may be issued in series with
such rights and preferences as may be determined by the Board of Directors.

Series A Convertible Redeemable
Preferred Stock

The Company's
Board of Directors has authorized 2,000,000 shares of $2.00 stated value, Series
A Preferred Stock. The preferred stock has a senior liquidation preference value
of $2.00 per share. It does not bear dividends. It contains a mandatory
redemption feature that required the Company to redeem the outstanding stock on
May 31, 1995 at a rate of $2.00 per share. On May 31, 1995, a majority of the
preferred stockholders agreed to waive the mandatory redemption in consideration
for a lower conversion price into common shares at $1.125 per share.
Subsequently, holders of 1,205,750 shares of Series A preferred stock converted
their holdings into common stock. The remaining 200,500 outstanding shares of Series A
preferred stock are held by owners who chose not to participate in the revised
offer. The Company is in default of the mandatory redemption feature of the
outstanding shares. The conversion privileges originally included with the stock
have expired.

Series B Convertible Redeemable
Preferred Stock

The Company's
Board of Directors has authorized 400,000 shares of $10.00 stated value, Series
B Convertible Preferred Stock. Each share of Series B preferred stock is
convertible into one share of the Company's common stock or may be redeemed at
an exercise price of $10.00 per share. In addition, the Series B shares have a
junior liquidation preference of $10.00 per share. Holders of the Series B
preferred stocks are entitled to receive an annual dividend payable at the rate
of 8% per annum, which is cumulative, and unpaid dividends bear interest at an
annual rate of 12%.

On June 30,
2001, all outstanding shares of Series B preferred stocks were converted into a
promissory note payable with a principal balance of $2,385,000. The promissory
note was transferred to OnSource Corporation effective July 1, 2001.

Series C Convertible Preferred
Stock

In January
1999, the Board of Directors of the Company ratified the issuance of Series C
preferred stock. The Company has authorized 600,000 Series C shares with a
stated value of $1.20 per share. Series C shares are convertible into common
stock at a rate of $1.20 per share. Holders of Series C preferred stock are
entitled to vote and to receive dividends at the annual rate of 7% based on the
stated value per share. In addition, the holders of Series C preferred stock are
entitled to participate, pro rata, in dividends paid on outstanding shares of
common stock. The dividends are cumulative and unpaid dividends bear interest at
an annual rate of 10%.

Effective
October 1, 2001, holders of 448,070 outstanding shares of Series C preferred
stock agreed to exchange their Series C shares and their cumulative unpaid
dividends and interest for promissory notes with an aggregate principal balance
of $640,941. They further agreed that the promissory notes would be transferred
to OnSource as part of the spin-off. As of June 30, 2003, there were 39,101
Series C preferred shares outstanding. The aggregate value of cumulative
preferred dividends in arrears was $14,643, or $0.37 per share.

Common Stock

The Company has
authorized 50,000,000 shares of $0.05 par value common stock.

During the year
ended June 30, 2002, two creditors agreed to convert the amounts owed to them
into shares of common stock. The debt instruments were promissory notes, bearing
interest at 9% to 12%, with an aggregate principal balance of $87,000, plus
accrued and unpaid interest of $15,401. The Company did not have the ability to
repay these promissory notes in accordance with the terms. In exchange for the
debt, the Company issued 205,000 shares of its common stock.

During the year
ended June 30, 2002, the Company reached final resolution in its dispute
regarding compensation owed to its former President. The Company had previously
recorded a liability of $46,580 related to this dispute. As final settlement,
the Company agreed to issue 80,000 shares of its common stock.

During the year
ended June 30, 2002, the Company transferred all of the assets and liabilities
of Global Central Corporation to a shareholder in exchange for forgiveness of
debt. The Company recorded a capital contribution of $133,693, which represents
the excess of debt forgiven over net assets transferred to the shareholder.

Warrants To
Purchase Common Stock

In October
1996, in connection with a private placement of convertible debt, the Company
issued 126,050 Class E Warrants, exercisable at $6.00 per share; 126,050 Class F
Warrants, exercisable at $7.00 per share; and 126,050 Class G Warrants,
exercisable at $8.00 per share. The Class, E, F and G warrants expire 30, 60 and
90 days after the effective registration of the underlying common shares with the
SEC.

8.     COMMITMENTS AND CONTINGENCIES

Leases

The Company leases
approximately 4,200 square feet of space used as its corporate offices. The
lease requires monthly payments of approximately $3,500 and terminates in July,
2006. A portion of the space is subleased to other companies.

Minimum lease payments for
future fiscal years are as follows:

| |  |  | 2004 |  |       | $41,000 
| |  |  | ---- |  | ----- | --------
| |  |  | 2005 |  |       | 42,000  
| |  |  | 2006 |  |       | 43,000  
| |  |  | 2007 |  |       | 4,000   
| |  |  |      |  | Total | $130,000

Rent expense for each of the
years ended June 30, 2003 and 2002, was approximately $14,000.

