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

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q

(Mark One)
 X  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
---                                ACT OF 1934
                  For the Quarterly Period Ended March 31, 2001

                                       OR


    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
---                               ACT OF 1934
    For the Transition Period from ____________________ to ____________________


                         Commission file number 0-26922

                         COAST HOTELS AND CASINOS, INC.
             (Exact name of registrant as specified in its charter)
                  Nevada                                  88-0345706
       (State or other jurisdiction of                 (I.R.S. employer
       incorporation or organization)               identification number)

              4500 West Tropicana Avenue, Las Vegas, Nevada 89103
              (Address of principal executive offices) (Zip code)

                                 (702) 365-7000
              (Registrant's telephone number, including area code)
                                      None
              (Former name, former address and former fiscal year,
                         if changed since last report.)

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

                      APPLICABLE ONLY TO CORPORATE ISSUERS:
    Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

    Shares of Common Stock outstanding as of May 15, 2001:  1,000

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


<PAGE>

Part I - FINANCIAL INFORMATION

Item 1.  Financial Statements.

                         COAST HOTELS AND CASINOS, INC.
               (A Wholly Owned Subsidiary of Coast Resorts, Inc.)
                            CONDENSED BALANCE SHEETS
                    (amounts in thousands, except share data)

                                                    March 31,
                                                      2001         December 31,
                                                   (unaudited)         2000
                                                   ------------   --------------
                      ASSETS

CURRENT ASSETS:
   Cash and cash equivalents......................  $   57,820     $   43,560
   Accounts receivable, net.......................       5,825          5,658
   Due from Coast Resorts.........................       4,419          9,464
   Other current assets...........................      19,418         18,619
                                                   ------------   ------------
   TOTAL CURRENT ASSETS...........................      87,482         77,301
PROPERTY AND EQUIPMENT, net.......................     481,830        485,925
OTHER ASSETS......................................       8,147          7,772
                                                   ------------   ------------
                                                    $  577,459     $  570,998
                                                   ============   ============
                  LIABILITIES AND
               STOCKHOLDER'S EQUITY

CURRENT LIABILITIES:
   Accounts payable...............................  $   11,759     $   16,308
   Accrued liabilities............................      45,569         38,201
   Construction accounts payable..................       3,943          4,868
   Current portion of long-term debt..............       2,443          2,430
                                                   ------------   ------------
   TOTAL CURRENT LIABILITIES......................      63,714         61,807
LONG-TERM DEBT, less current portion..............     345,861        353,337
DEFERRED INCOME TAXES.............................      11,900         11,417
DEFERRED RENT.....................................      21,214         20,330
                                                   ------------   ------------
   TOTAL LIABILITIES..............................     442,689        446,891
                                                   ------------   ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDER'S EQUITY:
   Common stock, $1.00 par value, 25,000 shares
      authorized, 1,000 shares issued and
      outstanding.................................           1              1
   Additional paid-in capital.....................      86,903         86,903
   Retained earnings..............................      47,866         37,203
                                                   ------------   ------------
   TOTAL STOCKHOLDER'S EQUITY.....................     134,770        124,107
                                                   ------------   ------------
                                                    $  577,459     $  570,998
                                                   ============   ============

     The  accompanying  notes are an integral part of these condensed  financial
 statements.


                                       1
<PAGE>

                         COAST HOTELS AND CASINOS, INC.
               (A Wholly Owned Subsidiary of Coast Resorts, Inc.)
                       CONDENSED STATEMENTS OF OPERATIONS
               For the Three Months Ended March 31, 2001 and 2000
                             (amounts in thousands)
                                   (unaudited)

                                          Three Months Ended
                                               March 31,
                                        ------------------------
                                           2001         2000
                                        -----------  -----------
OPERATING REVENUES:
   Casino...........................    $   94,721   $   73,011
   Food and beverage................        26,693       19,704
   Hotel............................         9,945        8,314
   Other............................         8,786        6,921
                                        -----------  -----------
     GROSS OPERATING REVENUES.......       140,145      107,950
   Less:  promotional allowances....       (12,597)      (9,364)
                                        -----------  -----------
     NET OPERATING REVENUES.........       127,548       98,586
                                        -----------  -----------