Option to Purchase Casinos USA

Among other terms
and conditions, the Company agreed to grant an option to the senior creditor to
purchase 100% of the common stock of Casinos USA for $100. The option can be
exercised any time after March 17, 2005. Global can redeem the option by paying
in full the principal and interest balance on the $500,582 promissory note.
Global does not currently have the capital resources to retire the promissory
note payable. It will attempt to generate the funds internally or through a
capital infusion. Should it fail to retire the debt before March 17, 2005, the
creditor will be able to purchase Casinos USA, including the assets and
operations of the Bull Durham for $100. As the Bull Durham constitutes all of
the Company's operations, such an event would have a material adverse effect on
the Company and its ability to retire its obligations.

Securities and Exchange Commission

On September
24, 1998, the Company and a former director entered into a voluntary consent
decree with the Securities and Exchange Commission, pursuant to which an
administrative order was entered by the Commission directing the Company and the
former director to cease and desist from anti-fraud violations of the federal
securities laws in the future.

On June 1,
1998, the Commission brought an administrative proceeding against a related
party and certain of its directors, alleging certain violations of federal
securities laws. Two of the individuals were also directors of the Company, who
subsequently resigned as directors of Global. The matters at issue in the
administrative proceeding do not involve the Company and management does not
believe that it will have a material adverse effect. Nevertheless, the
proceeding involves two of the Company's prior directors and the ultimate
outcome of this matter is uncertain.

Litigation

The Company
entered into a lawsuit in 1999 with the mortgage holders of the land and
building in Deadwood, South Dakota against a former director of the Company. The
Company believed that it acquired the property in its acquisition of Woodbine
Corporation from the former director and others in 1993, and consequently made
payments in the total amount of $118,000 towards the assumed mortgage. The
Company subsequently discovered that Woodbine Corporation had no direct or
indirect ownership of the property, but rather the former director held the
property under an installment land sale contract. The former director has been
joined in the litigation as the result of his refusal to transfer his interest
in the installment land sale contract to the Company. Amounts advanced under the
assumed mortgage were expensed at the onset of the litigation. The Company
entered into an agreement with the mortgage holders to receive $200,000 from the
sale of the property subsequent to foreclosure. During the year ended June 30,
2002, the Company resolved all remaining disputes related to this property and
received it's share of proceeds from the sale. The Company recognized a gain of
$194,000 on the transaction.

9.     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 operate.

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. Deferred tax assets are comprised mainly
of net operating loss carry-forwards.

The
reconciliation between the statutory federal tax rate and the effective tax rate
as a percentage is as follows:

| |                                            |  | 2003 |  | 2002
| | ------------------------------------------ |  | ---- |  | ----
| | Statutory federal income tax rate          |  | 34%  |  | 34% 
| | Effect of net operating loss carry-forward |  | (34) |  | (34)
| |                                            |  | -%   |  | -%  

At June 30,
2003, the Company had net operating loss carry forwards of approximately
$7,781,000 available to reduce future taxable income. The net operating loss
carry forwards expire in the years ending June 30 as follows:

| | 2009 |  |  |  | $1,888,000
| | ---- |  |  |  | ----------
| | 2010 |  |  |  | 1,217,000 
| | 2011 |  |  |  | 518,000   
| | 2012 |  |  |  | 790,000   
| | 2013 |  |  |  | 1,985,000 
| | 2014 |  |  |  | 316,000   
| | 2015 |  |  |  | 985,000   
| | 2016 |  |  |  | 82,000    
| |      |  |  |  | $7,781,000

When more than
a 50% change in ownership occurs, over a three-year period, as defined, the Tax
Reform Act of 1986 limits the utilization of net operating loss (NOL) carry
forwards in the years following the change in ownership. Therefore, the
Company's utilization of its NOL carry forwards may be partially reduced as a
result of changes in stock ownership. No determination has been made as of June
30, 2003, as to what implications, if any, there will be in the net operating
loss carry forwards of the Company. The deferred tax asset of approximately
$2,600,000 related to the operating loss carryforward has been fully reserved at
June 30, 2003.

10.     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 150,000 shares of
common stock for issuance under these Plans. The options expire five years from
the date of grant or upon termination of employment.

SFAS 123 requires
the Company to provide pro forma information regarding net income and earnings
per share as if compensation cost for the Company's stock option plans had been
determined in accordance with the fair value based method prescribed in SFAS
123. The fair value of the option grants is estimated on the date of grant
utilizing the Black-Scholes option pricing model with the following weighted
average assumptions for grants during the years ended June 30, 2003 and 2002:
expected life of options of 4 years, expected volatility of 168%, risk-free
interest rate of 2% and no dividend yield. The weighted average fair value at
the date of grant for options granted during the years ended June 30, 2003 and
2002 approximated $0.03 and $0.11 per option. These results may not be
representative of those to be expected in future years.

A summary of stock
option activity is as follows:

| |               |  |  |  |          | Weighted | Weighted | 
| | ------------- |  |  |  | -------- | -------- | -------- | 
| |               |  |  |  | Number   | average  | average  | 
| |               |  |  |  | of       | exercise | fair     | 
| |               |  |  |  | shares   | price    | value    | 
| | Balance at    |  |  |  |          |          |          | 
| | June 30, 2001 |  |  |  | 98,000   | $  1.95  |          | 
| | Granted       |  |  |  | 50,000   | $   .15  | $   .11  | 
| | Forfeited     |  |  |  | (48,000) | $  3.75  |          | 
| | Balance at    |  |  |  |          |          |          | 
| | June 30, 2002 |  |  |  | 100,000  | $   .14  |          | 
| | Granted       |  |  |  | 50,000   | $   .13  | $   .03  | 
| | Balance at    |  |  |  |          |          |          | 
| | June 30, 2003 |  |  |  | 150,000  | $   .13  |          | 

The following table summarizes information about fixed-price
stock options at June 30, 2003:

| |          |  | Outstanding |             |           | 
| | -------- |  | ----------- | ----------- | --------- | 
| |          |  | Weighted    | Weighted    | Weighted- | 
| |          |  | Average     | Average     | Average   | 
| | Exercise |  | Number      | Contractual | Exercise  | 
| | Prices   |  | Outstanding | Life        | Price     | 
| | $0.13    |  | 100,000     | 3.5 years   | $0.13     | 
| | $0.15    |  | 50,000      | 4.2 years   | $0.15     | 
| |          |  | 150,000     |             |           | 

The following
pro forma net income and earnings per share for 2003 and 2002 would result had the
Company's compensation cost been determined using the fair value based
accounting provisions of SFAS No. 123:

| |                              | 2003     |  | 2002     | 
| | ---------------------------- | -------- |  | -------- | 
| | Net Income reported          | $490,383 |  | $236,909 | 
| | Net Income pro forma         | $488,883 |  | $231,409 | 
| | Earnings per share reported  | $0.20    |  | $0.09    | 
| | Earnings per share pro forma | $0.20    |  | $0.09    | 

11.     401(k) SAVING AND PROFIT SHARING PLAN

On July 1,
1997, the Company started a Retirement Savings and Investment Plan (the
"401(k) Plan") for its employees that is intended to qualify under
Section 401(k) of the Internal Revenue Code. Qualified employees may participate
in the Company's 401(k) Plan by contributing up to 10% of their gross earnings
to the plan, subject to certain Internal Revenue Code restrictions. The Company
matches an amount equal to 100% of each participant's contribution up to a
maximum of 5% of their earnings. Company contributions for the years ended June
30, 2003 and 2002 were $13,620 and $16,965, respectively.

12.     RELATED PARTY TRANSACTIONS

An officer and
director operates a professional services firm that provides certain management,
accounting, and administrative services to the Company and to other clients.
During the years ended June 30, 2003 and 2002, his firm billed for services
performed in the amounts of $52,921 and $89,113 respectively.

A director
operates a law firm that provides legal services to the Company and other
clients. During the years ended June 30, 2003 and 2002, his firm billed for
services performed in the amounts of $40,463 and $32,858, respectively. The
balance due to the director was $111,750 at June 30, 2003.

During the year
ended June 30, 2002, the Company transferred its portfolio of marketable trading
securities and certain related assets and liabilities to a shareholder in full
satisfaction of all outstanding obligations to the shareholder. See Note 4.

|ITEM 8. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
      ACCOUNTING AND FINANCIAL DISCLOSURE
|------- | ------------------------------------------------------------------------------------------

None

|ITEM 8A. | CONTROLS AND PROCEDURES
|-------- | -----------------------

Frank L. Jennings,
Principal Executive and Financial Officer of Global Casinos, Inc., has
established and is currently maintaining disclosure controls and procedures for
the Company. The disclosure controls and procedures have been designed to ensure
that material information relating to the Company is made known to him as soon
as it is known by others within the Company.

Our Principal
Executive and Financial Officer conducts an update and a review and evaluation
of the effectiveness of the Company's disclosure controls and procedures and has
concluded, based on his evaluation within 90 days of the filing of this Report,
that our disclosure controls and procedures are effective for gathering,
analyzing and disclosing the information we are required to disclose in our
reports filed under the Securities Exchange Act of 1934. There have been no
significant changes in our internal controls or in other factors that could
significantly affect these controls subsequent to the date of the previously
mentioned evaluation.