OPERATING EXPENSES:
   Casino...........................        43,169       32,882
   Food and beverage................        18,865       13,346
   Hotel............................         3,783        3,165
   Other............................         6,699        5,592
   General and administrative.......        22,911       16,283
   Pre-opening expenses ............            --          268
   Deferred rent....................           884          520
   Depreciation and amortization....         8,568        5,774
                                        -----------  -----------
     TOTAL OPERATING EXPENSES.......       104,879       77,830
                                        -----------  -----------
OPERATING INCOME....................        22,669       20,756
                                        -----------  -----------

OTHER INCOME (EXPENSES):
   Interest expense, net............        (7,981)      (5,475)
   Interest capitalized ............            62          970
   Gain on disposal of assets ......         1,534           --
                                        -----------  -----------
TOTAL OTHER INCOME (EXPENSES).......        (6,385)      (4,505)
                                        -----------  -----------

INCOME BEFORE INCOME TAXES..........        16,284       16,251
Income tax provision ...............         5,621        5,610
                                        -----------  -----------
NET INCOME..........................     $  10,663   $   10,641
                                        ===========  ============

           The  accompanying  notes  are an  integral  part of  these  condensed
      financial statements.


                                       2
<PAGE>

                         COAST HOTELS AND CASINOS, INC.
               (A Wholly Owned Subsidiary of Coast Resorts, Inc.)
                       CONDENSED STATEMENTS OF CASH FLOWS
               For the Three Months Ended March 31, 2001 and 2000
                             (amounts in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                     Three Months Ended
                                                                          March 31,
                                                                  ------------------------
                                                                      2001        2000
                                                                  -----------  -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                <C>          <C>
   Net income...................................................   $  10,663    $  10,641
                                                                  -----------  -----------
   ADJUSTMENTS TO RECONCILE NET INCOME TO
      NET CASH PROVIDED BY OPERATING ACTIVITIES:
     Depreciation and amortization..............................       8,568        5,774
     Amortization of debt offering costs........................         294           --
     Gain on disposal of assets.................................      (1,534)          --
     Deferred income taxes......................................         576          355
     Deferred rent..............................................         884          900
     Changes in assets and liabilities:
      Net increase in accounts receivable and other assets......        (844)      (2,035)
      Net increase in accounts payable and accrued liabilities..       2,819        2,866
                                                                  -----------  -----------
   TOTAL ADJUSTMENTS............................................      10,763        7,860
                                                                  -----------  -----------
   NET CASH PROVIDED BY OPERATING ACTIVITIES....................      21,426       18,501
                                                                  -----------  -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures, net of amounts in construction
      accounts payable..........................................     (13,234)     (31,235)
   Proceeds from disposal of assets.............................       9,415           --
                                                                  -----------  -----------
   NET CASH USED IN INVESTING ACTIVITIES........................      (3,819)     (31,235)
                                                                  -----------  -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from issuance of long-term debt.....................      49,071           --
   Principal payments on long-term debt.........................        (463)        (270)
   Proceeds from borrowings under bank line of credit...........       6,000        9,000
   Repayments of borrowings under bank line of credit...........     (63,000)          --
   Decrease in due from Coast Resorts...........................       5,045        5,250
                                                                  -----------  -----------
   NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES..........      (3,347)      13,980
                                                                  -----------  -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS.......................      14,260        1,246
CASH AND CASH EQUIVALENTS, at beginning of period...............      43,560       38,616
                                                                  -----------  -----------
CASH AND CASH EQUIVALENTS, at end of period.....................   $  57,820    $  39,862
                                                                  ===========  ===========
</TABLE>

The  accompanying  notes  are an  integral  part of  these  condensed  financial
statements.