PART III

|ITEM 9. | DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
      PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
|------- | ---------------------------------------------------------------------------------------------------------------------

Directors and Executive Officers

The name, position
with the Company, age of each Director and executive officer of the Company is
as follows:

| | Name               | Age | Position                                     | Director/Officer Since
| | ------------------ | --- | -------------------------------------------- | ----------------------
| | Frank L. Jennings  | 52  | Chief Executive/Financial Officer & Director | 2001                  
| | Clifford L. Neuman | 55  | Director                                     | 1997                  

Frank L. Jennings has
served as Executive and Chief Financial Officer since 2001. He has also served
as Vice President and Chief Financial Officer for American Educational Products
from 1994 to 2001. Mr. Jennings has served as President and a director of The
Family Extension, Inc., and a Colorado non-profit corporation. He received his
BA degree in Economics from Austin College and his MBA in Finance from Indiana
University.

Clifford L. Neuman
has served as a Director of the Company since 1997 and has been reelected
annually. Mr. Neuman is a licensed, practicing attorney and a partner in the law
firm of Neuman & Drennen, LLC, with offices located in Boulder and Denver,
Colorado. Mr. Neuman received his Bachelor of Arts degree from Trinity College
in 1970 and his Jurist Doctorate degree from the University of Pennsylvania
School of Law in 1973.

All directors
serve for terms of one (1) year each, and are subject to reelection at the
Company's regular Annual Meeting of Shareholders, unless they earlier resign.

During the
fiscal year ended June 30, 2003, meetings of the Board of Directors were held
both in person and telephonically. All Board members attended 100% of the Board
meetings. Directors are entitled to reimbursement of their expenses associated
with attendance at such meeting or otherwise incurred in connection with the
discharge of their duties as a Director. The Board of Directors has adopted a
compensation plan for outside directors beginning fiscal year 2000 pursuant to
which such persons are entitled to a fee of $1,000 per meeting attended and to
receive, for each year of service, non-qualified stock options exercisable to
purchase 10,000 shares of the Company's Common Stock. The exercise price of the
options is the closing bid price of the Company's Common Stock on the date of
grant, and the options are exercisable for a period of five (5) years. No
compensation was paid or granted during fiscal 2002 or 2003. Directors who are
also executive officers of the Company receive no additional compensation for
their services as directors.

During fiscal
2003, the entire Board of Directors assumed all responsibilities of the Audit
and Compensation Committees. No member of the Audit Committee receives any
additional compensation for his service as a member of that Committee. The Audit
Committee is responsible for providing assurance that financial disclosures made
by Management reasonably portray the Company's financial condition, results of
operations, plan and long-term commitments. To accomplish this, the Audit
Committee oversees the external audit coverage, including the annual nomination
of the independent public accountants, reviews accounting policies and policy
decisions, reviews the financial statements, including interim financial
statements and annual financial statements, together with auditor's opinions,
inquires about the existence and substance of any significant accounting
accruals, reserves or estimates made by Management, reviews with Management the
Management's Discussion and Analysis section of the Annual Report, reviews the
letter of Management Representations given to the independent public
accountants, meets privately with the independent public accountants to discuss
all pertinent matters.

No member of
the Compensation Committee receives any additional compensation for his service
as a member of that Committee. The Compensation Committee is responsible for
reviewing pertinent data and making recommendations with respect to compensation
standards for the executive officers, including the President and Chief
Executive Officer, establishing guidelines and making recommendations for the
implementation of Management incentive compensation plans, reviewing the
performance of the President and CEO, establishing guidelines and standards for
the grant of incentive stock options to key employees under the Company's
Incentive Stock Option Plan.

No family
relationship exists between any director and executive officer.

In 1998, the
Securities and Exchange Commission (the "Commission") commenced an
administrative proceeding against The Rockies Fund, Inc. and its directors,
Stephen G. Calandrella, Clifford C. Thygesen and Charles Powell. Until 2001,
Messrs. Calandrella and Thygesen were also directors of the Company. In the
administrative action, the Commission has alleged certain violations of federal
securities laws and regulations by The Rockies Fund, Inc. and its directors. The
allegations involve certain violations of the Investment Company Act of 1940, as
amended, under which The Rockies Fund, Inc. is a regulated business development
company, as well as violations of the Securities Exchange Act of 1934, as
amended, and regulations thereunder arising from certain transactions in the
securities of another company unrelated to the Company. The Rockies Fund, Inc.
and its directors have adamantly denied any violations of federal securities
laws and have informed the Company that they intend to vigorously defend the
matter. In November 1998, the matter went to hearing before an administrative
law judge and a preliminary finding was issued in March 2001. In its Initial
Decision, the Administrative Law Judge found that the Rockies Fund and its
directors, including Messrs. Calandrella and Thygesen, had violated federal
securities laws. The matter is presently on appeal. While there can be no
assurance of the ultimate outcome of this matter or its potential effect upon
the Company, Management does not believe that it will have an adverse material
impact.

In response to this
administrative proceeding and the initial decision of the Administrative Law
Judge, at the request of the Division of Gaming, Messrs. Calandrella and
Thygesen resigned as officers and directors of the Company. In addition, the
restructuring of our gaming operations, the transfer of our gaming license from
Global Casinos to Casinos, U.S.A. and other matters addressed in the Astraea
Term Sheet were undertaken, in part, at the request of the Division of Gaming in
response to the results of this administrative proceeding. Furthermore, the
Division of Gaming requested that Messrs. Jennings and Neuman, while not
involved in the administrative proceeding, resign as officers and directors of
Casinos, U.S.A. due to their prior affiliations with Messrs. Calandrella and
Thygesen. Effective November 1, 2002, concurrently with the transfer of the
gaming license to Casinos, U.S.A., Messrs. Jennings and Neuman resigned as
officers and directors of Casinos, U.S.A. and were replaced by Barbara Fahey and
Pete Bloomquist, persons unaffiliated with prior management of the Company.

Other than the
foregoing, there are no material proceedings to which any director, officer or
affiliate of the Company, any owner of record or beneficially of more than five
percent (5%) of any class of voting securities of the Company, or any associate
of any such director, officer, affiliate of the Company, or security holder is a
party adverse to the Company or any of its subsidiaries or has a material
interest adverse to the Company or any of its subsidiaries.

Except as noted
herein or below, during the last five- (5) years no director or officer of the
Company has:

(1) had any
bankruptcy petition filed by or against any business of which such person was a
general partner or executive officer either at the time of the bankruptcy or
within two years prior to that time;

(2) been
convicted in a criminal proceeding or subject to a pending criminal proceeding;

(3) been
subject to any order, judgment, or decree, not subsequently reversed, suspended
or vacated, of any court of competent jurisdiction, permanently or temporarily
enjoining, barring, suspending or otherwise limiting his involvement in any type
of business, securities or banking activities; or

(4) been found
by a court of competent jurisdiction in a civil action, the Commission or the
Commodity Futures Trading Commission to have violated a federal or state
securities or commodities law, and the judgment has not been reversed,
suspended, or vacated.

Any
transactions between the Company and its officers, directors, principal
shareholders, or other affiliates have been and will be on terms no less
favorable to the Company than could be obtained from unaffiliated third parties
on an arms-length basis and will be approved by a majority of the Company's
independent, outside disinterested directors.

Indemnification and Limitation on Liability of Directors

The Company's
Articles of Incorporation provide that the Company shall indemnify, to the
fullest extent permitted by Utah law, any director, officer, employee or agent
of the corporation made or threatened to be made a party to a proceeding, by
reason of the former or present official of the person, against judgments,
penalties, fines, settlements and reasonable expenses incurred by the person in
connection with the proceeding if certain standards are met. At present, there
is no pending litigation or proceeding involving any director, officer, employee
or agent of the Company where indemnification will be required or permitted.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.

The Company's
Articles of Incorporation limit the liability of its directors to the fullest
extent permitted by the Utah Business Corporation Act. Specifically, directors
of the Company will not be personally liable for monetary damages for breach of
fiduciary duty as directors, except for (i) any breach of the duty of loyalty to
the Company or its stockholders, (ii) acts or omissions not in good faith or
that involved intentional misconduct or a knowing violation of law, (iii)
dividends or other distributions of corporate assets that are in contravention
of certain statutory or contractual restrictions, (iv) violations of certain
laws, or (v) any transaction from which the director derives an improper
personal benefit. Liability under federal securities law is not limited by the
Articles. The officers of the Company will dedicate sufficient time to fulfill
their fiduciary obligations to the Company's affairs. The Company has no
retirement, pension or profit sharing plans for its officers and Directors.

Compliance with Section 16(a) of the Exchange Act

Under the
Securities Laws of the United States, the Company's Directors, its Executive
(and certain other) Officers, and any persons holding more than ten percent
(10%) of the Company's common stock are required to report their ownership of
the Company's common stock and any changes in that ownership to the Securities
and Exchange Commission. Specific due dates for these reports have been
established and the Company is required to report in this report any failure to
file by these dates. All of these filing requirements were satisfied by its
Officers, Directors, and ten- percent holders. In making these statements, the
Company has relied on the written representation of its Directors and Officers
or copies of the reports that they have filed with the Commission.