                                       3
<PAGE>

                         COAST HOTELS AND CASINOS, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS

NOTE 1 - BACKGROUND INFORMATION AND BASIS OF PRESENTATION

Background Information

    Coast Hotels and Casinos,  Inc. (Coast Hotels) is a Nevada corporation and a
wholly owned  subsidiary of Coast  Resorts,  Inc. Coast Hotels owns and operates
four Las Vegas hotel-casinos:

o    The Suncoast Hotel and Casino,  which opened in September  2000, is located
     near Summerlin in the west end of the Las Vegas valley,  approximately nine
     miles from the Las Vegas Strip.

o    The Orleans  Hotel and Casino,  which opened in December  1996,  is located
     approximately  one  and  one-half  miles  west of the Las  Vegas  Strip  on
     Tropicana Avenue.

o    The Gold Coast Hotel and Casino,  which opened in December 1986, is located
     approximately one mile west of the Las Vegas Strip on Flamingo Road.

o    The Barbary Coast Hotel and Casino,  which opened in March 1979, is located
     on the Las Vegas Strip.


Basis of Presentation

    The accompanying  financial  statements are unaudited and have been prepared
in  accordance  with  generally  accepted  accounting   principles  for  interim
financial information and with Article 10 of Regulation S-X.  Accordingly,  they
do not include  all of the  information  and  footnotes  required  by  generally
accepted accounting principles for complete financial  statements.  In addition,
certain  amounts in the 2000  financial  statements  have been  reclassified  to
conform to the 2001 presentation.  The unaudited financial  statements should be
read in conjunction with the audited financial statements and footnotes included
in our annual  report on Form 10-K for the year ended  December 31, 2000. In the
opinion of management,  all adjustments and normal recurring accruals considered
necessary  for a fair  presentation  of the results for the interim  period have
been  included.  The  interim  results  reflected  in  the  unaudited  financial
statements are not necessarily indicative of expected results for the full year.

    On January 1, 2001,  the Company  adopted  Emerging  Issues Task Force Issue
00-14 ("EITF  00-14").  EITF 00-14  requires that cash  discounts and other cash
incentives  related to gaming play be recorded  as a reduction  to gross  casino
revenues.  EITF 00-14 also requires that prior periods be restated to conform to
this  presentation.  The  Company  previously  recorded  such  incentives  as an
operating expense and has reclassified prior period amounts.  There is no effect
on previously reported net income.


                                       4
<PAGE>

                         COAST HOTELS AND CASINOS, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS

NOTE 2 - LONG-TERM DEBT

    Long-term  debt  consists of the following as of March 31, 2001 and December
31, 2000:

                                                          March 31,
                                                            2001       December
                                                                             31,
                                                         (unaudited)     2000
                                                         -----------  ----------
Related parties:                                              (in thousands)
7.5% notes, payable in monthly installments of
   interest only, with all principal and any unpaid
   interest due December 31, 2001. The notes are
   uncollateralized and are payable to the former
   partners of Barbary Coast and Gold Coast...........   $   1,975    $   1,975

Non-related parties:
9.5% senior subordinated notes due April 2009, with
   interest payable semiannually on April 1 and
   October 1..........................................     225,000      175,000

$200.0 million reducing revolving credit facility due
   April 2004, collateralized by substantially all of
   the assets of Coast Hotels and Casinos, Inc........     119,000      176,000

8.6% note due August 11, 2007, payable in monthly
   installments of $26,667 principal plus interest on
   remaining principal balance, collateralized by
   1980 Hawker aircraft...............................       2,053        2,133

Other notes payable...................................         276          659
                                                         ----------   ----------
                                                           348,304      355,767
Less: current portion...................................     2,443        2,430
                                                         ----------   ----------
                                                         $ 345,861    $ 353,337
                                                         ==========   ==========

    In March 1999,  Coast Hotels issued $175.0 million  principal amount of 9.5%
senior  subordinated  notes  with  interest  payable  on April 1 and  October  1
beginning  October  1, 1999 and  entered  into a $75.0  million  senior  secured
revolving  credit  facility due 2004 to facilitate a  refinancing.  Availability
under the credit  facility was increased to $200.0 million in September 1999. On
February 2, 2001,  Coast Hotels  issued an additional  $50.0  million  principal
amount of senior  subordinated  notes. The net proceeds of  approximately  $49.1
million were used to reduce borrowings under the senior secured credit facility.
The notes were issued under the same indenture and have the same terms, interest
rate  and  maturity  date as the  $175.0  million  principal  amount  of  senior
subordinated notes issued in 1999.


                                       5
<PAGE>

                         COAST HOTELS AND CASINOS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - LONG-TERM DEBT (continued)

    Coast  Resorts is a guarantor of the  indebtedness  under both the indenture
and the credit facility.  Borrowings under the credit facility bear interest, at
Coast  Hotels'  option,  at a premium over the one-,  two-,  three- or six-month
London Interbank Offered Rate ("LIBOR").  The premium varies between 125 and 250
basis points,  depending on Coast  Hotels' ratio of total debt to EBITDA.  As of
March 31,  2001,  the  premium  over LIBOR was 2.25% (225 basis  points) and the
interest   rate  was  7.3%.   For  the   quarter   ended   March  31,  2001  the
weighted-average interest rate for the senior secured credit facility was 7.95%.
Coast  Hotels  incurs a commitment  fee,  payable  quarterly in arrears,  on the
unused portion of the credit  facility.  As of March 31, 2001, this variable fee
was at the maximum  rate of 0.5% per annum times the average  unused  portion of
the facility.

    The  availability  under the $200.0 million credit  facility will be reduced
quarterly  beginning  in the fiscal  quarter  ending  September  30,  2001.  The
reductions  will be $6.0  million on each of September  30,  2001,  December 31,
2001,  March 31, 2002 and June 30, 2002;  $8.5 million on each of September  30,
2002,  December 31, 2002, March 31, 2003 and June 30, 2003; and $11.5 million on
each of September 30, 2003, December 31, 2003, March 31, 2004 and June 30, 2004.
Advances  under the credit  facility  may be used for working  capital,  general
corporate purposes and certain  improvements to The Orleans, the Gold Coast, the
Suncoast and the Barbary  Coast.  As of March 31,  2001,  Coast Hotels had $81.0
million of availability under the $200.0 million credit facility.

    The loan agreement  governing the $200.0  million  senior secured  revolving
credit facility contains  covenants that, among other things,  limit the ability
of Coast Hotels to pay  dividends  or make  advances to Coast  Resorts,  to make
certain capital expenditures,  to repay certain existing indebtedness,  to incur
additional   indebtedness   or  to  sell   material   assets  of  Coast  Hotels.
Additionally,  the loan agreement  requires that Coast Hotels  maintain  certain
financial ratios with respect to its leverage and fixed charge  coverage.  Coast
Hotels is also  subject  to  certain  covenants  associated  with the  indenture
governing the senior  subordinated  notes,  including,  in part,  limitations on
certain restricted payments, the incurrence of additional indebtedness and asset
sales.  Management  believes  that,  at March  31,  2001,  Coast  Hotels  was in
compliance with all covenants and required ratios.


                                       6
<PAGE>

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
     of Operations

Results of Operations

   The following table sets forth, for the periods indicated,  certain financial
information regarding our results of operations:

                                    Three Months Ended
                                         March 31,
                                  ------------------------
                                     2001        2000
                                  ------------------------
                                      (in thousands)
                                        (unaudited)

Net operating revenues..........   $ 127,548    $  98,586
Operating expenses..............     104,879       77,830
                                  -----------  -----------
Operating income ...............   $  22,669    $  20,756
                                  ===========  ===========
Net income .....................   $  10,663    $  10,641
                                  ===========  ===========
EBITDA (1)......................   $  32,121    $  27,318
                                  ===========  ===========

(1)  "EBITDA" means earnings before interest, taxes, depreciation, amortization,
     deferred  (non-cash)  rent  expense,  other  non-cash  expenses and certain
     non-recurring items, including pre-opening expenses and gains and losses on
     disposal of assets (for all periods  presented,  the only non-cash  expense
     was  deferred  rent  and the  only  non-recurring  items  were  pre-opening
     expenses and gains and losses on disposal of assets.)  EBITDA is defined in
     our senior  secured  credit  facility and in the  indenture  governing  our
     senior subordinated  notes. EBITDA is presented as supplemental  disclosure
     because the  calculation of EBITDA is necessary to determine our compliance
     with  certain  covenants  under  these  financing  agreements  and  because
     management  believes  that  it  is  a  widely  used  measure  of  operating
     performance  in the gaming  industry.  EBITDA should not be construed as an
     alternative to operating  income or net income (as determined in accordance
     with  generally  accepted  accounting  principles)  as an  indicator of our
     operating  performance,  or as an  alternative  to cash flows  generated by
     operating,  investing and financing activities (as determined in accordance
     with  generally  accepted  accounting  principles)  as an indicator of cash
     flows or a measure of liquidity.  All companies do not calculate  EBITDA in
     the  same  manner.  As a  result,  EBITDA  as  presented  here  may  not be
     comparable to the similarly titled measures presented by other companies.