ITEM 10.EXECUTIVE
COMPENSATION

The following
tables and discussion set forth information with respect to all plan and
non-plan compensation awarded to, earned by or paid to the Chief Executive
Officer ("CEO"), and the Company's four (4) most highly compensated
executive officers other than the CEO, for all services rendered in all
capacities to the Company and its subsidiaries for each of the Company's last
three (3) completed fiscal years; provided, however, that no disclosure has been
made for any executive officer, other than the CEO, whose total annual salary
and bonus does not exceed $100,000.

|TABLE 1                                                    
|-----------------------------------------------------------
|SUMMARY COMPENSATION TABLE                                 
|                                                           
|Name and Principal
      Position                          
|Frank L Jennings,
      Chief Executive & Financial Officer
|                                                           

|1. | No executive officer received perquisites and other
      personal benefits, which, in the aggregate, exceeded the lesser of either
      $50,000 or 10% of the total of annual salary and bonus paid during the
      respective fiscal years.                                                                                                                                                                                                                      
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | Mr. Jennings received no salary from the Company during
      2003 or 2002. Mr. Jennings is an employee of Gunpark Management, LLC, a
      company that provides certain management, accounting, clerical and other
      administrative services to the Company. During 2003, Gunpark Management
      LLC received $36,000 from the Company for its services. During 2002,
      Gunpark Management, LLC received $30,000 from the Company for its
      services.

Company Stock Incentive Plans

In 1993, the Board
of Directors and the Shareholders of the Company adopted the Global Casinos,
Inc., Stock Incentive Plan (the "Incentive Plan"). The Incentive Plan
allows the Company to grant incentive stock options non-qualified stock options
and/or stock purchase rights (collectively "Rights") to officers,
employees, former employees and consultants of the Company and its subsidiaries.
Options granted to eligible participants may take the form of Incentive Stock
Options ("ISO's") under Section 422 of the Internal Revenue Code of
1986, as amended (the "Code") or options which do not qualify as ISO's
("Non-Qualified Stock Options" or "NQSO's"). As required by
Section 422 of the Code, the aggregate fair market value (as defined by the
Incentive Plan) of the Company's Common Stock (determined as of the date of
grant of ISO) with respect to which ISO's granted to an employee are exercisable
for the first time in any calendar year may not exceed $100,000. The foregoing
limitation does not apply to NQSO's. Rights to purchase shares of the Company's
Common Stock may also be offered under the Incentive Plan at a purchase price
under terms determined by the Incentive Plan Administrator.

Either the Board of
Directors (provided that a majority of Directors are "disinterested"
can administer the Incentive Plan, or the Board of Directors may designate a
committee comprised of Directors meeting certain requirements to administer the
Incentive Plan. The Administrator will decide when and to whom to make grants,
the number of shares to be covered by the grants, the vesting schedule, the type
of awards and the terms and provisions relating to the exercise of the awards.

An aggregate of
150,000 shares of the Company's Common Stock is reserved for issuance under the
Incentive Plan. As of June 30, 2003, options to purchase 150,000 shares of
Common Stock were issued and outstanding with a weighted average exercise price
of $0.14 per share. No shares were available for future option grants.

The following table
sets forth certain information concerning the granting of incentive stock
options during the last completed fiscal year to each of the named executive
officers and the terms of such options:

|TABLE 2
      Option/SAR Grants in the Last Fiscal Year
      Individual Grants
|-------------------------------------------------------------------------------
|Name                                                                           
|Frank L. Jennings                                                              

The following table
sets forth certain information concerning the exercise of incentive stock
options during the last completed fiscal year by each of the named executive
officers and the fiscal year-end value of unexercised options on an aggregated
basis:

|TABLE 3
      Aggregated Option/SAR Exercises in Last Fiscal Year
      and FY-End Option/SAR Values
|----------------------------------------------------------------------------------------------------
|Name                                                                                                
|Frank L. Jennings                                                                                   

|(1) | Value Realized is determined by calculating the
      difference between the aggregate exercise price of the options and the
      aggregate fair market value of the Common Stock on the date the options
      are exercised.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | The value of unexercised options is determined by
      calculating the difference between the fair market value of the securities
      underlying the options at fiscal year end and the exercise price of the
      options.
|(3) | As of June 30, 2003, the fair market value of the
      securities underlying the options was less than the exercise price of the
      options.                                                                               

|ITEM 11. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
      MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|-------- | ----------------------------------------------------------------------------------------------------

The following table
sets forth, as of September 29, 2003 and as adjusted for the sale of option and
warrant stock, the stock ownership of (i) each person known by the Company to be
the beneficial owner of five (5%) percent or more of the Company's Common Stock,
(ii) all Directors individually, (iii) all Officers individually, and (iv) all
Directors and Officers as a group. Each person has sole voting and investment
power with respect to the shares shown, except as noted.