                                       7
<PAGE>

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
     of Operations (continued)

Results of Operations (continued)

Three Months Ended March 31, 2001 Compared to Three Months Ended March 31, 2000

    In the quarter ended March 31, 2001, we  experienced  increases in revenues,
operating  income,  net  income  and  cash  flows  (EBITDA),  primarily  due  to
contributions  from our  newest  hotel-casino,  the  Suncoast,  which  opened in
September  2000. Net revenues in the first quarter were $127.5 million  compared
to $98.6  million in 2000,  an  increase  of 29.4%.  Operating  income was $22.7
million in the quarter  compared to $20.8  million in 2000, an increase of 9.2%.
Net income was $10.7 million,  up slightly over 2000 first quarter net income of
$10.6  million.   EBITDA  (earnings  before   interest,   taxes,   depreciation,
amortization,  deferred rent, other non-cash expenses and certain  non-recurring
items,  including  pre-opening  expenses  and gains and  losses on  disposal  of
assets) was $32.1 million in the quarter,  an increase of 17.6% over 2000 EBITDA
of $27.3 million.

    Casino.  Casino  revenues were $94.7 million in the three months ended March
31, 2001  compared to $73.0  million in the same period in 2000,  an increase of
29.7% due primarily to the opening in September 2000 of the Suncoast. Gold Coast
casino  revenues  declined in the quarter due to the recent  openings of two new
locals-oriented casinos and construction disruption from the on-going renovation
of the Gold Coast public areas.  Additionally,  a record  Megabucks  progressive
jackpot  of $34.0  million  in the first  quarter  of the prior  year  attracted
unusually high slot machine  wagering volume in that period and contributed to a
comparative  decline in our slot  revenues  in 2001 at the Gold  Coast,  Barbary
Coast and The Orleans.

    Casino expenses  increased  $10.3 million (31.3%) in the quarter,  primarily
due to the Suncoast.  The casino  operating  margin was relatively flat at 54.4%
compared to 55.0% in 2000.

    Food and  Beverage.  Food and beverage  revenues  were $26.7  million in the
first  quarter of 2001  compared to $19.7  million in 2000, an increase of 35.5%
due primarily to the  additional  revenues from the Suncoast.  Food and beverage
expenses  increased  41.4% to $18.9 million in 2001 compared to $13.3 million in
2000, primarily due to the additional expenses of the Suncoast.

    Hotel.  Hotel room  revenues  were $9.9 million in the first quarter of 2001
compared to $8.3  million in 2000,  an increase  of 19.6%  primarily  due to the
Suncoast.  Additionally,  improvements in the room occupancy  percentage and the
average daily rate at The Orleans contributed to the increase in revenues.

    Other.  Other  revenues  were  $8.8  million  in the first  quarter  of 2001
compared to $6.9  million in 2000,  an increase  of 26.9%  primarily  due to the
Suncoast.  Other expenses also increased because of the Suncoast to $6.7 million
in 2001 compared to $5.6 million in 2000, an increase of 19.8%.

    General and Administrative.  General and administrative  expenses were $22.9
million  in the first  quarter of 2001  compared  to $16.3  million in 2000,  an
increase  of  40.7%,  primarily  due to  the  Suncoast  expenses.  Additionally,
utilities  expenses  increased  substantially  in  the  quarter.  Excluding  the
Suncoast, which opened in September 2000, electricity and gas expenses increased
$868,000  (75.2%)  compared to the first quarter of 2000,  primarily  because of
increased costs of natural gas, which increased $672,000  (347.2%).  Included in
general and  administrative  expenses  was cash rent  expense of $1.3 million in
2001 and $675,000 in 2000.  During the construction of the Suncoast and until it
opened in September 2000, rent expense was capitalized as a cost of the project.