|Title              | Name & Address                                                                  | Shares Beneficially Owned
|------------------ | ------------------------------------------------------------------------------- | -------------------------
|Of Class           | of Beneficial Owner                                                             | Number                   
|Common
      Stock | Clifford L. Neuman
      1507 Pine Street
      Boulder, Colorado 80302         | 330,000                  
|                   | Frank L. Jennings
      5455 Spine Road, Mezzanine East
      Boulder, CO 80301 | 50,000 (2)               
|                   | All Officers and Directors
      as a Group (2 Persons)                         | 380,000                  

|(1) | Shares not outstanding but beneficially owned by virtue
      of the individuals' right to acquire them as of the date of this Proxy
      Statement or within sixty days of such date, are treated as outstanding
      when determining the percent of the class owned by such individual.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Includes options exercisable to purchase 50,000 shares
      of Common Stock at an exercise price of $0.15 per share granted February
      22, 2001.                                                                                                                                       

|ITEM 12. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
|-------- | ----------------------------------------------

Throughout its
history, the Company has experienced shortages in working capital and has
relied, from time to time, upon loans from affiliates to meet immediate cash
demands. There can be no assurance that these affiliates or other related
parties will continue to provide funds to the Company in the future, as there is
no legal obligation to provide such loans.

In fiscal 1998,
a family partnership controlled by Peter Bloomquist, a former director and Chief
Financial Officer of the Company, and as of November 1, 2002, an officer and
director of Casinos, U.S.A., loaned to the Company the sum of $85,000 bearing
interest at the rate of 12% per annum. The loan is a demand obligation and has
an outstanding unpaid principal balance of $47,000.

The Rockies
Fund, Inc. is a business development company that was a principal shareholder of
Global Casinos. From time to time, the Rockies Fund advanced funds to the
Company and has engaged in certain transactions with the Company.

Effective
December 31, 1998, creditors holding matured debt totaling $584,605, principal
and interest, converted that amount into an aggregate of 487,172 shares of
Series C Convertible Preferred Stock, having a stated value of $1.20 per share
which was higher than both the market price and net tangible book value per
share of the Company's common stock on the date of conversion. In this
transaction, The Rockies Fund, Inc. participated to the extent of converting
$287,219 in principal and $62,780 in interest into an aggregate of 291,667
shares of Series C Preferred Stock.

During 2002,the holders of all but 39,101 shares of Series C Preferred Stock exchanged
their shares of preferred stock for promissory notes and then consented to an
assignment and assumption of those promissory notes from Global Casinos to
OnSource as part of the spin-off. Rockies Fund participated in those exchanges
and assignments. In addition, the Company transferred a portfolio of marketable
trading securities together with a promissory note receivable and its unexpired
barter credits to the Rockies Fund in full satisfaction of all outstanding
obligations of the Company or its subsidiaries to the Rockies Fund, Inc. As of
the date of this Report, the Company has no further liability to the Rockies
Fund or its affiliates.

PART IV

|ITEM 13. | EXHIBITS AND REPORTS ON FORM 8-K
|-------- | --------------------------------

|        | 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                                                                                                                                                                               
|*****   | 3.4         | Certificate of Designations, Preferences, and Rights of Series B
      Convertible Preferred Stock                                                                                                                                                                               
|*****   | 3.5         | Certificate of Designations, Preferences, and Rights of Series C
      Convertible Preferred Stock                                                                                                                                                                               
|*****   | 3.6         | Agreement Respecting Rights of Holders of Series C 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       | Second Amended Plan of Reorganization of Casinos USA, Inc., and Order
      Confirming Plan                                                                                                                                                                                      
|*       | 10.25       | Warrant Agreement                                                                                                                                                                                                                                                                
|****    | 10.26       | Stock Purchase and Sale Agreement between Alaska Bingo Supply, Inc.,
      Global Alaska Industries, Inc. and Mark Griffin                                                                                                                                                       
|*****   | 10.27       | Convertible Promissory Note in the amount of $450,000 dated March 31,
      1998 in favor of Mark Griffin                                                                                                                                                                        
|****    | 10.28       | General Security Agreement from Global Alaska Industries, Inc. to Mark
      Griffin                                                                                                                                                                                             
|****    | 10.29       | Stock Pledge Agreement from Global Alaska Industries, Inc. to Mark
      Griffin                                                                                                                                                                                                 
|*****   | 10.30       | Agreement to Convert Debt dated March 31, 1998 with Mark Griffin                                                                                                                                                                                                                 
|*****   | 10.31       | Tollgate Casino Lease and Option Agreement                                                                                                                                                                                                                                       
|*****   | 10.32       | Equipment Lease with Plato Foufas & Co., Inc.                                                                                                                                                                                                                                    
|*****   | 10.33       | Employment Agreement of Eric Hartsough                                                                                                                                                                                                                                           
|******  | 10.34       | Stock Purchase Agreement dated December 30, 1999 between Arufinance,
      N.V. and Global Casinos, Inc.                                                                                                                                                                         
|******* | 10.35       | Term Sheet dated July 24, 2002 between Global Casinos, Inc., Astraea
      Investment Management L.P. and others.                                                                                                                                                                
|******* | 10.36       | Agreement dated September 17, 2002 among Global Casinos, Inc., Casinos,
      U.S.A., Inc. and Astraea Investment Management L.P.                                                                                                                                                
|******* | 10.37       | Agreement and Amendment to Promissory Note dated September 17, 2002
      between Casinos U.S.A., Inc. and Astraea Investment Management L.P. for
      promissory note in the original principal amount of $249,418.48.                                                         
|******* | 10.38       | Agreement and Amendment to Promissory Note dated September 17, 2002
      between Casinos U.S.A., Inc. and Astraea Investment Management L.P. for
      promissory note in the original principal amount of $750,000.                                                            
|******* | 10.39       | Agreement and Amendment to Promissory Note dated September 17, 2002
      between Casinos U.S.A., Inc. and Astraea Investment Management L.P. for
      promissory note in the original principal amount of $783,103.56.                                                         
|******* | 10.40       | Assumption Agreement dated September 17, 2002 among, Global Casinos,
      Inc., Casinos U.S.A., Inc. and Astraea Investment Management L.P.                                                                                                                                     
|******* | 10.41       | Bill of Sale, Assignment and Assumption dated October ___, 2002 between
      Global Casinos, Inc. and Casinos, U.S.A., Inc.                                                                                                                                                     
|******* | 10.42       | Option Agreement dated September 17, 2002 by and between Astraea
      Investment Management L.P. and Global Casinos, Inc.                                                                                                                                                       
|******* | 10.43       | Security Agreement dated September 17, 2002 by Casinos U.S.A., Inc. in
      favor of Astraea Investment Management L.P.                                                                                                                                                         
|******* | 10.44       | Service Agreement dated as of September 17, 2002 between Casinos
      U.S.A., Inc. and Global Casinos, Inc.                                                                                                                                                                     
|******* | 10.45       | Stock Pledge Agreement dated as of September 17, 2002 between Global
      Casinos, Inc. and Astraea Investment Management L.P.                                                                                                                                                  
|******* | 10.46       | Voting Agreement dated as of September 17, 2002 between Casinos U.S.A.,
      Inc. and Global Casinos, Inc.                                                                                                                                                                      
|        | 31          | Certification                                                                                                                                                                                                                                                                    
|        | 32          | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                          

_______________________________

|*       | 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.                                                                      
|****    | Incorporated by reference to the Registrant's Current Report on Form
      8-K dated August 1, 1997, as filed with the Commission on August 14, 1997.                    
|*****   | Incorporated by reference to the Registrant's Annual Report on Form
      10KSB for the year ended June 30, 1999.                                                        
|******  | Incorporated by reference to the Registrant's Current Report on Form
      8-K dated December 30, 1999, as filed with the Commission on January 14,
      2000.          
|******* | Incorporated by reference to the Registrant's Annual Report on Form
      10KSB for the year ended June 30, 2002.                                                        

Reports on Form 8-K

There were no reports on Form
8-K filed during the fourth quarter ended June 30, 2003.

|ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES
|-------- | --------------------------------------

The following table details the
aggregate fees billed to the Company by Stark Winter Schenkein & Co., LLP,
its principal accountant, for each of the last two fiscal years:

| |                    | 2003    | 2002   
| | ------------------ | ------- | -------
| | Audit Fees         | $31,500 | $12,000
| | Audit-Related Fees | -0-     | -0-    
| | Tax Fees           | -0-     | -0-    
| | All Other Fees     | -0-     | -0-    
| | Total              | $31,500 | $12,000

The caption
"Audit Fees" includes professional services rendered for the audit of
the annual consolidated financial statements and review of the quarterly
consolidated financial statements.

It is the
policy of the audit committee to pre-approve all services to be performed by the
independent accountants.

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:October 16, 2003 | By:/s/ Frank L. Jennings   Frank L. Jennings,
         Principal Executive Officer

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                                              | TITLE                                                                                               | DATE            
|------------------------------------------------------ | --------------------------------------------------------------------------------------------------- | ----------------
|/s/ Frank L.
      JenningsFrank L. Jennings           | Principal Executive Officer, Principal Accounting
      Officer, Chief Financial Officer & Director | October 16, 2003
|/s/ Clifford L. Neuman       
      Clifford L. Neuman | Director                                                                                            | October 16, 2003