                                       8
<PAGE>

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
     of Operations (continued)

Results of Operations (continued)

Three Months Ended March 31, 2001 Compared to Three Months Ended March 31, 2000
(continued)

     Pre-opening  Costs.  Pre-opening  costs related to the  development  of the
Suncoast  were expensed as incurred.  Pre-opening  expenses were $268,000 in the
first quarter of 2000.  There were no pre-opening  expenses in the first quarter
of 2001.

    Deferred  Rent.  Deferred  rent in the first  quarter  of 2001 was  $884,000
compared to $520,000 in the first quarter of 2000.  During the  construction  of
the Suncoast and until it opened in September 2000, rent expense was capitalized
as a cost of the project.

    Depreciation and  Amortization.  Depreciation  and amortization  expense was
$8.6 million in the first quarter of 2001 compared to $5.8 million in 2000.  The
increase was primarily due to the opening of the Suncoast.

    Other Income (Expenses). Net interest expense increased in the first quarter
of 2001 due to the higher debt related to the financing of the  construction  of
the Suncoast.  Net interest  expense was $8.0 million in the quarter compared to
$5.5 million in the first  quarter of 2000.  Capitalized  interest  decreased by
$908,000 due to the completion of the Suncoast  construction  in September 2000.
The $1.5 million net gain on disposal of assets  included a gain of $2.4 million
on the sale of approximately 29 acres that had been held for future development.

Liquidity and Capital Resources

    Our  principal  sources of  liquidity  have  consisted  of cash  provided by
operating  activities and debt financing.  Cash provided by operating activities
was $21.4  million in the three months ended March 31, 2001 and $18.5 million in
the three months ended March 31, 2000.

    Cash used in investing  activities in the quarters  ended March 31, 2001 and
2000 was $3.8 million and $31.2  million,  respectively,  and was  primarily for
capital  expenditures.  Expenditures of approximately $13.2 million in the first
quarter of 2001,  primarily for capital improvement  projects at the Gold Coast,
The Orleans and the Suncoast,  were offset in part by proceeds received from the
sale of assets, including approximately 29 acres of land in North Las Vegas that
had been held for possible future development. Expenditures in the first quarter
of 2000 were primarily for the construction of the Suncoast.

    Cash used in financing  activities  was $3.3 million in the first quarter of
2001, primarily from the issuance on February 2, 2001 of $50.0 million principal
amount of senior  subordinated  notes which was offset by paydowns of the credit
facility with cash flows from operations and approximately  $49.1 million of net
proceeds from the senior  subordinated  note issuance.  The senior  subordinated
notes were issued  under the same  indenture  and have the same terms,  interest
rate  and  maturity  date as our  $175.0  million  principal  amount  of  senior
subordinated  notes issued in 1999.  Cash provided by financing  activities  was
$14.0 million in the first quarter of 2000,  primarily from borrowings under our
$200.0 million senior secured credit facility.


                                       9
<PAGE>

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
     of Operations (continued)

Liquidity and Capital Resources (continued)

    The  availability  under our $200.0 million  senior secured credit  facility
will be reduced in  quarterly  amounts  beginning in the fiscal  quarter  ending
September 30, 2001. The reductions will be $6.0 million on each of September 30,
2001,  December 31, 2001, March 31, 2002 and June 30, 2002; $8.5 million on each
of September 30, 2002,  December 31, 2002, March 31, 2003 and June 30, 2003; and
$11.5 million on each of September 30, 2003,  December 31, 2003,  March 31, 2004
and June 30,  2004.  The  advances  under the  facility  may be used for working
capital,  general corporate purposes,  and certain  improvements to our existing
properties.  As of March 31, 2001, we had $119.0 million  outstanding  under the
$200.0  million  credit  facility.  Borrowings  under the credit  facility  bear
interest,  at our option,  at a premium over the one-, two-, three- or six-month
London  Interbank  Offered Rate ("LIBOR").  The premium varies  depending on our
ratio of total debt to EBITDA and can vary between 125 and 250 basis points.  As
of March 31, 2001,  the premium over LIBOR was 2.25% (225 basis  points) and the
interest   rate  was  7.3%.   For  the   quarter   ended   March  31,  2001  the
weighted-average interest rate for the senior secured credit facility was 7.95%.

    The loan agreement  governing the $200.0  million  senior secured  revolving
credit facility contains  covenants that, among other things,  limit our ability
to pay  dividends or make  advances to Coast  Resorts,  to make certain  capital
expenditures,  to repay  certain  existing  indebtedness,  to  incur  additional
indebtedness  or to sell  material  assets.  Additionally,  the  loan  agreement
requires that we maintain certain  financial ratios with respect to its leverage
and fixed charge coverage.  We are also subject to certain covenants  associated
with the  indenture  governing  our $225.0  million  principal  amount of senior
subordinated  notes,  including,  in part,  limitations  on  certain  restricted
payments, the incurrence of additional  indebtedness and asset sales. We believe
that, at March 31, 2001,  we were in compliance  with all covenants and required
ratios.

Capital Expenditures

    In January  2001,  we announced a proposed  expansion  of The  Orleans.  The
project has an estimated  cost of $100.0  million and is expected to be paid for
primarily out of cash flows from  operations  through the first quarter of 2003.
The expansion  will include a  special-events  arena,  a 620-room hotel tower, a
2600-car parking garage,  six additional movie theaters,  two restaurants and an
Irish pub.  Approximately 40,000 square feet of new gaming area and public space
will also be created for future use. We  anticipate  that 2001 cash  outlays for
the project will total  approximately  $50.0 million,  of which $3.2 million had
been expended in the first quarter.

    In the fourth quarter of 2000, we commenced an  approximately  $20.0 million
expansion  and remodel of the Gold Coast.  The project,  which is expected to be
paid for  primarily  out of cash  flows  from  operations,  will  include a new,
expanded buffet, a sports bar, an Asian-themed restaurant, 10,000 square feet of
additional meeting space, the refurbishing of our standard hotel guest rooms and
the redesign of most of the Gold Coast's public areas. We expect to complete the
project by the fourth quarter and to spend  approximately $18.5 million in 2001,
of which $4.1 million had been expended in the first quarter.

    The  Suncoast  hotel  room  tower  was   originally   built  to  accommodate
approximately  200  additional  hotel  rooms.  We  began  construction  of these
additional rooms in the first quarter of 2001 and expect to complete them during
2001 at an estimated cost of $9.0 million.  Additionally,  we expect to complete
the swimming  pool and related  landscaping  in the second  quarter of 2001 at a
cost of approximately  $11.5 million, of which $2.8 million had been expended in
the first quarter.


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<PAGE>

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
     of Operations (continued)

Capital Expenditures (continued)

    In the ordinary  course of operating our  hotel-casinos,  it is necessary to
upgrade or replace  fixtures and  equipment and to make  improvements  that will
extend the life of our physical  plants.  We anticipate  that these  maintenance
capital expenditures will total approximately $12.0 million in 2001.

   A key element of our business  strategy is the expansion or renovation of our
existing  properties as described  above.  The  completion of these  projects is
subject to certain risks, including but not limited to:

o    general construction risks, including cost overruns, shortages of materials
     or skilled labor, labor disputes,  unforeseen  environmental or engineering
     problems,  work stoppages,  fire and other natural disasters,  construction
     scheduling problems and weather interference;

o    change orders and plan or specification modifications;

o    changes and concessions required by governmental or regulatory authorities;
     and

o    delays in obtaining or inability to obtain all required  licenses,  permits
     and authorizations.

    We believe that existing cash  balances,  operating  cash flow and available
borrowings  under our $200.0  million  credit  facility will provide  sufficient
resources to meet our debt and lease payment obligations and foreseeable capital
expenditure requirements at our hotel-casino properties.

Energy Shortage

    Because of a shortage of  electricity  in the western  United  States in the
first quarter of 2001 and the possibility of a continued  shortage,  we are also
exposed  to the risk of  substantially  higher  utilities  rates.  To the extent
possible,  we attempt to limit our  exposure  to  utilities  rate  increases  by
purchasing multi-period fixed rate contracts,  but no assurance can be made that
such  contracts  will be available or, if purchased,  will result in significant
savings.


                                       11
<PAGE>

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
     of Operations (continued)

Certain Forward-Looking Statements

    This Form 10-Q includes  "forward-looking  statements" within the meaning of
the securities laws. All statements  regarding our expected financial  position,
business  strategies  and  financing  plans  under  the  headings  "Management's
Discussion  and  Analysis of  Financial  Condition  and Results of  Operations",
"Business" and elsewhere in this Form 10-Q are  forward-looking  statements.  In
addition,   in  those  and  other   portions  of  this  Form  10-Q,   the  words
"anticipates,"  "believes,"  "estimates," "seeks," "expects," "plans," "intends"
and similar expressions,  as they relate to Coast Hotels or its management,  are
intended to identify  forward-looking  statements.  Although we believe that the
expectations  reflected in such forward-looking  statements are reasonable,  and
have based  these  expectations  on our beliefs as well as  assumptions  we have
made, such expectations may prove to be incorrect.  Important factors that could
cause actual results to differ  materially from such  expectations are disclosed
in this Form 10-Q, including, without limitation, the following factors:

o    increased competition, both in Nevada and other states, including increased
     competition from California Native American gaming;

o    dependence on the Las Vegas area and Southern  California for a majority of
     our customers;

o    substantial  leverage and  uncertainty  that we will be able to service our
     debt;

o    uncertainties associated with construction projects,  including the related
     disruption of operations and the availability of financing, if necessary;

o    changes  in laws or  regulations,  third  party  relations  and  approvals,
     decisions of courts, regulators and governmental bodies;

o    uncertainties related to the economy; and

o    uncertainties  related to the cost and/or  availability  of electricity and
     natural gas.

    All subsequent written and oral forward-looking  statements  attributable to
us or persons acting on our behalf are expressly  qualified in their entirety by
our cautionary statements. The forward-looking statements included are made only
as of the date of this Form 10-Q. We do not intend, and undertake no obligation,
to update these forward-looking statements.


                                       12
<PAGE>


Item 3.  Quantitative and Qualitative Disclosures about Market Risk.

Market Risk

    Market risk is the risk of loss arising from adverse changes in market rates
and  prices,  such as  interest  rates,  foreign  currency  exchange  rates  and
commodity  prices.  Our primary  exposure  to market risk is interest  rate risk
associated with our long-term debt. We attempt to limit our exposure to interest
rate  risk  by  managing  the mix of our  long-term  fixed-rate  borrowings  and
short-term borrowings under our revolving bank credit facility. To date, we have
not invested in derivative- or foreign currency-based financial instruments.


                                       13
<PAGE>

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings.

    None.

Item 2.  Changes in Securities.

    None.

Item 3.  Defaults Upon Senior Securities.

    None.

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

    Not applicable.

Item 5.  Other Information.

    None.

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

    (a) Exhibits.

        None.
(b)   Reports on Form 8-K.

        On February 8, 2001, the Company filed a Form 8-K dated February 2, 2001
    under Item 5, Other  Events,  with  respect  to the  preliminary  release of
    unaudited  fourth quarter results and the issuance of $50,000,000  principal
    amount of additional 9 1/2% Senior Subordinated Notes Due 2009.

        On March 15,  2001,  the  Company  filed a Form 8-K dated March 14, 2001
    under Item 5, Other Events,  with respect to the  expiration of its offer to
    exchange up to $50.0 million  principle amount of newly issued  additional 9
    1/2% Senior Subordinated Notes Due 2009.

        On March 27,  2001,  the  Company  filed a Form 8-K dated March 26, 2001
    under Item 5, Other  Events,  with  respect to the  availability  of certain
    financial and other information on its website.


                                       14
<PAGE>

                                   SIGNATURES

    Pursuant to the  requirements  of the  Securities  Exchange Act of 1934, the
Registrant  has duly caused this  Quarterly  Report on Form 10-Q to be signed on
its behalf by the undersigned thereunto duly authorized.


Date:  May 15, 2001                     COAST HOTELS AND CASINOS, INC., a Nevada
                                        corporation


                                        By:   /s/ Gage Parrish
                                              -----------------------
                                              Gage Parrish
                                              Vice President and
                                              Chief Financial Officer

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